Annual Report 2021
Fiscal year ended March 31, 2021

Innovation
for a New Lifestyle.

Profile
Since the foundation of the Takara Leben Group in 1972, our objective has always been to offer homes to customers under the principle of providing ideal, affordable housing that anyone can buy with confidence andpeace of mind. We began with the detached house business, transitioned to our core new built-for-sale condominium business to meet the needs of the age, and then, in 2001, became a listed company. We have achieved
continuous growth as a general real estate business developer by bringing to reality our corporate vision:“THINK HAPPINESS AND MAKE THE HAPPINESS.”In an ever-changing environment, we thoroughly considered what is the value that Takara Leben can provide
for the realization of a safe, secure and sustainable society as well as how to mark the 50th anniversary of theGroup’s founding in 2022, and how to grow in the future. In May 2021, we formulated a long-term vision and
new Medium-Term Management Plan. The Group will work together as one so that the HAPPINESS that weenvisage will lead to the HAPPINESS of all our stakeholders.

VISIONMISSION

THINK HAPPINESS AND
MAKE THE HAPPINESSCreating
Together

Origin of the Company Name
The “Takara” that we have used in our company name since the days of “Takara
Komuten” refers to “treasure,” as in a home is the treasure of a lifetime. The
word “leben” added following the change in our company name is German for“life, lifestyle and living,” which are keywords essential when discussing a home.
This represents the concept of hoping to offer homes that are the treasure of alifetime to as many people as possible.

CONTENTS
Value Creation at Takara Leben
History of the Takara Leben Group

2

Value Creation Process

4

Financial/Non-Financial Highlights

6

Materiality

8

Takara Leben’s Strategy

Main Businesses

Company Profile
Company name: Takara Leben Co., Ltd.

Stock and Fee-Based Businesses

Flow Businesses

In the stock business, the Takara Leben Group is building stable revenue from rent, and revenue generated fromover 60,000 properties managed on consignment. In addition, in the fee-based business we listed two investment corporations expanding into areas such as investment management compensation and thereby establisheda system that does not rely on flow businesses.

The core of flow businesses is the new built-forsale condominium business, and targets families,
dual-income and single-person households inmetropolitan areas such as the Tokyo metropolitan

Real Estate Rental Business 3.9%
In this business segment, the Group leases the condominiums, office buildings, hotels
and other properties it holds. Leveraging the Group’s real estate information network to
the maximum extent, we have been actively acquiring rental properties throughout
Japan.

Real Estate Management Business 3.7%
In this business segment, the Group manages and operates properties. In addition to
managing our own properties through our unique and detailed services, the Group also
manages properties handled by other companies on a contract basis and is steadily
growing the number of properties it manages.

Electric Power Generation Business 9.1%
The Takara Leben Group generates a stable flow of earnings by selling electricity to electric
power companies. The Group also works diligently to contribute to society by producing
renewable energy. In addition to revenue gained from the sale of electric power, we are also
conducting sales of power generation facilities to Takara Leben Infrastructure Fund.

Other Businesses 4.4%
The Takara Leben Group receives commissions derived from other segments, and is active acrossa wide range of fields, including construction contracting. Management compensation has
expanded along with the increase in assets such as infrastructure funds and REITs, and future
large-scale repair work projects are growing due to the increase in the number of managed units.

Consolidated
Net Sales¥148.3billion(FY2020)

Representative: Kazuichi Shimada,
Representative Director
area, and active seniors in regional city centers. In
addition, the Takara Leben Group is engaged inrenovating and redeveloping buildings in partnership with government.

Established: September 1972
Capital stock: 4,819 million yen(As of March 31, 2021)
Net sales: 1 48,397 million yen(Fiscal year ended March 31, 2021)

Real Estate
Sales Business 79.0%

No. of employees: 365
(Male, 292; Female, 73)(As of March 31, 2021)

The real estate sales business accounts for nearly
80% of the Takara Leben Group’s total net sales. The
core of this business segment is new built-for-salecondominiums that represent roughly half of all net
sales. In a seamless system from the purchase ofland for condominiums to planning, development andsale, the Takara Leben Group addresses thechanging needs of customers and makes proposals
suited to customer lifestyles.
Among a host of other endeavors, the Group is
engaged in the sale of detached houses which has
firmly established needs, as well as the renewal andresale of condominiums where the market has been
expanding in scale over recent years, and liquidation
business of profit-generating real estate for bothresidences and offices.

Head office: TEKKO BUILDING 16F,
1-8–2 Marunouchi, Chiyoda-ku,
Tokyo, Japan 100-0005
TEL.: +81-3-6551-2100

Related Companies
Leben Community Co., Ltd.



Takara Leben Tohoku Co., Ltd.



Takara Leben West Japan Co., Ltd.



Nikko Takara Corporation Co., Ltd.



Takara Leben Realnet Co., Ltd.



Leben Zestock Co., Ltd.



Leben Trust Co., Ltd.



Takara Asset Management Co., Ltd.



Takara PAG Real Estate Advisory Ltd.



Leben Clean Energy Co., Ltd.
(Formerly ACA Clean Energy Co., Ltd.)Sunwood Corporation(As of June 30, 2021)

Medium-Term Management Plan

10Interview with the CEO

14

Interview with the CFO

18

Measures Adopted in Each Business

20

Takara Leben’s Foundation
Social Systems Supporting
Corporate Value

24

Corporate Governance

27

Introduction of Directors

30

Compliance & Risk Management

31

Risk & Opportunity Recognition

32

Interview with an Outside Director

34

Data
Six-Year Financial/Non-Financial Summary

36

Stock Information

37

Other Disclosure Information
https://www.leben.co.jp/en/ Materials related to the Company’s Settlement of Accounts
 Quarterly Financial Results Reports
 Business Report Ordinary General Meeting of Shareholders Information
 Others

Editorial Policy and Cautionary Statements
Regarding Forward-Looking Statements
This report, which for the most part provides details of the Takara Leben Group’s
operations in fiscal 2020, the fiscal year ended March 31, 2021, has been
designed to provide stakeholders with a deeper understanding of our businessactivities, management strategies, performance, and other non-financial
information, including interaction with society and the environment.
This document was prepared to provide information regarding the Company’s
consolidated results in fiscal 2020 and should not be construed as a solicitation
for investment in securities issued by Takara Leben Co., Ltd. The information
provided in this report is fundamentally based on data available as of March 31,
2021. Any forward-looking statements including opinions and forecasts are basedon the best judgments of management as of the time this report was prepared.
Accordingly, Takara Leben does not guarantee or promise that any forward-looking
statements will be realized or achieved or provide any assurance as to theaccuracy or integrity of information. Moreover, the content of this report issubject to change without prior notice.

Net Sales

History of the Takara Leben Group¥148.3Harmonic Circle

billionEstablished as Takara Komuten Co., Ltd. in Itabashi-ku, Tokyo in 1972, Takara Leben began the sale of proprietarily branded condominiums in the 1990s. Having subsequently been quick to respond to changes in lifestyleand the demands of the times, the number of units supplied as well as net sales have steadily increased. We area general real estate business developer that comprises 11 Group subsidiaries, and our business area now
extends broadly throughout Japan.

The Takara Leben Group’s symbol is the Harmonic Circle, whichis comprised of three rings, representing customers, partners,
and employees and expressing how they are linked to one
another and expanding organically to create harmony while
supporting each other. The three rings convey our hope ofcarrying out our corporate vision to “THINK HAPPINESS AND
MAKE THE HAPPINESS” while resonating with one another. The
gradation of striking blue to deep navy expresses the intelligenceand sincerity pursued by everyone in the Group.

Cumulative number of newbuilt-for-sale condominium
units supplied

34,871

Surpassed¥100 billionunits(As of March 31, 2021)

mark(10,000 units)(Billions of yen)

40000

100

4

Net sales and cumulative number of new built-for-salecondominium units supplied

50th Anniversary logo 30000
3

Surpassed¥50 billion
mark

Over

50
Surpassed¥10 billion

Over

mark

10 20
year
anniversary

30

year
anniversary

year
anniversary

1982

1972

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2003

2004

2005

20,000 units

2006

2007

2008

2009

2010

2011

2012

year
anniversary

2013

2014

2015

2016

2017

2018

2019

2020

2021

2

10000

50

year
anniversary

10,000 units

2002

20000

40

Over

0

As we approach the 50th anniversaryof our founding in September 2022,
we have created a commemorative
logo that incorporates a Harmonic
Circle and the impression of a city
skyline into the design. The circle
symbolizes Takara Leben’s gentle,
sun-like embrace of the city, while
the five lines underneath express its
achievements, accumulated overthe past 50 years, which have led to
the further prosperity of cities andthe Group.

30,000 units

2022 (For the period

10

ended March 31)

History

1972 Established as Takara Komuten Co.,

1994 Commenced sales of the “Leben Heim”

Ltd. in Yamato-cho, Itabashi-ku

series of condominiums

2000 Changed the name of Takara
Komuten Co., Ltd. to Takara
Leben Co., Ltd.

2003 Listed on the Second Sectionof the Tokyo Stock Exchange

2008 L aunched the new Takara
Leben brand2013 Entered the electric power
generation business2004 L isted on the First Sectionof the Tokyo Stock
Exchange

2010 L aunched the detached1975 Purchased the Company’s head office to1996 Changed the name of Takara Management

the Nakaitabashi Head Office Buildings(Dai-ichi Takara Building)Co., Ltd. to Leben Community Co., Ltd.

1999 Undertook the absorption-type merger of1982 Launched the real estate rental

Takara Jyuhan Co., Ltd.

house business withdetached house built by theCompany in its own right2001 Relocated the Company’s head office
to Ikebukuro following completion of
the Takara Leben Head Office
Building2011 Commenced sales of custom-built

Listed on the JASDAQ market

business

2006 Relocated the Company’s head
office to the ShinjukuSumitomo Building

1986 Established Takara Jyuhan Co., Ltd. in aneffort to expand sales and intermediary
operations

1988 Established Takara

	
Established TAFUKO Co., Ltd. as aManagement Co., Ltd. as a real estate
management company

houses; exhibited products at theTachikawa Housing Exhibition Center2012 Launched the new LEBEN
condominium brandMade the real estate rental andmanagement business Takara
Housing Co., Ltd. (current
Leben Trust Co., Ltd.) into a
subsidiary company

financial brokering business2015 Made Live Net Home Co., Ltd. (current

2018 Changed the name of TAFUKO

2019 Changed the name of Nikko	
Made Jyutakujyouhoukan Co., Ltd. into
a subsidiary company

	Made PAG Investment Management Ltd. (current
Takara PAG Real Estate AdvisoryLtd.) into a subsidiary company

	Leben Trust Co., Ltd.
merged (absorption-type)with Takara Property Co.,Ltd.

	
Launched the new NEBEL	Leben Community Co., Ltd.
established Leben
Community Vietnam Co.,
Ltd. as a local subsidiary in
the Socialist Republic ofVietnam

Takara Leben Tohoku Co., Ltd.) into a
subsidiary company; relocated to
Sendai City, Miyagi Prefecture2016 Made Nikko Property Co., Ltd. into a
Established Takara Asset	Management Co., Ltd. as aninvestment management business	Made Sunwood Corporation into
an affiliate accounted for by theequity method

subsidiary company

Property Co., Ltd. to Leben
Trust Co., Ltd.

condominium brand	Changed the name of Nikko Kensetsu Co.,
Ltd. to Nikko Takara Corporation Co., Ltd.
C ompleted steps for Takara Leben
Infrastructure Fund to be the first to liston the Tokyo Stock Exchange
Infrastructure Fund Market

2014 Set up the Hokuriku Office2017 Set up the Osaka Branch	Made Oasis Co., Ltd. (current
Takara Leben Realnet Co., Ltd.)
into a subsidiary company

	Set up the Sapporo Office	Made Nikko Kensetsu Co., Ltd.
into a subsidiary company

Co., Ltd. to Leben Zestock
Co.,Ltd.

	Changed the name of Jyutakujyouhoukan Co., Ltd. to Takara
Leben West Japan Co., Ltd.

	Established representative office of
TAKARA LEBEN CO., LTD. in Hanoi
CityT akara Leben Real Estate
Investment Corporation was
listed on the Tokyo Stock
Exchange Real Estate
Investment Trust Securities
Market2021 Established Leben Funding
LLC.

	Made ACA Clean EnergyCo., Ltd. (currently Leben
Clean Energy Co., Ltd.) a
subsidiary	Set up the Nagoya Office	Relocated the Company’s head
office to the TEKKO BUILDING in
Marunouchi, Chiyoda-ku

Real Estate-Related Milestones
1970s

1980s

1990s

2001

2006

2008

2011

2016

2020

New availability of home loans

Land prices soar in the
bubble economy

After the bubble bursts, corporate
factories and housing are sold off andthe development of condominium
buildings on vacant land moves forward

The J-REIT market is establishedenabling real estate investment
trusts to list on the Tokyo Stock
Exchange for the first time.

With formulation and enactment of the
Basic Act for Housing, Japan’s policy shifts
to encourage use of existing housing stockwith refurbishment and renovation

The financial crisis sparked by the
Lehman Shock leads to ongoing
consolidation among real estatecompanies

The Great East Japan Earthquake and other disasters
spur strengthened efforts to adopt seismic isolation andvibration control structures for condominiums, as well as
securing emergency sources of power and other features

Compliance with energy conservation standards
becomes mandatory, in line with the enactment of the
Building Energy Conservation Act, a law concerned withbuilding energy consumption performance

Coinciding with the development of SDGs in
Japan, ZEH (Net Zero Energy House)-standard
housing needs accelerate

Housing Trends Wide-spread availability of combined
living room, dining room, kitchen typeurban condominiums

2

Takara Leben Annual Report 2021

 Intensifying condominium
product planning competition
D esire for detached houses
with gardens

 “Expensive, Far, Small” during the
bubble economy Mass supply oriented towards “Inexpensive,
Near, Large”

 R ising popularity of energy-saving, Good
Design, and other added-value propertiesG rowing number of rental properties
allowing for DIY, pets, and greater
lifestyle freedom S hift from assumption of relocation to apreference to permanent residency F ocus on community formation Wide-spread availability ofenvironmentally responsible
housing Growth of dual-residence lifestyles(lifestyles based in two locations) and
IoT housing Wide-spread use of teleworkand home office demand

Takara Leben Annual Report 2021

30

Value Creation Process
VISION

With its vision of “THINK HAPPINESS AND MAKE THE HAPPINESS,” theTakara Leben Group has been achieving sustainable growth in response to
the diversifying housing needs of its various stakeholders. While leveraging
the strengths of the Group, which possesses many business styles, and seeking synergies between each business, we will continue to provide new value
to society through the creation of concepts that go beyond traditional norms.

