Make The World
More Sustainable

Ichigo Inc.
(Tokyo Stock Exchange Prime, 2337)

Materials for the Twenty-Third 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 beyond 100 years by drawing upon our real estatetechnologies and expertise.

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. Our clean
energy business contributes to a more sustainable society while contributing to Japan’s energy
self-sufficiency. Ichigo works closely with local communities, contributing to sustainable job
creation and economic growth.
Ichigo is currently operating 63 renewable energy plants in communities across Japan, with apanel output of 174MW. In tandem to growing its Clean Energy business, Ichigo has been
accelerating its CO2 reduction measures, and as a result its CO2 reductions significantly
exceed its CO2 emissions.

Social
Revitalizing Local Communities
Ichigo values its relationships with local communities across Japan, and with local
governments being important Ichigo stakeholders. Pursuant to the Act on Promotion of Power
Generation of Renewable Energy Harmonized with Sound Development of Agriculture,
Forestry, and Fisheries (“REAFF Law”), which promotes renewable energy generation inharmony with the development of local agriculture, forestry, and fisheries, Ichigo received
approval to convert farmland in Ibaraki Prefecture and build the first solar power plants
approved by the Kanto Regional Agricultural Administration Office. Ichigo’s three solar
power plants located in Shimotakai, Toride City, were built with the cooperation of all of theland owners, the Toride City Agriculture Committee, and the Shimotakai Regional
Development Association, and Ichigo continues to operate the plants with support from thelocal community.
The Ichigo Yokosuka Port Market project was
launched when an Ichigo-led consortium wasselected to renovate and operate the former
Yokosuka Port Market as a Public-Private
Partnership (PPP). The former Yokosuka Port
Market was originally opened in 2013 uponrenovating a refrigeration warehouse built in
1987, and Ichigo was selected as a PPP
operator based on its strong value-add capabilities to develop the facility into a core tourist
attraction of Kanagawa Prefecture. Ichigo renovated the facility by transforming its interior
design and doubling total floor space, and successfully attracted tenants that embody Miura
Peninsula’s rich food culture. Since its re-opening in October 2022, the Ichigo Yokosuka Port
Market has been extensively covered by the media and attracts many visitors.
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.
Athletes & Art
Ichigo supports world-class athletes and artists with disabilities
via sponsorship of Paralym Art.

1

GovernanceG
Governance Structure
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 andoversight capabilities, and the majority of the Board are
Independent Directors. All Board Members are aware of theirfiduciary responsibility towards shareholders and work collaboratively and appropriately withother stakeholders to ensure sustained value creation for shareholders. The Board examines anddecides on matters stipulated by law and regulation, set in Ichigo’s Articles of Incorporation,and defined in internal rules pertaining to the Board. All other decisions are delegated to
Ichigo’s Statutory Executive Officers to deliver both speed and efficiency in decisionmaking
and strong corporate governance. All Statutory Executive Officers make decisions and lead
employees within their specific scope of delegated responsibility and authority.
Rigorous Compliance
Under a rigorous compliance and risk management framework, Ichigo has built a robust andfully independent whistleblower system and has implemented the following compliancemeasures.
-

Maintain a sound work environment by preventing all types of harassment-

Preempt potential problems through regular compliance surveys and the whistleblower
system-Periodic training on key topics such as prevention of insider trading-

Established a rotation rule within Ichigo to eliminate conflicts of interests that may arise
with respect to preferential transactions-

Identify and manage transactions that pose a conflict of interest-

Established a policy to prevent any dealings with anti-social forces-

Promote self-corrective measures via self-inspections and a reporting system on issues

Risk Management
Ichigo manages all possibilities of unexpected losses at Ichigo and any of its subsidiaries in linewith the ISO 31000 risk management guidelines. Ichigo has set risk management rules and has
established a risk management structure that spans the entire group.

2

Ichigo’s ESG Initiatives
Ichigo believes that working on behalf of the environment and society is a fundamental social
responsibility. As Ichigo grows and takes on new challenges as a sustainable infrastructurecompany, sustainability remains at the core of everything we do, and we reduce ourenvironmental impact and pro-actively join conservation efforts.

CDP 2022 Climate Change Assessment
Ichigo received A- scores and was recognized at the highest
Leadership Level in the Climate Change and Water Security
Assessments by CDP, a non-profit organization that promotes global
environmental reporting. Leadership Level scores (A, A-) are given
to companies that lead with best practice environmental initiatives.
About CDP
CDP is a global non-profit organization that runs the world’s environmental disclosure system
and assesses over 18,700 companies on their environmental transparency and actions. An
assessment questionnaire spanning topics such as governance, risk management, businessstrategy, and targets and performance is used to score companies among eight levels:
Leadership (A/A-), Management (B/B-), Awareness (C/C-), and Disclosure (D/D-).

RE100
Ichigo joined RE100, a global initiative to accelerate the transition of electricity used bybusinesses to 100% renewable energy, and is targeting sourcing 100% renewable electricity
across its operations, including Ichigo Office (8975) and Ichigo Hotel (3463), by 2025. As of
FY23/2-end, Ichigo has made 70% progress towards it target, and will continue accelerating
its Net Zero Carbon initiatives.

TCFD
Ichigo believes that it is the responsibility of companies towork towards addressing the global problem of climatechange. Ichigo has made sustainability a key business andsocial priority, and will work towards creating a sustainable3future by identifying climate-related risks and establishing appropriate risk management
procedures while also identifying new business opportunities that can help solve the problem.
Ichigo discloses its governance, strategy, risk management, and metrics and targets in linewith the TCFD framework.
GUN Global Compact

Ichigo believes companies exist to serve society. In line with this mission, Ichigo has signed
the UN Global Compact to a global sustainability initiative that calls
for companies and organizations 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 achieve the Ten Principles regarding humanrights, labor, environment, and anti-corruption based on CEO
commitments.

The Ten Principles of the UN Global Compact
Human Rights

Principle 1: Support and respect human rights
Principle 2: Human rights abuses

Labor

Principle 3: 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

4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 11, 2023
Ichigo Inc. (Tokyo Stock Exchange Prime, 2337)
Representative: Scott Callon, Chairman

Materials for the Twenty-Third Annual Shareholder Meeting
Dear Shareholders:
We are pleased to invite you to attend the Twenty-Third 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 26, 2023, 6:15 p.m. JST.
1. Date and Time

Sunday, May 28, 2023 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-Third Period (March 1, 2022 – February 28, 2023)
b. Ichigo’s parent financial statements for the Twenty-Third Period
Matters to be Resolved
Proposal

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.

5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 26,
2023. 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 26, 2023.

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.

6

Table of Contents
Materials for the Twenty-Third Annual Shareholder Meeting

1

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

8

Business Report
I. Current Operations and Financials
A. Business Conditions in the Current Fiscal Year (FY23/2)
B. Earnings and Assets in the Current and Past Three Fiscal Years
C. Company and Subsidiary Information
D. Key Matters to be Addressed
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)

26
35
38
39
41
42
42
43
44
45
46
46
54
55
55

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

56
57
58

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

59
60
61

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

62
64
66

7

Proposal

Election of Nine Directors

The terms of office of all ten 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

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

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
Infrastructure Business) & COO

100%(9 of 9 Total)

Executive Managing Director & Statutory
Executive Officer (HR)88.8%
(8 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

88.8%(8 of 9 Total)

Name

Reappointment –Independent Director

Nobuhide Nakaido
8

Reappointment –Independent Director

Sakon Uda
9

New –Independent Director

–

–

8

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 20111

May 2012
Scott Callon(December 6, 1964)
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 CEO, Ichigo Asset Management, 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.
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)

9

IchigoShares
Held

N/A

No.

Name
(Date of Birth)(continued fromprevious page)

1

Career History

IchigoSharesHeld(Other Positions)
Partner & CEO, Ichigo Asset Management, Ltd.
Chairman, CEO, and Representative Executive Officer,
Japan Display, Inc.
Independent Director, Fujitsu Limited
Message to Our Shareholders
This is your company. With ESG principles central to our mission, allof us at Ichigo are committed to delivering responsible andsustainable growth for our shareholders. As a sustainableinfrastructure company, Ichigo is committed to making the world
more sustainable and serving all stakeholders.

10

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
Takuma Hasegawa October 2016
(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
I believe that real estate is the social infrastructure and life
infrastructure that supports people’s lives. In line with its mission to“Make The World More Sustainable,” all of us at Ichigo are
dedicated to solving various social issues via its businesses to realize
a sustainable society. Thank you for your support.

11

IchigoSharesHeld496,338
sharesNo.

Name(Date of Birth)

Career History
April 1990
May 2007
March 2008
May 2009
November 2009
May 2010
April 2011
November 2011
July 2012

November 2012
March 2013
3
Minoru Ishihara(October 5, 1967)
May 2015
March 2017
March 2018
March 2019

June 2019
April 2021
April 2022
May 2022

Joined Hazama Corporation
Joined Ichigo as Head of Human Resources andGeneral Administration Division
Executive Officer and Head of Human Resourcesand General Administration Division
Director (current), Managing Director & Statutory
Executive Officer (Administration), Member ofCompliance Committee
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.
Executive Vice President & 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, Takara Building
Maintenance Co., Ltd.
Executive Vice President & Statutory Executive
Officer & COO (current)
President & Representative Director, Ichigo Real
Estate Services Fukuoka Co., Ltd.
Group Head of Sustainable Real Estate
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)
Statutory Executive Officer (Sustainable
Infrastructure Business) (current)
Chairman & Representative Director, Centro Co.,Ltd.
Director, I Think Rent Co., Ltd. (current)

12

IchigoSharesHeld

113,208
sharesNo.

