Make The World
More Sustainable[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

Ichigo(2337)
Additional Accounting Notes
for the Twenty-Fourth Annual Shareholder Meeting Business Report– Employee Stock Option Details– Controls to Ensure Appropriate Business Conduct
 Notes to the Consolidated Financial Statements
 Notes to the Parent Financial Statements

Pursuant to Japanese law and Article 14 of Ichigo’s Articles of Incorporation, these Notes are posted
on Ichigo’s website at www.ichigo.gr.jp/en1

Employee Stock Option Details

1. Stock Options Issued as Compensation for Execution of Duties by Officers
15th Stock Option Plan

Holding Details

Date of resolution
Number of stock options
Type and number of shares
Issue price
Exercise price
Exercise period
Exercise conditions2
Directors(excluding Independent Directors)
Independent Directors
Statutory Executive Officers(excluding those who are also
Directors)

January 13, 2017
1,377,700 units1
1,377,700 common shares (1 share per unit)
N/A
JPY 423 per share
January 14, 2020 – January 13, 2025
Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:

1

260,000 units
260,000 shares
3
60,000 units
60,000 shares
4
170,900 units
170,900 shares
8

Of the total stock options 490,900 units have been issued to Officers. (No units havebeen exercised in the fiscal year ending February 2024.)
2
Exercise Conditions(i) Any person who is allotted stock options is required to remain in the positionof Director, Statutory Executive Officer, or employee of Ichigo, or Director,
Statutory Executive Officer, Auditor or employee of Ichigo’s subsidiaries andother similar positions until the rights are exercised, except for retirement due
to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(ii) Pledges and other disposition of stock options are not permitted.
(iii) If a person who is allotted stock options should become deceased, the heir
may exercise the rights subject to the conditions provided for in the Stock
Options Allotment Agreement as described in (iv).
(iv) Other conditions are subject to the Stock Options Allotment Agreement
entered into between Ichigo and recipient of stock options pursuant to theresolution of Ichigo’s Board of Directors.

2

16th Stock Option Plan

Holding Details

Date of resolution
Number of stock options
Type and number of shares
Issue price
Exercise price
Exercise period
Exercise conditions2
Directors(excluding Independent Directors)
Independent Directors
Statutory Executive Officers(excluding those who are also
Directors)

January 12, 2018
1,344,300 units1
1,344,300 common shares (1 share per unit)
N/A
JPY 519 per share
January 13, 2021 – January 12, 2026
Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:1

218,700 units
218,700 shares
3
67,500 units
67,500 shares
5
173,600 units
173,600 shares
8

Of the total stock options 459,800 units have been issued to Officers. (No units havebeen exercised in the fiscal year ending February 2024.)
2
Exercise Conditions(i) Any person who is allotted stock options is required to remain in the positionof Director, Statutory Executive Officer, or employee of Ichigo, or Director,
Statutory Executive Officer, Auditor or employee of Ichigo’s subsidiaries andother similar positions until the rights are exercised, except for retirement due
to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(ii) Pledges and other disposition of stock options are not permitted.
(iii) If a person who is allotted stock options should become deceased, the heir
may exercise the rights subject to the conditions provided for in the Stock
Options Allotment Agreement as described in (iv).
(iv) Other conditions are subject to the Stock Options Allotment Agreement
entered into between Ichigo and recipient of stock options pursuant to theresolution of Ichigo’s Board of Directors.

3

17th Stock Option Plan

Holding Details

Date of resolution
Number of stock options
Type and number of shares
Issue price
Exercise price
Exercise period
Exercise conditions2
Directors(excluding Independent Directors)
Independent Directors
Statutory Executive Officers(excluding those who are also
Directors)

January 11, 2019
1,390,200 units1
1,390,200 common shares (1 share per unit)
N/A
JPY 432 per share
January 12, 2022 – January 11, 2027
Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:1

177,300 units
177,300 shares
3
67,500 units
67,500 shares5
175,600 units
175,600 shares
8

Of the total stock options 420,400 units have been issued to Officers. (No units havebeen exercised in the fiscal year ending February 2024.)
2
Exercise Conditions(i) Any person who is allotted stock options is required to remain in the positionof Director, Statutory Executive Officer, or employee of Ichigo, or Director,
Statutory Executive Officer, Auditor or employee of Ichigo’s subsidiaries andother similar positions until the rights are exercised, except for retirement due
to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(ii) Pledges and other disposition of stock options are not permitted.
(iii) If a person who is allotted stock options should become deceased, the heir
may exercise the rights subject to the conditions provided for in the Stock
Options Allotment Agreement as described in (iv).
(iv) Other conditions are subject to the Stock Options Allotment Agreement
entered into between Ichigo and recipient of stock options pursuant to theresolution of Ichigo’s Board of Directors.

4

18th Stock Option Plan

Holding Details

Date of resolution
Number of stock options
Type and number of shares
Issue price
Exercise price
Exercise period
Exercise conditions2
Directors(excluding Independent Directors)
Independent Directors
Statutory Executive Officers(excluding those who are also
Directors)

October 14, 2020
1,722,500 units1
1,722,500 common shares (1 share per unit)
N/A
JPY 340 per share
October 15, 2023 – October 14, 2028
Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:

1

240,000 units
240,000 shares
3
60,000 units
60,000 shares
4
201,000 units
201,000 shares
8

Of the total stock options 501,000 units have been issued to Officers. (15,000 units
have been exercised in the fiscal year ending February 2024.)
2
Exercise Conditions(i) Any person who is allotted stock options is required to remain in the positionof Director, Statutory Executive Officer, or employee of Ichigo, or Director,
Statutory Executive Officer, Auditor or employee of Ichigo’s subsidiaries andother similar positions until the rights are exercised, except for retirement due
to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(ii) Pledges and other disposition of stock options are not permitted.
(iii) If a person who is allotted stock options should become deceased, the heir
may exercise the rights subject to the conditions provided for in the Stock
Options Allotment Agreement as described in (iv).
(iv) Other conditions are subject to the Stock Options Allotment Agreement
entered into between Ichigo and recipient of stock options pursuant to theresolution of Ichigo’s Board of Directors.

5

19th Stock Option Plan

Holding Details

Date of resolution
Number of stock options
Type and number of shares
Issue price
Exercise price
Exercise period
Exercise conditions2
Directors(excluding Independent Directors)
Independent Directors
Statutory Executive Officers(excluding those who are also
Directors)
1
2

April 19, 2021
1,782,000 units1
1,782,000 common shares (1 share per unit)
N/A
JPY 388 per share
April 20, 2024 – April 19, 2029
Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:

236,200 units
236,200 shares
3
75,000 units
75,000 shares
5
206,000 units
206,000 shares
8

Of the total stock options 517,200 units have been issued to Officers.
Exercise Conditions(i) Any person who is allotted stock options is required to remain in the positionof Director, Statutory Executive Officer, or employee of Ichigo, or Director,
Statutory Executive Officer, Auditor or employee of Ichigo’s subsidiaries andother similar positions until the rights are exercised, except for retirement due
to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(ii) Pledges and other disposition of stock options are not permitted.
(iii) If a person who is allotted stock options should become deceased, the heir
may exercise the rights subject to the conditions provided for in the Stock
Options Allotment Agreement as described in (iv).
(iv) Other conditions are subject to the Stock Options Allotment Agreement
entered into between Ichigo and recipient of stock options pursuant to theresolution of Ichigo’s Board of Directors.

6

20th Stock Option Plan

Holding Details

Date of resolution
Number of stock options
Type and number of shares
Issue price
Exercise price
Exercise period
Exercise conditions2
Directors(excluding Independent Directors)
Independent Directors
Statutory Executive Officers(excluding those who are also
Directors)
1
2

August 19, 2022
1,933,800 units1
1,933,800 common shares (1 share per unit)
N/A
JPY 350 per share
August 20, 2025 – August 19, 2030
Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:

232,100 units
232,100 shares
3
90,000 units
90,000 shares
6
240,000 units
240,000 shares
8

Of the total stock options 562,100 units have been issued to Officers.
Exercise Conditions(i) Any person who is allotted stock options is required to remain in the positionof Director, Statutory Executive Officer, or employee of Ichigo, or Director,
Statutory Executive Officer, Auditor or employee of Ichigo’s subsidiaries andother similar positions until the rights are exercised, except for retirement due
to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(ii) Pledges and other disposition of stock options are not permitted.
(iii) If a person who is allotted stock options should become deceased, the heir
may exercise the rights subject to the conditions provided for in the Stock
Options Allotment Agreement as described in (iv).
(iv) Other conditions are subject to the Stock Options Allotment Agreement
entered into between Ichigo and recipient of stock options pursuant to theresolution of Ichigo’s Board of Directors.

