Make The World
More Sustainable

Ichigo Inc.
(Tokyo Stock Exchange First Section, 2337)

Materials for the Twentieth Annual Shareholder Meeting

THE KNOT TOKYO Shinjuku

Miyako City

Our Mission: Make The World More Sustainable
Ichigo is a Japanese sustainable infrastructure company dedicated to making the world moresustainable.
Our three key businesses are: Sustainable Real Estate, in which we preserve and improve realestate; Asset Management, including managing Tokyo Stock Exchange-listed Ichigo Office(8975), Ichigo Hotel (3463), and Ichigo Green (9282); and Clean Energy, in which we develop
solar and wind power plants to supply clean energy and bring productive use to idle land.
We are committed to growing long-term value for our shareholders by contributing to a sustainable
society.
The word “Ichigo” comes from the ancient Japanese proverb,
Ichigo Ichie, literally meaning “One lifetime, one encounter.”
The phrase was first used by a 16th century master of the tea
ceremony, Sen no Rikyu. He called upon his disciples to give
total focus and sincerity to each act of the tea ceremony forevery guest, because that particular moment will only exist onceand must be fully lived and realized. Ichigo embraces the Ichigo
Ichie philosophy of sincerity and service, and works to build
strong long-term relationships to support the success of all of
our clients, shareholders, and stakeholders.

Ichigo’s Sustainability Commitment (ESG)
Environmental
Sustainable Real Estate
Ichigo preserves and improves real estate, lengthening the useful life of buildings and otherphysical and social infrastructure. Ichigo is for reducing mankind’s environmental footprint
and against the squandering of resources and human talent in wasteful and unnecessary
demolition and development.
Safe & Clean Energy Produced LocallyIchigo gives new purpose to idle land across Japan and supports the revitalization of local
communities by building renewable energy plants that generate clean power locally. Ichigo iscurrently operating 45 solar power plants in communities across Japan with a panel output of
136MW (as of February 29, 2020).

SocialSports Rooted in Communities: J.League Top Partner
Ichigo is a Top Partner of the J.League, Japan’s professional soccer league, and is working tosupport the J.League’s vision of promoting sports that benefit local communities. Ichigo is
deploying its real estate expertise to help the J.League and local governments maintain aging
stadiums and reduce steep operating costs.
Smart Agriculture
Ichigo has built a smart agriculture business to promote high-quality, locally-sourced
agriculture, strengthen local communities, create jobs, and increase Japan’s food selfsufficiency.
Athletes & Art
Ichigo supports world-class athletes and artists with disabilities
via sponsorship of ParalymArt.
GGovernance

Ichigo was an early adopter of global best-practice governance, adopting a Company with
Committees (Nominating, Audit, Compensation) governance structure in 2006. The
independence of Ichigo’s Board of Directors underpins its strong governance and oversightcapabilities. Of 9 members of Ichigo’s Board, 5 are Independent Directors.

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.

May 8, 2020
Ichigo Inc. (Tokyo Stock Exchange First Section, 2337)
Representative: Scott Callon, Chairman

Materials for the Twentieth Annual Shareholder Meeting
Dear Shareholders:
We would like to express our deepest condolences to those affected by the Covid-19 global
pandemic and our wishes for the earliest possible recovery.
We are pleased to invite you to attend the Twentieth Annual Shareholder Meeting of Ichigo
Inc. (“Ichigo”).
We will take all necessary Covid-19 precautions at the Annual Shareholder Meeting, but you
may also exercise your voting rights via postal mail or the Internet. We would appreciate it if
you could please review the Reference Materials for the Annual Shareholder Meeting attached
below and cast your vote by returning the enclosed voting form or by accessing our voting
website (https://soukai.mizuho-tb.co.jp/) no later than Friday, May 22, 2020, 6:15 p.m. JST.
1. Date and Time

Sunday, May 24, 2020 at 10:00 a.m.

2. Place

La Rose, Fifth Floor, Dai-ichi Hotel Tokyo
1-2-6 Shimbashi, Minato-ku, Tokyo

3. Agenda
Matters to be Reported
a. Ichigo’s business report, consolidated financial statements, and the results of the audit of
the consolidated financial statements by the Independent Auditor and Ichigo’s Audit
Committee for the Twentieth Period (March 1, 2019 – February 29, 2020)
b. Ichigo’s parent financial statements for the Twentieth Period
Matters to be Resolved
Election of Nine Directors
Additional Accounting Notes
Additional accounting notes to Ichigo’s consolidated and parent financial statements aredisclosed on our website at www.ichigo.gr.jp/en/ir/library.
Please also note that any amendments to the business report, consolidated and parent financial
statements, or shareholder meeting materials will be posted on our website atwww.ichigo.gr.jp/en.

1Voting via the Internet
1. Handling of Multiple Votes via both the Proxy Card and the Internet
If you cast multiple votes via both the proxy card and the Internet voting site, only the votecast via the Internet will be deemed effective.
2. Handling of Multiple Votes via the Internet
If you cast multiple votes via the Internet voting site, only the last vote will be deemed
effective.
3. Internet Voting Procedure
The internet voting procedure is per the below. If you choose to attend the meeting, voting via
the proxy card or the Internet is unnecessary.
a. Voting Website(i)

You can access the designated website https://soukai.mizuho-tb.co.jp/ from a PC,
smartphone, or mobile phone.

(ii)

Please access our voting website (https://soukai.mizuho-tb.co.jp/) and use the voting
rights exercise code and password shown on the enclosed voting form. Follow the onscreen instructions to indicate your consent or dissent.

(iii) We will accept votes submitted via the Internet until 6:15 p.m. JST on Friday, May 22,2020. Please contact the help desk below if you have any questions.
b. Login via QR CodeYou can access the voting form by reading the QR code on the enclosed voting form. This is ashareholder-unique QR code that allows you to vote without having to enter your ID or
password. We will accept votes submitted until 6:15 p.m. JST on Friday, May 22, 2020.

Inquiries concerning the Internet Voting Process
Help Desk, Corporate Agency Division, Mizuho Trust & Banking Co., Ltd.
Toll-free telephone (within Japan): 0120-768-524 (9:00 a.m. to 9:00 p.m. JST)
Institutional Investors
Institutional investors may use the electronic proxy-voting platform of the Tokyo Stock
Exchange for electronic voting.

2

Table of Contents
Materials for the Twentieth Annual Shareholder Meeting

1

Reference Materials for the Twentieth Annual Shareholder Meeting
Election of Nine Directors

4

Business Report
I. Current Operations and Financials
A. Business Conditions in the Current Fiscal Year (FY20/2)
B. Earnings and Assets in the Current and Past Three Fiscal Years
C. Company and Subsidiary Information
D. Key Business Priorities
E. Key Business Segments
F. Employees
G. Principal Lenders
H. Policy on Dividends and Shareholder Distributions
I. Other Material Matters
II. Other Matters
A. Shares and Shareholder Information
B. Employee Stock Options
C. Directors and Officers
D. Independent Auditor
E. Controls to Ensure Appropriate Business Conduct
F. Policy on Corporate Control (Takeover Defenses)

40
40
41
48
49
49

Consolidated Financial Statements
Consolidated Balance Sheet
Consolidated Income Statement
Consolidated Statement of Changes in Shareholders’ Equity

50
51
52

Parent Financial Statements
Parent Balance Sheet
Parent Income Statement
Parent Statement of Changes in Shareholders’ Equity

53
54
55

Auditor’s Report on the Consolidated Financial Statements
Auditor’s Report on the Parent Financial Statements
Audit Committee Report

56
57
58

3

20
32
33
34
36
36
37
38
39

Election of Nine Directors
The terms of office of all nine Directors will expire at the conclusion of this shareholder
meeting. Accordingly, Ichigo proposes the election of the following nine Directors.
The candidates for Director are as follows:
No.

1

2

Name
Scott Callon
Reappointment

Takuma Hasegawa
Reappointment

3

4

Minoru Ishihara
Reappointment

Eri Murai
Reappointment

Tetsuya Fujita
5

Reappointment –Independent Director

Noriko Kawate
6

Reappointment –Independent Director

Yukio Suzuki
7

Reappointment –Independent Director

Masatoshi Matsuzaki
8

Reappointment –Independent Director

Current Position and Responsibility
Chairman of the Board of Directors
Nominating Committee Member
Compensation Committee Member
Compliance Committee Member
Chairman & Representative Statutory
Executive Officer

100%(10 of 10
Total)

Chairman of Nominating Committee
Chairman of Compensation Committee
Chairman of Compliance Committee
President & Representative Statutory
Executive Officer

100%(10 of 10
Total)

Executive Vice President & Statutory
Executive Officer (Sustainable Real Estate)
& COO

100%
(10 of 10
Total)

Executive Managing Director & Statutory
Executive Officer (HR)100%
(6 of 6 Total)

Lead Independent Director
Chairman of Audit Committee
Nominating Committee Member
Compensation Committee Member
Compliance Committee Member

100%(10 of 10
Total)

Independent Director
Nominating Committee Member
Audit Committee Member
Compensation Committee Member

100%(10 of 10
Total)

Independent Director
Audit Committee Member
Vice Chairman of Compliance Committee

100%(10 of 10
Total)

Independent Director
Nominating Committee Member
Compensation Committee Member

100%(10 of 10
Total)

Independent Director

100%(10 of 10
Total)

Nobuhide Nakaido
9

Reappointment –Independent Director

Board Meeting
Attendance

4

No.

Name
(Date of Birth)

Career History
April 1988
September 1991
March 1994
August 1994
March 1997
June 2000
May 2001
April 2002
January 2003
May 2006
October 2008
November 2008

November 2011
May 2012
1

Scott Callon(December 6, 1964)
July 2012

May 2015
September 2015
May 2016
October 2016
July 2017
May 2019
March 2020

MIPS Computer Systems, Inc.
Asia-Pacific Research Center, Stanford
University
Research Institute of Capital Formation, Japan
Development Bank
Bankers Trust Asia Securities Co., Ltd.
Morgan Stanley Japan Limited
Japan Representative, Prudential plc
Representative Director, PCA Asset Management
LimitedMorgan Stanley Japan Limited
Head of Equities, Morgan Stanley Japan Limited
Partner and Chief Executive Officer, Ichigo AssetManagement, Ltd. (current)
Ichigo Chairman & Representative Statutory
Executive Officer (current)
Director (current), Chairman of Nominating
Committee, Chairman of Compensation
Committee, Vice Chairman of Compliance
Committee
Member of Nominating Committee, Member ofCompensation Committee
Associate Director, Japan Association of
Corporate Directors
Audit & Supervisory Board Member, Chiyoda
Co., Ltd.
Director, Member of Nominating Committee,
Member of Compensation Committee, Ichigo
Real Estate Investment Advisors Co., Ltd. (now
Ichigo Investment Advisors Co., Ltd.)
Independent Director, Chiyoda Co., Ltd. (current)
Chairman of Compliance Committee
Chairman of Nominating Committee, Chairmanof Compensation Committee
Member of Nominating Committee (current),
Member of Compensation Committee (current)Group Head of IT
Chairman & Statutory Executive Officer, Ichigo
Investment Advisors Co., Ltd.
Member of Compliance Committee (current)
Chairman & Representative Director, Japan
Display Inc. (current)(Other Positions)
Partner & Chief Executive Officer, Ichigo Asset Management, Ltd.
Chairman & Representative Director, Japan Display Inc.
Independent Director, Fujitsu Limited (Upon shareholder approval inJune 2020)
Independent Director, Chiyoda Co., Ltd. (Until May 2020)
5

IchigoShares
Held

N/A

No.

Name
(Date of Birth)(continued fromprevious page)

1

Career History
Message to Our Shareholders
I offer my deepest condolences and wishes for the earliest possible
recovery to all of those globally affected by the Covid-19 pandemic.
This is your company. How societies and companies adapt to a postCovid-19 future is the central question of our time. Companies canlearn and grow from hardship and become stronger. All of us at
Ichigo will work to strengthen our capabilities and drive sustainablegrowth in shareholder value.

6

IchigoShares
Held

No.