THINK HAPPINESS AND MAKE THE HAPPINESSLong-term Vision

National Brand Establishment
Become a “company trusted by all stakeholders” as theprofessional of space/city/renewable energy development

Materiality

Input

Strengths

Ability to generate stable cash flow Shareholders’ equity
¥53.6 billion
 Interest-bearing debt ¥118.5 billion(As of March 31, 2021)

Consolidated
Net Sales¥148.3
Rebuilding andredevelopment

Real Estate-Related
Businesses

Buildings, equipment,social infrastructure Power-generation facilities nationwide62

Mega-solar

Infrastructure funds
management

Planning
Capabilities

Intellectual Capital25(As of March 31, 2021)

Human Capital
Diverse human resources thatpossess expertise No. of employees
365
 Real estate notaries
207

Development

Sales

Real estate
management

RepairBrokerage■ Real Estate Sales
Business

Details P. 20■ Real Estate Rental
Business

Details P. 22

Sales
Capabilities

Realestate rental

Rentalmanagement

RepairSalesN umber of units sold■ Electric Power
Generation Business

Details P. 23■ Other Businesses

Details P. 23(FY2020)

Businesses derived from realestate rental businessNew built-for-sale detached houses
REIT andprivate fundmanagement

Rentalmanagement

110 unitsC umulative number of units supplied*New built-for-sale condominiums(As of March 31, 2021)

New Medium-Term Management Plan

Trust and reliability, brand strengthand a collaborative framework

7 Elements of the New Medium-Term

12(As of April 30, 2021)

 Business locations(Including head office and overseas locations)

9Managerial
Capabilities

1 Further growth of

4 Establishment of a stable

2 Maximized group

5 Improvement of productivity

core businesses
synergies

3 Optimized businessportfolio

financial groundand creation of newservices through promotion
of DX

N
 umber of managed housing units

66,037 units

Management Plan

6 Proactive ESG considerations
7 Personnel development andestablishment of the rewarding
workplace environmentIntellectual Capital
Advanced technologies andservices that respond todiversifying lifestyles

Human Capital
Encouraging the strong roles ofdiverse employees
 Paid leave utilization rate
55.4%
 P ercentage of women in management
7.34%
 P ercentage of persons withdisabilities employed
1.98%* Scope of calculation: Takara Leben(As of March 31, 2021)(FY2020)

34,871 units

Social and Relationship Capital

Takara Leben Annual Report 2021

¥6.5 billion

2,129 units(As of March 31, 2021)

4■ Real Estate Management Business
¥5.4 billion

New built-for-sale condominiums

 No. of employees (consolidated)1,061

Land, the global environment(FY2020)■ Electric Power Generation Business
¥13.4 billion■ Real Estate
Details P. 22
Management Business* Scope of calculation: Takara Leben

Natural Capital(FY2020)■ Other Businesses

Technologies and expertise that
respond to customer requests(As of June 30, 2021)

68.0%
 TSR over the past 5 years
 Dividend per share¥14 annually■ Real Estate Rental Business ¥5.7 billion
Housing lots
purchasing

A sound financial foundation thatenables further investments for
growthbillion■ Real Estate Sales Business ¥117.2 billion* Calculated based on the number of licenses
including wholesale portion(As of March 31, 2021)

 Group companies

Financial Capital

Development
Capabilities

Manufacturing Capital

OutcomeFacilities
management

Businesses derived from condominiums
equipped with solar power systems

Financial Capital No. of trademark registrations

OutputValue Chain

Details P. 8

(As of March 31, 2021)

R ental revenues¥5.7 billion(FY2020)

C urrent power generation

About 206 MW*Including wholesale portion(As of March 31, 2021)

Social and
Relationship Capital
Building regional vitality andrelationships of trust for the longterm with all stakeholders No. of new built-for-salecondominium contracts
1,958(FY2020)Natural Capital
Effective use of resources andinitiatives for renewable energy to
reduce environmental impact
 Amount of CO2 used
 Amount of energy used

Takara Leben Annual Report 2021

5

Financial/Non-Financial Highlights
Net Sales

Operating Income(Millions of yen)

(Millions of yen)

200,000

15,000148,397

160,000

ROE

10,78912,000

Dividend Payout Ratio

（％）

(%)

25

40

20

120,000

9,000

15

80,0006,000

1040,000

3,000

5

30

9.0

Previous Medium-Term Management Plan02017.32018.32019.32020.32021.32017.32018.32019.32020.32021.320

10Previous Medium-Term Management Plan

0

32.4

Previous Medium-Term Management Plan02017.32018.32019.32020.32021.3

Previous Medium-Term Management Plan02017.32018.32019.32020.32021.3In the fiscal year ended March 31, 2021, net sales totaled 148,397 million
yen, down 11.9% year on year. Despite posting a record high in the numberof units sold in our core built-for-sale condominium business, this decrease in
net sales was mainly due to the impacts associated with determining the timing of sales of profit-generating real estate and postponing the sale of power
generation facilities.Notwithstanding the aforementioned, net sales exceeded
our initial forecast of 136,800 million yen announced in September 2020.

In the fiscal year ended March 31, 2021, operating income came to
10,789 million yen, down 9.3% year on year in line with the downturn inconsolidated net sales. On a positive note, this was well in excess of the
6,000 million yen initially forecast in September 2020.

ROE has been in a downward trend, and came in well below the target of
15%. Despite this, when excluding such special factors as extraordinary
losses (impairment losses), ROE came to 17.2% and 13.9% in the fiscal
years ended March 31, 2020, and March 31, 2021, respectively. We willtake a variety of steps to improve profits including reducing selling, general, and administrative expenses, while building up equity.

While the dividend payout ratio in the fiscal year ended March 31, 2021
declined 6 percentage points year on year in line with booking impairment
losses for fixed assets, we achieved the target of 25–30% raised in the previous Medium-Term Management Plan during all three fiscal years covered by
the Plan. Takara Leben remains committed to continuously securing proper
returns and positioning shareholder returns as one of its most importantmanagement issues under the new Medium-Term Management Plan.

Net Income Attributable to Owners of Parent

Operating Income Margin

Current Power Generation

Number of Managed Housing Units(Millions of yen)

(%)

(MW)

(Units)

8,000

16

250

80,000

6,000

4,693

4,000

206

200

12

7.3

66,03760,000150

840,000
100

2,000

4
Previous Medium-Term Management Plan02017.32018.32019.32020.32021.320,00050Previous Medium-Term Management Plan02017.32018.32019.32020.32021.3

Previous Medium-Term Management Plan02017.32018.32019.32020.32021.3

Previous Medium-Term Management Plan02017.32018.32019.32020.32021.3In the fiscal year ended March 31, 2021, net income attributable to owners of parent was 4,693 million yen, down 12.5% year on year. This largely reflects the change in use of certain hotels to residences following areview of assets which led to the posting of an impairment loss on fixed
assets of 2,589 million yen in light of the uncertainties surrounding theimpact of COVID-19.

In the fiscal year ended March 31, 2021, the operating income margin
came to 7.3%, up 0.2 of a percentage point year on year thanks largely
to contributions from the high rate of return on self-developed residential
properties in the liquidation business and improvement in profit margins.

The Takara Leben Group is promoting the electric power generation business using renewable energy. As of the end of March 2021, 62 facilities
were in operation, an increase of 14 facilities from the previous year (calculated based on the number of licenses, including wholesale portion). In
March 2021, our largest solar power generation facility was completed in
Chiba Prefecture.

In the real estate management business, the number of units under management is steadily increasing with the number of managed housing units
amounting to 66,037 as of March 31, 2021, an increase of 6,290 units
compared with the previous fiscal year. Takara Leben will continue toactively acquire properties for management, including those managed byother companies, in order to realize stable revenue as a stock business.

Equity Ratio

D/E Ratio

Percentage of Women in Management

Percentage of Persons with Disabilities Employed(%)(Times)

30

3

(%)

(%)

10

2.5

2.2

26.5
2

8

1

6

7.34

1.98

2.0
1.5

25
1.0
0.5
Previous Medium-Term Management Plan

20

2017.32018.32019.32020.32021.3

Takara Leben has witnessed a gradual improvement in its equity ratio
since the fiscal year ended March 31, 2018. While falling short of its 30%
target, the Company’s equity ratio came in at 26.5% in the fiscal year
ended March 31, 2021. This was the highest level of the past five fiscal
periods. Going forward, every effort will be made to secure a more stable
equity ratio while diversifying fund procurement methods.

6

Takara Leben Annual Report 2021

Previous Medium-Term Management Plan02017.32018.32019.32020.32021.3In the fiscal year ended March 31, 2021, the D/E ratio was 2.2 times.
Over the three years from the fiscal year ended March 31, 2019 to the fiscal year ended March 31, 2021, the D/E ratio trended between 2.2 and2.3 times. As a result, the Company achieved its target of less than 3times set under the previous Medium-Term Management Plan for theentire period.

Previous Medium-Term Management Plan

4

2017.32018.32019.32020.32021.3The percentage of women in management was 7.34% in the fiscal year
ended March 31, 2021. The Takara Leben Group has also identified personnel development as a key strategy and positioned efforts to promote
the empowerment of women as one of its most important measures under
its new Medium-Term Management Plan. We aim to lift the percentage ofwomen in management to 9.5% in the fiscal year ending March 31, 2025,
through such measures as the development of a career system.

Previous Medium-Term Management Plan

0.0

2017.32018.32019.32020.32021.3

Takara Leben is promoting diversity and inclusion initiatives with the aimof becoming a corporate group where diverse human resources can
excel. In the fiscal year ended March 31, 2021, the percentage of persons with disabilities employed was 1.98%. With the goal of raising thispercentage to 2.30% by the fiscal year ending March 31, 2025, we will
work to build a comfortable work environment.

Takara Leben Annual Report 2021

7

Materiality
Basic Policy
Key Themes

To continuously improve its corporate value, the Takara
Leben Group is working to resolve social issues throughits business activities and formulating issues that have aparticularly significant impact on management as criticalissues (materiality). By working on responses to ESG,
such as strengthening efforts to address environmental
issues that include the provision of high-quality housing
and innovative services, we will fulfill our responsibilities asa public entity of society responsible for creating towns
while creating new value.

Customers
Competitors

Shareholders
and investors

Local
communities,
NPOs, and
NGOs

Media

Governments

Executives andemployees
Trading
partners

We contribute to improving therichness of people’s lifestyles bycreating new value. Details P.24

Forming Communities
We form communities withstakeholders—such as local
communities, trading partners,
and employees—and aim for
growth together.
Details P.25

Promotion Framework
To link our efforts with regard to materiality to the improvement of corporate value for all Group companies, we arebuilding a promotion framework which spans across allcompanies. We are also building a vertical promotion
framework unifying management with business activities
by making decisions and reporting at our Executive Committee meetings as appropriate.
In addition, we are organizing training for executives of
all Group companies and staff in charge of CSR. We arealso providing opportunities for information sharing anddiscussion with ground staff. Moving forward, we will further strengthen our activities and create new value by creating environments where employees can work with asense of ownership, and by reaffirming awareness of critical issues.

Creating Lifestyles
with Value

Representative Director
Executive Committee
Frequency: Once each month
Participants: Directors, auditors, and executive officers
Content: Decisions on measures; confirmation of progress

Scope of work: Formulation of direction; proposal of measures;
implementation and awareness-raising of
measures; progress management

Providing Comfortable
Spaces of High Quality
We support the comfortable andsafe living of our customers byproviding products bringing
great satisfaction to ourcustomers.
Details P.24

Process of Selecting Key Themes and Identifying Key Issues

We identified 31 issues relating to the business environment based on GRI, SDGs, SASB
and other international guidelines, as well as our Group philosophy and Medium-Term
Management Plan and demands from our customers, shareholders and investors, local
communities, employees and other stakeholders.

STEP

Evaluate significance from the Takara Leben Group’s perspective

2

We utilized questionnaires completed by all employees including management and officers
to identify relations between social issues and our business and Group philosophy, andrank them in accordance with priority.

STEP

Evaluate importance from our stakeholders’ perspectives

3

STEP

4

STEP

5

8

Grasp and organize social issues

We utilized questionnaires completed by customers, shareholders and investors, and business partners and drew on international guidelines such as the GRI and the SDGs to rank
issues.

Priorities for stakeholders

1

Developing Environments
and Cultures

High

We contribute to a sustainable
society by actively working on
environmental issues, and at thesame time, contribute to improving quality of life by providing
opportunities for mental activities such as learning and practicing the arts.
Details P.26

Identify key issues
Priorities were revised from the perspectives of the Takara Leben Group and our stakeholders, a review was conducted by management, and then the key issues were identified.

Set policies for key themes
Policies were set for the four key themes.