7

21th Stock Option Plan

Holding Details

Date of resolution
Number of stock options
Type and number of shares
Issue price
Exercise price
Exercise period
Exercise conditions2
Directors(excluding Independent Directors)
Independent Directors
Statutory Executive Officers(excluding those who are also
Directors)
1
2

April 19, 2023
2,474,000 units1
2,474,000 common shares (1 share per unit)
N/A
JPY296 per share
April 20, 2026 – April 19, 2031
Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:Number of stock options:
Number of shares:
Number of holders:

325,000 units
325,000 shares
3
108,000 units
108,000 shares
6
320,000 units
320,000 shares
8

Of the total stock options 753,000 units have been issued to Officers.
Exercise Conditions(i) Any person who is allotted stock options is required to remain in the positionof Director, Statutory Executive Officer, or employee of Ichigo, or Director,
Statutory Executive Officer, Auditor or employee of Ichigo’s subsidiaries andother similar positions until the rights are exercised, except for retirement due
to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(ii) Pledges and other disposition of stock options are not permitted.
(iii) If a person who is allotted stock options should become deceased, the heir
may exercise the rights subject to the conditions provided for in the Stock
Options Allotment Agreement as described in (iv).
(iv) Other conditions are subject to the Stock Options Allotment Agreement
entered into between Ichigo and recipient of stock options pursuant to theresolution of Ichigo’s Board of Directors.

8

2. Stock Options Issued for Compensation for Execution of Duties by Officers andEmployees during the Current Fiscal Year
21th Stock Option Plan

Holding Details

Date of resolution
Number of stock options
Type and number of shares
Issue price
Exercise price
Exercise period
Exercise conditions2

April 19, 2023
2,500,000 units1
2,500,000 common shares (1 share per unit)
N/A
JPY 296 per share
April 20, 2026 – April 19, 2031

Employees(excluding those who are Directors
and Statutory Executive Officers)

Number of stock options:
Number of shares:
Number of holders:

1,720,000 units
1,720,000 shares
202

Directors and Employees of
Subsidiaries

Number of stock options:
Number of shares:
Number of holders:

27,000 units
27,000 shares
3

1
2

Of the total stock options 1,747,000 units have been issued to employees.
Exercise Conditions(i) Any person who is allotted stock options is required to remain in the positionof Director, Statutory Executive Officer, or employee of Ichigo, or Director,
Statutory Executive Officer, Auditor or employee of Ichigo’s subsidiaries andother similar positions until the rights are exercised, except for retirement due
to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(ii) Pledges and other disposition of stock options are not permitted.
(iii) If a person who is allotted stock options should become deceased, the heir
may exercise the rights subject to the conditions provided for in the Stock
Options Allotment Agreement as described in (iv).
(iv) Other conditions are subject to the Stock Options Allotment Agreement
entered into between Ichigo and recipient of stock options pursuant to theresolution of Ichigo’s Board of Directors.

3. Other Material Matters regarding Stock Options
N/A

9

Controls to Ensure Appropriate Business Conduct
Pursuant to Article 416 of the Company Law and Article 112 of the Enforcement
Regulation of the Company Law, Ichigo’s Board of Directors approved and enacted a“Basic Policy for the Establishment of Structure of Internal Controls,” with details
shown below. Pursuant to Article 14 of Ichigo’s Articles of Incorporation, Ichigo hasmade this policy available on its corporate website:www.ichigo.gr.jp/en/ir/management_policies/internal_controls.html
1. Internal Controls to Ensure that Statutory Executive Officers and Employees
Execute Their Duties in Full Compliance with Japanese Law and Ichigo’s Articles
of Incorporation (Article 416, Paragraph 1, Item 1 of the Company Law, Article
112, Paragraph 2, Item 4 of the Enforcement Regulation of the Company Law)
Overview(1) The Board of Directors complies with relevant laws and regulations, the Articles
of Incorporation, resolutions adopted at shareholders’ meetings, Ichigo’s mission,
Ichigo’s Code of Corporate Ethics, and Ichigo’s Code of Conduct in making its
decisions and delegating daily management to the Statutory Executive Officers,
who in turn supervise employees within their respective delegated areas ofmanagement. The Board of Directors supervises the Statutory Executive Officers
by receiving periodic reports on the status of business execution. The Audit
Committee audits the performance of both Statutory Executive Officers andemployees.
(2) The Board of Directors sets internal rules, establishes relevant divisions andappoints Statutory Executive Officers, and engages external experts with respect toestablishing compliance, financial reporting controls, internal audit, prevention of
dealings with anti-social forces, and prevention of insider trading.
Status(1) The Board of Directors is comprised of five independent and four internal
Directors, and had a total of 11 meetings during FY24/2 with a 100% attendance
rate. Statutory Executive Officers make decisions and/or seek board approvalthrough board proposals, and report their activities to the Board of Directors at least
quarterly. The Audit Committee is comprised of three Independent Directors, andheld a total of 20 meetings during FY24/2 with a 100% attendance rate.
(2)(a) Compliance – The Compliance Committee held four meetings to deliberatematerial compliance matters and conducted training sessions based on thecompany’s Code of Corporate Ethics and Code of Conduct. A whistle-blowing
system exists, including the ability to directly notify an external lawyer.
(b) Financial Reporting Controls – The President and Statutory Executive Officersof each division and subsidiary work to ensure compliance with internal controls
and the evaluation thereof.
(c) Internal Audit Department – The objective of the Internal Audit Department for
FY24/2 was to contribute to management level decision-making through a groupwide, risk-based approach along with the Audit Committee and auditors ofsubsidiaries. Specifically, the Internal Audit Department examined the execution ofmanagement duties, the status of investment securities, and the status of
information management.

10(d) Prevention of Dealings with Anti-Social Forces – Ichigo has written manuals on
how to handle Anti-Social Forces as well as rules that require Anti-Social Forceclauses to be included in contracts. Furthermore, Ichigo works with the Tokyo
Metropolitan Police Department and other external experts in conducting due
diligence of business counterparties. (See “System Against Anti-Social Forces.”)(e) Prevention of Insider Trading – Through its internal rules on the management of
insider information, Ichigo strictly manages all critical corporate information andensures proper disclosure thereof. Internal rules require that all officers andemployees must pre-clear any transaction in designated securities with the Statutory
Executive Officer of their respective divisions.
2. Systems to Ensure Proper Storage and Management of Information Required for
Execution of Duty by Statutory Executive Officers (Article 112, Paragraph 2, Item
1 of the Enforcement Regulation of the Company Law)
Overview
Ichigo has internal rules with respect to the creation, management, and storage of
information and documents pertaining to the execution of duties by Statutory
Executive Officers. Ichigo remains fully compliant with all relevant laws andregulations.
StatusHandling of information is stipulated in the Information Management Policy andhandling of documents is stipulated in the Document Management Policy, and all
officers and employees conduct business in full compliance with both policies.
3. Risk Management Policies and Systems (Article 112, Paragraph 2, Item 2 of the
Enforcement Regulation of the Company Law)
Overview
Ichigo’s policy is that the Statutory Executive Officer of each division is responsible
for the compliance of respective business operations and for managing business risks.
In addition, a Chief Risk Officer has been appointed and a Risk Management
Division established in order to ensure a proper risk management framework exists
across the entire group and to deal with any significant risks that arise. Ichigo’s risk
management framework also prescribes how to respond to any loss of basic business
functions as a result of natural disasters or accidents.
StatusIchigo continually monitors business execution and the risk thereof, and the Chief
Risk Officer reports monitoring results to the Board. Ichigo has business continuity
plans that specify how to recover from natural disasters and accidents, and all
officers and employees are fully aware of these plans.