Name
(Date of Birth)

Career History
April 1994
November 2002
October 2004
September 2005
May 2006
May 2007
March 2008
May 2009
March 2010
January 2011
March 2015
May 2015

2

March 2016
May 2016
Takuma Hasegawa October 2016
(January 29, 1971)
March 2018
October 2019

Joined Fujita Corporation
Joined Ichigo
General Manager, Fund Business Division
General Manager, Fund Business Division
Group 1
Senior Statutory Executive Officer & General
Manager, Fund Business Division Group 1
Senior Statutory Executive Officer & CMO
Senior Statutory Executive Officer
Director & Executive Vice President & Statutory
Executive Officer (Real Estate)
Independent Director, Takara Building
Maintenance Co., Ltd.
President & Representative Director (Overall
Company Management), Ichigo Estate Co., Ltd.
Executive Vice President & Statutory Executive
Officer
Director (current), President & Representative
Statutory Executive Officer (current)
Chairman & Director, Ichigo ECO Energy Co.,
Ltd. (current)
Chairman of Compliance Committee (current)
Member of Nominating Committee, Member ofCompensation Committee
Chairman of Nominating Committee (current),
Chairman of Compensation Committee (current)Group Head of IT
Director, Cost Science Inc. (current)(Other Positions)
Chairman & Director, Ichigo ECO Energy Co., Ltd.
Director, Cost Science Inc.
Message to Our Shareholders
As a sustainable infrastructure company, Ichigo is growing andexpanding its sustainable real estate business while seeking to createa more sustainable society under our new Ichigo 2030 long-term
vision. Together with our employees, I will dedicate all of mystrength to overcome the challenging real estate market conditions
caused by the Covid-19 pandemic and continue working towards
establishing Ichigo as a truly sustainable company that meets
shareholder expectations. Thank you for your continued support.

7

IchigoSharesHeld495,138
sharesNo.

Name(Date of Birth)

Career History
April 1990
October 2005
May 2007
March 2008
October 2008
November 2008
May 2009
October 2009
November 2009
May 2010
April 2011

3
Minoru Ishihara(October 5, 1967)

May 2011
November 2011
July 2012

November 2012
March 2013

May 2015
March 2017
April 2017

Joined Hazama Corporation
Joined Creed Corporation
Joined Ichigo as Head of Human Resources andGeneral Administration Division
Executive Officer and Head of Human Resourcesand General Administration Division
Chief Administrative Officer & Statutory
Executive Officer and Head of Business
Management
Director, Asset Investment Advisors Co., Ltd.
(now Ichigo Investment Advisors Co., Ltd.)
Director (current), Managing Director & Statutory
Executive Officer (Administration), Member ofCompliance Committee
Managing Director (Administration), Asset
Investment Advisors Co., Ltd. (now Ichigo
Investment Advisors Co., Ltd.)
President & Representative Director, Asset
Logistics Co., Ltd. (now Ichigo Marché Co., Ltd.)
Director, Senior Managing Director & Statutory
Executive Officer (Administration)
President & Representative Director, Miyako City
Co., Ltd.
Senior Managing Director (Administration),
Ichigo Real Estate Investment Advisors Co., Ltd.
(now Ichigo Investment Advisors Co., Ltd.)
Executive Vice President (current) & Statutory
Executive Officer (Administration)
Director (current), Executive Vice President &Statutory Executive Officer (Administration),
Ichigo Real Estate Investment Advisors Co., Ltd.
(now Ichigo Investment Advisors Co., Ltd.)
Director, Ichigo ECO Energy Co., Ltd.
Head of Real Estate
Chairman, President, & Representative Director,
Miyako City, Co., Ltd. (current)
Chairman & Director, Ichigo Marché Co., Ltd.
Chairman & Director, Takara Building
Maintenance Co., Ltd.
Executive Vice President & Statutory Executive
Officer & COO (current)
President & Representative Director, Ichigo Real
Estate Services Fukuoka Co., Ltd. (current)
Chairman, President, & Representative Director,
Ichigo Marché Co., Ltd.

8

IchigoSharesHeld

151,608
sharesNo.

Name(Date of Birth)

Career History(continued from March 2018previous page) March 2019

June 20193

Group Head of Sustainable Real Estate (current)
Chairman & Representative Director, Ichigo
Marché Co., Ltd. (current)
Chairman & Representative Director, Hakata
Hotels Inc. (current)
President & Representative Director, Miyazaki
Sunshine FM Co., Ltd. (current)(Other Positions)
Chairman, President, & Representative Director, Miyako City Co.,
Ltd.
Chairman & Representative Director, Ichigo Marché Co., Ltd.
President & Representative Director, Ichigo Real Estate Services
Fukuoka Co., Ltd.
Chairman & Representative Director, Hakata Hotels Inc.
President & Representative Director, Miyazaki Sunshine FM Co.,Ltd.
Message to Our Shareholders
Although the Covid-19 pandemic’s negative impact on businessconditions is expected to be long-term, I will strive to protect realestate as an essential element of people’s lives. As workstyles,
consumer behavior, and lifestyles change on the back of the IT
revolution, Ichigo will continue adapting to these changes andfurther strengthen the sustainability of our businesses. I will continue
to work toward meeting the expectations of our shareholders, andappreciate your guidance and support.

9

IchigoShares
Held

No.

Name
(Date of Birth)

Career History
April 1993
April 2002
January 2007
July 2012
March 2013

March 2014
March 2015

4
Eri Murai(May 16, 1970)

March 2017
May 2019
March 2020

Joined Fujita Corporation
Joined Ichigo
Head of Finance, Ichigo
Statutory Executive Officer (Business
Management), Head of Business Planning,
IchigoDirector (Administration), Ichigo Estate,
Director, Ichigo Global Capital
Director (Business Planning), Ichigo ECOEnergySenior Statutory Executive Officer(Administration & HR), Ichigo
Executive Managing Director (current) &Statutory Executive Officer (Administration& HR)Group Head of Administration & HR, Ichigo
President, Ichigo University
Head of HR Development
Director (current)
Statutory Executive Officer (HR) (current)

Message to Our Shareholders
The Covid-19 pandemic is dramatically impacting Ichigo’s
businesses. It is under such challenging times that I believe it isimportant for Ichigo to work as a whole and leverage individual
skills and experiences to overcome difficulties together. I willcontinue to create a work environment at Ichigo in which
employees can express their individual talents, helping drive
sustainable growth and higher shareholder value. Thank you foryour guidance and support.

10

IchigoSharesHeld

6,800
sharesNo.

Name(Date of Birth)

Career History
April 1976
April 2001
April 2002
October 2006
April 2007
October 2009
May 2010
February 2011
March 2011
May 2011
May 2012

5

Tetsuya Fujita(March 26, 1954)

July 2012

May 2014

October 2015
May 2016
August 2017
March 2019
June 2019

Joined Taisho Marine and Fire Insurance Co., Ltd.
(now Mitsui Sumitomo Insurance Co., Ltd.)
Executive Director, Taisho Marine & Fire
Insurance (Malaysia) Bhd. (now MSIG Insurance(Malaysia) Bhd)
Board Director, Skandia Life Insurance (Japan)(now Tokyo Marine Nichido Financial Life
Insurance Co., Ltd.)
Executive Director, AXA Life Insurance Co., Ltd.
Representative President & CEO, AXA Financial
Life Insurance Co., Ltd. (now AXA Life
Insurance Co., Ltd.)
Senior Advisor, AXA Life Insurance Co., Ltd.
Ichigo Independent Director (current), Member ofAudit Committee, Member of Compliance
Committee
Auditor, St. Thomas University
President, ReMark Japan Co., Ltd.
Chairman of Compliance Committee,
Member of Nominating Committee (current),
Member of Compensation Committee (current)
Director, Member of Audit Committee, Memberof Nominating Committee, Member ofCompensation Committee, Ichigo Real Estate
Investment Advisors Co., Ltd. (now Ichigo
Investment Advisors Co., Ltd.)
Chairman of Audit Committee (current), Memberof Compliance Committee (current),
Chairman of Audit Committee of Ichigo Real
Estate Investment Advisors Co., Ltd. (now Ichigo
Investment Advisors Co., Ltd.)
Advisor, LAUREATE INTERNATIONALUNIVERSITIES Japan
Lead Independent Director (current)
Special Advisor to CEO, ReMark Group
Advisor, Creative Solutions Co., Ltd.
CEO & Representative Director, Creative
Solutions Co., Ltd (current)(Other Positions)
CEO & Representative Director, Creative Solutions Co., Ltd.

11

IchigoSharesHeld64,200sharesNo.

Name(Date of Birth)(continued fromprevious page)

5

Career History
Message to Our Shareholders
The world economy and the real estate market is entering a new era
due to the Covid-19 pandemic. I believe that the ability to makedecisions is crucial to overcome difficulties into the new era. As an
Independent Director, I want to further strengthen corporate
governance and risk management, and contribute to the creation ofeven greater corporate value for Ichigo as a sustainable infrastructurecompany on behalf of all shareholders.

12

IchigoShares
Held

No.

Name
(Date of Birth)

Career History
April 1999
July 2001
August 2004
November 2004
February 2008
January 2009
May 2011
November 2011
July 2012
June 2013
May 2014

6

Noriko Kawate(February 22, 1976)
February 2015

Joined International Dept., Deloitte Touche
Tohmatsu LLC
Qualified as Certified Public Accountant
Joined Cast & Itoga (now Uryu & Itoga)
Qualified as Certified Tax Accountant
President of CLEA Consulting Co., Ltd. (current)
Joined Gracia Corporation
Ichigo Independent Director (current), Memberof Audit Committee (current)
Qualified as American Certified Public
Accountant
Director, Member of Audit Committee of Ichigo
Real Estate Investment Advisors Co., Ltd. (now
Ichigo Investment Advisors Co., Ltd.)
Audit & Supervisory Board Member, Meiji
Machine Co., Ltd.
Member of Nominating Committee (current),
Member of Compensation Committee (current),
Member of Nominating Committee, Member ofCompensation Committee of Ichigo Real Estate
Investment Advisors Co., Ltd. (now Ichigo
Investment Advisors Co., Ltd.)
Partner, Cast Group (current)(Other Positions)
President, CLEA Consulting Co., Ltd.
Partner, Cast Group
Message to Our Shareholders
Last year, Ichigo got off to a good start on its Ichigo 2030 long-term
vision. However, since the beginning of this year, the Covid-19
global pandemic has negatively impacted the real estate industry inwhich Ichigo participates. Although Ichigo may face difficulties innavigating the unprecedented changes in the economic landscape, I
will do my best as an Independent Director to support Ichigo’s
sustainable growth.

13

IchigoSharesHeld

48,700sharesNo.

Name(Date of Birth)

Career History
April 1975
June 1996
June 1997
June 1999
June 2000
June 2003
June 2005
June 2008
July 2010
August 2010
June 2012
May 2015

September 2015
May 2016

7
Yukio Suzuki(June 3, 1950)

March 2018
June 2018

Joined Nomura Research Institute, Ltd.
Director, Nomura Research Institute Ltd.
Director & Head of Financial Research Center,
Nomura Securities Co., Ltd.
Executive Director in charge of Research
Division, Nomura Asset Management Co., Ltd.
Executive Managing Director in charge of
Research Division, Nomura Asset Management
Co., Ltd.
Executive Managing Director, Nomura AssetManagement Co., Ltd.
Director and Audit Mission Director, Nomura
Holdings, Inc.
Advisor, Nomura Securities Co., Ltd.
CEO, Belle Investment Research ofJapan Inc. (current)
Advisor, Deloitte Touche Tohmatsu, LLC
Independent Director, Systena Corporation(current)
Ichigo Independent Director (current), Directorof Ichigo Real Estate Investment Advisors Co.,
Ltd. (now Ichigo Investment Advisors Co.,
Ltd.)
Member of Compliance Committee
Member of Audit Committee (current), Vice
Chairman of Compliance Committee (current)
Independent Auditor, WILLs Inc. (current)
Independent Auditor, XNET Corporation(current)(Other Positions)
CEO, Belle Investment Research of Japan Inc.
Independent Director, Systena Corporation
Independent Auditor, WILLs Inc.
Independent Auditor, XNET Corporation
Message to Our Shareholders
Sustainable corporate value creation requires a long-term vision,
strategizing and executing on new business development, delivering
revolutionary products and services, and solid risk management
attuned to changes in the business environment. It is especially
important that the process of corporate value creation be sharedwith shareholders. I want to fulfill my responsibility as an
Independent Director by offering management supervision based ona belief in effective corporate governance, strong human capitaldevelopment, and concern for the environment.

14

IchigoSharesHeld

13,900sharesNo.

