stronger portfolio, promising future report 2019.pdf · 14 hotel business 16 corporate governance 8...
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Annual R
eport 2019 U
NIZO
Holdings C
ompany, Lim
ited
A vegetable-based ink has beenused, containing less than 1%petroleum-based solvents toprevent atmospheric pollutionby minimizing emissions ofvolatile organic compounds.
UNIZO Holdings Company, Limited
2-10-9, Hatchobori, Chuo-ku, Tokyo 104-0032, Japan https://www.unizo-hd.co.jp/en/
Printed in Japan
Annual Report 2019UNIZO Holdings Company, Limited
Stronger Portfolio, Promising Future
Stronger Portfolio, Promising Future
As its corporate philosophy,
the UNIZO Group strives to be a company that
1. creates value and richness together with all stakeholders;
2. earns the trust and meets expectations of customers,
and continues to be a chosen partner; and
3. contributes to society and the environment.
Our Group (the UNIZO Group) will
focus on growth via our two pillars of
the Real Estate Business and the Hotel Business
Cautionary Statement regarding Forward-Looking StatementsThis annual report contains certain forward-looking statements with respect to UNIZO Holdings Company, Limited’s financial position, results of operations, and business. Such statements are based on analyses and determi-nations regarding information available to management at the time this report was prepared and involve risks and uncertainties that may cause actual results to differ materially from forecasts. These risks and uncertainties include, but are not limited to, changes in operating conditions. Information regarding companies and entities other than the Company and the Group is drawn from publicly available data. Accordingly, the Company does not guarantee the accuracy of this information.
Contents
2 Corporate Philosophy, Basic Management Policy, and Vision
4 Financial Summary
6 President’s Message
10 Fourth Medium-Term Management Plan
12 Review of Operations
12 Real Estate Business
14 Hotel Business
16 Corporate Governance
18 CSR Activities
19 Directors, Audit & Supervisory Board Members, and Executive Officers
20 Financial Section
20 Management’s Discussion and Analysis
24 Consolidated Balance Sheet
26 Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
27 Consolidated Statement of Changes in Net Assets
29 Consolidated Statement of Cash Flows
30 Notes to Consolidated Financial Statements
47 Independent Auditor’s Report
48 Corporate Information
49 Investor Information
As the business environment has made it
difficult to expand assets via new investments,
and because for the fiscal year ended March 31,
2019, the UNIZO Group achieved its numerical
target for net income for the last fiscal year of
the Third Medium-Term Management Plan
one year ahead of schedule, the Group formulated
the new three-year Fourth Medium-Term
Management Plan STRONGER FOOTHOLD 2021,
Strengthening the Management Structure.
In the Plan, aiming toward growth and
advancement globally, the UNIZO Group
will strengthen its management structure as
a basic policy. Also, the Group will manage
its portfolio mainly through capital recycling, and
unless there is a change in the business
environment, for the time being, the Group
will not raise capital via new-share issuance
by public offering and assets will be acquired
within the extent of cash inflows from
investing activities.
Fourth Medium-Term Management Plan
STRONGER FOOTHOLD 2021, Strengthening the Management Structure
Annual Report 2019 1
2 Annual Report 2017
Corporate Philosophy
The UNIZO Group strives to be a company that
1 Creates value and richness together
with all stakeholders
2 Earns the trust and meets expectations
of customers, and continues to be a chosen partner
3 Contributes to society and
the environment
2 Annual Report 2019
1. Build asset portfolio with strong risk
resistance and high profitability
2. Sustainable income improvement
3. NOI yield*1 +1.0% improvement or greater
4. Maintain equity ratio above 20%
Aiming toward Growth and Advancement globally, the UNIZO
Group will strengthen its Management Structure
Portfolio will be managed mainly through capital recycling, and
unless there is a change in the business environment, for the time
being, no capital raising via new-share issuance by public offering
and assets to be acquired within extent of cash inflows from
investing activities
*1 NOI yield = Operating income before depreciation and amortization ÷ Weighted average book value for commercial real estate (calculation basis: rental office buildings and other properties for lease, self-operated hotels, and other assets).
Vision
Basic Policy
Annual Report 2019 3
Millions of yenThousand of US
dollars*1
2015 2016 2017 2018 2019 2019
For the fiscal year ended March 31
Revenue from operations ¥ 27,841 ¥ 33,163 ¥ 39,586 ¥ 52,462 ¥ 56,053 $ 505,027
Operating income 8,987 11,381 13,802 17,570 17,622 158,771
Ordinary income 7,514 9,276 10,497 11,500 11,796 106,279
Net income attributable to owners of the parent company 4,318 7,015 6,621 8,488 11,903 107,243
Increase in property and equipment, and intangible assets 114,304 82,245 144,149 137,163 18,812 169,492
Depreciation and amortization 4,915 6,866 8,207 10,776 11,714 105,541
EBITDA*2 13,902 18,248 22,009 28,347 29,336 264,312
Cash flows from operating activities 11,175 15,724 5,006 27,238 12,562 113,181
Cash flows from investing activities (113,399) (73,720) (130,651) (127,884) 105,307 948,797
Cash flows from financing activities 103,216 73,671 144,196 108,317 (67,799) (610,856)
At fiscal year-end
Total assets 391,757 467,562 633,866 738,467 693,552 6,248,779
Total net assets 52,883 55,008 76,486 86,903 113,160 1,019,551
Interest-bearing debt 314,964 386,238 530,583 620,880 554,234 4,993,548
Amounts per share (yen, US dollars)
Net income ¥ 244.59 ¥ 353.71 ¥ 292.25 ¥ 313.24 ¥ 356.56 $ 3.21
Net assets 2,654.39 2,762.05 3,208.13 3,039.54 3,306.72 29.79
Dividends 65.00 70.00 75.00 80.00 85.00 0.76
Key indicators
Operating margin (%) 32.3 34.3 34.9 33.5 31.4
Return on assets (ROA)*3 (%) 2.3 2.2 2.0 1.8 1.6
Return on equity (ROE)*4 (%) 10.0 13.0 10.1 10.4 11.9
Equity ratio*5 (%) 13.4 11.7 12.0 11.7 16.3
Net D/E ratio*6 (times) 5.9 6.7 6.4 6.6 3.8
Unrealized gains*7 (Millions of yen, Thousands of US dollars) 82,628 136,119 163,779 177,324 220,907*8 1,990,332*8
Payout ratio (%) 26.6 19.8 25.7 25.5 23.8
Number of employees 238 268 316 366 386
*1 US dollar amounts are the above presented Japanese yen amounts converted at the rate of ¥110.99=US$1.00, the exchange rate prevailing on March 31, 2019*2 EBITDA = Operating income + Depreciation and amortization*3 ROA = (Operating income + Interest and dividend income + Gain on investments in partnerships – Interest expenses) ÷ Average total assets between beginning and end of
the period*4 ROE = Net income ÷ Average total net assets between beginning and end of the period*5 Equity ratio = Total net assets ÷ Total assets*6 Net D/E ratio = (Interest-bearing debt – Cash and deposits) ÷ Total net assets*7 Unrealized gains = Difference between book value and appraised value for commercial real estate as of fiscal year-end (calculation basis: rental office buildings and other
properties for lease, self-operated hotels, and other assets)*8 Values for properties held by the Group as of April 30, 2019, calculated using book values and appraised values as of March 31, 2019
UNIZO Holdings Company, Limited and its consolidated subsidiariesFiscal years ended March 31
In the fiscal year ended March 31, 2018, the UNIZO Group changed revenue recognition standards. Figures for the fiscal year ended March 31, 2017, and for earlier fiscal years, have been retrospectively adjusted and reflect the change in standards.From the fiscal year ended March 31, 2019, deferred tax assets are presented in the investments and other assets section of the balance sheet, and deferred tax liabilities are presented in the non-current liabilities section of the balance sheet. Figures for the fiscal year ended March 31, 2018 have been retrospectively adjusted.
Financial Summary
4 Annual Report 2019
56,053
0
15,000
30,000
45,000
60,000
15.3 16.3 17.3 18.3 19.3
Revenue from operations
(Millions of yen)
17,622
11,796
0
5,000
10,000
15,000
20,000
15.3 16.3 17.3 18.3 19.3
Operating income Ordinary income
Operating income / Ordinary income
(Millions of yen)
(%)
11,90311.9
0
4.0
8.0
12.0
16.0
0
4,000
8,000
12,000
16,000
15.3 16.3 17.3 18.3 19.3
Net income attributable to owners of the parent company / ROE
(Millions of yen) (%)
Net income attributable to owners of the parent company (left scale) ROE (right scale)
(%)
113,16016.3
0
6.0
12.0
18.0
24.0
0
40,000
80,000
120,000
160,000
15.3 16.3 17.3 18.3 19.3
Total net assets / Equity ratio
(Millions of yen) (%)
Total net assets (left scale) Equity ratio (right scale)
0
220,907
85,995
134,91260,000
120,000
180,000
240,000
15.3 16.3 17.3 18.3 19.4*
Unrealized gains on business-use real estate
(Millions of yen)
Unrealized gains on office buildings for lease Unrealized gains on hotels and other assets
* Values for properties held by the Group as of April 30, 2019, calculated using book values and appraised values as of March 31, 2019
356.56
0
100
200
300
400
15.3 16.3 17.3 18.3 19.3
Net income per share
(Yen) (%)
85
23.8
0
40
60
80
100
0
30.0
20 15.0
45.0
60.0
75.0
15.3 16.3 17.3 18.3 19.3
Dividends per share / Payout ratio
(Yen) (%)
Cash dividends per share (left scale) Payout ratio (right scale)
693,552
0
150,000
300,000
450,000
600,000
750,000
15.3 16.3 17.3 18.3 19.3
Total assets
(Millions of yen)
Annual Report 2019 5
President’s Message
Aiming toward growth and advancement
globally, the UNIZO Group will
strengthen its management structure
as a basic policy.
Tetsuji KosakiPresident & CEO
Stronger Portfolio, Promising Future
6 Annual Report 2019
Business Environment and PerformanceEven though weakness has appeared in some export sectors, the Japanese
economy continued to recover gradually. For the Japanese economy going
forward, even though weakness has appeared in some export sectors, the
gradual economic recovery is likely to continue. Factors that warrant atten-
tion include effects of trade friction between China and the United States,
increasing uncertainty about the Chinese economy, progress in negotiations
over the British vote to leave the European Union, and effects of negotiations
over the Trade Agreement on Goods (TAG) between the United States and
Japan.
In the United States, economic growth continued centered on consumer
spending and capital expenditure. For the US economy going forward, even if
economic growth centered on consumer spending and capital expenditure
continues, growth may slow. Factors that warrant attention include trends in
short and long-term interest rates, effects of trade friction between China
and the United States, developments in the United Kingdom after leaving the
European Union, and the evolution of the 2020 US Presidential election.
Results for the Fiscal Year Ended March 31, 2019Looking at consolidated earnings, revenue from operations increased 6.8%
year on year, operating income increased 0.3%, ordinary income increased
2.6%, and net income attributable to owners of the parent increased 40.2%.
The increase of 40.2% included gains and losses on sales of property and
equipment, and intangible assets recorded during the period in step with the
Executive SummaryAs the business environment has made it difficult to expand assets via
new investments, and because for the fiscal year ended March 31, 2019,
the UNIZO Group achieved its numerical target for net income for the
last fiscal year of the Third Medium-Term Management Plan one year
ahead of schedule, we formulated the new three-year Fourth Medium-
Term Management Plan STRONGER FOOTHOLD 2021, Strengthening
the Management Structure.
In the Plan, aiming toward growth and advancement globally, we will
strengthen our management structure as a basic policy.
Going forward we will continue to advance in a unified effort to raise
corporate value and be a corporate group that can sustain growth.
Annual Report 2019 7
sale of sixteen properties in Japan, four properties overseas, and two hotels
as part of capital recycling efforts.
Formulation of the Fourth Medium-Term Management PlanIn the Fourth Medium-Term Management Plan STRONGER FOOTHOLD 2021,
aiming toward growth and advancement globally, we will strengthen our
management structure as a basic policy. Also, we will manage our portfolio
mainly through capital recycling, and unless there is a change in the business
environment, for the time being, we will not raise capital via new-share issu-
ance by public offering and assets will be acquired within the extent of cash
inflows from investing activities.
In the Real Estate Business, in Japan and overseas, we will thoroughly
implement efficiency improvements to lower expenditures and strengthen
the income base through existing tenant sales and new tenant sales. In Japan,
the Business will work together with UNIZO Hotel for general sales, and over-
seas the Business will strengthen leasing and improve property management
abilities.
In the Hotel Business, we will also thoroughly implement efficiency
improvements to lower expenditures. Through the introduction of the new
Hotel Membership Program (launched February 1, 2019) and policies for each
hotel according to its individual characteristics, the Business will improve
profitability. Furthermore, the Business will thoroughly develop and publicize
the three hotel brands—HOTEL UNIZO, UNIZO INN, and UNIZO INN Express—
and offer superior service and the convenience of outstanding locations to a
global customer base. To do so, the Business will make intensive efforts in
ensuring smooth openings for new hotel locations, managing hotels under
management contract appropriately, and developing staff.
Shareholder ReturnsWe aim to enhance corporate and shareholder value while staying focused on
changes in the business climate, earnings performance, and financial condi-
tions with a view to bolstering business development and our operating foun-
dation. Our basic policy on shareholder returns is to consistently provide
stable dividends, while balancing this with robust shareholders’ equity. We
8 Annual Report 2019
believe this balance will lead to the maximization of returns to our
shareholders.
Based on this policy and on our projected future business development,
cash dividends for the fiscal year ended March 31, 2019 were ¥85 per share
(including an interim dividend of ¥40 per share), constituting a ¥5 increase
year on year.
Furthermore, in the fiscal year ending March 31, 2020, we are planning to
pay ¥85 per share (including an interim dividend of ¥40 per share).
Outlook for the Fiscal Year Ending March 31, 2020We expect revenue and income to decline due to property sales as part of
capital recycling efforts in the fiscal year ending March 31, 2020. However,
through these strategies, we will clearly identify earnings potential and risks
and endeavor to enhance profitability.
For the fiscal year ending March 31, 2020, we forecast consolidated revenue
from operations of ¥45,300 million, a 19.2% decrease from the fiscal year
ended March 31, 2019; consolidated operating income of ¥13,500 million, a
23.4% decrease from the fiscal year ended March 31, 2019; and consolidated
ordinary income of ¥8,800 million, a 25.4% decrease from the fiscal year
ended March 31, 2019. As real estate market conditions have a large impact on
property sales prices, at present extraordinary income (loss) is difficult to
forecast, and forecasts for net income attributable to owners of the parent
company and net income per share are not disclosed. Forecasts will be dis-
closed promptly when making such forecasts becomes possible.
Going forward we will continue unified efforts to raise corporate and share-
holder value, not only to meet but to exceed shareholder expectations. We
look forward to the continued support and encouragement for our efforts
from shareholders.