11

4. Systems to Ensure Effective Execution of Duties by Statutory Executive Officers(Article 112, Paragraph 2, Item 3 of the Enforcement Regulation of the Company
Law)
Overview
Ichigo provides for efficient and agile execution of duties by establishing clarity
with respect to scope of responsibilities and associated authority. Ichigo setsbusiness plans and monitors progress based on the group’s management philosophy
and mission, annual group policies, and annual business targets. Furthermore,
Ichigo holds a regular Senior Management Meeting comprised of the Chairman,
President, Executive Vice President, and representatives of each subsidiary toevaluate and make decisions on material business matters.
StatusStatutory Executive Officers execute their duties within their respective delegatedscopes of responsibilities without any undue overlap or negligence. For FY23/2,
Statutory Executive Officers set their business policies and targets in accordancewith the Ichigo 2030 long-term vision and successfully achieved these targets. The
Head of Finance provides analytic support to the Senior Management Meeting tosupport its effectiveness as a forum for vigorous discussion and review of key
business issues.
5. Audit Committee and Audit Systems (Article 416, Paragraph 1, Item 1 of theCompany Law, Article 112, Paragraph 1, Items 1~7 of the Enforcement Regulationof the Company Law)
Overview(1) Ichigo appoints Directors and employees that assist the Audit Committee in theexecution of its duties. Such Directors and employees carry out their duties
independent from the Board of Directors, other Directors, and Statutory
Executive Officers, with any change in appointment requiring the authorizationof the Audit Committee.
(2) Audit Committee Members attend important meetings, and can request
explanations from officers and employees as well as view all related materials.
(3) Officers and employees must report to the Audit Committee or Audit
Committee Members matters that have material impact on the business andfinancial situation of Ichigo. Any person making such report shall not receive
disadvantageous treatment for making such report.
(4) The Audit Committee maintains a close relationship with the Internal Audit
Department by discussing audit plans and receiving reports on audit results.
The Audit Committee also receives periodic reports from the Independent
Auditor as well as exchanges views on any material audit matters.
(5) The Audit Committee holds meetings with Audit Committee Members andauditors of subsidiaries, attends important meetings at subsidiaries, andreceives explanations and reports from subsidiaries in order to assess theappropriate execution of duties by Directors and Statutory Executive Officersof subsidiaries.
(6) The Audit Committee, at its sole discretion, can appoint external specialists
necessary for the execution of audits and can request that Ichigo bear associatedcosts.

12

Status(1) In accordance with internal rules pertaining to Directors and employees
assisting in the duties of the Audit Committee, Ichigo has appointed several
employees to assist the Audit Committee and has ensured their independence.
Furthermore, the prior consent from the Audit Committee has been sought for
any organizational or compensation matter with respect to these appointed
individuals.
(2) In accordance with Audit Committee Rules, the Audit Committee attended
important management meetings and received explanations as well as reviewed
any relevant materials. In addition, officers and employees have made all
required reporting to the Audit Committee, and no disadvantageous treatment
has resulted from such reporting.
(3) The Audit Committee approved internal audit plans and received reports on the
results of audits. Furthermore, the Audit Committee has received periodic
reports from the external auditor and has engaged in discussion of material
audit matters.
(4) The Audit Committee holds two liaison meetings a year with Audit Committee
Members and auditors of subsidiaries, and receives explanations and reports
from the officers and employees of subsidiaries.
(5) The Audit Committee has requested that Ichigo bear the costs associated withauditing of subsidiaries.
6. Systems to Ensure Fully Appropriate Business Activities by Ichigo and its
Subsidiaries (Article 112, Paragraph 2, Item 5 of the Enforcement Regulation of theCompany Law)
Overview(1) Ichigo and all subsidiaries share Ichigo’s Management Philosophy, Code ofCorporate Ethics, and Code of Conduct, and have executed a managementagreement requiring that they work collaboratively in dealing with corporate
governance, compliance, risk management, and prevention of dealings with
Anti-Social Forces.
(2) Ichigo has appointed a Statutory Executive Officer and established a Corporate
Operations Division responsible for monitoring business activities ofsubsidiaries, and requires each subsidiary to provide business reports.
(3) With respect to any transaction with Ichigo Trust Pte. Ltd., the major
shareholder of Ichigo, Ichigo takes special care to protect the interests ofminority shareholders by having the Board of Directors evaluate the purpose,process, and price of any such transactions and ensure that they contribute toincreasing Ichigo’s corporate value and protect all Ichigo shareholders.
(4) Ichigo supports, advises, and manages its subsidiaries to ensure their businessactivities are fully compliant with the Company Law. Ichigo oversees
appropriate business conduct of subsidiaries by receiving periodic reports withrespect to their business operations as well as execution of duties by Directors
and officers.

13(5) Through its internal rules on the management of insider information, Ichigo
strictly manages all critical corporate information and ensures proper disclosure
thereof. Internal rules require that all officers and employees must pre-clear any
transaction in designated securities with the Statutory Executive Officer of theirrespective divisions.
Status(1) Structure to Ensure that Ichigo Subsidiaries Execute Their Duties inCompliance with Laws and Regulations and Ichigo’s Articles of Incorporation
The Boards of each subsidiary have approved a “Basic Policy for the
Establishment of Structure of Internal Controls,” pursuant to the one establishedby Ichigo. Audit Committee Members and internal auditors of respective
subsidiaries attend Board of Directors meetings as well as any other importantmanagement meetings and examine related materials to ensure Directors andofficers are executing their duties in compliance with laws and regulations, andIchigo’s Articles of Incorporation.
(2) Structure for Ichigo Subsidiaries to Report to Ichigo on the Execution of Their
DutiesThe President receives a report every three months from the presidents of eachsubsidiary with respect to business operations and the execution of duties byDirectors and officers.
(3) Structure of Risk Management at Ichigo Subsidiaries
Each subsidiary monitors business risks pursuant to their respective risk
management policies, and reports results to Ichigo’s Risk Management
Division. The Head of Ichigo’s Risk Management Division, in turn, reports thisinformation to Ichigo’s Board. The Chief Risk Officer provides the Board of
Directors with a comprehensive update on the status of group-wide risk
management.
(4) Structure to Ensure Efficient Execution of Duties at Ichigo Subsidiaries
Each subsidiary has policies in place to ensure clarity of scope of
responsibilities, with management decisions being made in line with suchpolicies, therefore resulting in the efficient execution of duties.
Reference: Establishment and Status of Internal Structures to Prevent Dealings
with Anti-Social Forces
As part of its internal control systems, Ichigo has established an internal structure
to prevent dealings with Anti-Social Forces:(1) Ichigo and its subsidiaries have clear policies on preventing dealings with AntiSocial Forces stipulated within its Code of Corporate Ethics.
(2) Ichigo has appointed the Executive Vice President and the Corporate
Operations Division as being responsible in handling requests from Anti-Social
Forces, and also receives advice on this issue from external legal counsel.
Furthermore, Ichigo augments its efforts in this area by collaborating withexternal experts such as the Organized Crime Control Division of the Tokyo
Metropolitan Police Department, the Marunouchi Police Station, and the
National Center for Removal of Criminal Organizations.
(3) Ichigo’s Statutory Executive Officer (Corporate Operations) centrally manages
group-wide information pertaining to Anti-Social Forces.

14(4) Under no circumstance will Ichigo heed to the request from an Anti-Social
Force, and working together with external experts Ichigo shall firmly reject any
request. All contracts with external parties will include language that aims toprevent dealings with Anti-Social Forces. Ichigo will terminate business
relationships with any existing counterparty that is identified as being an AntiSocial Force.
(5) All officers and employees of Ichigo and subsidiaries receive compliancetraining, and are made fully aware of their obligation to prevent dealings with
Anti-Social Forces and escalate any concerns on this matter.

15

Notes to the Consolidated Financial Statements
I. Material Matters for Preparation of the Consolidated Financial Statements
A. Scope of Consolidation
1. Consolidated Subsidiaries
Number of consolidated subsidiaries: 46
Major Consolidated Subsidiaries
Ichigo Investment Advisors Co., Ltd.
Ichigo Estate Co., Ltd.
Ichigo ECO Energy Co., Ltd.
Ichigo Owners Co., Ltd.
Ichigo Marché Co., Ltd.
Miyako City Co., Ltd.
Centro Co., Ltd.
Ichigo Animation Co., Ltd.
OneFive Hotels Inc.
Ichigo Si Co., Ltd.
Collinear Inc.
Storage Plus Corp. has been excluded from the scope of consolidation because
Ichigo sold all of its holdings in it during FY24/2.
One investment partnership has been excluded from the scope of consolidation
because its materiality decreased during FY24/2.
Collinear Inc. has been added to the scope of consolidation because its materiality
increased during FY24/2.
2. Major Non-Consolidated Subsidiaries
N/A
3. Reason Why Some Companies Were Not Classified as Subsidiaries Despite
the Possession of a Majority of their Voting Rights
N/A
4. Disclosure of Special Purpose Companies (SPC)
An overview of SPC, SPC transactions, and SPC transaction amounts are noted in
XII. Notes on Special Purpose Companies (SPC).
B. Equity-Method Accounting
1. Equity-Method Affiliates
N/A
2. Non-Consolidated Subsidiaries Accounted for Under the Equity-Method
N/A

16

3. Material Non-Consolidated Subsidiaries Not Accounted for Under the EquityMethod
N/A
4. Non-Equity-Method Affiliates
N/A
5. Reason Why Some Companies Were Not Classified as Affiliates despite Ichigo
Possessing between 20% and 50% of Their Voting Rights
N/A
C. Fiscal Year of Consolidated Subsidiaries
The fiscal year-ends of consolidated subsidiaries are as follows:
January-end
February-end
March-end
November-end
December-end