Takara Leben Annual Report 2021

 Support for diversifying
lifestyles andglobalization Propose new services for lifestyles: 5 proposals Provide new built-for-sale condominiums overseas:
3 properties (FY2024) Responses to changes
to business models
brought by an ageing
society anddepopulation Provide NEBEL properties: 3 properties Urban development andcreating towns Number of redevelopment projects: 2
 Support for local communities: 10 projects

 Construction and maintenance of a corporate
governance system Evaluate the effectiveness of the Board of Directors
 Enhance and reinforce corporate governance systems
 Investigate introducing clawback provisions
 Conduct anti-corruption education and training Promoting compliance Promote understanding by officers and employees ofhuman rights issues
 Number of incidents of disadvantageous treatment: 0 Use questionnaire surveys to determine rates of awareness of internal whistle-blowing systems

 Employee healthmanagement

 Medical examination rate: 100%
 Stress check rate: 100%
 Paid leave utilization rate: 70%

 Encouraging employment of diverse humanresources Percentage of persons with disabilities employed:
2.30%
 Percentage of women in management: 9.5% (FY2024) Rate of return to work after taking maternity or childcare
leave: 100%
 Training time per employee: 24 hours Sales staff questionnaire satisfaction rate: 90% Providing safe, secure
products and services Number of nonconformities relating to business processes and quality standards: No more than 10 Hold briefings concerning preventive measures: At least 5S
 QMS® Master certifications (other than operations
management departments): At least 2 employees Housing performance evaluation report acquisition rate: 100%
 Accident frequency rate; lost time injury frequency rate
(scope: employees): 0% Number of lost time injuries (scope: employees): 0 Improving customer
satisfaction Implement customer satisfaction surveys

 Improving value ofbuildings

 Safety Conferences: Once annually Special patrols (safety confirmation): 4 times annually Number of safety and health training sessions (scope:
employees): Twice annually Supplier survey results: A-rank acquisition rate: 90% Accident frequency rate; lost time injury frequency rate
(scope: suppliers): No more than 1.83%

 Providing buildings andspaces that consider theenvironment and culture Formulate an environmental policy Capture and disclosure of CO2 emmissions
 Set CO2 emissions reduction targets
E nergy-saving rank (Flat 35) acquisition rate: 100% of
detached houses
 Support for cultural development: 5 projects

 Responses to global
warming Acquisition of ZEH condominium certification: 1 property Acquisition of CASBEE certification: 1 property with
A-rank or higher certification Initiatives for renewableenergy New mega-solar power generation facility capacity
brought online: 20 MW Total power generation: 360 MW (FY2024) Effective use ofresources Maximize effective use of resources and water Responses to disasters Create BCP countermeasures manual Provide lifestyles that harmonize residents and surrounding environments,
such as the LEBEN or
NEBEL brands.

 Contributing to the revitalization of regional
areas through our regional city revitalization business, which connects
urban and regional areas.
 Improve our ability torespond to risk throughthorough risk assessmentand management.

 Improve customer satisfaction levels through theuse of our proprietary
Service Quality Management System (SQMS®).
 Create housing that combines both design andhabitability, pursuing theperformance of housing.
 Improve building value
through regular repairs
and renovations toimprove building comfort,
functionality, and safety.

At the Takara Leben Group, we have identified key themes and key issues through the following steps.
STEP Provide products andservices that respond tochanging social issues
and needs.

 Corporate activities thatcan respond to social
needs with an emphasison dialogues with our
stakeholders.

CSR Promotion Team

Business activities: Execution of policies and progress
management

Key Issues Provide opportunities andenvironments where adiverse range of people
can work energetically.

Executive in Charge of CSR

Takara Leben Group CSR Staff

PoliciesHigh

Priorities for the Takara Leben Group Reduce greenhouse gas
emissions through supplying housing with highenvironmental performance and our renewableenergy power generation
business.
 Provide seismic-resistantand fire-resistant housingthat can withstand natural
disasters.
 Provide opportunities for
cultural activities to ourstakeholders.

KPI

Takara Leben Annual Report 2021

9Medium-Term Management Plan
New Medium-Term Management Plan (FY2021–FY2024) General Concept

Previous Medium-Term Management Plan (FY2018–FY2020) Review

Evolution through Sustainable Change

ThemeGrand Design— Innovation for a New Lifestyle. —Strategies by Segment
Real Estate
Sales Business

01.

Further growth of core businesses

02.

Maximized group synergies

7 Elements of the03.

Optimized business portfolio

New Medium-Term
Management Plan

04.

Establishment of a stable financial ground05.

Improvement of productivity and creation of new services through promotion of DX

06.

Proactive ESG considerations

07.

Personnel development and establishment of the rewarding workplace environment

Establishing stable and sustainable foundations for growth /Diversifying the business portfolio / Responding to ESG

Basic Policy

Performance Results

New Built-for-Sale Condominiums• Targets include families, dual-income families, single-person households, seniors• Supply of compact condominiums that meetchanges in the times

While strong willingness to purchase condominiums for actual
demand is observed, we have built a system with capacity of supplying 2,000 units annually

New Detached Houses• Outskirts of Tokyo metro area, within 10 minutes
walk of station• Thorough implementation of short-term return cycle

Restructured the system by handpicking the supply areas due to thetough competitive environment packed with contenders

Details P.12-13

Renewal Resale• Uptake of expanding used condominium needs• Increase number of owned units, develop a business cycle

Liquidation

Successful uptake of used condominium needs led to growth withincreased year-end owned units

The amount of both investment and sales increased, secured a highgross profit margin from self-developed properties• Diversification of exit points• Optimization of the balance sheet

Declined due to expansion of liquidation sales

Real EstateManagement
Business• Replace other companies in management withcompetitive services• Spin-off into Other businesses, such as large-scale
repair works

Achieved the plan through replacements from other company
properties

Electric Power
Generation
Business• Development of environment-friendly renewableenergy• Incorporation of post facility-sale commission
incomeFacility sale timing was delayed due to the postponed construction
schedule
Electricity sale, profits declined due to early depreciation following
completion of large-scale projects

Other
Businesses• Expansion of revenue derived from each segment

Increase in management compensation due to expansion of scale ofinfrastructure fund and REIT

Performance Goals / Management Index

Operating Income
Ordinary Income
Net Income Attributable to
Owners of Parent
Management Index
Equity Ratio
LTV
D/E Ratio
ROE(Millions of yen)

FY2021

Real Estate• Securing of stable revenue
Rental Business

Performance Goals (FY2020)
Net Sales

Performance Goals

Performance Results

170,000 million yen
14,500 million yen
13,000 million yen
9,000 million yen
30%Less than 60%
Less than 3 times

15%

Performance (FY2020)
Net Sales
Operating Income
Ordinary Income
Net Income Attributable to
Owners of Parent

FY2022

FY2023

FY2024

Net Sales

158,600

155,200

187,100

203,700

Gross Profit

29,10028,40035,20038,700Operating Income

7,900

8,000

13,20015,700Ordinary Income

7,100

7,400

12,50015,000Net Income Attributable to
Owners of Parent

4,800

5,000

8,500

10,000Management Index

148,397 million yen
10,789 million yen
9,933 million yen
4,693 million yen

Management Index
Equity Ratio
LTV
D/E Ratio
ROE

26.5%
58.0%
2.2 times
9.0%

Equity Ratio

LTV

D/E Ratio

ROE

More thanLess thanLess thanMore than30%(FY2024)

60

%

2.5

13

%

times

(After FY2023)(13.9%*)* Excluding factors related to impairment loss

Shareholder Returns

Review by Fiscal Year
FY2019FY2020Progressed mostly as plannedBooked valuation write-downs ofsome hotel project inventories as
impact of COVID-19 began to emerge

Growing impact of COVID-19• Achieved planned net sales and net
income• Operating income and ordinary income
fell short of goals due to increased
sales and personnel expenses following nationwide expansion

10

28 yenFY2018

Takara Leben Annual Report 2021

• Achieved planned net sales with a record
high number• Income fell short of the goal with accrued
lower-of-cost-or-market loss of 1,008 million yen and impairment losses of 2,071
million yen for hotel assets• New built-for-sale condominium businessactual demand prospered, resulting inrecord-high net sales and delivered units• Facility sales schedule postponed inelectric power generation business due
to careful selection of projects anddelayed construction

 Year-end dividend Interim dividend

Dividend Payout Ratio
Previous Medium-Term
Management Plan Targets
20–25%

24 yen14 yen14 yen14 yenFY2020
ActualFY2021
Forecast

FY2022
Forecast

30–35%FY2023
Forecast

FY2024
Forecast

Takara Leben Annual Report 2021

11

Medium-Term Management Plan

7 Elements of the New Medium-Term Management Plan (FY2021–FY2024)
The Takara Leben Group has formulated seven elements designed to connect with sustainable growth in corporate value. In working towards achieving the targets for the fiscal year ending March 31, 2025, we will selectively
engage in these strategies throughout the Group.

01.

Further growth of core businesses

As the Group’s core business, the new built-for-sale condominium business will establish a stable, nationwide
supply system in aims of recording sales of 2,600 units by
the Plan’s final year. As the next mainstay of the Group,
the liquidation business will maintain an investment level

New Builtfor-Sale
Condominium
Businessof 30 to 50 billion yen per year and actively promote rental
residence development. The energy business will develop
a business model for de-FIT, and will penetrate into direct
and bilateral energy trading.

Year 1

Year 2

Year 3

Year 4FY2021

FY2022

FY2023

FY2024• Establish an integrated system for purchase,
product planning and sales• Record 2,400 unit sales

02.

32.0%

 Real Estate Sales Business  Real Estate Rental Business  Real Estate Management Business Energy Business  Other Businesses

26.3%

FY202119.9%

FY202221.5%

FY2023

FY2024• Record 2,600 unit sales

68.0%

73.7%

• Develop FIT-based electric
power generation facilities• Develop FIT-based electric
power generation facilities• On-site PPA initiatives• Off-site PPA initiatives• Develop FIT-based electric power generation facilities• On/off-site PPA initiatives• Micro grid initiatives

Maximized group synergies
business and energy business. Through the expansion ofexisting businesses and entry into new businesses, theGroup is strengthening efforts to enhance group wide
synergy.

Real Estate Sales BusinessTakara Leben Tohoku Co., Ltd.
Takara Leben West Japan Co., Ltd.

Renewal Resale Business

Real Estate Rental Management Business

Nikko Takara Corporation Co., Ltd.
Sunwood Corporation

Energy Business

Leben Zestock Co., Ltd.

Leben Trust Co., Ltd.

Leben Clean Energy Co., Ltd.

Real Estate Distribution Business

Real Estate Management Business

Investment Management BusinessTakara Leben Realnet Co., Ltd.

Leben Community Co., Ltd.

Takara Asset Management Co., Ltd.
Takara PAG Real Estate Advisory Ltd.

Takara Leben Annual Report 2021

04.

Establishment of a stable financial ground

Build a robust balance sheet•B uild area-specific financial institution networks•D iversify financing schemes•A ctively use off-balance schemes•S ecure funds for growth investments• Develop profit-generating real estate for long-term ownership• Perform constant investments

Centered on the eleven main Takara Leben Group subsidiaries the Group is currently engaged in businesses thatleverage each company’s strengths in sectors beyond justthe real estate sales business, including the management

12

Business Portfolio Shiftness, which includes penetration into direct and bilateralenergy trading and increasing managed units. The Group willbuild a business portfolio that is optimized to the specificneeds of customers as they evolve and changes in the times.

80.1%

78.5%

• Construction cost control

Liquidation
Business

Renamed from
“Electric Power
Generation Business”
in FY2021

Optimized business portfolio

Along with maintaining expansion of the real estate sales
business as the linchpin strategy, including maximizing thepotential of the new built-for-sale condominium business thatstands at its core, the Group aims to grow the stock fee busi-• Expand bases for the nationwide deployment• Record gross profit of 5 billion yen constantly throughout the years

EnergyBusiness

03.

Examples of initiatives for establishing a stablefinancial ground• Develop new relationships with financial institutions• Leverage new financing schemes, including
crowdfunding• Effectively leverage bridge funds and SPC

05.

Improvement of productivity and creationof new services through promotion of DX

DX promotion•C hallenge for AI-enabled marketing capabilities and create
new services through DX promotion
Group ICT promotion•O rganizing a seamless work environment through the intergroup ICT promotion addressing workstyle reforms, including the “With COVID-19” lifestyle
Group security reinforcement•G roup ICT promotion and reinforcement of the security
structure
Productivity improvement• Improved productivity by promoting digitalization ofoperations
Examples of DX promotion initiatives• Introduction of a smartphone-enabled condominium
management system• IT-enabled condominium business promotion work

06.

Proactive ESG considerations

Environment-friendliness• Promote energy business and disclosure of non-financial
information such as environmental data
Carbon neutrality• Implement various schemes to achieve carbon neutrality
within the Group
Governance controls• Control corporate governance through such effort as raising percentage of outside and/or female directors
Risk management measures• Establish and reinforce the risk management structure
Examples of• Implement customer satisfaction
key ESGsurveysrelated indexes • Rate of women in management• Capture and disclosure of CO2
emissions•S et CO2 emission reduction target, etc.

07.

Personnel development and establishmentof the rewarding workplace environment

Personnel development• Promote career development programs
Workstyle reforms• Proactive support for workstyle reforms
Enhanced engagement• Enhanced engagement through promotion of inner branding including the 50th Anniversary Project
Examples of personnel related initiatives
 xpansion of educational and training programs•E•P romotion of taking paid leave and utilization of
telework• Implementation of activities for the 50th Anniversary

Takara Leben Annual Report 2021

13

Interview with the CEO
Takara Leben Group’s Long-Term Vision
Formulated the Group’s long-term vision for the next decade to fulfill our responsibilities as apublic entity of society and achieve both the creation of corporate value and the realization of asustainable society.

Even amid drastic changes inlifestyles, we will resolutely put
into effect the new Medium-Term
Management Plan by means of abusiness style that leverages ourstrengths.
In addition to more actively addressing ESG, we aim toincrease corporate value by increasing the synergy
between our core business, the new built-for-sale condominium business, and each of our other businesses.

National Brand Establishment
Become a “company trusted by all stakeholders”
as the professional of space/city/renewableenergy development
Robust and stablecorporate management

Solid business growthand shareholder returns

VISION

Awareness andbehaviors as being apublic entity of society

THINK HAPPINESS AND
MAKE THE HAPPINESS

Higher employee
engagement

Co-creation with local
communities andenvironment involved

Kazuichi Shimada
Representative Director,
CEO and President Executive Officer

Q1
Looking back on the fiscal year ended March 31, 2021,
please provide details about your initiatives and tell us
about your achievements and any issues. Also, pleasetell us how you see the current environment in which
Takara Leben operates, including COVID-19.
The fiscal year ended March 31, 2021 was the final year of
the previous Medium-Term Management Plan, and due tothe impact of COVID-19 we were forced to revise the figures and announced a revision of our earnings forecast in
September 2020.