Name(Date of Birth)

Career History
April 1976
June 1999
October 2003
April 2005

April 2006
June 2006
April 2009
April 2013
April 2014
June 20148

May 2016

Masatoshi Matsuzaki(July 21, 1950)

June 2016

August 2016
May 2018
June 2019

Joined Konishiroku Photo Industry Co., Ltd.
(now Konica Minolta, Inc.)
General Manager, System Technology
Development Division, Office Document
Company, Konica Corporation
Director, Konica Minolta BusinessTechnologies, Inc.
Executive Officer, Konica Minolta Holdings
Inc.
Representative Director & President, Konica
Minolta Technology Center, Inc.
Senior Executive Officer, Konica Minolta
Holdings Inc.
Director & Senior Executive Officer, Konica
Minolta Holdings Inc.
Representative Director & CEO Konica
Minolta Holdings, Inc.
Representative Director & CEO Konica
Minolta, Inc.
Director & Chairman of the Board of
Directors, Konica Minolta, Inc. (current)
Chairman of the Board of Directors, Japan
Business Machine and Information System
Industries Association
Deputy Chairman, Japan Association of
Corporate Directors
Ichigo Independent Director, Member ofNominating Committee (current), Member ofCompensation Committee (current)
Independent Director, Nomura ResearchInstitute, Ltd. (current)
Independent Director, Nippon Sheet Glass Co.
Ltd. (current)
Member of Public Interest Supervisory
Committee, PwC Aarata LLC (current)
Executive Director & Deputy Chairman, Japan
Association of Corporate Directors (current)
Independent Director, LIXIL Corporation(current)(Other Positions)
Chairman of the Board of Directors, Konica Minolta Inc.
Executive Director & Deputy Chairman, Japan Association of
Corporate Directors
Independent Director, Nomura Research Institute, Ltd.
Independent Director, Nippon Sheet Glass Co. Ltd. (Until June
2020)
Member of Public Interest Supervisory Committee, PwC Aarata LLC
Independent Director, LIXIL Corporation
15

IchigoSharesHeld

32,600sharesNo.

Name(continued fromprevious page)

8

Career History(Date of Birth)

Message to Our Shareholders
In the short term, Ichigo may experience negative impacts frommarket changes caused by the Covid-19 global pandemic. I believe
sustainable corporate growth is important for shareholders and all
stakeholders. In order to achieve the Ichigo 2030 long-term vision,
I will continue to use my perspective as an Independent Director tohelp the company's management team keep an eye on structuralchanges in the business environment and assess opportunities andrisks in order to meet the expectations of shareholders.

16

IchigoShares
Held

No.

Name
(Date of Birth)

Career History
April 1971
April 1998
April 2002
April 2003
April 2004
April 2005
April 2009
June 2009
October 2011
June 2013
April 2016

9

June 2016
May 2017
October 2018
Nobuhide Nakaido March 2019
(November 1, 1946)

Joined Sumitomo Corporation
Director, Sumitomo Corporation
Managing Director, Sumitomo Corporation
Managing Executive Officer, Sumitomo
Corporation
Senior Managing Executive Officer,
Sumitomo Corporation
Executive Vice President, Sumitomo
Corporation
Executive Director, Assistant to President,
Sumitomo Corporation
Chairman, President, & CEO, Sumisho
Computer Systems Corporation (now SCSKCorporation)
President & CEO, SCSK Corporation
Chairman, SCSK
Director & Senior Advisor, SCSKCorporation
Senior Advisor, SCSK Corporation
Ichigo Independent Director (current)
Chairman, Japan Association for Chief
Human Resources Officers (current)
Independent Director, eSOL Co., Ltd.
(current)(Other Positions)
Chairman, Japan Association for Chief Human Resources
Officers
Independent Director, eSOL Co., Ltd.
Message to Our Shareholders
Consistent with Ichigo’s corporate mission Make The World
More Sustainable, I will do my best as an Independent Director tocontribute to growing shareholder value via business model
innovations, corporate governance, and workstyle changes, andsupport Ichigo in becoming a sustainable infrastructure company
that opens up a new era.

17

IchigoSharesHeld

10,000shares(Note 1) None of the candidates for Director or Independent Director are a related party of
Ichigo.
(Note 2) Ichigo’s Nominating Committee and Board of Directors’ reasons for nominating
Scott Callon, Takuma Hasegawa, Minoru Ishihara, and Eri Murai for Director are
as follows:(i) Scott Callon has extensive experience leading Ichigo since October 2008 as
Director and Chairman and has knowledge and expertise derived from serving ona number of Japanese government bodies, including the Financial Services
Agency (FSA) Council of Experts that drafted Japan’s Corporate Governance
Code and the Ministry of Economy, Trade and Industry (METI) Competitivenessand Incentives Structures for Sustainable Growth Project (the “Ito Review”). He
assumed the position of Director in November 2008, and his term of office will
have been eleven and a half years at the close of this shareholder meeting.
(ii) Takuma Hasegawa has extensive knowledge and experience at Ichigo, having led
a number of Ichigo’s real estate businesses. He has been Ichigo’s President since
May 2015. He assumed the position of Director in May 2009 for two years, andhis term of office will have been seven years at the close of this shareholder
meeting.
(iii) Minoru Ishihara has extensive knowledge and experience as Executive Vice
President and COO of Ichigo. He assumed the position of Director in 2009, andhis term of office will have been eleven years at the close of this shareholder
meeting.
(iv) Eri Murai has extensive knowledge and experience since joining Ichigo in 2002,
having led a number of key initiatives in finance, internal management, and HR.
She is currently the Executive Managing Director & Statutory Executive Officer(HR), and her term of office will have been one year at the close of thisshareholder meeting.
(Note 3) All five candidates for Independent Director – Tetsuya Fujita, Noriko Kawate,
Yukio Suzuki, Masatoshi Matsuzaki, and Nobuhide Nakaido – meet the Tokyo
Stock Exchange’s (TSE) requirements for Independent Directors and will be
registered with the TSE as such.
(Note 4) Ichigo’s Nominating Committee and Board of Directors’ reasons for nominating
Tetsuya Fujita, Noriko Kawate, Yukio Suzuki, Masatoshi Matsuzaki, andNobuhide Nakaido as candidates for Independent Director are as follows:(i) Tetsuya Fujita has extensive knowledge and experience working for a leading
property insurance company and a leading life insurance company. He assumed
the position of Independent Director in May 2010, and his term of office will havebeen ten years at the close of this shareholder meeting.
(ii) Noriko Kawate has extensive experience in statutory auditing at a major auditing
firm and in accounting and tax advisory as a certified public accountant and tax
accountant. She assumed the position of Independent Director in May 2011, andher term of office will have been nine years at the close of this shareholder
meeting.
(iii) Yukio Suzuki has extensive experience and knowledge of corporate and securities
research from serving important roles at a securities company, think tank, andasset management company at a major financial group, and has experience andknowledge in operational monitoring and risk control, which he can draw upon to
fully monitor Ichigo’s activities on behalf of shareholders. He assumed theposition of Independent Director in May 2015, and his term of office will havebeen five years at the close of this shareholder meeting.

18

(iv) Masatoshi Matsuzaki has extensive experience as the CEO and Chairman leadinga major global office equipment manufacturer, driving positive structuraltransformation and business innovation, and played a leading role in developing a
best-practice board committee system to support strong corporate governance,
which he can draw upon to fully monitor Ichigo’s activities on behalf ofshareholders. He assumed the position of Independent Director in May 2016, andhis term of office will have been four years at the close of this shareholder
meeting.
(v) Nobuhide Nakaido has extensive experience and knowledge as the Executive Vice
President of one of Japan’s largest trading companies and President & Chairmanof a leading Japanese IT systems integrator, driving innovation in the IT service
industry and increasing corporate value through workstyle & workplacetransformation. He has extensive knowledge and experience leading major global
companies which he can draw upon to fully monitor Ichigo’s activities on behalfof shareholders. He assumed the position of Independent Director in May 2017,and his term of office will have been three years at the close of this shareholder
meeting.
(Note 5) No candidate for Independent Director has been involved in inappropriate conduct
while serving as a Director in other companies over the past five years.
(Note 6) Additional information pertaining to the independence of the candidates for
Independent Director is as follows:(i) Tetsuya Fujita and Noriko Kawate served as Independent Directors of Ichigo
subsidiary, Ichigo Investment Advisors, from July 2012 to May 2016.
(ii) Yukio Suzuki served as an Independent Director of Ichigo subsidiary, Ichigo
Investment Advisors, from May 2015 to May 2016.
(iii) No candidate for Independent Director has received in the last two years, nor will
they receive, material monetary or other financial compensation (excluding any
remuneration as Director or Advisor before assuming the position of Independent
Director) from Ichigo or related entities.
(iv) No candidate for Independent Director is the spouse of the management of Ichigo
or related entities, nor are they related within three degrees of consanguinity.
(Note 7) In order to retain Independent Directors of high quality, Ichigo has signed limited
liability agreements with Tetsuya Fujita, Noriko Kawate, Yukio Suzuki, Masatoshi
Matsuzaki, and Nobuhide Nakaido. The extent of liabilities for compensation
under the agreements is the minimum limited liability amount as defined in
Article 425, Paragraph 1 of the Company Law; provided that the liability islimited only when the Independent Directors have performed their duties whichcause liability in good faith and without gross negligence. Upon the reappointment of Tetsuya Fujita, Noriko Kawate, Yukio Suzuki, Masatoshi
Matsuzaki, and Nobuhide Nakaido as Independent Directors, Ichigo will enter
into new limited liability agreements with equivalent terms with each of them.
(Note 8) Scott Callon has not received and will not receive any compensation from Ichigo.
(Note 9) Shares owned by Yukio Suzuki, a candidate for Independent Director, include
shares owned by Belle Investment Research of Japan Inc., all of whose shares are
owned by Yukio Suzuki.
(Note 10) The number of Ichigo shares owned by each of the candidates for Director is as ofFebruary 29, 2020.

19

Business Report(March 1, 2019 – February 29, 2020)
I.

Current Operations and Financials

A. Business Conditions in the Current Fiscal Year (FY20/2)
1. Business Results and Progress
In the current fiscal year, although exports decreased due to a slowdown in the world
economy, corporate earnings remained high and capital expenditures strong. Household
consumption increased moderately on the back of increases in employment and income,despite the negative impact of the autumn 2019 consumption tax increase. Although theJapanese economy was forecast to expand moderately as a result of stable domestic
demand, supportive economic and fiscal policies, and the Bank of Japan’s monetaryeasing, the Covid-19 pandemic is putting downward pressure on both Japanese and global
economic activity.
Pre-Covid-19, the Japanese real estate market continued to generate stable investment
returns, with ongoing rent increases supported by historically low vacancy rates. Low
interest rates drove strong demand for real estate investments in the search for yield,
while the J-REIT market grew backed by capital gains and steady rent increases.
However, Covid-19 is expected to have a negative impact on real estate. Hotel earnings inparticular are expected to drop as a result of both new supply and a drop in inboundtourism.
For clean energy, while changes in the renewable energy feed-in-tariff (FIT) rules havecaused some companies to reevaluate project viability, solar power plants have proved
their resilience against natural disasters. The Tokyo Stock Exchange infrastructure market
offers continuing growth prospects, with solar power producers offering both highearnings stability and less sensitivity to changes in economic conditions.
FY20/2 also marked the first year of Ichigo’s Ichigo 2030 long-term vision. Ichigo isexpanding its business domain as a sustainable infrastructure company to fulfill its
mission of Make The World More Sustainable.
Core Business Growth–

Sustainable Real Estate (SRE)
Given the strong real estate market, Ichigo was selective on acquisitions and worked
to be innovative in its acquisition strategies to avoid auctions and buy at the lowest
possible prices. As a result, Ichigo acquired JPY 63 billion in assets, while selling
JPY 60.6 billion. Ichigo also worked to increase the value of its assets through its
core value-add activities, maintaining high occupancy while driving higher rental
income.

–Asset Management
Ichigo supported the growth of its TSE-listed REITs and solar YieldCo by sellinghigh-quality assets to Ichigo Office (8975) and Ichigo Hotel (3463) and operating
Ichigo Green’s (9282) solar power plants. It also expanded its private fund business.
During the year, Ichigo Office was selected for inclusion in the FTSE
EPRA/NAREIT Global Real Estate Index Series, a global real estate investment
benchmark used by institutional investors worldwide.

20

–Clean Energy
Despite the massive size of Typhoon Faxai (Typhoon No. 15) and Typhoon Hagibis(Typhoon No. 19), there were no injuries or material damages at any Ichigo power
plants, and the plants produced solar power as normal. Even with the typhoons and along rainy season, Ichigo’s FY20/2 solar power generation exceeded forecast.
Ichigo brought five new solar power plants (23MW) online, and continues to develop
a pipeline of reliable, high-performance solar power plants and grow wind power
plant generation. In particular, construction of the Ichigo Yonezawa Itaya ECOPower Plant, Ichigo’s first wind power plant, is on-track.

Stock Earnings

Depreciation

1,632

2,507

SRE
583

18,485

Asset Management

Clean Energy

1,391

18,45013,451

FY19/2(Gross Profit: JPY M )FY20/2

FY19/2

13,331

FY20/2

2,057

2,062

FY19/2

FY20/2

1,049

1,116

2,978

3,057

FY19/2

FY20/2

Ichigo as a Sustainable Infrastructure Company
Ichigo is building upon its capabilities in real estate and clean energy to pursue newopportunities for growth and value creation for tenants, customers, and local
communities.

