Aoyama Zaisan Networks Company, Limited

Integrated Report 2021

Aoyama Zaisan Networks Company, Limited

Aoyama Zaisan Networks’ Core Values

Through the succession, operation and management of property,

we contribute to the happiness of our customers
and a sustainable society.
Aoyama Zaisan Networks started business in 1991 as a group company of Funai Consulting Incorporated.
We have operated as a property consulting company offering real estate solutions.
We have expanded our business in Japan and overseas as a consulting company providing comprehensive property-related
solutions to “individual asset owners” and “corporate owners,” marking our 30th anniversary in 2021.
Under the corporate slogan, “We will remain your best partner in 100 years,” we will pursue further growth in order toprotect the property of our customers as well as society and pass them down to the future.

CONTENTS

We will remain your best partner in 100 years.

01

Aoyama Zaisan Networks’ Core Values

03

Our Strengths and Source for Creation of Value

05

Top Message

09

Aoyama Zaisan Networks’ Materiality

13

Medium-Term Management Plan Explained by President

15

Corporate Governance

21

Management Index

Back coverCorporate Data

VisionJapan’s top comprehensive property consulting
firm supported and chosen by many customers
as “About property, Aoyama Zaisan Networks”● To aim for the sustainable development of society and AZNResolving social challenges related to property
succession/operations/management

Management
objectives

We seek to contribute to the happiness of
our customers through the succession,
operation and management of property.
We seek to ensure both the physical andmental well-being of the members
whom we work with.

Editorial Policy●Basic conceptThis report primarily covers performance for FY2020(January 1, 2020 – December 31, 2020). But some parts
deal with data or events from prior years or from mostrecent years.
Essentially, the subject of this report is Aoyama Zaisan
Networks and its group companies (nine consolidated
subsidiaries) as of December 31, 2020.
●Note on future prospects
The contents of this Integrated Report that are nothistorical facts are future forecasts made by Aoyama
Zaisan Networks Company, Limited based on its outlook
and plans. These future forecasts contain factors
including risks and variables; actual outcomes andperformance may vary from them.
●Published in November 2021

1

2

Our Strengths and Source for Creation of Value

By pursuing business management that enhances sustainability
and making tireless efforts on challenges, we protect your property.

Number of registered experts with national qualifications(as of September 2021)

More than■ Business portfolio and net sales

Broad network

professionals*CPAs, tax accountants, lawyers, judicial
scriveners, licensed social insurance
consultants, first-class architects, real estateappraisers, first-class FP technicians, etc.

1

Enriched consulting products

Amount of cumulative ADVANTAGE CLUB partnerships formed(as of September 2021)

Approx. ¥85.02

Pursuit of enduring andsustainable total optimizationfrom customers’ point of view

billionA network established by connecting leading tax accounting firms(Ordinary profit: million yen)
and accounting offices in Japan (as of September 2021)■ Revenue from property consulting

96■ Revenue from real estate transactions■ Revenue from real estate resales■ Revenue from subleases and others
16,000147

In order to fulfill our mission, protect customers’ property, and ensure their ever-lasting happiness, we must continue
securely on our course going forward.
The bankruptcy of Lehman Brothers (global financial crisis) in 2008 brought us to radically change our management policy
from a real estate reselling & short-term return-oriented one to a customer value & secure return-oriented one. We now
have a structure in place to offer comprehensive solutions, with a diverse array of services of “inheritance/property
succession,” “business succession,” “real estate solution/consulting products,” etc.
Under the Third Medium-Term Management Plan starting from 2022, we will pursue the realization of non-consecutive
growth with the vision of Japan’ s top comprehensive property consulting firm supported by many customers as “About
property, Aoyama Zaisan Networks.”(Net sales: million yen)
20,000Source for creation of value

High level of expertise

2

3,000

bases

● Ordinary profit

2,500*From 2019 onward, revenue fromsubleases and revenue from others
are included in revenue from realestate transactions and revenue fromproperty consulting, respectively.

2,000

12,000Enhanced productivity andexpanded fields via knowledge andtechnologies of a group of experts

1,500

8,000

3

1,000

4,000

500

0

0

Recorded a loss due to the real estate reselling model with dead stock
accumulated after the bankruptcy of Lehman Brothers

Consulting backed
by advanced personality

Converted to a property consulting-based
business model
-500

2004

2005

2006

2007

Listed on Mothers, TSE; booming real estate market

Period of growth in property consulting services
for individual asset owners

3

2008

2009

2010

Merged with Proggest Holdings, Ltd.

2011

2012

2013

Changed trade name to
Aoyama Zaisan Networks Company, Limited

Expansion of the field of business succession
consulting for corporate owners as a result ofmergers

2014

2015

2016

2017

2018

Promoted to TSE Second Section
First Medium-Term Management Plan
Merged with Nihon Shisan Soken Co., Ltd.

Period of growth as a comprehensive property

consulting firm

2019

2020

Sequential ART System cutover
Second Medium-Term Management Plan

On to the new stage by expanding
collaborations and getting equipped withadvanced technology

4Top Message

Aiming to further grow and evolve
as a comprehensive
property consulting firm,
we will serve the happiness ofas many customers as possible.
President

In 2019, we launched the Second Medium-Term Management
Plan. Positioning this plan as three years of preparation forthe period of growth expansion starting from 2022, we worked
under five basic policies including initiatives to be equippedwith advanced technology and expanding collaborations. Someof the basic policies such as initiatives to be equipped withadvanced technology and employees’ individual progress
made great strides, while others did not show much progress(e.g., zero overseas real estate products were formed)■A DVANTAGE CLUB, a long-term revenue model in proportion to
the number of partnerships formed

Masazumi Hasumi

Features: 3 revenue points
Revenue is generated at each phase of●❶forming, ●❷managing, and ●❸dissolving a partnership

Having sought for customers’ happiness for the last 30 years

5■ Comprehensive property consulting

ul

t in

g

Bus
in
c e

cessionsuc ngss sultion

AZN was originally established on September 17, 1991 as
Funai Property Dock Co., Ltd. with support from Funai
Consulting Incorporated Co., Ltd., for the purpose of offering
property succession/operations/management services toasset owners who owned land particularly. Thereafter wechanged the trade name to Funai Property Consultants Co.,
Ltd. in 1999, released the first project of our core product
ADVANTAGE CLUB in 2002, and were listed on the Mothers,
Tokyo Stock Exchange in 2004.
In October 2008, we acquired 100% ownership of Proggest
Holdings, Ltd. and at the same time, Masazumi Hasumi, took
over the management of the company from my predecessor,
then-President Yoshihito Hirabayashi. The purpose of thismerger was to grow dramatically to become a “comprehensive
property consulting firm” by adding a new business/property
succession consulting service for corporate owners to an
existing property consulting service mainly for asset owners
who own land particularly. This deal built a foundation for thes(2) In retrospect: 30 years since our foundation in 1991

on

Aoyama Zaisan Networks marked its 30th anniversary thisyear. Looking back on the original point where we started ourbusiness to mark this milestone, we find it comes down to a“job to be of help to people.” Based on this idea, we have two
management objectives: (1) “We seek to contribute to thehappiness of our customers through the succession, operationand management of property,” and (2) “We seek to ensure boththe physical and mental well-being of the members whom wework with.” That is to say, we believe that we makecontributions to the happiness of customers through oursolutions to property-related problems existing in society,through which we can make ourselves happy as well. To
please customers, we should learn to become a person of
three qualities: wisdom, action, and personality. To develop
the personality one, which allows us to be of help to many
people, we learn the value of virtues practiced by everyone
and try to practice it ourselves, day in and day out.

current AZN.
In 2008, however, the Lehman Brothers collapsed in
September, and triggered a global financial crisis, as you know.
We also ended up with a net loss of over ¥4.8 billion in thefollowing year (2009), mainly due to a loss on sale of realestate to repay loans, which hit us so hard and forced us to lay
off some of our employees. This brought us to discontinue ourprevious policy of carrying inventory and reselling real estateand convert to a new property consulting-based businessmodel.
In July 2012, we changed the trade name from Funai Property
Consultants Co., Ltd. to “Aoyama Zaisan Networks Company,
Limited” and stood at the new starting line as an independent
property consulting firm both in name and reality. In October
2013, we merged with Nihon Shisan Souken Co., Ltd., acompany operating mainly in Chiba Prefecture, in a bid tostrengthen our property consulting services dramatically.
And in 2014, we embarked on the First Medium-Term
Management Plan. Driven by the “Abenomics” growth strategy
by the second Abe administration inaugurated in December
2012, our operating profit showed significant increases: ¥445
million (FY2014), ¥485 million (FY2015), ¥751 million (FY2016),¥1,094 million (FY2017), and ¥1,464 million (FY2018).
Meanwhile, we also started a business to deliver real estatetransactions and related products in the United States andIndonesia to residents in Japan through the partnership withour counterparts in these countries.