14

Takara Leben Annual Report 2021

From April to May 2020, when the state of emergency
declaration was in force, in principle all showrooms wereclosed in the new built-for-sale condominium business, ourcore business, which had a major impact on our sales
activities. However, from June 2020 onward, following thelifting of the state of emergency declaration, the number ofvisitors increased and maintained the same momentum
even in the months when the numbers of visitors normallydecrease every year. In addition, the numbers accessing
property sites via the Internet increased significantly overthe full year exceeding the same month last year. Due tostrong demand for condominiums from these, as ofDecember, the number of units for which contracts had
been signed against the number of condominium units
scheduled for delivery had exceeded the initial forecast of
1,980 units.
In the fiscal year under review, the number of units delivered reached a record high of 2,129, gain on sale ofself-developed residence properties (rental properties) in
the liquidation business also contributed and, although net
sales were down on the previous period, gross profit wasabove the previous year’s level. In addition to the ongoing
low interest rate policy, there were factors such as theincreasing interest in and concerns about customers’
housing due to government requests to stay at home, andthe changes in work styles, including working from home,and I think these signs are more significant than the Company’s expectations in the COVID-19 pandemic. Customers’ awareness of housing is changing and lifestyle
diversification progressing, and I think that this change willcontinue in the years to come.
Meanwhile, since it was unclear when or if the COVID-19
epidemic would end and the situation return to normal in
the fiscal year under review, we conducted a review of ourhotel asset owned policy. As a result of some changes inusage from hotels to residences, impairment losses of

2,589 million yen were recorded under fixed assets.
While people are becoming more aware of and interested in their homes, it is also true that, in contrast, somepeople are worried about the future due to the changes inthe social environment. While observing in what ways suchchanges will affect medium- to long-term trends, we willaddress these changes in a flexible manner.

Q2
Looking back on the previous Medium-Term
Management Plan, which ran from the fiscal year ended
March 31, 2019 to the fiscal year under review, ended
March 31, 2021, please tell us about your strategic
targets and achievements as well as about any issues.
Under the previous Medium-Term Management Plan, we
formulated three basic policies: establishing stable andsustainable foundations for growth; diversifying the business portfolio; and responding to ESG. Net sales in the firstand second years of the plan achieved steady targets, particularly those in the second year, when a record high wasrecorded. However, the effects of COVID-19 began toappear from the end of the second year, and the target
was not achieved in the third year, the fiscal year ended

Takara Leben Annual Report 2021

15

Interview with the CEO
March 31, 2021.
On the other hand, I do think that our efforts achieved
some results. In terms of “establishing foundations for
growth,” we were able to build a supply system for morethan 2,000 units in the new built-for-sale condominium
business, which is our core business. In addition, the liquidation business has grown to become a second mainstay,and the fund business is also growing, and thus our business domains are steadily expanding. With regard to our
response to ESG, we continued to develop the electric
power generation business, discussed ESG material issues
internally, and set KPIs. In the years to come, we will
strengthen our efforts toward the achievement of our goals.

Q3
Please provide us with an outline and tell us about thestrategy and business goals of your new Medium-Term
Management Plan (FY2021-FY2024).
In formulating our new Medium-Term Management Plan,
we adopted “national brand establishment” as our new
long-term vision. Due to the recent rise in social awarenesswith regard to ESG and sustainability and the demand forhigher functionality in housing, this represents a re-examination and formulation of our role, which is the basis of ourdaily lives called housing. The Plan is a sign of our determination to become a company trusted by all stakeholders byrealizing a sustainable society as a public entity of society,rather than a company that pursues only profit.
In addition, in light of COVID-19’s effects, instead ofthree years the new Medium-Term Management Plan has
been formulated as a four-year plan. We have adopted
seven elements as important strategies and will steadily

implement them one by one.
The first element is to expand the real estate sales business, including the core business of new built-for-sale condominiums. The second and third elements involve
maximizing group synergies and optimizing our businessportfolio. By growing each Group company in the businessareas that we have been expanding so far, we will generate
profits while taking advantage of synergies throughout theGroup, including Takara Leben itself. From the fiscal year
ending March 31, 2025 onward, we will continue this initiative as a strategy geared toward the next growth stage.
As the fourth element, we will establish stable financial
ground by diversifying fundraising methods to realize thesestrategies. The fifth element is the promotion of DX. In condominium purchasing, more than 80% of the contracts
have already been visit reservations made via the Internet,
so it can be said that DX promotion is indispensable for oursales strategy. We will examine whether DX is capable ofdoing things such as increasing Companywide productivity,
purchasing land used for business as well as improving
customer service. Regarding proactive ESG considerations, which is the sixth element, we will connect this tospecific measures, such as the supply of our first net zeroenergy house (ZEH) condominiums, while remaining awareof KPIs.
With regard to personnel, who form the final element, we
will actively promote system reforms and workstylereforms, while further improving the working environment.
In addition, we will engage in the development of personnel, who are indispensable to corporate growth, throughcareer development programs.
As performance goals, over the first two years, we will firstly
return net sales to their pre-COVID levels. In the final fiscal

Grand Design

01.

Further growth of core businesses

02.

Maximized group synergies

03.
7 Elementsof the New
Medium-Term
Management
Plan

Optimized business portfolio

04.

Establishment of a stable financial ground05.

Improvement of productivity and creation of
new services through promotion of DX

06.
07.
16

Takara Leben Annual Report 2021

Proactive ESG considerations
Personnel development and establishmentof the rewarding workplace environment

year, ending March 31, 2025, we are targeting net sales ofmore than 200 billion yen and net income of 10 billion yen.

Q4
Please tell us about the areas and initiatives that you
are particularly focusing on in the important strategies
of your new Medium-Term Management Plan.
One of the elements of the new Medium-Term Management Plan is the sales plan adopted for new built-for-salecondominiums, which form our core business. Since thenumber of units delivered increased more than expected in
the fiscal year under review, the number of properties solddecreased, and we refrained from purchasing land due tothe COVID-19 pandemic, we have set at 1,800 the numberof units to be delivered in the first year, the fiscal year ending March 31, 2022, and at 1,500 in the second year. In
the third year, we are targeting the delivery of 2,400 units,
and in the final year 2,600 units, which is much higher than
the record high.
In this way, we will strategically promote the liquidation
business and the electric power generation business while
focusing on the new built-for-sale condominium business.
In the liquidation business, we will expand the asset scaleof Takara Leben Real Estate Investment Corporation andstrengthen a flow business for property sales and a feebased business system for management compensation.
Similarly, in the electric power generation business, in
April 2021 ACA Clean Energy (currently Leben Clean Energy), which develops electric power generation facilities,
became a consolidated subsidiary and changed the business segment name to the Energy Business, and over the
next four years will build a new electric power generation
supply system. Specifically, not only by participating in the
feed-in tariff (FIT) system, through which the nation guarantees that electric utilities will purchase the generated electricity at a fixed price, but also going forward we will
aggressively enter into a bilateral energy trading power purchase agreements (PPAs) model, by which contracts are
directly concluded between electric power generation companies and private companies and local governments thathave demand for electricity.
The need for renewable energy will continue to grow inthe years to come toward the realization of a carbon-freesociety. In these times of major environmental change, wewill strategically promote the energy business as part of thegreat value that Takara Leben can provide.

Q5
As you will be marking the 50th anniversary of theGroup’s founding in 2022, please tell us about theCompany’s future direction and long-term vision.
Since our founding in 1972, we have adopted the conceptof “ideal, affordable housing that anyone can buy with confidence and peace of mind” and been working to improvethe value of “housing” that has such a major impact on ourcustomers’ lives.
As we approach the major milestone that is the 50th
anniversary of our founding, through activities that haveincluded the formulation of the slogan “Innovation for a
New Lifestyle.” and the design of the 50th anniversary logo,
I had once again been considering together with our
employees what kinds of “innovations” could be provided
to customers as value. In the fiscal year under review, theInnovation Development Project was launched by employees, and a presentation was held to propose ideas that
embody the “innovation” that the Company has adopted.
At the presentation, we commended excellent ideas fromthe 40 proposals and are currently working toward the realization of the project.
I tell new employees, “Do work for yourselves.” First of all,if they do a job to their own satisfaction, Takara Leben will
become the company of choice for their customers, and thatwill be of benefit to the Company. Employees, business partners, and shareholders will all be happy, and this will lead tothe creation of unique value that can be shared with all
stakeholders. I think that the result of that will be the longterm vision of “national brand establishment.”
To create value on a permanent basis for 50 to 100 years
as a company trusted by society—based on our corporate
vision of “THINK HAPPINESS AND MAKE THE HAPPINESS” and through the challenges faced voluntarily byeach and every employee—we will continue our efforts toimprove housing and society and realize a sustainable society from now on.

Takara Leben Annual Report 2021

17

Interview with the CFO
Q2
The Company has positioned the establishmentof a stable financial ground as a key strategy
under its new Medium-Term Management Plan
(FY2021-FY2024). Can you elaborate andprovide us with details of specific strategies andmeasures going forward?

In addition to continuing to grow in
multiple business fields and steadily
accumulating shareholders’ equity,
Takara Leben is diversifying fundprocurement methods as it works
diligently to establish a stablefinancial foundation.

Masashi Yamamoto
Director, CFO andManaging Executive Officer

Q1
Please provide us with details of performance
results and related factors for FY2020.
The consolidated financial results for the fiscal year
ended March 31, 2021, saw net sales decrease
11.9% year on year, to 148,397 million yen, operating income decline 9.3% year on year, to 10,789
million yen, and ordinary income fall 11.3% year on
year, to 9,933 million yen. Meanwhile, net income
attributable to owners of parent dropped 12.5%
year on year, to 4,693 million yen.
Although net sales and earnings decreased compared with the previous fiscal year, results exceeded

our initial forecast, which took into account the
impact of COVID-19. As far as new built-for-salecondominiums are concerned, one of the main reasons for exceeding forecasts was that actual
demand for the condominiums that we handle was
not significantly affected by the pandemic withstrong trends in sales activities compared with condominiums for investment, which are more susceptible to the effects of economic trends. From aliquidation perspective, a second factor is that thesale of real estate rental residential properties developed by the Company generated a high profit
margin.

Management Index

18

What are your thoughts and assumptions
regarding shareholder returns, especiallyregarding the dividend payout ratio and sharebuybacks?
Takara Leben has positioned the return of profits toshareholders as one of its highest priorities. Guided
by this principle, our policy is to pay stable dividends commensurate with our business performance on a continuous basis while appropriately
securing the internal reserves necessary for continued growth.
Although total shareholder returns (TSR) has fallen
below 100% due in part to the drop in our shareprice, we achieved the dividend payout ratio target
in each of the three fiscal years of the previous
Medium-Term Management Plan, which was set at25-30%. Under the new Medium-Term Management Plan, we have raised the dividend payout ratio
target to 30-35%. We are considering raising thisratio even further once we have achieved our target
equity ratio. In this manner, we are committed toactively providing returns to our shareholders.
Takara Leben has set a treasury stock holding
standard of about 10%, which we employ when
undertaking an M&A transaction and to retire treasury stock when the holding standard is exceeded.
We are also considering the buyback of shares as
and when appropriate. However, our first priority is
to build up our capital base and improve our equity
ratio.
Looking ahead, we will continue to increase net
sales and income while expanding our business asa general real estate business developer in an effort
to return more profits to our shareholders.

(%)

Previous Medium-Term
Management Plan

FY2018FY2019FY2020(%)

30% (Fiscal year ending March 2021)

25.6

25.9

26.5

LTV (Loan to value)

(%)

Less than 60%(Every fiscal year ending March)

60.5

58.3

58.0

(Times)Less than 3 times(Every fiscal year ending March)

2.3

2.2

2.2

15% (Every fiscal year)

14.3

10.9

9.0

ROE

Q3

Total Shareholder Returns (TSR)

Equity ratio

D/E ratio 

In the previous Medium-Term Management Plan
(FY2018-FY2020), the Company identified four target management indexes: an equity ratio of 30% or
more, an LTV ratio of less than 60%, a D/E ratio ofless than 3 times, and an ROE of 15% or more. Dueto the increase in asset size associated with the
expansion of business fields and the posting of an
impairment loss, we fell slightly short of our equity
ratio and ROE targets. On a positive note, we wereable to control both our LTV and D/E ratios throughout each of the three fiscal years of the Plan.
Under the new Medium-Term Management Plan,
we have once again identified four target management indexes: an equity ratio of more than 30%, an
LTV ratio of less than 60%, a D/E ratio of less than
2.5 times, and an ROE of more than 13%. Our realestate business model is underpinned by borrowings from financial institutions. As businessexpands, interest-bearing debt tends to increase.
With this in mind, we have set a higher D/E ratio target than previously identified to ensure that we generate solid profits and build a sound financial
structure by accumulating internal reserves. While
our ROE target is slightly lower under the new Medium-Term Management Plan, we are proud to saythat it is high for the industry. Moving forward, Takara Leben will continue to pursue its business in a bid
to achieve these established goals.
Among a host of specific initiatives, we have continued to actively expand our nationwide network.
As a part of these endeavors, we opened the
Nagoya Office in June 2021. We are also strengthening our financial institution network in each area
to ensure stable funding. In order to further diversify
fund-raising methods, we established Leben Funding LLC. in January 2021, and have undertaken
crowdfunding in cooperation with Funds, Inc. The

funds raised will be used to finance renewable energy-related projects and other CSR activities. In thismanner, we will continue to promote a variety ofmeasures in a bid to establish a stable financial
ground, one of the seven elements of the new Medium-Term Management Plan.

(%)

Takara Leben Annual Report 2021

TOPIX: Share index (including dividends)of return on investment

200

Takara Leben TSR

10002017.32018.32019.32020.32021.3

Takara Leben Annual Report 2021

19

Measures Adopted in Each Business
Real Estate Sales Business

Planning and development of new built-for-sale condominiums anddetached houses, and nationwide expansion of the sales business andthe liquidation business engaged in sales of profit-generating real estate

FY2020 Performance Results
Although the COVID-19 pandemic led to a period during which showrooms were closed and other sales activities were restricted, sales progressed more favorably than initially planned. As a result, segment performance was generally robust, except for the detached house business,
which was faced with a tough competitive environment. Net sales fell
12,448 million yen, or 9.6%, year on year to 117,200 million yen, whereas the gross profit margin rose 3.8 points year on year to 21.2%.
In particular, the core new built-for-sale condominium business delivered its highest number of units to date at 2,129, far exceeding the
1,980 units targeted for delivery under the initial plan. Both net sales andgross profit reached their highest levels to date, with net sales increasing
2.9% year on year to 79,435 million yen, and gross profit increasing
10.8% year on year to 17,339 million yen. Although the number of purchased units declined in the renewal resale business, high demand forused condominiums drove sales above those of the previous fiscal year.
In the liquidation business, sales of properties including highly profitableself-development residence properties helped to greatly improve theprofit margin.