Name(Date of Birth)

Career History(continued from May 2023
previous page)3

Chairman, President, & Representative Director,
Centro Co., Ltd. (current)
Chairman & Director, Storage Plus Corporation(current)
Director, FANTERIA Co., Ltd. (current)(Other Positions)
Chairman, President, & Representative Director, Miyako City Co.,
Ltd.
Chairman & Representative Director, Ichigo Marché Co., Ltd.
Director, Ichigo Investment Advisors Co., Ltd.
Chairman & Representative Director, Hakata Hotels Inc.
President & Representative Director, Miyazaki Sunshine FM Co.,
Ltd.
Chairman, President, & Representative Director, Centro Co., Ltd.
Director, I Think Rent Co., Ltd.
Chairman & Director, Storage Plus Corporation
Director, FANTERIA Co., Ltd.
Message to Our Shareholders
Thank you always for your support.
Ichigo’s mission is to become a sustainable infrastructure company.
By leveraging our expertise, we address social issues, improve ourbusinesses, and create new businesses.
I will continue to work towards realizing Ichigo’s values tocontribute to the revitalization of Japan and regional communities.

13

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
In a diversifying society, the power of human capital, in addition
to digital technology, is important for Ichigo to become thesustainable infrastructure company outlined in our long-term
vision.
I will build a diverse workforce that embodies theprofessionalism, venture spirit & diversity, and teamwork
outlined in Ichigo’s Code of Conduct, and maximize our
employees’ potential via learning opportunities and experiences
driving individual growth.
Thank you for your continued guidance and support.

14

IchigoSharesHeld

10,300shares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
July 20125

Tetsuya Fujita(March 26, 1954)
May 2014

October 2015
May 2016
August 2017
March 2019
June 2019
June 2020
November 2021

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

15

IchigoSharesHeld70,000sharesNo.

Name(Date of Birth)(continued fromprevious page)

5

Career History
Message to Our Shareholders
Ichigo has been working towards future growth under its Ichigo 2030
long-term vision.
As an Independent Director, I will supervise overall management andconflicts of interest, and make contributions to grow shareholder
value. Towards this end, I will continue to focus on communicatingwith shareholders.

16

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

February 2015
6

Noriko Kawate(February 22, 1976)

June 2021

April 2022

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 (now Cast Global Group)(current)
Independent Auditor, Sumitomo Bakelite Co.,
Ltd. (current)
Independent Auditor, Nichireki Co., Ltd.
(current)
Civil Conciliation Commissioner, Tokyo District
Court (current)(Other Positions)
President, CLEA Consulting Co., Ltd.
Partner, Cast Group
Independent Auditor, Sumitomo Bakelite Co., Ltd.
Independent Auditor, Nichireki Co., Ltd.
Civil Conciliation Commissioner, Tokyo District Court
Message to Our Shareholders
While there has been a silver lining in the business environment
surrounding Ichigo, mainly in the hotel business on the back ofrelaxed Covid travel restrictions and normalized economic activities,
a sudden weakening of the yen, inflation, and rising global interest
rates warrant no optimism. Even under a difficult businessenvironment, I will perform my duty as an Independent Director tohelp Ichigo achieve growth as a sustainable infrastructure company
over the long term.

17

IchigoSharesHeld

51,000sharesNo.

Name(Date of Birth)

Career History
April 1975
June 1996
June 1997
June 1999
June 2000
June 2003
June 2005
April 2007
June 2008
July 2010
August 2010
June 2012
May 2015

7
Yukio Suzuki(June 3, 1950)

September 2015
May 2016
March 2018
June 2018
June 2021
April 2022
December 2022
March 2023

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.
Chairman, The Securities Analysts Associationof Japan
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
Independent Director, Member of Audit
Committee, XNET Corporation (current)
Independent Director, Nihonbashi Value Partners
Co., Ltd. (current)
Independent Director, Value Quest Partners
Co., Ltd. (current)
Independent Director, WILLs Inc. (current)(Other Positions)
CEO, Belle Investment Research of Japan Inc.
Independent Director, Systena Corporation
Independent Director, WILLs Inc.
Independent Director, Member of Audit Committee, XNET
Corporation
Independent Director, Nihonbashi Value Partners Co., Ltd.
Independent Director, Value Quest Partners Co., Ltd.

18

IchigoSharesHeld

15,100sharesNo.

Name(Date of Birth)(continued fromprevious page)

7

Career History
Message to Our Shareholders
Sustainable shareholder value creation requires a corporate purpose,a long-term vision, strategies for new business models, thedevelopment of revolutionary products and services, and risk
management that is resistant to changes in the businessenvironment. It is especially important that the process ofshareholder value creation be shared with all stakeholders andshareholders. I will fulfill my responsibility as an Independent
Director by supervising management, especially from theperspective of ESG, which is at the root of sustainableinfrastructure.

19

IchigoShares
Held

No.

Name
(Date of Birth)

Career History
April 1971
April 1998
June 1998
April 2002
April 2003
April 2004
April 2005
April 2009
June 2009
October 2011
June 2013
April 2016
June 2016
May 2017
October 20188

March 2019
June 2020
Nobuhide Nakaido(November 1, 1946) March 2022

Joined Sumitomo Corporation
Trustee, 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)
Independent Director, JAC Recruitment Co.,
Ltd. (current)(Other Positions)
Chairman, Japan Association for Chief Human Resources
Officers
Independent Director, eSOL Co., Ltd.
Independent Director, Sourcenext Corp.
Independent Director, JAC Recruitment Co., Ltd.
Message to Our Shareholders
While the most difficult time of the Covid pandemic is over andthe business environment is turning around, I believe that Ichigo,
as a sustainable infrastructure company, needs dynamism morethan ever to achieve sustainable growth of shareholder value.
As an Independent Director, I will not only contribute to Ichigo’smanagement and supervision, but also strengthen Ichigo’s
governance to allow Ichigo to take appropriate risks.

20

IchigoSharesHeld

10,000sharesNo.

Name(Date of Birth)

Career History
April 1981
July 1989
December 1995
February 2006
October 2007

April 2010
May 2010
July 2010
June 2011
December 2011

November 2012
9
Sakon Uda
(May 22, 1955)

April 2014
June 2014
April 2015
April 2016
September 2016
July 2017
November 2017
March 2019
June 2021

Nippon Kokan KK (now JFE Holdings, Inc.)
McKinsey & Company, Inc.
Principal (Partner), McKinsey & Company,
Inc.
Executive Officer, Japan Post Holdings Co.,Ltd.
Senior Executive Managing Director, Japan
Post Holdings Co., Ltd
Senior Managing Executive Officer, Japan
Post Service Co., Ltd (currently Japan Post
Co., Ltd.)
Advisor, Japan Post Co., Ltd.
Professor, Business Breakthrough University
Kenichi Ohmae Graduate School of Business
Statutory Executive Officer & COO, Tokyo
Star Bank Ltd.
Independent Director, Ebara Corporation
The Investigation Committee on the
Accident at the Fukushima Nuclear Power
Stations (“ICANPS”), Tokyo Electric Power
Company
Consultant, Nuclear Damage Compensation
and Decommissioning Facilitation
Corporation
Head of Tokyo Electric Power Company
Procurement Committee
Dean, Faculty of Business Administration,
Professor, Business Breakthrough University
Director, Business Breakthrough, Inc.
(current)
Director & Academic Committee Member,
Japan-North America Medical Exchange
Foundation
Vice President, Business Breakthrough
University
Special Advisor, Tokyo Metropolitan
Government Political Reform Headquarters
Director, Japan-North America Medical
Exchange Foundation
Committee Member, Tokyo Metropolitan
Government Urban Planning Council(current)
Independent Director & Chairman of theBoard, Ebara Corporation
Independent Director, The CC Innovation,
Ltd.
21

IchigoShares
Held

–

No.

Name
(Date of Birth)

Career History
June 2022

December 2022
February 2023

IchigoSharesHeld

Vice Chairman of the Board, Strategy
Advisors Co., Ltd. (current)
Independent Director, Dream Incubator Inc.
(current)
Independent Director, Pacific Consultants
Co., Ltd. (current)Electricity Prices Advisor, Consumer Affairs
Agency (current)(Other Positions)
Director, Business Breakthrough, Inc.
Committee Member, Tokyo Metropolitan Government Urban
Planning Council
Vice Chairman of the Board, Strategy Advisors Co., Ltd.
Independent Director, Dream Incubator Inc.
Independent Director, Pacific Consultants Co., Ltd.
Electricity Prices Advisor, Consumer Affairs Agency
Message to Our Shareholders
I have demonstrated through my experience that corporate
governance is not merely a formality, but the most importantdriver of corporate innovation and is essential for creating
shareholder value. I will leverage my experience and contributeto further grow Ichigo’s shareholder value.
Thank you for your guidance and support.