June 2019
Annual Report 2019 9
12
Build asset portfolio with strong risk resistance and high profitabilityAmount of property sales: about ¥200 billion
(Including over ¥100 billion sold during fiscal year ended March 31, 2019)
Sustainable income improvementRevenue and income expected to decline due to property sales in fiscal year ending March 31,
2020. Plan to achieve revenue and income growth without assuming asset expansion in
two-year period covering fiscal years ending March 31, 2021 - March 31, 2022
• By fiscal year ending March 31, 2022, plan to increase ordinary income by about 20% vs. fiscal
year ending March 31, 2020 through higher revenue and cost efficiency improvements
• Reduce expenditures via efficiency improvements—Efficiency target: Over ¥500 million
reduction by fiscal year ending March 31, 2022
(Billions of yen)
Fiscal year ended
March 31, 2019 Results
Fiscal year endingMarch 31, 2020 Target
Fiscal year endingMarch 31, 2021 Target
Fiscal year endingMarch 31, 2022 Target
Change (%) Change (%) Change (%)Vs. fiscal year ending March 31, 2020 (%)
Revenue from operations 56.0 45.3 (19.2) 45.7 +0.9 47.1 +3.1 +4.0
Operating income 17.6 13.5 (23.4) 14.5 +7.4 15.4 +6.2 +14.1
Ordinary income 11.7 8.8 (25.4) 9.8 +11.4 10.4 +6.1 +18.2
Net income* 11.9
(Assumptions) 1. JPY interest rates : flat over 3 years 2. USD interest rates: flat over 3 years 3. FX: flat at ¥110/$ over 3 years
* As real estate market conditions have a large impact on property sales prices, at present extraordinary income (loss) is difficult to forecast, and numerical targets for net income have not been set
Aiming toward Growth and Advancement globally, the UNIZO Group will strengthen its
Management Structure
Portfolio will be managed mainly through capital recycling, and unless there is a change in the
business environment, for the time being, no capital raising via new-share issuance by public
offering and assets to be acquired within extent of cash inflows from investing activities
Vision & Numerical Targets
Basic Policy
Fourth Medium-Term Management Plan
STRONGER FOOTHOLD 2021Strengthening the Management Structure
Fiscal Years Ending March 31, 2020 – March 31, 2022
10 Annual Report 2019
3
4
Real Estate BusinessRevenue and income expected to decline over 20% on one-time basis in fiscal year ending March 31, 2020 due to effects of property sales;
expect revenue and income to grow from fiscal year ending March 31, 2021 onward
Japan
Thoroughly implement efficiency improvements to lower
expenditures
Strengthen income base
Overseas
Thoroughly implement efficiency improvements to lower
expenditures
Strengthen leasing
Improve property management abilities
(Billions of yen)
Fiscal year ended
March 31, 2019 Results
Fiscal year endingMarch 31, 2020 Target
Fiscal year endingMarch 31, 2021 Target
Fiscal year endingMarch 31, 2022 Target
Change (%) Change (%) Change (%)Vs. fiscal year ending March 31, 2020 (%)
Revenue from operations 43.3 33.5 (22.7) 33.4 (0.3) 34.1 +2.1 +1.8
Operating income 16.4 12.6 (23.2) 12.6 0.0 12.8 +1.6 +1.6
Note: Figures for segment revenue from operations and operating income are before intersegment eliminations and adjustments
Hotel BusinessRevenue and income expected to decline about 10% on one-time basis in fiscal year ending March 31, 2020 due to effects of
property sales; expect to achieve over 70% increase in income over 2 years from fiscal year ending March 31, 2021
Thoroughly implement efficiency improvements to lower
expenditures
Improve profitability through introduction of new Hotel
Membership Program
Improve profitability for each hotel according to its indi-
vidual characteristics
Manage hotels under management contract appropriately
Publicize three-brand strategy
Develop staff
Ensure smooth openings for new hotel locations
(Billions of yen)
Fiscal year ended
March 31, 2019 Results
Fiscal year endingMarch 31, 2020 Target
Fiscal year endingMarch 31, 2021 Target
Fiscal year endingMarch 31, 2022 Target
Change (%) Change (%) Change (%)Vs. fiscal year ending March 31, 2020 (%)
Revenue from operations 12.9 12.0 (7.5) 12.5 +4.2 13.2 +5.6 +10.0
Operating income 1.9 1.7 (14.2) 2.5 +47.1 3.0 +20.0 +76.5
Note: Figures for segment revenue from operations and operating income are before intersegment eliminations and adjustments
NOI yield* +1.0% improvement or greater (fiscal year ended March 31, 2019: 4.7%)Improve yield on asset portfolio via capital recycling
Improve income via higher revenue and cost efficiency improvements
* NOI yield = Operating income before depreciation and amortization ÷ Weighted average book value for commercial real estate (calculation basis: rental office buildings and other properties for lease, self-operated hotels, and other assets)
Maintain equity ratio above 20% (fiscal year ended March 31, 2019: 16.3%)Maintain equity ratio stably above 20%
• Improve portfolio to steadily build more income (including extraordinary income [loss] booked due to
property sales), which will strengthen financial base and raise equity ratio stably above 20%
Annual Report 2019 11
Real Estate BusinessThe Real Estate Business is the UNIZO Group’s first pillar, accounting for 77% and 89% of
revenue from operations and operating income, respectively. In Japan and overseas, the Group
will thoroughly implement efficiency improvements to lower expenditures and strengthen the
income base through existing tenant sales and new tenant sales. In Japan, the Business will work
together with UNIZO Hotel for general sales, and overseas the Business will strengthen leasing
and improve property management abilities.
77.0%
Share of revenue from operations
Rentable area of UNIZO properties
(Thousand m2)
513
232
280
0
200
400
600
800
17.3 18.316.315.314.313.3 19.4
Average vacancy rate of all UNIZO properties
(%)
5.1
0
2
4
6
8
17.3 18.316.315.314.313.3 19.3
Japan US
* In the fiscal year ended March 31, 2018, the UNIZO Group changed revenue recognition standards. Figures for the fiscal year ended March 31, 2017, and for earlier fiscal years, have been retrospectively adjusted and reflect the change in standards.
0
5,000
10,000
15,000
20,00016,405
17.3 18.316.315.3 19.3
Operating income*
(Millions of yen)
Revenue from operations*
(Millions of yen)
0
15,000
30,000
45,000 43,363
17.3 18.316.315.3 19.3
Review of Operations
Overview of Market Conditions
In the office building market of Japan, the market appears to
be gradually nearing the peak as vacancy rates in Tokyo’s five
central wards have fallen to below the 2% level, and the upward
trend in rents in some areas, including central Tokyo, contin-
ues. In the office building market in the United States, the
market appears to have mostly peaked as vacancy rates con-
tinue to fall in leading cities while rents, however, are flat in
some cities.
Overview of the Fiscal Year Ended March 31, 2019
In the Real Estate Business, in Japan and overseas, even
though properties acquired in the fiscal years ended March 31,
2018 and March 31, 2019 made contributions and intensive
efforts were made in leasing vacant space and increasing rent,
due to property sales as part of capital recycling efforts,
revenue from operations increased 2.1% to ¥43,363 million
from ¥42,458 million in the previous fiscal year, and operating
income decreased 1.0% to ¥16,405 million from ¥16,565 million
in the previous fiscal year, an increase in revenue and decrease
in income.
Strategies and Outlook for the Fiscal Year Ending March 31, 2020
In the Real Estate Business, in Japan and overseas, the
Group will thoroughly implement efficiency improvements
to lower expenditures and strengthen the income base
through existing tenant sales and new tenant sales. In Japan,
the Business will work together with UNIZO Hotel for gen-
eral sales, and overseas the Business will strengthen leasing
and improve property management abilities.
12 Annual Report 2019
*1 The names of properties above are as of April 30, 2019*2 Rentable area is rounded down to the nearest whole number.
Company-Owned Properties (as of April 30, 2019)
Name*1 LocationRentable
Area (m2)*2
Rentable Area
(sqft)*2
Date of Completion
1 UNIZO Yaesu Building Chuo Ward, Tokyo 22,692 244,254 Oct. 1967
2 UNIZO Yaesu 2-Chome Building Chuo Ward, Tokyo 2,421 26,063 Dec. 1993
3 UNIZO Edobashi Building Chuo Ward, Tokyo 5,695 61,308 Dec. 1986
4 UNIZO Kodemmacho Building Chuo Ward, Tokyo 3,707 39,907 Apr. 1983
5 UNIZO Suitengu Building Chuo Ward, Tokyo 3,374 36,327 Oct. 1992
6 UNIZO Horidome 2-Chome Building
Chuo Ward, Tokyo 9,977 107,395 Nov. 1966
7 UNIZO Kakigaracho 1-Chome Building
Chuo Ward, Tokyo 1,619 17,433 Aug. 1991
8 UNIZO Nihonbashihoncho 1-Chome Building
Chuo Ward, Tokyo 1,562 16,818 Feb. 1999
9 UNIZO Nihonbashi Tomizawacho Building
Chuo Ward, Tokyo 2,303 24,792 Apr. 1988
10 UNIZO Nihonbashihoncho 3-Chome Building
Chuo Ward, Tokyo 3,262 35,118 Feb. 1974
11 UNIZO Hatchobori Building Chuo Ward, Tokyo 4,819 51,881 Mar. 1993
12 UNIZO Kakigaracho Kitajima Building
Chuo Ward, Tokyo 1,837 19,781 Nov. 1992
13 UNIZO Ningyocho 3-Chome Building
Chuo Ward, Tokyo 1,933 20,815 Apr. 1989
14 UNIZO Nihonbashi Tomizawacho Yowa Building
Chuo Ward, Tokyo 1,490 16,044 Mar. 1986
15 UNIZO Ningyocho Forest Building
Chuo Ward, Tokyo 2,395 25,787 Jan. 1989
16 UNIZO Nihonbashi Hisamatsucho Building
Chuo Ward, Tokyo 1,668 17,954 June 1988
17 UNIZO Ningyocho First Building Chuo Ward, Tokyo 3,586 38,602 May 1993
18 UNIZO Higashinihonbashi Building
Chuo Ward, Tokyo 2,631 28,321 Apr. 1991
19 UNIZO Horidomecho 1-Chome Building
Chuo Ward, Tokyo 1,676 18,041 Feb. 1988
20 Daisan Sakurabashi Building Chuo Ward, Tokyo 8,855 95,316 Sept. 1992
21 UNIZO Higashinihonbashi 1-Chome Building
Chuo Ward, Tokyo 2,175 23,413 Sept. 1987
22 UNIZO Shinkawa Eitaidori Building
Chuo Ward, Tokyo 4,031 43,397 Sept. 1987
23 UNIZO Iwamotocho 2-Chome Building
Chiyoda Ward, Tokyo 1,935 20,834 Sept. 1991
24 Resona Kudan Building Chiyoda Ward, Tokyo 3,202 34,467 Aug. 1984
25 UNIZO Iwamotocho 3-Chome Building
Chiyoda Ward, Tokyo 4,037 43,455 Apr. 1983
26 UNIZO Ochanomizu Building Chiyoda Ward, Tokyo 1,878 20,216 Sept. 1988
27 UNIZO Iwamotocho Building Chiyoda Ward, Tokyo 2,877 30,972 Oct. 1986
28 Kojimachi-odori Building Chiyoda Ward, Tokyo 15,015 161,624 Jan. 2012
29 UNIZO Higashikanda 1-Chome Building
Chiyoda Ward, Tokyo 5,474 58,928 Jan. 1994
30 UNIZO Kandaogawamachi 3-Chome Building
Chiyoda Ward, Tokyo 2,023 21,781 Jan. 2010
31 UNIZO Kudankita 1-Chome Building
Chiyoda Ward, Tokyo 1,748 18,816 Feb. 1993
32 UNIZO Kandanishi Fukudacho Building
Chiyoda Ward, Tokyo 1,698 18,279 Feb. 1996
33 UNIZO Iwamotocho Sakae Building
Chiyoda Ward, Tokyo 577 6,220 Aug. 1992
34 UNIZO Suidobashi Building Chiyoda Ward, Tokyo 1,958 21,084 Aug. 1992
35 UNIZO Kandakajicho 3-Chome Building
Chiyoda Ward, Tokyo 2,162 23,279 Feb. 1991
36 UNIZO Uchikanda 1-Chome Building
Chiyoda Ward, Tokyo 1,237 13,315 Feb. 2008
37 UNIZO Iwamotocho 3-Chome Building South Annex
Chiyoda Ward, Tokyo 1,556 16,751 July 1987
38 UNIZO Higashikanda 3-Chome Building
Chiyoda Ward, Tokyo 1,389 14,957 Oct. 1988
Name*1 LocationRentable
Area (m2)*2
Rentable Area
(sqft)*2
Date of Completion
39 UNIZO Kandasudacho 2-Chome Building
Chiyoda Ward, Tokyo 1,154 12,422 Mar. 1993
40 UNIZO Iwamoto-cho 1-Chome Building
Chiyoda Ward, Tokyo 1,728 18,608 Apr. 1983
41 UNIZO Shibadaimon 2-Chome Building
Minato Ward, Tokyo 4,844 52,148 Apr. 1987
42 Resona Shimbashi Building Minato Ward, Tokyo 2,850 30,680 Sept. 1978
43 UNIZO Shiba 4-Chome Building Minato Ward, Tokyo 4,635 49,895 July 1990
44 UNIZO Nishishimbashi 3-Chome Building
Minato Ward, Tokyo 2,696 29,023 Feb. 1986
45 UNIZO Hamamatsucho 1-Chome Building
Minato Ward, Tokyo 857 9,229 July 1986
46 UNIZO Oi 4-Chome Building Shinagawa Ward, Tokyo
1,940 20,882 May 1993
47 UNIZO Takadanobaba Kanzan Building
Shinjuku Ward, Tokyo 3,177 34,205 July 1993
48 UNIZO Takadanobaba 4-Chome Building
Shinjuku Ward, Tokyo 3,026 32,572 Mar. 1988
49 UNIZO Kagurazaka Building Shinjuku Ward, Tokyo 2,366 25,468 Mar. 1992
50 UNIZO Takadanobaba Building Shinjuku Ward, Tokyo 1,144 12,318 Oct. 1991
51 UNIZO ebisu422 Shibuya Ward, Tokyo 1,217 13,109 Mar. 1993
52 Yanase Shibuya Building Shibuya Ward, Tokyo 4,223 45,458 Oct. 1988
53 UNIZO Hatsudai Building Shibuya Ward, Tokyo 1,343 14,465 Feb. 1992
54 UNIZO Hongo 4-Chome Building Bunkyo Ward, Tokyo 2,723 29,310 Oct. 1987
55 UNIZO Koishikawa Building Bunkyo Ward, Tokyo 2,162 23,278 Oct. 1991
56 UNIZO Koishikawa Urban Building
Bunkyo Ward, Tokyo 2,410 25,942 July 1987
57 UNIZO Hongo 1-Chome Building Bunkyo Ward, Tokyo 4,467 48,092 Dec. 1987
58 UNIZO Hongo 2-Chome Building Bunkyo Ward, Tokyo 1,091 11,753 Feb. 1991
59 UNIZO Myogadani Building Bunkyo Ward, Tokyo 7,460 80,303 July 1972/Feb. 1979
60 Ueno Suzunoya Honten Building Taito Ward, Tokyo 6,800 73,197 Mar. 1990
61 UNIZO Ueno 1-Chome Building Taito Ward, Tokyo 2,417 26,018 Aug. 1981
62 UNIZO Suehirocho Building Taito Ward, Tokyo 2,509 27,013 Mar. 1984
63 UNIZO Asakusabashi 4-Chome Building
Taito Ward, Tokyo 2,478 26,673 Sept. 1986
64 UNIZO Kitaueno 2-Chome Building
Taito Ward, Tokyo 3,551 38,229 May 1992
65 UNIZO Nakaokachimachi Building
Taito Ward, Tokyo 1,189 12,799 Dec. 1988
66 UNIZO Kamata 5-Chome Building
Ota Ward, Tokyo 6,642 71,504 May 2010
67 UNIZO Tachikawa Building Tachikawa City, Tokyo 4,879 52,524 Dec. 1992
68 UNIZO Wako Building Wako, Saitama Pref. 2,113 22,745 Oct. 1995
69 40 West 25th Street Manhattan, New York City, USA
12,655 136,226 1913
70 24-28 West 25th Street Manhattan, New York City, USA
12,371 133,170 1911
71 685 Third Avenue Manhattan, New York City, USA
60,478 650,988 1960/1975
72 1201 Connecticut Avenue Washington D.C., USA 17,435 187,678 1940
73 820 First Street Washington D.C., USA 27,103 291,741 1990
74 1100 First Street Washington D.C., USA 32,420 348,967 2009
75 1030 15th Street Washington D.C., USA 30,783 331,348 1964/2008
76 425 Third Street Washington D.C., USA 21,992 236,727 2007
77 1325 G Street Washington D.C., USA 28,351 305,173 1969
78 1341 G Street Washington D.C., USA 12,110 130,352 1903
79 1111 19th Street Washington D.C., USA 25,119 270,381 1979
Annual Report 2019 13
0
10
20
30
40
0
2,000
4,000
6,000
8,000
8
24
327,884
5,422
17.3 18.316.315.313.3 14.3 19.4
Number of UNIZO hotels and rooms
(Rooms) (Hotels)
Rooms in operation (left scale) Rooms including those in planning and development stage (left scale) Hotels in operation (right scale) Hotels in planning and development stage (right scale)
* In the fiscal year ended March 31, 2018, the UNIZO Group changed revenue recognition standards. Figures for the fiscal year ended March 31, 2017, and for earlier fiscal years, have been retrospectively adjusted and reflect the change in standards.
0
500
1,000
1,500
2,000
2,5001,981
17.3 18.316.315.3 19.3
Operating income*
(Millions of yen)
0
4,000
8,000
12,000
16,00012,974
17.3 18.316.315.3 19.3
Revenue from operations*
(Millions of yen)
23.0%
Hotel BusinessThe Hotel Business is the Group’s second pillar, accounting for 23% and 11% of revenue from
operations and operating income, respectively. The Group will thoroughly implement efficiency
improvements to lower expenditures. Through the introduction of the new Hotel Membership
Program (launched February 1, 2019) and policies for each hotel according to its individual
characteristics, the Business will improve profitability. Furthermore, the Business will thoroughly
develop and publicize the three hotel brands—HOTEL UNIZO, UNIZO INN, and UNIZO INN Express—
and offer superior service and the convenience of outstanding locations to a global customer base.
To do so, the Business will make intensive efforts in ensuring smooth openings for new hotel locations,
managing hotels under management contract appropriately, and developing staff.
Overview of Market Conditions
In the hotel sector in Japan, the pace of growth in number of
hotel guests from abroad has somewhat slowed, and Japanese
guest numbers are on a downward trend. However, new or
expanded hotel capacity continues to come on line at a
high level.
Overview of the Fiscal Year Ended March 31, 2019
In the Hotel Business, even though occupancy rates and
revenue per room at existing hotels weakened slightly, hotels
opened in the fiscal years ended March 31, 2018 and March 31,
2019 made contributions to revenue; revenue from operations
increased 27.0% to ¥12,974 million from ¥10,219 million in the
previous fiscal year. Also, even though preparation costs for
new hotel openings were incurred and hotels opened in the
fiscal year ended March 31, 2019 were not yet profitable, hotels
opened in the fiscal year ended March 31, 2018 made full-year
contributions; operating income increased 8.4% to ¥1,981
million from ¥1,828 million in the previous fiscal year.