More than 140
registered experts
in each field provide
one-stop services

P r oper t y c(1) Looking back on the starting point of AZN froma major milestone

partially because of the impact of the novel coronavirus
disease (COVID-19) pandemic in 2020.
However in FY2021, the final year of this plan, we sold
ADVANTAGE CLUB partnerships, previously sold to AZN
customers only, to new customers through regional banks andsecurities companies with no particular problem and posted
record-high sales; we managed to finish up preparation for
the growth expansion period from the next fiscal year, which
we find greatly rewarding.

Re

al

esta

te s olutions

Purchase/sell
real estateForma voluntary
partnership❸ Dissolve

Today, we have nearly a 60% market share by ADVANTAGE CLUB, a real estate joint ownership
scheme where customers jointly own real estate in urban areas and receive leasing income bytaking advantage of the Act on Specified Joint Real Estate Ventures. As of September 30, 2021,
we have cumulative total 56 partnerships, and cumulative total assets under management of¥85.02 billion against the backdrop of growing customer needs for inheritance measures andproperty management.

❶

Manage❷Our long-term vision
We design our long-term vision based on the following standpoints and create new strategies.

1#

Standpoint

Aoyama Zaisan Networks achieves the higher quality and quantitative expansion of our customer services,made of a pair of wheels of a “comprehensive property consulting service” and a “strategic individual service”

In property succession, business succession, or property
management, most of the concerns our customers havecannot be resolved just by removing visible parts. For
instance, customers come to see us for solutions to various
concerns about tax payment, potential disputes among theirchildren, smooth business succession, and so on in the case ofinheritance (their passing). Through a number of meetings,
they grasp the big picture of their assets and businesses andthen get to realize what they really want to put first and what
they should do now; that is how they reach their best
succession plan.
For customers to be successful in inheritance or businesssuccession cases, we need to analyze the status of theirassets and fully understand their thoughts before planning
together and proceeding according to the plan. Our belief is:“No success comes without a plan.”
To make a plan and go along with it, we advise customers toconsider from the following five perspectives (see diagram onright): (1) smooth succession of management; (2) smooth
succession of property; (3) securing tax payment funds; (4)management and maintenance of property; and (5)preparation for the unexpected. In this way we can create aperfect plan with an overall balance.
Further, we must accomplish individual finalized plans one by
one when executing. To be more specific, this includes
purchasing profitable real estate, effectively using land
property, selecting appropriate securities products, utilizing
family offices for family succession, and asset managementby asset management companies. Enhancing and expanding
these services is imperative to the totally optimized plan. We
will strengthen our corporate structures, with the possibilityof a company split-up in consideration. The enhancement of
individual plans also can be an opportunity for manycustomers to get to know us and go on to use ourcomprehensive property consulting service.
Having a close connection between (A) a “comprehensive
property consulting service” based on the formulation of thetotally optimized plan and (B) the enhancement & expansion of
a “strategic individual service” to support (A), AZN will grow toresolve the issues of our customers.

■ Five perspectives
Smoothof
1 succession
management

5 Preparation
for the unexpectedManagement and

4 maintenanceof property

Smoothof
2 succession
propertytax
3 Securing
payment funds

6

Top Message

2#Standpoint

Aoyama Zaisan Networks offers a property consulting service via smartphone
and online communication tools as its standard service

The COVID-19 pandemic dramatically accelerated digitization,

attentively. However, we also should be able provide high-and particularly the world of smartphones showed aquality consulting services online if we devise some ways, justphenomenal expansion. We are just around the corner fromas teleworking, which we were not used to in the beginning,

the world where we deliver our consulting services via

has now become a standard practice.

smartphone. It does not make sense if we cannot have data on

Against these backdrops, we set our vision, as the second

our assets handy and checkable. We know we should see ourlong-term vision, to create a structure to provide consulting

customers in person in meetings or at the restaurant so that

services via smartphone and online communication tools for

we can understand their thoughts and feelings morecustomers in Japan as well as overseas.

3#Standpoint

Aoyama Zaisan Networks grows to become a group of consultants withadvanced personality

Some say we easily lose personality (human touch) in a digitalcompany that can offer the property consulting service forsociety, which definitely makes us more swayed by what we

succession of figures as well as something intangible but

see.

valuable.

Also in a property consulting service, figures and data such as

In order to conduct this type of consulting, we must be a

the amounts of assets, inheritance tax, and partition of estatecompany with consultants with important qualities as a

are alleged to get our attention easily. Tangible (visible)

person, such as kindness, warmth, integrity, honesty, love,

figures and data are indeed important, but what we should

mercy, and altruistic values. Namely, it is imperative for us toreally value in property succession is to keep all family

grow to become a group of consultants with an advanced

members on good terms and to communicate an approach topersonality. The goal is lofty, but we will have no future

property use and a way of life that makes a contribution to thewithout achieving it.

Building a new structure for the next stage(1) Developing a new structure as a foundation
for the new Medium-Term Management Plan

(For more details, please see pp. 13–14 “Medium-Term Management Plan
Explained by President.”)

which should add to the significance of the succession,
operations, and management of property considerably,
followed by a growth in their relevant markets, as everyone
already knows.
To meet such growing societal needs, we must advance digitaltransformation (DX), but at the moment we see delays intaking measures for DX in the field of property succession/
operations/management. Faced with an issue that currently
we have no standards for providing services efficiently or for
their quality, that is the risk in our view. We should pushforward with improvements to the structure to meet the needsof as many customers as possible, enhance service quality &quantity, and offer them easy-to-use services. To be able togrow to become a company ensuring the happiness of manycustomers, we will further seek a synergy effect with the “ART
System,” which is already in operation as part of our initiatives
to be equipped with advanced technology, and advance DX.

(2) Business opportunities and risks■ ART System

We see the expansion of property market focused oninheritance and business succession as our opportunities in
the future business environment. In our time, the aging
population and falling birthrate, decreasing work force
population, a lack of successors, and the declining quality ofsocial security services as a result of increasing social
security costs are feared. Under these circumstances, all of us
are asked to live on our own to lead a happy life. In order to doso, we first need to make an economic foundation stronger,

The ART System stands for a fusion of “A”oyama/“A”sset, “R”eal(numerous consulting achievements), and “T”echnology, and systematizes
the knowledge and methods of our most experienced consultants andautomates a process of producing materials for the purpose of improving
efficiency and productivity in the consulting business.

We are now in the middle of developing the new Third
Medium-Term Management Plan. As a company that cantransform concerns that asset owners who own land inparticular, business owners, and financial asset owners haveover their property, mainly associated with inheritance andbusiness succession, into a “sense of security/peace of mind,”
we aim to become a leading company recognized as “About
property, Aoyama Zaisan Networks.” To that end, we areformulating a plan with four items (customer, service,technology, and organizational structure) as its foundation.
We will aim to become a company that ensures the happinessof many customers by resolving their property problems.

POINT

1

Standardization of
consulting know-how

2

Improvement ofefficiency/productivity

3

Monetization using ART
System in collaboration
with leading regional
banks

world. In other words, our desire is to grow to become a

For the enhancement of the largest management capital “human resources”

4#Standpoint

Aoyama Zaisan Networks is actively engaged in CSR activities

The growth and development of our company depends on how

this business to make the world a place for many people tomuch contribution we can make for the happiness and growth

live happily, we study initiatives for a decarbonized societyof many people or on how far we can contribute to thethrough our operations. We will identify CSR activities wehappiness of our customers through our property solutions. In

should focus on so that we can serve SDGs through our

addition to contributing a portion of our income earned fromdedication to our customers.

■ CSR case examples in our core business: regional revitalization project consulting
Drawing on a “special business” under the Act on Specified
Joint Real Estate Ventures, we are engaged in the regional
revitalization projects.
With the Group consulting capability and government licenses,
we will develop and transform idle land in front of train
stations owned by local governments into lively town squares.

First project

Komatsu City, Ishikawa Prefecture(Completed in 2017)
Second projectTsuruga City, Fukui Prefecture(In progress)

Illustration of Tsuruga Station Western District

7

The most important management capital for us is “humanresources.” With an emphasis on the balance of financial,physical, and mental fulfillment of our employees, we havebeen committed to their well-being so that they can feel it
constantly. We also run a human resources training program
focused on wisdom, action, and personality so that each
employee can find his/her work rewarding.
As mentioned earlier, the “ART System,” which boosts

service quality and supports productivity improvement
in consulting, also serves human resource development.
The systematization of knowledge and rules of thumb of
resourceful consultants as an educational curriculum canlead to the speedy development of consultants. A DX initiative
should also lead not only to benefitting consultants, but also
to company-wide improved productivity and human resource
development; we will actively advance the initiative.