25 companies
9 companies
1 companies
1 company
10 companies

For subsidiaries whose fiscal year-ends are in December or January, financial data asof that date have been used. For subsidiaries whose fiscal year-ends are in Marchand November, provisional financial data (created at a point in time within threemonths from March-end) have been used. All necessary adjustments forconsolidation have been made with respect to significant transactions which
occurred in FY24/2.
D. Accounting Standards
1. Valuation of Material Assets
a. Other Securities
Securities without market prices (excluding equities)

Mark-to-market(Valuationdifference isreported as acomponent ofshareholders’equity; the cost is
calculated using
the moving
average cost
method.)Equities without market prices

Moving average
cost method (Thevaluation method
for investment
partnerships isnoted in 6. (c)Investment
Partnerships.)17

b. Derivatives

Mark-to-market

c. Real Estate for Sale

Cost (however, impair assets whose
profitability declines)

2. Depreciation Methods for Material Depreciable Assets
Property, Plant, and Equipment

Primarily straight-line method

Useful life

Buildings and structures: 8~39 years
Solar power plant equipment: 20 years

3. Accounting Standards for Material Allowancesa. Allowance for Doubtful Accounts
Reserved based on the record of bad debts with respect to ordinary receivables andloans, plus an estimate of uncollectible amounts determined with reference tospecific doubtful receivables from customers experiencing financial difficulties.
b. Allowance for Employee Bonuses
Reserved based on an estimated amount for the current fiscal year.
4. Standards for Recognition of Important Revenues and Costs
a. Recognition of Revenues
Details of the performance obligations and the fulfillment of performanceobligations (i.e., time of revenue recognition) accounted for by its core businesses
that arise from contracts with Ichigo’s and Ichigo subsidiaries’ clients are as
follows:
Asset Management
Asset-Related Fee Revenue
As for the fees received from the REITs, infrastructure fund, and private funds, theperformance obligation to operate and manage an asset arises based on the client
contract. A performance obligation is satisfied over a certain period as stipulated
in the contract, and revenue is recognized during that period. However, fees linked
to asset acquisitions and sales are recognized as revenue at the time of the closingof the acquisition or sale, as the obligation is fulfilled all at once.
Sustainable Real Estate
Revenue from Asset Sales
As for the revenue from asset sales, the performance obligation to transfer
ownership of an asset arises based on the purchase and sale agreement with theclient. The performance obligation is fulfilled and revenue is recognized at thetime of the closing of the sale.
The sale price is determined in the purchase and sale agreement, and part of thesale price is received as a deposit upon the signing of the contract, and the balanceis paid when the asset is transferred.
Real Estate Rental Revenue
Real estate rental revenue is recognized in accordance with the Accounting
18

Standard for Lease Transactions (ASBJ Statement No. 13, March 30, 2007).
In addition, fees arising from the provision of ancillary services to the lease
contract are recognized as revenue when the term of service ends or throughout
the contract term depending on the details of the agreement.
Clean Energy
Power Production Revenue
Ichigo’s consolidated subsidiary bears the performance obligation to supply
electricity generated at its power plants based on its power supply contracts with
its clients. The performance obligation is satisfied and revenue is recognized at thetime electricity is supplied.
5. Material Hedge Accounting Method
a. Hedge Accounting Method
In general, Ichigo adopts the deferral hedge accounting method. However, interest
rate swaps and interest rate caps that meet the criteria for special treatment are
accounted for under the special treatment method.
b. Hedging Instruments and Hedging Targets
Hedging instruments

Interest rate swaps and interest rate caps

Hedging targets

Loans

c. Hedging Policy
Pursuant to its internal rules, Ichigo hedges against interest rate risks that arise
from its business activities.
d. Evaluation Method of the Effectiveness of Hedges
Ichigo evaluates the effectiveness of hedging activities with reference to theaccumulated gain or loss on the hedging instruments and related hedging targets
for a period from the commencement of the hedges to the time of evaluation.
Interest-rate swaps and interest rate caps accounted for under the special treatment
method are omitted from this evaluation.

19

6. Goodwill Amortization Period and Method
Goodwill is amortized on a straight-line basis for a period of 10 to 20 years
depending on the specific characteristics of each subsidiary.
7. Other Material Matters Related to the Preparation of the Financial Statementsa. Consumption Tax
For most items, consumption taxes are excluded from the relevant revenue, costs,
or expenses.
Non-deductible consumption taxes are generally accounted for as costs in thecurrent fiscal year; however, certain items paid in connection with the acquisitionof assets are amortized over 5 years using the straight-line method or are includedin acquisition costs.
b. Operational Investments
Operational investments are separated from non-operational investments and areaccounted for under Operational Securities Investments and Operational Loan
Investments within Current Assets. Profits and losses arising from operational
investments are accounted for under Operating Profits and Losses.
Although Ichigo may control the decision-making body of investment vehicles orhold significant influence over them by holding shares, shares are held solely for
operational investment purposes and Ichigo has no intention of holding them assubsidiaries or affiliates. Therefore, such investment vehicles are excluded fromsubsidiaries or affiliates.
c. Investment Partnerships
Ichigo accounts for investments in investment partnerships as Operational
Securities Investments. Such investments are recorded at the time the investments
are made. Gains and losses distributed from the investment partnerships arerecorded as Revenue, and Operational Securities Investments increases ordecreases by the same amount. Refunds received from the investment partnerships
are credited to Operational Securities Investments.
d. Group Aggregate Tax Treatment
Ichigo qualifies for group aggregate tax treatment.

20II. Notes on Changes in Accounting Policies
Application of Implementation Guidance on Accounting Standard for Fair Value
Measurement
The “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Statement No. 31, June 17, 2021; hereinafter the “Fair Value
Measurement Accounting Standard Implementation Guidance”) has been applied
from the beginning of FY24/2. In accordance with the transitional treatment
provided for in Clause 27-2 of the Fair Value Measurement Accounting Standard
Implementation Guidance, new accounting standards prescribed in the Fair Value
Measurement Accounting Standard Implementation Guidance will henceforth beapplied on an ongoing basis. There is no impact on the consolidated FY24/2
earnings results from this change.
III. Notes to the Consolidated Income Statement
From FY24/2, insurance income previously included under Other Non-Operating
Income, is separately stated as Insurance Income, because the materiality of thisitem increased. As a result, JPY 11 million of Other Non-Operating Income in
FY23/2 is restated as Insurance Income under Non-Operating Income.
IV. Notes on Accounting Estimates
Valuation of Real Estate
A. Amount Recorded in FY24/2 Financial Statements
Real Estate for Sale
Fixed Assets

JPY 103,721 million
JPY 152,926 million

B. Information on Material Accounting Estimates for Specific Line Items
Ichigo and its subsidiaries invest in real estate including offices, hotels, residential
assets, and retail assets, and record real estate expected to be sold as Real Estate forSale as of FY24/2-end. Real estate expected to be held over the longer term isrecorded as Fixed Assets.
If the net sale value of Real Estate for Sale is less than the book value, the net salevalue is recorded on the balance sheet, and the difference is recorded as Valuation
Loss on Real Estate for Sale under Cost of Goods Sold. With respect to Fixed
Assets, for assets and asset groups that show indications of impairment, if the total
undiscounted future cash flow is less than the book value, Ichigo impairs the bookvalue to the asset’s recoverable amount and an equivalent impairment loss isrecorded. When recording the impairment loss, the net sale value is recorded as therecoverable amount.
Ichigo uses the lower of the internally-calculated valuation amount based on the
direct capitalization method (income approach) and the third-party real estateappraisal value as the net sale value.
Both the internal valuation amount and third-party real estate appraisal value arecalculated using the income approach based on the net income or the future cash
flows expected to be generated by the real estate assets and the cap rate.
Net income and future cash flow forecasts are impacted by rent levels in the area
where the asset is located and by the asset’s occupancy. The cap rate is impacted byinterest rate fluctuations, land prices per region and asset type, real estate market

21

conditions, and the age, grade, rights, and regulatory compliance of the asset. Due
to sustained high real estate transaction prices, cap rates have been trending
downward in FY24/2. As a result, the impact on the valuation of real estate islimited.
Ichigo makes efforts to reduce the uncertainty of its internally-calculated valuations
that are based on publicly available data via means such as obtaining third-party
verifications of the cap rates per region and asset type. However, because there
exists a large number of factors that impact the estimate of net sale value, anychange in the preconditions and assumptions of the valuation caused by a change inbusiness environment may result in the recording of a Valuation Loss on Real
Estate for Sale or an Impairment Loss.
V. Additional Note
Application of Practical Solution on the Accounting and Disclosure Under theGroup Aggregate Tax Treatment
From FY24/2, Ichigo and certain domestic subsidiaries have shifted to groupaggregate tax treatment from consolidated tax treatment. In accordance with thischange, the accounting treatment and disclosure of income taxes and tax effectaccounting are based on the “Practical Solution on the Accounting and Disclosure
Under the Group Tax Sharing System” (ASBJ Practical Solution No.42, August 12,2021). In accordance with Clause 32 (1) of Practical Solution No.42 Clause 32 Item
1, there is no impact of the change in accounting policies associated with theapplication of Practical Solution No.42.