(Note 1) None of the candidates for Director or Independent Director are a related party of
Ichigo.
(Note 2) Ichigo’s Nominating Committee and Board of Directors’ reasons for nominating
Scott Callon, Takuma Hasegawa, Minoru Ishihara, and Eri Murai for Director are
as follows:(i) Scott Callon has extensive experience 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 14 and a halfyears at the close of this shareholder meeting.
(ii) Takuma Hasegawa has extensive knowledge and experience at Ichigo, having led
a number of Ichigo’s real estate businesses. He has been Ichigo’s President since
May 2015. His term of office will have been ten years at the close of thisshareholder meeting.
(iii) Minoru Ishihara has extensive knowledge and experience as Executive Vice
22–

President and COO of Ichigo. He assumed the position of Director in 2009, andhis term of office will have been 14 years at the close of this shareholder meeting.
(iv) 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 (HR), and her term of officewill have been four years at the close of this shareholder meeting.
(Note 3) All five candidates for Independent Director – Tetsuya Fujita, Noriko Kawate,
Yukio Suzuki, Nobuhide Nakaido, and Sakon Uda – meet the Tokyo Stock
Exchange’s (TSE) requirements for Independent Directors and will be registeredwith the TSE as such.
(Note 4) Ichigo’s Nominating Committee and Board of Directors’ reasons for nominating
Tetsuya Fujita, Noriko Kawate, Yukio Suzuki, Nobuhide Nakaido, and Sakon Uda
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 13 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 12 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 eight years at the close of this shareholder meeting.
(iv) 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 six years at the close of this shareholder
meeting.
(v) Sakon Uda has extensive experience in corporate strategy and management, andhas served as Independent Director and Chairman of the Board of major listedcompanies. He has extensive knowledge in corporate governance, HR
development, and corporate management which he can draw upon to fully
monitor Ichigo’s activities on behalf of shareholders.
(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.
23

(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
compensation 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, andNobuhide Nakaido. The extent of liabilities for compensation under theagreements is the minimum limited liability amount as defined in Article 425,
Paragraph 1 of the Company Law; provided that the liability is limited only whenthe Independent Directors have performed their duties which cause liability ingood faith and without gross negligence. Upon the re-appointment of Tetsuya
Fujita, Noriko Kawate, Yukio Suzuki, and Nobuhide Nakaido as Independent
Directors, Ichigo will enter into new limited liability agreements with equivalentterms with each of them. Upon the appointment of Sakon Uda as an Independent
Director, Ichigo will enter into the same limited liability agreement with him.
(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 are
owned by Yukio Suzuki.
(Note 11) The number of Ichigo shares owned by each of the candidates for Director is as ofFebruary 28, 2023.

24

Skill Matrix of Ichigo’s Board of Directors (as of May 2023)
Ichigo has made sustainability a key management priority. Along with the expansion of
Ichigo’s businesses, our Board of Directors has been structured with a focus on diversity anda balance in skills, regardless of gender, nationality, or age.
Skill Matrix
No.

Name

Corporate
Management

Finance/
Investment

Risk
Management○

1

Scott Callon

○

○

2

Takuma Hasegawa

○

○

3

Minoru Ishihara○

4

Eri Murai

5

Tetsuya Fujita

6

Noriko Kawate

7

Yukio Suzuki

8
9○

Diversity
ESG

GenderNationality

Male

UnitedStates

○

Male

Japan

○

Male

Japan

Female

Japan

Male

Japan

○
○

○

Human
Resource
Development

○

○

○

○

Female

Japan

○

○

○

Male

Japan

Nobuhide Nakaido

○

○

○

Male

Japan

Sakon Uda

○

○

Male

Japan

○

25

Business Report(March 1, 2022 – February 28, 2023)
I.

Current Operations and Financials

A. Business Conditions in the Current Fiscal Year (FY23/2)
1. Business Results
The Japanese economy normalized to pre-Covid levels, as its recovery accelerated during
the current fiscal period on the back of the gradual lifting of Covid restrictions. Domestic
tourism was supported by the Japanese government’s domestic travel subsidy program,and inbound tourism continued to recover as Japanese restrictions on inbound travel
lifted. Investment demand also increased, as companies resumed capital investments on
the back of strong corporate earnings. On the other hand, risks associated with increases
in resource prices and cost of living negatively impact the global economy and must be
monitored.
In the Japanese real estate market, the hotel industry saw a recovery in revenue driven bystrong hotel demand. January – February 2023 RevPAR for hotels operated by Hakata
Hotels, Ichigo’s subsidiary, recovered to 150 to 200% vs. 2022 average RevPAR, withgrowth expected to continue. Vacancies and rent for central Tokyo office buildings were
flat. Ichigo’s mid-size office buildings continued to see stable demand, and Ichigo willcontinue to keep an eye on the diversifying tenant needs arising from changes inworkstyle, to provide high-quality office. Residential assets and logistics assets continued
to experience stable demand as well as steady investment appetite.
Japan has been accelerating the establishment of policies aimed towards a net zero carbon
society in line with global climate initiatives, and as a result the importance of clean
energy businesses is on the rise. Ichigo will continue to focus on generating renewableenergy that is safe for the planet.
Ichigo revised up its FY23/2 forecast when it announced its FY23/2 Q3 earnings, yet
FY23/2 exceeded the revised forecasts on the back of a strong real estate market and arobust recovery in hotel demand.
To respond to the rapid changes in business environment, Ichigo has taken measures tomaintain its strong financial base and robust cash flows. Ichigo’s robust cash generation
is funding growth investments, including asset acquisitions, investments in new
businesses, and flexible deployment of share buybacks in line with our Ichigo 2030 longterm vision. During FY23/2, Ichigo conducted share buybacks of JPY 4.5 billion.
In line with our Ichigo 2030 long-term vision, Ichigo is also strategically expanding its
business activities as a sustainable infrastructure company to further drive its competitive
strengths. In particular, Ichigo is growing stock earnings via non-asset businesses,
leveraging its real estate know-how and value-add capabilities. Ichigo will continue togrow its core businesses and develop new businesses to maximize shareholder value andfurther strengthen its commitment to shareholders.

26Core Business Growth–

Sustainable Real Estate (SRE)In FY23/2, Ichigo acquired JPY 50.7 billion of assets funded by its robust cash flow
generation. Of these acquisitions, Ichigo acquired six office assets (JPY 12.4 billion)
to grow its pipeline for Ichigo Office (8975).
Leveraging its real estate know-how and value-add capabilities, Ichigo launched the
Ichigo Owners Co-Ownership business, which allows investors to make diversified,small-scale investments in a broad array of real estate assets, and the Ichigo
Residence Token, a digital real estate business. In growing its investment products,
Ichigo is expanding its client base and acquisition opportunities, leading to a virtuous
cycle of asset acquisitions and sales. In FY23/2, Ichigo Owners acquired and soldJPY 36 billion and JPY 28 billion in residential assets, respectively. Thesetransactions have led to asset management contracts, thus contributing to stockearnings. FY23/2 SRE sales was JPY 55.1 billion.
As part of Ichigo’s Public-Private Partnership (PPP) business, an Ichigo-led
consortium was selected to operate and manage the Yokosuka Port Market located in
Yokosuka City, Kanagawa Prefecture as a PPP. Ichigo was recognized for its strong
value-add capabilities transforming existing buildings into new tourist attractions,and after its reopening, the market has been extensively covered by the media andhas been attracting many visitors. In addition to owning and leasing hotels, Ichigo
has been selling PROPERA, an Ichigo-developed AI hotel revenue management
system, and is growing sales in anticipation of hotel demand recovery from tourism.

–

Asset Management
Ichigo continued to support its TSE-listed REITs, its listed solar power producer, andprivate funds.
Ichigo Office (8975) and Ichigo Hotel (3463) acquired high-quality assets during
FY23/2. Ichigo Office sold an asset at a price that was 2.3 times book value and 1.9
times recent appraisal value in FY22/2, and completed the sale of another asset in
FY23/2 Q4, further driving shareholder value. Ichigo Office will continue to makestrategic acquisitions and sales and maximize shareholder value.
As part of efforts to strengthen sponsor commitment, Ichigo has decided to purchase
Ichigo Office shares. Ichigo Office and Ichigo Hotel (3463) are the only J-REITs
with a no fixed fee, performance-fee only asset management structure directly linked
to shareholder value creation. Ichigo will continue to proactively support Ichigo
Office and Ichigo Hotel, and drive long-term shareholder value via the provision ofhigh-quality assets, establishing bridge funds, and deploying Ichigo’s value-add
capabilities to increase the value of Ichigo Office and Ichigo Hotel assets.

–

Clean Energy
Ichigo’s power plants in operation now total
63 (total output 174.2MW) having brought
three new power plants (5MW, +3.7% yearon-year) online during FY23/2. Ichigo is alsoplanning entry into green biomass as a third
renewable energy business to make productive
use of aging forest wood supply, help conserve
forests, and contribute to the revitalization of
local economies. Ichigo will continue togrow its clean energy business, which has
Ichigo Ueda Yoshidaike Eco Power Plant
proven to be stable and resilient to market
fluctuations amidst the Covid pandemic.
27

Growth Strategy to Build Market Fluctuations–

Strengthening Financial Base
Since the global financial crisis, Ichigo has been strengthening both its earnings andfinancial base via measures such as lengthening borrowing terms, reducing
borrowing costs, hedging against increases in interest-rates, and borrowing via
unsecured loans. Ichigo has also increased funding via ESG-linked loans. Ichigo willcontinue these measures to underpin its growth as a sustainable infrastructurecompany.

–

Cash Flow Management
To further strengthen its cash flows, Ichigo reclassified some of its Real Estate forSale as Fixed Assets in order to make use of the tax effect on depreciation. The
FY23/2-end Fixed Asset Ratio is 84.3%.