On to the next stage for further growth and evolution
Based on the idea, “financial assets are the foundation
for leading a happy life,” we have delivered our property
consulting service for the last 30 years, primarily to a limited
number of customers in the Tokyo Metropolitan area. As
technologies have been showing dramatic progress in recent
years, in the next stage, we will grow to address property
problems of customers across Japan as well as overseas andto become a company ensuring the happiness of an infinitely
larger number of customers than now.
The Group will do our best to live up to your expectations in
the next 30 years.

8

Aoyama Zaisan Networks’ Materiality

Vital (extremely important)

We are committed to solutions for the property-related problems of asset owners and corporate owners andfurthermore for social challenges, under two management objectives: (1) “We seek to contribute to the happiness of
our customers through the succession, operation and management of property,” and (2) “We seek to ensure both thephysical and mental well-being of the members whom we work with.” With these needs growing year after year, we
calculate our business opportunities should be expanded further down the road. On the other hand, environmental andsocial risks are increasingly escalating; we should conduct our business while incorporating non-financial issues inlight of ESG in management strategies and valuing a harmony with stakeholders, so that we can continue sustainablegrowth.

Identified materiality(categorized by E/S/G)

Importance for stakeholders

Identifying materiality (key issues)

Importance for AZNIn FY2020, as our priority issues, we identified materiality associated with business such as the “reduction ofenvironmental load of buildings” and materiality associated with business foundation such as “human resource
development” and “corporate governance.”

Environment

A process of identifying materiality
As for materiality, we identify social challenges with asignificant impact on society as well as on us, by working
through the steps shown below.
In Step 2, Ms. Emi Matsukawa (Chair/Director of Collective
Action Institute, outside Advisor for PRONEXUS Inc.,
and Worldwide Senior Manager of CDP, an international

Step 1

Step 2

Identify social
challenges

Hold hearings
internally/
externallyand evaluate
importanceAnalyze global social
challenges/ESG trends
and identify a wide range
of environmental/social/economic issues

Eenvironmental NGO, since Feb 2020), as someone with an
external voice and expert, gave us in-house lectures andhelped us screen priority items. In Step 3 and 4, we selected
12 items as our materiality identified at the meetings ofdivision managers and Medium-Term Management Plan,
where we had discussions for approval.

Step 3

Organize social challenges
in terms of importancefor external parties(stakeholders) including
ESG investors andimpact on AZN

Step 4

Identify
materiality

Internal
discussions &approvals

Identified materiality

Vital(extremely important)

S

SocietyG

Governance● Reduction of environmental● Human resource development● Corporate governanceload of buildings● Transition to decarbonizedsociety● Climate change actions and
GHG reduction● Response to climate change● Water security management● Waste reduction● Human rights in labor● Anti-corruption policies &environment and humanrights due diligence● Diversity promotion● Engagement with local
community

practices<Relevance of SDGs to our business>

Discuss and identify(finalize) important
challenges based on
two axes: importancefor AZN and importancefor our stakeholders

E Environment

S Society

G Governance

HIGH materiality

Expectations from stakeholders

Corporate governance

Climate change actions and GHG reduction

Reduction of environmental load of buildings

Engagement with local community

Human rights in labor environment andhuman rights due diligence

Human resource development

Response to climate change

Transition to decarbonized society

Waste reduction

Water security management

Anti-corruption policies & practices

LOW materiality

Diversity promotion

Impact on our business

9

Making contributions to the Sustainable Development Goals (SDGs)
The 17 Sustainable Development Goals (SDGs) were set
for the international community to work together for
global sustainable development, as part of the (2030)
Agenda for Sustainable Development, which was adopted
in September 2015 at the United Nations Summit. To
these goals, we will make contributions through ourbusiness activities as a member of society.

We have selected items relevant to our business fromthe 17 SDGs in the process of identifying materiality. We
recognize these items to be addressed or consideredparticularly by us through our business activities. In a
bid to resolve social challenges through our businessactivities, we will be further committed to SDGsconscious initiatives and management.

10

Aoyama Zaisan Networks’ Materiality

Materiality policies & initiatives

Realization of society that supports(the success of) diverse talents● Human resource development

Human resource development Policies & major initiatives● Diversity promotion

As for human resource development, our policy is to make contributions to our customers
and society by making the most of our management capital, “human resources,” with a goalof “enhancing personality” and “building a strong organization adaptable to changes.”
We develop human resources through the following measures: redefining functions in therevised personnel system, visualizing management status by 360-degree assessment,
developing an industry-ready employee training framework by introducing an education
program (for consultants), instilling corporate philosophy in Hasumi-Juku (academy), andvisualizing educational training programs via online tools.

Realization of decarbonized society● Reduction of environmentalload of buildings● Transition to decarbonized society● Climate change actions and
GHG reduction● Response to climate change
Making contributions to thefollowing SDGs:

Policies & major initiatives

Diversity promotion

The Group, a comprehensive property consulting firm, is engaged in business activities
utilizing energies from land and other natural resources, as part of consulting operations;
we recognize response to climate change as an important management challenge with a

Making contributions to thefollowing SDGs:

considerable impact on our business continuity. We also consider our green (eco-friendly)
initiatives to accommodate needs from both customers and tenants as well as drive
improvements in future asset value and solutions to social challenges. At the moment, we

Policies & future initiatives

The Group regards our co-workers as one of the most important aspects of management
capital. We respect each individual’s physical and mental well-being, understanding offunctions, personality and autonomy/self-reliance, while constantly providing opportunities
for self-improvement and enlightenment, in a bid to become a company with advanced
personality. We are also makes efforts for employees to continue working with ease in theirlife events, such as setting up a satellite office, implementing a staggered work shift system,
promoting childcare leave (acquisition rate by women in FY2020: 100%), and enhancement a
temporary employees program that allows employees over 65 (retirement age).

are committed to initiatives to switch to electricity using clean energy and to facilities withlower environmental load (AC with less CFC consumption, etc.).
Future initiatives

Business activities with emphasis on partnerships

We will formulate the “Group Environmental Policy” and make further eco-friendly efforts in aseries of the purchase/operation/management/sale of office buildings including ADVANTAGE
CLUB.

●E
 ngagement with local

community

Realization of recycling-based society● Water security management

Policies & major initiatives● Waste reduction

As a water security management initiative, we are engaged in the development/constructionof buildings/towns by considering the conservation of water environment such as effective

Making contributions to thefollowing SDGs:

water use and groundwater recharge while saving water and effectively using water

Policies & major initiatives
As a comprehensive property consulting firm, the Group recognizes our engagement in local
communities is one of the important agenda in terms of resolving social challenges andprotecting property.
We are committed to activities to support the establishment of incorporated foundations
with the primary purpose of scholarship support, nursing homes for the elderly and licensed
nursery schools to clear children on waiting lists, and the redevelopment of land in front oftrain stations as a regional revitalization project, in an effort to coexist and collaborate withlocal communities.
Future initiatives

Making contributions to thefollowing SDGs:

resources together with our customers and tenants, in an effort to protect water environment.
In our group’s view, CO2 emissions associated with our business activities including real

Under the mission, “to remain your best partner in 100 years,” the Group makes efforts
to contribute to your happiness through the succession, operation and management ofproperty, as a comprehensive property consulting firm. We regard local communities as afoundation for the life of all people including our customers, their families, and companies
and employees they treasure, as a foundation for social and economic activities, and as animportant foundation for you to lead a happy life. So that our customers can happily live andthe value of their assets can improve in local communities, we will promote our engagement
in local communities.

estate operations have a significant impact on climate change and thus are considered as amajor risk. As a waste reduction initiative, we will step up our activities to improve energy
efficiency in business operations, shift to renewable energy, reduce emissions, and so on.

Continuing improvement in governanceenvironment and humanrights due diligence
Making contributions to thefollowing SDGs:●A nti-corruption policies &Recognizing corporate governance as an important management mechanism to maketransparent/fair and speedy/decisive decisions, the Group is actively committed to it.
Compensation for officers/executives is determined through fair and highly transparent
reviews by the Compensation Council; we are engaged in proper activities including theevaluation of the effectiveness of the Board of Directors in line with the policy.

Policies & future initiatives
The Group seeks to contribute to the physical and mental well-being of people through ourmanagement objectives, core values, and action guidelines. Going forward, we will formulate

Anti-corruption Policies & future initiatives

our policy on human rights and finalize our basic concept about respect for human rights, roll

For the purpose of practicing fair and bona fide management in compliance with laws,
we establish the Compliance Committee consisting of the President, full-time Directors,
Executive Officers/General Managers of the divisions, and external legal counsels (attorneys)
as a structure to advance compliance with laws and corporate ethics.
Going forward, we will formulate and implement anti-corruption rules and prevention
guidelines from an anti-corruption point of view.

them out to all the officers and employees, and ask understanding and support from all of ourbusiness partners including suppliers.

