Make The World
More Sustainable

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

Materials for the Twenty-First Annual Shareholder Meeting

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 7, 2021
Ichigo Inc. (Tokyo Stock Exchange First Section, 2337)
Representative: Scott Callon, Chairman

Materials for the Twenty-First Annual Shareholder Meeting
Dear Shareholders:
We would like to express our deepest condolences to all those affected by the Covid
pandemic globally, and our wishes for the earliest and fullest possible recovery.
We are pleased to invite you to attend the Twenty-First Annual Shareholder Meeting of Ichigo
Inc. (“Ichigo”).
We will take all necessary Covid precautions at the Annual Shareholder Meeting, and you
may also exercise your voting rights via postal mail or the Internet. We would appreciate it if
you could please review these shareholder meeting materials and cast your vote by returning
your voting form or by accessing our voting website (https://soukai.mizuho-tb.co.jp/) no later
than Friday, May 21, 2021, 6:15 p.m. JST.
1. Date and Time

Sunday, May 23, 2021 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 Twenty-First Period (March 1, 2020 – February 28, 2021)
b. Ichigo’s parent financial statements for the Twenty-First 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 Ichigo’s 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 21,
2021. 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 21, 2021.

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 Twenty-First Annual Shareholder Meeting

1

Reference Materials for the Twenty-First Annual Shareholder Meeting
Election of Nine Directors

4

Business Report
I. Current Operations and Financials
A. Business Conditions in the Current Fiscal Year (FY21/2)
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)

21
33
35
36
38
38
39
40
41
42
42
43
50
50
51

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

52
53
54

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

55
56
57

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

58
59
60

3

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

Board Meeting
Attendance

Chairman of the Board of Directors
Nominating Committee Member
Compensation Committee Member
Compliance Committee Member
Chairman & Representative Statutory
Executive Officer

100%(9 of 9 Total)

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

100%(9 of 9 Total)

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

100%
(9 of 9 Total)

Executive Managing Director & Statutory
Executive Officer (HR)100%
(9 of 9 Total)

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

100%(9 of 9 Total)

Independent Director
Nominating Committee Member
Audit Committee Member
Compensation Committee Member

100%(9 of 9 Total)

Independent Director
Audit Committee Member
Vice Chairman of Compliance Committee

100%(9 of 9 Total)

Independent Director
Nominating Committee Member
Compensation Committee Member

100%(9 of 9 Total)

Independent Director

100%(9 of 9 Total)

Nobuhide Nakaido
9

Reappointment –Independent Director

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

1

Scott Callon(December 6, 1964)

May 2012

July 2012

May 2015
September 2015
May 2016
October 2016
July 2017
May 2019
March 2020
June 2020
August 2020
January 2021

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.
Independent Director, Fujitsu Limited (current)
Chairman, Representative Executive Officer, &Director, Japan Display Inc. (current)
CEO, Japan Display Inc. (current)

5

IchigoShares
Held

N/A

No.

Name
(Date of Birth)(continued fromprevious page)

Career History

IchigoSharesHeld(Other Positions)
Partner & Chief Executive Officer, Ichigo Asset Management, Ltd.
Chairman, CEO, and Representative Executive Officer, Japan
Display, Inc.
Independent Director, Fujitsu Limited
Message to Our Shareholders

1

I offer my deepest condolences and wishes for the earliest and fullest
possible recovery to all those affected by the Covid pandemic
globally.
This is your company. We have a responsibility to build a better
company and a better society for the generation that comes after us.
As a sustainable infrastructure company, all of us at Ichigo arecommitted to working to solve fundamental social problems,
contributing to a sustainable society, and growing long-term value forour shareholders.

6

N/A

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
October 2016
Takuma Hasegawa(January 29, 1971) March 2018
October 2019
July 2020

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)
Chairman & Director, Ichigo Land Shinchiku
Co., Ltd.

(Other Positions)
Chairman & Director, Ichigo ECO Energy Co., Ltd.
Director, Cost Science Inc.
Message to Our Shareholders
Ichigo is working as a sustainable infrastructure company to solve
social problems and create a more sustainable society. To this end, I
believe it is crucial for all our employees to address environmental
changes, listen to its customers, and take on new challenges.
Together with our employees, I will dedicate all of my strength togrow Ichigo as a company that meets shareholder expectations.
Thank you for your continued support.

7

IchigoSharesHeld495,538
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

IchigoSharesHeld105,608
sharesNo.

Name(Date of Birth)

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

June 2019
April 2021

3Group 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)
Statutory Executive Officer (Sustainable
Infrastructure) (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
I believe Ichigo’s strength lies in its direct relationships with clients
across different industries and its expertise built on extensive valueadd experience. Our mission is to create sustainable infrastructure
via integrating this strength with technology, including rent-worthy
office spaces, attractive experiences and services, a favorite home ina favorite city, and public facilities reflecting community feedback
collected via open platforms. I will supervise our businesses andexecute my responsibilities to ensure safety and security for all andenrich people’s daily lives. I will continue to work toward meetingthe expectations of our shareholders, and appreciate your guidanceand 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

March 2017
May 2019
March 2020

4

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)

Eri Murai(May 16, 1970)
Message to Our Shareholders
The changes during the last year had a significant impact on oursociety and individual values. When it comes to the work
environment, Ichigo have faced needs to respect diversity andincrease individual autonomy. I will continue to support each
employee’s aspiration for growth, and promote a strongorganization where employees can make the most of Ichigo’score values such as professionalism, entrepreneurial spirit anddiversity, and teamwork.
I will make an all-out effort to drive sustainable growth andhigher shareholder value. Thank you for your guidance andsupport.