Shareholder Returns–

Flexible Share Buybacks
In line with our Ichigo 2030 long-term vision, Ichigo conducts flexible sharebuybacks, and has conducted share buybacks consecutively for six years.
Ichigo is working to drive EPS, an important metric of shareholder value, tomaximize shareholder value, and will continue to grow profits and flexibly conduct
share buybacks.

FY23/2 Aug-Nov
FY23/2 Apr-Jun
FY22/2
FY21/2
FY20/2
FY19/2
FY18/2

Number of Share
Purchased(% of Shares Outstanding)
9,448,400(1.9%)
5,103,800(1.0%)
4,363,500(0.9%)
9,645,800(1.9%)
7,081,200(1.4%)
7,869,700(1.6%)
8,436,500(1.7%)

28

Average
Purchase Price

AmountJPY 317

JPY 3 billion

JPY 293

JPY 1.5 billion

JPY 343

JPY 1.5 billion

JPY 311

JPY 3 billion

JPY 424

JPY 3 billion

JPY 381

JPY 3 billion

JPY 355

JPY 3 billion

–

Dividend Policy (FY23/2 Dividend Increase)
Ichigo is working to drive long-term shareholder value with a shareholder return
policy that focuses on divided stability, transparency, and growth, and has establisheda Dividend on Equity (DOE) payout ratio policy of greater than 3%.
Underpinned by its robust earnings stability, Ichigo has also adopted a progressive
dividend policy, under which dividend is maintained or raised every year, but not cut.
Although the use of a dividend payout ratio is more common in shareholder return
policies, dividend payout ratios are highly sensitive to short-term earnings
fluctuations and thus result in uncertainty with respect to future dividends. Ichigo’s
adoption of a progressive dividend policy underscores its commitment to long-termvalue growth for its shareholders.
Ichigo focuses on maximizing long-term cash flows for shareholders. Supported by apickup in post-Covid economic activity, Ichigo generated robust cash flows in
FY23/2, and increased its dividend to JPY 8.
11 Consecutive Years of
Dividend Growth

JPY 5

JPY 6

JPY 7

JPY 7

JPY 7

JPY 7

FY19/2

FY20/2

FY21/2

FY22/2

JPY 8

JPY 3
JPY 1*

JPY 1.1

JPY 1.3

FY13/2(Resumed
Dividend)

FY14/2

FY15/2

FY16/2

FY17/2

FY18/2* Adjusted to reflect 200:1 stock split

29

FY23/2

–

J.League Shareholder Program
In 2019, Ichigo became a J.League Top Partner to work with the J.League to promotelocal community development, and launched a Shareholder Program that offers freetickets to J.League games to Ichigo, Ichigo Office, Ichigo Hotel, and Ichigo Green
shareholders.
As a J.League Top Partner, Ichigo is continuing to distribute J.League game tickets toshareholders for the 2023 season as a means to express its gratitude to shareholders
and contribute to regional development.
As an extension of its Shareholder Program, Ichigo offered shareholders the chance
to win via lottery a Miyazaki Thanks Market Christmas Set featuring food products
selected by players of Ichigo-sponsored soccer team, Tegevajaro Miyazaki.

30

FY23/2 Earnings Details
Ichigo generated consolidated FY23/2 revenue of JPY 68.1 billion (+19.6% year-onyear), operating profit of JPY 12.5 billion (+24.7% year-on-year), all-in operating profitof JPY 16.9 billion (+27.4% year-on-year), recurring profit of JPY 10.8 billion (+45.2%
year-on-year), and net income of JPY 9.4 billion (+45.4% year-on-year).
All-In Operating Profit = Operating Profit + Gains on Sale of Sustainable Real Estate
Assets Recorded as Extraordinary Gains
Segment Earnings Details
The breakdown of revenue and operating profit by segment is as follows. In order todisclose Sustainable Real Estate’s actual profit contribution, Ichigo has set all-in
operating profit, operating profit plus gains on sale of sustainable real estate assets
recorded as extraordinary gains, as a KPI. From FY23/2, Ichigo changed its reporting ofsegment P&L from operating profit to all-in operating profit to improve disclosuretransparency.
Asset Management
Due to increased performance fees and gains on sale performance fee from the asset saleat Ichigo Office (8975), revenue increased to JPY 4.2 billion (+46.3% year-on-year) andsegment operating profit increased to JPY 3.0 billion (+64.5% year-on-year).
Sustainable Real Estate
A strong hotel recovery offset a decrease in real estate rental income resulting from
temporary vacancies at our large office building. Furthermore, due to sales of residential,
retail, and office assets, revenue increased to JPY 58.6 billion (+19.2% year-on-year).
Segment operating profit increased to JPY 11.9 billion (+27.6% year-on-year) due tosales of fixed assets.
Clean Energy
Due to full-year contributions from power plants that came online in FY22/2 and bringing
online three new plants, revenue increased to JPY 5.7 billion (+6.3% year-on-year).
Segment operating profit was down 5.5% year-on-year to JPY 2.0 billion due to anincrease in organizational restructuring consulting fee.
Consolidated Income Statement Details
RevenueDue to gains from residential asset and logistics asset sales, new solar plants increasing
power generation revenue, and an increase in base AM fees from Ichigo Office, revenue
increased 19.6% year-on-year to JPY 68.1 billion.
The revenue breakdown was: real estate sales JPY 41.1 billion, real estate rental income
JPY 17.1 billion, real estate management fee income JPY 3.7 billion, and power
production revenue JPY 5.6 billion.
Operating Profit
Gains on sales of assets in the sustainable real estate business and an increase inperformance-based AM fee in the asset management business contributed to operating
profit of JPY 12.5 billion (+24.7% year-on-year).
Non-Operating Profit & Expenses
Non-operating profit totaled JPY 979 million (+170.9% year-on-year) due to a year-on –31

year increase in derivative valuation gains, with derivative valuation gains of JPY 790
million (Ichigo hedges against increases in interest rates using interest rate swaps) anddividend income of JPY 46 million.
Non-operating expenses totaled JPY 2.6 billion (-9.8% year-on-year).
By category, interest expenses were JPY 2.2 billion and debt financing-related fees were
JPY 171 million.
Extraordinary Gains
Extraordinary gains totaled JPY 4.6 billion (+36.6% year-on-year) on gains on sale on
fixed assets under the Sustainable Real Estate business of JPY 4.4 billion.
Extraordinary losses totaled JPY 1.2 billion (-1.9% year-on-year) on impairment loss on atangible asset of JPY 803 million, valuation loss on securities investments of JPY 261
million, and allowance for doubtful accounts of JPY 127 million.
Net Income
Net income increased 45.4% year-on-year to JPY 9.4 billion. Incomes taxes totaled JPY
4.4 billion (which included a tax adjustment of JPY 152 million).

32

2. Capital Expenditures
During FY23/2, property, plant, and equipment (PP&E), including operating and indevelopment power plants, increased by JPY 904 million.
3. Financing
In order to maintain its strong financial base, Ichigo is improving its borrowing terms anddiversifying its borrowings, including by lowering borrowing costs, staggering loan
maturities, extending loan durations, and reducing loan amortizations.
As a sustainable infrastructure company, Ichigo has been recognized for its initiatives
contributing to a sustainable society. As one example of this, it has established a newcommitment line with a maximum loan amount of JPY 9.253 billion via Sumitomo
Mitsui Banking Corporation’s (“SMBC”) Positive Impact Finance program on February
27, 2023 (drawdown period starting on March 3, 2023). Ichigo also established a newcommitment line with a maximum loan amount of JPY 13 billion via Mizuho Bank’s(“Mizuho”) Positive Impact Finance Program on February 28, 2023.
These Positive Impact Finance programs aim to provide ongoing support for corporate
initiatives that are deemed to have positive societal impact based on a comprehensive andquantitative assessment of the borrowers’ business activities.1 These new commitment
lines will support Ichigo’s initiatives towards building a sustainable society and further
strengthen its financial base.
1

The Principles for Positive Impact Finance is a financial framework, established byUnited Nations Environment Programme Finance Initiative (“UNEP FI”), that aims toprovide financing in support of attaining SDGs by helping companies realistically andreliably deliver positive impacts while helping them to identify and mitigate any potential
negative impacts.
As a result, Ichigo’s corporate loan balance as of FY23/2-end was JPY 167.7 billion(-0.5% year-on-year), and non-recourse loan balance was JPY 42.2 billion (+3.3% yearon-year). The average interest rate during FY23/2 for corporate loans and non-recourse
loans were 0.89% (– year-on-year) and 1.06% (+0.04% year-on-year), respectively.
Ichigo continues to have an extraordinarily stable and durable balance sheet, with 94.1%
of corporate loans (+1.6% year-on-year) as of FY23/2-end being long-term. JPY 90.9
billion of corporate loans have remaining loan terms of more than five years, with
Ichigo’s corporate loans having an average loan term of 10.0 years and an averageremaining loan maturity of 6.1 years. The proportion of total uncollateralized borrowings
was 25.5% (+1.3% year-on-year) as of FY23/2-end, driven by the aforementioned
FY23/2 commitment lines.