Strategies and Outlook for the Fiscal Year Ending March 31, 2020
In the Hotel Business, the Group will thoroughly implement
efficiency improvements to lower expenditures. Through the
introduction of the new Hotel Membership Program (launched
February 1, 2019) and policies for each hotel according to its
individual characteristics, the Business will improve profit-
ability. Furthermore, the Business will thoroughly develop and
publicize the three hotel brands—HOTEL UNIZO, UNIZO INN,
and UNIZO INN Express—and offer superior service and the
convenience of outstanding locations to a global customer base.
To do so, the Business will make intensive efforts in ensuring
smooth openings for new hotel locations, managing hotels
under management contract appropriately, and developing staff.
Review of Operations
Share of revenue from operations
14 Annual Report 2019
Nationwide expansion in outstanding locations in the central areas of major cities and regional hub cities(as of April 30, 2019)
UNIZO Group’s Hotels (as of April 30, 2019)
: Planned hotels*1 Opening period and number of rooms subject to change*2 Provisional name*3 ON/OP: Own and operate; OP: Operate*4 No longer operated by UNIZO Group as of check-out on June 25, 2019*5 No longer operated by UNIZO Group as of check-out on June 1, 2019
Brand Name Location Opened Rooms Type*3
1 HOTEL UNIZO Ginza-itchome Chuo Ward, Tokyo Jan. 2015 305 ON/OP
2 HOTEL UNIZO Ginza-nanachome Chuo Ward, Tokyo June 2016 224 ON/OP
3 HOTEL UNIZO Shimbashi Minato Ward, Tokyo Oct. 1978 233 ON/OP
4 HOTEL UNIZO Shibuya Shibuya Ward, Tokyo May 2010 186 ON/OP
5 HOTEL UNIZO Yokohamaeki-West Nishi Ward, Yokohama Nov. 2018 156 ON/OP
6 HOTEL UNIZO Kyoto Shijo Karasuma Shimogyo Ward, Kyoto Oct. 2014 281 ON/OP
7 HOTEL UNIZO Osaka Umeda Kita Ward, Osaka Apr. 2018 220 ON/OP
8 HOTEL UNIZO Osaka Yodoyabashi Chuo Ward, Osaka Apr. 2009 333 ON/OP
9 HOTEL UNIZO Osaka Shinsaibashi Chuo Ward, Osaka Jan. 2018 186 ON/OP
10 HOTEL UNIZO Fukuoka Tenjin Chuo Ward, Fukuoka Oct. 2007 159 ON/OP
11 HOTEL UNIZO Hakataeki Hakataguchi Hakata Ward, Fukuoka Sept. 2018 217 ON/OP
12 HOTEL UNIZO Nagoya Ekimae Nakamura Ward, Nagoya June 2019*1 210*1 ON/OP
13 HOTEL UNIZO Kyoto Karasuma Oike*2 Nakagyo Ward, Kyoto Winter 2020-2021*1 317*1 ON/OP
Brand Name Location Opened Rooms Type*3
1 UNIZO INN Sapporo Chuo Ward, Sapporo Jan. 2016 224 ON/OP
2 UNIZO INN Sendai*4 Aoba Ward, Sendai Dec. 1973 250 OP
3 UNIZO INN Asakusa Taito Ward, Tokyo July 1992 121 ON/OP
4 UNIZO INN Kandaeki-West Chiyoda Ward, Tokyo Aug. 2017 219 ON/OP
5 UNIZO INN Hatchobori Chuo Ward, Tokyo July 2003 148 ON/OP
6 UNIZO INN Kanazawa Hyakumangoku Dori Oyamamachi, Kanazawa Nov. 2017 220 ON/OP
7 UNIZO INN Nagoya Sakae Naka Ward, Nagoya May 2014 252 ON/OP
8 UNIZO INN Kyoto Kawaramachi Shijo Nakagyo Ward, Kyoto July 2017 242 ON/OP
9 UNIZO INN Shin-Osaka Yodogawa Ward, Osaka Mar. 2018 225 ON/OP
10 UNIZO INN Kobe Sannomiya Chuo Ward, Kobe Jan. 2018 199 ON/OP
11 UNIZO INN Hiroshima*5 Naka Ward, Hiroshima Sept. 1985 171 ON/OP
12 UNIZO INN Osaka Kitahama Chuo Ward, Osaka July 2019*1 291*1 ON/OP
13 UNIZO INN Hiroshima Ekimae*2 Minami Ward, Hiroshima Spring 2020*1 250*1 ON/OP
Brand Name Location Opened Rooms Type*3
1 UNIZO INN Express Morioka Moriokaeki-Nishi Dori, Morioka Apr. 2018 259 ON/OP
2 UNIZO INN Express Kanazawa Ekimae Horikawa Shinmachi, Kanazawa Apr. 2019 392 ON/OP
3 UNIZO INN Express Kagoshima Tenmonkan Higashi Sengokucho, Kagoshima June 2019*1 295*1 ON/OP
4 UNIZO INN Express Hakodate Ekimae Wakamatsucho, Hakodate Winter 2019-2020*1 277*1 ON/OP
5 UNIZO INN Express Utsunomiya*2 Shukugo,Utsunomiya Autumn 2020*1 319*1 ON/OP
6 UNIZO INN Express Osaka Minami Honmachi*2 Chuo Ward, Osaka Spring 2021*1 503*1 ON/OP
*4
*5
Annual Report 2019 15
UNIZO Holdings Company, Limited
Basic StanceThe UNIZO Group is committed to establishing and developing a corporate governance structure and system that garners the trust
of society. Every effort is channeled toward improving the soundness, transparency, and efficiency of management to secure the
confidence of all stakeholders and to enhance corporate value on a sustainable basis.
Overview of Corporate Governance Structure and SystemFor its corporate governance system, the Company has put
in place an Audit & Supervisory Board, appointed five
outside Directors (Independent Officers) and appointed
three outside Audit & Supervisory Board members
(Independent Officers) that have a high level of indepen-
dence. Through mutual collaboration among the Audit &
Supervisory Board, the internal auditing division, and the
accounting auditor, every effort is being made to establish
a framework that is capable of reinforcing the supervisory
function over management. The Company has also put in
place a Nomination Committee and a Compensation
Committee as discretionary advisory bodies to the Board
of Directors.
Board of DirectorsThe Board of Directors comprises fourteen members (includ-
ing five outside directors). Based on its governing rules and
regulations, the Board of Directors meets once a month in
principle. The Board serves as the decision-making body for
important matters relating to the execution of the Company’s
business activities and supervises the status of business exe-
cution by directors.
Audit & Supervisory Board and Board MembersThe Audit & Supervisory Board comprises five members
(including three outside members). Based on its governing rules
and regulations, the Audit & Supervisory Board meets once
a month in principle. As part of their mainstay activities,
Audit & Supervisory Board members attend meetings of the
Board of Directors14 Directors
(incl. 5 outside Directors)
President & CEO
Nomination Committee (discretionary)
Compensation Committee (discretionary)
Divisions / departments
Management Committee
Executive Officers24 Executive Officers
(execution of operations)
Legal counsel
Audit & Supervisory Board5 Members
(incl. 3 outside Members)
Business Audit Department(internal auditing division)
Accounting auditor(auditing firm)
General Meeting of Shareholders
Group Companies
• Management guidance• Oversight
• Prior consultation• After-the-fact reporting• Various consultations
Appointment
Advisory
Advisory
Audit
Audit report
Internal audits
Internal audits
Direction
Oversight Coordination Coordination
Appointment Appointment
Basic Policy
1 Respect the rights of shareholders and secure equality for all shareholders.
2 Work in appropriate cooperation with stakeholders, including shareholders, in consideration of their gain.
3 Secure transparency by the appropriate disclosure of company information.
4 Properly execute the roles and responsibilities of the Board of Directors and the Audit & Supervisory Board.
5 Maintain a constructive dialogue with shareholders.
Advisory
Coordination
Consultations
Accounting audits
Corporate Governance
16 Annual Report 2019
Board of Directors and put forward their opinions;
exchange opinions with the President & CEO; monitor the
business execution process; peruse important documents,
including internal memos and requests for approval; conduct
site visits of subsid iary companies; and supervise the indepen-
dence of the accounting auditor and audit important mate-
rials, including financial reports, business reports, and
records of key transactions.
Furthermore, the Audit & Supervisory Board members
constantly exchange information with the Business Audit
Department and the accounting auditor and maintain
close mutual coordination with them including receiving
regular audit reports from them.
Executive OfficersThrough an executive officer system, the Company is
working to strengthen its governance system via separa-
tion of management decision-making and supervisory
functions from the execution of business activities while at
the same time clarifying the authority and responsibilities
of executive officers. Executive officers are charged with
executing business in their respective areas in accordance
with the policies and other stipulations determined by the
Board of Directors.
Management CommitteeThe Management Committee has been established as a con-
sultative entity to support the President. The Management
Committee is made up of executive officers, including the
Chairman of the Board and the President, and in principle
meets once a week to deliberate on important matters relating
to the execution of business activities. Reports on operations
and other matters of importance are also presented during
committee meetings.
Internal Auditing DivisionThe Company has put in place internal audit operating
guidelines and established the Business Audit Department
as an entity in charge of internal audits. Within this frame-
work, internal audits are conducted for the Company and
the Group as a whole.
The Business Audit Department undertakes internal
audits in accordance with business audit plans it formu-
lates for each fiscal year. In addition to reporting the
results of each internal audit directly to the President, the
Business Audit Department reports to the Audit &
Supervisory Board and each audited department through
business audit reports. In the event that a business audit
report identifies the need for improvement measures to be
taken, the President issues the necessary instructions to
the related audited department in order to further
upgrade and enhance the internal control system.
Moreover, the Business Audit Department maintains
close coordination with the Audit & Supervisory Board and
the accounting auditor by constantly exchanging informa-
tion with them in order to conduct efficient audits.
Accounting AuditorThe Company has an audit agreement with Ernst & Young
ShinNihon LLC for its accounting audit. In accordance
with annual audit schedules, Ernst & Young ShinNihon
LLC conducts accounting audits pursuant to the provi-
sions stipulated under Japan’s Companies Act and
Financial Instruments and Exchange Act.
Compliance Structure and SystemThe UNIZO Group recognizes the importance of exhibiting
the highest corporate ethics grounded in adhering to stat-
utory and regulatory requirements. With this in mind, the
Group works diligently to bolster its compliance system.
As a part of these endeavors, the UNIZO Group established
the UNIZO Group Individual Code of Conduct to ensure
that directors, officers, and employees observe all statu-
tory and regulatory requirements as well as social norms.
Furthermore, the Group has put in place a set of compli-
ance guidelines as well as related rules and regulations in
order to establish a framework that is capable of ensuring
compliance.
In addition, an executive officer has been appointed to
assume overall responsibility for ensuring compliance
with the aim of further enhancing the efficacy of the
Group’s compliance initiatives. At the same time, the
Compliance Department has been established as a special-
ized department. Complementing this endeavor, the
Business Audit Department, which serves as the Group’s
internal auditing division, conducts audits on the status of
compliance. Through these and other measures, every
effort is made to ensure thorough compliance.
Risk Management Structure and SystemThe Company has put in place a set of internal rules and
regulations in order to address a wide variety of business risks.
For example, the Company has established a personal infor-
mation protection policy and formulated a set of personal
information protection rules and regulations to address the
requirements of Japan’s Personal Information Protection Law.
As a part of efforts to further bolster its business risk manage-
ment structure and system, the Company has also put in place
self-assessment operating guidelines as well as rules and
regulations governing the handling of accidents and claims,
the preparation of external documents, and the operation
and management of computer systems. In this manner, the
Company is taking every step to put in place and fortify a
risk management structure and system.
Annual Report 2019 17
The UNIZO Group’s Approach to CSRBased on its corporate philosophy, the UNIZO Group aims
to be a corporate group that continues to contribute to
society and all stakeholders through the Real Estate
Business and Hotel Business.
StakeholdersThe UNIZO Group will conduct an ongoing dialogue with
its stakeholders, including shareholders and other inves-
tors, customers, local communities, and employees.
CSR Initiatives
Shareholders and Investors The Group holds business results presentations aimed at
institutional investors and analysts to promote construc-
tive dialogue with all shareholders and investors. For indi-
vidual investors, the Group holds investor presentation
meetings.
CustomersProviding High-Quality, Comfortable Spaces
In the Real Estate Business, the Group will continue
investing in central Tokyo, and overseas expand in the
United States with New York and Washington D.C. as bases.
In doing so the Group will offer high-quality spaces that
meet the diverse needs of clients.
Developing affordable urban hotels that meet the ever
widening diverse needs of global customers
The Group will thoroughly disseminate the three hotel
brands—HOTEL UNIZO, UNIZO INN, and UNIZO INN
Express—and offer superior service and the convenience
of outstanding locations to a global customer base.
Instructing a sense of Japanese hospitality in staff and
transfusing that sense to each hotel
The Group is implementing a training program that emphasizes
hospitality, and is strengthening language training.
Placing AEDs in all hotels
In order for guests to use our hotels with a sense of ease,
the Group is putting in place systems to handle unforeseen
circumstances.
Local CommunitiesThe UNIZO Group contributes to communities where it
engages in business by offering space and facilities for
shelter during disasters to those affected.
Natural EnvironmentThe Group manages its real estate and hotel businesses
while safeguarding the natural environment.
Climate Change Initiatives
At some of the Group’s office buildings and hotels, efforts
are being made to combat climate change, including
adopting LED lighting and introducing heating and cooling
equipment to control the thermal environment in order to
reduce energy usage, and installing rooftop green spaces.
Controlling Waste
At the Group’s hotels, with permission from guests staying
multiple nights, linens and certain amenities are not
changed during room cleaning.
Saving Water
At the Group’s office buildings and hotels, water-saving
fixtures, such as automatic faucets and water-saving
shower heads, are being introduced.
Strengthening the UNIZO Group Management StructureManagement Structure
From a perspective of improving management soundness,
transparency, and efficiency to gain trust from all stake-
holders and continuously raise corporate value, the Group
is working to strengthen and build corporate governance.
In doing so it aims to be a corporate group trusted by
society.
EmployeesDeveloping new graduates
For main career-path employees, the Group offers three
career-path courses—the open course, construction
course, and hotel management and administrative
course—to give a boost to career paths that individuals
desire. The Group runs an on-the-job training program,
matching the characteristics of each course, to support the
development of the employees that will carry the UNIZO
Group in the future.
Also, the Group provides a system to cover the cost of
improving skills and gaining qualifications necessary for the job.
Support system for child and family care
The Group has a system for child and family care leave.
The system enables employees to take leave or work short-
ened hours as needed in step with life changes.
Appointing diverse employees
The Group aims to create a workplace that respects racial and
gender diversity and maximize performance among individuals.
Corporate Philosophy
The UNIZO Group strives to be a company that
1 Creates value and richness together with all stakeholders
2 Earns the trust and meets expectations of customers, and continues to be a chosen partner
3 Contributes to society and the environment
CSR Activities
Shareholders and other investors
Customers
Local communities
Employees
Conduct business management in a manner that meets expectations and disclose information appropriately
Provide high-quality, comfortable spaces and high-quality services
Contribute to society and to preserva-tion of the global environment
Create employee-friendly workplaces and develop personnel
18 Annual Report 2019
Directors and Audit & Supervisory Board Members
Executive Officers
Chairman and Director
Takao Suzuki
President and Director (Representative Director)
Tetsuji Kosaki
Senior Managing Director
Masato Yamamoto
Senior Managing Director
Yoshinori Yukimoto
Managing Director
Hitoshi Sato
Managing Director
Hiroshi Takimoto
Managing Director
Noriko Kosugi
Director
Yoshio Yamada
Chief Executive Officer
Tetsuji KosakiOverall management of corporate operations
Senior Managing Executive Officer
Masato YamamotoCorporate Planning Division; International Business Development Division; General Manager of Corporate Planning Department and Research Department
Senior Managing Executive Officer
Yoshinori YukimotoHuman Resources Division; Credit Risk Management Division; Business Audit Department; Compliance Department; Administration Department; Information System Department
Managing Executive Officer
Hitoshi SatoFacility Management Division
Managing Executive Officer
Hiroshi TakimotoDomestic Business Development Division;International Business Development Division (deputy); General Manager of Domestic Business Development Department
Managing Executive Officer
Noriko KosugiFinancial Planning Division
Managing Executive Officer
Hideaki KobayashiSpecial Assignment
Managing Executive Officer
Masafumi ShinagawaInternational Finance Division; General Manager of International Finance Department
Director
Takeshi Okabe
Outside Director
Motoaki Kitayama*Attorney
Outside Director
Toshiro Yonemura*Outside Director, Seven & i Holdings Co., Ltd.
Outside Director
Masashi Otake*President, Otake Global Capital LLC
Outside Director
Masato Miki*Representative Director and President,Broadway Capital Management Co., Ltd.