10

IchigoSharesHeld

8,000
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

July 2012
Tetsuya Fujita(March 26, 1954)
May 2014

October 2015
May 2016
August 2017
March 2019
June 2019
June 2020

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)
Executive Director, Postal Club Inc. (current)(Other Positions)
CEO & Representative Director, Creative Solutions Co., Ltd.
Executive Director, Postal Club Inc.

11

IchigoSharesHeld

66,200sharesNo.

Name(Date of Birth)(continued fromprevious page)

Career History
Message to Our Shareholders
While Ichigo needs to promptly and actively respond to drasticchanges in the market and the work environment amidst Covid,challenges for the future lie ahead of our businesses.

5

As an Independent Director, I will focus on smooth communicationand further strengthen corporate governance and risk management,
and contribute to the creation of even greater corporate value for
Ichigo as a sustainable infrastructure company on behalf of allshareholders.

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
The spread of Covid over the last year has had a significant impact
on the business environment of the real estate industry. Ichigo will
flexibly respond to drastic changes in the business environment, andwill grow and evolve as a sustainable infrastructure company serving
society.
As an Independent Director, I will supervise and oversee businessexecution from an objective viewpoint on behalf of a broad range ofstakeholders, and further contribute to Ichigo’s sustainable growth.

13

IchigoSharesHeld49,500shares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 and all stakeholders. I want to fulfill my
responsibility as an Independent Director by offering management
supervision in consideration of ESG, a foundation of sustainableinfrastructure.

14

IchigoSharesHeld

14,300shares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.
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

42,200sharesNo.

Name(continued fromprevious page)

8

Career History(Date of Birth)

Message to Our Shareholders
In response to the changes caused by Covid, Ichigo’s executive
team has taken significant and positive measures with respect tothe organization and human resources. I believe sustainable growthis important for shareholders and all stakeholders.
In order to achieve the Ichigo 2030 long-term vision, I willcontinue to use my perspective as an Independent Director to help
the company's management team keep an eye on structural changes
in the business environment and assess opportunities and risks inorder 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
March 2019Nobuhide Nakaido June 2020
(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)
Independent Director, Sourcenext Corp.
(current)(Other Positions)
Chairman, Japan Association for Chief Human Resources
Officers
Independent Director, eSOL Co., Ltd.
Independent Director, Sourcenext Corp.
Message to Our Shareholders
I believe this year will be very important for us to make progress
as a sustainable infrastructure company, even with the harshbusiness environment caused by Covid. I will do my best to
support management combatting such difficulties, including
giving further flexibility in workstyles with an eye on the postCovid 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:
Scott Callon has extensive experience as Chairman of Ichigo since October 2008,
and has knowledge and expertise derived from serving on a number of Japanese
government bodies, including the Financial Services Agency (FSA) Council ofExperts that drafted Japan’s Corporate Governance Code and the Ministry of
Economy, Trade and Industry (METI) Competitiveness and 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 twelve and ahalf years at the close of this shareholder meeting.
(i) 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 eight years at the close of this shareholder
meeting.
(ii) 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 twelve years at the close of this shareholder
meeting.
(iii) Eri Murai has extensive knowledge and experience, having led a number of key
initiatives in finance, internal management, and HR since joining Ichigo in 2002.
She is currently the Executive Managing Director & Statutory Executive Officer(HR), and her term of office will have been two years 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 eleven 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 ten 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 six 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 five 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 four 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) Ichigo and the independent directors have entered into a director liability
insurance contract, with the directors named as insured, which provides coverage
for any damages that may by caused by directors taking on responsibilities for
performing their duties or receiving claims in pursuit of responsibilities.
Candidates will be named insured after the re-election, and the contract will berenewed during their tenure.
(Note 9) Scott Callon has not received and will not receive any compensation from Ichigo.
(Note 10) Shares owned by Yukio Suzuki, a candidate for Independent Director, include
shares owned by Belle Investment Research of Japan Inc., all of whose shares are19

owned by Yukio Suzuki.
(Note 11) The number of Ichigo shares owned by each of the candidates for Director is as ofFebruary 28, 2021.

20

Business Report(March 1, 2020 – February 28, 2021)
I.

Current Operations and Financials

A. Business Conditions in the Current Fiscal Year (FY21/2)
1. Business Results and Progress
In the current fiscal year, the Covid pandemic severely impacted economic activities
globally. Although the Japanese economy is gradually recovering on the back ofgovernment grants and programs to support corporate finances and the global economic
recovery, the speed of recovery slowed after the second state of emergency declared by
the Japanese government in January 2021. The prolonged fall-off in economic activity
has resulted in a drop in household consumption, and businesses requiring face-to-faceinteractions have especially been affected. Although the economy is expected to gradually
recover on the back of the Covid vaccine rollout and the lifting of the state of emergency,
it is expected to take some time.
In the Japanese real estate market, the office industry saw many lease terminations atlarge-size office buildings, although occupancy is slowly recovering. Office demand is
expected to change due to shift to remote work, but no significant change has been seenin Ichigo’s primarily mid-size office buildings. The hotel industry has been especiallychallenged by Covid, with a significant drop in demand due to travel restrictions.
Meanwhile, residential assets and logistics assets are continuing to experience stabletenant demand, and there is steady appetite for real estate investment in both asset types.
In clean energy, the rising importance of ESG globally is driving higher recognition ofthis business, which in addition to its positive ESG contributions, offers high earnings
stability and low sensitivity to changes in economic conditions.
To respond to the rapid changes in market conditions, Ichigo has taken measures tomaintain its strong financial base and robust cash flows. In line with our Ichigo 2030
long-term vision, Ichigo is also expanding its business activities as a sustainableinfrastructure company to fulfill our mission of Make The World More Sustainable.
In keeping with this mission, Ichigo has joined RE100, a global initiative to accelerate thetransition of electricity used by businesses to 100% renewable energy and realize a Net
Zero Carbon society. Ichigo is committed to sourcing 100% renewable energy across all
Ichigo, Ichigo Office (8975), and Ichigo Hotel (3463) assets by 2040.