21

New Business Entry–

Real Estate & Tourism: Hotel Operator Market Entry via Hakata Hotels
Ichigo entered the hotel operator market via acquiring Hakata Hotels to leverage its
extensive experience and know-how as a hotel owner-operator to drive higher hotel
earnings and value. With the acquisition, Ichigo is operating seven hotels (700 guest
rooms), primarily in the Fukuoka area, ranging from full-service to casual hotels.
Ichigo is also developing its own brands and delivering a high level ofprofessionalism that benefits from its rich experience beyond the hotel industry.

–

Real Estate & IT: AI-based Hotel Revenue Management System PROPERAPROPERA is Ichigo’s proprietary hotel revenue management system that uses
artificial intelligence (AI) to drive a dynamic-pricing algorithm that calculates
optimal pricing for hotel rooms in order to maximize hotel operator revenues.
PROPERA’s AI-based dynamic pricing can respond to changes in the market byusing machine learning to calculate optimal hotel room pricing up to 365 days inadvance. chigo has deployed PROPERA to increase revenues by 10% to 40% at its
own hotels, and is now rolling out PROPERA to third-party hotel operators.

–

Real Estate & Agriculture & Tourism: Public-Private Partnership as Operator of
Yokosuka Port Market
Ichigo was selected as the operator of Yokosuka Port Market after the city of
Yokosuka, as part of its tourism-promotion efforts, held an open public bid torenovate and operate the facility as a Public-Private Partnership (PPP) . Ichigo isworking to revitalize the local community, create new employment, and promote
regional economic development, while generating a new capital-efficient, non-asset
earnings stream for Ichigo.

Yokosuka Port Market After Renovation (Image)22

–Real Estate & Anime: Ichigo’s New Anime Series VLADLOVEOn April 4, 2019, Ichigo established a wholly-owned subsidiary, Ichigo Animation,
which became the sole investor financing the production of a new anime series
directed by renowned Japanese directors Mamoru Oshii and Junji Nishimura. Ichigo
has launched the anime business to create synergies with Ichigo’s existingsustainable real estate business.
Japanese anime has become a global cultural phenomenon and a centerpiece of thegovernment’s Cool Japan campaign to create new growth and employment
opportunities. As the sole producer of this new anime series, Ichigo is supporting thedirectors and other creators in producing high-quality work for audiences in Japanand around the world.
Ichigo Animation is also investing in other animation initiatives that promote the
AKIBA CULTURES ZONE (ACZ), Ichigo’s major retail asset in Akihabara, theTokyo district that is the epicenter of Japan’s anime sub-culture. VLADLOVErelated goods are already being sold at ACZ, along with related events being held
there. Ichigo will continue to work to increase ACZ’s international recognition as alandmark of Japan’s anime sub-culture.

–

Real Estate & Gaming: Real-World Augmented Reality (AR) Game TSUBASA+
Ichigo has also invested in TSUBASA+, a global, real-world augmented reality (AR)game that uses smartphone GPS.
TSUBASA+ merges elements from the popular soccer manga Captain Tsubasa withthe real world. Ichigo is contributing Ichigo’s real estate capabilities and expertise inorder to integrate real-world locations into the game, including placing virtual
stadiums at Ichigo real estate assets.

New Anime Series VLADLOVEReal -World AR Game TSUBASA+

23

–

Improved Borrowing Terms, Green Bond Issuance, JPX-Nikkei 400 Index Inclusion,
J.League Shareholder Program Launch, & Ichigo Social Media and Branding
Ichigo further strengthened its financial base in FY20/2 by extending its loan
maturities, lowering borrowing costs, hedging against future interest rate rises, andexpanding its uncollateralized borrowing.
Ichigo also issued a green bond in order to fund the construction and operation ofsolar power plants and grow its clean energy business.
For the fourth year in a row, Ichigo was selected for inclusion in the JPX-Nikkei
Index 400 and ranked within the JPX-Nikkei 400’s top 200 companies in August
2019, marking the achievement of all of Ichigo’s goals set out in its Power Up 2019
mid-term business plan.
Ichigo became a J.League Top Partner in 2019, working with the J.League to help
build stronger and healthier local communities. Ichigo also launched a Shareholder
Program for Ichigo, Ichigo Office, Ichigo Hotel, and Ichigo Green shareholders. The
Shareholder Program represents two first for Japanese shareholder programs: 1)
Ichigo is the first Japanese company to include not just its own shareholders, but also
the shareholders of the REITs and YieldCo that it manages, in its shareholder
program; and 2) Ichigo is the first company to offer shareholders free tickets to all 55
J.League clubs (which is the number of clubs during the 2019 season) and all J.
League games.

Ichigo also uses social media, including Facebook and Instagram, to provide Ichigorelated news and updates, and continues to execute on new branding initiatives todrive shareholder value.

24

FY20/2 Earnings Details
Ichigo generated consolidated FY20/2 revenue of JPY 87.4 billion (+4.6% year-on-year),
operating profit of JPY 27.7 billion (+5.5% year-on-year), recurring profit of JPY 24.4
billion (+5.7% year-on-year), and net income of JPY 8.2 billion (-46.7% year-on-year).
In FY20/2, the first year of the Ichigo 2030 long-term vision, Ichigo achieved record-highoperating and recurring profits on the back of stable stock earnings and strong flow
earnings. From early 2020, however, the Covid-19 global pandemic is dramaticallylowering hotel demand and putting pressure on real estate tenants across-the-board.
Given these market conditions, Ichigo conducted a systematic review of the current
market values of all of its Real Estate for Sale, and wrote down assets (primarily hotel
and retail) that are significantly impacted by current business conditions. Ichigo thus
recorded an FY20/2 extraordinary Covid-19 loss of JPY 8.07 billion, the bulk of which isa JPY 7.49 billion writedown of Real Estate for Sale.
Although FY20/2 net income thus decreased year-on-year, Ichigo has maintained thetrustworthiness and integrity of its balance sheet and lowered future balance sheet risk.
Segment Earnings Details
The breakdown of revenue and operating profit by segment is as follows:
Asset Management
Due to increased performance fees at Ichigo Hotel (3463), a new private real estate fundmandate, and growth in base asset management fees, revenue increased to JPY 3.9 billion(+14.2% year-on-year) with segment operating profit up 15.1% year-on-year to JPY 2.5
billion.
Sustainable Real Estate
Strong value-add outcomes combined with stable growth in rental income contributed to
an increase in stock earnings. Asset sales continued to be robust, generating high grossmargins. As a result, revenue increased to JPY 80.5 billion (+4.0% year-on-year), withsegment operating profit up 5.7% year-on-year to JPY 24.0 billion.
Clean Energy
Despite below-average productive daylight hours in July and August 2019, full-year
contributions from power plants that came online in FY19/2 increased revenue to JPY 3.8
billion (+4.0% year-on-year). However, segment operating profit declined to JPY 1.3
billion (-6.7% year-on-year), due to increases in plant depreciation expenses and the costallocation from group-wide strategic investments.
Ichigo expects FY21/2 earnings growth from 5 power plants that came online during
FY20/2.
Consolidated Income Statement Details
Revenue
Robust asset sales, increased rental income from new acquisitions and value-add
activities generating higher rents, higher Ichigo Hotel performance fees from hotel sales
and asset management fees from new private funds, and the completion of new power
plants led to a 4.6% year-on-year increase in revenue to JPY 87.4 billion.
Real estate sales contributed JPY 60.6 billion, real estate rental income JPY 19.1 billion,
real estate management fee income JPY 3.1 billion, and solar power production revenue
JPY 3.8 billion.
25

Operating Profit
Asset sales, rental income, and power generation revenue growth led to a record
operating profit of JPY 27.7 billion (+5.5% year-on-year). Depreciation increased JPY
807 million due to the reclassification of some real estate for sale assets to fixed assets,with SG&A also rising JPY 940 million because of business expansion and strategic
investments.
Non-Operating Profit & Expenses
Non-operating profit totaled JPY 150 million (+1.7% year-on-year), with dividend
income of JPY 78 million and insurance proceeds of JPY 35 million.
Non-operating expenses totaled JPY 3.5 billion (+3.8% year-on-year), despite a decreasein the mark-to-market loss on long-term interest rate hedges, due to an increase in debt
financing-related fees for asset acquisitions and sales,.
By category, interest costs were JPY 2.3 billion, debt financing-related fees were JPY 538
million, and the mark-to-market loss on long-term interest rate hedges was JPY 336
million.
Extraordinary Gains
Extraordinary gains totaled JPY 215 million (vs. JPY 2 million in FY19/2) on gains onsale of subsidiary shares of JPY 169 million and gains on sale of securities investments of
JPY 11 million.
Extraordinary losses totaled JPY 8.1 billion on a Covid-19 writedown of real estate forsale of JPY 7.5 billion, a Covid-19 writedown of goodwill of JPY 319 million, and a
Covid-19 writedown of securities investments of JPY 229 million.
Net Income
Net income declined 46.7% year-on-year to JPY 8.2 billion. Incomes taxes totaled JPY
8.0 billion (which included a tax adjustment of -JPY 584 million).

26

Operating Profit
28,00026,27922,90021,919FY17/2

FY18/2(JPY million)
27,721

21,00016,387
14,0007,000
0FY16/2

FY19/2

FY20/2Net Income(JPY million)

18,00015,00014,89414,01812,925

15,373

12,000
8,201

9,000
6,000
3,000
0
FY16/2

FY17/2

FY18/227

FY19/2

FY20/2

2. Capital Expenditures
During FY20/2, property, plant, and equipment (PP&E), including operating and indevelopment power plants, increased by JPY 4.3 billion.
3. Financing
In order to drive earnings growth and further strengthen its financial standing, Ichigo istaking advantage of the current low interest rate environment to improve its borrowing
terms and diversify its borrowings, including by lowering borrowing costs, staggeringloan maturities, extending loan durations, and reducing loan amortizations.
Ichigo continues to increase its uncollateralized financing to further strengthen its
borrowings and creditworthiness. In June 2019, Ichigo initiated a second uncollateralized
JPY 10 billion commitment line. Combined with the JPY 10 billion commitment line
initiated during FY19/2, the uncollateralized commitment lines totaled JPY 20 billion.
Ichigo also issued an uncollateralized bond of JPY 3 billion in September 2019.
Ichigo plans to make effective use of the above commitment lines and uncollateralizedbond to secure ongoing liquidity and fund real estate acquisitions.
Second Uncollateralized Commitment LineUse of Proceeds
Commitment Line Amount
Lenders
Drawdown Period
Loan Final Repayment Date
Collateralized
Contract Date

Real estate acquisitions
JPY 10 billion
Syndicate (Lead Arranger: Mizuho Bank)
June 28, 2019 to June 30, 2022 (3 years)
June 29, 2029 (10 years)
No
June 28, 2019

Uncollateralized Bond
IssuerTotal Issue AmountPayment Date
Maturity
Lead UnderwriterFiscal Agent

IchigoJPY 3 billion
September 27, 20195 years
Mizuho Securities
Mizuho Bank

Ichigo ECO Energy, Ichigo’s wholly-owned subsidiary, issued a green bond of JPY 2.9billion in July 2019 in order to grow its clean energy business and further contribute to
Ichigo’s goal of building a more sustainable society.
Green Bond
IssuerTotal Issue AmountPayment Date
Maturity
Lead Underwriter

Ichigo ECO Energy
JPY 2.9 billion
July 31, 201910 years
SMBC

Note: SMBC, Daishi Bank, Resona Bank, and Kiraboshi Bank are the members of thegreen bond syndicate.

28

Ichigo’s balance of interest-bearing corporate loans as of FY20/2-end was JPY 173.2
billion (+20.8% year-on-year), and its balance of non-recourse loans was JPY 40.3 billion(-23.5% year-on-year). The average interest rate during F20/2 for interest-bearing
corporate loans and non-recourse loans were 0.91% (-0.06% year-on-year) and 1.02% (0.10% year-on-year), respectively.
Ichigo continues to have an extraordinarily stable and durable balance sheet, with 91.0%
of interest-bearing corporate loans as of FY20/2-end being long-term. JPY 112.7 billionof interest-bearing corporate loans have remaining loan terms of more than five years,
with total interest-bearing corporate loans having an average loan term of 10 years.
Furthermore, 53.0% of Ichigo’s interest-bearing corporate loans as of FY20/2-end arewith the Japanese megabanks. The proportion of total uncollateralized borrowings was
25.6% as of FY20/2-end, driven by the aforementioned FY20/2 commitment line andbond issuance.