11

Corporate governance Policies & major initiatives

practices

Business activities with respect for human rights● Human rights in labor● Corporate governance

Making contributions to thefollowing SDGs:

12

Medium-Term Management Plan Explained by President■ Medium-Term Management Plan (Overview)

Vision

Reviewing Second Medium-Term Management Plan (2019–2021)
Positioning the three years from 2019 to 2021 as the periodof the Second Medium-Term Management Plan in anticipationof our growth expansion from 2022, we made efforts under
the following five basic policies: “initiatives to be equippedwith advanced technology,” “tie-up expansion,” “support the
expanding and diversifying needs of property and businesssuccessions,” “support expanding management needs,”
and “initiative to improve human resources and employee
satisfaction.”
Amid the COVID-19 pandemic, we saw a sharp decline in thenumber of referrals from financial institutions and were notallowed to make face-to-face sales with elderly customers;
we had to struggle for earnings. Then from the fourth quarterof FY2020 to the first half of FY2021, the number of referrals
showed a smooth recovery, and the Internet-based system
environment for customer services was also installed, which
contributed to an increase in the number of “Web-based
consulting services.” In addition, the active formation of“ADVANTAGE CLUB” partnerships on a regular basis helped

our earnings to get on an expansion track from a recovery
path.
The greatest achievement through our efforts under theSecond Medium-Term Management Plan is an advancementin the preparation of foundation for the growth expansion
period from the next fiscal year as a comprehensive
property consulting firm. The “ART System,” in which ourknowledge and know-how are invested under the basic policyof “equipped with advanced technology,” is now officiallyin operation. We also started selling our core product“ADVANTAGE CLUB,” the real estate small-lot product, tofinancial institutions such as banks and achieved sales
outcomes more than expected. We also successfully launched
the family office service, IFA (Independent Financial Advisor)
financial instrument investment service, and STO (Security
Token Offering) business, as new businesses. Through these
activities, the Group has completed setting up a base forrunning new business operations actively.

Developing a new structure as a foundation for the new Medium-Term Management Plan (2022–2026)(the company we
aim to become)Third Medium-Term
Management Plan
(2022–2026)

First Medium-Term
Management Plan
(2014–2018)

Period of venture
as a property
consulting firm

Second Medium-Term
Management Plan
(2019–2021)

Period of growth
expansion

Period of growth as aproperty consulting firm;
period of enhancementin personality &technology fortificationin anticipation of future
growth expansion period

as a property consulting firm

Japan’s top
comprehensive
property consulting
firm supported andchosen by manycustomers as “About
property, Aoyama
Zaisan Networks”

Overview of a new structure■ Positioning of services that expand customer base and generate synergies for core business
Services for specific customers or specific services
Existing

ExistingNew

13enables new customer experience such as providing
communication tools, sending and sharing informationand visualizing one’s own asset information, andcontinue information-sharing with customers withwhom a contact point is already established, in a bid
to increase the number of consultations and profit
opportunities.
❷ To “improve operational productivity” in order to offer as
many consulting services as possible. We will advanceour system by adding more knowledge to the existing
ART System and raising the close rate through thestandardization of quality, while reducing the workload/
number of operations to lead to proposals speedily.
Furthermore, we will pursue improved productivity by
establishing the optimal flow intertwined with onlinebased consulting.
As for an organization structure , to build anorganization that addresses property-related concerns ofmany customers, we should produce a lot of human resources
who are well-balanced with the three skills (qualities) rooted
in AZN management objectives and core values: wisdom,
action, and personality. For consulting, we need humanresources not only with wisdom (a high-level of knowledge,
experience, and thinking) but also with ability to take quick
action to address customers’ problems, and personality tothink of what’s best for customers and identify and share
their true concerns.
We will build a self-sustaining organization climate byinstilling our corporate philosophy, which is a base foreverything, develop a pleasant work environment based ondiverse ways of working, design appropriate evaluation/compensation programs according to functions, andcreate a rewarding mutual approval framework. Making
these consistent efforts, we aim to become a company
that addresses property problems of many customers andensures their happiness.

Customers

We are now developing the new Third Medium-Term
Management Plan.
As a company that can transform concerns that asset owners
who own land in particular, business owners, and financial
asset owners have over their property, mainly associatedwith inheritance and business succession, into a “sense of
security/peace of mind,” we aim to become a leading company
recognized as “About property, Aoyama Zaisan Networks.” To
this end, we are formulating the Plan based on the following
four items: customer, service, technology, and organizational
structure.
As for customers , high-net-worth asset owners withdeeper concerns will be the main target of our services.
The fundamental vision depicted in the Medium-Term
Management Plan is to build a structure in which our services
are recognized by many target customers and can bedelivered by us.
As for services, for our comprehensive property consulting
services to be recognized and used by many asset owners, we
also should address needs of strong interest to customers,
individually. A business split-up, which I talked about at theGeneral Meeting of Shareholders, means breaking down asingle gate (i.e., existing comprehensive property consulting
service) into eight gates in terms of value. By meeting needs
moment to moment, we aim to lead to a comprehensive
property consulting service with the philosophy of expanding
customer recognition using our service as an entrance,increasing contact points with customers, and having total
optimization.
We desire to realize two things with regard to technology
utilization.
❶ To increase contact points with customers, acquire newcustomers, and communicate with existing customers
smoothly. In short, we want to stay connected not only
via traditional face-to-face communication but also via
digital communication. We will establish a platform thatNew

◦ ADVANTAGE CLUB◦ Regional revitalization projects
consulting◦ Closedown support consulting by
use of funds◦ Consulting for effective real estateutilization◦ Purchase consulting◦ Family office service◦ IFA (Independent Financial Advisor)
financial instrument investment service

LTV growth◦ STO (Security Token Offering)businessCore businessComprehensive
property consulting

Increase new customers

New customers × Existing services

New customers × New services■ ART System & Web-based consulting strategy
ART System

Web-based consulting

Comprehensive property consulting◦ ADVANTAGE CLUB◦ Regional revitalization projects
consulting◦ Closedown support consulting by use offunds◦ Consulting for effective real estateutilization◦ Purchase consulting◦ Family office service◦ IFA (Independent Financial Advisor)
financial instrument investment service◦ STO (Security Token Offering) business

Collaboration
with regional
banks
Digitalization ofbusiness operations(by use of Web)For more nationwide customers

Web-based consulting

Collaboration
with NW
officesART System

Providing knowhow through humaninteraction

14

Corporate GovernanceDirectors and Audit & Supervisory Board Members

Director

1

2

3

7

8

9

Masazumi Hasumi President

Masayuki Yagi Director, Managing Executive Officer

Takeshi Matsuura Director, Managing Executive Officer

Shintaro Hashiba Director, Executive Officer

Haruo Shimada Director Outside Independent

Keiji Watanabe Director Outside IndependentAug. 1983
Nov. 1991
Dec. 1996

Apr. 1990
Sept. 1991
Mar. 2006

Apr. 1991
May 1995

Apr. 1987

Apr. 1975

July 1987

Sept. 2008
Oct. 2008
Aug. 2016
June 2017
Dec. 2019
Oct. 2020
Jan. 2021

Joined Aoyama Audit Corporation
Joined Yamada & Partners Accounting Office
Representative Director of Proggest Co., Ltd.
(company name changed to Proggest Holdings,
Ltd. in July 2005)
Director of the Company
President
President of Business Succession Navigator
Corporation (current position)
Director of PT. Aoyama Zaisan Networks
Indonesia (current position)
Chairman of Aoyama Zaisan Networks Kyushu
Co., Ltd. (current position)
Representative Director of Aoyama Financial
Service Co., Ltd. (current position)
Representative Director of Aoyama Family OfficeService Co., Ltd. (current position)

Jan. 2011
Mar. 2013
Mar. 2014
Jan. 2021

Joined Murakami Corporation
Joined the Company
Director, Executive Officer, and Manager ofFirst Business Department
Executive Officer, Manager of Individual Asset
Consulting Department
Director, Executive Officer, and General
Manager of Business Division
Director, Managing Executive Officer, andGeneral Manager of Business Division
Director, Managing Executive Officer, General
Manager of Business Division, and General
Manager of Real Estate Division II (current
position)

Oct. 2000
Jan. 2005
Jan. 2006
Mar. 2016

Jan. 2021

Joined Daiwa House Industry Co., Ltd.
Joined Nissho Iwai Real Estate Corp. (current:
Sojitz Corporation)
Joined the Company
Executive Officer, Manager of Real-estate
Department
President of Funai Estate Co., Ltd. (current:
Aoyama Estate Co., Ltd.)
Director, Managing Executive Officer, andGeneral Manager of Real-estate Division of theCompany
Director, Managing Executive Officer, andGeneral Manager of Real Estate Division I(current position)