To accelerate its sustainability initiatives, Ichigo has also signed the UN Global Compact.
The UN Global Compact is a global sustainability initiative that calls for companies andorganizations to take leadership and take actions as members of society to implement
universal sustainability principles. Companies and organizations that sign the UN Global
Compact are required to honor Ten Principles with respect human rights, labor,
environment, and anti-corruption.

21

The Ten Principles of the UN Global Compact
Human Rights

Principle 1: Support and respect human rights
Principle 2: No complicity in human rights abuses

Labor

Principle 3: Uphold freedom of association and the effective
recognition of the right to collective bargaining
Principle 4: Elimination of all forms of forced andcompulsory labor
Principle 5: Effective abolition of child labor
Principle 6: Elimination of discrimination in respect of
employment and occupation

Environment

Principle 7: Support a precautionary approach toenvironmental challenges
Principle 8: Promote greater environmental responsibility
Principle 9: Encourage the development and diffusion ofenvironmentally-friendly technologies

Anti-Corruption

Principle 10: Work against corruption in all its forms,
including extortion and bribery

22

Core Business Growth–

Sustainable Real Estate (SRE)The Covid impact on the leasing market differed greatly by asset type. Hotels weremost severely impacted with a sharp decrease in revenues, and a full recovery is
expected to take some time. However, Ichigo-owned hotels are seeing a high level ofoccupancy due to the deployment of PROPERA, an Ichigo-developed AI hotelrevenue management system. Recovery has been seen in the retail market since lastJune in assets not dependent on inbound tourism. However, due to the second state of
emergency declared by the Japanese government, the gap in the speed of recovery is
widening between business types. Restaurants are continuing to suffer the impact,
and Ichigo is communicating and cooperating with tenants to respond to thesituation.
Covid impacts have not been significant in offices, residential assets, and logistics
assets. Notably, investor appetite for high-end residential assets having stableearnings has not changed, and Ichigo has been in acquisitions and sales of theseassets. During the year, Ichigo sold JPY 41.4 billion in assets, while acquiring JPY
38.2 billion, of which most were residential.

–

Asset Management
Ichigo supported its TSE-listed REITs and solar power producer, and private funds.
Ichigo Office (8975) and Ichigo Hotel (3463) became the first and only J-REITs witha no fixed fee, performance-fee only asset management structure. As a result, base
AM fees decreased as revenue dropped on Covid impacts such as a decrease in hotel
variable rents. To support further strengthening of Ichigo Hotel’s financial base amid
the Covid pandemic, Ichigo subscribed to a JPY 500 million subordinated bondissued by Ichigo Hotel.

–

Clean Energy
Ichigo’s online power plants now total 51 power plants (150MW), having brought
six new solar power plants (13.7MW) online this year. Amidst Covid, the clean
energy business has proven to be stable and unaffected by market conditions. Ichigo
continues to develop a pipeline of reliable, high-performance solar and wind power
plants, now totaling 67 power plants (198.8MW), +33% year-on-year as of April 30,
2021.
Ichigo’s first wind power plant, the Ichigo Yonezawa Itaya ECO Power Plant began
operation in March 2021. Its construction was funded by Shinsei Bank’s Green Loan
program. Shinsei Bank recognized Ichigo Yonezawa for its contributions toachieving two Sustainable Development Goals (SDGs): SDG 7 - Affordable andClean Energy, and SDG 9 - Industry, Innovation, and Infrastructure.

23

–

Robust Financial Base
Since the global financial crisis, Ichigo has been strengthening its
earnings base and financial position via measures such aslengthening borrowing terms, reducing borrowing costs, hedging
against increases in interest-rates via interest rate swaps, andborrowing via unsecured loans. Ichigo will continue these policies tobuild upon its capabilities in real estate and clean energy and growas a sustainable infrastructure company.
In the current year, Ichigo borrowed funds via Sumitomo Mitsui
Banking Corporation’s (“SMBC”) ESG/SDGs syndicated loan
program (“ESG/SDGs Finance”) based on the United Nations(“UN”) Principles for Positive Impact Finance (maximum JPY 10.6
billion). The use of funds in ESG/SDGs Finance is unspecified and therefore funds
can be used by the borrowing company broadly across its businesses.

–

Cash Flow Management
To further increase its cash flows, Ichigo reclassified some of its Fixed Assets to Real
Estate for Sale to increase tax efficiency and cash generation via taking depreciation
allowances on its real estate income.

New Business Entry: Sustainable Infrastructure for a Sustainable Society
Ichigo is creating new value in real estate, clean energy, and other social infrastructure,
and working to create richer, more fulfilling lives for the people of Japan. Ichigo is also
generating new earnings streams, as well as growing its existing businesses, to contributeto Ichigo’s growth as a sustainable infrastructure company.
As one example, Ichigo entered the hotel operator market in March 2019 via theestablishment of Hakata Hotels to leverage Ichigo’s extensive experience and know-how
as a hotel owner-operator and drive higher hotel earnings and value growth.
In FY21/2, Ichigo launched its second hotel brand, The OneFive. Ichigo carried out
value-add renovations to two 35 year-old hotels, rebranding and relaunching them as The
OneFive Terrace Fukuoka and The OneFive Villa Fukuoka. The OneFive is a line of
hotels featuring the highest level of omotenashi (Japan’s tradition of hospitality andservices) and simple, high-quality comfort.

The OneFive Terrace Fukuoka

24

Ichigo is also expanding its boutique hotel brand, THE KNOT. Its third and fourth THE
KNOT hotels, THE KNOT SAPPORO and THE KNOT HIROSHIMA, had their grandopenings this past year. THE KNOT offers opportunities to tourists, business travelers,
and local residents to discover and rediscover the city.