33

Average Interest Rate and Loan Term

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

2.5%

12
10.8 years

10.2 years

10.3 years

10.0 years

10.0 years

10.1 years

10.0 years

9.6 years
8.3 years

2.0%

9
7.6 years

7.6 years

7.2 years
6.5 years

6.1 years

1.5%

6

1.24%

1.04%

1.0%

0.97%

0.91%

0.92%

0.89%

0.89%

FY20/2

FY21/2

FY22/2

FY23/20.5%

30FY17/2

FY18/2

FY19/2

Term Structure of Loans

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/A34

B. Earnings and Assets in the Current and Past Three Fiscal Years
20th Period(FY20/2)

21st Period(FY21/2)

22nd Period(FY22/2)

23rd Period(FY23/2)

Revenue (JPY million)

87,36061,36856,93468,093Operating Profit (JPY million)

27,721

9,668

10,01812,492All-In Operating Profit(JPY million)

27,721

10,38813,266

16,908Recurring Profit (JPY million)

24,395

7,179

7,471

10,848Net Income (JPY million)

8,201

5,027

6,473

9,409

Net Income per Share (JPY)

16.89

10.48

13.81

20.45

Total Assets (JPY million)

333,726

347,076

337,887

338,619

Net Assets (JPY million)

101,607110,255

112,191

114,393

Net Assets per Share (JPY)208.49209.81215.46227.24

Dividend per Share (JPY)

7.0

7.0

7.0

8.0

8.2%

5.0%

6.5%

9.2%

Return on Equity(Notes)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.
All-In Operating Profit = Operating Profit + Gains on Sale of Sustainable Real
Estate Assets Recorded as Extraordinary GainsThe “Accounting Standard for Revenue Recognition” (Accounting Standard
Board of Japan (“ASBJ”) Statement No. 29, March 31, 2020) has been applied
from the beginning of FY23/2.

Operating Profit(JPY million)
28,00026,27927,721

21,00014,00012,492
9,668

10,018

FY21/2

FY22/27,000

0FY19/2

FY20/235

FY23/2

All-In Operating Profit(JPY million)
28,00026,27927,721

21,00016,90813,266

14,00010,3887,000

0FY19/2

FY20/2

FY21/2

FY22/2

FY23/2Net Income(JPY million)

18,00015,00015,373

12,000
9,409

8,201

9,000

5,027

6,000

6,473

3,000
0
FY19/2

FY20/2

FY21/2

FY22/2

FY23/2Net Income per Share (EPS)
(JPY)
33

31.14

20.45

22
16.89
13.81
10.48

11

0
FY19/2

FY20/2

FY21/236

FY22/2

FY23/2

Total Assets & Net Assets

360,000

Total Assets
Net Assets
319,343(JPY million)
333,726

347,076

337,887

338,619300,000
240,000
180,000
102,859

120,000

110,255

101,607

112,191

114,393

60,0000FY19/2

FY20/2

FY21/2

FY22/2

FY23/2

Net Assets per Share
(JPY)
210

202.14208.49209.81215.46

FY19/2

FY20/2

FY21/2

FY22/2227.24

140

70

0

37

FY23/2

C. Company and Subsidiary Information(1) Parent Company
Ichigo Inc.
(2) Important Subsidiaries
Name

CapitalPercentage
Ownershipof Voting Rights

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

Main Business

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 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

Ichigo Si Co., Ltd.

JPY 20 million

100%

R&D, production, andapplication of silicon dioxide(SiO2)(Notes)Ichigo Land Shinchiku Co., Ltd. and Ichigo Real Estate Services Fukuoka Co.,
Ltd. were merged into Ichigo Estate Co., Ltd. on December 1, 2022.
Hakata Hotels Inc. will change its name to OneFive Hotels Inc. on May 31, 2023.

38

D. Key Matters to be Addressed
Ichigo’s core Sustainable Real Estate business contributes towards a sustainable society via
preserving and improving existing real estate, and aims to increase tenant satisfaction bycapturing tenant needs. Although the outlook for office demand remains uncertain on theback of Covid-related workstyle changes, Ichigo will continue to provide high-quality
offices and flexibly respond to changes in tenant needs.
As a sustainable infrastructure company, Ichigo continues to work to grow its existing
businesses as well as develop new businesses that will support its sustainable growth. Ichigo
believes companies exist to serve society, and is working to contribute to a sustainable
society while growing long-term value for its shareholders.
In line with this mission, Ichigo has been proactively addressing environmental issues in
conducting its business activities. In addition to growing its Sustainable Real Estate businesswith the aim of extending the useful life of real estate beyond 100 years, Ichigo has joined
RE100, a global initiative to accelerate the transition of electricity used by businesses to100% renewable energy towards a net zero carbon society. Ichigo is committed to sourcing
100% renewable electricity across its operations, including Ichigo Office (8975) and Ichigo
Hotel (3463), by 2025. Towards this end, Ichigo will continue to generate renewableelectricity via its Clean Energy business, while also working to reduce its energy
consumption.
In order to transform its business model to drive significantly higher long-term growth for
its shareholders, Ichigo developed Ichigo 2030, its long-term vision. The key elements ofIchigo 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.
39

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.

40

Shareholder Return Policy
Ichigo will work to drive long-term shareholder value with a shareholder return policy that
focuses on 1) dividend stability, transparency, and growth, and 2) flexible share buybacks.
1. Progressive Dividend Policy
Ichigo will continue its progressive dividend policy, originally adopted in FY17/2, in Ichigo
2030. Ichigo’s progressive dividend policy underscores its commitment to driving continued
organic earnings and dividend growth for shareholders. Under this policy, the previous
year’s dividend becomes the floor for the current year’s dividend. The dividend will beraised (or kept flat) but not cut, providing shareholders downside protection.
2. DOE >3%
In addition to its progressive dividend policy, Ichigo will continue its policy of a DOE(Dividend on Equity) payout ratio of greater than 3%. In contrast to a “dividend payout ratio
policy,” which calculates dividends based upon annual earnings which can be highly
volatile, a DOE policy pays dividends based upon far more stable shareholder equity. A
DOE policy thus results in more stable dividends for shareholders. Ichigo believes that the
combination of a progressive dividend and a DOE-based payout policy will significantly
increase the security, certainty, and visibility of its dividend to the benefit of Ichigo’s
shareholders.
3. Flexible Deployment of Share Buybacks
In addition to the above dividend policies, Ichigo has adopted a policy to flexibly conduct
share buybacks to optimize its capital structure and drive shareholder value.
E. Key Business Segments (as of February 28, 2023)
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.

41

F. Employees (as of February 28, 2023)
1. Employees (Consolidated)
Number of employees

Increase/decrease fromprevious fiscal year-end

372 (110)+59 (+26)

Clean Energy

18 (1)+2 (–)

Company-wide

72 (2)+17 (-2)

462 (113)+78 (+24)

Segment
Asset Management
Sustainable Real Estate

Total(Note 1) The number of employees is the number of full-time employees (excluding
workers dispatched from Ichigo to other companies and including workers
dispatched from other companies to Ichigo), including Directors who are also
employees.
(Note 2) The average number of non-full-time employees (including part-time andtemporary staff) is presented in parentheses.
(Note 3) On a year-on-year basis, the number of employees increased by 78 and thenumber of non-full-time employees increased by 24, 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

90 (3)-9 (-2)43.8 years old

7.2 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, 2023)
Lenders

AmountMizuho Bank, Ltd.

JPY 41.2 billion

Sumitomo Mitsui Banking Corporation

JPY 31.2 billion

Kansai Mirai Banking Corporation

JPY 7.3 billion

Shinsei Bank, Ltd.

JPY 6.5 billion

The Tokyo Star Bank, Limited.

JPY 6.3 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.)

42

H. Policy on Dividends and Shareholder Distributions
Ichigo views distributions to its shareholders as an important priority.
Ichigo’s Board of Directors adopted a progressive dividend policy on April 19, 2016. 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 FY23/2 dividend per share is JPY 8.
Dividend per Share

(JPY)
8
7

8.0
7.0

7.0

7.0

7.0

FY19/2

FY20/2

FY21/2

FY22/2

6
5
4
3
2
1
0

43

FY23/2

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
April 19, 2022 and August 19, 2022. The details of the buybacks are as follows:
1. Share Buyback Rationale
To grow value for Ichigo shareholders
2. Share Buyback Summary
April 2022 Share Buyback
Number of Shares
AmountAverage Share Price
Buyback Period
Buyback Method

5,103,800
JPY 1,499,974,600
JPY 293
April 20, 2022 – June 10, 2022
In-market purchases via securities firmAugust 2022 Share Buyback
Number of Shares
AmountAverage Share Price
Buyback Period
Buyback Method

9,448,400
JPY 2,999,994,200
JPY 317
August 22, 2022 – November 16, 2022
In-market purchases via securities firm44II. Other Matters
A. Shares and Shareholder Information (as of February 28, 2023)
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 51,992,200 treasury shares)
34,502

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

49.65

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

27,671,900

6.10

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

22,653,000

5.00

Morgan Stanley MUFG Securities Co., Ltd.

20,455,464

4.51

BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT
ACCOUNTS M LSCB RD(Standing Proxy: MUFG Bank, Ltd.)

20,252,000

4.47

BNYMSANV RE GCLB RE JP RD LMGC
(Standing Proxy: Citibank, N.A., Tokyo Branch)

12,243,455

2.70

Custody Bank of Japan, Ltd. (Trust Bank)

9,512,300

2.10

SMBC Nikko Securities Inc.