Oct. 2003
Oct. 2004
July 2008
May 2014

Aug. 2014
Nov. 2015
		Aug. 2017
Mar. 2020
July 2020

Joined The Kyowa Bank, Ltd. (current: Resona
Bank, Limited)
General Manager of Shin-Yurigaoka Branch
General Manager of Tokyo Central Marketing Division 1
General Manager of Shin-Toshin Marketing Division 3
Director, Deputy Division Manager of Marketing
Division, General Manager of Business Development
Department of J-COM Co., Ltd. (current: LIKE, Inc.)
Director of J-COM Holdings Co., Ltd. (current: LIKE, Inc.)
Joined the Company
General Manager of Management Planning Office
Executive Officer, General Manager of
Administration Division
Director, Executive Officer, General Manager of
Administration Division
Director, Executive Officer, General Manager of
Administration Planning Division (current position)

Apr. 1982
Mar. 1986
June 2000

Mar. 2007
Apr. 2007
Jan. 2016
Apr. 2017

Feb. 2021

Associate professor of Faculty of Economics,
Keio University
Professor of Faculty of Economics, Keio University
Visiting professor of Massachusetts Institute ofTechnology
Visiting professor of Research Center for
A d v anc e d S cienc e and T e chnol o g y , theUniversity of Tokyo
Outside Director of the Company (current position)
President of Chiba University of Commerce
President of Shimada Sogo Kenkyujo (current
position)
Former Chairperson of the Board of Trusteesof Tokyo Metropolitan Public University
Corporation
Outside Director of Tech I.S. Co., Ltd.(current
position)

Apr. 1996
June 2000
July 2003
June 2008
June 2010
Mar. 2011
June 2017
June 2017

June 2018

Representative Partner of Aoyama Audit Corporation(current: PricewaterhouseCoopers Aarata LLC)
Representative Partner of Tohmatsu & Co.
(current: Deloitte Touche Tohmatsu LLC)
Outside Director of Ichiyoshi Securities Co., Ltd.
Global Middle Markets Leader of Deloitte
Touche Tohmatsu LLC
Outside Director of ASAHI KOGYOSHA CO.,LTD. (current position)
Outside Director of SBI Holdings, Inc.
Outside Director of the Company (current position)
Outside Director of SBI Insurance Group Co.,
Ltd. (current position)
Outside Audit & Supervisory Board Memberof Hokuetsu Kishu Paper Co., Ltd. (current:
Hokuetsu Corporation) (current position)
Outside Director of UKAI CO., LTD. (current position)<Reasons for appointment><Reasons for appointment><Reasons for appointment><Reasons for appointment><Reasons for appointment><Reasons for appointment>

Serving as President of the Company, he has extensive
experience as a corporate manager and a high level of knowledge
about the Company’s business activities. He has implemented
his duties of determining the Company’s important issues andsupervising Directors and Executive Officers in performing theirduties in an appropriate, fair and efficient manner; he is expected
to continue his contribution to strengthening the governancesystem.

Serving as Director, Managing Executive Officer, and General
Manager of Business Division of the Company, he directs andsupervises overall sales departments and performs his duties
relating to the Company’s business activities appropriately;
he is expected to continue his contribution to the longterm improvement in corporate value and strengthening thegovernance system.

Serving as Director, Managing Executive Officer, and General
Manager of Real Estate Division of the Company, he appropriately
performs his duties to supervise the Company’s Real Estate
Division and is also in charge of the provision of profitable realestate in Japan and abroad and the regional revitalization business,
which leads to contribution to regional economies; he is expected
to continue his contribution to the long-term improvement incorporate value and strengthening the governance system.

Serving as Director, Executive Officer, General Manager of
Administration Planning Division of the Company, he has
reinforced the administrative functions of administration planning,IR, accounting, finance, legal affairs, systems, personnel, generalaffairs, etc. His wide-ranging experience and knowledge are stillneeded for the Company to organize the management foundationand develop new business strategies in order to achieve its
continuous growth.

By drawing on his extensive knowledge as a long-term
economics researcher, he is expected to continue his contribution
to strengthening the governance system, including reinforcing
the supervision of Directors in performing their duties, from his
independent position.

Holding experience and professional knowledge as an expertof accounting, he supervises the Company’s management
appropriately from his objective position as a professional
accountant; he is expected to continue his contribution tostrengthening the governance system, including reinforcing thesupervision of Directors in performing their duties, from his
independent position.

Audit & Supervisory Board Member

4

5

6

10

11 Hiroyuki Fujita Audit & Supervisory Board Member
Apr. 1989
Aug. 1995
Oct. 2000
Apr. 2004
Mar. 2018
Mar. 2018
Mar. 2018

Shinji Shimane Director, Executive Officer

Takaomi Ogawa Director, Executive Officer

Hideo Matsuda Director, Executive Officer

Michihiro Nagasaka Director Outside

Oct. 1995

Sept. 1992

Apr. 1984

Apr. 1985
Mar. 1992
Dec. 2010
Mar. 2014

Oct. 2000
Sept. 2001
Aug. 2006
Jan. 2016
Mar. 2016

Jan. 2021

Joined Ota Showa Audit Corporation (current:
Ernst & Young ShinNihon LLC)
Joined Avaya Japan Ltd.
Joined Proggest Co., Ltd. (current: Aoyama
Zaisan Investments Co., Ltd.)
Director (current position)
Representative Director of Shinsei Aoyama
Partners Co., Ltd. (current position)
Director, Executive Officer, and General Manager
of Business Succession Consulting Division of
the Company
Director, Executive Officer, and General Manager
of Consulting Division IV (current position)<Reasons for appointment>
Serving as Director, Executive Officer, and General Manager ofConsulting Division IV, he focuses on the operations of businesssuccession funds, a joint work with our business partner, Shinsei
Bank, Limited. He is expected to continue his contribution to
expanding the Company’s performance and strengthening thegovernance system.

15

Aug. 2003
Dec. 2009
Oct. 2013
Mar. 2016
June 2017
Apr. 2020

Joined Takano Yasuo Zeirishi Jimusho (current:
Zeimu Sogo Tax Corporation)
Director of Funai Zaisan Consultants Keiyo Co.,
Ltd. (current: Nihon Shisan Soken Co., Ltd.)
President of Funai Zaisan Consultants Keiyo Co.,
Ltd. (current: Nihon Shisan Soken Co., Ltd.)
Executive Officer, General Manager of NSS
Division of the Company
Director, Executive Officer, General Manager of
NSS Division (current position)
President of Nihon Shisan Soken Co., Ltd. (former: Nihon
Shisan Soken Consultant Inc.) (current position)
Representative Director of Nitto Fudosan Co.,
Ltd. (current position)<Reasons for appointment>
Serving as Director, Executive Officer and General Manager of
NSS Division of the Company and as President of Nihon Shisan
Soken Co., Ltd., the Company’s subsidiary, he contributes tothe expansion of business performance of the Aoyama Zaisan
Networks group in the Keiyo area, by drawing on his extensive
experience. He is expected to continue his contribution to
expanding the Company’s performance and strengthening thegovernance system.

Dec. 2014
Jan. 2018		Mar. 2018

Oct. 2020
Jan. 2021

Joined Sato Sumio Zeirishi Jimusho (current:
Meinan Keiei Tax Corporation)
Representative Director of Meinan Zaisan
Consultants Co., Ltd.
Joined the Company
Executive Officer, General Manager of General
Information Network Division
Director, Executive Officer, General Manager ofGeneral Information Network Division (current
position)
Director of Aoyama Financial Service Co., Ltd.
(current position)
Director of Aoyama Zaisan Networks Kyushu Co.,
Ltd. (current position)<Reasons for appointment>
Serving as Director, Executive Officer and General Manager ofGeneral Information Network Division of the Company, he makes
efforts in expanding a national network of tax accountants’corporations and accounting firms and also performs his duties
as a supervisor of the development and sale of operating leaseproducts. He is expected to continue his contribution to expanding
the Company’s performance and strengthening the governancesystem.