THE KNOT SAPPOROTHE KNOT HIROSHIMA

To further drive earnings in Ichigo’s hotel business, Ichigo developed PROPERA, a
proprietary hotel revenue management system that uses artificial intelligence (AI) to
drive dynamic-pricing algorithms that calculate optimal pricing for hotel rooms andmaximize hotel revenues. PROPERA’s AI-based dynamic pricing responds to changes in
the market by using machine learning to calculate optimal hotel room pricing up to 365
days in advance. Ichigo 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.

25

Ichigo’s anime business is financing the production of a new anime series directed byrenowned Japanese directors Mamoru Oshii and Junji Nishimura. Ichigo launched theanime business to create synergies with AKIBA CULTURES ZONE (ACZ), Ichigo’s
retail asset located in Akihabara, the Tokyo district that is the epicenter of Japan’s anime
sub-culture.
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 with the real world. Ichigo is contributing Ichigo’s real estate
capabilities and expertise in order to integrate real-world locations into the game,including placing virtual stadiums at Ichigo real estate assets.
For Ichigo’s Shareholder Program, although Ichigo had not been able to distribute
J.League game tickets this past year due to Covid, Ichigo offered J.League Merchandise
such as Ichigo original J.League towels and autographed soccer balls, and online eventswith Takeshi Okada, Japan Football Association Senior Advisor, and Masayuki Okano,
Former Japan National Soccer Team Player.

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

26

FY21/2 Earnings Details
Ichigo generated consolidated FY21/2 revenue of JPY 61.4 billion (-29.8% year-on-year),
operating profit of JPY 9.7 billion (-65.1% year-on-year), recurring profit of JPY 7.2
billion (-70.6% year-on-year), and net income of JPY 5.0 billion (-38.7% year-on-year).
Segment Earnings Details
The breakdown of revenue and operating profit by segment is as follows:
Asset Management
Due to decreased performance fees and a fall-off of gains on sales at Ichigo Hotel (3463)
due to Covid, revenue decreased to JPY 2.5 billion (-37.2% year-on-year), with segment
operating profit down 44.5% year-on-year to JPY 1.4 billion.
Sustainable Real Estate
Gains on sales decreased due to a decrease in sales year-on-year as a result of limited
sales and acquisition activity in assets other than residential assets and an increase indepreciation expenses due to reclassifying real estate for sale to fixed assets in FY20/2.
Rental income also decreased for hotel assets with variable rent leases. Revenue
decreased to JPY 54.8 billion (-32.0% year-on-year), with segment operating profit down
72.8% year-on-year to JPY 6.5 billion.
Clean Energy
Due to full-year contributions from power plants that came online in FY20/2 and bringing
online six new plants, revenue increased to JPY 4.7 billion (+22.6% year-on-year), withsegment operating profit up 44.2% year-on-year to JPY 1.8 billion.
Consolidated Income Statement Details
Revenue
Despite gains on sales from residential asset sales and new solar plants increasing power
generation revenue, the decrease in real estate sales and hotel rental income due to Covid
contributed to a 29.8% year-on-year decrease in revenue to JPY 61.4 billion.
The revenue breakdown was: real estate sales JPY 38.6 billion, real estate rental income
JPY 15.9 billion, real estate management fee income JPY 1.9 billion, and power
production revenue JPY 4.7 billion.
Operating Profit
Decreases in asset sales and rental income and a JPY 1.8 billion increase in depreciation
expenses led to operating profit of JPY 9.7 billion (-65.1% year-on-year).
Non-Operating Profit & Expenses
Non-operating profit totaled JPY 417 million (+178.1% year-on-year), with derivative
valuation gains of JPY 243 million (Ichigo hedges against increases in interest rates using
interest rate swaps) and dividend income of JPY 78 million.
Non-operating expenses totaled JPY 2.9 billion (-16.4% year-on-year), due to a decreasein mark-to-market loss on long-term interest rate hedges and debt financing-related fees.
By category, interest expenses were JPY 2.3 billion and debt financing-related fees were
JPY 279 million.

27

Extraordinary Gains
Extraordinary gains totaled JPY 720 million (+233.7% year-on-year) on gains on sale on
fixed assets of JPY 720 million.
Extraordinary losses totaled JPY 288 million (-96.4% year-on-year) on an allowance for
doubtful accounts of JPY 144 million, a writedown of securities investments of JPY 114
million, and a writedown of goodwill of JPY 27 million.
Net Income
Net income declined 38.7% year-on-year to JPY 5.0 billion. Incomes taxes totaled JPY
2.6 billion (which included a tax adjustment of -JPY 58 million).

28

Operating Profit(JPY million)
28,00026,27922,90027,721

21,91921,00014,000
9,668
7,000
0
FY17/2

FY18/2

FY19/2

FY20/2

FY21/2Net Income(JPY million)