New Medium-Term Management Plan Strategy■■

Net sales (Millions of yen)
Gross profit margin

129,649

117,200

104,823

20.1%

2019.3

17.4%

2020.3

Takara Leben Annual Report 2021

FY202121.2%

2021.3

FY2022LEBEN MORIOKA CHUO-DORI THE BIRTH

FY2023

FY2024

Net sales

Gross profit

Net sales

Gross profit

Net sales

Gross profit

Net sales

Gross profit

New built-for-salecondominium business

70,00014,00058,00012,00093,50019,500101,500

21,500

New detached housebusiness

8,900

900

11,0001,500

12,2001,600

13,5001,800

Renewal resale business

5,900

900

6,400

1,000

7,100

1,100

8,500

1,300

Liquidation business

22,0003,100

38,0005,400

36,0005,100

36,0005,100Other business of realestate sales

1,100

200

1,000

300

1,000

300

1,000

300

New Built-for-Sale
Condominium Business

LUXENA KADOMA

20

Given uncertainty surrounding exactly when the COVID19 pandemic will come to an end, the new Medium-Term
Management Plan maintains a conservative outlook forthe future, with the fiscal year ending March 31, 2022,
expected to see net sales fall 7.9% year on year to107,900 million yen and gross profit fall 23.3% year on
year to 19,100 million yen. In the final year of the Plan, theGroup will grow net sales to 160 billion yen and grossprofit to 30 billion yen.
(Millions of yen)Previous Medium-Term Management
Plan Review
Purchasing activities by Group companies during the fiscal year ended
March 31, 2019 produced results, with sales expanding nationwide andnet sales trending favorably. Upon entering 2020, however, the significant
impact of the COVID-19 pandemic forced each segment to take action.
In addition to seeing greater demand for compact condominiums due
to growth in single-person households and dual-income households, thereal estate market experienced a diversification in customer lifestyles,
including expanded use of telework and changes in values, due to theimpact of the COVID-19 pandemic. Against this backdrop, supplying
condominiums that matched these new needs helped to maintain stablerevenue from sales of new built-for-sale condominiums, despite the
COVID-19 pandemic.
The liquidation business saw the market contract during the fiscal year
ended March 31, 2021, due to the COVID-19 pandemic, and experienced a coinciding decline in investment amount. Despite this situation,
the Group achieved our targets for gross profit as part of the liquidation
business, which has grown into a second mainstay for the Group, during
all three years of the Plan.

As our primary operation, the real estate sales businessaccounts for roughly 80% of total net sales throughout theGroup, where several other Group companies besides Takara
Leben also engage in these business activities. Within the
new Medium-Term Management Plan, the Group has presented “Further Growth of Core Businesses” as one of ourcore strategies, through which we will promote the expansionof peripheral businesses and business synergy, while maintaining new built-for-sale condominiums as our core.

The Group will expand its main brand “LEBEN” and its compact condominium brand “NEBEL” nationwide. Moreover,
we will expand target groups by developing new brands that
address different needs, and will actively penetrate the redevelopment business, including high-visibility, station-front
redevelopments and renewal projects for aging condominiums. These efforts are aimed at increasing annual sales forthe fiscal year ending March 31, 2025, to 2,600 units,
exceeding the highest sales levels to date.
The Group also opened the Nagoya Office in June 2021 inan effort to ensure a stable nationwide supply system. Withbases already in operation in the seven cities of Sapporo,
Sendai, Toyama, Tokyo, Osaka, Matsuyama, and Fukuoka,
metropolitan areas (the Tokyo metropolitan area, Chubu
area, and Kinki area) accounted for 49.6% of sales in the fiscal year ended March 31, 2021. As a future strategy, theGroup will engage in stable purchase and supply through adomestic operation consisting of eight bases in order toachieve a 50-50 breakdown in the ratio of sales between themetropolitan areas and other regional cities in which we
operate. This effort is intended to further expand market
share and improve customer satisfaction.

Renewal Resale BusinessIn order to address the recent growth trend in used properties, the Group will leverage the Group’s internal real estate
network to its fullest as a means of actively securing inventories. Specifically, we aim to establish a stable renewal business cycle targeting 1,050 owned units by the end of the
fiscal year ending March 31, 2025.
The Group will also engage in other measures to further
improve profitability, including enhancing efficiency of customer proposals through IT adoption and DX.

Liquidation Business
Having set an investment pace of 30 to 50 billion yen per fiscal year as the basic policy, the Group will implement an
investment-recovery cycle and further grow this operation
into a second mainstay. Moreover, in order to increase thetotal ratio of the asset portfolio accounted for by residences
and offices to 70%, the Group will actively promote residence development. The Group will also focus efforts ondevelopment of environmentally friendly properties and aims
to acquire CASBEE (Comprehensive Assessment System
for Built Environment Efficiency) certification for new development projects.

Takara Leben Annual Report 2021

21

Measures Adopted in Each Business

Real Estate Rental Business

Apartment, condominium, and office rental business

FY2020 Performance Results and Previous
Medium-Term Management Plan Review■■

As a lender, the Group engages in the real estate rental business for apartments,
condominiums, and offices in the core area of the Tokyo metropolitan area andthroughout Japan.
The fiscal year ended March 31, 2021, saw sales in the liquidation business progress, while net sales declined 3.5% year on year to 5,753 million yen and the grossprofit margin declined 6.1 points year on year to 20.6%. Despite these declines, theGroup achieved both the net sales and gross profit margin targets as initially planned.
Moreover, although improving the gross profit margin during the previous Medium-Term Management Plan presented challenges, overall the gross profit margin progressed as planned.

Net sales (Millions of yen)
Gross profit margin

5,829

5,965

5,753

26.7%

20.6%

20.7%

2019.32020.32021.3

New Medium-Term Management Plan Strategy
Despite an uncertain future outlook, the Group will work to build a portfolio centered onresidences, which are highly resilient to movements in the economy and for which a certain level of demand is anticipated.
The Group will expand business in order to ensure net sales continue to grow at apace of 1,000 million yen per fiscal year starting in the fiscal year ending March 31,
2022, and thereby achieve a level of 8,100 million yen by the fiscal year ending March
31, 2025. Moreover, the Group will distribute risk by region and improve profitability bycontinuing to make carefully selected purchases and advancing nationwide expansion.

Real Estate Management Business

L.Biz TSUKUBAIn this business, Leben Community engages in general management and operation services for condominiums and rental properties owned by the Group and other companies. Net sales for the fiscal year ended March 31, 2021, increased 7.9% year on year to5,446 million yen, while the number of units under management increased by 6,290 year
on year to 66,037. Moreover, the transition in properties managed by companies outside
the Group to those inside the Group has progressed to the point where the ratio of nongroup units managed now accounts for more than half of all units at 51.3%. By enhancing replacement of these properties owned by other companies, the Company achieved
the net sales targets of the previous Medium-Term Management Plan.

■■

Net sales (Millions of yen)
Gross profit margin

4,512

14.0%

2019.3

5,046

5,446

9.5%
11.4%
2020.322

Takara Leben Annual Report 2021

FY2020 Performance Results and Previous
Medium-Term Management Plan Review■■

13,485
10,794
15.0%

5.1%

13.2%

2019.3

New Medium-Term Management Plan Strategy

Other Businesses

Net sales (Millions of yen)
Gross profit margin

20,982This business is engaged in the sale of solar power generation facilities and the sale of electricity.
Net sales for the fiscal year ended March 31, 2021, declined 35.7% year on year to 13,485 million yen as a result of revenue from the sale of operational power generation facilities, including a5,953 million yen sale of a facility to Takara Leben Infrastructure Fund, Inc. As a result, the total
scale of operational power generation now stands at 206 MW. Under the previous Medium-Term
Management Plan construction schedules were pushed back due to the impact of the COVID19 pandemic. The corresponding decline in the scale of sales year on year thus led to a decreasein sales during the final year of the Plan. In terms of revenue from electricity sales, the Company
incurred a gross loss of 290 million yen for the fiscal year ended March 31, 2021, due to depreciation coinciding with the completion of the large-scale power generation facility. Despite this, net
sales have now exceeded those of the previous fiscal year for three consecutive periods.

2020.32021.3LS Miyagi Matsushima Power
Generation Facility

Sales and brokerage fees, management compensation, revenue fromconstruction work, revenue from repair work, and other businesses

FY2020 Performance Results and Previous
Medium-Term Management Plan Review
As part of other businesses, Takara Asset Management Co., Ltd., and Takara PAG Real
Estate Advisory Ltd., are engaged in the investment management business, while Nikko
Takara Corporation Co., Ltd., is engaged in the construction business. In terms of performance under the previous Medium-Term Management Plan, led by the strength ofbuilding construction, results proceeded generally as planned, whereas revenue from
repair work during the fiscal year ended March 31, 2021, came in at 1,113 million yen,falling below the target of 2,000 million yen, due to the impact of several plans being
pushed back into the fiscal year ending March 31, 2022, and beyond. Accordingly, net
sales for this segment during the fiscal year ended March 31, 2021, declined 4.9% year
on year to 6,512 million yen.

2021.3■■

Net sales (Millions of yen)
Gross profit margin

6,850
6,045

6,512

40.8%
42.4%

2019.337.9%

2020.32021.3

New Medium-Term Management Plan Strategy

New Medium-Term Management Plan Strategy
In order to secure stable revenue as the basic policy for the stock business, the Groupwill continue to increase the number of units under management while aiming to expand
profit-earning opportunities by taking up businesses deriving from management operations. Moreover, the Group will work to acquire replacement projects in anticipation ofbringing in large-scale repair work and other peripheral businesses. With a target of
83,000 units under management for the fiscal year ending March 31, 2025, the Groupwill continue to broadly acquire managed properties and steadily accumulate a greaternumber of managed units as a mainstay of the stock business.

Electric power generation businesses leveraging
renewable energies

In April 2021, the Group acquired ACA Clean Energy Co., Ltd. (currently Leben Clean
Energy Co., Ltd.), a company with strengths lying in the development of small and medium
scale power generation facilities, as a consolidated subsidiary. Along with the developmentof mega-solar power generation facilities promoted by the Group thus far, this move aims
to further strengthen the electric power generation business. Going forward, the Group willcontinue to develop power generation facilities and acquire operational power generation
facilities in targeting a total generation capacity of 360 MW by the fiscal year ending March
31, 2025. Moreover, the Group will include PPA, a model for direct and bilateral energy
trading, and local microgrid concepts into its vision, and build a business model that does
not rely on the FIT scheme in anticipation of further expansion of the market into the future.

General management business for condominiums and offices

FY2020 Performance Results and Previous
Medium-Term Management Plan Review

Electric Power Generation Business

THE LEBEN SENDAI OTEMACHI

Under the basic policy of expanding peripheral businesses deriving from these otherbusinesses, the Group will pursue advantages of scale, steadily take up profit-earning
opportunities deriving from other segments, and establish our own hotel brand in aneffort to expand business.
In terms of overseas businesses, which are positioned as being supplemental to domestic
businesses, the Group will primarily expand the real estate sales business with Southeast
Asian countries as the target for the immediate future. Centered on the two major bases ofHaiphong and Hanoi in Vietnam, the Group aims to diversify our businesses, including the
new built-for-sale condominium business and the real estate management business.

THE MINATO RESIDENCE

Takara Leben Annual Report 2021

23Social Systems Supporting Corporate ValueThe Takara Leben Group engages in various initiatives based on the materiality we have formulated in aims ofimproving long-term corporate value. This effort is intended to help resolve social problems and realize a sustainable society.

Facial Recognition Security System

Amidst ever increasing demands for residential safety and peace of mind, Takara Leben
strives to provide condominiums that offer comfort, good design, and reliable security. We
introduced Japan’s first* facial recognition security system at LEBEN FUJIEDA PRIOR in Shizuoka Prefecture, sales for which began in June 2020. Advanced access control systems
that automatically open and close doors using facial recognition were installed at seven locations, achieving a high level of security.
* The security service, which incorporates facial recognition technology with auto locks at the entrance, elevator, guest
room, party room, bicycle parking lot, two secondary entrances, and parcel delivery boxes, is the first for a condominium developer in Japan (according to research by Fulltime System Co., Ltd.).

Adapting to New Lifestyles 2* A PPP project is a public-private partnership project. It is a new form of public-private collaboration
whereby private sector parties provide public services.

BOCCO emo

* A project to support leading residential and building projects that contribute to improvements in the qualityof housing and residential lifestyles and the creation and expansion of new business markets relating toresidential lifestyles using the Internet of Things (IoT) and other technologies.

Service Quality Management System

Leben Community ensures quality using our unique Service Quality Management
System (SQMS®) to continue managing our customers’ important assets over thelong term. SQMS® applies ISO 9001, an international standard for quality management systems, to condominium management. It sees condominium management as consisting of four support services (site management, financial
management, asset management, and operations management) and applies the
PDCA cycle to each to continuously improve quality.

Condominium Management Quality Improvement Measures 2

Quality-Related Education and Training

Leben Community works to develop human resources who understand SQMS®
and can put it into practice. It conducts training on the core concepts of SQMS®
to ensure that young employees understand its fundamental approaches andcharacteristics. The Company also provides regular training for the superintendents and condominium management staff that serve as key personnel in maintaining and improving the quality of condominium management.
Moreover, to expand SQMS® both internally and externally, Leben Community
also certifies as SQMS® Masters employees who have extensive practical experience and are well versed in SQMS® concepts, quality standards, process management, and more and grants them SQMS® badges. The SQMS® Master program
was launched in fiscal 2018, and 10 employees have been certified to date.

24

Takara Leben Annual Report 2021

In order to enable all employees, regardless of gender,
age, nationality, or disability, to realize their full potential,
one of the key issues for the Group as faced by management is raising the ratio of women in management andincreasing the ratio of persons with disabilities employed.
The Group will therefore engage in efforts to resolve thisissue along with clear numerical targets starting in thefiscal year ending March 31, 2022. Moreover, the Group
acts with respect for the fundamental human rights of
employees and all other stakeholders, while observing
laws and regulations, as well as social codes of ethics.
The Group has also established and complies with ethical rules.