9,137,400

2.02

MORGAN STANLEY SMITH BARNEY LLC CLIENTSFULLY PAID SEG ACCOUNT(Standing Proxy: Citibank, N.A., Tokyo Branch)

8,124,800

1.79

STATE STREET LONDON CARE OF STATE STREETBANK AND TRUST, BOSTON SSBTC A/C UK LONDONBRANCH CLIENTS- UNITED KINGDOM(Standing Proxy: The Hong Kong and Shanghai Banking
Corporation Limited, Tokyo Branch)

4,775,100

1.05

TOTAL

359,933,619

79.39(Note 1) Shareholding Ratio is calculated excluding 51,992,200 treasury shares.
(Note 2) The Shareholding Ratio of Ichigo Trust Pte. Ltd., Ichigo’s largest shareholder,
increased during the period from 48.11% to 49.65% as a result of share sales.

45

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
Twenty-Third Annual Shareholder Meeting available on Ichigo’s corporate website:www.ichigo.gr.jp/en/ir/stocks/shareholders_info.html
C. Directors and Officers
1. Directors (as of February 28, 2023)
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 CEO, Ichigo Asset Management, Ltd.
Chairman, CEO, & 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.
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.
Chairman & Representative Director, Hakata Hotels Inc.
President & Representative Director, Miyazaki Sunshine FM Co., Ltd.
Chairman & Representative Director, Centro Co., Ltd.
Director, I Think Rent 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.

NorikoKawate2

Nominating Committee Member, Audit Committee Member, Compensation
Committee Member
President, CLEA Consulting Co., Ltd.
Partner, Cast Group
Independent Auditor, Sumitomo Bakelite Co., Ltd.
Independent Auditor, Nichireki Co., Ltd.
Civil Conciliation Committee Member, Tokyo District Court

Director

Director

Independent
Director46

Position

Name

Responsibility and Other Business Affiliations

Yukio
Suzuki3

Vice Chairman of Compliance Committee, Audit Committee Member
CEO, Belle Investment Research of Japan Inc.
Independent Director, Systena Corporation
Independent Auditor, Wills Inc.
Independent Director, XNET Corporation
Independent Director, Nihonbashi Value Partners Co., Ltd.
Independent Director, Value Quest Partners Co., Ltd.

Masatoshi
Matsuzaki

Nominating Committee Member, Compensation Committee Member
Special Advisor, Konica Minolta Inc.
Independent Director, LIXIL Corporation (Chairman of the Board)
Independent Director, SmartHR, Inc. (Chairman of the Board)
Independent Director, Ushio Inc.

Independent
Director

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

Independent
Director

Amina
Sugimoto

Representative Director, CEO, & Co-Founder, fermata Inc.

Independent
Director

Independent
Director

1

Audit Committee Member Tetsuya Fujita, serves 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.

47

2. Statutory Executive Officers (as of February 28, 2023)
Position

Name

Responsibility and Other Business Affiliations

Scott Callon

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

Takuma Hasegawa

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

Executive Vice President &Statutory Executive Officer &COO

Minoru Ishihara

Executive Vice President, Sustainable Real
EstateDirector, Ichigo Investment Advisors Co., Ltd.
Chairman, President, & Representative
Director, Miyako City Co., Ltd.
Chairman & Representative Director, Ichigo
Marché Co., Ltd.
Chairman & Representative Director, Hakata
Hotels Inc.
President & Representative Director, Miyazaki
Sunshine FM Co., Ltd.
Chairman & Representative Director, Centro
Co., Ltd.
Director, I Think Rent 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

Sustainable Engineering
President & Representative Director, Ichigo
Marché Co., Ltd.

Takashi Ohigawa

HR

Yasutoyo Senda

Audit
Sustainable Infrastructure Business, DX
Acceleration

Chairman & Representative
Statutory Executive Officer

President & Representative
Statutory Executive Officer

Executive Managing Director

Senior Statutory Executive
Officer
Statutory Executive Officer
Statutory Executive Officer

Kenichi Tanaka48

3. Directors and Statutory Executive Officers Who Stepped Down during the Current
Fiscal Year
Senior Statutory Executive Officer Ryutaro Yamamoto and Statutory Executive Officer
Akihiko Tsukasa stepped down to assume roles as directors at Ichigo subsidiaries following
a company reorganization on April 1, 2022. Kenichi Tanaka retired upon the expiration of
his term.
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. Outline of Director Liability Insurance
Ichigo has entered into a director liability insurance agreement with an insurance company,
pursuant to Article 430, Paragraph 3, Clause 1 of the Company Law, that insures against
damages arising in relation to directors executing on their responsibilities and claims madewith respect to directors executing on their responsibilities. Insured persons include Ichigo’s
Directors and Statutory Executive Officers as well as any Director, Auditor, or Statutory
Executive Officer seconded to an Ichigo Group company. The agreement does not insure
against damages arising from certain exempted reasons such as willful misconduct. All
insurance premiums are borne by Ichigo.
6. Policy on Determining Compensation for Directors and Statutory Executive Officers
a. Basic Policy
Compensation 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– Compensation for Directors
Compensation of 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. The performance-based bonus is based on Ichigo’s
total corporate performance, the Director’s level of contribution towards value
creation across the Ichigo Group, and the Director’s level of achievement of theirrespective goals.
– Compensation for Independent Directors
Compensation of Independent Directors consists of a monthly base salary and aperformance-based bonus. The monthly base salary is a fixed amount in accordancewith the number of points assigned to each Independent Director based on theirrespective supervisory roles and past management experience. If a performance-based
director bonus is to be paid, the amount is based on a point system, similar to that used
for monthly base salary, taking into consideration the importance of the supervisory
function and the contribution towards value creation across the Ichigo Group.
49

– Compensation for Statutory Executive Officers
Compensation of Statutory Executive Officers consists of a monthly base salary and aperformance-based bonus. The monthly base salary is a fixed amount based on the roleof each Statutory Executive Officer. The performance-based bonus is based on
Ichigo’s total corporate performance, the performance of the operating unit or area forwhich the Statutory Executive Officer is responsible, the Statutory Executive Officer’s
individual performance, and the Statutory Executive Officer’s contribution towards
enhancing operations and alignment with the corporate mission and corporate code of
conduct.
– Employee Stock Options
Stock options are granted to further strengthen commitment towards Ichigo’s
sustainable growth and the maximization of shareholder value. These stock options are
granted in addition to the compensation described above.

50

7. Total Compensation Paid to Directors and Statutory Executive Officers(JPY million)
Amount by Category
Base Salary

PerformanceBased Bonus

Stock Options

Number of
Recipients(persons)

244

78

156

10

3

55

24

29

2

10

54

35

14

3

6

Amount Paid
Directors(excluding
Independent
Directors)
Statutory
Executive
Officers
Independent
Directors(Note 1) As of the end of the period, there are ten Directors (including six Independent
Directors) and 11 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 compensation,
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 compensation from Ichigo.
(Note 3) The total number of recipients is 19. This deviates from 17, the total number of
Directors and Statutory Executive Officers as of February 28, 2023, due to theinclusion of Directors that have stepped down.
(Note 4) In addition, Ichigo paid JPY 139 million as employee compensation to eight
Statutory Executive Officers who also serve as employees.
(Note 5) No compensation has been paid by Ichigo subsidiaries to Ichigo’s Independent
Directors.
(Note 6) Exercise of stock options during FY23/2 is stated in B. Employee Stock Options.
(Note 7) The performance-based bonus is based on a comprehensive assessment of Ichigo’s
total corporate performance and growth in shareholder value and incorporates
metrics including achievement of Ichigo’s annual operating profit, recurring profit,
and net income targets, shareholder returns (dividend per share and the Dividendon Equity (DOE) ratio), and progress with respect to the KPIs set in the Ichigo
2030 long-term vision. Ichigo’s FY23/2 earnings forecast is reported as a range,
with the bottom of the range being a conservative forecast, given uncertainties dueto the ongoing Covid pandemic. Therefore, Ichigo did not set targets for annual
operating profit, recurring profit, or net income for this fiscal period. Performancebased bonus amounts were determined in light of net income increasing by 45.4%
year-on-year this fiscal period.
Forecast

ActualActual vs. Forecast

Operating Profit–

JPY 12,492 million–

Recurring Profit–

JPY 10,848 million–

Net Income–

JPY 9,409 million–

Dividend

JPY 7

JPY 8

114%

DOE

3%

3.6%

119%

51

(Note 8) FY23/2 compensation for Directors and Statutory Executive Officers has beenreviewed by the Compensation Committee and complies with Ichigo’scompensation policy.
8. 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. and aPartner of Cast Group. Ichigo has no relationship with CLEA Consulting Co., Ltd. orCast 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.
– Independent Director Amina Sugimoto is Representative Director, CEO, & CoFounder of fermata Inc. Ichigo has no relationship with fermata Inc.
b. Positions as Independent Directors in Other Companies– Independent Director Noriko Kawate is an Independent Auditor of Sumitomo BakeliteCo., Ltd., an Independent Auditor of Nichireki Co., Ltd, and a Civil Conciliation
Committee Member of the Tokyo District Court. Ichigo has no relationship with any ofthese companies.
– Independent Director Yukio Suzuki is an Independent Director of Systena Corporation,an Independent Director of WILLs Inc., an Independent Director and Audit Committee
Member of XNET Corporation, an Independent Director of Nihonbashi Value Partners
Co., Ltd., and an Independent Director of Value Quest Partners Co., Ltd. Ichigo has no
relationship with any of these companies.
– Independent Director Masatoshi Matsuzaki is a Special Advisor of Konica Minolta
Inc., an Independent Director and Chairman of the Board of Directors of LIXIL
Corporation, an Independent Director of SmartHR, Ltd., and an Independent Directorof Ushio Inc. Ichigo has no relationship with any of these companies.
– Independent Director Nobuhide Nakaido is an Executive Director of Japan Association
for Chief Human Resources Officer, and an Independent Director of eSOL Co., Ltd.,
Sourcenext Corp., and JAC Recruitment Co., Ltd. Ichigo has no relationship with anyof these companies.
c. Relationship with Ichigo or Related Entities of Ichigo
The six Independent Directors have no spouses or relatives in the third degree or closer
who are Statutory Executive Officers of Ichigo or related entities.