18,00015,00014,894

15,37314,01812,000
9,000

8,201

6,000

5,027

3,000
0
FY17/2

FY18/2

FY19/229

FY20/2

FY21/2

2. Capital Expenditures
During FY21/2, property, plant, and equipment (PP&E), including operating and indevelopment power plants, increased by JPY 4.4 billion.
3. Financing
In order to maintain its strong financial base in a difficult Covid environment, Ichigo isimproving its borrowing terms and diversifying its borrowings, including by loweringborrowing costs, staggering loan maturities, extending loan durations, and reducing loanamortizations.
As a sustainable infrastructure company, Ichigo is proactively executing a broad array of
ESG initiatives, including in its financing activities. Ichigo became the first Japanese realestate company to borrow funds via Sumitomo Mitsui Banking Corporation’s ESG/SDGs
syndicated loan program (“SMBC ESG/SDGs Finance”) based on the United Nations
Principles for Positive Impact Finance, borrowing JPY 10.6 billion.
SBMC ESG/SDGs Finance is a syndicated loan program that finances sustainablebusiness management based on a comprehensive analysis and evaluation of theenvironmental, social, and economic impacts of a company’s business activities. The useof funds in SMBC ESG/SDGs Finance is unspecified, and therefore funds can be used by
the borrowing company broadly across its businesses.
UN Principles for Positive Impact Finance
The UN Principles for Positive Impact Finance is a financial framework established by
the United Nations Environment Programme Finance Initiative (“UNEP FI”) in January
2017 as a principle for financial institutions to fund businesses that contribute toachieving the SDGs. It is comprised of four principles: Definition, Frameworks,
Transparency, and Assessment, and defines a structure for financing aimed to mitigate thenegative impacts and systematically and sustainably increase the positive impacts of aborrowing company’s activities.
Furthermore, Ichigo ECO Energy, Ichigo’s wholly-owned subsidiary, borrowed JPY 3.0
billion from Shinsei Bank to finance the construction of Ichigo’s first wind power plant,
the Ichigo Yonezawa Itaya ECO Power Plant.
Shinsei Bank recognized Ichigo Yonezawa for its contributions to achieving two
Sustainable Development Goals (SDGs): SDG 7 - Affordable and Clean Energy, andSDG 9 - Industry, Innovation, and Infrastructure.
Shinsei Bank also commended Ichigo for:1) expanding the scope of its real estate and clean energy businesses as a sustainableinfrastructure company in line with its commitment to building a more sustainable
society;2) carrying out the Ichigo Yonezawa project consistent with Ichigo’s mission;3) working closely with local communities;4) constructing Ichigo Yonezawa with due consideration for the environment and society,complying not only with relevant laws and regulations, but also conducting Ichigo’s own
environmental impact assessment.

30

Ichigo’s corporate loan balance as of FY21/2-end was JPY 177.7 billion (+2.6% year-onyear), and non-recourse loan balance was JPY 42.3 billion (+5.0% year-on-year). The
average interest rate during F21/2 for corporate loans and non-recourse loans were 0.92%(+0.01% year-on-year) and 1.06% (+0.04% year-on-year), respectively.
Ichigo continues to have an extraordinarily stable and durable balance sheet, with 91.6%
of corporate loans (+0.6% year-on-year) as of FY21/2-end being long-term. JPY 115.6
billion of corporate loans have remaining loan terms of more than five years, with
Ichigo’s corporate loans having an average loan term of 10 years and an averageremaining loan maturity of 7.2 years. Furthermore, 52.6% (-0.4%) of Ichigo’s corporateloans as of FY21/2-end are with the Japanese megabanks. The proportion of total
uncollateralized borrowings was 21.8% (-3.8%) as of FY21/2-end, driven by the
aforementioned FY21/2 commitment line and bond issuance.

Average Interest Rate and Loan Term

Weighted Average Loan Period
Weighted Average Remaining Loan Maturity
Weighted Average Interest Rate

2.5%
10.8 years

10.2 years

9.0 years

8.7 years

2.0%
8.3 years
1.5%

10.3 years

10.0 years

12
10.0 years

9.6 years
9
8.3 years

7.8 years

7.6 years

7.6 years

7.2 years

1.71%

6
1.41%
1.04%

1.24%
1.0%

0.97%

0.91%

0.92%

FY21/20

0.5%
FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2

8% (JPY 4.9B)

10% (JPY 10.3B)

6% (JPY 6.1B)

5% (JPY 5.6B)

8% (JPY 11.3B)

9% (JPY 15.6B)

8% (JPY 14.9B)

92%(JPY 53.4B)

90%(JPY 94.4B)

94%(JPY 92.2B)

95%(JPY 112.8B)

92%(JPY 132.1B)

91%(JPY 157.5B)

92%(JPY 162.7B)

FY15/2

FY16/2

FY17/2

FY18/2

FY19/2

FY20/2

FY21/2

Term Structure of Loans
Short-Term
Long-Term

331

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/A32

B. Earnings and Assets in the Current and Past Three Fiscal Years
18th Period(FY18/2)

19th Period(FY19/2)

20th Period(FY20/2)

21st Period(FY21/2)

Revenue (JPY million)

57,84683,54087,36061,368Operating Profit (JPY million)

21,91926,27927,721

9,668

Recurring Profit (JPY million)

19,18523,076

24,395

7,179

Net Income (JPY million)

14,01815,373

8,201

5,027

Net Income per Share (JPY)

28.12

31.14

16.89

10.48

Total Assets (JPY million)

296,501

319,343

333,726

347,076

Net Assets (JPY million)

92,725

102,859

101,607110,255

Net Assets per Share (JPY)180.20202.14208.49209.81Dividend per Share (JPY)

6.0

7.0

7.0

7.0

16.5%

16.3%

8.2%

5.0%

Return on Equity(Note)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.

Net Income per Share (EPS)
(JPY)
33

29.66

31.14
28.12

22
16.89
10.48

11

0
FY17/2

FY18/2

FY19/233

FY20/2

FY21/2

Net Assets per Share

210

202.14208.49(JPY)
209.81

FY19/2

FY20/2

FY21/2180.20159.6014070

0FY17/2

FY18/2

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

Total Assets
Net Assets 296,501
273,455

319,343

333,726

347,076

240,000
180,000
120,000

102,859
83,443

101,607110,255

92,72560,0000FY17/2

FY18/2

FY19/234

FY20/2

FY21/2

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 590 million

100%Japanese anime studio & realestate-related content developer

Hakata Hotels Inc.