Moreover, the Group formed the “Health Committee,”which regularly meets as a body intended to implement
measures for creating workplace environments in which
diverse human resources can work to demonstrate theirfull capabilities. Having defined occupational accidents,
overtime work, and other similar issues as major risks thatthreaten the health and safety of employees, the Committee engages in active deliberations with the objective ofresolving these issues. The Committee members pointout specific problems regarding workplace environments
and customs, deliberate upon measures for addressingthese problems together with members of management,
and implement these in succession.

Enhancing the Personnel and Training Systems

Providing Comfortable Spaces of High Quality
Condominium Management Quality Improvement Measures 1

LEBEN HIGASHIKAWAGUCHI EKIMAE project

Creating Workplace Environments that Facilitate WorkLEBEN FUJIEDA PRIOR

Communication Robot

In order to enable community building that allows the increasing number ofdual-income households to continue to live in greater comfort, Nikko Takara Corporation has proposed living spaces equipped with BOCCO emo, a communication robot envisioned to reduce the burden of housework and support childcare.
With BOCCO emo present, effects including improvements in the rhythm of daily
life through the provision of notification, reduction of parental anxiety by watchingover children and providing support when parents are away from home, anddevelopment of good study habits by children can be expected. As a result of
these proposals, Nikko Takara Corporation became the first business selected for
the Sustainable Building Design Pioneering Project (Next-Generation Housing)* of
the Ministry of Land, Infrastructure, Transport and Tourism in fiscal 2020.

Participation in Local Communities Through Business
In September 2020, Takara Leben and SaitamaKenko Construction Inc. enteredinto a basic agreement with the local government to participate in a project foruse of public land in front of the south exit of Higashi-Kawaguchi Station. The
project plan provides for integrated development of an administrative center,
police box, and apartment building under a basic policy of establishing an administrative base with low financial burdens, enhancing the safety and convenience of
local residents, and developing permanent urban residences. This will be the first
PPP project* in which the Takara Leben Group participates.

Creating Lifestyles with Value
Adapting to New Lifestyles 1

Forming Communities

The Group recognizes that each employee is an essential
part of creating sustainable value, and that employees willgrow together with the Group as we work towards a futurein which the management plan is achieved. The Group istherefore advancing an appropriate, fair personnel system.
Based on the concrete promises that employees are
expected to fulfill in their day-to-day work, the Group has
set evaluation targets for each grade and occupation,
where employee actions are evaluated at evaluation meetings. These efforts are intended to enable feedback that ismore acceptable for employees, as well as to improve theevaluation skills of those in management positions by facili■ Basic Policy for Personnel System
Personnel system which stably nurtures talentrequired to achieve management plan
Clearly state the type of people required by thecompany to build a framework where employees
can set out their career visions■ Review distribution of labor costs to secure andkeep talented people as well as improve
motivation■ Conduct training and selection to generatetalented people for management positions■ Carry out evaluation and treatment that are highly
fair and transparent to nurture employees’ senseof acceptance and increase their desire to grow■Condominium Management Staff Training

tating their understanding of these systems.
In addition, Takara Leben works to reinforce its educational and training programs with the aims of promoting
growth of employees and enhancing overall organizational
strength. In fiscal 2020, we systematically implemented
programs over the course of the year to enable employees to acquire the knowledge and skills that they needincluding rank-based training for all employees, and training for selected personnel. We also conducted ESG training to teach employees important approaches andknowledge for undertaking sustainability measures during
the COVID-19 pandemic.

■ 12 Actions for Our Promise
1 Fully engage in work
2 Enjoy workfrom the heart
3 Speak truthfully
from the heart
4 Be serious in eachand every task

■ Effects of Personnel System

7 Pay attention tofeelings
8 Act swiftly
9 Take initiative topropose, and carrythrough actions

5 Respect each other

10 Treat teamwork
with importance

6 Pursuethe right things

11 Remove existing
barriers
12 Never give up

Attractive treatment
for talented people

Improvement toretention rate oftalented people

Expansionof business

Productivity improvement
Creation of
new businesses■ Passing down knowledge■ Development of unity
within the company■■

Takara Leben Annual Report 2021

25

Social Systems Supporting Corporate Value

Corporate Governance

Developing Environments and Cultures

Basic Approach

Initiatives for Renewable Energy

Rather than simply pursuing profit as part of its businessactivities, Takara Leben strongly thinks that it must comply
with laws and corporate ethics and carry out its duties asa responsible member of society.
While maintaining close relationships with customers,
shareholders, and employees, we think that reflecting the
feedback received from various stakeholders in our business, while continuously responding in ways that keep inmind what our company should achieve and for whom,

The Takara Leben Group operates an electric power generation business that leverages renewable energies. The
Group develops mega-solar power facilities on idle landand engages in large-scale solar power generation in aneffort to contribute to reductions in the emissions of CO2,
a greenhouse gas.
In March 2021, the Group held a ceremony marking thecompletion of construction on the LS Chiba Katsuura
Power Generation Facility in Katsuura City, Chiba, as thelargest mega-solar power generation facility built by theGroup. The new facility boasts a total site area of approximately 520,000 m2, a generating capacity of roughly 30
MW, and a projected annual power generation of 34 million kWh. Much of the facility site is leased from Katsuura
City, and the project is being conducted in a manner that
also contributes to the community.
In addition, Takara Leben Infrastructure Fund seeks tocreate eco-friendly, sustainable environments by investingin renewable energy power generation facilities and otherprojects. Its efforts contribute to reducing CO2 emissions
by approximately 70,410 tons* annually.
* Annual amount of reduction of CO2 emissions compared to fossil fuel-fired
thermal power plants based on the output of power generation facility panels.

will lead to sound and efficient business management asa going concern, as well as serve the purpose of creating
long-term profits.
Furthermore, by not limiting ourselves to a systematic
check and balance function but rather by spreading theroots as indexes or systems, we will work so that thecheck and balance across the entire company will function in sync with each person’s awareness.

Corporate Governance System
In addition to prudent and swift decision making by the
Board of Directors, Takara Leben has built a system toensure management proprieties, such as appropriate
mutual supervision by directors over the state of businessexecution, and audit and supervision by auditors overdirectors’ state of business execution. We also introduced
an executive officer system to clarify the management
supervisory roles of directors and the business execution
responsibilities of executive officers.

LS Chiba Katsuura Power Generation Facility

Corporate Governance System Chart

Promotion of ZEH Condominiums as Energy-Saving Housing

Ordinary General Meeting of Shareholders
Election

Board of Directors(including outside
directors)

Audit
Election/
Supervision

ReportCompliance &Risk Management
Committee* Condominiums that seek to conserve energy while maintaining a comfortable interior environment and to achieve net zero primary energy consumption over the course of a year by improving thermal insulation
efficiency and installing high-efficiency equipment and systems.

Representative
Director

Collaboration

Takara Leben began operation of new means of financing
with the aim of encouraging measures that contribute to
the global environment. Leben Funding LLC. was established in January 2021, and in collaboration with Funds,
Inc., it launched the Takara Leben Sustainability Fund andconducted crowdfunding to solicit loan investments froma wide range of investors. The collected funds will be
used as working capital for renewable energy projects
and CSR measures.

26

Takara Leben Annual Report 2021

ReportReportDirection

Audit

Internal Audit Office

Collaboration

Report

Audit

Audit

Individual
investors

Loan fund online market

Audit

ReportReportTakara Leben Sustainability Fund

Collaboration(outside auditors)

AdviceCompensation
Committee

Audit &
Supervisory Board

Audit

Accounting Auditor

The highest 5-star rank under the Building-Housing
Energy-efficiency Labeling System (BELS), which
evaluates energy conservation performance.

AdviceElection

Administrative
Departments
Business
Departments

Nomination Committee

Election

Executive Officers

With the LEBEN NAGANO NAKAGOSHO THE PEERLESS, currently under construction in Nagano City, Nagano Prefecture, Takara Leben is proposing a ZEH
condominium* with unprecedented environmental value
by taking measures to curtail peak energy use through theInternet of Things (IoT), conserving energy through total
electrification and collective power reception in private
areas, and supplying CO2-free electric power. The property has obtained certification under ZEH-M Oriented, aproject to encourage CO2 reductions in new housing
complexes and existing residences, presented by the
Ministry of the Environment, a first among Takara Leben
properties in Nagano Prefecture.

TakaraLeben

Subsidiaries and Affiliates
Leben Community Co., Ltd.

Leben Trust Co., Ltd.

Takara Leben Tohoku Co., Ltd.

Takara Asset Management Co., Ltd.

Takara Leben West Japan Co., Ltd.

Takara PAG Real Estate Advisory Ltd.

Nikko Takara Corporation Co., Ltd.

Leben Clean Energy Co., Ltd.

Takara Leben Realnet Co., Ltd.

Sunwood Corporation

Audit

Leben Zestock Co., Ltd.

Takara Leben Annual Report 2021

27

Corporate Governance
Board of Directors
Takara Leben has appointed 12 directors, four of whom
are outside directors. All four outside directors have been
designated as independent officers. In principle, theBoard of Directors’ meetings are held once a month, andalso on an extraordinary basis as required to ensure thatdecisions are made prudently and promptly, and that directors mutually supervise the status of business execution.
Auditors are always in attendance at the Board of Directors’ meetings and state their opinions as necessary. At thesame time, auditors work closely with outside directors and,as necessary, audit and oversee the running of the Board of
Directors’ meetings and the status of business execution.
Also in attendance at the Board of Directors’ meetings are
executive officers, the head of the Internal Audit Office, andthe heads of other departments, who have received requests
from the Board of Directors based on internal regulations,and express their opinions on each issue or reporting matter.
The Takara Leben Executive Committee discusses management issues and a Sales Conference discusses sales
progress, where each meets once every month. In addition
to sharing progress on management targets, these meetings glean information on problem areas and issues from
regular performance reports presented by each department
and deliberate important matters relating to overall management. The content of those reports is raised at theBoard of Directors’ meetings on an as-required basis.
Evaluating the Effectiveness of the Board of Directors
With the support of an outside consulting organization,
Takara Leben analyzes and evaluates the effectiveness of
the Board of Directors by having all directors, including
outside directors, and corporate auditors anonymously fillout a questionnaire.
In the fiscal year ended March 31, 2021, the Board of
Directors was generally assessed to operate appropriately
as a whole and to be effective overall. In addition, we willverify and fully investigate any issues, and will continue toadvance initiatives intended to improve the function of theBoard of Directors on an ongoing basis.
Executive Officer System
Having introduced an executive officer system, Takara
Leben has clarified its directors’ management oversight
responsibilities and the business execution responsibilities
of its executive officers and is working to further speed up
its decision making and strengthen its business execution.
Audit & Supervisory Board
As a system for the check and balance of decision making,all three auditors of Takara Leben are outside corporate
auditors. Each auditor is equipped with adequate background, experience, and mettle to objectively carry out
assessments and verifications. Besides audits for Takara
Leben, the auditors are also involved in audits for subsidiary companies, such as attending their board meetingsand interviewing their directors, maintaining firm relationships with these companies. Furthermore, the auditors andthe accounting auditor work to further improve the effectiveness and efficiency of audits by understanding andadjusting each other’s annual schedules; going together toevents such as onsite inspections and checks on showrooms, and exchanging information as appropriate.
Internal Audit Office
Takara Leben also established guidelines on internal
audits and established an Internal Audit Office as an independent organization reporting directly to the representative director to enhance and strengthen internal audits. In
the proposal and execution of the internal audit plan, theoffice coordinates the schedules of auditors and the
Accounting Auditor and adjusts the scopes of audits toseek efficient operation of various functions. Auditors
accompany and witness operation audits conducted by
the Internal Audit Office, and work on building an effective
and efficient audit system by means such as verifying theReasons for Nominations of Outside Directors and Frequency of Attendance at Board of Directors’ Meetings
Position

Outside Director

Outside Director

Name

Kenji Kawada

Kentaro Taniguchi

Outside Director
Chiaki Tsuji(newly appointed)
Outside Director
Keiko Yamahira(newly appointed)

28

Takara Leben Annual Report 2021

Reason for Nomination

Attendance at Board of
Directors’ Meetings

Mr. Kawada was nominated for his involvement in the management of financial institutions and business firms, his wealth of experience and achievements regarding management, and his possession of extensive knowledge
and insight.

21/21

Mr. Taniguchi was nominated for his having served many years as Representative Director and President of business firms, his wealth of experienceand achievements as a manager, and his possession of extensive knowledge and insight.

18/18

Ms. Tsuji was nominated for her international work as a lawyer in Japan andGermany, her high level of insight, extensive expertise, and wealth of experience and achievements.

—

Ms. Yamahira was nominated for her many years of involvement in management in the real estate industry, as well as for her wealth of experience andher extensive insight in management.

—

growth, and serves the purpose of linking to sound, effective,
and stable management as an ongoing concern.
The limit of the annual amount of compensation isdeemed to be 600 million yen (not including, however, theemployee portion of the salary), and the limitation of the special stock option compensation to 600 million yen annuallywhich is decided by a resolution at an Ordinary General
Meeting of Shareholders. The compensation of auditors isdetermined at the Ordinary General Meeting of Shareholders
limited to an annual amount of 60 million yen or less.

scope of the audit and collecting opinions as appropriate.
Executive Compensation
Directors’ compensation is determined based on advice fromthe Compensation Committee, a voluntary advisory body, following a comprehensive review of performance, underlying
risks, degree of responsibility for Group management, anddegree of progress under the Medium-Term Management
Plan. By linking a fixed ratio of compensation to performanceand the degree of contribution made by each director, compensation functions as an incentive to achieve sustainable

Amounts of Director and Auditor Compensation (As of March 31, 2021)
Total amount by compensation type (Millions of yen)

Position

Total compensation(Millions of yen)

Basic compensation

Stock options

Bonuses

Retirement benefits

Number ofrecipients

Directors(of which, outside
directors)

380
(35)

353
(35)

26
(—)

—

—

15
(4)

Auditors(of which, outside
auditors)

28
(28)

28
(28)

—

—

—

4
(4)

Total
(of which, outside directors
and outside auditors)

408
(63)

381
(63)

26
(—)

—

—

19
(8)

(Notes) 1. The amount paid to directors does not include the employee salaries of directors concurrently serving as employees.
2. Stock options are the amount recorded as an expense in the fiscal year related to the allocated stock acquisition rights, and are received by seven directors.