Average Interest Rate and Loan Term
Weighted Average Loan Period
Weighted Average Remaining Loan M aturity
Weighted Average Interest Rate

(Interest Rate)(Loan Term, Years)

2.5%

12
10.8 years
10.2 years

2.0%

9.0 years

1.96%

10.3 years

10.0 years

8.7 years
99.6 years
8.3 years

8.3 years

7.8 years

5.9 years

7.6 years

7.6 years

1.71%
6

1.5%
5.5 years

1.41%
1.24%

1.04%

1.0%

0.97%

3
0.91%

0.5%

0
FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2

14% (JPY 4.1B)

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 6.1B)

5% (JPY 5.6B)

8% (JPY 11.3B)

9% (JPY 15.6B)

86%(JPY 26.1B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 92.2B)

95%(JPY 112.8B)

92%(JPY 132.1B)

91%(JPY 157.5B)

FY14/2

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2

Term Structure of Loans
Short-Term
Long-Term

29

4. Business Transfers, Absorption-Type Splits or Incorporation-Type Splits
N/A
5. Transferred Businesses from Other Companies
N/A
6. Succession of Rights and Obligations relating to the Business of Other Companies byAbsorption-Type Merger or Absorption-Type Split
N/A
7. Acquisition and Disposition of Shares and Other Interests in Other Companies and Stock
Options, etc.
N/A30

B. Earnings and Assets in the Current and Past Three Fiscal Years
17th Period(FY17/2)

18th Period(FY18/2)

19th Period(FY19/2)

20th Period(FY20/2)

Revenue (JPY million)

109,253

57,84683,54087,360Operating Profit (JPY million)

22,90021,91926,27927,721

Recurring Profit (JPY million)

19,755

19,18523,076

24,395Net Income (JPY million)

14,89414,01815,3738,201

Net Income per Share (JPY)

29.66

28.12

31.14

16.89

Total Assets (JPY million)

273,455

296,501

319,343

333,726

Net Assets (JPY million)

83,44392,725

102,859

101,607

Net Assets per Share (JPY)159.60180.20202.14208.49Dividend per Share (JPY)

5.0

6.0

7.0

7.0

20.2%

16.5%

16.3%

8.2%

Return on Equity(Note 1) Net Income per Share is calculated based on the average number of outstanding
shares, excluding treasury shares, during the period. Net Assets per Share is
calculated based on the number of outstanding shares, excluding treasury shares,
as of the end of the fiscal year.
(Note 2) Due to a change in accounting treatment from FY20/2, prior years have been
restated. For details, please see page 18 of the “Additional Accounting Notes for
the Twentieth Annual Shareholder Meeting.”

Net Income per Share (EPS)
(JPY)
33

29.66
25.86

31.14
28.12

22
16.89
11

0
FY16/2

FY17/2

FY18/231

FY19/2

FY20/2

Net Assets per Share

210

202.14(JPY)
208.49FY19/2

FY20/2180.20159.60140134.5470

0
FY16/2

FY17/2

FY18/2

Total Assets & Net Assets(JPY million)
360,000
300,000

Total Assets
Net Assets
251,448

273,455

296,501

319,343

333,726

240,000
180,000
120,000

72,166

83,44392,725

102,859

101,607

60,0000FY16/2

FY17/2

FY18/232

FY19/2

FY20/2

C. Company and Subsidiary Information(1) Controlling Parent Company
N/A – Ichigo does not have a controlling parent company.
(2) Important Subsidiaries
Percentage
Ownershipof Voting Rights

Name

CapitalMain Business

Ichigo Investment Advisors Co.,Ltd.

JPY 400 million

100%

Asset manager of Ichigo Office(8975), Ichigo Hotel (3463),
and Ichigo Green (9282)

Ichigo Estate Co., Ltd.

JPY 500 million

100%

Sustainable real estate

Ichigo ECO Energy Co., Ltd.

JPY 150 million

100%

Clean energy business focusing
on utility-scale solar and wind
power production, making
purposeful use of idle landnationwide

Ichigo Owners Co., Ltd.

JPY 110 million

100%Real estate investment services

Ichigo Land Shinchiku Co., Ltd.

JPY 50 million

100%

Sustainable real estate

Ichigo Real Estate Services
Fukuoka Co., Ltd.

JPY 101 million

100%Real estate business centeredon Fukuoka

Ichigo Marché Co., Ltd.

JPY 95 million

100%

Operates Matsudo Nanbu market
in Chiba Prefecture

Miyako City Co., Ltd.

JPY 50 million

100%

Operates Miyako City shopping
mall in Miyazaki Prefecture

Centro Co., Ltd.

JPY 30 million

100%

New real estate-related
businesses

Storage Plus Corp.

JPY 80 million

100%

High-grade self-storage

Ichigo Animation KK

JPY 400 million

100%Japanese anime studio & realestate-related content developer

Hakata Hotels Inc.

JPY 100 million

100%

Hotel operator(Note 1) Ichigo did not have any significant subsidiaries during FY20/2.
(Note 2) Centro established a wholly-owned subsidiary, Hakata Hotels, to expand thehotel operator business on March 11, 2019.
(Note 3) The newly-established Ichigo Animation became a consolidated subsidiary on
April 4, 2019.
(Note 4) Percentage Ownership of Voting Rights for Centro, Storage Plus, and Hakata
Hotels is calculated based on the number of shares held by Ichigo’s subsidiary.
(Note 5) The Ichigo Animation capital amount is the amount held by a tokumei kumiai
partnership.
33

D. Key Business Priorities
Ichigo’s immediate focus will be managing the expected negative impact of the Covid-19
pandemic on the real estate market, including decreased rental income due to departing tenants
and a drop in real estate value for hotels and other assets. Ichigo has adopted the lower of costor market accounting for real estate early, maintained a strong financial base, and maximized
cash management.
The revolution in IT and networks that has transformed industries globally has also reachedreal estate, creating opportunities for radical improvements in serving tenant needs. To
invest in the potentially enormous growth opportunities from this technological change anddrive significantly higher long-term growth for its shareholders, Ichigo has decided topursue Ichigo 2030, an 11-year vision that is significantly more transformative than a
traditional three-year mid-term business plan.
Ichigo 2030: Ichigo as a Sustainable Infrastructure Company
As a sustainable infrastructure company, Ichigo is growing and expanding its core real estateand clean energy capabilities into new areas. In doing so, Ichigo will generate new earnings
streams and opportunities to serve clients while seeking to create a more sustainable society.
a. Sustainable
We have entered an era when humanity must tread more lightly on our planet and learn to do
more with less. Ichigo already has an extensive track record in sustainable real estatethrough its business model of preserving and improving existing real estate, whichchallenges the wasteful cycle of demolition and redevelopment in Japanese real estate. With
Ichigo 2030, Ichigo will continue its long-standing commitment to sustainability whiledeveloping new technologies to extend the lives of key social infrastructure beyond 100
years. Sustainability is integral to the healthy development of people, society, and theenvironment.
b. Infrastructure
Ichigo has moved beyond the traditional view of real estate as simply physical buildings andland to one in which Ichigo more broadly provides key infrastructure that is fundamental topeople’s lives. Ichigo first expanded beyond real estate in 2012, when it began developing solar
power, offering sustainable energy to support a cleaner and safer Japan and world. Ichigo 2030
takes this strategy forward by expanding the scope of Ichigo’s real estate and clean energy
businesses into other types of infrastructure that contribute to creating richer, more fulfilling
lives for the people of Japan.
Ichigo is now working to merge the physical infrastructure of daily life – offices, homes,
hotels – with the networks and data-driven possibilities of the digital world in order to offer
more enriching experiences to its clients, tenants, and other stakeholders. While continuing
to grow Ichigo’s existing businesses, Ichigo is increasing investments in new technologies
and talent and developing new partnerships with other companies who share oursustainability vision.
Time Period
FY20/2 to FY30/2 (11 years)
KPIs
1. High Capital Productivity(a) FY20/2~FY30/2 Average ROE >15%
Although Ichigo’s growth investments in IT and new businesses will initially lower ROE,
Ichigo believes these investments will increase long-term ROE by driving higher capital
productivity and earnings stability. Ichigo is focused on growing long-term EPS as a key
driver of shareholder value.
34

(b) FY20/2~FY30/2 Continuous JPX-Nikkei 400 Index Inclusion
Ichigo is targeting continuous inclusion in the JPX-Nikkei 400 Index for the entire Ichigo
2030 period (11 years). The JPX-Nikkei 400 selects companies based on ROE, operating
profit, and market capitalization, resulting in an index that is comprised of companies withhigh capital productivity and profitability.
2. High Cash Flow Generation(a) FY20/2~FY30/2 Continuous Economic Operating Cash Flow* > Net Income
Ichigo’s robust cash flows fund both growth investments and shareholder returns, so
growing these cash flows is an important business priority. Ichigo is therefore setting a target
of its annual Economic Operating Cash Flow exceeding its annual Net Income for the entire
Ichigo 2030 period (11 years).
* Economic Operating Cash Flow = Cash Flows from Operations +/- any changes in Real
Estate and Power Plants for Sale
3. High Earnings Stability
FY30/2 Stock Earnings Ratio >60%
Ichigo is targeting increasing its Stock Earnings ratio from FY19/2’s 53% to 60% in
FY30/2. It is also working to increase and diversify its Flow Earnings in order to reduce theweighting of profits from Value-Add real estate sales, which can be sensitive to changes in
the real estate market. As a result, Ichigo expects to significantly increase both its earnings
and its earnings stability over the Ichigo 2030 period.
Shareholder Return Policy
Ichigo will work to drive long-term shareholder value with a shareholder return policy that
focuses on 1) dividend stability, transparency, and growth, and 2) flexible share buybacks.
1. Progressive Dividend Policy
Ichigo will continue its progressive dividend policy, originally adopted in FY17/2, in Ichigo
2030. Ichigo’s progressive dividend policy underscores its commitment to driving continued
organic earnings and dividend growth for shareholders. Under this policy, the previous
year’s dividend becomes the floor for the current year’s dividend. The dividend will beraised (or kept flat) but not cut, providing shareholders downside protection.
2. DOE >3%
In addition to its progressive dividend policy, Ichigo will continue its policy of a DOE(Dividend on Equity) payout ratio of greater than 3%. In contrast to a “dividend payout ratio
policy,” which calculates dividends based upon annual earnings which can be highly
volatile, a DOE policy pays dividends based upon far more stable shareholder equity. A
DOE policy thus results in more stable dividends for shareholders. Ichigo believes that the
combination of a progressive dividend and a DOE-based payout policy will significantly
increase the security, certainty, and visibility of its dividend to the benefit of Ichigo’s
shareholders.
3. Flexible Deployment of Share Buybacks
In addition to the above dividend policies, Ichigo is newly adopting a policy to flexibly
conduct share buybacks to optimize its capital structure and drive shareholder value.

35

E. Key Business Segments (as of February 29, 2020)
Ichigo’s biggest segment is Sustainable Real Estate, in which Ichigo preserves and improves
real estate. Ichigo receives rental income during the period it is carrying out its value-add,
along with profits on sale that reflect the real estate’s higher value after the value-add iscomplete.
In addition to its value-add activity with respect to mid-size offices, hotels, and retail andother assets, Ichigo develops and operates solar and wind power plants to supply clean
energy and bring productive use to idle land.
Ichigo’s Sustainable Real Estate Business Model
Sustainable Real Estate Business Model
Green
Infrastructure

Solar Plants
Buy

Ichigo Green(9282)

Sell

OfficeIchigo Office(8975)
Hotel

Value-Add
Real
不動産
EstateIchigo Hotel(3463)

Preserve &Improve

ThirdParty
Investors

Real
EstateSell

Buy

F. Employees (as of February 29, 2020)
1. Employees (Consolidated)
Number of employees

Increase/decrease fromprevious fiscal year-end

Asset Management
Sustainable Real Estate

246 (64)

80 (+57)

Clean Energy

16 (1)

3 (–)

Company-wide

61 (1)

9 (-1)

Total

323 (66)

92 (+56)

Segment(Note 1) The number of employees is the number of full-time employees (excluding
workers dispatched from Ichigo to other companies and including workers
dispatched from other companies to Ichigo), including Directors who are also
employees.
(Note 2) The average number of non-full-time employees (including part-time andtemporary staff) is presented in parentheses.
(Note 3) On a year-on-year basis the number of employees increased by 92 and thenumber of non-full-time employees increased by 56, primarily reflecting theaddition of employees from acquired companies.