JPY 100 million

100%

Hotel operator

35

D. Key Business Priorities
Covid has severely affected global economic activity has been se. Within the real estatemarket, hotels have been severely impacted by Covid, leading to a significant decrease inhotel earnings, and future office demand may be negatively impacted by work style changes
accelerated by Covid. With respect to real estate sales and acquisitions, there has been
limited Covid impact on asset prices, which have remained high, and interest rates aretrending down.
As a sustainable infrastructure company, Ichigo is continuing to grow its current businesses
and develop new businesses for long-term growth. Ichigo is also focusing on integrating its
businesses with the networks and data-driven possibilities of the digital world.
Ichigo believes companies exist to serve society, and is working to contribute to asustainable society while growing long-term value for its shareholders.
In line with this mission, Ichigo has joined RE100, a global initiative to accelerate thetransition of electricity used by businesses to 100% renewable energy. Ichigo is committed
to sourcing 100% renewable energy across its operations, including Ichigo Office (8975) and
Ichigo Hotel (3463), by 2040. Ichigo will continue to grow its clean energy business andreduce energy consumption to achieve this target.
In order to transform its business model to drive significantly higher long-term growth for
its shareholders, Ichigo released Ichigo 2030, an 11-year vision, in 2019. The key elementsof Ichigo 2030 are described below.
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 working 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 andclean 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.

36

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.
(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 significantly37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.
E. Key Business Segments (as of February 28, 2021)
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 28, 2021)
1. Employees (Consolidated)
Number of employees

Increase/decrease fromprevious fiscal year-end

Asset Management
Sustainable Real Estate

316 (75)+70 (+11)

Clean Energy

14 (1)-2 (–)

Company-wide

59 (3)-2 (+2)Total

389 (79)+66 (+13)

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
38dispatched from other companies to Ichigo), including Directors who are also
employees.

39

(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 66 and thenumber of non-full-time employees increased by 13, primarily reflecting theaddition of employees from business expansions.
2. Employees (Parent company only)
Number of
employees

Increase/decrease
from previous fiscal
year-end

Average age

Average years of
employment

106 (3)-4 (+2)41.8 years old

5.9 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.
G. Principal Lenders (as of February 28, 2021)
Lenders

AmountSumitomo Mitsui Banking Corporation

JPY 43.7 billion

Mizuho Bank, Ltd.

JPY 38.8 billion

Kansai Mirai Banking Corporation

JPY 10.2 billion

The Nishi-Nippon City Bank, Ltd.

JPY 8.2 billion

The Tokyo Start Bank, Limited.

JPY 7.0 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.)

40

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 FY21/2 dividend per share is JPY 7.
Dividend per Share
(JPY)
7

7.0

7.0

FY19/2

FY20/2

FY21/2

6.0

6
5

7.0

5.0

4
3
2
1
0
FY16/2

FY17/241

I. Other Material Matters
Ichigo’s Board of Directors decided to conduct share buybacks, pursuant to the provisionsof Articles 156 and 165 of the Company Law, at the Board of Directors meetings held on
October 14, 2020 and January 13, 2021. The details of the buybacks are as follows:
1. Share Buyback Rationale
To grow value for Ichigo shareholders
2. Share Buyback Summary
October 2020 Share Buyback
Number of Shares
AmountAverage Share Price
Buyback Period
Buyback Method

4,712,500
JPY 1,499,988,000
JPY 318
October 15, 2020 – November 20, 2020
In-market purchases via securities firm

January 2021 Share Buyback
Number of Shares
AmountAverage Share Price
Buyback Period
Buyback Method

4,933,300
JPY 1,499,969,700
JPY 304
January 14, 2021 – February 18, 2021
In-market purchases via securities firm42II. Other Matters
A. Shares and Shareholder Information (as of February 28, 2021)
1. Number of Authorized Shares:
2. Total Number of Shares Issued:
3. Number of Shareholders:

1,500,000,000 shares
505,381,018 shares (including 33,283,200 treasury shares)
26,554

Top 10 Shareholders
Name

Shares Held

Shareholding Ratio

ICHIGO TRUST PTE. LTD. (Standing Proxy: The Hong
Kong and Shanghai Banking Corporation Limited, Tokyo
Branch)225,108,200

47.68%

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

22,574,900

4.78%

Morgan Stanley MUFG Securities Co., Ltd.

20,852,086

4.42%

BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT
ACCOUNTS M LSCB RD(Standing Proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)16,823,501

3.56%

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

15,890,400

3.37%

SMBC Nikko Securities Inc.

10,592,800

2.24%

Custody Bank of Japan, Ltd. (Trust Account)

9,784,400

2.07%

8,837,989

1.87%

8,124,800

1.72%

6,816,621

1.44%

345,405,697

73.16%NORTHERN TRUST CO. (AVFC) RE YALE UNIVERSITY(Standing Proxy: The Hong Kong and Shanghai Banking
Corporation Limited, Tokyo Branch)
MORGAN STANLEY SMITH BARNEY LLC CLIENTSFULLY PAID SEG ACCOUNT(Standing Proxy: Citibank, N.A., Tokyo Branch)
BNYMSANV RE GCLB RE JP RD LMGC
(Standing Proxy: Citibank, N.A., Tokyo Branch)
TOTAL(Note 1) Shareholding Ratio is calculated excluding 33,283,200 treasury shares.
(Note 2) The Shareholding Ratio of Ichigo Trust Pte. Ltd., Ichigo’s largest shareholder,decreased during the period from 49.35% to 47.68% as a result of share sales.
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/library/shareholders_meeting43

C. Directors and Officers
1. Directors (as of February 28, 2021)
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.
Chairman, Chief Executive Officer, & Representative Director, Japan
Display Inc.
Independent Director, Fujitsu Ltd.