22VI. Notes to the Consolidated Balance Sheet
A. Assets Provided as Collateral and Secured Obligations
Assets Provided as Collateral
Cash and deposits
Accounts receivable
Operational loan investments
Real estate for sale
Real estate for sale (reserved for collateral)
Current assets – other
Buildings and structures
Solar and wind power plants
Land
Buildings and structures under construction
Buildings and structures under construction(reserved for collateral)
Property, plant, and equipment – other
Leasehold rights
Securities investments
Total

JPY 2,400 million
JPY 180 million
JPY 1,324 million
JPY 60,961 million
JPY 1,478 million
JPY 11 million
JPY 24,762 million
JPY 9,311 million
JPY 63,107 million
JPY 2 million
JPY 2,667 million
JPY 548 million
JPY 1,220 million
JPY 9,038 million
JPY 177,016 million

Figures shown in Buildings and structures, Solar and wind power plants, andProperty, plant, and equipment – other are net amounts.
Secured Obligations
Short-term loans
Long-term loans (due within one year)
Long-term loans
Total

JPY 13,200 million
JPY 8,398 million
JPY 112,051 million
JPY 133,649 million

B. Non-Recourse Loans
Non-recourse loans are borrowings where funds for repayment are limited only tothe value of the underlying real estate and profits from such real estate. The lenderhas no recourse to Ichigo in the event of a failure of payment.
Assets provided as collateral and the related non-recourse loans are as follows:
Assets Provided as Collateral
Cash and deposits
Accounts receivable
Current assets – other
Buildings and structures
Solar and wind power plants
Land
Buildings and structures under construction
Fixed Assets – other
Investment and other assets – other
Total

JPY 5,290 million
JPY 260 million
JPY 11 million
JPY 12,110 million
JPY 13,239 million
JPY 29,582 million
JPY 45 million
JPY 90 million
JPY 340 million
JPY 60,972 million

Figures shown in Buildings and structures, Solar and wind power plants, andProperty, plant, and equipment – other are net amounts.

23

Non-Recourse Loans
Long-term non-recourse loans (due within one year)
Long-term non-recourse loans
Total

JPY 6,413 million
JPY 35,265 million
JPY 41,678 million

C. Deferred Gains (Losses) on Long-Term Interest Rate Hedges
Using interest rate swaps and interest rate caps, Ichigo has significantly reduced its
interest rate risk should Japanese interest rates rise. Unrealized gains or losses onthese hedges are recorded as a deferred gains (losses) on long-term interest rate
hedges.
D. Overdraft, Loan Commitment, and Term Loan Agreements
To secure funding flexibility and stability, Ichigo has overdraft, loan commitment,
and term loan agreements with financial institutions.
Unused balance of the above agreements (as of the end of FY24/2)
Total amount of overdraft, loan commitment, andterm loan agreements
Draw-down amount
Unused balance

JPY 59,467 million
JPY 36,911 million
JPY 22,555 million

VII. Notes to the Consolidated Income Statement
Valuation Gains (Losses) on Derivatives
Using interest rate swaps and interest rate caps, Ichigo has significantly reduced its
interest rate risk should Japanese interest rates rise. Any increase (decrease) in themarket value of these instruments is recorded as valuation gains (losses) on
derivatives.
VIII. Notes to the Consolidated Statement of Changes in Shareholders’ Equity
A. Type and Number of Shares Issued and Type and Number of Treasury Shares

Shares issued
Common shares
Total
Treasury shares
Common shares
Total
1
2

Number ofshares at the
beginning of
FY24/2

Increase inshares during
FY24/21505,381,018
505,381,018

21,00021,000––505,402,018
505,402,018

51,992,200
51,992,200

13,687,000
13,687,000

697,200
697,200

64,982,000
64,982,000

Decrease inshares during
FY24/22

Number ofshares at the endof FY24/2

Increase in treasury shares due to share buyback: 13,687,000 shares
Decrease in treasury shares due to sale of treasury shares: 697,200 shares

24

B. Employee Stock Options
Underlying Number of Shares
Stock Options
15th
stock option
issuance
16th
stock option
issuance
17th
stock option
issuance1
18th
stock option
issuance1
19th
stock option
issuance1
20th
stock option
issuance1
21st
stock option
issuance1
Total
1

March 1,
2023

Increase in Decrease in
FY24/2
FY24/2February29, 2024

Value(as of February
29, 2024)

Commonshares1,498,500–

120,800

1,377,700

JPY 223 million

Commonshares1,453,700–

109,400

1,344,300

JPY 273 million

Commonshares1,502,600–

112,400

1,390,200

JPY 102 million

Commonshares

1,816,700–

94,2001,722,500

JPY 96 million

Commonshares1,855,200–

73,2001,782,000

JPY 98 million

Commonshares1,973,900–

40,1001,933,800

JPY 54 million

Commonshares–2,500,000

26,0002,474,000

JPY 29 million

10,100,600

2,500,000

576,100 12,024,500

JPY 879 million

Share Type–The 19th, 20th, and 21st stock option issuances are currently not exercisable, because their exercise
dates are in the future.

25

C. Dividends
1. Dividends Paid
Ichigo’s Board of Directors approved the following dividend on April 19, 2023:(a) Total Dividend(b) Source(c) Dividend per Share(d) Record Date(e) Payment Date

JPY 3,627 million
Retained earnings
JPY 8
February 28, 2023
May 29, 2023

2. Dividends where the Record Date is in FY24/2, but the Payment Date is in FY25/2
Ichigo’s Board of Directors approved the following dividend on May 26, 2024:
(a)
(b)
(c)
(d)
(e)

Total Dividend
SourceDividend per Share
Record Date
Payment Date

JPY 3,963 million
Retained earnings
JPY 9
February 29, 2024
May 27, 2024

26

IX. Notes on Financial Instruments
A. Matters Concerning Status of Financial Instruments
1. Policies on Financial Instruments
Ichigo funds itself primarily via bank loans and bonds, taking into account Ichigo’s
asset acquisition and disposition activity. Short-term excess funds are managed inliquid financial instruments such as bank deposits, and short-term working capital isfinanced via bank loans. Ichigo’s policy is to use derivatives only for hedging
purposes and not for speculative transactions.
2. Details and Risks of Financial Instruments
Accounts receivable is an operating receivable that is exposed to customer credit
risks. Foreign currency-denominated financial instruments in overseas business
operations are exposed to currency risks.
Operational securities investments are primarily investments in Japanese and foreign
equities, and securities investments primarily take the form of equity and are
typically investments in companies with which Ichigo has a business relationship.
All of these investments are exposed to issuer credit risk, interest rate risk, andmarket price fluctuation risk.
Bank loans, bonds, and non-recourse loans are for the purpose of financing
investments and capital expenditures, and are expected to be redeemed or repaid
within approximately thirty years after the fiscal year-end. Floating-rate loans are
exposed to interest rate risk, a part of which is hedged using derivative transactions(e.g. interest rate swaps and interest rate caps). Please refer to (I) Material Mattersfor Preparation of the Consolidated Financial Statements (D) Accounting Standards,(4) Material Hedge Accounting Method.
3. Risk Management of Financial Instruments(a) Management of Credit Risk
Operating receivables exist primarily at subsidiaries. Responsible departments
monitor the collection status pursuant to the designated procedure for mitigationof collection risk. Other operating receivables arise irregularly, e.g. at the time ofinvestment monetization, and the responsible department determines theexecution of the transaction based on the time needed for collection and the credit
worthiness of the counterparty and monitors the receivable until it is collected inaccordance with the agreement. Ichigo monitors operational securities
investments and securities investments with respect to the financial status of theissuers and reviews holding policies, as necessary and appropriate.
(b) Management of Market Risk
Ichigo uses interest rate swaps and interest rate caps for the purpose of reducing
interest rate risk on corporate and non-recourse loans. Ichigo monitors
operational securities investments and securities investments which have market
risks (e.g., real estate funds) or are denominated in foreign currencies regularly
for the impact from changes in market value and currency rates and reviews theholding policies as necessary. Derivative transactions are executed and controlled
in the Finance Department in accordance with the designated procedure.

27

(c) Management of Liquidity Risk
Ichigo establishes and updates its funding plan as necessary based on newinvestment and disposition plans set by the responsible departments, and manages
liquidity risk by maintaining short-term liquidity.