Apr. 2015
June 2021

Joined Wakabayashi Law Office
Joined Nihon M&A Center Inc.
Manager of Business Promotion Department
Outside Director of the Company (current
position)Manager of Sales Support Department, General
Planning Division of Nihon M&A Center Inc.
Director of Business Succession Navigator
Corporation

Joined The Mitsui Bank, Limited (current:
Sumitomo Mitsui Banking Corporation)
Joined Yamazaki Certified Tax Accountant Office
Joined Tohmatsu & Co. (current: Deloitte Touche
Tohmatsu LLC)
Registered as a CPA
Appointed as outside Audit & Supervisory Board
Member of the Company (current position)
Audit & Supervisory Board Member of Nihon
Shisan Soken Co., Ltd. (current position)
Audit & Supervisory Board Member of Aoyama
Estate Co., Ltd. (current position)

The Company is in partnership with Nihon M&A Center Inc.,
which he works for, for asset/business succession/real estate
consultation services for corporate owners. He is expected
to provide useful advice concerning business know-how andmarketing promotion and strengthen the relationship with Nihon
M&A Center for further business development.

Mar. 2018
Mar. 2018
Dec. 2019
Apr. 2020
Oct. 2020
Jan. 2021

Independent
Audit & Supervisory Board Member of BusinessSuccession Navigator Corporation (current position)
Audit & Supervisory Board Member of Aoyama Zaisan Investments
Co., Ltd. (former: Proggest Co., Ltd.) (current position)
Audit & Supervisory Board Member of Aoyama
Zaisan Networks Kyushu Co., Ltd. (current position)
Audit & Supervisory Board Member of Nitto
Fudosan Co., Ltd. (current position)
Audit & Supervisory Board Member of Aoyama
Financial Service Co., Ltd. (current position)
Audit & Supervisory Board Member of Aoyama
Family Office Service Co., Ltd. (current position)

12 Hisao Nakatsuka Audit & Supervisory Board Member
Apr. 1970
Apr. 1994
Jan. 1996
Jan. 1999
Nov. 2001
Mar. 2002
Aug. 2002
Mar. 2005

Joined The Tokai Bank, Limited (current: MUFG
Bank, Ltd.)
General Manager of Fujisawa Branch
General Manager of Chofu Branch
General Manager of Takenotsuka Branch
Joined the Company
Director, General Manager of Consulting
Department
Director, General Manager of Administrative
Department
Audit & Supervisory Board Member of Funai
Estate Co., Ltd. (former: Aoyama Estate Co., Ltd.)

13 Hiroaki Rokugawa Audit & Supervisory Board Member<Reasons for appointment>

OutsideApr. 1997
Apr. 1997
June 2002
Mar. 2007
Apr. 2007
June 2008
Mar. 2009

Registered as Attorney (Dai-Ichi Tokyo Bar
Association)
Joined Hori & Partners
Joined Barack Ferrazzano Kirschbaum &Nagelberg LLP (Chicago)
Joined Tokyo Aoyama, Aoki, Koma Baker &McKenzie Law Office
Lecturer of Advanced Institute of Industrial
Technology (current position)
Representative Attorney of Ogasawara Konno &Rokugawa (current position)
Outside Audit & Supervisory Board Member ofApr. 2006
Sept. 2008
Oct. 2010
Oct. 2013
Mar. 2014
Mar. 2015
Mar. 2016

OutsideDec. 2010
Dec. 2016
Sept. 2017
Sept. 2020

Managing Director of the Company
Audit & Supervisory Board Member of Proggest
Co., Ltd.
Director of Aoyama Estate Co., Ltd.
Audit & Supervisory Board Member of Nihon
Shisan Soken Co., Ltd.
Director of Nihon Shisan Soken Co., Ltd.
Advisor of the Company
Audit & Supervisory Board Member (current
position)Independent
the Company (current position)
Outside Auditor of Yumeshin Holdings Co., Ltd.
(current: Yumeshin Holdings Group Co.) (current
position)
Outside Director of Tsunagu Group Holdings, Inc.
(current position)
Outside Auditor of OKWAVE Inc. (current
position)
Outside Director of Abalance Corporation(current position)

16

Corporate Governance

Basic concept of corporate governance

Number of times and attendance at the meetings of Board of Directors / Audit & Supervisory Board / Compensation Council (FY2020)◦To ensure the equal treatment of all shareholders◦To make timely and accurate disclosure regarding all
the important matters related to the company, including
its financial conditions, financial results, shareholder
composition, and governance◦T o ensure the strategic orientation of the company,
effective supervision of management executives, andaccountability

Recognizing corporate governance as an importantmanagement mechanism to make transparent/fair andspeedy/decisive decisions, we are actively committed to it.
In addition, the Company’s Board of Directors and Audit &Supervisory Board acknowledge the corporate governanceframework should primarily perform the following functions:◦T o protect shareholders’ rights and encourage their
exerciseCorporate governance system
Directors, and Executive Officers, meets on a weekly basis to verify
management policies and discuss management strategies andbusiness execution for the purpose of sharing problem awarenessand having smooth communication among all members. The
Board of Directors lays down the medium-term management
plans and annual plans to define the goals we should achieve,
clarifies performance targets for the respective divisions
Executive Officers take charge of, and gets reports on progress
regularly in the Board of Directors meetings for the purpose of
supervising business execution by Executive Officers.

AZN is a company with the Audit & Supervisory Board andappoints ten Directors (including three outside Directors) and three
Audit & Supervisory Board Members (including two outside Audit& Supervisory Board Members). We also implement an executive
officer system in terms of the segregation of management
and execution; Executive Officers execute the operations of thedivisions/departments in charge, in accordance with organization
regulations and rules on the segregation of duties set forth by the
Board of Directors.
The Executive Committee, consisting of the President, full-time

Masazumi Hasumi
Masayuki Yagi
Takeshi Matsuura
Shinji Shimane
Takaomi Ogawa
Hideo Matsuda
Shintaro Hashiba
Haruo Shimada
Keiji WatanabeMichihiro Nagasaka
Hiroyuki Fujita
Hisao Nakatsuka
Hiroaki Rokugawa

Board of Directors
100% (13/13)
100% (13/13)
100% (13/13)
100% (13/13)
100% (13/13)
100% (13/13)
100% (10/10)
85% (11/13)
92% (12/13)
85% (11/13)
100% (13/13)
92% (12/13)
92% (12/13)

Appoint / Discharge

Consult / Advise

We are committed to improving the effectivenessof the Board of Directors and conduct aquestionnaire for evaluation and analysis, on anannual basis.

Appoint / Discharge

Board of Directors

Executive Committee

Departments / Affiliates

Audit

Collaboration
Collaboration

Internal Audit OfficeCompensation for officers
selected by the resolution of the Board of Directors, two or moreof whom must be outside Directors as a rule for the purpose ofraising the transparency and objectivity of the review process.
The three members of the Compensation Council for this fiscal
year are: President Masazumi Hasumi, outside Director Haruo
Shimada, and outside Director Keiji Watanabe.

Compensation for the Company’s Directors and Audit &Supervisory Board Members is determined within the extent
approved by the General Meeting of Shareholders, with theCompany earnings, management actions/measures, andeconomic environment comprehensively considered, and throughfair and transparent reviews by the Compensation Council.
The Compensation Council is composed of three or more Directors

Category of officer
Director (except outside Director)

Total amount ofcompensation(thousand yen)
137,425

Report discussion
results to the Board of
Directors

Questionnaire evaluation items

Summary of questionnaire results◦ Members of the Board of Directors, executive structures◦ Administration/management of the Board of Directors◦ Topics/agenda of the Board of Directors meetings◦S upervision structures by the Board of Directors
 upervision structures by shareholders◦S

About the Board of Directors of the Company,
there were no important matters raised in each
evaluation item, whereas some findings about theBoard of Directors operations were noted; we will
make some improvements and aim to realize amore effective Board of Directors.

We define the following risks and a contingency plan (response attheir occurrence) in our risk management rules.
In the event of the following risks deemed equivalent to a serious
operational crisis, we immediately set up an “(emergency) task
force,” which will be in charge of addressing problems across theboard. The status of risk management is audited by our Internal
Audit Office on its effectiveness and validity, and its results arereported to the Board of Directors on a periodic basis.

(1) External risks( i ) Information leak( ii ) Problems involved in business operations (including
customer consulting services)(iii) Civil violent incidents, contact/problems with antisocial forces(iv) Criminal acts by employees (fraud etc.)( v ) Other risks/incidents associated with AZN’s credit(2) Internal risks( i ) Traffic accidents by employees (property/personal
damage)( ii ) Internal troubles (sexual harassment etc.)(iii) Mishaps of employees and their families, otherwork accidents(iv) Other cases constituting a crime by employees(3) Disasters etc.