Nomination and Compensation Committees
In order to increase the objectivity and transparency indecision-making processes relating to personnel appointments and compensation of directors and others and tofurther enhance and reinforce corporate governancestructures, Takara Leben established Nomination andCompensation Committees as voluntary advisory bodies.
Each committee comprises three or more directors
selected by resolution of the Board of Directors, of whicha majority are independent outside directors, thereby providing appropriate opportunities for outside directors toparticipate and give advice. The committees deliberateand submit reports primarily on the matters listed on theright based on advice from directors.

Nomination Committee(1) Matters relating to nomination of candidate directors, executive officers, and others;(2) Matters relating to nomination and succession of the representative director;(3) Matters relating to basic policies and criteria on nominationof directors and others; and(4) Other matters referred to the Nomination Committee by the
Board of Directors.

Compensation Committee(1) Matters relating to compensation of directors and executive
officers;(2) Matters relating to basic policies and criteria on compensation of directors and others; and(3) Other matters referred to the Compensation Committee by
the Board of Directors.

Committee Composition

Voluntary committee equivalent to
the Nomination
Committee

Committee Name

Total No. ofMembers

No. of Standing
Committee
Members

No. of Internal
Directors

No. of Outside
Directors

No. of Outside
Experts

OthersCommittee Head
(Chairman)

Nomination
Committee

6

0

2

4

0

0

OutsideDirector

6

0

2

4

0

0

OutsideDirector

Voluntary committee equivalent toCompensation
the Compensation
Committee
Committee

Takara Leben Annual Report 2021

29

Introduction of Directors

Compliance & Risk Management(As of June 25, 2021)

Compliance

YoshioMurayama

KazuichiShimadaKazuyuki
Shimizu

Director andChairman

Representative Director,
CEO and President
Executive Officer

Director, COO andVice President
Executive Officer

Sep. 1972	Established the Company, Senior Managing Director
Mar. 1973	Representative Director and President
Apr. 2012	Representative Director and President and CEO
Apr. 2014	Representative Director and Chairman
Jun. 2016	Director and Chairman (Incumbent)

Oct. 2004	Joined Leben Community Co., Ltd.
May 2014	Senior Managing Director, Leben Community Co., Ltd.
May 2016	Representative Director and Vice President, Leben
Community Co., Ltd.
Jun. 2018	Representative Director, Takara Leben West Japan Co., Ltd.
Director and Vice President
May 2020	Director, Leben Community Co., Ltd. (Incumbent)
Apr. 2021	Director, COO and Vice President Executive Officer(Director in charge of Corporate Planning Division andCSR) (Incumbent)

Masashi
Yamamoto

Masahiro
YoshidaShoichiAkisawa

Director, CFO, andManaging Executive
Officer

Director andManaging Executive
Officer

Director andManaging Executive
Officer

May 2016 Joined the Company
May 2017	Director, Leben Community Co., Ltd.
Jun. 2017	Director, Executive Officer, Executive General Manager
of General Planning Division, General Manager ofControl Group of Corporate Planning Division,
General Manager of Personnel and General Manager ofCorporate Planning Division
Apr. 2021	Director, CFO, Managing Executive Officer andExecutive General Manager of Administration
Headquarters (Incumbent)

Mar. 2001	Joined the Company
Oct. 2011	General Manager of 2nd Sales Division, Sales Division
Apr. 2014	Executive Officer and General Manager of 2nd Group of
Sales Division
Jan. 2015	Representative Director, Takara Leben Tohoku Co., Ltd.
May 2020	Director, Takara Leben West Japan Co., Ltd.
Apr. 2021	Director, Managing Executive Officer and Executive
General Manager of Condominium Businesses
Headquarters (Incumbent)

May 2019	Representative Director, Leben Zestock Co., Ltd.
(Incumbent)
Jun. 2019	Director, Executive Officer, and Executive General
Manager of Investment Development Division
Apr. 2021	Director, Managing Executive Officer and Executive
General Manager of Investment Development Business
Headquarters (Incumbent)

HiroshiIwamotoMika
TakaaraKenji
KawadaDirector andExecutive Officer

Director andExecutive Officer

Director (Outside)

Oct. 2001 Joined the Company
Apr. 2015	General Manager of 1st Sales Division, 1st Sales Group,
Sales Division
Apr. 2017	Executive Officer and General Manager of Overall
Development Group, Development Division
Apr. 2021	Director, Executive Officer, Vice Executive General
Manager of Condominium Businesses Headquarters andGeneral Manager of Urban Development Business
Division (Incumbent)

Jan. 2000 	Joined the Company
Jun. 2016 	Director, Executive Officer,
General Manager of Overall Sales Group, Sales Division,
General Manager of Sales Promotion Division, andGeneral Manager of Business Division
Apr. 2021	Director, Executive Officer, Manager of Business
Development Promotion Office and Manager of Business
Development Promotion Division (Incumbent)

May 2003	Representative Director and President, Resona
Holdings, Inc.
Jan. 2016	Representative of TMA KAWADA OFFICE (Incumbent)
Jun. 2017	Outside Director, PE&HR Co., Ltd. (Incumbent)
Outside Director, Takara Leben Co., Ltd. (Incumbent)
Jun. 2018	Outside Auditor, Konishi Co., Ltd. (Incumbent)

ChiakiTsuji

Keiko
Yamahira

Director (Outside)

Director (Outside)

Director (Outside)

Takara Leben Annual Report 2021

Oct. 1976	Passed the National Bar Examination
Apr. 1979	Registered with Tokyo Bar Association
Oct. 1990	Qualified as a lawyer in Germany (Japanese law)
Apr. 1993	Lecturer at Bunka Women’s University (Now Bunka
Gakuen University)
Jul. 2001	Established Yoshioka Tsuji Total Law Offices
Apr. 2004	Professor at Department of Law, Graduate School,
Yamanashi Gakuin University
Jun. 2017	Outside Director, Yorozu Corporation (Audit andSupervisory Committee member) (Incumbent)
Jun. 2019	Outside Director, Keihin Corporation (Now Hitachi
Astemo, Ltd.)
Jul. 2019	Joined law office Kinoru Tokyo (Incumbent)
Jun. 2021	Outside Director, Takara Leben Co., Ltd. (Incumbent)

Employee Awareness-Raising
We administer compliance education with a variety ofthemes and strive to create a corporate culture of legal
and regulatory compliance and respect for human rights.
In specific terms, we offer lectures and conduct training
led by experts on preventing unfair business dealings,
personal information protection, harassment prevention,and other such topics.

Internal Whistle-Blowing System (Help Line)The Takara Leben Group established an internal whistle-blowing system (help line) as a means of reporting or
consulting on issues such as harassment and complianceviolations. We outsource responses to an outside law firmthat has no direct interest in the Group as an external
consultation desk, and have put in place independentlines of contact with auditors as an internal consultationdesk. These and other efforts serve to reinforce the protection of reporting individuals, the subjects of reports,
persons who cooperate with investigations, and others.
We are also working to strengthen compliance management through the early detection and rectification of
improper conduct and other issues.

Risk Management
The increasing complexity of the economy in recent years
has led to an expansion of business opportunities, as wellas to a demand for multifaceted risk management. The
Group therefore identifies and manages individual risks inorder to raise corporate value and to ensure that businessactivities endure indefinitely while fulfilling its social
responsibilities. We established the Compliance & Risk
Management Committee as a body to carry out thesemeasures, and to implement comprehensive risk management throughout the Group.
The Takara Leben Group has established crisis management structures and adopted Crisis Management
Rules and a Crisis Management Manual based on theassumption that such emergencies as corporate scandals, accidents, natural disasters, and administrative

action will occur as risks. The Crisis Management Rules
define crises and specify procedures from initial responses to formation and disbanding of response organizations.
There are also two sets of detailed crisis control rules
regarding crisis responses and disaster countermeasures.
In addition, each division works with the division
responsible for crisis management to formulate risk recovery and prevention plans and makes reports to the Compliance & Risk Management Committee at its monthly
meetings. As a part of our business continuity planning(BCP), we adopt a preventive approach to risk management including the preparation of manuals for the continuation and recovery of business operations in the eventthat an emergency situation occurs.

Risk Management Structures

KentaroTaniguchi

Feb. 2000	Joined SOFTBANK E-COMMERCE CORP.
(Now Softbank Corp.)
General Manager of New Business Department
Mar. 2001	Representative Director and Vice President, CMnet
Corporation
Jan. 2006	Director and COO, DeeCorp Limited
Apr. 2006	Director and President, DeeCorp Finance Limited
Jun. 2020	Outside Director, Takara Leben Co., Ltd. (Incumbent)
Apr. 2021	Director and Chairman, DeeCorp Limited (Incumbent)

30

May 1987	Joined the Company
Jun. 2006	Representative Director, Vice President and Executive
General Manager of Development Division
Apr. 2014	Representative Director, President, CEO, COO and CFO
Jun. 2019	Representative Director, CEO and President Executive
Officer (Incumbent)

In order to fulfill its corporate social responsibilities, allorganizations, officers, and employees comply with laws,
regulations, and social norms, as well as separately
established ethics rules, and strive to serve as an example
for society in the conduct of the Group’s business.

Apr. 1983	Joined Kubota House Co., Ltd. (Now Sanyo Homes
Corporation)
Jun. 2011	Director and Executive Officer, Sanyo Homes
Corporation
Jun. 2012	Director, Sanyo Reform Co., Ltd. (Concurrent position)
Jun. 2013	Director and Senior Executive Officer, Sanyo Homes
Corporation
Jun. 2015	President and Representative Director, Sanyo Homes
Corporation
Apr. 2017	Chairperson, Sanyo Homes Community Corporation
Jun. 2019	Outside Director, Joshin Denki Co., Ltd. (Incumbent)
Outside Director, Fujitec Co., Ltd. (Incumbent)
Jun. 2021	Outside Director, Takara Leben Co., Ltd. (Incumbent)

The Takara Leben Group established a Compliance & Risk
Management Committee chaired by the president. The
Committee verifies and reports on all business-relatedrisks, and deliberates and makes decisions on measuresand management to avoid or mitigate risks. In addition,
subcommittees—such as for business strategy, finance, IT& administration, and compliance—are established as necessary to establish systems that make proactive proposals
appropriate to management of individual risks. Furthermore, the scope of deliberations within each subcommittee is reported to and verified by the Compliance & Risk
Management Committee as appropriate in accordancewith the Compliance & Risk Management Committee
Rules. These matters are also reported to the Board of
Directors as necessary, forming a structure for timely decision-making in preparation for the occurrence of risks.

Reflect in management strategies
Board of Directors
Report and verify based on rules

Compliance & Risk Management Committee
Proposals appropriate to the management of individual risks

Subcommittees
Business Strategy

Finance

IT & Administration

Compliance

Risk identification and analysis

Financial/Non-financial data, changes in the external environment, etc.

Takara Leben Annual Report 2021

31

Risk & Opportunity Recognition
Throughout the world, risks that have a significant impact on corporate activities have been diversifying andbecoming increasingly complex on a daily basis.
Takara Leben predicts those events with the potential to occur in the future, and defines risks and opportunities in an effort to help resolve social issues and create value.
Risk Factors

Risks & Opportunities

Market environment

Risks

Risks related tochanges inmarketenvironment

Risks related tochanges infinancingconditions

Risks related to
products andservices

Opportunities· Increased funding costs due to changes in financial institution lending attitudes and financing market conditions· Decreased number of commercialization projects due to subsidy systemrevisions

Opportunities· Investment corporation obtains credit rating, establishes environment for
issuing investment corporation bonds

Risks· Obsolescence of products/services due to changes in lifestyles, intensifiedcompetition including new entrants, and rapid environmental changes· Slower sales due to higher selling prices

Opportunities

Business activities

Opportunities

The environment,
including climatechangeOthers· Foster loyalty by achieving customer satisfaction· Increased large-scale renovation of age-appropriate properties· Restricted business activities due to stricter regional legal regulations,changes in legal interpretation and management policy· Lost business opportunities due to changes in FIT· Identify issues and promote solutions via
the Compliance & Risk Management
Committee

Opportunities· Ongoing low-interest housing loans, eased tax reduction requirements· Introduction of new systems to replace FIT

Risks· Leakage of confidential information and stoppages of production lines andlogistics systems due to unauthorized access and cyber attacks· Payment of damages and fines, incurring countermeasures expenses· Insurance contracts, strengthen information security systems, ensure confidentiality, restrict external access, establish
internal regulations, and conduct training

Risks· Stricter regulations for greenhouse gas usage/emissions and energy conservation due to worsening global environmental problems

Opportunities· Invigoration of reusable energy markets due to greater interest in ESG andSDGs· Pursue the development of renewableenergy power generation facilities andnew businesses such as PPA

Information
security· Booking of impairment losses due to changes in market conditions· Tenant requests for lower rents due to economic downturn· Implement ongoing performance monitoring, countermeasures

Risks· Natural disasters, including earthquakes, tsunamis, typhoons, torrential
rain· Group business facilities, supply chains, and customers being disrupted byterror, riots, war· Spread of infectious diseases· Promote the earthquake-proofing ofbuildings and facilities, implement
countermeasures for tsunamis, torrential
rain, floods· Stockpile emergency supplies necessary
for disasters· Conduct disaster preparation drills· Promote teleworking and enhance workplace health management

Naturaldisasters, etc.

Takara Leben Annual Report 2021

· Increased interest in disaster-resistant buildings

employees to reduce the risk of infection during commuting. In March 2020, when COVID-19 infections werespreading, we made flexible working hours available to all
employees (non-managerial positions). From April 7 to May
25, 2020, when the state of emergency declaration was ineffect, in principle, employees who were able to work fromhome undertook their duties by teleworking.
We also have strict rules governing, for example, thereceiving of PCR tests for cases such as outbreaks ofinfections on business partner premises. These rules also
clarify the basic policy for the measures to be taken in theoffices where an infected person is found.

In addition to working to prevent infections in showrooms
by limiting the number of people and frequent disinfection
procedures to make our customers feel at ease, Takara
Leben encourages online business negotiations by using
IT tools and strives to provide sufficient information for
those looking to purchase a condominium.