4. Supplement to Matters Concerning Market Values of Financial Instruments
Market values of financial instruments include prices based on market prices as wellas prices calculated based on rational assumptions where market prices are notavailable. Such prices may fluctuate, since their calculations include variables thatcan vary based on assumptions.

28

B. Adjustments to Market Values of Financial Instruments
Amounts recorded on the consolidated balance sheet, corresponding market values,
and their differences as of February 29, 2024 are shown below.
(JPY million)
Amount Recordedon Consolidated
Balance Sheet
Assets(1) Securities investments

Market Value

Difference

15,921

15,921–

15,921

15,921–

Liabilities(1) Bonds3(2) Long-term loans4

7,469
166,921

7,431
166,907-37-13(3) Long-term non-recourse loans5

41,67841,573-105

216,068

215,912

-156

600

600

–

Total Assets

Total Liabilities
Derivative Transactions6
1“Cash and deposits,” “Accounts receivable,” “Short-term loans,” and “Income taxes
payable” are omitted because they are cash or items to be settled in the short term withmarket values approximately equal to book value.

2

The amounts of equities without market values and investment partnerships recorded on
the consolidated balance sheet are shown below. Such figures are not included in (1)Securities investments. Equities without market values are not subject to disclosure asprescribed in Clause 5 of the Implementation Guidance on Disclosures of Fair Value of
Financial Instruments (ASBJ Implementation Guidance No. 19, March 31, 2020). The
market value of investment partnerships is not subject to disclosure as prescribed in the
Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ
Implementation Guidance No. 31, June 17, 2021) Article 24-16.
(JPY million)
Amount Recorded on
Consolidated Balance Sheet
Operational securities investments

14

Securities investments

1,164

Total

1,178

3

“Bonds (due within one year)” are included in “(1) Bonds.”“Long-term loans (due within one year)” are included in “(2) Long-term loans.”
5“Long-term non-recourse loans (due within one year)” are included in “(3) Long-term
non-recourse loans.”
6
Claims and obligations associated with derivative transactions are shown in net amounts.
For figures whose net amounts are net obligations, the figure is shown in parenthesis.
429

C. Breakdown of Financial Instruments by Market Value
Ichigo has classified the market values of financial instruments into three levels
based on the observability and importance of the inputs used to calculate market
value.
Level 1: Market value calculated based on observable inputs that reflect market
prices for identical assets and liabilities in active markets
Level 2: Market value calculated based on observable inputs other than thoseincluded in Level 1
Level 3: Market value calculated based on unobservable inputs
If multiple significant inputs are used to calculate market value, the financial
instrument is classified under the lowest level of the multiple inputs.
1. Financial Instruments Recorded at Market Value in Consolidated Balance Sheet
Market Value (JPY million)
Level 1
Securities investments
Derivative transactions
Total Assets

Level 2

Level 3

Total

15,440
–

450
600

30
–

15,921600

15,4401,051

30

16,522

2. Financial Instruments Recorded at Market Value in Consolidated Balance Sheet
Market Value (JPY million)
Level 1

Level 2

Level 3

Total

Corporate Bonds
Long-Term Loans
Long-Term Non-Recourse Loans

–
–
–

7,431
166,907
41,573

–
–
–

7,431
166,907
41,573

Total Assets–

215,912–215,912(Note) Valuation Methods Applied to Market Value Calculations and Explanation of
Inputs Used in Market Value Calculations
Securities Investments
Listed stocks are valuated using market price and classified as Level 1 because they
are traded on an active market. Meanwhile, because market prices for Ichigo’sbonds, which are not actively traded on the market, are not available, the value ofthe bonds are calculated using the present value of future cash flow discounted by adiscount rate and bonds are classified as Level 2.
Derivative Transactions
The market value of interest rate swaps and interest rate caps are calculated using
information obtained from the lender banks, and are classified as Level 2. The
market value of interest rate swaps and interest rate caps under special treatment isincluded in long-term loans and long-term non-recourse loans since it is accounted
for with the instrument it hedges.
30Bonds (Due Within One Year)
The market value of bonds issued by Ichigo is calculated based on the present valueof the total amount of principal and interest using a discount rate that accounts forthe remaining period and credit risk of the bonds, and is classified as Level 2.
Long-Term Loans and Long-Term Non-Recourse Loans
The market values of long-term loans and long-term non-recourse loans arecalculated based on the present value of the total amount of principal and interest
using a discount rate that accounts for the remaining period and credit risk of theloans, and are classified as Level 2.

31

X. Notes on Leased Real Estate Not Currently Held for Sale
A. Income From Leased Real Estate Not Currently Held for Sale
Ichigo and some of its consolidated subsidiaries own leased real estate mainly in
the Tokyo Metropolitan area that are not currently held for sale. Income on thisleased real estate in FY24/2 was JPY 5,475 million (rental revenue is recorded in
Revenue and the cost of lease is recorded in Costs of Goods Sold).Gains andLosses on sales of real estate were JPY 4,273 million (recorded as extraordinary
gains and losses).
B. Market Value of Leased Real Estate Not Currently Held for Sale
(JPY million)
1Market ValueBook Value on Consolidated Balance Sheetas of Feb 29,
Mar 1, 2023
Increase/Decrease2
Feb 29, 2024
20243
166,227-12,048
154,178
209,651
1

Book Value on Consolidated Balance Sheet = Acquisition Cost – (Cumulative
Depreciation + Cumulative Impairment Loss)
2
The main components of the increase for the fiscal year are JPY 2,857 million from
Capital Expenditures and JPY 2,557 million due to the acquisition of real estate. The
main components of the decrease for the fiscal year are JPY 13,940 million resulting
from asset sales, JPY 3,014 million resulting from the sale of Storage Plus Corp.,
and JPY 2,856 million of Depreciation.
3
Market value as of February 29, 2024 is based upon third-party real estate appraisals andcalculated by Ichigo using reasonable indices reflecting market prices.

32

XI. Notes to Revenue Recognition
A. Breakdown of Revenue From Contracts with Customers
Revenue From External Customers(JPY million)
InterSegment
Activities
Totalor
Reclassifi
cations
423
2,907

Revenue
From
ClientContract

Revenue
From
Other
Sources1

2,484

–

2,484

2,411

–

2,411

423

2,834

73

–

73

–

73

16,68557,642

74,3276274,389

Revenue From Asset Sales

8,221

43,08651,308–51,308

Real Estate Rental Revenue

8,012

14,46922,482

62

22,544

Other

450

85

536

–

536

Clean Energy

5,789

146

5,935

–

5,935

5,789

–

5,789

–

5,789

–

146

146

–

146

24,95957,78882,747

485

83,233

Asset Management
Asset-Related Fee Revenue
Other
Sustainable Real EstatePower Production Revenue
Other
Total

Total

Adjustment
–
–
–
-485
-485
Amount Recorded in
24,95957,78882,747–82,747
Financial Statements
1
Revenue from other sources includes gains on sale of real estate based on the
Accounting Treatment for Sellers Regarding Real Estate Securitization Using
Special Purpose Companies (ASBJ Report No. 15, November 4, 2014) and rental
income based on the Accounting Standard for Lease Transactions (ASBJ
Statement No. 13, March 30, 2007).
B. Information on Understanding Revenue from Contracts with Customers
Please refer to (I) Material Matters for Preparation of the Consolidated Financial
Statements (D) Accounting Standards, (4) Recognition of Revenues and Costs for
information regarding revenue.

33

C. Information on Understanding FY24/2 and FY25/2 Revenue
1. Financial Instruments Recorded at Market Value in Consolidated Balance Sheet(JPY million)
FY24/2
Liabilities From Client Contracts (as of Mar 1, 2022)

3,610

Liabilities From Client Contracts (as of Feb 28, 2023)

2,255

Contract Assets (as of Mar 1, 2022)–

Contract Assets (as of Feb 28, 2023)–

Contract Liabilities (as of Mar 1, 2022)

43

Contract Assets (as of Feb 28, 2023)

29

Contract liabilities are advances received as deposits from clients under the
Sustainable Real Estate business. Contract liabilities decrease in line with revenue
recognition. In FY24/2, the amount of revenue recognized for the satisfaction of
performance obligations from prior periods is not material.
2. Financial Instruments Recorded at Market Value in Consolidated Balance Sheet
Ichigo did not have any contracts with an expected contract term over one year.