52

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

Independent
Director

Amina Sugimoto

Activities
Attended 9 out of 9 meetings (100%) of the Board of Directors.
Attended 18 out of 18 meetings (100%) of the Audit Committee
and attended 2 out of 2 meetings (100%) of the Compliance
Committee. Attended 5 out of 5 meetings (100%) of theNominating Committee and 6 out of 6 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,primarily in the areas of corporate management, risk
management, and ESG.
Attended 9 out of 9 meetings (100%) of the Board of Directors.
Attended 18 out of 18 meetings (100%) of the Audit Committee.
Attended 5 out of 5 meetings (100%) of the Nominating
Committee and 6 out of 6 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, primarily in the areas offinance and investment, and risk management.
Attended 9 out of 9 meetings (100%) of the Board of Directors.
Attended 18 out of 18 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, primarily in the areas of corporate
management, finance and investment, and risk management.
Attended 9 out of 9 meetings (100%) of the Board of Directors.
Attended 5 out of 5 meetings (100%) of the Nominating
Committee. Attended 6 out of 6 meetings (100%) of theCompensation Committee. Commented and advised on
resolutions and discussions from an objective standpoint
independent from the management team, primarily in the areas ofcorporate management, ESG, and human resource development.
Attended 8 out of 9 meetings (88.8%) of the Board of Directors.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team,primarily in the areas of corporate management, finance andinvestment, and human resource development.
Attended 6 out of 7 meetings (85.7%) of the Board of Directors
after appointment as Independent Director. Commented andadvised on resolutions and discussions from an objective
standpoint independent from the management team, primarily inthe areas of corporate management, finance and investment, and
ESG.

53

D. Independent Auditor
1. Grant Thornton Taiyo LLC
2. Fees Paid to the Independent Auditor(i)Fees paid to the Independent Auditor during FY23/2
Fees for the services specified in Article 2, Paragraph 1 of theCertified Public Accountants Act (Act No. 103 of 1948)

JPY 66 million

Fees for the services other than those specified in Article 2,
Paragraph 1 of the Certified Public Accountants Act–
JPY 66 million(ii)

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

JPY 93 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.

54

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 Twenty-Third Annual Shareholder Meeting
available on Ichigo’s corporate website:www.ichigo.gr.jp/en/ir/stocks/shareholders_info.html
1. Internal Controls to Ensure that Statutory Executive Officers and Employees Execute
Their Duties in Full Compliance with Japanese Law and Ichigo’s Articles 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.

55

Consolidated Balance Sheet(As of February 28, 2023)(JPY million)

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

128,057
40,536
3,866
1,324

Operational securities investments

47

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 and wind power plant
equipment
Depreciation
Solar and wind power plant
equipment (net)Land
Buildings under construction
Solar and wind power plants underconstruction
Other
Depreciation
Other (net)
Intangible Assets
Goodwill
Leasehold rights
Other
Investments and Other Assets
Securities investments

79,151
3,197

Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful
accounts
Total Assets

Item
Liabilities
Current Liabilities
Short-term loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans(due within one year)
Income taxes payable
Accrued bonuses-66
210,562
199,323
66,790-12,751
54,039Other current liabilities
Long-Term Liabilities
Bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities

34,956Long-term security deposits received-8,094

Other long-term liabilities

Amount19,200
962
364
8,539
4,218
949
112
4,053
205,026
5,239
152,624
38,012
1,589
7,163
396

26,862
114,431
679
2,250
3,040
-1,980
1,060
2,398
717
1,397
283
8,840

3,937

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-133

Minority Interests

10,552

Total Net Assets
Total Liabilities and Net Assets

114,393338,619

4,455
240
341

338,61956

224,226
102,678
26,888
11,26682,438-17,914
347
296
51
814

Consolidated Income Statement(March 1, 2022 – February 28, 2023)(JPY million)

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

57

Amount68,093
48,674
19,4186,926
12,492
46
38
10
790
92
2,165
171
285
4,416
205
23
261
127
803
18
4,425
152

979

2,622
10,848
4,621

1,235
14,234
4,578
9,656
246
9,409

Consolidated Statement of Changes in Shareholders’ Equity(March 1, 2022 – February 28, 2023)(JPY million)
Shareholders’ Equity
CapitalReserve

CapitalBalance as of March 1, 2022
Changes in the Current
Fiscal Year
Dividend Payment
Net Income
Change in Consolidated
Subsidiaries
Share Buyback
Sale of Treasury Shares
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as ofFebruary 28, 2023

26,88876,310

Total
Shareholders’Equity-13,423
101,043-3,275
9,409-3,275
9,409

-6

-6

Retained
Earnings

11,268Treasury
Shares-2-4,4999-4,499
7

–

-2

6,127

-4,4901,634

26,888

11,26682,438-17,914102,678

Other Comprehensive Income
Deferred Gains
Stock
Total Other
Valuation Gains (Losses) on
Options(Losses) on
Long-Term Comprehensive
IncomeOther Securities Interest Rate
HedgesBalance as of March 1, 2022
Changes in the Current
Fiscal Year
Dividend Payment
Net Income
Changes in Consolidated
Subsidiaries
Share Buyback
Sale of Treasury Shares
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as ofFebruary 28, 2023

25

-254

-228

961

Minority Total Net
Interests Assets
10,415

112,191-3,2759,409-6-4,499
7

270

305

576

-146

136

566

270

305

576

-146

136

2,201

296

51

347

814

10,552

114,39358

Parent Balance Sheet(As of February 28, 2023)(JPY million)

Item
AssetsAmountCurrent Assets
Cash and deposits
Accounts receivable
Operational securities investments
Short-term loans to affiliates
Long-term loans to affiliates(due within one year)
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
SoftwareLeasehold rights
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

44,492
16,861838
47
23,617

Deferred tax assets
Other
Less: allowance for doubtful
accounts
Total Assets

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

Amount
7,377
962
72
4,543
1,201

513

Accrued expenses

157

100
673

Income taxes payable
Advances received

255
36

Deposits received

22

Other

125

1,369
502
-31
111,245
8,036
3,725
-631
3,094
4,847
222
-127
95
352
257
92
2
102,856
3,157

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
Earnings reserve

76,2283,000
62,698
10,371155
383,60571,034
26,888
11,264
11,20460
50,79544

5,296

Earnings reserve – other

50,751

4,002

Retained earnings carried forward

50,75139,938Treasury shares-17,914

10

Revaluations and Adjustments
Valuation gains (losses) on othersecurities
Deferred gains (losses) on
long-term interest rate hedges
Stock Options

48,285
24
2,269
-127
155,738

283
230
53
814

Total Net Assets

72,132

Total Liabilities and Net Assets

155,73859

Parent Income Statement(March 1, 2022 – February 28, 2023)(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
Debt financing-related fees
Other
Recurring Profit
Extraordinary Gains
Gains on reversal of stock options
Extraordinary Losses
Valuation losses on securities investments
Allowance for doubtful accounts
Impairment loss
Pre-Tax Net Income
Income taxes – current
Income taxes – deferred
Net Income

60

Amount
6,936
342
6,594
3,331
3,262
709
32
790
6
15
967
141
111
205
201
863
117
434
26

1,554

1,220
3,597
205

1,181
2,620
460
2,159

Parent Statement of Changes in Shareholders’ Equity(March 1, 2022 – February 28, 2023)(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
26,888 11,204
March 1, 2022
Changes in the Current
Fiscal Year
Dividend Payments
Share Buyback
Sale of Treasury
SharesNet Income
Changes in Items otherthan Shareholders’EquityTotal Changes－－
Balance as of
26,888 11,204
February 28, 2023

Balance as of March 1, 2022
Changes in the Current Fiscal Year
Dividend Payments
Share Buyback
Decrease due to Company Split
Net Income
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as of February 28, 2023

62 11,266-2

4451,866

51,911 -13,423

76,643-3,275-3,275-4,499-3,275-4,499

9

7

-2

-2

2,159

2,159

2,159

-2

－

-1,115-1,115-4,490-5,60860 11,264

44

50,75150,795 -17,914

71,034

Revaluation and Adjustment
Gains
Valuation Deferred
Total(losses)on
Gains (losses) Long-Term
Revaluation
on OtherandInterest Rate Adjustment
Securities
Hedges
-30
-250
-280

Stock
Options

Total Net
Assets961

77,323-3,275-4,499
7
2,159

260

303

564

-146

417

260
230

303
53

564
283

-146
814

-5,19072,13261

Auditor’s Report on the Consolidated Financial Statements
Report of Independent Auditor
April 14, 2023
To the Board of Directors of Ichigo Inc.
Grant Thornton Taiyo LLC
Hiroaki Ohkane, CPA, Designated and Engagement Partner(seal)

Daisuke Noda, CPA, Designated and Engagement Partner(seal)