Efforts to Support Condominium Management and Raise Awareness
Leben Community Co., Ltd. is working to reduce thechances of interpersonal contact in the course of condominium management operations. For management union
meetings and general meetings, in addition to minimizing
the number of participants, we saved time by distributing
materials and gathering opinions and questions inadvance. In addition, we actively held online meetings in
response to customer requests. Also, in daily management work, we took measures with customer consent
that included changing from spoken greetings to nods,
the recommendation for conversations to be conducted

through the window of the management room, and theimplementation of inspection work in a way that does not
involve entering the room.
By means of issue No. 50 (published in October 2020)of Smilax, our information magazine, we sent out infection
prevention measures that are useful in people’s everyday
lives from the perspective of a condominium management
expert. The measures included bactericidal methods thatcan be carried out with household detergent, ideas toprevent virus spread and actions to be taken in communal
areas.

Countermeasures Taken at “My Reha”

Risks

Opportunities

32· Acquire housing performance evaluations· Build a safe implementation management
systemRisks

Legal regulations

To protect the health and safety of employees, their families
and customers, Takara Leben’s Crisis Management Committee played a central role in putting in place and promoting a response policy for COVID-19. The flow of action to
be taken in the event of someone feeling they had a cold or
were unwell, or after having received a positive result from a
PCR test, is made known to all employees. For employees
who are confirmed as having been infected, we thoroughly
enforce rules, such as reporting the infection to the head ofeach department and the health center and for employees
not to go to work until they are asymptomatic. We are also
encouraging teleworking and flexible working hours for

Customer Service System in Showrooms· Capture demand generation/growth opportunities via new products· The compact condominium market expands to regional cities· Solid purchasing of actual users· Compensation costs and brand image deterioration in the event that product safety issues occur· Lower service quality due to labor shortages

Measures to Prevent Spread of COVID-19 Infections· Supply compact condominiums· Stabilize procurement prices mainly by
diversifying suppliers, decentralizing on aregional basis, and using long-term
contracts

Risks related to
procurement

Fixed asset
impairments· Redouble efforts to diversify financing
methods· Deteriorating supplier operating conditions· Raw materials/component supply shortages due to natural disasters andaccidents· Surging procurement prices due to rising land prices and high construction
costs

Risks

Risks related tothe environment,
including climatechange· Supply condominiums in the center ofregional cities· Increased demand for condominiums among seniors· Capture opportunities for proposing solutions to vacant house issues

Risks

Risks

Product/service
quality andliability· Deterioration in market conditions such as political instability, economic
recession, and spread of infectious diseases· Decline in electricity sales revenue due to electric power companies curtailing output· Decreasing demand for housing due to aging society and depopulation

Measures

The Takara Leben Group’s Responses to COVID-19

At the My Reha day care service specializing in rehabilitation, thorough infection control measures are taken basedon information from the Ministry of Health, Labour andWelfare and local governments. The facility provides services using disinfected instruments in a constantly ventilated space. We have a system in place that allows
people to use the facility with peace of mind by collaborating with local governments, regional comprehensive
support centers (care managers), and disinfection specialists. We also implemented the provision of a training

menu that can be carried out at home for those who aretaking time off from the facility to help prevent the spreadof infection.

Takara Leben Annual Report 2021

33

Interview with an Outside Director
Q2
Please tell us about any changes in the Board of
Directors resulting from efforts to strengthen
Takara Leben’s corporate governance system.

Kenji Kawada
Outside Director

Personal
History

May 2003
Representative Director andPresident,
Resona Holdings, Inc.

January 2016
Representative of
TMA KAWADA OFFICE(Incumbent)

June 2017
Outside Director, PE&HR Co., Ltd.
(Incumbent)
Outside Director,
Takara Leben Co., Ltd. (Incumbent)

June 2018
Outside Auditor, Konishi Co., Ltd.
(Incumbent)

We interviewed Kenji Kawada, who has served as an outside director of Takara Leben since 2017, about how he regards
the new Medium-Term Management Plan, initiatives to enhance the governance system, and the roles of directors.
With his many years of involvement in the management of financial and business firms, Mr. Kawada has a wealth ofexperience in business management and governance system building, including his appointment as Representative
Director and President of Resona Holdings in 2003, where he led the effort to become the first financial institution in thebanking industry to make the shift to a Company with three Committees system.

Q1
Takara Leben announced its new Medium-Term
Management Plan in May 2021, but what did theBoard of Directors discuss during theformulation stage? Please tell us about how you
regard the Medium-Term Management Plan.
When the Board of Directors formulated the new
Medium-Term Management Plan, it summarizedeach business portfolio over the three-year period of
the Medium-Term Management Plan (FY2018–
FY2020) up through the previous fiscal year, andmade revisions starting from the very basis for thebusiness plan in part due to the impact of the
COVID-19 pandemic during FY2019 and FY2020.
Covering a four-year period, the new Medium-Term Management Plan is formulated with aview to the world after COVID-19. Although it is difficult to predict tomorrow amid the turbulent socialand economic conditions of today, I recognize thatthe new Plan emphasizes boldly expanding business fields and lifting existing business to new
34

Takara Leben Annual Report 2021

heights as a means of achieving sustainable growth.
In response to instructions from top management
and in light of the intentions of top management anddirectors responsible for each business, during eachof its meetings the Board of Directors held repeateddiscussions with an emphasis on the seven elements of the new Medium-Term Management Plan.
The seven elements are 1) Further growth of corebusinesses, 2) Maximized group synergies, 3) Optimized business portfolio, 4) Establishment of a stable financial ground, 5) Improvement of productivity
and creation of new services through promotion ofDX, 6) Proactive ESG considerations, and 7) Personnel development and establishment of the
rewarding workplace environment. The two-year
period through FY2022 is defined as one of cautiousness in consideration of the impacts of the
COVID-19 pandemic, while FY2023 and FY2024 aredefined as periods of rapid progress. Although thismakes for a conservative approach, I still regard thisas an innovative Medium-Term Management Plan.

I think that the most important issues regarding corporate governance for Takara Leben are to work toachieve sustainable corporate growth and to foster
trust and expectations for management from eachstakeholder.
Takara Leben’s corporate governance system ischaracterized by ongoing management reforms
every fiscal year and corporate governance that is
substantially and constantly evolving. In particular,
the Company attaches great importance to thetransparency of matters approved by the Board of
Directors, which is required as a listed company.
During the past year, under this thinking we held
repeated discussions with the Representative Director and the rest of the directors regarding how the
Board of Directors is run.
The first of the changes from last year’s Board of
Directors is that each director now more closely
inspects each issue from the perspectives of bothbusiness execution and management oversight. The
second change is related to the quarterly reports on
business execution presented by each director,
where the directors now go beyond the obvious of
discussing their own business execution, andactively debate that of the other directors.
I hope to see the Board extend these trends further into the future.

Q3
Please provide any comments you may have on
future issues toward further enhancing
governance.
There are several major issues regarding efforts toenhance governance.
The first is clearly separating business execution
and management oversight, which continue to beintertwined. Doing so requires further expanding thescale of Takara Leben, as well as enhancing capabilities through the continuous self-development ofeach director.
The second is transforming into a business groupin which the future and past actions of the directors
are evaluated.
In his work titled “Nihon no Shiso (JapaneseThought),” the late Masao Maruyama, a Japanesepolitical scientist and thought historian whom I
respect, talks about the meaning of the “performance-oriented nature of modern society.” Here hedescribes a shift from “being” logic to “doing” logic.
“Being” a director is no longer a rigid status relationship. In other words, from the perspective of theperformance-oriented nature of modern society,“being” a director is not about how “distinguished”

you are, but about how the function (role) of what
you are “doing” as a director is evaluated. I think it isimportant to build a governance system in whichbusiness execution and management oversight are
separated following this understanding.

Q4
Please tell us your thoughts on the roles you are
expected to play and the responsibilities you
must fulfill as an outside director.
The role of internal directors has two aspects: business execution and management oversight bymeans of the Board of Directors. In contrast, themain role of outside directors is to offer their opinions on the sustainable growth of corporate value
through the management oversight function entrusted to them by each stakeholder.
Companies are professional groups, and since it
is important for outside directors to point things out
with regard to the efforts of those companies’ businesses from the perspective of broader society, it isimperative that they possess the ability to feel thetrending movements of society.
I therefore feel that I am expected to apply thepast experience and knowledge I have acquired
through my involvement in the management offinancial institutions and business firms to the management policies and business strategies of Takara
Leben, as well as to offer advice intended to facilitate the sustainable growth of the Company and toenhance medium- to long-term corporate value.
Moreover, one of the responsibilities I must fulfill
as an outside director is to apply my past experience in cultivating human resources as a means ofurging on the growth of the internal directors andeach individual employee.
These roles and responsibilities of outside directors are intended to grow the Company in a sustainable manner, and have the purpose of sharing theresults of this growth with the Company’s stakeholders. I therefore think it is important for me tomake every effort on a regular basis as a means offulfilling these.

Takara Leben Annual Report 2021

35

Six-Year Financial/Non-Financial Summary

Stock Information
Millions of yen

2016.32017.32018.32019.32020.32021.3

Net sales¥76,268¥103,599¥110,851¥132,005¥168,493¥148,397

Gross profit

17,835
7,563
6,708

21,86910,3499,496

25,77912,597
11,792

26,886
10,046
9,027

30,516
11,901
11,201

29,928
10,7899,933

Net income attributable to owners ofparent

4,308

6,107

7,367

6,426

5,361

4,693

Cash flows from operating activities

2,428(19,816)
19,66322,644(27,540)
6,129

9,869
(34,463)
24,012

22,428(34,347)
3,427

47,708(32,136)(1,608)26,330(25,090)
2,654

22,756
1,192

20,8142,397

30,302
1,943

29,902
2,447

28,841
2,031

25,666
1,803

129,74475,75353,94533,67770,396

139,874
86,58553,23736,792
79,864

177,588
102,931
74,61842,907
106,663

184,893
98,51286,28647,734
111,821

195,448
115,31479,874
51,139114,036

204,315
125,686
78,531
54,632
118,570

Operating income
Ordinary income

Cash flows from investing activities
Cash flows from financing activities
Capital expenditure
Depreciation and amortization
Total assets
Current assets
Fixed assets
Net assets
Interest-bearing debt

Net assets per share (Yen)Dividends per share (Yen)

38.99
304.7113.0

56.14
339.2915.0

68.12
394.9016.0

59.33
436.6816.0

49.45
467.0519.0

43.22
498.7814.0

Operating Indices:ROE (%)ROA (%)
Operating income margin (%)
Debt ratio (Times)
Current ratio (%)
Inventory turnover (Times/Year)
Equity ratio (%)
Dividend payout ratio (%)

8897

Total Number of Shares
121,000,000 shares
Outstanding (As of March 31, 2021)

Stock Exchange
ListingFirst Section, Tokyo Stock Exchange

Trading Unit of Shares

Shareholder Registry Sumitomo Mitsui Trust Bank, Ltd.
1-4-1, Marunouchi, Chiyoda-ku, Tokyo
Administrator

100 shares

Number of Shareholders(As of March 31, 2021)

71,969TOPIC

Per Share Information:
Net income per share (Yen)

Securities Code

13.3
3.7
9.9
2.9
176.7
2.0
25.8
33.3

17.4
4.5
10.0
2.8
171.5
2.3
26.2
26.7

18.6
4.6
11.4
3.1
182.0
1.9
24.1
23.5

14.3
3.5
7.6
2.9
168.3
1.9
25.6
27.0

10.9
2.8
7.1
2.8
175.7
2.4
25.9
38.4

9.0
2.3
7.3
2.7
225.9
2.1
26.5
32.4

As a result of its initial assessment from the Tokyo Stock Exchange regarding the Company’s compliance with the listing standards ofthe new market segments, Takara Leben has confirmed that it is in compliance with the listing standards of the Prime Market. Based on
the aforementioned and following a resolution of the Board of Directors, the Company has applied for transition to the Prime Market.

Major Shareholders (Top 10) (As of March 31, 2021)

Number of Shares Held By Investor Segment (As of March 31, 2021)

Shares(Thousands)

Percentage
share (%)

Yoshio Murayama

25,633

21.18

Takara Leben Co., Ltd.

12,344

10.20

The Master Trust Bank of Japan, Ltd.
(Trust Account)

5,784

4.78

Murayama Kikaku Co., Ltd.

2,000

1.65

Non-Japanese
investors 14.96%

Custody Bank of Japan, Ltd. (Trust Account)

1,592

1.32

Thousand shares

Custody Bank of Japan, Ltd. (Trust Account 5)

1,267

1.05

STATE STREET BANK WEST CLIENT - TREATY
505234

1,211

1.00

Sumitomo Mitsui Banking Corporation

1,184

0.98

Takara Leben Business Partner Shareholding
Association

1,164

0.96

Custody Bank of Japan, Ltd. (Trust Account 6)

1,123

0.93

Name of shareholder

Financial instrument trader (Securities companies)

2.06%
2,488 Thousand shares

Individuals and others

55.23%
66,822

Treasury stock 10.20%
12,344 Thousand shares

18,096

Other domestic
corporate investors

Total Numberof Shares
Outstanding
121,000,000
sharesThousand shares

Government andlocal public entities

3.41%
4,123 Thousand shares

0.00%
0 Thousand shares

Financial institutions 14.15%

17,123 Thousand shares

Share Price Trends
Share price (Yen)Net Sales by Segment (Changes)

1,000Millions of yen

Real estate sales business
Real estate rental business
Real estate management businessElectric power generation business
Other businesses
Total sales

2016.32017.32018.32019.32020.32021.363,383
4,307
3,362
909
4,305
76,26879,638
5,056
3,665
11,1084,130
103,599

79,341
5,472
4,000
18,2393,797
110,851

104,823
5,829
4,512
10,794
6,045
132,005

129,649
5,965
5,046
20,982
6,850
168,493

117,200
5,753
5,446
13,4856,512
148,397

Non-Financial Data

750

500

250

2016.32017.32018.32019.32020.32021.3

Percentage of women in
management (%)

8.20

9.23

8.10

9.46

8.33

7.34

Percentage of persons withdisabilities employed (%)

0.94

1.20

1.09

2.19

2.06

1.98

0

4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3
2016

2017

2018

2019

2020

2021

* Scope of calculation: Takara Leben

36

Takara Leben Annual Report 2021

Takara Leben Annual Report 2021

37

Takara Leben Co., Ltd.
TEKKO BUILDING 16F, 1-8-2 Marunouchi,
Chiyoda-ku, Tokyo, Japan 100-0005
Office of the President
TEL.: +81-3-6551-2130 FAX: +81-3-6551-2139
https://www.leben.co.jp/en/