Outside Director
Kenji Hasegawa*
Managing Executive Officer
Satoshi KomuraFinance Division
Managing Executive Officer
Tetsuya TakagiCorporate Planning Division (deputy)
Managing Executive Officer
Yayoi ItoCorporate Planning Division (deputy); Financial Planning Division (deputy)
Executive Officer
Yoshio YamadaArchitecture and Construction Planning Division; Facility Management Division (deputy); General Manager of Architecture and Construction Planning Department
Executive Officer
Takeshi OkabeGeneral Manager of Executive Secretariat
Executive Officer
Shigeo YasunoGeneral Manager of Human Resources Planning Department
Executive Officer
Shigeru SasakiHead of Accounting Unit
Executive Officer
Michiaki KonoInternational Business Development Division (deputy);General Manager of International Business Development Department
Standing Audit & Supervisory Board Member
Mitsugi Izumiyama
Standing Audit & Supervisory Board Member
Hiroyasu Nakamura
Outside Audit & Supervisory Board Member
Tetsuo Ito*AttorneyOutside Corporate Auditor, Takasago ThermalEngineering Co., Ltd.Outside Corporate Auditor, ASAHI KASEICORPORATIONOutside Director, Japan Petroleum ExplorationCo., Ltd.
Outside Audit & Supervisory Board Member
Atsushi Kato*Certified Public AccountantOutside Director, SUMIDA CORPORATION
Outside Audit & Supervisory Board Member
Toshio Mizushima*Certified Public AccountantOutside Director, The Joyo Bank, Ltd.
Executive Officer
Minoru KawasakiSpecial Assignment
Executive Officer
Takafumi KayanoGeneral Manager of Investor Relations Department
Executive Officer
Ichiro ShiibaFinance Division (deputy); International Finance Division (deputy); General Manager of Finance Department 1 and Finance Department 2
Executive Officer
Yoshiharu OnoGeneral Manager of Human Resources Department
Executive Officer
Shinichi TsujiGeneral Manager of Credit Risk Management Department
Executive Officer
Ko IokawaGeneral Manager of Administration Department
Executive Officer
Masaharu SakanoGeneral Manager of Information System Department
Executive Officer
Hiroko EndoPublic Relations Division; General Manager of Public Relations Department
As of June 18, 2019
* Independent officer as stipulated by the Tokyo Stock Exchange
Directors, Audit & Supervisory Board Members, and Executive Officers
Annual Report 2019 19
Revenue from operations
(Millions of yen)
Operating income / Operating margin(Millions of yen) (%)
Net income attributable to owners of the parent company / Net income per share(Millions of yen) (Yen)
Operating Results Business Environment
Looking back on macroeconomic trends during the fiscal year ended
March 31, 2019 (April 1, 2018 to March 31, 2019), even though weakness
has appeared in some export sectors, the Japanese economy contin-
ued to recover gradually. In the office building market of Japan, the
market appears to be gradually nearing the peak as vacancy rates in
Tokyo’s five central wards have fallen to below the 2% level, and the
upward trend in rents in some areas, including central Tokyo, contin-
ues. In the hotel sector in Japan, the pace of growth in number of hotel
guests from abroad has somewhat slowed, and Japanese guest num-
bers are on a downward trend. However, new or expanded hotel
capacity continues to come on line at a high level. For the Japanese
economy going forward, even though weakness has appeared in some
export sectors, the gradual economic recovery is likely to continue.
Factors that warrant attention include effects of trade friction
between China and the United States, increasing uncertainty about
the Chinese economy, progress in negotiations over the British vote to
leave the European Union, and effects of negotiations over the Trade
Agreement on Goods (TAG) between the United States and Japan.
In the United States, economic growth continued centered on
consumer spending and capital expenditure. In the office building
market in the United States, the market appears to have mostly peaked
as vacancy rates continue to fall in leading cities while rents, however,
are flat in some cities. For the US economy going forward, even if
economic growth centered on consumer spending and capital expen-
diture continues, growth may slow. Factors that warrant attention
include trends in short and long-term interest rates, effects of trade
friction between China and the United States, developments in the
United Kingdom after leaving the European Union, and the evolution of
the 2020 US Presidential election.
Revenue from Operations and Operating Income
Revenue from operations for the fiscal year ended March 31, 2019
totaled ¥56,053 million, an increase of 6.8% from ¥52,462 million in
the previous fiscal year. Operating income totaled ¥17,622 million, an
increase of 0.3% from ¥17,570 million in the previous fiscal year.
[Real Estate Business]
In Japan and overseas, even though properties acquired in the fiscal
years ended March 31, 2018 and March 31, 2019 made contributions
and intensive efforts were made in leasing vacant space and increas-
ing rent, due to property sales as part of capital recycling efforts,
revenue from operations during the fiscal year ended March 31, 2019
increased 2.1% to ¥43,363 million from ¥42,458 million in the
previous fiscal year, and operating income decreased 1.0% to ¥16,405
million from ¥16,565 million in the previous fiscal year, an increase
in revenue and decrease in income.
[Hotel Business]
Even though occupancy rates and revenue per room at existing hotels
weakened slightly, hotels opened in the fiscal years ended March 31,
2018 and March 31, 2019 made contributions to revenue; revenue
from operations during the fiscal year ended March 31, 2019 increased
27.0% to ¥12,974 million from ¥10,219 million in the previous fiscal
year. Also, even though preparation costs for new hotel openings
were incurred and hotels opened in the fiscal year ended March 31,
2019 were not yet profitable, hotels opened in the fiscal year ended
March 31, 2018 made full-year contributions; operating income
increased 8.4% to ¥1,981 million from ¥1,828 million in the previous
fiscal year. This marked an increase in revenue and income.
[Other Income (Expenses)]
Other income mainly comprised interest and dividend income of
¥1,134 million. Principal other expenses included interest expenses
of ¥7,990 million.Millions of yen
Revenue from operations 2019 2018 Increase
(decrease) (%)
Real Estate Business 43,363 42,458 2.1
Hotel Business 12,974 10,219 27.0
Subtotal 56,337 52,677
Adjustments (284) (215)
Consolidated 56,053 52,462 6.8
Operating income (left scale)
Operating margin (right scale)
Net income attributable to owners of
the parent company (left scale) Net income per share (right scale)
56,053
0
15,000
30,000
45,000
60,000
18.3 19.317.316.315.3
17,622
31.4
0
5,000
10,000
15,000
20,000
0
10
20
30
40
18.3 19.317.316.315.3
11,903
356.56
0
4,000
2,000
6,000
8,000
12,000
0
100
200
300
600
400
10,000 500
18.3 19.317.316.315.3
Management’s Discussion and AnalysisIn the fiscal year ended March 31, 2018, the UNIZO Group changed revenue recognition standards. Figures for the fiscal year ended March 31, 2017, and for earlier fiscal years, have been retrospectively adjusted and reflect the change in standards.From the fiscal year ended March 31, 2019, deferred tax assets are presented in the investments and other assets section of the balance sheet, and deferred tax liabilities are presented in the non-current liabilities section of the balance sheet. Figures for the fiscal year ended March 31, 2018 have been retrospectively adjusted.
Financial Section
20 Annual Report 2019
Depreciation and amortization
(Millions of yen)
Cash flows from operating activities / Interest coverage ratio(Millions of yen) (Times)
ROA / ROE
(%)
Millions of yen
Operating income 2019 2018 Increase (decrease) (%)
Real Estate Business 16,405 16,565 (1.0)
Hotel Business 1,981 1,828 8.4
Subtotal 18,386 18,394
Adjustments (764) (823)
Consolidated 17,622 17,570 0.3
Income Before Income Taxes and Net Income Attributable
to Owners of the Parent Company
Income before income taxes during the fiscal year ended March 31,
2019 increased 34.2% compared with the previous fiscal year to
¥16,863 million. Accounting for income taxes, which increased to
¥4,987 million from ¥4,070 million in the previous fiscal year, net
income attributable to owners of the parent company during the
fiscal year ended March 31, 2019 came to ¥11,903 million, an increase
of 40.2% compared with the previous fiscal year.
Cash Flows Net cash provided by operating activities in the fiscal year ended
March 31, 2019 amounted to ¥12,562 million, a ¥14,675 million
decrease from the previous fiscal year. Major plus factors of operat-
ing cash flow included ¥16,863 million of income before income
taxes and ¥11,714 million of depreciation and amortization, a non-
cash expense. Major minus factors of operating cash flow included
¥4,929 million in gains and losses on sales of property and equip-
ment, and intangible assets as part of capital recycling efforts, a
¥5,846 million decrease in security and guarantee deposits received
from tenants, and ¥5,425 million of income taxes paid.
Net cash provided by investing activities in the fiscal year ended
March 31, 2019 amounted to ¥105,307 million, a ¥233,191 million
increase in inflow from the previous fiscal year. Even though out-
flows of ¥19,336 million to purchase property and equipment
occurred, inflows from the sales of property and equipment as part
of capital recycling efforts totaled ¥146,002 million.
Net cash used by financing activities in the fiscal year ended
March 31, 2019 amounted to ¥67,799 million, a ¥176,116 million
increase in outflow from the previous fiscal year. While proceeds
from issuance of new shares totaled ¥11,724 million and proceeds
from long-term loans payable were ¥82,905 million, repayment of
long-term loans payable totaled ¥159,855 million.
Financial Position Assets
Total assets as of March 31, 2019 amounted to ¥693,552 million, a
decrease of ¥44,914 million from March 31, 2018. The decrease was
attributable to a ¥117,656 million decrease in property and equip-
ment, which as part of capital recycling efforts included an increase
of ¥16,847 million from new investments, and a decrease of ¥134,191
million from sales of properties. The value of the UNIZO Group's
investment and rental properties (office buildings and other properties
for lease) as of March 31, 2019 was ¥433,981 million on the consoli-
dated balance sheet and their appraised value was ¥570,429 million
as of the same date. The hotel and other assets operated by the
Group were carried on its March 31, 2019 consolidated balance sheet
at a value of ¥104,410 million and had an appraised value of ¥190,406
million as of the same date. Furthermore, the March 31, 2019 value of
the investment and rental properties (office buildings and other
properties for lease) that the Group held as of April 30, 2019 was
¥427,797 million on the consolidated balance sheet and their
appraised value was ¥562,709 million, and the March 31, 2019 value
of the hotel and other assets that the Group held as of April 30, 2019
was ¥104,410 million and had an appraised value of ¥190,406 million.
Liabilities
As of March 31, 2019, total liabilities amounted to ¥580,391 million, a
decrease of ¥71,172 million from March 31, 2018. Interest bearing
debt decreased by ¥66,646 million from March 31, 2018.
Net Assets
Net assets as of March 31, 2019 amounted to ¥113,160 million, an
increase of ¥26,257 million from March 31, 2018. The increase was
the result of a ¥5,899 million increase in capital stock and a ¥5,899
million increase in capital surplus due to a public offering completed
in May 2018, the result of a ¥9,393 million increase in retained
earnings, and other factors.
Cash flows from operating activities (left scale)
Interest coverage ratio (right scale)
ROA ROE
11,714
0
4,000
2,000
6,000
8,000
12,000
10,000
18.3 19.317.316.315.3
12,562
1.6
0
10,000
20,000
30,000
0
3.0
6.0
9.0
18.3 19.317.316.315.3
11.9
1.6
0
5
10
15
18.3 19.317.316.315.3
Annual Report 2019 21
Management Benchmarks
The operating margin decreased 2.1 percentage points from 33.5%
in the fiscal year ended March 31, 2018 to 31.4% during the fiscal
year ended March 31, 2019. ROA was 1.6%, down 0.2 percentage
points from the previous fiscal year, and ROE was 11.9%, an increase
of 1.5 percentage points.
Basic Policy on Dividends
The UNIZO Group has a basic policy of maintaining consistent and
stable cash dividend payments. The Group continuously strives to
enhance corporate and shareholder value by maintaining a balance
between stable cash dividends and robust shareholders’ equity in
consideration of the need for promoting future business development
and strengthening the business foundation, keeping a firm eye on
trends in the business environment and business results, along with
the financial condition.
The Group’s basic policy on the distribution of income is to pay
two dividends—an interim dividend and year-end dividend—per year.
Based on the above policy and the financial results for the fiscal
year ended March 31, 2019, the Group paid an interim dividend of
¥40 per share and a year-end dividend of ¥45 per share. The annual
dividend was therefore ¥85 per share. For the fiscal year ending
March 31, 2020, consistent with its basic policy and based on the
assumption that financial results will be achieved as forecast, the
Group expects to pay an annual dividend of ¥85 per share, comprising
an interim dividend of ¥40 per share and a year-end dividend of
¥45 per share.
Amounts per Share
Basic net income per share increased 13.8% compared with the previ-
ous fiscal year to ¥356.56 per share. Net assets per share increased
8.8% from the previous fiscal year-end to ¥3,306.72 per share.
Capital Investment (Acquisition of Property and Equipment)
As the business environment has made it difficult to expand assets
via new investments, the Group managed its portfolio mainly
through capital recycling.
As a result, the aggregate total of capital investment, including the
purchase of property and equipment, amounted to ¥18,812 million.
Depreciation and amortization amounted to ¥11,714 million, an
increase of ¥938 million compared with the previous fiscal year.
Business and Other Risks Trends in Economic and Real Estate Market Conditions
The UNIZO Group’s Real Estate Business (office leasing in Japan and
overseas) is susceptible to the effects of economic trends as well as
real estate market conditions. Accordingly, real estate market
trends, including an increase in vacancy rates or a decrease in rents
due to a downturn in the economy or oversupply in the market for
office buildings for lease, a deterioration in real estate prices, and
other factors have the potential to significantly impact the Group’s
financial results and position.
Similarly, the Group’s Hotel Business is susceptible to the
effects of economic trends and personal consumption behavior.
Accordingly, a decrease in demand for business travel by the cor-
porate sector and leisure travel by individuals due to an economic
slump, a decrease in visitors from abroad, a downturn in room rates
and occupancy stemming from an oversupply of rooms due to the
opening of new hotels, and other related factors have the potential
to significantly impact the Group’s financial results and position.
Changes in Statutory and Regulatory Requirements
In addition to general laws and ordinances that affect corporate
management, including the Companies Act, the UNIZO Group’s
business activities in Japan are subject to laws and ordinances
related to its businesses, and to the regulatory requirements of local
government authorities. Likewise, the Group’s overseas business
activities are also subject to statutory and regulatory national and
local requirements related to those business activities. Accordingly,
a future change in these requirements may cause new obligations to
be imposed, the cost burden to increase, and restrictions on busi-
ness and operating rights to occur. These items have the potential to
significantly impact the Group’s financial results and position.
Furthermore, any license or permit the Group has acquired to
conduct its businesses being terminated or revoked; or a change in
real estate-related tax systems that is linked to an increase in costs
associated with the acquisition, maintenance, and disposal of real
Total assets
(Millions of yen)
Total net assets / Equity ratio
(Millions of yen) (%)
Interest-bearing debt / Net D/E ratio(Millions of yen) (Times)
Total net assets (left scale)
Equity ratio (right scale)
Interest-bearing debt (left scale)
Net D/E ratio (right scale)
693,552
0
200,000
400,000
600,000
800,000
18.3 19.317.316.315.3
113,160
16.3
0
40,000
20,000
60,000
80,000
120,000
0
3
6
9
18
100,000 15
12
18.3 19.317.316.315.3
554,234
3.8
0
200,000
100,000
300,000
500,000
700,000
400,000
600,000
0
2
4
6
8
18.3 19.317.316.315.3
Financial Section
22 Annual Report 2019
estate has the potential to significantly impact the Group’s financial
results and position.
Fluctuations in Interest Rates
Even though the consolidated balance of outstanding interest bear-
ing debt decreased by ¥66,646 million during the fiscal year ended
March 31, 2019, the interest bearing debt to total assets ratio ended
the fiscal year at a high level of 79.9%. The UNIZO Group uses interest
rate swaps to hedge against interest rate rises, but an increase in
financing costs brought about by higher interest rates has the poten-
tial to significantly impact the Group’s financial results and position.
Fluctuations in Exchange Rates
The UNIZO Group’s operations are affected by exchange rate
fluctuations. If the yen appreciates, the yen-equivalent value of the
Group’s transactions denominated in foreign currencies decreases.
Additionally, a portion of the Group’s assets and liabilities are
converted to yen-equivalent values for preparation of the consoli-
dated financial statements. Accordingly, exchange rate movements
have the potential to significantly impact these assets and liabilities’
yen-equivalent values even if their values in local-currency terms
remain unchanged.
Fluctuations in Share Prices of Securities
The UNIZO Group invests in the shares of public and non-public
companies to build, maintain, and strengthen trading relationships
and to further improve stability in management. Accordingly, a
substantial and widespread decline in the prices of securities may
cause the Group to be susceptible to an impairment charge or
devaluation loss on its investment securities, which has the potential
to significantly impact the Group’s financial results and position.
Office Building Tenants and Lease Agreements
There are no guarantees that office building tenants will renew lease
agreements at the end of the lease term. In addition, many tenants
are able to cancel lease agreements during the lease term by provid-
ing advance notice. Accordingly, an increase in cancellations may
cause declines in the UNIZO Group’s rental revenue during the
period until new tenants are found, which has the potential to
significantly impact the Group’s financial results and position.