TakumaHasegawa

President & Representative Statutory Executive Officer
Chairman of Nominating Committee, Compensation Committee, andCompliance Committee
Chairman & Director, Ichigo ECO Energy Co., Ltd.
Chairman & Director, Ichigo Land Shinchiku 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 (HR)Independent
Director

TetsuyaFujita1

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

Independent
Director

NorikoKawate2

Independent
Director

Yukio
Suzuki3

Director

Director

Independent
Director

Masatoshi
Matsuzaki4

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
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.
Member, Public Interest Supervisory Committee of PwC Aarata LLC
Independent Director, LIXIL Group Corporation

44

Independent
Director

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

1

Audit Committee Member Tetsuya Fujita, has served as president of a major life insurance
and a major property insurance company, in addition to having served as internal 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 toensure the effectiveness of auditing by the Audit Committee. As a result, Ichigo has
not appointed a full-time Audit Committee member.

45

2. Statutory Executive Officers (as of February 28, 2021)
Position

Name

Responsibility and Other Business Affiliations

Scott Callon

Overall Group Management
Partner & Chief Executive Officer, Ichigo
Asset Management, Ltd.
Chairman, Chief Executive Officer, &Representative Director, Japan Display Inc.
Independent Director, Fujitsu Ltd.

Takuma Hasegawa

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

Executive Vice President &Statutory Executive Officer &COO

Minoru Ishihara

Executive Vice President, Sustainable Real
Estate, PROPERA
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

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

Executive Managing Director

Takeyuki Yoshimatsu

Corporate Operations
Executive Vice President, Ichigo Investment
Advisors Co., Ltd.

Senior Statutory Executive
Officer

Takanori Sakamatsu

Finance

Senior Statutory Executive
Officer

Kazunori Kurita

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

Senior Statutory Executive
Officer

Takashi Ohigawa

Real Estate Strategic Planning, Execution

Statutory Executive Officer

Akihiko Tsukasa

Statutory Executive Officer

Kenichi Tanaka

Osaka Branch, Retail, Sports, Smart
Agriculture
Business Promotion

Statutory Executive Officer

Yasutoyo Senda

Audit

Chairman & Representative
Statutory Executive Officer

President & Representative
Statutory Executive Officer

Executive Managing Director46

3. Directors and Statutory Executive Officers Who Stepped Down during the Current
Fiscal Year
Ichigo Chairman & Representative Director Kenji Iwasaki, who also served as Chairman &Director of Ichigo Land, passed away on July 5, 2020.
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)

8(5)

JPY 253 million(JPY 51 million)

Statutory Executive Officers

9

JPY 54 million

Total(of whom are Independent Directors)

17(5)

JPY 307 million(JPY 51 million)(Note 1) As of the end of the period, there are nine Directors (including five Independent
Directors) and 12 Statutory Executive Officers (four of whom are also Directors),
resulting in a total of 17 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 18 Directors and Statutory Executive Officers, which is the sum of the17 aforementioned Directors and Statutory Executive Officers plus the one nonremunerated Director, differs from the total of 17 Directors and Statutory
Executive Officers as of the end of the period, because one Statutory Executive
Officer stepped down during FY21/2.
(Note 4) The amount paid includes remuneration in the form of stock options of JPY 23
million for Directors (of which JPY 5 million is for Independent Directors) and
JPY 8 million for Statutory Executive Officers.
(Note 5) In addition, Ichigo paid JPY 116 million as retirement and condolence payments inrelation to the passing of a Statutory Executive Officer during FY21/2 andreceived death benefit.
(Note 6) In addition, Ichigo paid JPY 124 million as employee compensation to six
Statutory Executive Officers who also serve as employees. This amount includes
remuneration in the form of stock options of JPY 10 million.
(Note 7) No remuneration has been paid by Ichigo subsidiaries to Ichigo’s Independent
Directors.

47

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. andExecutive Director of Postal Club Inc. Ichigo has no relationship with Creative
Solutions Co., Ltd. or Postal Club Inc.
– 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 any of these companies.
– 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., a Member of the Public Interest Supervisory Committee of PwC
Aarata LLC, and an Independent Director of LIXIL Group Corporation. Ichigo has no
relationship with any of these companies.
48

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

49

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 9 out of 9 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 the Compliance
Committee. Attended 7 out of 7 meetings (100%) of theNominating Committee and 7 out of 7 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 9 out of 9 meetings (100%) of the Board of Directors.
Attended 19 out of 19 meetings (100%) of the Audit Committee.
Attended 7 out of 7 meetings (100%) of the Nominating
Committee and 7 out of 7 meetings (100%) of the Compensation
Committee since becoming a member. Commented and advisedon resolutions and discussions from an objective standpoint
independent from the management team.
Attended 9 out of 9 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 the Compliance
Committee. Commented and advised on resolutions anddiscussions from an objective standpoint independent from the
management team.
Attended 9 out of 9 meetings (100%) of the Board of Directors.
Attended 7 out of 7 meetings (100%) of the Nominating
Committee. Attended 7 out of 7 meetings (100%) of theCompensation Committee. Commented and advised on
resolutions and discussions from an objective standpoint
independent from the management team.
Attended 9 out of 9 meetings (100%) of the Board of Directors.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.

50

D. Independent Auditor
1. Grant Thornton Taiyo LLC
2. Fees Paid to the Independent Auditor(i)Fees paid to the Independent Auditor during FY21/2
Fees for the services specified in Article 2, Paragraph 1 of theCertified Public Accountants Act (Act No. 103 of 1948)

JPY 73 million

Fees for the services other than those specified in Article 2,
Paragraph 1 of the Certified Public Accountants Act–
JPY 73 million(ii)

Total monetary and other financial benefits payable by Ichigo andsubsidiaries to the Independent Auditor

JPY 96 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.

51

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/library/shareholders_meeting
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.

