Corporate GovernanceDirectors and Audit & Supervisory Board Members

Director

1

2

3

7

8

9

Masazumi Hasumi President

Masayuki Yagi Director, Managing Executive Officer

Takeshi Matsuura Director, Managing Executive Officer

Shintaro Hashiba Director, Executive Officer

Haruo Shimada Director Outside Independent

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

Apr. 1990
Sept. 1991
Mar. 2006

Apr. 1991
May 1995

Apr. 1987

Apr. 1975

July 1987

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

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

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

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

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

Jan. 2021

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

Oct. 2003
Oct. 2004
July 2008
May 2014

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

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

Apr. 1982
Mar. 1986
June 2000

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

Feb. 2021

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

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

June 2018

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

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

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

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

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

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

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

Audit & Supervisory Board Member

4

5

6

10

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

Shinji Shimane Director, Executive Officer

Takaomi Ogawa Director, Executive Officer

Hideo Matsuda Director, Executive Officer

Michihiro Nagasaka Director Outside

Oct. 1995

Sept. 1992

Apr. 1984

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

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

Jan. 2021

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

15

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

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

Dec. 2014
Jan. 2018		Mar. 2018

Oct. 2020
Jan. 2021

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

Apr. 2015
June 2021

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

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

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

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

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

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

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

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

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

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

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

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

16

Corporate Governance

Basic concept of corporate governance

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

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

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

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

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

Appoint / Discharge

Consult / Advise

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

Appoint / Discharge

Board of Directors

Executive Committee

Departments / Affiliates

Audit

Collaboration
Collaboration

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

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

Category of officer
Director (except outside Director)

Total amount ofcompensation(thousand yen)
137,425

Report discussion
results to the Board of
Directors

Questionnaire evaluation items

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

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

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

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

( i ) Extraordinary disasters including natural disasters

Information security management

Total amount per type of compensation (thousand yen)
Fixed

Performance-linked
90,05436,752

Number of eligible officers

Other
10,618

7

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

4,800

4,800

-

-

1

Outside Officer

43,38539,495

3,890

-

5

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

17

Have discussions
based on questionnaire
results

Risk management

Audit Firm
Audit

Direct / Report

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

Collaboration

President

Direct / Report

Conduct aquestionnaire

Audit & Supervisory Board
Audit

Appoint / Discharge

Direct / Report

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

Evaluation of the effectiveness of Board of Directors

General Meeting of Shareholders

Legal Counsel

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

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

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

Message

CFO Interview

Message from Outside Director

CFO Interview

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

Outside Director

Haruo Shimada(In office since 2007)

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

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

Outside Director

Keiji Watanabe(In office since 2011)

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

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

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

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

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

Shintaro Hashiba

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

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

15
11.9%

11.5%

8.7%

9.0%

10

13.4%

13.0%

10.5%

10.3%

8.0%

7.3%
5

0

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

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

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

35.7%
25.0
Payout ratio

20

45.0%

38.3%
19.5

2.5

80.3%
26.5
16.5

52.8%
28.0
17.0

14.0

12.5

15.0
9.5
10
5.5
0

FY20177.0

FY20188.5

FY201910.0

FY202011.0

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

19

20