Natural and Human-Made Disasters and Other Contingencies
The UNIZO Group maintains a substantial real estate portfolio
comprising numerous properties. Accordingly, the Group imple-
ments periodic inspections and maintenance, and maintains an
appropriate level of property and casualty insurance coverage.
Despite this coverage, accidents attributable to unanticipated
events, including natural disasters such as earthquakes, tsunamis,
hurricanes, and wind and flood damage; weather incidents such as
blizzards; human-caused incidents such as accidents and fires;
other factors that can cause damage, degradation, or malfunction in
buildings and equipment; and acts of terror or war have the potential
to significantly impact the Group’s financial results and position.
Furthermore, although the Group pays a high amount of attention
to safety and health in its hotels, an outbreak of food poisoning or
other accidents have the potential to significantly impact the Group’s
financial results and position.
Credit Risk of Trading Partners
The UNIZO Group examines the credit profile of new trading part-
ners with respect to rents, accounts receivable, and other obliga-
tions to the Group, and continuously monitors the profiles of
existing trading partners. Additionally, tenant deposits and other
similar measures provide protection that is factored into the Group’s
management. Despite these efforts, a deterioration of business
results at a major tenant may cause difficulty in receiving the
obligations that tenant has to the Group, which has the potential to
significantly impact the Group’s financial results and position.
Labor-Related Issues
The UNIZO Group employs many part-time staff in its operations.
Accordingly, a change in labor regulations such as social insurance
or labor requirements may cause staff costs to rise, which has the
potential to significantly impact the Group’s financial results and
position. Furthermore, a change in labor regulations or related laws
for other employees also has the potential to significantly impact the
Group’s financial results and position.
Information Management
The UNIZO Group collects and collates wide-ranging information,
including personal information, in the normal course of its operat-
ing activities. While the maintenance and management of this
information is handled with the utmost care, any leakage of all or a
part of this information due to unauthorized external access or
inappropriate use by employees may cause a significant deteriora-
tion in the reputation and standing of the Group. This has the
potential to significantly impact the Group’s financial results and
position.
Litigation
The UNIZO Group is not involved in any currently ongoing litigation
that has the potential of a material impact on its earnings. In the
conduct of its business activities, however, the Group may become
party to lawsuits initiated for a variety of reasons by parties such as
business partners and customers. This has the potential to signifi-
cantly impact the Group’s financial results and position.
When the Group acquires or constructs real estate, including
office buildings and hotels, it makes every effort to ensure com-
pliance with all relevant statutory and regulatory requirements.
Additionally, the Group consults closely with local residents; selects
professionals highly qualified in construction; and takes steps to
address legal, environmental, and quality concerns. Despite these
efforts, an issue arising, for unforeseen reasons, may cause the
Group to be served with a claim, become subject to litigation, or
become subject to other direct action. Furthermore, the Group may
become subject to damage to its reputation and social standing, or
subject to other indirect action. This has the potential to significantly
impact the Group’s financial results and position.
Annual Report 2019 23
Millions of yenThousands of
US dollars
2019 2018 2019
Assets
Current assets
Cash and deposits (Notes 14 and 16) ¥122,006 ¥ 46,115 $1,099,252
Notes and accounts receivable - trade (Note 14) 3,983 4,158 35,886
Allowance for doubtful accounts (Note 14) (80) (43) (720)
Inventories (Note 4) 109 36 982
Other (Note 5) 4,717 2,945 42,499
Total current assets 130,737 53,212 1,177,916
Fixed assets
Property and equipment (Notes 5, 18 and 19)
Buildings and structures 178,949 217,799 1,612,298
Buildings and structures in trust 93,463 124,852 842,084
Machinery, equipment, and vehicles 409 403 3,685
Machinery, equipment, and vehicles in trust 512 533 4,613
Land 123,828 151,815 1,115,668
Golf courses 1,489 1,489 13,415
Land in trust 172,492 196,290 1,554,121
Other 10,382 10,039 93,539
581,528 703,223 5,239,463
Less accumulated depreciation (41,237) (45,275) (371,537)
Total property and equipment 540,290 657,947 4,867,916
Intangible assets (Notes 5 and 18) 8,567 10,007 77,187
Investments and other assets
Investment securities (Notes 14 and 15) 11,402 12,981 102,729
Deferred tax assets (Note 7) 129 38 1,162
Other 2,434 4,288 21,929
Allowance for doubtful accounts (8) (8) (72)
Total investments and other assets 13,957 17,300 125,750
Total fixed assets 562,815 685,254 5,070,862
Total assets ¥693,552 ¥738,467 $6,248,779
See accompanying notes to consolidated financial statements.
Consolidated Balance Sheet UNIZO Holdings Company, Limited and its consolidated subsidiariesAs of March 31, 2019 and 2018
Financial Section
24 Annual Report 2019
Millions of yenThousands of
US dollars
2019 2018 2019
Liabilities
Current liabilities
Notes and accounts payable - trade ¥ 4 ¥ 3 $ 36
S hort-term loans payable and current portion of long-term loans payable (Notes 5 and 14) 75,476 66,547 680,025
Income taxes payable 4,529 1,485 40,805
Provision for employees’ bonuses 219 197 1,973
Provision for point card certificates 61 39 549
Provision for shareholder benefits 179 270 1,612
Other 6,270 6,981 56,491
Total current liabilities 86,741 75,525 781,520
Non-current liabilities
Corporate bonds (Notes 5 and 14) 104,000 104,000 937,021
Long-term loans payable (Notes 5 and 14) 374,758 450,333 3,376,502
Deferred tax liabilities (Note 7) 2,214 3,228 19,947
P rovision for directors’ and audit & supervisory board members’ retirement benefits 372 378 3,351
Provision for environmental measures 185 185 1,666
Provision for retirement benefits (Note 6) 729 722 6,568
Security and guarantee deposits received from tenants (Note 14) 11,384 17,190 102,567
Other 5 0 45
Total non-current liabilities 493,650 576,039 4,447,697
Total liabilities 580,391 651,564 5,229,218
Net assets
Shareholders’ equity (Note 8)
Capital stock (common stock):
Authorized — 50,000,000 shares at March 31, 2019 and 2018
I ssued — 34,220,700 shares at March 31, 2019 and 28,520,700 shares at March 31, 2018 32,062 26,163 288,872
Capital surplus 31,978 26,078 288,116
Retained earnings 44,588 35,195 401,729
Treasury stock: 405 shares at March 31, 2019 and 301 shares at March 31, 2018 (1) (0) (9)
Total shareholders’ equity 108,629 87,436 978,727
Accumulated other comprehensive income (loss)
Unrealized gains (losses) on investment securities 2,746 3,538 24,740
Deferred gains (losses) on hedges 170 1,182 1,531
Foreign currency translation adjustments 1,610 (5,468) 14,505
Total accumulated other comprehensive income (loss) 4,527 (747) 40,787
Non-controlling interests 4 214 36
Total net assets 113,160 86,903 1,019,551
Total liabilities and net assets ¥693,552 ¥738,467 $6,248,779
Annual Report 2019 25
Millions of yenThousands of
US dollars
2019 2018 2019
Revenue from operations ¥ 56,053 ¥52,462 $ 505,027
Cost of revenue from operations 32,039 28,429 288,665
Gross profit 24,014 24,033 216,361
Selling, general, and administrative expenses (Note 12) 6,392 6,462 57,590
Operating income 17,622 17,570 158,771
Other income (expenses)
Interest and dividend income 1,134 929 10,217
Interest expenses (7,990) (6,692) (71,988)
Gain on derivative instruments 1,150 — 10,361
Gain on sales of investment securities (Note 15) 174 578 1,567
Gain on sales of property and equipment, and intangible assets (Note 13) 19,372 560 174,538
Loss on sales of investment securities (Note 15) — (76) —
Loss on sales of property and equipment, and intangible assets (Note 13) (14,442) — (130,119)
Loss on disposal of property and equipment, and intangible assets (Note 13) (36) — (324)
Other, net (Note 13) (121) (306) (1,090)
(758) (5,007) (6,829)
Income before income taxes 16,863 12,563 151,932
Income taxes (Note 7)
Current 5,452 4,233 49,121
Deferred (465) (163) (4,189)
4,987 4,070 44,931
Net income 11,876 8,492 107,000
Net income attributable to non-controlling interests (27) 4 (243)
Net income attributable to owners of the parent company ¥ 11,903 ¥ 8,488 $ 107,243
See accompanying notes to consolidated financial statements.
Millions of yenThousands of
US dollars
2019 2018 2019
Net income ¥11,876 ¥ 8,492 $107,000
Other comprehensive income (loss) (Note 20)
Change in unrealized gains (losses) on investment securities (791) (237) (7,126)
Change in deferred gains (losses) on hedges (1,012) 1,072 (9,117)
Foreign currency translation adjustments 7,102 (8,086) 63,987
Total other comprehensive income (loss) 5,298 (7,251) 47,734
Comprehensive income ¥17,174 ¥ 1,240 $154,734
Total comprehensive income (loss) attributable to:
Owners of the parent company ¥17,179 ¥ 1,248 $154,779
Non-controlling interests (4) (7) (36)
See accompanying notes to consolidated financial statements.
Consolidated Statement of Comprehensive IncomeUNIZO Holdings Company, Limited and its consolidated subsidiariesFiscal years ended March 31, 2019 and 2018
Consolidated Statement of Income UNIZO Holdings Company, Limited and its consolidated subsidiariesFiscal years ended March 31, 2019 and 2018
Financial Section
26 Annual Report 2019
Millions of yen
Shareholders’ equity
Capital stock Capital surplus Retained earnings Treasury stockTotal shareholders’
equity
Balance as of April 1, 2017 ¥20,516 ¥20,431 ¥28,430 ¥(0) ¥ 69,378
Changes of items during the period
Issuance of common stock 5,647 5,647 — — 11,294
Dividends paid (Note 8) — — (2,091) — (2,091)
N et income attributable to owners of the parent company — — 8,488 — 8,488
Purchase of treasury stock — — — — —
E ffect of change in accounting periods of consolidated subsidiaries — — 367 — 367
N et changes of items other than shareholders’ equity — — — — —
Total changes of items during the period 5,647 5,647 6,764 — 18,058
Balance as of March 31, 2018 ¥26,163 ¥26,078 ¥35,195 ¥(0) ¥ 87,436
Changes of items during the period
Issuance of common stock 5,899 5,899 — — 11,798
Dividends paid (Note 8) — — (2,509) — (2,509)
N et income attributable to owners of the parent company — — 11,903 — 11,903
Purchase of treasury stock — — — (0) (0)
E ffect of change in accounting periods of consolidated subsidiaries — — — — —
N et changes of items other than shareholders’ equity — — — — —
Total changes of items during the period 5,899 5,899 9,393 (0) 21,192
Balance as of March 31, 2019 ¥32,062 ¥31,978 ¥44,588 ¥(1) ¥108,629
Millions of yen
Accumulated other comprehensive income (loss)
Unrealized gains (losses) on investment securities
Deferred gains (losses)
on hedges
Foreign currency translation
adjustments
Total accumulated other comprehensive
income (loss)Non-controlling
interests Total net assets
Balance as of April 1, 2017 ¥3,775 ¥ 110 ¥ 2,993 ¥ 6,880 ¥ 228 ¥ 76,486
Changes of items during the period
Issuance of common stock — — — — — 11,294
Dividends paid (Note 8) — — — — — (2,091)
N et income attributable to owners of the parent company — — — — — 8,488
Purchase of treasury stock — — — — — —
E ffect of change in accounting periods of consolidated subsidiaries — — — — — 367
N et changes of items other than shareholders’ equity (237) 1,072 (8,462) (7,628) (14) (7,642)
Total changes of items during the period (237) 1,072 (8,462) (7,628) (14) 10,416
Balance as of March 31, 2018 ¥3,538 ¥ 1,182 ¥(5,468) ¥ (747) ¥ 214 ¥ 86,903
Changes of items during the period
Issuance of common stock — — — — — 11,798
Dividends paid (Note 8) — — — — — (2,509)
N et income attributable to owners of the parent company — — — — — 11,903
Purchase of treasury stock — — — — — (0)
E ffect of change in accounting periods of consolidated subsidiaries — — — — — —
N et changes of items other than shareholders’ equity (791) (1,012) 7,079 5,275 (209) 5,065
Total changes of items during the period (791) (1,012) 7,079 5,275 (209) 26,257
Balance as of March 31, 2019 ¥2,746 ¥ 170 ¥ 1,610 ¥ 4,527 ¥ 4 ¥113,160
See accompanying notes to consolidated financial statements.
Consolidated Statement of Changes in Net AssetsUNIZO Holdings Company, Limited and its consolidated subsidiariesFiscal years ended March 31, 2019 and 2018
Annual Report 2019 27
Consolidated Statement of Changes in Net Assets (continued)UNIZO Holdings Company, Limited and its consolidated subsidiariesFiscal year ended March 31, 2019
Thousands of US dollars
Shareholders’ equity
Capital stock Capital surplus Retained earnings Treasury stockTotal shareholders’
equity
Balance as of March 31, 2018 $235,723 $234,958 $317,100 $(0) $787,782
Changes of items during the period
Issuance of common stock 53,148 53,148 — — 106,297
Dividends paid (Note 8) — — (22,605) — (22,605)
N et income attributable to owners of the parent company — — 107,243 — 107,243
Purchase of treasury stock — — — (0) (0)
E ffect of change in accounting periods of consolidated subsidiaries — — — — —
N et changes of items other than shareholders’ equity — — — — —
Total changes of items during the period 53,148 53,148 84,629 (0) 190,936
Balance as of March 31, 2019 $288,872 $288,116 $401,729 $(9) $978,727
Thousands of US dollars
Accumulated other comprehensive income (loss)
Unrealized gains (losses) on investment securities
Deferred gains (losses) on hedges
Foreign currency translation
adjustments
Total accumulated other comprehensive
income (loss)Non-controlling
interests Total net assets
Balance as of March 31, 2018 $31,876 $10,649 $(49,265) $ (6,730) $ 1,928 $ 782,980
Changes of items during the period
Issuance of common stock — — — — — 106,297
Dividends paid (Note 8) — — — — — (22,605)
N et income attributable to owners of the parent company — — — — — 107,243
Purchase of treasury stock — — — — — (0)
E ffect of change in accounting periods of consolidated subsidiaries — — — — — —
N et changes of items other than shareholders’ equity (7,126) (9,117) 63,780 47,526 (1,883) 45,634
T otal changes of items during the period (7,126) (9,117) 63,780 47,526 (1,883) 236,570
Balance as of March 31, 2019 $24,740 $ 1,531 $ 14,505 $40,787 $ 36 $1,019,551
See accompanying notes to consolidated financial statements.
Financial Section
28 Annual Report 2019
Millions of yenThousands of
US dollars
2019 2018 2019
Cash flows from operating activities
Income before income taxes ¥ 16,863 ¥ 12,563 $ 151,932
Depreciation and amortization 11,714 10,776 105,541
Increase (decrease) in provision for employees’ bonuses 22 41 198
Increase (decrease) in provision for retirement benefits 7 65 63
Increase (decrease) in provision for directors’ and audit & supervisory board members’ retirement benefits (6) (83) (54)
Increase (decrease) in allowance for doubtful accounts 59 44 531
Increase (decrease) in provision for environmental measures — 2 —
Increase (decrease) in provision for point card certificates 21 35 189
Increase (decrease) in provision for shareholder benefits (90) 129 (810)
Interest and dividend income (1,134) (929) (10,217)
Interest expenses 7,990 6,692 71,988
(Gain) loss on sales of investment securities (174) (502) (1,567)
(Gain) loss on sales of property and equipment, and intangible assets (4,929) (560) (44,409)
(Increase) decrease in notes and accounts receivable - trade (2,007) (710) (18,082)
(Increase) decrease in inventories (73) (5) (657)
Increase (decrease) in notes and accounts payable - trade 1 0 9
Increase (decrease) in accrued expenses 72 168 648
Increase (decrease) in security and guarantee deposits received from tenants (5,846) 1,140 (52,671)
Other, net 2,368 7,095 21,335
Subtotal 24,858 35,964 223,966
Interest and dividends income received 1,132 940 10,199
Interest expenses paid (8,002) (6,401) (72,096)
Income taxes paid (5,425) (3,266) (48,878)
Net cash provided by operating activities 12,562 27,238 113,181
Cash flows from investing activities
Payments for term deposits (23,304) — (209,964)
Purchase of property and equipment (19,336) (135,746) (174,213)
Proceeds from sales of property and equipment 146,002 5,385 1,315,451
Purchase of intangible assets (67) (36) (603)
Proceeds from sales of intangible assets 1,331 312 11,992
Proceeds from sales of investment securities 670 2,229 6,036
Proceeds from collection of loans receivable 0 1 0
Payments for loans receivable (0) (0) (0)
Other, net 10 (29) 90
Net cash provided by (used in) investing activities 105,307 (127,884) 948,797
Cash flows from financing activities
Net increase (decrease) in short-term loans payable 130 (16,145) 1,171
Proceeds from long-term loans payable 82,905 147,180 746,959
Repayment of long-term loans payable (159,855) (80,594) (1,440,264)
Proceeds from issuance of corporate bonds — 48,747 —
Proceeds from issuance of common stock 11,724 11,224 105,631
Repayments to non-controlling interests (192) — (1,729)
Dividends paid (Note 8) (2,507) (2,090) (22,587)
Dividends paid to non-controlling interests (3) (4) (27)
Purchase of treasury stock (0) — (0)
Other, net — (0) —
Net cash provided by (used in) financing activities (67,799) 108,317 (610,856)
Effect of exchange rate changes on cash and cash equivalents 3,119 (2,121) 28,101
Net increase (decrease) in cash and cash equivalents 53,189 5,550 479,223
Cash and cash equivalents at the beginning of the period 46,115 40,402 415,487
Increase (decrease) in cash and cash equivalents due to change in accounting periods of consolidated subsidiaries — 163 —
Cash and cash equivalents at the end of the period (Note 16) ¥ 99,305 ¥ 46,115 $ 894,720
See accompanying notes to consolidated financial statements.