52

Consolidated Balance Sheet(As of February 28, 2021)(JPY million)

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

120,771
50,832
1,382
1,324

Operational securities investments

590

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

64,1092,698

Securities investments-167
226,305
214,392
68,277-7,60360,67328,893-4,702
24,191
122,592
3,910
2,745-1,126
1,619
4,038
968
1,272
1,797
7,874
5,147
10

Deferred tax assets

605

Total Assets

Other current liabilities

Amount22,374
4,879
274
9,751
1,358
573
9
5,527

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

214,446
5,878
156,890
40,974
1,868
7,795
1,039

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

236,820

Minority Interests

10,197

Total Net Assets
Total Liabilities and Net Assets

110,255
347,076

1,405

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

2,202
-91
347,07653

99,33526,888
11,27573,160-11,988
-285
90
-375
1,007

Consolidated Income Statement(March 1, 2020 – February 28, 2021)(JPY million)

Item

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

54

61,36845,776
15,591
5,923
9,668
17
78
243
78

417

2,338
17
29
279
241
720
–
114
144
27
1
2,622
-58

2,906
7,179
720

288
7,610
2,564
5,046
18
5,027

Consolidated Statement of Changes in Shareholders’ Equity(March 1, 2020 – February 28, 2021)(JPY million)
Shareholders’ Equity
CapitalReserve

CapitalBalance as of March 1, 2020
Changes in the Current
Fiscal Year
Share Issuance
Dividend Payment
Net Income
Share Buyback
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as ofFebruary 28, 2021

Balance as of March 1, 2020
Changes in the Current
Fiscal Year
Share Issuance
Dividend Payment
Net Income
Share Buyback
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as ofFebruary 28, 2021

Retained
Earnings

26,885

11,272

2

2

Total
Shareholders’Equity-8,988100,674

Treasury
Shares71,505-3,372
5,027-2,9995-3,372
5,027-2,999

2

2

1,655

-2,999-1,33826,888

11,27573,160-11,988

99,335

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

158

-397

-239

988

Minority Total Net
Interests Assets
184

101,6075-3,372
5,027-2,999

-67

21

-45

19

10,013

9,986

-67

21

-45

19

10,013

8,648

90

-375

-285

1,007

10,197110,255

55

Parent Balance Sheet(As of February 28, 2021)(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
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

59,131
26,062103586
30,777116
434

Amount
7,352
3,325
112
2,636
824
108
215

631

Advances received

47

564

Deposits received

36

-145

Other

46

101,924
6,365
2,582
-450
2,131
4,146
156
-68
87
1,393
469
924
94,165
2,907

Long-Term Liabilities
Bonds
Long-term loans
Long-term loans of affiliates
Long-term security deposits received
Other long-term liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Capital reserve – other
Retained earnings

73,4673,184
59,995
10,00084
20280,82079,567
26,888
11,273
11,20468
53,394

6,322

Earnings reserve

2,160

Earnings reserve – other53,34946,083Retained earnings carried forward

53,34910
36,115

Treasury shares
Revaluations and Adjustments
Valuation gains (losses) on othersecurities
Deferred gains (losses) on
long-term interest rate hedges-11,988-339

Deferred tax assets

180

Other

471

Less: allowance for doubtful
accounts-85

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

161,056

Stock Options
Total Net Assets
Total Liabilities and Net Assets

56

44

30
-369
1,007
80,235
161,056

Parent Income Statement(March 1, 2020 – February 28, 2021)(JPY million)

Item
Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Profit
Interest income
Dividend income
Mark-to-market gains on long-term interest rate
hedgesCredit guarantees income
Other
Non-Operating Expenses
Interest expense
Mark-to-market loss on long-term interest rate
hedgesDebt financing-related fees
Other
Recurring Profit
Extraordinary Losses
Covid-19 writedown of securities investments
Allowance for doubtful accounts
Pre-Tax Net Income
Income taxes – current
Income taxes – deferred
Net Income

57

Amount
6,537
273
6,263
3,257
3,006
612
72
243
15
7

951

639
29
118
292
114
144
795
194

1,079
2,878
259
2,618
990
1,628

Parent Statement of Changes in Shareholders’ Equity(March 1, 2020 – February 28, 2021)(JPY million)
Shareholders’ Equity
Capital Surplus

CapitalRetained Earnings

Total
Treasury Shareholders’SharesEquityOther
Retained
Earnings

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

Balance as of
26,885 11,201
March 1, 2020
Changes in the Current
Fiscal Year
Share Issuance2
2
Dividend Payments
Share Buyback
Decrease due toCompany Split
Net Income
Changes in Items otherthan Shareholders’EquityTotal Changes
22Balance as of
26,888 11,204
February 28, 2021

Balance as of March 1, 2020
Changes in the Current Fiscal Year
Share Issuance
Dividend Payments
Share Buyback
Decrease due to Company Split
Net Income
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as of February 28, 2021

68 11,270

44

56,35456,398-3,372-3,372-1,261-1,261-1,261

1,628

1,628

1,628

2

-8,98885,566-2,9995-3,372-2,9992－-3,004-3,004-2,999-5,99868 11,273

44

53,34953,394 -11,988

79,567－

Revaluation and Adjustment
Gains
Valuation Deferred
Total(losses)on
Gains (losses) Long-Term
Revaluation
on OtherandInterest Rate Adjustment
Securities
Hedges
81
-389
-308

Stock
Options

Total Net
Assets988

86,246
5-3,372-2,999-1,261
1,628

-50

19

-30

19

-11

-50
30

19
-369

-30
-339

19
1,007

-6,01080,23558

Auditor’s Report on the Consolidated Financial Statements
Report of Independent Auditor
April 13, 2021
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, 2020 to February 28, 2021 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.

59

Auditor’s Report on the Parent Financial Statements
Report of Independent Auditor
April 13, 2021
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, 2020 to February 28, 2021 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.

60

Audit Committee Report

April 19, 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, 2020 to February 28, 2021. 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.

61

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.

62