Auditing Opinion
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, 2022 to February 28, 2023 pursuant to
Article 444, Paragraph 4 of the Company Law.
The consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Ichigo Group consisting of Ichigo Inc. and its consolidated subsidiaries for the period for the
consolidated financial statements in conformity with accounting principles generally accepted in Japan.
Auditing Opinion Rationale
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility
under the auditing standards are further described in the Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements. We are independent from Ichigo Inc. and its consolidated subsidiaries inaccordance with the code of professional ethics in Japan, and we have fulfilled other ethical responsibilities as
the auditor. We believe we received sufficient and appropriate information to have a reasonable basis to express
our opinion.
Other Contents
Other contents refer to the business report and its supplementary information. It is the Management’s
responsibility to compile and disclose these contents. In addition, it is the Audit Committee’s responsibility tomonitor the execution of duties by Executive Officers and Directors in the development and operation of thereporting process for these other content.
Our audit opinion on the consolidated financial statements does not include any other content, and we do not
express an opinion on the other contents.
Our responsibility in the audit of the consolidated financial statements is to read through the business report andits supplementary information, and examine if there is a difference between these contents and the consolidated
financial statements or the knowledge we acquired during the audit process, and whether there are otherindications of material error in these contents.
We are required to report the fact if we determine that there are material errors.
We note that there are no material errors to report.
Management & Audit Committee’s Responsibilities with Respect to the Consolidated 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.
In preparing the Consolidated Financial Statements, the management shall evaluate whether it is appropriate toprepare the Consolidated Financial Statements based on the assumption of a going concern, and if it is required
to disclose matters of a going concern based on the corporate accounting standards generally accepted in Japan,
the management shall be responsible to disclose such matters.

62

The Audit Committee is responsible for overseeing the performance of duties of the Statutory Executive Officers
and Directors in developing and operating the Company’s financial reporting process.
Auditor’s Responsibility with respect to Auditing the Consolidated Financial Statements
The Auditor’s responsibility is to obtain reasonable assurance as to whether the consolidated financial statements
as a whole are free of material misstatement due to fraud or error, based on the audit performed by the Auditor,
and to create an independent Auditor’s report and express its opinion on the consolidated financial statements.
Misstatements may arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the decisions of those referring to the consolidated financial
statements. Audit is conducted in accordance with the auditing standards generally accepted in Japan byexercising professional judgement and conducting the following with professional skepticism throughout theauditing process:–

Identify and assess material misstatement risks, whether due to fraud or error. In addition, develop andimplement audit procedures in accordance with such material misstatement risks. The selection andapplication of audit procedures shall be at the discretion of the auditors. In addition, obtain sufficient andappropriate audit evidence to provide a basis for our opinion.

–

Although the purpose of auditing the Consolidated Financial Statements is not to express an opinion on theeffectiveness of internal controls, the Auditors have considered internal controls related to auditing incarrying out risk assessments in order to establish audit procedures that are appropriate to the circumstances.

–

Evaluate the appropriateness of the accounting policy adopted by the management and its application
method, as well as the reasonableness of the accounting estimates made by the management and theadequacy of the related notes.

–

Conclude whether it is appropriate for the management to prepare the Consolidated Financial Statements
based on the assumption of a going concern, and based on the audit evidence obtained, whether there is any
material uncertainty regarding events or circumstances that may raise significant doubts about theassumption of a going concern. If there is any material uncertainty regarding the assumption of a going
concern it is required to include in its Audit report cautions regarding the notes of the Consolidated
Financial Statements, and to include a qualified opinion regarding the Financial Statements if the notes of
the Consolidated Financial Statements concerning significant uncertainties are inappropriate. The auditors’
conclusions are based on the audit evidence obtained by the date of the audit report, but future events orcircumstances may prevent an entity from continuing as a going concern.

–

Evaluate whether the presentation and notes of the Consolidated Financial Statements are in compliancewith the corporate accounting standards generally accepted in Japan, as well as the presentation (including
the related notes), composition and contents of the Consolidated Financial Statements and whether theConsolidated Financial Statements fairly presents the underlying transactions and accounting events.

–

Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its
consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The
auditor is responsible for directing, supervising and performing the audit of the consolidated financial
statements. The auditor is solely responsible for the audit opinion.

We communicate with the Audit Committee and its members regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant inadequacies in internal control
that we identify during our audit.
We also report to the Audit Committee and its members that we have complied with relevant ethicalrequirements regarding independence, and other matters that may reasonably be thought to bear on our
independence, and if any, related safeguards in order to remove or reduce the risk of matters which may affectour independence.
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 its consolidated subsidiaries and us or the engagement partner.

63

Auditor’s Report on the Parent Financial Statements
Report of Independent Auditor
April 14, 2023
To the Board of Directors of Ichigo Inc.
Grant Thornton Taiyo LLC
Hiroaki Ohkane, CPA, Designated and Engagement Partner(seal)

Daisuke Noda, CPA, Designated and Engagement Partner (seal)
Auditing Opinion
We have audited the consolidated financial statements of Ichigo Inc., namely the balance sheet, the income
statement, the statement of changes in shareholders’ equity, the notes to financial statements, and their
supplementary information for the fiscal year from March 1, 2022 to February 28, 2023 pursuant to Article 436,
Paragraph 2 Item 1 of the Company Law.
The financial statements referred to above present fairly, in all material respects, the financial position of Ichigo
Inc. for the period for the consolidated financial statements in conformity with accounting principles generally
accepted in Japan.
Auditing Opinion Rationale
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility
under the auditing standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements. We are independent from Ichigo Inc. in accordance with the code of professional ethics in Japan, andwe have fulfilled other ethical responsibilities as the auditor. We believe we received sufficient and appropriate
information to have a reasonable basis to express our opinion.
Other Contents
Other contents refer to the business report and its supplementary information. It is the Management’s
responsibility to compile and disclose these contents. In addition, it is the Audit Committee’s responsibility tomonitor the execution of duties by Executive Officers and Directors in the development and operation of thereporting process for these other content.
Our audit opinion on the financial statements does not include any other content, and we do not express an
opinion on the other content.
Our responsibility in the audit of the financial statements is to read through the business report and its
supplementary information, and examine if there is a difference between these contents and the financial
statements or the knowledge we acquired during the audit process, and whether there are other indications ofmaterial error in these contents.
We are required to report the fact if we determine that there are material errors.
We note that there are no material errors to report.
Management & Audit Committee’s Responsibilities with Respect to the Financial Statements
Management is responsible for compiling and indicating the financial statements in accordance with thegenerally accepted accounting principles of Japan. This includes the operation and maintenance of an internal
compliance structure which management deems necessary to ensure that the financial statements are compiled
and indicated free of material misstatement in the form of fraud or error.
In preparing the Financial Statements, the management shall evaluate whether it is appropriate to prepare the
Financial Statements based on the assumption of a going concern, and if it is required to disclose matters of a64

going concern based on the corporate accounting standards generally accepted in Japan, the management shall be
responsible to disclose such matters.
The Audit Committee is responsible for overseeing the performance of duties of the Statutory Executive Officers
and Directors in developing and operating of the Company’s financial reporting process.
Auditor’s Responsibility with respect to Auditing the Financial Statements
The Auditor’s responsibility is to obtain reasonable assurance as to whether the financial statements as a whole
are free of material misstatement due to fraud or error, based on the audit performed by the Auditor, and to makean independent Auditor’s report and express its opinion on the financial statements. Misstatements may arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the decisions of those referring to the financial statements.
Audit is conducted in accordance with the auditing standards generally accepted in Japan by exercisingprofessional judgement and conduct the following with professional skepticism throughout the auditing process:–

Identify and assess material misstatement risks, whether due to fraud or error. In addition, develop andimplement audit procedures in accordance with such material misstatement risks. The selection andapplication of audit procedures shall be at the discretion of the auditors. In addition, obtain sufficient andappropriate audit evidence to provide a basis for our opinion.

–

Although the purpose of auditing the Financial Statements is not to express an opinion on the effectivenessof internal controls, the Auditors have considered internal controls related to auditing in carrying out risk
assessments in order to establish audit procedures that are appropriate to the circumstances.

–

Evaluate the appropriateness of the accounting policy adopted by the management and its application
method, as well as the reasonableness of the accounting estimates made by the management and theadequacy of the related notes.

–

Conclude whether it is appropriate for the management to prepare the Financial Statements based on theassumption of a going concern, and based on the audit evidence obtained, whether there is any material
uncertainty regarding events or circumstances that may raise significant doubts about the assumption of agoing concern. If there is any material uncertainty regarding the assumption of a going concern it is required
to include in its Audit report cautions regarding the notes of the Financial Statements, and to include a
qualified opinion regarding the Financial Statements if the notes of the Financial Statements concerning
significant uncertainties are inappropriate. The auditors’ conclusions are based on the audit evidence
obtained by the date of the audit report, but future events or circumstances may prevent an entity fromcontinuing as a going concern.

–

Evaluate whether the presentation and notes of the Financial Statements are in compliance with thecorporate accounting standards generally accepted in Japan, as well as the presentation (including therelated notes), composition and contents of the Financial Statements and whether the Financial Statements
fairly presents the underlying transactions and accounting events.

We communicate with the Audit Committee and its members regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant inadequacies in internal control
that we identify during our audit.
We also report to the Audit Committee and its members that we have complied with relevant ethicalrequirements regarding independence, and other matters that may reasonably be thought to bear on our
independence, and if any, related safeguards in order to remove or reduce the risk of matters which may affectour independence.
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.

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Audit Committee Report

April 19, 2023
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 twenty-third fiscal year from March 1, 2022 to February 28, 2023. 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.

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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.

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