Consolidated Statement of Cash FlowsUNIZO Holdings Company, Limited and its consolidated subsidiariesFiscal years ended March 31, 2019 and 2018
Annual Report 2019 29
1 Significant Accounting Policies
Basis of preparation
The accompanying consolidated financial statements of UNIZO
Holdings Company, Limited (the “Company”) and consolidated
subsidiaries (collectively the “Group”) have been prepared in
conformity with accounting principles generally accepted in Japan
(“Japanese GAAP”), which are different in certain respects as to the
application and disclosure requirements of International Financial
Reporting Standards, and in accordance with the provisions
prescribed in the Financial Instruments and Exchange Act of Japan
and its related accounting regulations.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to the
consolidated financial statements issued domestically in order to
present them in a form that is more familiar to readers outside
Japan. The notes to the consolidated financial statements include
information that may not be required under Japanese GAAP but is
presented herein as additional information.
The consolidated financial statements are stated in Japanese
yen, the currency of the country in which the Company is incorpo-
rated and principally operates.
As permitted by the regulations under the Financial
Instruments and Exchange Act of Japan, amounts of less than one
million yen have been rounded down. As a result, the totals shown in
the accompanying consolidated financial statements in yen do not
necessarily agree with the sums of the individual amounts.
Scope of consolidation
As of and for the fiscal years ended March 31, 2019 and 2018, the consolidated financial statements include the accounts of the Company and the
20 (21 in 2018) subsidiaries over which the Company has control through majority voting rights.
The subsidiaries are as follows
Ownership percentage
Consolidated subsidiaries 2019 2018
UNIZO Real Estate Company, Limited 100.0% 100.0%
UNIZO Holdings U.S., LLC 100.0% 100.0%
UNIZO Real Estate NY One, LLC 100.0% 100.0%
UNIZO Real Estate NY Two, LLC 100.0% 100.0%
UNIZO Real Estate NY Three, LLC 100.0% 100.0%
UNIZO Real Estate NY Four, LLC 100.0% 100.0%
UNIZO Real Estate DC One, LLC 100.0% 100.0%
UNIZO Real Estate DC Two, LLC 100.0% 100.0%
UNIZO Real Estate DC Three, LLC 100.0% 100.0%
UNIZO Real Estate DC Four, LLC 100.0% 100.0%
UNIZO Real Estate DC Five, LLC 100.0% 100.0%
UNIZO Real Estate DC Six, LLC 100.0% 100.0%
UNIZO Real Estate DC Seven, LLC 100.0% 100.0%
UNIZO Real Estate DC Eight, LLC 100.0% 100.0%
UNIZO Real Estate DC Nine, LLC 100.0% 100.0%
UNIZO Real Estate One, LLC 100.0% 100.0%
UNIZO Real Estate Two, LLC — 100.0%
EEJRE 321 W 44 JV, LLC 98.8% 98.8%
EEJRE 321 W 44 Owner, LLC 98.8% 98.8%
UNIZO Facilities Company, Limited 100.0% 100.0%
UNIZO Hotel Company, Limited 100.0% 100.0%
Note: With an effective date of March 1, 2019, UNIZO Real Estate Two, LLC was merged in an absorption-type merger with UNIZO Holdings U.S., LLC as the surviving company, and UNIZO Real Estate Two, LLC as the company being absorbed. UNIZO Real Estate Two, LLC is therefore no longer included in the scope of consolidation.
The fiscal year end of consolidated subsidiaries is March 31.
Notes to Consolidated Financial StatementsUNIZO Holdings Company, Limited and its consolidated subsidiariesFiscal years ended March 31, 2019 and 2018
Financial Section
30 Annual Report 2019
Use of estimates
The preparation of the consolidated financial statements in confor-
mity with Japanese GAAP requires management to make estimates
and assumptions that affect reported amounts of assets, liabilities,
revenues, expenses and disclosure of contingent liabilities. Actual
results could differ from those estimates.
Cash and cash equivalents
All highly liquid investments that are readily convertible to cash and
with insignificant risk of market value fluctuation, with a maturity of
three months or less at the time of purchase, are treated as cash
equivalents for the purpose of preparing the consolidated statement
of cash flows.
Reconciliation between cash and deposits in the consolidated
balance sheet and cash and cash equivalents in the consolidated
statement of cash flows as of March 31, 2019 and 2018 is presented in
Note 16 “Supplemental Cash Flow Information”.
Investment securities
All securities held by the Company are classified as available-for-
sale securities. Securities with readily determinable market price are
stated at fair value based on the market price on the balance sheet
date. Valuation gains and losses are recorded directly to net assets.
Cost of securities is determined using the moving-average method.
Available-for-sale securities without readily determinable market
price are stated at cost, using the moving-average method.
Inventories
Merchandise and finished goods are primarily stated at cost by the
periodic average method. Raw materials and supplies are stated at
cost by the last purchase price method. All inventories held for sale
in the ordinary course of business are measured at the lower of cost
or net selling value.
Depreciation and amortization
Property and equipment other than leased assets are depreciated by
the declining-balance method. Buildings (excluding building fix-
tures) acquired on or after April 1, 1998 and building fixtures and
structures acquired on or after April 1, 2016 are depreciated using the
straight-line method.
The estimated useful lives are as follows:
Buildings and structures: 2–50 years
Machinery, equipment and vehicles: 2–17 years
Other (tools, furniture and fixtures): 2–20 years
Depreciable assets with an acquisition cost of ¥100,000 or more and
less than ¥200,000 are depreciated by the straight-line method over
three years.
Intangible assets other than leased assets are amortized using
the straight-line method. Software for internal use is amortized
using the straight-line method over the period of expected use by
the Group (five years).
Long-term prepaid expenses are amortized by the straight-line
method.
Provision for employees’ bonuses
A provision for employees’ bonuses is made based on the expected
cost of bonuses at the end of the fiscal year.
Provision for point card certificates
A provision for point card certificates is made at the end of the fiscal
year to cover the amount of estimated future disbursements arising
from usage of accumulated points on cards earned by customers.
Provision for shareholder benefits
A provision for shareholder benefits is made to cover the amount of
estimated future disbursements for the shareholder benefit plan.
Provision for directors’ and audit & supervisory board
members’ retirement benefits
At the General Meeting of Shareholders held on June 17, 2016, it was
resolved to terminate the retirement benefits plan for directors and
audit & supervisory board members. A provision for directors’ and
audit & supervisory board members’ retirement benefits is made
based on the future expected amount of final payments of the
retirement benefits.
Provision for environmental measures
A provision for environmental measures is made to cover the
amount of estimated future disbursements arising from the disposal
of polychlorinated biphenyl (“PCB”) at certain consolidated
subsidiaries.
Allowance for doubtful accounts
An allowance for doubtful accounts is provisioned at an amount
determined based on the historical experience of bad debt with
respect to ordinary receivables and an estimate of uncollectible
amounts determined by reference to specific doubtful receivables
from customers that are experiencing financial difficulties.
Retirement benefits
The Group applies the simplified method for the calculation of
provision for retirement benefits and retirement benefit expenses.
Under the simplified method, the Group provisions the amount that
is required if all employees retire voluntarily at the end of the
consolidated fiscal year as provision for retirement benefits.
Annual Report 2019 31
Foreign currency translation adjustments
Assets and liabilities of foreign subsidiaries are translated into
Japanese yen based on the spot exchange rate as of the period end
date and on the average exchange rate for the period for revenue
and expenses, and differences in translations are recorded in
foreign currency translation adjustments in net assets.
Income taxes
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates that will be in effect when those
temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rate is
recognized in income in the period that includes the enacted dates.
Hedge accounting
The Group utilizes derivative transactions and foreign currency-
denominated long-term loans to hedge against market interest rate
fluctuations and foreign currency fluctuations accompanying
foreign currency-denominated transactions. These transactions are
conducted against items subject to hedging and not used for specu-
lative purposes.
The Group utilizes interest rate swaps to hedge the exposure
associated with long-term loans, and foreign exchange contracts
and long-term loans to hedge the exposure associated with invest-
ments in subsidiaries.
The Group adopts deferral hedge accounting for hedge
transactions. For interest rate swaps that meet requirements for
exceptional accounting treatment, exceptional accounting treatment
is applied.
The Group evaluates the effectiveness of its hedging activities by
comparing cumulative amounts of fluctuations in cash flows of
hedged items, or market price fluctuations of these items, and
cumulative amounts of fluctuations in cash flows of hedging instru-
ments, or market price fluctuations of these instruments, on a
semi-annual basis, using fluctuations of these indicators as a basis.
For items to which significant conditions regarding notional
amounts for hedging instruments and hedged items are identical, and
it can be assumed that at the time of hedging and continuing thereaf-
ter that fluctuations in cash flow will be completely offset, the Group
omits assessment of the effectiveness of hedges.
Revenue recognition
Revenue for rents received from tenants is normalized over the
contract period and recognized in this manner. Revenue from sales
of assets and other properties is recognized when the properties are
delivered and accepted by the buyers.
Appropriation of retained earnings
Under the Companies Act of Japan (the “Companies Act”), the
appropriation of retained earnings with respect to a given fiscal
year is made by resolution of the shareholders at the General
Meeting of Shareholders held subsequent to the close of such
fiscal year.
2 Changes in presentation method
Change in presentation method due to adoption of Partial
Amendments to Accounting Standard for Tax Effect Accounting
The Company has adopted the Partial Amendments to Accounting
Standard for Tax Effect Accounting (ASBJ Statement No. 28, issued
on February 16, 2018) from the beginning of the fiscal year ended
March 31, 2019. Deferred tax assets are now being presented in the
investments and other assets section of the balance sheet, deferred
tax liabilities are now being presented in the non-current liabilities
section of the balance sheet, and notes related to tax effect accounting
(Note 7) have been changed.
As a result, on the consolidated balance sheet as of March 31,
2018, ¥19 million from the ¥228 million of Deferred tax assets within
Current assets is being presented as part of the ¥38 million of
Deferred tax assets within Investments and other assets, ¥209
million from the ¥228 million of Deferred tax assets within Current
assets is being presented as part of the ¥3,228 million of Deferred
tax liabilities within Non-current liabilities, and ¥593 million of
Deferred tax liabilities within Current liabilities is being presented
as part of the ¥3,228 million of Deferred tax liabilities within
Non-current liabilities.
Financial Section
32 Annual Report 2019
3 US Dollar Amounts
The US dollar amounts shown in the accompanying consolidated
financial statements and notes thereto were translated from the
presented Japanese yen amounts into US dollar amounts at
¥110.99=US$1.00, the rate of exchange prevailing on March 31, 2019,
and were then rounded down to the nearest thousand. As a result,
the totals shown in the accompanying consolidated financial
statements (US dollars) do not necessarily agree with the sums of the
individual amounts. The translation of Japanese yen amounts into US
dollars is included solely for the convenience of readers outside
Japan, and such translation should not be construed as a representa-
tion that the Japanese yen amounts have been, or could in the future
be converted into US dollars at that or any other rate.
4 Inventories
As of March 31, 2019 and 2018, inventories are summarized as follows:
Millions of yenThousands of
US dollars
2019 2018 2019
Merchandise ¥ 15 ¥11 $135
Raw materials and supplies 94 24 846
Total ¥109 ¥36 $982
5 Short-Term Loans Payable, Corporate Bonds and Long-Term Loans Payable
As of March 31, 2019 and 2018, short-term loans payable and current portion of long-term loans payable consist of the following:
Millions of yenThousands of
US dollars
2019 2018 2019
Short-term loans payable (Average interest rates: 0.5% in 2019 and 0.5% in 2018) ¥ 5,280 ¥ 5,150 $ 47,571
Current portion of long-term loans payable (Average interest rates: 1.1% in 2019 and 0.7% in 2018) 70,196 61,397 632,453
Total ¥75,476 ¥66,547 $680,025
As of March 31, 2019 and 2018, corporate bonds consist of the following:
Millions of yenThousands of
US dollars
Coupon rate Maturity 2019 2018 2019
UNIZO Series One Unsecured Corporate Bonds 0.84% November 2020 ¥ 5,000 ¥ 5,000 $ 45,049
UNIZO Series Two Unsecured Corporate Bonds 0.51 May 2021 10,000 10,000 90,098
UNIZO Series Three Unsecured Corporate Bonds 0.85 May 2023 10,000 10,000 90,098
UNIZO Series Four Unsecured Corporate Bonds 0.43 November 2021 10,000 10,000 90,098
UNIZO Series Five Unsecured Corporate Bonds 0.80 November 2023 10,000 10,000 90,098
UNIZO Series Six Unsecured Corporate Bonds 0.99 November 2026 10,000 10,000 90,098
UNIZO Series Seven Unsecured Corporate Bonds 0.52 May 2022 10,000 10,000 90,098
UNIZO Series Eight Unsecured Corporate Bonds 0.89 May 2024 10,000 10,000 90,098
UNIZO Series Nine Unsecured Corporate Bonds 1.20 May 2027 10,000 10,000 90,098
UNIZO Series Ten Unsecured Corporate Bonds 0.75 November 2022 8,000 8,000 72,078
UNIZO Series Eleven Unsecured Corporate Bonds 1.10 November 2024 6,000 6,000 54,058
UNIZO Series Twelve Unsecured Corporate Bonds 1.50 November 2027 5,000 5,000 45,049
Total ¥104,000 ¥104,000 $937,021
As of March 31, 2019 and 2018, long-term loans payable, excluding current portion, consists of the following:
Millions of yenThousands of
US dollars
2019 2018 2019
L ong-term loans payable (Average interest rates: 1.3% in 2019, 1.5% in 2018, Last due in December 2028) ¥374,758 ¥450,333 $3,376,502
Total ¥374,758 ¥450,333 $3,376,502
Annual Report 2019 33
As of March 31, 2019 and 2018, secured liabilities and the corresponding assets pledged as collateral are as follows:
Millions of yenThousands of
US dollars
2019 2018 2019
Secured liabilities
Current portion of long-term loans payable ¥ 38,459 ¥ 30,082 $ 346,508
Long-term loans payable 194,587 268,341 1,753,193
Total ¥233,047 ¥298,424 $2,099,711
Assets pledged as collateral
Other current assets ¥ 40 ¥ 62 $360
Buildings and structures 57,429 57,427 517,424
Buildings and structures in trust 58,894 75,203 530,624
Machinery, equipment, and vehicles 22 59 198
Machinery, equipment, and vehicles in trust 97 40 873
Land 33,874 39,183 305,198
Land in trust 143,487 157,060 1,292,792
Other (Tools, furniture, and fixtures) 354 194 3,189
Intangible assets (Leasehold interest in land) 8,224 8,316 74,096
Total ¥302,426 ¥337,547 $2,724,804
Additionally, investments in capital of subsidiaries of the Company, which are eliminated in consolidation, have been pledged as collateral.
The amounts of such investments are ¥14,038 million ($126,479 thousand) and ¥79,497 million as of March 31, 2019 and 2018, respectively.
Repayment schedule of corporate bonds and long-term loans payable (including current portion) subsequent to March 31, 2019 is as follows:
Corporate bonds Long-term loans payable
Fiscal years ending March 31 Millions of yen Thousands of US dollars Millions of yen Thousands of
US dollars
2020 — — ¥ 70,196 $ 632,453
2021 ¥ 5,000 $ 45,049 54,999 495,531
2022 20,000 180,196 121,621 1,095,783
2023 18,000 162,176 73,460 661,861
2024 and thereafter 61,000 549,599 124,677 1,123,317
Total ¥104,000 $937,021 ¥444,954 $4,008,955
6 Provision for Retirement Benefits
The Group has a retirement benefit plan that provides lump-sum payments in accordance with the Group’s guidelines for retirement benefits.
The Group applies the simplified method in calculating the provision for retirement benefits and retirement benefit expenses.
(1) Changes in provision for retirement benefits
Millions of yenThousands of
US dollars
2019 2018 2019
Balance at beginning of period ¥ 722 ¥657 $6,505
Retirement benefit expenses 111 93 1,000
Benefits paid (104) (27) (937)
Balance at end of period ¥ 729 ¥722 $6,568
Financial Section
34 Annual Report 2019
(2) Reconciliation from retirement benefit obligations to liability (asset) for retirement benefits on the consolidated balance sheet
Millions of yenThousands of
US dollars
2019 2018 2019
Unfunded retirement benefit obligations ¥729 ¥722 $6,568
Total net liability for retirement benefits at end of period ¥729 ¥722 $6,568
Provision for retirement benefits ¥729 ¥722 $6,568
Total net liability for retirement benefits at end of period ¥729 ¥722 $6,568
Total retirement benefit expenses based on the simplified method are ¥111 million ($1,000 thousand) and ¥93 million for the fiscal years ended
March 31, 2019 and 2018, respectively.