362. Employees (Parent company only)
Number of
employees

Increase/decrease
from previous fiscal
year-end

Average age

Average years of
employment

110 (1)12 (-1)42.5 years old

5.7 years(Note 1) The number of employees is the number of full-time employees (excluding
workers dispatched from Ichigo to other companies and including workers
dispatched from other companies to Ichigo) including Directors who are also
employees.
(Note 2) The average number of non-full-time employees (including part-time andtemporary staff) is presented in parentheses.
(Note 3) On a year-on-year basis the number of employees increased by 12; however,this was mainly due to employees being moved from a subsidiary pursuant toa corporate reorganization and new hiring.
G. Principal Lenders (as of February 29, 2020)
Lenders

AmountSumitomo Mitsui Banking Corporation

JPY 43.4 billion

Mizuho Bank, Ltd.

JPY 37.9 billion

Kansai Mirai Banking Corporation

JPY 10.4 billion

The Nishi-Nippon City Bank, Ltd.

JPY 8.0 billion

The Tokyo Start Bank, Limited.

JPY 7.4 billion(Note) These amounts are for corporate loans and do not include non-recourse loans
with respect to assets that Ichigo manages (e.g., tokumei kumiai partnerships,
etc.)

37

H. Policy on Dividends and Shareholder Distributions
Ichigo views distributions to its shareholders as an important priority.
Ichigo’s Board of Directors adopted on April 19, 2016 a progressive dividend policy. This
policy underscores Ichigo’s commitment to driving continued organic earnings and dividend
growth for its shareholders. Under a progressive dividend policy, the previous year’s
dividend becomes the floor for the current year’s dividend. The dividend will be raised (orkept flat) but not cut, providing shareholders downside protection.
In addition to this progressive dividend policy, Ichigo has adopted a minimum DOE(dividend on equity) payout ratio of 3%. In contrast to an “earnings payout ratio policy,”
which pays dividends based upon more volatile annual earnings, a DOE policy that pays
dividends based upon more stable shareholder equity is by its very nature more stable.
Ichigo believes that the combination of a progressive dividend and a DOE-based payout
policy will significantly increase the security, certainty, and visibility of its dividend to thebenefit of Ichigo’s shareholders.
The FY20/2 dividend per share is JPY 7.
Dividend per Share

7

(JPY)

7.0

7.0

FY19/2

FY20/2

6.0

6
5.0

5
4
3

3.0

2
1
0
FY15/2

FY16/2

FY17/238

I. Other Material Matters
Ichigo’s Board of Directors decided to conduct a share buyback, pursuant to the provisionsof Articles 156 and 165 of the Company Law, at the Board of Directors meeting held on
July 11, 2019 and October 10, 2019. The details of the buyback are as follows:
1. Share Buyback Rationale
To grow value for Ichigo shareholders
2. Share Buyback Summary
July 2019 Share Buyback
Number of Shares
7,081,200
AmountJPY 2,999,996,200
Average Share Price JPY 424
Buyback Period
July 12, 2019 – November 1, 2019
Buyback Method
In-market purchases via trust bank
(Note) The share buyback period was extended to January 10, 2020 at the Board of
Directors meeting held on October 10, 2019.

39

II. Other Matters
A. Shares and Shareholder Information (as of February 29, 2020)
1. Number of Authorized Shares:
2. Total Number of Shares Issued:
3. Number of Shareholders:

1,500,000,000 shares
505,368,918 shares (including 23,637,400 treasury shares)
23,400

Top 10 Shareholders
Name

Shares Held

Shareholding Ratio

ICHIGO TRUST PTE. LTD. (Standing Proxy: The Hong
Kong and Shanghai Banking Corporation Limited, Tokyo
Branch)237,743,200

49.35%

MACQUARIE BANK LIMITED DBU AC(Standing Proxy: Citibank, N.A., Tokyo Branch)

22,653,000

4.70%

Morgan Stanley MUFG Securities Co., Ltd.

13,909,865

2.89%

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

13,219,000

2.74%

NORTHERN TRUST CO. (AVFC) RE YALE UNIVERSITY(Standing Proxy: The Hong Kong and Shanghai Banking
Corporation Limited, Tokyo Branch)

11,265,000

2.34%

SMBC Nikko Securities Inc.

8,526,200

1.77%Japan Trustee Services Bank, Ltd. (Trust Account)

8,459,300

1.76%

8,124,800

1.69%

7,501,372

1.56%

7,009,244

1.46%

338,410,981

70.25%MORGAN STANLEY SMITH BARNEY LLC CLIENTSFULLY PAID SEG ACCOUNT(Standing Proxy: Citibank, N.A., Tokyo Branch)
BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT
ACCOUNTS M LSCB RD(Standing Proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)
J.P. MORGAN BANK LUXEMBOURG S.A. 1300000(Standing Proxy: Mizuho Bank, Ltd.)TOTAL(Note 1) Shareholding Ratio is calculated excluding 23,637,400 treasury shares.
(Note 2) The Shareholding Ratio of Ichigo Trust Pte. Ltd., Ichigo’s largest shareholder,
increasedd during the period from 48.67% to 49.35% as a result of sharebuyback.
B. Employee Stock Options
Detailed disclosure of Employee Stock Options issued as a compensation for execution ofduties by officers and Directors are stated in the Additional Accounting Notes for the
Twentieth Annual Shareholder Meeting available on Ichigo’s corporate website:www.ichigo.gr.jp/en/ir/shareholders_info.html#agm

40

C. Directors and Officers
1. Directors (as of February 29, 2020)
Position

Name

Responsibility and Other Business Affiliations

Scott
CallonChairman & Representative Statutory Executive Officer
Chairman of the Board of Directors, Nominating Committee Member,Compensation Committee Member, Compliance Committee Member
Partner and Chief Executive Officer, Ichigo Asset Management, Ltd.
Independent Director, Chiyoda Co., Ltd.
Chairman & Statutory Executive Officer, Ichigo Investment Advisors Co.,Ltd.

TakumaHasegawa

President & Representative Statutory Executive Officer
Chairman of Nominating Committee, Compensation Committee, andCompliance Committee, Head of IT
Chairman & Director, Ichigo ECO Energy Co., Ltd.
Director, Cost Science Inc.

Director

MinoruIshihara

Executive Vice President & Statutory Executive Officer (Sustainable Real
Estate) & COO
Director, Ichigo Investment Advisors Co., Ltd.
Chairman, President, & Representative Director, Miyako City Co., Ltd.
Chairman & Representative Director, Ichigo Marché Co., Ltd.
President & Representative Director, Ichigo Real Estate Services Fukuoka
Co., Ltd.
Chairman & Representative Director, Hakata Hotels Inc.
President & Representative Director, Miyazaki Sunshine FM Co., Ltd.

Director

Eri
Murai

Executive Managing Director & Statutory Executive Officer(Administration & HR)

Independent
Director

TetsuyaFujita1

Chairman of Audit Committee, Nominating Committee Member,Compensation Committee Member, Compliance Committee Member
CEO & Representative Director, Creative Solutions Co., Ltd.

Independent
Director

NorikoKawate2

Independent
Director

Yukio
Suzuki3

Director

Director

Nominating Committee Member, Audit Committee Member, Compensation
Committee Member
President, CLEA Consulting Co., Ltd.
Partner, Cast Group
Vice Chairman of Compliance Committee, Audit Committee Member
CEO, Belle Investment Research of Japan Inc.
Independent Director, Systena Corporation
Independent Auditor, Wills Inc.
Independent Auditor, XNET Corporation

Independent
Director

Masatoshi
Matsuzaki4

Nominating Committee Member, Compensation Committee Member
Chairman of the Board of Directors, Konica Minolta Inc.
Executive Director & Deputy Chairman, Japan Association of Corporate
Directors
Independent Director, Nomura Research Institute, Ltd.
Independent Director, Nippon Sheet Glass Co. Ltd.
Member, Public Interest Supervisory Committee of PwC Aarata LLC
Independent Director, LIXIL Group Corporation

Independent
Director

Nobuhide
NakaidoExecutive Director, Japan Association for Chief Human Resources Officers
Independent Director, eSOL Co., Ltd.

41

1

Tetsuya Fujita, Chairman of the Audit Committee, has served as president of a major life
insurance and a major property insurance company, in addition to having served asinternal audit officer at a major life insurance company, and is certified as an internal
auditor. He thus has extensive knowledge of internal auditing.
2
Audit Committee Member Noriko Kawate is a Certified Public Accountant as well as a
Certified Tax Accountant and thus has extensive knowledge of the finance and accounting
fields.
3
Audit Committee Member Yukio Suzuki has served important roles at financial conpanies
and thus has extensive experience and knowledge of corporate and securities research.
4
Ichigo has registered all of the Independent Directors with the Tokyo Stock Exchange as
meeting the Tokyo Stock Exchange’s qualifications for Independent Directors.
(Note) Ichigo has assigned officers and employees to assist the Audit Committee to fulfill its
duties. Independent from other officers and employees, they proactively collectinformation and work closely with the Audit Committee members on a daily basis,and thus the effectiveness of auditing by the Audit Committee is ensured. Since suchcondition is maintained, Ichigo does not appoint a full-time Audit Committee
member.

42

2. Statutory Executive Officers (as of February 29, 2020)
Position

Name

Responsibility and Other Business Affiliations

Chairman & Representative
Statutory Executive Officer

Scott Callon

Overall Group Management
Chairman & Statutory Executive Officer,
Ichigo Investment Advisors Co., Ltd.
Partner & Chief Executive Officer, Ichigo
Asset Management, Ltd.

Chairman & Representative
Statutory Executive Officer

Kenji Iwasaki

Overall Group Management
Chairman & Director, Ichigo Land Shinchiku
Co., Ltd.

Takuma Hasegawa

Overall Group Management
Chairman & Director, Ichigo ECO EnergyCo., Ltd.
Director, Cost Science Inc.

Executive Vice President &Statutory Executive Officer &COO

Minoru Ishihara

Chairman, President, & Representative
Director, Ichigo Investment Advisors Co., Ltd.
Chairman, President, & Representative
Director, Miyako City Co., Ltd.
Chairman & Representative Director, Ichigo
Marché Co., Ltd.
President & Representative Director, Ichigo
Real Estate Services Fukuoka Co., Ltd.
Chairman & Representative Director, Hakata
Hotels Inc.
President & Representative Director, Miyazaki
Sunshine FM Co., Ltd.

Executive Managing Director

Eri MuraiHR

Go Watanabe

Finance
President & Representative Director, Centro
Co., Ltd.
Chairman & Director, Storage Plus Corp.

Executive Managing Director

Takeyuki Yoshimatsu

Business Management
Executive Vice President, Ichigo Investment
Advisors Co., Ltd.

Statutory Executive Officer

Katsuhiko Hattori

Engineering

Statutory Executive Officer

Akihiko Tsukasa

Osaka Branch

Statutory Executive Officer

Kenichi Tanaka

Business Development

Statutory Executive Officer

Yasutoyo Senda

Audit

Statutory Executive Officer

Takanori Sakamatsu

Accounting & Business Planning

Statutory Executive Officer

Kazunori Kurita

Engineering, Design, Facility Management
President & Representative Director, Ichigo
Marché Co., Ltd.

Statutory Executive Officer

Takashi Ohigawa

Real Estate Strategic Planning

President & Representative
Statutory Executive Officer

Executive Managing Director43

3. Directors and Statutory Executive Officers Who Stepped Down during the Current
Fiscal Year
N/A (none other than those whose terms expired).
4. Outline of Limited Liability Agreement with Independent Directors
In order to retain Independent Directors of high quality, Ichigo has signed limited liability
agreements with its Independent Directors pursuant to Article 427, Paragraph 1 of theCompany Law.
The extent of liability for compensation under the agreements is the minimum limited
liability amount as defined in Article 425, Paragraph 1 of the Company Law; provided thatthe liability is limited only when the Independent Directors have performed their duties ingood faith and without gross negligence.
5. Total Remuneration Paid to Directors and Statutory Executive Officers
Number of Recipients

Amount Paid

Directors(of whom are Independent Directors)

9(6)

JPY 301 million(JPY 56 million)

Statutory Executive Officers

11

JPY 164 million

Total(of whom are Independent Directors)

20(6)

JPY 465 million(JPY 56 million)(Note 1) As of the end of the period, there are nine Directors (including five Independent
Directors) and 14 Statutory Executive Officers (four of whom are also Directors),
resulting in a total of 19 officers. Since those who are both a Statutory Executive
Officer and a Director do not receive Statutory Executive Officer’s remuneration,
the total amount and number of recipients are shown in the row of Directors andnot in the row of Statutory Executive Officers.
(Note 2) There is one Director that receives no remuneration from Ichigo.
(Note 3) The total of 21 Directors and Statutory Executive Officers, which is the sum of the
20 aforementioned Directors and Statutory Executive Officers plus the one nonremunerated Director, differs from the total of 19 Directors and Statutory
Executive Officers as of the end of the period, because one Statutory Executive
Officer stepped down and one Statutory Executive Officer was promoted to
Director during FY20/2.
(Note 4) The amount paid includes remuneration in the form of stock options of JPY 37
million for Directors (of which JPY 9 million is for Independent Directors) and
JPY 16 million for Statutory Executive Officers.
(Note 5) In addition, Ichigo paid JPY 121 million as employee compensation to seven
Statutory Executive Officers who also serve as employees. This amount includes
remuneration in the form of stock options of JPY 12 million.
(Note 6) No remuneration has been paid by Ichigo subsidiaries to Ichigo’s Independent
Directors.