34

XII. Notes on Special Purpose Companies (SPC)
A. Overview of SPC and SPC Transactions
Ichigo Owners, an Ichigo consolidated subsidiary providing real estate investment
services to individual investors, launched a business that allows investors to makediversified, small-scale investments in a broad array of real estate assets pursuant
to the Act on Specified Joint Real Estate Ventures. This new business employs
voluntary partnerships as part of its structure.
Under this business, investors invest in a voluntary partnership pursuant to a
specified real estate venture agreement. The voluntary partnership receives
distributions of the income generated from the real estate asset it acquires using theinvested funds. dividends on the gains from the real estate purchased via theinvestments. Rental income and gains on sales associated with the real estate asset
are attributed to the investors.
Pursuant to the voluntary partnership agreement, Ichigo Owners receives a fee forserving as managing partner. Ichigo Owners also engages in real estatetransactions with the voluntary partnership.
FY24/2
Number of Voluntary Partnerships
Total Assets as of Fiscal Period-end
Total Liabilities

4
JPY 2,358 million
JPY 4 million

B. SPC Transaction Amounts(JPY million)

Real Estate Transactions1
Managing Partner Fee2

Transaction
Category
Amount954 Revenue
8 Revenue

Amount954
8

1

The Real Estate Transaction amount is the sale price of the asset at the time ofsale, and recorded under Revenue in the Consolidated Income Statement.
2
The Managing Partner Fee is calculated as a percentage of the sale price andrecorded under Revenue in the Consolidated Income Statement.
XIII. Per Share Data
Net Assets per ShareNet Income per ShareNet Income per Share (fully diluted)

JPY 237.57
JPY 26.89
JPY –Note: Ichigo had no dilutive common shares. Therefore, diluted net income per share
information has not been disclosed.

XIV. Material Subsequent Events
N/A

35

Notes to the Parent Financial Statements
I. Material Accounting Policies
A. Valuation Method for Securities
1. Shares in subsidiaries and affiliates

Moving average cost method

2. Other securities
Securities without market prices (excluding equities)

Mark-to-market(Valuation difference
is reported as acomponent ofshareholders’ equity;
the cost is calculatedusing the moving
average cost method.)

Equities without market prices

Moving average cost
method (Valuation
method forinvestment
partnerships is notedin (G) Other Material
Matters Related to the
Preparation of the
Financial Statements(3) Investment
Partnerships.)

3. Derivatives

Mark-to-market

4. Real estate for sale

Cost (however, impair assets whose
profitability declines)

B. Depreciation Method for Fixed Assets
1. Property, Plant, and Equipment

Primarily straight-line method

Useful life

Buildings and Structures: 8~39 years

2. Intangible Assets

Straight-line method

Useful life

Software: 5 years

C. Amortization of Deferred Assets
Issuance cost of shares: Full amount is recorded as cost.
D. Accounting Standards for Allowances
Allowance for doubtful accounts
Reserved based on the record of bad debts with respect to ordinary receivables andloans, plus an estimate of uncollectible amounts determined with reference tospecific doubtful receivables from customers experiencing financial difficulties.

36

E. Accounting Standard for Recognition of Important Revenue and Costs
Details of the performance obligations and the fulfillment of performance obligation(i.e., time of revenue recognition) accounted for by its core businesses that arise
from contracts with Ichigo’s clients are as follows:
Management Advisory Fee
Ichigo receives a management advisory fee from some of its subsidiaries and its
performance obligation is to provide management advice and guidance. The
performance obligation is satisfied over a period of time, and revenue is recognizedat the time it is satisfied.
Dividend Income
Dividend income consists of dividend income from Ichigo subsidiaries and gains
and losses distributed from the investment partnerships. Dividend income from
Ichigo subsidiaries are recognized as revenue on the payment date. For details ofgains and losses distributed from the investment partnerships, please refer to I.
Material Accounting Policies (G) Other Material Matters Related to the Preparationof the Financial Statements (3) Investment Partnerships.
As revenue from dividend income is a financial instruments transaction within thescope of the Accounting Standard for Financial Instruments (ASBJ Statement No.
10, July 4, 2019), it is not accounted for as revenue arising from contracts withclients.
Real Estate Rental Revenue
Real estate rental revenue is recognized as revenue when the term of the provisionof ancillary services to the lease contract ends or throughout the contract term
depending on the details of the agreement.
Real estate rental revenue is recognized in accordance with the AccountingStandard for Lease Transactions (ASBJ Statement No. 13, March 30, 2007).
F. Hedge Accounting Method
1. Hedge Accounting Method
In general, Ichigo adopts the deferral hedge accounting method. However, interest
rate swaps that meet the criteria for special treatment are accounted for under the
special treatment method.
2. Hedging Instruments and Hedging Targets
Hedging instruments
Hedging targets

Interest rate swaps
Loans

3. Hedging Policy
Pursuant to its internal rules, Ichigo hedges against interest rate risks that arise fromits business activities.
4. Evaluation of Hedge EffectivenessIchigo evaluates the effectiveness of hedging activities with reference to theaccumulated gain or loss on the hedging instruments and related hedging targets fora period from the commencement of the hedges to the time of evaluation. Interest37

rate swaps accounted for under the special treatment method are omitted from thisevaluation.
G. Other Material Matters Related to the Preparation of the Financial Statements
1. Non-deductible Consumption Tax
Non-deductible consumption taxes are generally accounted for as costs in thecurrent fiscal year; however, certain items paid in connection with the acquisitionof assets are amortized over 5 years using the straight-line method.
2. Operational Investments
Operational investments are separated from non-operational investments and areaccounted for under Operational Securities Investments and Operational Loan
Investments within Current Assets. Profits and losses arising from operational
investments are accounted for under Operating Profits and Losses.
Although Ichigo may control the decision-making body of investment vehicles orhold significant influence over them by holding shares, shares are held solely for
operational investment purposes and Ichigo has no intention of holding them assubsidiaries or affiliates. Therefore, such investment vehicles are excluded fromsubsidiaries or affiliates.
3. Investment Partnerships
Ichigo accounts for investments in investment partnerships as Operational
Securities Investments or Investment Securities in Other Affiliates. Suchinvestments are recorded at the time the investments are made. Gains and losses
distributed from the investment partnerships are recorded as Revenue, and thecorresponding balance sheet item increases or decreases by the same amount.
Refunds received from the investment partnerships are credited to thecorresponding balance sheet item.
4. Group Aggregate Tax Treatment
Ichigo qualifies for group aggregate tax treatment..
II. Notes to Accounting Policies
Application of Implementation Guidance on Accounting Standard for Fair Value
Measurement
The Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Statement No. 31, June 17, 2021; hereinafter “Fair Value Measurement
Accounting Implementation Guidance”) has been applied from the beginning of
FY24/2. In accordance with the transitional treatment provided for in Clause 27-2 ofthe Fair Value Measurement Accounting Implementation Guidance, new accounting
standards prescribed in the Fair Value Measurement Accounting Implementation
Guidance will henceforth be applied on an ongoing basis. There is no impact on the
FY24/2 earnings results from this change.

38III. Notes to Accounting Estimates
Valuation of Real Estate
A. Amount Recorded in FY24/2 Financial Statements
Fixed Assets

JPY 7,865 million

B. Information on Material Accounting Estimates for Specific Line Items
Please see the Valuation of Real Estate section under IV. Notes to Accounting
Estimates for the Consolidated Financial Statements.
IV. Additional Information
Group Aggregate Tax Treatment
From FY24/2, Ichigo has shifted to group aggregate tax treatment from consolidated
tax treatment. In accordance with this change, the accounting treatment and disclosureof income taxes and tax effect accounting are based on the “Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System” (Practical Solution
No.42, August 12, 2021.)
V. Notes to the Balance Sheet
A. Assets Provided as Collateral and Secured Obligations
Assets provided as collateral
Cash and deposits
Buildings and structures
Land
Property, plant, and equipment – other
Securities investments
Shares of affiliated companies
Long-term loans to affiliates
Leasehold rights
Total

JPY 43 million
JPY 196 million
JPY 2,099 million–
JPY 9,038 million
JPY 1 million
JPY 1,399 million
JPY 162 million
JPY 12,941 million

Figures in Buildings and structures and Property, plant, and equipment – other are
net amounts.
Secured obligations
Long-term loans (due within one year)
Long-term loans
Total

39

JPY 1,337 million
JPY 9,990 million
JPY 11,328 million

B. Contingent Liabilities
Ichigo is guaranteeing the following subsidiaries’ loans from financial institutions:
Ichigo Estate Co., Ltd.
Ichigo ECO Energy Co., Ltd.
Ichigo Owners Co., Ltd.
Miyako City Co., Ltd.
Centro Co., Ltd.
OneFive Hotels Inc.
GK Daiba Jisho
GK Kawabata Holdings
GK Nakasu Holdings
GK ACZ
GK Ichigo Yubetsu Barou ECO Power Plant GK
Ichigo Toyokoro Sasadamachi ECO Power Plant GK
Ichigo Betsukai Kawakamicho ECO Power Plant GK
Ichigo Akkeshi Shirahama ECO Power Plant GK
Ichigo Yonago Izumi ECO Power Plant GK
Sera Aomizu Ushinoro ECO Power Plant GK
Ichigo Hamanaka Bokujo ECO Power Plant GK
Ichigo Toki Oroshicho ECO Power Plant GK
Ichigo Toride Shimotakai ECO Power Plant GK
Ichigo Kijo Takajo ECO Power Plant Co., Ltd.
Ichigo Ebino Suenaga ECO Power Plant GK