7 Income Taxes
The Company and consolidated subsidiaries are subject to corporate tax, inhabitance tax, and enterprise tax.
The significant components of deferred tax assets and liabilities as of March 31, 2019 and 2018 are as follows:
Millions of yenThousands of
US dollars
2019 2018 2019
Deferred tax assets
Tax loss carryforwards*1 ¥ 2,192 — $ 19,749
Provision for retirement benefits 231 ¥ 228 2,081
Pr ovision for directors’ and audit & supervisory board members’ retirement benefits 115 117 1,036
Enterprise tax payable 322 122 2,901
Provision for employees’ bonuses 70 63 630
Allowance for doubtful accounts 26 15 234
Loss on valuation of securities of subsidiaries 78 78 702
Unrealized loss on investment securities 155 155 1,396
Provision for point card certificates 21 13 189
Provision for environmental measures 56 56 504
Other 563 689 5,072
Subtotal deferred tax assets 3,833 1,540 34,534
Valuation allowance for total deductible temporary differences (417) (439) (3,757)
Subtotal valuation allowance (417) (439) (3,757)
Total deferred tax assets 3,416 1,101 30,777
Deferred tax liabilities
Unrealized gains on investment securities (1,212) (1,504) (10,919)
Gains on valuation of investment securities (607) (615) (5,468)
Other (3,681) (2,170) (33,165)
Total deferred tax liabilities (5,501) (4,290) (49,563)
Net deferred tax liabilities ¥(2,084) ¥(3,189) $(18,776)
*1 Amounts of tax loss carryforwards and related deferred tax assets by carryforward period
As of March 31, 2019
Millions of yen
2019
Within 1 year
Greater than 1 year, within
2 years
Greater than 2 years, within
3 years
Greater than 3 years, within
4 years
Greater than 4 years, within
5 years
Greater than 5 years, within
10 years
Greater than 10 years or
no period limit Total
Tax loss carryforwards(a) — — — — — ¥4 ¥2,188 ¥2,192
Valuation allowance — — — — — — — —
Deferred tax assets — — — — — ¥4 ¥2,188 ¥2,192(b)
Annual Report 2019 35
Thousands of US dollars
2019
Resolution Within 1 year
Greater than 1 year, within
2 years
Greater than 2 years, within
3 years
Greater than 3 years, within
4 years
Greater than 4 years, within
5 years
Greater than 5 years, within
10 years
Greater than 10 years or
no period limit Total
Tax loss carryforwards(a) — — — — — $36 $19,713 $19,749
Valuation allowance — — — — — — — —
Deferred tax assets — — — — — $36 $19,713 $19,749(b)
(a) Tax loss carryforwards were calculated using the statutory tax rate.(b) Tax loss carryforwards of ¥2,192 million ($19,749 thousand; calculated using the statutory tax rate) have been booked as deferred tax assets of ¥2,192 million
($19,749 thousand). The tax loss carryforwards that gives rise to the deferred tax assets are determined to be recoverable via future expected income, and as such a valuation allowance has not been recognized.
For the fiscal years ended March 31, 2019 and 2018, reconciliations between the statutory income tax rate and the effective income tax rate as a
percentage of income are as follows:2019 2018
Statutory income tax rate — 30.9 %
Non-deductible expenses for tax purpose such as entertainment expenses — 0.8 %
Non-taxable income — (0.3)%
Per capita inhabitance tax — 0.2 %
Changes in valuation allowances — (0.2)%
Other — 1.0 %
Effective income tax rate — 32.4 %
For the fiscal year ended March 31, 2019, the difference between the statutory income tax rate and effective income tax rate after tax effect
accounting is less than 5/100ths of the statutory income tax rate, and thus the note for this period is omitted.
8 Shareholders’ Equity
Under the Companies Act and its regulations, the entire amount paid
for new shares is required to be designated as capital stock.
However, a company may, by a resolution of the Board of
Directors, designate an amount not exceeding one-half of the
amount paid for the new shares as capital reserve, which is included
in capital surplus.
The Companies Act provides that an amount equal to 10% of the
amount to be disbursed as dividends be transferred to the capital
reserve (which is part of capital surplus) or the legal reserve (which is
part of retained earnings) until the sum of the capital reserve and the
legal reserve equals 25% of the capital stock account. The capital
reserve amounted to ¥31,978 million ($288,116 thousand) and ¥26,078
million and the legal reserve amounted to ¥126 million ($1,135 thousand)
and ¥126 million as of March 31, 2019 and 2018, respectively. Dividend
distributions can be made at any time based on resolution at the
General Meeting of Shareholders, or by the Board of Directors if
certain conditions are met, but neither the capital reserve nor the
legal reserve is available for distribution of dividends.
Changes in the outstanding number of shares of common stock and treasury stock for the fiscal years ended March 31, 2019 and 2018 are as follows:Shares
2019 2018
Common stock - issued
Shares at beginning of period 28,520,700 23,770,700
Increase 5,700,000 4,750,000
Shares at end of period 34,220,700 28,520,700
Treasury stock
Shares at beginning of period 301 301
Increase 104 —
Shares at end of period 405 301
For the fiscal year ended March 31, 2019, the increase in number of shares of common stock was due to issuance of new shares of
4,957,000 shares via a public offering in May 2018 and issuance of new shares of 743,000 shares via a third-party allotment in June 2018.
For the fiscal year ended March 31, 2018, the increase in number of shares of common stock was due to issuance of new shares of
4,140,000 shares via a public offering in July 2017 and issuance of new shares of 610,000 shares via a third-party allotment in July 2017.
Financial Section
36 Annual Report 2019
For the fiscal year ended March 31, 2019, the increase of 104 shares of treasury stock was due to purchase of less-than-trading-unit shares.
Dividends paid to shareholders were as follows:
During the fiscal year ended March 31, 2019
Resolution Type of sharesAmount
(Millions of yen)
Amount (Thousands of
US dollars)Amount per share (Yen)
Amount per share
(US dollars) Record date Effective date
J une 20, 2018 General Meeting of Shareholders Common stock ¥1,140 $10,271 ¥40 $0.36 March 31,2018 June 21,2018
O ctober 29, 2018 Board of Directors Common stock ¥1,368 $12,325 ¥40 $0.36
September 30, 2018
November 29, 2018
During the fiscal year ended March 31, 2018
Resolution Type of sharesAmount
(Millions of yen)Amount per share (Yen) Record date Effective date
J une 23, 2017 General Meeting of Shareholders Common stock ¥950 ¥40 March 31, 2017 June 26, 2017
O ctober 26, 2017 Board of Directors Common stock ¥1,140 ¥40
September 30, 2017
November 29, 2017
Dividends with a record date during the fiscal year but with an effective date subsequent to the fiscal year were as follows:
For the year ended March 31, 2019
ResolutionType of shares Source
Amount (Millions of yen)
Amount (Thousands of
US dollars)Amount per share (Yen)
Amount per share (US
dollars) Record date Effective date
J une 18, 2019 General Meeting of Shareholders
Common stock
Retained earnings ¥1,539 $13,866 ¥45 $0.40 March 31, 2019 June 19, 2019
9 Amounts per Share
Yen US dollars
2019 2018 2019
Net income per share ¥ 356.56 ¥ 313.24 $ 3.21
Net assets per share 3,306.72 3,039.54 29.79
Under “Accounting Standard for Earnings per Share” (Accounting
Standard Board of Japan [“ASBJ”] Statement No. 2), net income per
share is calculated based on the net income available for distribution
to shareholders of common stock and the weighted average number
of shares of common stock outstanding during the respective years.
For the fiscal years ended March 31, 2019 and 2018, the weighted
average number of shares of common stock was 33,383,887 and
27,098,207, respectively. Diluted net income per share for 2019 and
2018 has not been presented because there were no items with
dilutive effect for those years.
Net assets per share is calculated based on the net assets
available to shareholders of common stock and the number of shares
of common stock outstanding, net of the number of shares of
treasury stock, at the end of the year.
10 Leases
The Group leases office buildings and commercial properties and earns income on these leases. Future minimum lease income subsequent to
March 31, 2018 from non-cancellable operating leases is summarized as follows:
Millions of yenThousands of
US dollars
Fiscal years ending March 31 2019 2019
2020 ¥16,736 $150,788
2021 and thereafter 73,127 658,861
Total ¥89,864 $809,658
Annual Report 2019 37
11 Contingent Liabilities
Contingent liabilities as of March 31, 2019 are as follows:
Millions of yenThousands of
US dollars
2019 2019
Guarantees on employees’ mortgages ¥0 $0
Total ¥0 $0
12 Selling, General, and Administrative Expenses
Major items included in Selling, general, and administrative expenses for the fiscal years ended March 31, 2019 and 2018 are as follows:
Millions of yenThousands of
US dollars
2019 2018 2019
Sales commission ¥ 7 ¥ 7 $ 63
Advertising expenses 113 94 1,018
Directors’ compensation 700 994 6,306
Salaries and allowances 2,443 1,974 22,010
Provision for bonuses 190 168 1,711
Retirement benefit expenses 91 77 819
Provision for shareholder benefits 119 239 1,072
Commission fee 691 930 6,225
Other 2,034 1,974 18,325
Total ¥6,392 ¥6,462 $57,590
13 Other Income (Expenses)
The components of Gain on sales of property and equipment, and intangible assets for the fiscal years ended March 31, 2019 and 2018 are as follows:
Millions of yenThousands of
US dollars
2019 2018 2019
Buildings and structures ¥ 4,028 — $ 36,291
Buildings and structures in trust (9,323) ¥238 (83,998)
Land 3,196 — 28,795
Land in trust 20,660 773 186,142
Intangible assets 810 (451) 7,297
Total ¥19,372 ¥560 $174,538
The components of Loss on sales of property and equipment, and intangible assets for the fiscal years ended March 31, 2019 and 2018 are as follows:
Millions of yenThousands of
US dollars
2019 2018 2019
Buildings and structures ¥ (8,121) — $ (73,168)
Buildings and structures in trust (512) — (4,613)
Land (5,506) — (49,608)
Land in trust (302) — (2,720)
Total ¥(14,442) — $(130,119)
Financial Section
38 Annual Report 2019
The components of Loss on disposal of property and equipment, and intangible assets for the fiscal years ended March 31, 2019 and 2018 are as
follows:
Millions of yen Thousands of US dollars
2019 2018 2019
Buildings and structures in trust ¥(12) — $(108)
Other (Tools & equipment) (21) — (189)
Disposal fees (2) — (18)
Total ¥(36) — $(324)
The components of Other, net under Other income (expenses) for the fiscal years ended March 31, 2019 and 2018 are as follows:
Millions of yen Thousands of US dollars
2019 2018 2019
Other income, net ¥ 49 ¥ 32 $ 441
Other expenses, net (170) (339) (1,531)
Total ¥(121) ¥(306) $(1,090)
14 Financial Instruments
Overview
(1) Management policy on financial instruments
The Group borrows primarily funds and short-term working
capital needed for capital investment in the Real Estate
Business and the Hotel Business from financial institutions. The
Group utilizes derivative instruments to reduce interest rate
fluctuation risk or foreign currency fluctuation risk that is
associated with transactions denominated in foreign curren-
cies, and does not enter into derivatives for speculative
purposes.
(2) Financial instruments and associated risks
Notes and accounts receivable - trade are exposed to the credit
risk of customers. Foreign currency denominated transactions,
which arise from overseas operations, are exposed to market
risk resulting from fluctuations in foreign currency exchange
rates. Investment securities are exposed to the risk of market
price fluctuations.
The Group obtains loans primarily as funds needed for
capital investments. Loans with floating rates of interest are
exposed to the risk of interest rate fluctuations.
For derivative transactions, the Group uses interest rate
swaps to hedge against the interest rate fluctuations.
(3) Risk management systems for financial instruments
(a) Credit risk management (counterparty credit risk)
When starting business with a new customer, the Group
carries out a credit check. The Group also monitors collec-
tions from customers continuously.
(b) Market risk management (fluctuation risk of foreign exchange
rates, interest rates and others)
The fair values of investment securities and the financial
position of the issuers are monitored and reported to the
Board of Directors and related divisions periodically.
The conditions of the derivative instruments for
transactions exposed to interest rate risk and foreign cur-
rency risk are reported to the Board of Directors.
(c) Liquidity risk management related to fund procurement (risk
that payments cannot be made by due dates)
The Group manages liquidity risk by the Finance Department
timely preparing and updating cash management plans
based on reports from each division and consolidated
subsidiaries.
(4) Supplementary explanation of the fair value of financial
instruments
The fair values of financial instruments are based on quoted
market prices, if available, or reasonably estimated values if no
quoted market prices are available. Since certain assumptions
are reflected in estimating the fair values, the fair values may
differ if different assumptions are used.
Annual Report 2019 39
Fair values of financial instruments
Carrying values and fair values of financial instruments listed on the consolidated balance sheet as of March 31, 2019 and 2018 are as follows:
Millions of yen Thousands of US dollars
2019 2019
Carrying value Fair value Difference Carrying value Fair value Difference
(1) Cash and deposits ¥122,006 ¥122,006 — $1,099,252 $1,099,252 —
(2) N otes and accounts receivable - trade 3,983 3,903 — 35,886 35,165 —
A llowance for doubtful accounts*1 (80) — (720) —
(3) I nvestment securities 7,235 7,235 — 65,186 65,186 —
(4) Derivative transactions*2 245 245 — 2,207 2,207 —
Total assets ¥133,391 ¥133,391 — $1,201,828 $1,201,828 —
(5) Short-term loans payable ¥ 5,280 ¥ 5,280 — $ 47,571 $ 47,571 —
(6) Corporate bonds 104,000 103,832 ¥(167) 937,021 935,507 $(1,504)
(7) Long-term loans payable*3
L oans with floating interest rate 173,899 173,899 — 1,566,798 1,566,798 —
Loans with fixed interest rate 271,054 271,025 (28) 2,442,147 2,441,886 (252)
Total liabilities ¥554,234 ¥554,037 ¥(196) $4,993,548 $4,991,774 $(1,765)
*1 The amount represents the allowance for doubtful accounts that was provisioned for the notes and accounts receivable - trade and was netted against such receivables when estimating the fair value.
*2 Net credit and debits stemming from derivative transactions are displayed in net amounts.*3 The amount includes current portion of long-term loans payable.
Millions of yen
2018
Carrying value Fair value Difference
(1) Cash and deposits ¥ 46,115 ¥ 46,115 —
(2) N otes and accounts receivable - trade 4,158 4,115 —
A llowance for doubtful accounts*1 (43)
(3) I nvestment securities 8,704 8,704 —
(4) Derivative transactions*2 1,704 1,704 —
Total assets ¥ 60,640 ¥ 60,640 —
(5) Short-term loans payable ¥ 5,150 ¥ 5,150 —
(6) Corporate bonds 104,000 103,266 ¥ (733)
(7) Long-term loans payable*3
Loans with floating interest rate 250,309 250,309 —
Loans with fixed interest rate 261,421 260,052 (1,369)
Total liabilities ¥620,880 ¥618,778 ¥(2,102)
*1 The amount represents the allowance for doubtful accounts that was provisioned for the notes and accounts receivable - trade and was netted against such receivables when estimating the fair value.
*2 Net credit and debits stemming from derivative transactions are displayed in net amounts.*3 The amount includes current portion of long-term loans payable.
Financial Section
40 Annual Report 2019
Note 1. Fair value measurement of financial instruments and notes on investment securities and derivative transactions
(1) Cash and deposits, (2) Notes and accounts receivable - trade
Fair value is based on the carrying amount as the carrying amount approximates fair value, and because of the short maturity of these
instruments.
(3) Investment securities
Fair values of investment securities are based on quoted prices on exchanges.
(4) Derivative transactions
Fair value is measured based on prices obtained from financial institutions.
(5) Short-term loans payable
Fair value is based on the carrying amount as the carrying amount approximates fair value, and because of the short maturity of these
instruments.
(6) Corporate bonds
Fair value is measured based on market prices.
(7) Long-term loans payable
Long-term loans payable with floating interest rates, which are renewed periodically, are stated at their carrying values as their carrying
values approximate their fair values. The fair value of long-term loans payable with fixed interest rates are estimated as the present value of
future cash flows discounted using the current interest rate for a similar loan of comparable maturity.
Note 2. Carrying values of financial instruments for which determination of fair value is deemed extremely difficult
Millions of yenThousands of
US dollars
As of March 31 2019 2018 2019
Investment securities - unlisted equity securities ¥ 4,166 ¥ 4,277 $ 37,534
Security and guarantee deposits received from tenants 11,384 17,190 102,567
The fair values of these items are deemed extremely difficult to determine since no quoted market prices are available and their future cash flows
cannot be estimated.