44

6. Policy on Determining Remuneration for Directors and Statutory Executive Officers
a. Basic Policy
Remuneration for Directors and Statutory Executive Officers of Ichigo is determinedbased on factors including the duties of each individual, contribution to Ichigo, basecompensation, and relevant work experience.
b. Specific Policies– Remuneration for Directors
Remuneration for Directors consists of a monthly base salary and a performance-based
bonus. The monthly base salary is a fixed amount based on the role andresponsibilities of each Director, while the performance-based bonus is based on
Ichigo’s performance.
– Remuneration for Statutory Executive Officers
Remuneration for Statutory Executive Officers consists of a monthly base salary and aperformance-based bonus. The monthly base salary is a fixed amount based on the roleand responsibilities of each Statutory Executive Officer, whereas the performancebased bonus is based on the performance of Ichigo, the performance of the division forwhich the Statutory Executive Officer is responsible, and the performance of the
Statutory Executive Officer.
– Employee Stock Options
Stock options are granted to Directors and Statutory Executive Officers (and all Ichigo
employees) to increase alignment in growing value for shareholders. These stock
options are granted in addition to the remuneration described above.
7. External Positions Held by Independent Directors
a. Positions in Other Companies and the Relationship between Ichigo and these Other
Companies– Independent Director Tetsuya Fujita is CEO of Creative Solutions Co., Ltd. Ichigo
has no relationship with Creative Solutions Co., Ltd.
– Independent Director Noriko Kawate is President of CLEA Consulting Co., Ltd. anda Partner of Cast Group. Ichigo has no relationship with CLEA Consulting Co., Ltd.
or Cast Group.
– Independent Director Yukio Suzuki is CEO of Belle Investment Research of Japan
Inc. Ichigo has no relationship with Belle Investment Research of Japan Inc.
b. Positions as Independent Directors in Other Companies– Independent Director Yukio Suzuki is an Independent Director of Systena
Corporation, an Independent Auditor of WILLs Inc., and an Independent Auditor of
XNET Corporation. Ichigo has no relationship with Systena Corporation, WILLs
Inc., or XNET Corporation.
– Independent Director Masatoshi Matsuzaki is the Chairman of the Board of Directorsof Konica Minolta Inc., Executive Director and Deputy Chairman of the Japan
Association of Corporate Directors, an Independent Director of Nomura ResearchInstitute, Ltd. and Nippon Sheet Glass Co. Ltd., a Member of the Public Interest
Supervisory Committee of PwC Aarata LLC, and an Independent Director of LIXILGroup Corporation. Ichigo has no relationship with any of these companies.
45

– Independent Director Nobuhide Nakaido is an Executive Director of Japan
Association for Chief Human Resources Officer and an Independent Director ofeSOL Co., Ltd. Ichigo has no relationship with any of these companies.
c. Relationship with Ichigo or Related Entities of Ichigo
The five Independent Directors have no spouse or relatives in the third degree orcloser who are Statutory Executive Officers of Ichigo or related entities.

46

d. Independent Director Activities in the Current Fiscal Year
Name

Independent
Director

Tetsuya Fujita

Independent
Director

Noriko Kawate

Independent
Director

Yukio Suzuki

Independent
Director

Masatoshi Matsuzaki

Independent
Director

Nobuhide Nakaido

Activities
Attended 10 out of 10 meetings (100%) of the Board of
Directors. Attended 19 out of 19 meetings (100%) of the Audit
Committee and attended 2 out of 2 meetings (100%) of theCompliance Committee. Attended 5 out of 5 meetings (100%) of
the Nominating Committee and 5 out of 5 meetings (100%) of
the Compensation Committee since becoming a member.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.
Attended 10 out of 10 meetings (100%) of the Board of
Directors. Attended 19 out of 19 meetings (100%) of the Audit
Committee. Attended 5 out of 5 meetings (100%) of theNominating Committee and 5 out of 5 meetings (100%) of theCompensation Committee since becoming a member.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.
Attended 10 out of 10 meetings (100%) of the Board of
Directors. Attended 19 out of 19 meetings (100%) of the Audit
Committee and attended 2 out of 2 meetings (100%) of theCompliance Committee. Commented and advised on resolutions
and discussions from an objective standpoint independent fromthe management team.
Attended 10 out of 10 meetings (100%) of the Board of
Directors. Attended 5 out of 5 meetings (100%) of theNominating Committee. Attended 5 out of 5 meetings (100%) of
the Compensation Committee. Commented and advised on
resolutions and discussions from an objective standpoint
independent from the management team.
Attended 10 out of 10 meetings (100%) of the Board of Directors
since becoming a Director. Commented and advised on
resolutions and discussions from an objective standpoint
independent from the management team.

47

D. Independent Auditor
1. Grant Thornton Taiyo LLC
2. Fees Paid to the Independent Auditor(i)Fees paid to the Independent Auditor during FY20/2
Fees for the services specified in Article 2, Paragraph 1 of theCertified Public Accountants Act (Act No. 103 of 1948)

JPY 70 million

Fees for the services other than those specified in Article 2,
Paragraph 1 of the Certified Public Accountants Act–
JPY 70 million(ii) Total monetary and other financial benefits payable by Ichigo andsubsidiaries to the Independent Auditor

JPY 85 million(Note 1) Pursuant to Article 399, Paragraph 1 of the Company Law and based on the“Auditor Evaluation & Selection Standards” and “Auditor Selection &Compensation Agreement Processes” set forth by Ichigo’s Audit Committee,
Ichigo’s Audit Committee concurs with the Independent Auditor’s fees after athorough confirmation and consideration of the content of the Independent
Auditor’s audit plan, execution of work, audit fee trends, and the Independent
Auditor’s calculation of its fee estimates.
(Note 2) Pursuant to both the Company Law and the Financial Instruments and Exchange
Law, the audit agreement between Ichigo and the Independent Auditor does notcall for itemizing the audit fee breakdown, and, thus as a practical matter, Ichigo is
not able to itemize the fees. Therefore, the fees paid to the Independent Auditor
show the total amount.
3. Policy for the Determination of Dismissal or Non-Reappointment of the Independent
Auditor
The Audit Committee has stipulated a Policy for the dismissal or non-reappointment of
the Independent Auditor based on the “Auditor Evaluation & Selection Standards” and“Auditor Selection & Compensation Agreement Processes” set forth by Ichigo’s Audit
Committee. The Policy is as below:(a) The term of the Independent Auditor is one year, as specified in a one-year audit
contract.
(b) The reappointment of the Independent Auditor will be decided at the Audit Committee.
(c) 1. The selection, dismissal, or the non-reappointment of the Independent Auditor will
be decided at the Annual Shareholder Meeting. The Audit Committee makes thedecision to place this on the shareholding meeting agenda.
2. In the event Ichigo decides to dismiss or not reappoint an Independent Auditor at
Ichigo’s discretion or for the breach of laws and regulations such as the Company
Law or the Certified Public Accountants Law, or the breach of the contract ofengagement, the dismissal or the non-reappointment will be deliberated by the Audit
Committee with reference to the views of the Directors and Statutory Executive
Officers.

48

3. In the event the dismissal or the non-reappointment of the Independent Auditor is
to become the agenda of the shareholder meeting, the details of the agenda item will
be determined by the Audit Committee.
4. In the event the Independent Auditor contravenes his/her duty as an Auditor or if
proper duty as an Auditor stipulated in Article 340, Paragraph 1 of the Company Law
is deemed difficult, the Audit Committee may dismiss the Independent Auditor uponconsent of all Audit Committee members.
E. Controls to Ensure Appropriate Business Conduct
Detailed disclosure of Controls to Ensure Appropriate Business Conduct is included in the
Additional Accounting Notes for the Twentieth Annual Shareholder Meeting available on
Ichigo’s corporate website:www.ichigo.gr.jp/en/ir/shareholders_info.html#agm
1. Internal Controls to Ensure that Statutory Executive Officers and Employees Execute
Their Duties in Full Compliance with Japanese Law and Ichigo’s Articles ofIncorporation
2. Systems to Ensure Proper Storage and Management of Information Required for
Execution of Duty by Statutory Executive Officers
3. Risk Management Policies and Systems
4. Systems to Ensure Effective Execution of Duties by Statutory Executive Officers (5. Audit Committee and Audit Systems
6. Systems to Ensure Fully Appropriate Business Activities by Ichigo and its
Subsidiaries
Reference: Establishment and Status of Internal Structures to Prevent Dealings with
Anti-Social Forces
F. Policy on Corporate Control (Takeover Defenses)
Ichigo has not adopted any takeover defense, poison pill, or any other policy with respect
to entities or persons who would seek to control decisions with respect to Ichigo’s
financial and business policies.

49Consolidated Balance Sheet(As of February 29, 2020)(JPY million)

Item
AssetsAmountCurrent Assets
Cash and deposits
Trade notes and accounts receivable
Operational loan investments

117,608
41,0672,308
1,324

Operational securities investments

902

Real estate for sale
Other
Less: allowance for doubtful
accounts
Fixed Assets
Property, Plant, and Equipment
Buildings and structures
Depreciation
Buildings and structures (net)
Solar power plant equipment
Depreciation
Solar power plant equipment (net)Land
Buildings under construction
Solar power plants underconstruction
Other
Depreciation
Other (net)
Intangible Assets
Goodwill
Leasehold rights
Other
Investments and Other Assets

68,290
3,721

Securities investments-6
216,118
206,198
60,131-5,08055,05026,713-3,28723,425
122,114
2,432
1,844
-727
1,116
2,482
1,090
687
705
7,436
4,321
510

Deferred tax assets

568

Total Assets

Other current liabilities

Amount24,2803,086
274
12,277
1,178
2,416
33
5,013

Long-Term Liabilities
Bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Other long-term liabilities

207,838
6,082
151,483
39,156
1,890
8,118
1,107

Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Earnings reserve
Treasury shares
Accumulated Other Comprehensive
IncomeValuation gains (losses) on othersecurities
Deferred gains (losses) on
long-term interest rate hedges
Stock Options

232,119

2,058

Long-term loans receivable

Other
Less: allowance for doubtful
accounts

Item
Liabilities
Current Liabilities
Short-term loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans(due within one year)
Income taxes payable
Accrued bonuses

2,128
-91
333,726

Minority Interests
Total Net Assets
Total Liabilities and Net Assets

50

100,674
26,885
11,272
71,505-8,988
-239
158
-397
988
184
101,607
333,726

Consolidated Income Statement(March 1, 2019 – February 29, 2020)(JPY million)

Item

AmountRevenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Profit
Interest income
Dividend income
Insurance income
Other
Non-Operating Expenses
Interest expense
Mark-to-market loss on long-term interest rate
hedgesDebt financing-related fees
Other
Recurring Profit
Extraordinary Gains
Gains on sale of securities investments
Gains on sale of subsidiary shares
Other
Extraordinary Losses
Loss on disposal of fixed assets
Covid-19 writedown of real estate for sale
Covid-19 writedown of securities investments
Covid-19 writedown of goodwill
Pre-Tax Net Income
Income taxes – current
Income taxes – deferred
Pre-Minority Interest Net Income
Net Income Attributable to Minority Interests
Net Income

51

87,36052,851
34,5096,787
27,721
8
78
35
27

150

2,293
336
538
307
11
169
35
27
7,487
229
319
7,990
-584

3,476
24,395215

8,065
16,545
7,406
9,139
938
8,201

Consolidated Statement of Changes in Shareholders’ Equity(March 1, 2019 – February 29, 2020)(JPY million)
Shareholders’ Equity
CapitalReserve

CapitalBalance as of March 1, 2019
Changes in the Current
Fiscal Year
Share Issuance
Dividend Payment
Net Income
Change in Consolidated
Subsidiaries
Share Buyback
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as ofFebruary 29, 2020

Balance as of March 1, 2019
Changes in the Current
Fiscal Year
Share Issuance
Dividend Payment
Net Income
Change in Consolidated
Subsidiaries
Share Buyback
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as ofFebruary 29, 2020

66,730

Total
Shareholders’Equity-5,98898,769-3,4198,201

129-3,419
8,201

-7

-7

Retained
Earnings

26,820

11,20764

64–

Treasury
Shares-2,999-2,999

64

64

4,774

-2,9991,904

26,885

11,272

71,505-8,988100,674

Other Comprehensive Income
Deferred Gains
Stock
Total Other
Valuation Gains (Losses) on(Losses) on
Long-Term Comprehensive Options
IncomeOther Securities Interest Rate
Hedges