( i ) Extraordinary disasters including natural disasters

Information security management

Total amount per type of compensation (thousand yen)
Fixed

Performance-linked
90,05436,752

Number of eligible officers

Other
10,618

7

Audit & Supervisory Board Member(except outside Audit & Supervisory Board Member)

4,800

4,800

-

-

1

Outside Officer

43,38539,495

3,890

-

5

Notes:
1. T he extent of compensation for the Directors of the Company is up to ¥500 million per year (note: the employee salary portion is not included), which was adopted at the 16th Annual General
Meeting of Shareholders held on March 24, 2007. In addition, the resolution adopted at the 28th Annual General Meeting of Shareholders held on March 28, 2019 sets out nonmonetarycompensation by company housing up to ¥40 million per year.
2. T he extent of compensation for the Audit & Supervisory Board Members of the Company is up to ¥50 million per year, which was adopted at the 11th Annual General Meeting of Shareholders heldon March 20, 2002.
3. T he amount of fixed compensation, which is a basic compensation, is respectively determined by taking account of the functions, positions/titles, duties, contributions, etc. of each Director/Audit &Supervisory Board Member comprehensively.
4. T he amount of bonus, which is a performance-linked compensation, is respectively determined based on the amount of consolidated operating profit as one of important benchmarks for evaluation,by evaluating respective contributions to business performance/earnings and execution of duties in proportion to individual positions/titles and duties. We select this benchmark because it
typically represents the business performance/earnings of the Group.
5. F or this fiscal year, the benchmark target associated with performance-linked compensation was set at operating profit of ¥1,800 million. (Performance-linked compensation to be paid in full if thetarget is accomplished.) But the actual operating profit was ¥1,303 million, falling short of the target; the amount of performance-linked compensation paid this year fell below the previous year’s.
6. T he total amount of compensation of Directors does not include the portion of employee salaries for Directors who serve concurrently as employees.
7. O ne unpaid Director is excluded from the above number of eligible officers.
 or “Other,” nonmonetary compensation by company housing is provided.
8. F

17

Have discussions
based on questionnaire
results

Risk management

Audit Firm
Audit

Direct / Report

Direct / ReportCollect responses from all
the Directors and Audit &Supervisory Board Members

Collaboration

President

Direct / Report

Conduct aquestionnaire

Audit & Supervisory Board
Audit

Appoint / Discharge

Direct / Report

Compensation Council
100% (1/1)
100% (1/1)
100% (1/1)-

Evaluation of the effectiveness of Board of Directors

General Meeting of Shareholders

Legal Counsel

Audit & Supervisory Board
100% (13/13)
100% (13/13)
100% (13/13)

For the purpose of continually maintaining and strengthening our information security management structure including personal
information management, we obtain the international accreditation and information security management system certification “ISO 27001”
and implement and maintain a system based on the standard for operations.

Compliance
For the purpose of practicing fair and bona fide management incompliance with laws, we establish the Compliance Committee
consisting of the President, full-time Directors, Executive Officers/
General Managers of the divisions, and external legal counsels(attorneys). The Compliance Committee performs the following
operations:(1) To recognize potential risk of losing trust from the securities market
and customers in business operations, and prepare countermeasures(draft)(2) To review if there is any compliance issue in the real estate specified
joint enterprise operations, and give approval of their execution(3) To review and report preventive measures against serious complianceviolations(4) To examine/check suspicious compliance activities (potential
compliance violations)18Corporate Governance

Message

CFO Interview

Message from Outside Director

CFO Interview

I will look out for internal and external changes andback up employees with “advanced personality.”

Outside Director

Haruo Shimada(In office since 2007)

Aoyama Zaisan Networks is working very hard all in unity and unison under the
singular leadership of President Masazumi Hasumi. Out of respect to humanity,
President Hasumi goes out of his way night and day to focus on offering maximum
support to customers and employees, as his most important people, so that they
can fulfill the greatest potential of their own life.
The world is now faced with an extraordinary upheaval and long-term structuralchanges. The U.S.–China dispute and the COVID-19 pandemic have shaken Japanand the world to the core and had a great impact on economic society. Meanwhile,in the long term, the aging population and DX driven by the spread of the latest
information technology are fundamentally changing the structure of economic
society.
Fixing its eyes on these changes, AZN is committed to providing assistance for realestate and financial assets owners to make smart use in the aging society. It offersa family office service for higher-net-worth customers to smoothly pass down
the values of their important businesses or family, whether they are tangible orintangible, from generation to generation.
As an outside Director of the Company, I will work harder to fulfill my duty to lookout for constant changes in things internally and externally and share a broad anddeep sense of them through interaction with other executives.

To achieve sustainability on the basis ofstrong governance and human capital.

Outside Director

Keiji Watanabe(In office since 2011)

In a society with a progressively aging population and falling birthrate, therealization of AZN’s corporate philosophy is becoming increasingly important, in
my view. Particularly in the future society, Society 5.0, where advanced digitaltechnologies such as the IoT, big data, and AI will arrive, it should become even more
important for a lot of people as the method of realizing the company’s corporate
philosophy also becomes sophisticated.
Sustainability has become a priority issue in corporate management, and strong
governance is needed to address this issue.
In addition, the recruitment and development of competent personnel and sharing ofknow-how are required especially in the business sector of AZN; improvement in thevalue of human capital should lead directly to an increase in corporate value. (In the
United States, the disclosure of human capital information was mandated in 2020.)
As a certified public accountant, I have been engaged with domestic or internationallarge corporations, medium-sized firms, and others for nearly 40 years at aninternational accounting firm through accounting audit and advisory operations. In
addition, I have served as an outside director for the seven listed companies since
2000. Thus, I believe I can make my contribution to reinforcing AZN’s governancefrom a stakeholder’s point of view.
For information disclosure, the engagement of the Board of Directors is necessary;particularly, the disclosure of non-financial information including on ESG andclimate change has a significant impact on management activities. I should be
able to make my contribution by drawing on my long years of experience withinformation disclosure as a CPA.

By pursuing maximized corporate value
while maintaining financial soundness,
we will be committed to new initiatives.
Director, Executive Officer, General Manager of Administration Planning Division

Aoyama Zaisan Networks’ financial policy dates back to aloss posted in 2009 from disposal of real estate inventory. We
increased profits by purchasing and reselling real estate after
the listing on Mothers in 2004, but the global financial crisisof 2008 caused us a large loss and damage to our finance.
To rebuild our damaged financial foundation, we undertook asound finance project as follows: To purchase the real estate
which forms an ADVANTAGE CLUB partnership in order toachieve the optimal asset mix for customers, via a sameday settlement system so that AZN will not incur any risk. To
establish a structure for the level of cash and deposits thatenables us to continue consulting services for our customers
with no problem for the next few years in the event of
economic risks such as the global financial crisis of 2008. To
ignore quick profit, offer customers values and accumulate
profit in return for that. We emphasize finance because wemust perform our consulting service for our customers, who
own assets, on a permanent basis beyond generations.

Adoption of ROIC to pursue both AZN growth andreturn to outside parties
Ten years have since passed, and we believe the restructuringof our finance has been completed now that we earn a stable
income. For our second growth phase in the future, we aim
to achieve both internal growth and return to outside parties
while continuing the existing sound finance policy and being
conscious of capital efficiency. From this point of view, we
started introducing ROIC by division as well as divisional
operating profit management in 2021, with a view to improving
internal capital efficiency management. Recognizing that the
maximization of corporate value through improved ROC, alongwith capital cost reduction, is an extremely important KPI
to achieve both growth and return, management executives
began making efforts to improve it. As for return to outside
parties, we will also continue our policy of keeping a payout
ratio at the 50% level and a consecutive increase in dividends
thanks to growing earnings. On treasury stock acquisitions, wewill decide flexibly considering our business environment andfinancial conditions.

Aiming for non-consecutive growth under theThird Medium-Term Management Plan
In 2021, we are formulating a variety of measures in orderto prepare for the Third Medium-Term Management Plan
starting from the next year for non-consecutive growth. In
making investments in new businesses, we will set a hurdle
rate based on capital cost to swiftly decide on execution orwithdrawal, with the aim of achieving non-consecutive growth.

Shintaro Hashiba

To our stakeholders
Finally, for our stakeholders, we will engage in information
disclosure and dialogue more actively than before. We will
increase contact points for dialogue and listen intently to what
you want from us to apply in management.

Recovery to normal
level is expected
in FY2021■ ROIC(%)
20● Return On Invested Capital (ROIC)● Adjusted ROIC*

15
11.9%

11.5%

8.7%

9.0%

10

13.4%

13.0%

10.5%

10.3%

8.0%

7.3%
5

0

FY2016FY2017FY2018FY2019FY2020* For adjusted ROIC, NOPAT is calculated by subtracting the amount of income tax
at the eﬀective statutory tax rate (30.62%) from operating proﬁt.

We aim to continuously
increase dividends and havea payout ratio of 50% or morein the medium and long term.