Note 3. Redemption schedule after March 31, 2019 for monetary claims and for securities with terms to maturity
Millions of yen Thousands of US dollars
2019 2019
1 year or less Over 1 year 1 year or less Over 1 year
Cash and deposits ¥122,006 — $1,099,252 —
Notes and accounts receivable - trade 3,983 — 35,886 —
Total ¥125,990 — $1,135,147 —
Annual Report 2019 41
15 Investment Securities
The carrying value, cost, and their difference for available-for-sale securities with readily determinable fair values as of March 31, 2019 and 2018
are summarized in the below tables. Unlisted equity securities and investments in partnerships are not included in the tables below since the fair
values of such investments are deemed extremely difficult to determine.
Millions of yen Thousands of US dollars
2019 2019
Carrying value Cost Difference Carrying value Cost Difference
S ecurities whose carrying value exceeds their cost
Equity securities ¥7,235 ¥3,276 ¥3,959 $65,186 $29,516 $35,669
S ecurities whose cost exceeds their carrying value
Equity securities — — — — — —
Total ¥7,235 ¥3,276 ¥3,959 $65,186 $29,516 $35,669
Millions of yen
2018
Carrying value Cost Difference
S ecurities whose carrying value exceeds their cost
Equity securities ¥8,704 ¥3,661 ¥5,042
S ecurities whose cost exceeds their carrying value
Equity securities — — —
Total ¥8,704 ¥3,661 ¥5,042
Available-for-sale securities sold during the fiscal years ended March 31, 2019 and 2018 were as follows:
Millions of yen Thousands of US dollars
2019 2019
Sales proceeds Aggregate gain Aggregate loss Sales proceeds Aggregate gain Aggregate loss
Equity securities ¥670 ¥174 — $6,036 $1,567 —
Total ¥670 ¥174 — $6,036 $1,567 —
Millions of yen
2018
Sales proceeds Aggregate gain Aggregate loss
Equity securities ¥2,229 ¥578 ¥(76)
Total ¥2,229 ¥578 ¥(76)
For the years ended March 31, 2019 and 2018, there were no investment securities for which the Company recognized impairment loss.
16 Supplemental Cash Flow Information
The following table represents a reconciliation of cash and deposits in the consolidated balance sheet and cash and cash equivalents in the
consolidated statement of cash flows as of March 31, 2019 and 2018:
Millions of yenThousands of
US dollars
2019 2018 2019
Cash and deposits ¥122,006 ¥46,115 $1,099,252
Term deposits with maturity greater than three months (22,701) — (204,531)
Cash and cash equivalents ¥ 99,305 ¥46,115 $ 894,720
Financial Section
42 Annual Report 2019
17 Segment Information
1. Overview of reportable segments
The Group’s reportable segments are components of the Group
about which separate financial information is available and whose
operating results are regularly evaluated by the Board of Directors
to make decisions about how resources are allocated among the
Group and assess its performance.
In the Real Estate Business, the Group owns, leases, and
manages office buildings and other assets.
In the Hotel Business, the Group owns and operates affordable
urban hotels.
2. Calculation method of revenue from operations,
income (loss), assets, liabilities, and other items by
reportable segment
The accounting policies of each reportable segment are consistent
with those disclosed in Note 1 “Significant Accounting Policies”,
except for measurement of inventories.
Inventories in segment information are stated at cost, before
adjusting book values to net selling values where those values have
declined below cost. Segment income is measured on a basis of
operating income. Intersegment sales and transfers are accounted
for based on prevailing market prices.
As noted in Note 2 “Changes in Presentation Method”, the
Company has adopted the Partial Amendments to Accounting
Standard for Tax Effect Accounting (ASBJ Statement No. 28, issued
on February 16, 2018). Segment assets presented for the fiscal year
ended March 31, 2018 reflect these changes.
Information by reportable segment for the years ended March 31, 2019 and 2018 is summarized as follows:
Millions of yen
2019
Reportable segmentTotal Adjustments
(Note 1)Consolidated
(Note 2)Real Estate Business Hotel Business
Revenue from operations
Revenue from external customers ¥ 43,122 ¥ 12,931 ¥ 56,053 — ¥ 56,053
Intersegment sales and transfers 240 43 284 ¥ (284) —
Total ¥ 43,363 ¥ 12,974 ¥ 56,337 ¥ (284) ¥ 56,053
Segment income ¥ 16,405 ¥ 1,981 ¥ 18,386 ¥ (764) ¥ 17,622
Segment assets ¥545,953 ¥109,879 ¥655,832 ¥37,720 ¥693,552
Other items
Depreciation and amortization ¥ 9,139 ¥ 2,524 ¥ 11,663 ¥ 50 ¥ 11,714
Increase in property and equipment, and intangible assets 4,529 14,217 18,747 65 18,812
Thousands of US dollars
2019
Reportable segmentTotal Adjustments
(Note 1)Consolidated
(Note 2)Real Estate Business Hotel Business
Revenue from operations
Revenue from external customers $ 388,521 $116,505 $ 505,027 $ 505,027
Intersegment sales and transfers 2,162 387 2,558 $ (2,558) —
Total $ 390,692 $116,893 $ 507,586 $ (2,558) $ 505,027
Segment income $ 147,806 $ 17,848 $ 165,654 $ (6,883) $ 158,771
Segment assets $4,918,938 $989,990 $5,908,928 $339,850 $6,248,779
Other items
Depreciation and amortization $ 82,340 $ 22,740 $ 105,081 $ 450 $ 105,541
Increase in property and equipment, and intangible assets 40,805 128,092 168,907 585 169,492
Notes: 1. Details of “Adjustments” are as follows: (1) Included in the segment income adjustment of ¥(764) million ($[6,883] thousand) is an intersegment elimination of ¥2,344 million ($21,119 thousand) and corporate
expenses of ¥ (3,108) million ($[28,002] thousand) not allocated to each reportable segment. Corporate expenses mainly comprise general administrative expenses not allocated to reportable segments.
(2) Included in the segment assets adjustment of ¥37,720 million ($339,850 thousand) is an elimination of ¥(399,863) million ($[3,602,693] thousand) relating to the parent’s intercompany receivables, an elimination of ¥(10,292) million ($[92,729] thousand) relating to the parent’s investment in capital of subsidiaries, and corporate assets of ¥447,876 million ($4,035,282 thousand) not allocated to each reportable segment.
2. Segment income is reconciled and agrees to the operating income presented on the consolidated financial statements.
Annual Report 2019 43
Millions of yen
2018
Reportable segmentTotal Adjustments
(Note 1)Consolidated
(Note 2)Real Estate Business Hotel Business
Revenue from operations
Revenue from external customers ¥ 42,261 ¥ 10,200 ¥ 52,462 — ¥ 52,462
Intersegment sales and transfers 197 18 215 ¥ (215) —
Total ¥ 42,458 ¥ 10,219 ¥ 52,677 ¥ (215) ¥ 52,462
Segment income ¥ 16,565 ¥ 1,828 ¥ 18,394 ¥ (823) ¥ 17,570
Segment assets ¥618,548 ¥100,059 ¥718,608 ¥19,859 ¥738,467
Other items
Depreciation and amortization ¥ 9,059 ¥ 1,650 ¥ 10,709 ¥ 67 ¥ 10,776
Increase in property and equipment, and intangible assets 114,396 22,722 137,119 44 137,163
Notes: 1. Details of “Adjustments” are as follows: (1) Included in the segment income adjustment of ¥(823) million is an intersegment elimination of ¥2,506 million and corporate expenses of ¥(3,329) million not allocated
to each reportable segment. Corporate expenses mainly comprise general administrative expenses not allocated to reportable segments. (2) Included in the segment assets adjustment of ¥19,859 million is an elimination of ¥(348,582) million relating to the parent’s intercompany receivables, an elimination
of ¥(10,292) million relating to the parent’s investment in capital of subsidiaries, and corporate assets of ¥378,734 million not allocated to each reportable segment. 2. Segment income is reconciled and agrees to the operating income presented on the consolidated financial statements.
Related Information
1. Information by product and service
Information by product and service is omitted, as similar information is disclosed on segment information.
2. Information by geographic locations
(1) Revenue from operations
Millions of yen Thousands of US dollars
2019 2019
Japan United States Total Japan United States Total
¥32,443 ¥23,609 ¥56,053 $292,305 $212,712 $505,027
Millions of yen
2018
Japan United States Total
¥30,647 ¥21,814 ¥52,462
(2) Property and equipment
Millions of yenThousands of
US dollars
2019 2019
Japan United States Total Japan United States Total
¥325,032 ¥215,258 ¥540,290 $2,928,480 $1,939,435 $4,867,916
Millions of yen
2018
Japan United States Total
¥373,076 ¥284,871 ¥657,947
Financial Section
44 Annual Report 2019
3. Information by primary customers
Not applicable, as there were no customers accounting for more than 10% of the revenue from operations presented in the Consolidated
Statement of Income.
Impairment loss by reportable segments
Not applicable
Amortization amount and unamortized balance of goodwill by reportable segments
Not applicable
Gain from negative goodwill by reportable segments
Not applicable
18 Investment and Rental Properties
Certain subsidiaries of the Company own commercial properties,
including office buildings for rent primarily in the Tokyo metropoli-
tan area.
For the fiscal year ended March 31, 2019, operating income from
investment and rental properties totaled ¥17,162 million ($154,626
thousand; revenue from these investment and rental properties is
included in revenue from operations, and expenses are included in
cost of revenue from operations or selling, general, and administra-
tive expenses). Gain on sales of property and equipment, and
intangible assets from these investment and rental properties, which
is included in other income (expenses), amounted to ¥18,555 million
($167,177 thousand). Loss on sales of property and equipment, and
intangible assets, which is included in other income (expenses),
amounted to ¥(14,442) million ($[130,119] thousand), and loss on
disposal of property and equipment, and intangible assets, which is
included in other income (expenses), amounted to ¥(14) million
($[126] thousand).
For the fiscal year ended March 31, 2018, operating income from
investment and rental properties totaled ¥17,418 million (revenue
from these investment and rental properties is included in revenue
from operations, and expenses are included in cost of revenue from
operations or selling, general, and administrative expenses). Gain on
sales of property and equipment, and intangible assets from these
investment and rental properties, which is included in other income
(expenses), amounted to ¥560 million.
The carrying values, net changes of the carrying values and appraised values of these investment and rental properties for the fiscal years ended
March 31, 2019 and 2018 are as follows:
Millions of yenThousands of
US dollars
2019 2018 2019
Carrying value
Beginning of the period ¥ 563,490 ¥479,645 $5,076,943
Net changes (129,508) 83,844 (1,166,843)
End of the period ¥ 433,981 ¥563,490 $3,910,090
Appraised value—end of the period ¥ 570,429 ¥677,259 $5,139,463
Notes: 1. The carrying values on the consolidated balance sheet include acquisition costs of investment and rental properties, net of accumulated depreciation, and the balance of leasehold interest in land.
2. For the fiscal years ended March 31, 2019, net changes primarily present sales of office buildings for rent of ¥133,877 million ($1,206,207 thousand). For the fiscal years ended March 31, 2018, net changes primarily present acquisition of office buildings for rent of ¥108,348 million.
3. Appraised values as of March 31, 2019 and 2018 are based on appraisals undertaken for all subject properties by external real estate appraisers (DAIWA REAL ESTATE APPRAISAL CO., LTD., Kudan Urban Appraisal Co., Ltd., TOKYO KANTEI Co., Ltd., The Tanizawa Sogo Appraisal Co., Ltd., Chuo Real Estate Appraisal Co., Ltd., JLL Morii Valuation & Advisory K.K., Rich Appraisal Institute co., Ltd., BBG, Inc., and CBRE, Inc.).
Annual Report 2019 45
19 Asset Retirement Obligations
Because the Group owns certain asbestos-treated property and
equipment, the Group assumes obligations for asbestos removal
during future demolition work.
Given that a study to measure the expected level of concentration of
asbestos requires a partial dismantlement of properties, it is
impracticable to perform such study for the properties that are
currently leased. In addition, it is difficult to estimate the timing of
settlement of these obligations based on estimates of the physical
useful lives of the assets as they are subject to deterioration, and it is
not possible to estimate the timing of demolition without a detailed
business plan. Therefore, the Group does not recognize asset retire-
ment obligations since it is not possible to reasonably estimate the
amount of the obligations.
20 Other Comprehensive Income
For the years ended March 31, 2019 and 2018, recycling and effect of deferred income tax on other comprehensive income are summarized as
follows:
Millions of yen Thousands of US dollars
2019 2018 2019
Change in unrealized gains (losses) on investment securities
Amount increased for the period ¥ (925) ¥ 235 $ (8,334)
Recycling (158) (577) (1,423)
Amount before the effect of deferred income tax (1,083) (341) (9,757)
Effect of deferred income tax 292 103 2,630
Net change in unrealized gains (losses) on investment securities (791) (237) (7,126)
Change in deferred gains (losses) on hedges
Amount increased for the period (309) 1,581 (2,784)
Recycling (1,150) — (10,361)
Amount before the effect of deferred income tax (1,459) 1,581 (13,145)
Effect of deferred income tax 447 (509) 4,027
Net change in deferred gains (losses) on hedges (1,012) 1,072 (9,117)
Foreign currency translation adjustments
Amount increased for the period 7,102 (8,086) 63,987
Net change in total other comprehensive income (loss) ¥ 5,298 ¥(7,251) $ 47,734
21 Subsequent Events
Not applicable
Financial Section
46 Annual Report 2019
Independent Auditor’s Report
Annual Report 2019 47
UNIZO Holdings Company, Limited
Headquarters
2-10-9, Hatchobori, Chuo-ku, Tokyo 104-0032
Japan
TEL: +81-3-3523-7531
Website
https://www.unizo-hd.co.jp/en/
Established
September 1, 1959
Capital Stock (as of March 31, 2019)
¥32,062 million
Employees (as of March 31, 2019)
386 (Group)
IR Contact
2-10-9, Hatchobori, Chuo-ku, Tokyo 104-0032
Japan
TEL: +81-3-3523-7536
History
Sept. 1959Daisho Fudosan Company, Limited, founded in Chuo-ku, Tokyo
June 1972 Company name changed to Jowa Kosan Co., Ltd.
Mar. 2004Group reorganized and Jowa Holdings Company, Limited launched. Transitioned to holding company structure
June 2009 Listed on 2nd Section, Tokyo Stock Exchange
Feb. 2011 Listed on 1st Section, Tokyo Stock Exchange
July 2015Company name changed to UNIZO Holdings Company, Limited
Corporate Information
48 Annual Report 2019
Stock Listing
Tokyo Stock Exchange (First Section)
Securities Code
3258
Common Stock (as of March 31, 2019)
Authorized: 50,000,000 shares
Issued: 34,220,700 shares
Number of Shareholders
(as of March 31, 2019)
33,534
Trading Unit
100 shares
Transfer Agent and Registrar
Mizuho Trust & Banking Co., Ltd.
2-1, Yaesu 1-chome, Chuo-ku,
Tokyo 103-8670
Japan
Rating Information ( JCR)
(announced on December 13, 2018)
Long-Term Senior Credit Rating: BBB+
Rating Outlook: Stable
Breakdown of Shareholders (as of March 31, 2019)
Stock Price and Trading Volume (as of March 31, 2019)
(Yen) (1,000 shares)
Major Shareholders (as of March 31, 2019)
Japanese institutions (non-financial) 31.57%
Financial institutions 18.11%
Individuals and others 28.24%
Foreign investors 17.25%
Securities companies 4.80%
Treasury shares 0.00%
17.3 18.3 19.30
10,000
20,000
60,000
70,000
0
1,000
2,000
30,0003,000
4,000
6,000
50,0005,000
7,000
40,000
Name Shares held(1,000 shares)
Ownership percentage
(%)
H.I.S. Co., Ltd. 1,549 4.52
The Kyoritsu Co., Ltd. 1,476 4.31
Nippon Steel Kowa Real Estate Co., Ltd.* 1,383 4.04
The Master Trust Bank of Japan, Ltd. (Trust Account)
1,314 3.84
NITTO BOSEKI CO., LTD. 1,301 3.80
SUGA Co., Ltd. 1,136 3.32
Japan Trustee Services Bank, Ltd. (Trust Account)
913 2.67
IBJ Leasing Company, Limited 883 2.58
TOKO ELECTRICAL CONSTRUCTION CO., LTD. 640 1.87
BARCLAYS BANK PLC A/C CLIENT SEGREGATED A/C PB CAYMAN CLIENTS
591 1.72
* The Japanese name of Nippon Steal Kowa Real Estate Co., Ltd. was changed on April 1, 2019 (English name remains unchanged)
Investor Information
Annual Report 2019 49
Annual R
eport 2019 U
NIZO
Holdings C
ompany, Lim
ited
A vegetable-based ink has beenused, containing less than 1%petroleum-based solvents toprevent atmospheric pollutionby minimizing emissions ofvolatile organic compounds.
UNIZO Holdings Company, Limited
2-10-9, Hatchobori, Chuo-ku, Tokyo 104-0032, Japan https://www.unizo-hd.co.jp/en/
Printed in Japan
Annual Report 2019UNIZO Holdings Company, Limited
Stronger Portfolio, Promising Future