-408

386

-21

827

Minority Total Net
Interests Assets
3,283

102,859
129-3,4198,201-7-2,999

-228

10

-217

160

-3,098-3,156

-288

10

-217

160

-3,098-1,251

158

-397

-239

988

184

101,60752

Parent Balance Sheet(As of February 29, 2020)(JPY million)

Item
AssetsAmountCurrent Assets
Cash and deposits
Accounts receivable
Operational securities investments
Short-term loans to affiliates
Advance payments
Accounts receivable – otherAccounts receivable due toconsolidated taxation
Other
Less: allowance for doubtful
accounts
Fixed Assets
Property, Plant, and Equipment
Buildings and structures

61,413
20,254324
902
38,027132593

Depreciation
Buildings and structures (net)
Land
Other
Depreciation
Other (net)
Intangible Assets
Software
Other
Investments and Other Assets
Securities investments
Securities investments inaffiliates
Affiliate bonds
Securities investments in affiliates –otherLong-term loans receivable
Long-term loans to affiliates
Deferred tax assets – other
Other Less: allowance for doubtful
accounts
Less: allowance for doubtful
accounts
Total Assets

Item
Liabilities
Current Liabilities
Short-term loans
Bonds (due within one year)
Long-term loans (due within one year)
Accounts payable
Accrued expenses
Income taxes payable

Amount10,731
1,620
112
5,269
1,288
76
2,067

548

Advances received

62

630

Deposits received

39

Other

195

–
85,156
6,386
2,575
-336
2,209
4,146
83
-52
31
526
502
23
78,242
2,087

Long-Term Liabilities
Bonds
Long-term loans
Long-term security deposits received
Other long-term liabilities
Other long-term liabilities

49,593
3,296
45,777

Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Capital reserve – other
Retained earnings

60,32484
435

85,566
26,885
11,270
11,201
68
56,398

6,321

Earnings reserve

1,700

Earnings reserve – other

56,354

44,118Retained earnings carried forward

56,354

10
23,290Treasury shares
Revaluations and Adjustments
Valuation gains (losses) on othersecurities
Deferred gains (losses) on
long-term interest rate hedges-8,988
-308

379
419
-85
146,570

Stock Options
Total Net Assets
Total Liabilities and Net Assets

53

44

81
-389
988
86,246
146,570

Parent Income Statement(March 1, 2019 – February 29, 2020)(JPY million)

Item
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Profit
Interest income
Dividend income
Credit guarantees income
Other
Non-Operating Expenses
Interest expense
Debt financing-related fees
Mark-to-market loss on long-term interest rate
hedgesOther
Recurring Profit
Extraordinary Gains
Gains on sale of securities investments
Gains on sale of subsidiary shares
Extraordinary Losses
Covid-19 writedown of real estate for sale
Covid-19 writedown of securities investments
Other
Pre-Tax Net Income
Income taxes – current
Income taxes – deferred
Net Income

54

Amount21,895783
21,112
3,761
17,351
530
71
17
12

632

521
332
218
298
11
138
2,040
200
19
5,587
-510

1,370
16,612149

2,260
14,502
5,077
9,424

Parent Statement of Changes in Shareholders’ Equity(March 1, 2019 – February 29, 2020)(JPY million)
Shareholders’ Equity
Capital Surplus

CapitalBalance as ofMarch 1, 2019
Changes in the Current
Fiscal Year
Share Issuance
Dividend Payments
Share Buyback
Net Income
Changes in Items
other thanShareholders’ Equity
Total Changes
Balance as ofFebruary 29, 2020

Total
TreasuryShareholders’SharesEquityRetained Earnings
Other
Retained
Earnings

Total
Other Total Earnings
Capital Capital
Retained
CapitalReserve Surplus Surplus Reserve Carried Earnings
Forward/Retained
Earnings

26,820 11,136

64

64

64

64

26,885 11,201

Balance as of March 1, 2019
Changes in the Current Fiscal Year
Share Issuance
Dividend Payments
Share Buyback
Net Income
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as of February 29, 2020

68 11,205

44

64

50,34950,393-3,419-3,419

9,424

9,424

-5,988-2,99982,431129-3,419-2,999
9,424

64

－

6,005

6,005

-2,9993,135

68 11,270

44

56,35456,398-8,98885,566－

Revaluation and Adjustment
Deferred Gains
Valuation
Total
Stock
Total Net
(losses) on
Gains (losses) Long-Term
Revaluation Options
Assetson OtherandInterest
Rate
Securities
Adjustment
Hedges
312
-389
-77
827
83,181129-3,419-2,999
9,424
-230

－

-230

160

-70

-230
81

－
-389

-230
-308

160
988

3,064
86,24655

Auditor’s Report on the Consolidated Financial Statements
Report of Independent Auditor
April 14, 2020
To the Board of Directors of Ichigo Inc.
Grant Thornton Taiyo LLC
Hiroaki Ohkane, CPA, Designated and Engagement Partner(seal)

Kenta Nishimura, CPA, Designated and Engagement Partner (seal)
We have audited the consolidated financial statements of Ichigo Inc., namely the consolidated balance sheet, theconsolidated income statement, the consolidated statement of changes in shareholders’ equity and the notes toconsolidated financial statements, for the fiscal year from March 1, 2019 to February 29, 2020 pursuant to
Article 444, Paragraph 4 of the Company Law.
Management’s Responsibility with respect to the Financial Statements
Management is responsible for compiling and indicating the consolidated financial statements in accordance withthe generally accepted accounting principles of Japan. This includes the operation and maintenance of an internal
compliance structure which management deems necessary to ensure that the consolidated financial statements
are compiled and indicated free of material misstatement in the form of fraud or error.
Auditor’s Responsibility
The responsibility of the Auditor is to perform an independent audit and declare an opinion with respect to theconsolidated financial statements. We conducted our audit in accordance with auditing standards generally
accepted in Japan. Those standards require that we obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement.
We conducted our audit by carrying out auditing procedures on amounts in the consolidated financial statements
and information we received from the Company. These procedures included sampling and testing based on ourassessment of the potential risk of material misstatement in the form of fraud or error. Although our intent is not
to express an opinion regarding the appropriateness of the internal compliance structure, we did assess operationof the internal compliance structure to the extent it affects the accuracy of the consolidated financial statements.
This included an overall assessment of the consolidated financial statements and any assumptions made bymanagement with respect to the Company’s accounting policies or their application, and any estimates indicatedin the consolidated financial statements.
We believe we received sufficient and appropriate information to have a reasonable basis to express our opinion.
Auditing Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of the Ichigo Group consisting of Ichigo Inc. and its consolidated subsidiaries for the period forthe consolidated financial statements in conformity with accounting principles generally accepted in Japan.
Matter of Note
The Company has reclassified some of its Real Estate for Sale assets to Fixed Assets as stated in the notes to theconsolidated financial statements (Reclassification of Certain Real Estate for Sale Assets to Fixed Assets). This
reclassification has not affected our opinion.
Potential Conflicts of Interest
There are no interests to be specified pursuant to the provisions of the Certified Public Accountant Law between
the Company and us or the engagement partner.

56

Auditor’s Report on the Parent Financial Statements
Report of Independent Auditor
April 14, 2020
To the Board of Directors of Ichigo Inc.
Grant Thornton Taiyo LLC
Hiroaki Ohkane, CPA, Designated and Engagement Partner(seal)

Kenta Nishimura, CPA, Designated and Engagement Partner (seal)
We have audited the Twentieth Period financial statements of Ichigo Inc., namely the balance sheet, the income
statement, the statement of changes in shareholders’ equity, and the notes to the financial statements andschedules, for the fiscal year from March 1, 2019 to February 29, 2020 pursuant to Article 436, Paragraph 2,
Item 1 of the Company Law.
Management’s Responsibility with respect to the Financial Statements
Management is responsible for compiling and indicating the financial statements and notes and schedules thereto
in accordance with the generally accepted accounting principles of Japan. This includes the operation andmaintenance of an internal compliance structure which management deems necessary to ensure that the financial
statements and notes and schedules are compiled and indicated free of material misstatement in the form of fraud
or error.
Auditor’s Responsibility
The responsibility of the Auditor is to perform an independent audit and declare an opinion with respect to thefinancial statements and the notes and schedules. We conducted our audit in accordance with the auditing
standards generally accepted in Japan. Those standards require that we obtain reasonable assurance about
whether the financial statements and schedules are free of material misstatement.
We conducted our audit by carrying out auditing procedures on amounts in the financial statements and notes andschedules and information we received from the Company. These procedures included sampling and testing
based on our assessment of the potential risk of material misstatement in the form of fraud or error. Although ourintent is not to express an opinion regarding the appropriateness of the internal compliance structure, we didassess operation of the internal compliance structure to the extent it affects the accuracy of the financial
statements and notes and schedules. This included an overall assessment of the consolidated financial statements
and notes and schedules and any assumptions made by management with respect to the Company’s accounting
policies or their application, and any estimates indicated in the financial statements and notes and schedules.
We believe we received sufficient and appropriate information to have a reasonable basis to express our opinion.
Auditing Opinion
In our opinion, the financial statements and schedules referred to above present fairly, in all material respects, thefinancial position of Ichigo Inc. for the period for the financial statements and schedules in conformity withaccounting principles generally accepted in Japan.
Potential Conflicts of Interest
There are no interests to be specified pursuant to the provisions of the Certified Public Accountant Law between
the Company and us or the engagement partner.

57

Audit Committee Report

April 16, 2020
Audit Committee, Ichigo Inc.
Tetsuya Fujita, Audit Committee Member (seal)
Noriko Kawate, Audit Committee Member (seal)
Yukio Suzuki, Audit Committee Member (seal)
The Audit Committee has audited the execution of the duties of the Directors and Statutory Executive Officers
during the twentieth fiscal year from March 1, 2019 to February 29, 2020. We report the method and results ofthis audit as follows:
1. Method and Description of Audit
The Audit Committee has received regular reports and has made requests for explanations as necessary fromthe Directors, Statutory Executive Officers, and employees of Ichigo regarding the details of resolutions by the
Board of Directors with respect to Article 416, Paragraph 1, Item 1, b and e of the Company Law and thesystem established under the resolutions (internal control system) and in accordance with audit policy andduties prescribed by the Audit Committee. In cooperation with the Internal Audit Department and otherinternal control related divisions of Ichigo, the Audit Committee has investigated the process and details ofdecision-making at important meetings, the details of principal-approved documents and other material
documents relating to the execution of business, the execution of duties by Statutory Executive Officers andemployees and reviewed Ichigo’s business and assets. With respect to subsidiaries, we have communicatedand exchanged information with Directors and auditors of subsidiaries and received business reports fromsubsidiaries as necessary.
In addition, we have supervised and verified that the Independent Auditor was independent and conducting anappropriate audit and received reports on the execution of duties from the Independent Auditor and requested
explanations as necessary. We have also received a report from the Independent Auditor that the structure toensure appropriate performance of duties (matters described in Article 131, each Item of the Company
Calculation Rules) has been established pursuant to laws and regulations including the Standards for Quality
Control of Audits (issued by Business Accounting Council on October 28, 2005) and that management
structures have been properly established within the audit firm.
By these methods, we have reviewed Ichigo’s own business report, financial statements (balance sheet,income statement, statement of changes in shareholders’ equity and notes) and their schedules, along with
Ichigo’s consolidated financial statements (including the consolidated balance sheet, consolidated income
statement, consolidated statement of changes in shareholders’ equity and consolidated notes).
2. Results of Audit
A. Audit Results of Business Report(1) We note that the business report and its schedules present Ichigo’s status correctly pursuant to all laws
and regulations and the Articles of Incorporation.
(2) We note that there has been no misconduct with respect to the execution of duties by Directors andStatutory Executive Officers, nor have we discovered any material facts which violate laws andregulations or the Articles of Incorporation.
(3) We note that the details of the resolution by the Board of Directors with respect to the internal control
system are reasonable. Also, there is nothing material to be pointed out with respect to the execution ofduties on the internal control system by Statutory Executive Officers.

58

B. Audit Results of Financial Statements and their Schedules
We note that the method and results of the audit conducted by the Independent Auditor, Grant Thornton
Taiyo LLC, were reasonable.
C. Audit Results of Consolidated Financial Statements
We note that the method and results of the audit conducted by the Independent Auditor, Grant Thornton
Taiyo LLC, were reasonable.
(Note) All members of the Audit Committee are Independent Directors as provided in Article 2, Item 15 andArticle 400, Paragraph 3 of the Company Law.

59