JPY 33,909 million
JPY 8,967 million
JPY 16,026 million
JPY 1,016 million
JPY 415 million
JPY 12 million
JPY 8,000 million
JPY 2,838 million
JPY 3,524 million
JPY 5,138 million
JPY 132 million
JPY 68 million
JPY 97 million
JPY 93 million
JPY 344 million
JPY 290 million
JPY 699 million
JPY 195 million
JPY 201 million
JPY 137 million
JPY 3,802 million
JPY 85,909 million

Total

C. Affiliate Receivables and Payables (excluding items separately indicated)
JPY 2,767 million
JPY 159 million
JPY 11 million

Short-term receivables from affiliates
Short-term payables to affiliates
Long-term payables to affiliates
D. Deferred Gains (Losses) on Long-Term Interest Rate Hedges

Using interest rate swaps and caps, Ichigo has significantly reduced its interest raterisk should Japanese interest rates rise. Any unrealized gains (losses) on thesehedges are recorded as deferred gains (losses) on long-term interest rate hedges.
VI. Income Statement
A. Transactions with affiliates
Operational Transactions
Revenue
Operating expenses
Non-Operational Transactions

JPY 8,065 million
JPY 183 million
JPY 1,159 million

40

B. Mark-to-market gains (losses) on long-term interest rate hedges
Using interest rate swaps and interest rate caps, Ichigo has significantly reduced its
interest rate risk should Japanese interest rates rise. Any increase (decrease) in themarket value is recorded as a mark-to-market gains (losses) on long-term interest
rate hedges.
VII. Statement of Changes in Shareholders’ Equity
Type and Number of Treasury Shares
Common shares

64,982,000 shares

VIII. Taxes
A. Breakdown of Deferred Tax Assets and Liabilities
Deferred Tax Assets
Accrued business taxes
Surplus for provision of allowance for doubtful
accounts
Valuation loss on operating securities investments
Valuation loss on securities investments
Valuation loss on investments in real estate
Valuation loss on securities of affiliates
Other
Sub-total
Allowance for valuation
Deferred Tax Assets Total

JPY 68 million
JPY 347 million
JPY 1 million
JPY 183 million
JPY 1,531 million
JPY 839 million
JPY 204 million
JPY 3,176 million-JPY 2,920 million
JPY 256 million

Deferred Tax Liabilities
Valuation gain on other securities
Deferred gains (losses) on long-term interest rate hedges
Other liabilities
Deferred Tax Liabilities Total-JPY 192 million-JPY 20 million-JPY 4 million-JPY 217 million

Net Deferred Tax Assets

JPY 38 million

B. Accounting Treatment of Income Taxes and Tax Effect Accounting
From FY24/2, Ichigo has shifted to group aggregate tax treatment from consolidated
tax treatment. In accordance with this change, the accounting treatment of income
taxes and tax effect accounting are based on the “Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System” (Practical
Solution No.42, August 12, 2021.)

41

IX. Related Party Transactions(JPY million)
Affiliation

Name

Subsidiary

Ichigo EstateCo., Ltd.

Subsidiary

Ichigo ECOEnergy Co.,Ltd.

Voting Rights Nature ofTransaction
Balance
Held
Transaction
Account
AmountOutstanding
by Ichigo Relationship
Short-termloans to19,315affiliates
Lending1
32,423Long-termloans to43,234affiliates
Current
assets –54
otherInterest
428
received
Current
liabilities ––otherService Provision of100%
33,909––contract credit
guarantee2
Receipt ofcredit1,385––
guarantee6,7
Receipt ofcredit27,737––
guarantee and4collateral

100%

Servicecontract

42

Managementadvisory fee9

1,479

–

–

Provision of
creditguarantee2

8,967

–

–

Voting Rights
Nature ofTransaction
Balance
Affiliation
Name
Held
Transaction
Account
RelationshipAmountOutstanding
by Ichigo
Short-termloans to11,950affiliates
1
Lending
20,741Long-termloans to12,886affiliates
Current
Interest
assets –337
51
received
otherIchigo Owners
Service
Subsidiary
100%ofCo., Ltd.
contract Provisioncredit–16,026–guarantee2
Receipt ofcredit–10,736–guarantee andcollateral４
Receipt ofcollateral3

43

700

–

–

(JPY million)
Affiliation

Name

Subsidiary

GK Daiba
Jisho

Subsidiary

Subsidiary

GK Kawabata
Holdings

GK Nakasu
Holdings

Voting Rights
Nature ofTransaction
Held
Transaction
Account
RelationshipAmountby Ichigo
Provision of
credit–8,000
2
guarantee
None8
TK Equity
Receipt ofAdvances
credit2 received
guarantee fee

None8

None8

Provision of
creditguarantee2
TK Equity
Receipt ofcreditguarantee fee
Provision of
creditguarantee2
TK Equity
Receipt ofcreditguarantee fee
Provision of
creditguarantee2

Subsidiary

GK ACZ

None8

Subsidiary

None8

–

Advances
1 received
3,524

–

Advances
1 received
5,138

–

–
6
–
2
–

2

–

TK Equity
Receipt ofcreditguarantee fee

Ichigo Ebino
Suenaga ECOPower Plant
GK

2,838

Balance
Outstanding

Provision of
TK Equity credit
guarantee2

44

Advances
1 received

3,802

–

7

–

(JPY million)
Affiliation

Subsidiary

Subsidiary

Subsidiary

Voting Rights
Nature ofTransaction
Balance
Held
Transaction
Account
RelationshipAmountOutstanding
by Ichigo
Long-term
Borrowing
323 loans ofBorrowing1
10,574&affiliates
GK LIFT2
100
Payment of
327 Accrued
83
Interest Interest paid
expenses
Payment ofcredit1 Prepaid
1
guarantee fee
expenses
to guarantor
GK Kichijoji
None8
TK Equity
Holdings
Investment
Receipt ofother
2,701 and3
collateral3,5
assets –other
Payment ofcredit– Prepaid–
guarantee fee
expenses
to guarantor
GK Akihabara
None8
TK Equity
Jisho
Investment
Receipt ofother2,006 and2collateral3,5
assets –
other
Name

Major
Ichigo Trust
Shareholder Pte. Ltd.

51.11

Transfer of
securities10

–

1

9,999

–

The interest rate on loans from Ichigo to affiliates (and in certain cases, from affiliates toIchigo) is based upon Ichigo’s actual borrowing costs, with due consideration to the particular
circumstances of the affiliates.
2
Ichigo has provided credit guarantees to banks on loans to the subsidiary.
3
The subsidiary has received collateral from Ichigo for loans from banks.
4
The subsidiary has received both guarantees and collateral from Ichigo for the loans frombanks.
5
Ichigo has received collateral from its subsidiaries for a loan of JPY 4,707 million from banks.
6
Ichigo has received credit guarantees from its subsidiaries for bank loans.
7
Ichigo has received credit guarantees and collateral from its subsidiaries for a loan of JPY
1,385 million from banks.
8
Although Ichigo holds 0% of the voting rights, its wholly-owned subsidiary holds 100% ofmanagerial authority over the investment partnership (aka TK or Tokumei Kumiai). However,
the entity is considered to be Ichigo’s subsidiary, because Ichigo has adopted the accounting
standard under the Practical Solutions on Application of Control Criteria and Influence Criteria
to Investment Partnerships (ASBJ Guidance No. 20, March 25, 2011).
9
Ichigo engages in the management of certain wholly-owned subsidiaries.
10
Ichigo Trust purchased Ichigo Office (8975) shares via OTC transaction at the TSE closing
price of Ichigo Office shares of the most recent trading day before the execution date.
11
The above amounts do not include consumption tax and other taxes. However, the amounts
recorded on the balance sheet do include consumption tax and other taxes.

45–

X. Notes on Revenue Recognition
Information for understanding revenue recognition is provided in I. Material
Accounting Policies, E. Accounting Standards for Important Revenue and Cost.
XI. Per Share Data
Net Assets per ShareNet Income per ShareNet Income per Share (fully diluted)

JPY 144.88
JPY 4.11
JPY–

Note: Ichigo had no dilutive common shares. Therefore, diluted net income per share
information has not been disclosed.
X. Material Subsequent Events
N/A46