■ Dividend & payout ratio(Yen)■Year-end■Interim■Commemorative
30

35.7%
25.0
Payout ratio

20

45.0%

38.3%
19.5

2.5

80.3%
26.5
16.5

52.8%
28.0
17.0

14.0

12.5

15.0
9.5
10
5.5
0

FY20177.0

FY20188.5

FY201910.0

FY202011.0

FY2021(forecast)*The stock split was executed effective August 31, 2021. In this chart, the amount ofdividend is converted after considering the split.

19

20

Management Index

Financial / Non-financial data (summary)(As at end of December 2020; groupwide data unless otherwise noted)

Financial highlights■ Net sales■ Operating proﬁt /Ratio of operating proﬁt(Million yen)
20,00019,061

19,118(Million yen)
2,000■Operating proﬁt● Ratio of operating proﬁt to net sales
8.5%

17,227
15,00014,420 14,562

7.5%

1,500

1,464

(%)
10

(%)
50

8

40

■ Earnings per share (EPS)

1,603

6.8%
1,303

6

150

(100 million yen) ■Existing ■ New
900

40.6%

39.8%

28.7%

700

4

20
50

600

49

574.5

2

10

0

0

500

42.5
466.8

0

Dec.
2016

Dec.
2017

Dec.
2018

Dec.
2019

0

Dec.
2020

Dec.
2016

Dec.
2017

Dec.
2018

Dec.
2019

Dec.
2020

Dec.
2016

Dec.
2017

Dec.
2018

Dec.
2019

Dec.
2020

0

Dec.
2016

Dec.
2017

Dec.
2018

Dec.
2019

400

Dec.
2020

Dec.
2017

■Number of customers ■ Number of consultants
1,905
1,823
1,752

1,500

1,000

967

720.3
574.5

627.5

500

509.3
Dec.
2018

1,398

53.0

65.2

509.3

500

92.8

627.5

66

66
751

150.0

1,603
720.3

101
100

■ Numbers of customers/consultants
2,000

800

36.5%

35.8%

30

140

1,000

5,000

■ Amount of cumulative ADVANTAGE CLUBpartnerships formed

(Yen)

8.4%

1,094

5.2%
10,000■ Equity ratio

Dec.
2019

Dec.
2020

Dec.
2021
(planned)

148

134

120
0

Dec.
2016

Dec.
2017

Dec.
2018

167
Dec.
2019

170
Dec.
2020

Non-financial highlights■ Number of employees(by gender)■ Number of consultants■ Percentage of managers(by gender)■ Number of new recruits(new graduate/mid-career)
FY2020Women■ Average salary(non-consolidated)(Thousand yen)
10000

Women

New graduate

70■ Turnover(non-consolidated)

10.9%

10

8000

170

6.7%

(of 247)

8,027

8,219

Dec.
2017

Dec.
2018

8,629
8,000

7,398

6000

4000

Men

Men

Mid-career

177

18

2000

89.1%

0

Definition of non-financial highlights<Scope> Unless otherwise noted, groupwide full-time employees and temporary employees (excl. Directors and part-timers), including those who left the Company during the year.

Dec.
2016

Dec.
2019

Dec.
2020

<Method of calculation> Number of employees as of December 31 of the applicable year (including those who resigned on December 31).

Financial Indicators
Unit

Dec. 2008

Dec. 2009

Dec. 2010

Dec. 2011

Dec. 2012

Dec. 2013

Dec. 2014

Dec. 2015

Dec. 2016

Dec. 2017

Dec. 2018

Dec. 2019

Dec. 2020■ Financial data
Net sales
Operating profit
Ordinary profit
Profit attributable to owners of parent
Total assets
Net assets
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
EPS
BPS
Dividends per share
ROA
ROE
ROIC
Adjusted ROIC
Equity ratio(Million yen)
(Million yen)
(Million yen)
(Million yen)
(Million yen)
(Million yen)
(Million yen)
(Million yen)
(Million yen)
(Yen)
(Yen)
(Yen)
(%)
(%)
(%)
(%)
(%)

15,2691,785
947
47
17,1025,950
2,238-2,174-2,534
4
562
15
2.4%
0.8%
9.9%
8.0%
34.8%

5,408
-3,686-4,245-4,820
6,442
1,187
708
2,153
-5,339-456
112
7.5-36.1%-135.0%
18.4%

5,227
200
160
82
4,498
1,222
1,890
282
-1,745
7
115
5
2.9%
6.8%
2.2%
3.7%
27.2%

7,627
186
166
218
3,698
1,224
579
122
-602
20
115
6.5
4.1%
17.8%
6.9%
4.9%
33.1%

5,839
98
91
92
4,769
1,941
227
-1,203
247
8
119
7.5
2.2%
7.4%
3.4%
2.3%
26.5%

6,369
160
142
201
4,698
2,151
368
1,886
-425
18
183
10
3.0%
11.8%
4.4%
3.3%
45.7%

9,305
445
467
362
5,930
2,447
197
43
253
30
207
15
8.8%
15.9%
10.1%
8.3%
40.9%

14,275
485
471
518
7,220
2,909
801
-162
370
44
245
18
7.2%
19.5%
11.4%
7.3%
40.0%

14,420
751
628
587
9,258
3,329
1,177
-1,061
1,116
49
279
23
7.6%
18.9%
11.9%
8.7%
35.8%

14,562
1,094
943
768
12,587
3,624-1,277
-840
2,174
66
316
30
8.6%
22.2%
11.5%
9.0%
28.7%

17,227
1,464
1,358
1,162
12,353
4,518
272
332
-1,787
101
395
39
10.9%
28.6%
13.4%
10.5%
36.5%

19,061
1,603
1,503
1,676
15,492
6,390
2,300
723
1,215
140
518
50
10.8%
31.1%
13.0%
10.3%
40.6%

19,118
1,303
1,195
800
16,001
6,566
1,942
-753
-215
66
524
53
7.6%
12.7%
8.0%
7.3%
39.8%

*For adjusted ROIC, NOPAT is calculated by subtracting the amount of income tax at the effective statutory tax rate (30.62%) from operating profit.
Invested capital is calculated as the average of two fiscal years.
*The 100-for-1 stock split of common shares was executed effective January 1, 2014. The amounts for 2013 and earlier are converted after considering the split.

21

22

■ Corporate data (as of June 30, 2021)

Corporate profile

Executives

Name of Company

Aoyama Zaisan Networks Company, Limited

President

Masazumi Hasumi

Head Office

3F Aoyama Tower Place, 8-4-14 Akasaka, Minato-ku, Tokyo
107-0052
Phone: +81-3-6439-5800

Director, Managing
Executive Officer

Masayuki Yagi

September 17, 1991

Director, Managing
Executive Officer

Takeshi Matsuura

Incorporated
Capital stock

1,165.50 million yen

Director, Executive
Officer

Shinji Shimane

Business line

Individual property consulting
Business succession consulting
Real estate solutions consulting

Director, Executive
Officer

Takaomi Ogawa

Director, Executive
Officer

Hideo Matsuda

Director, Executive
Officer

Shintaro Hashiba

Outside Director

Haruo Shimada

Outside Director

Keiji Watanabe

Outside Director

Michihiro Nagasaka

Outside Audit &Supervisory Board
Member (standing)

Hiroyuki Fujita

Audit & Supervisory
Board Member

Hisao Nakatsuka

Outside Audit &Supervisory Board
MemberHiroaki Rokugawa

Number of employees 252(Group)Consolidated
subsidiaries

Aoyama Estate Co., Ltd.
Nihon Shisan Souken Co., Ltd.
Aoyama Zaisan Investments Co., Ltd.
Aoyama Zaisan Networks Kyushu Co., Ltd.
Aoyama Financial Service Co., Ltd.
Aoyama Family Office Service Co., Ltd., and 4 other companies

Stock overview
Number of shares in issue

12,175,600

Number of shareholders

5,235

Major shareholders (top 10)
Name

Shares held

Shareholding ratio

1,246,600

10.33

Yasuo Takano

665,800

5.51

NOMURA PB NOMINEES LIMITED OMNIBUS MARGIN (CASHPB)

538,900

4.46

STATE STREET BANK AND TRUST CLIENT OMNIBUS
ACCOUNT OM02 505002

505,700

4.19

Nihon M&A Center Inc.

500,000

4.14

Custody Bank of Japan, Ltd. (trust account 9)

312,800

2.59

Custody Bank of Japan, Ltd. (trust account)

295,900

2.45

Custody Bank of Japan, Ltd. (pension trust account)

286,500

2.37

Capital Asset Planning, Inc.

200,000

1.65

The Master Trust Bank of Japan, Ltd. (trust account)

182,200

1.51

Masazumi Hasumi

For more information or inquiries about this report,
please contact:
Aoyama Zaisan Networks Company, Limited
IR Public Relations Department, Administration
Planning Division
Phone: +81-3-6439-5824
URL: https://www.azn.co.jp/contactus/
2110278