MIRARTH : Integrated Report 2022(view) 8,404KB

Integrated Report 2022

Fiscal year ended March 31, 2022

From Takara Leben to

MIRARTH HOLDINGS

Takara Leben Co., Ltd. transitioned to a holding company structure through an absorption-type company split on October 1, 2022, and changed its name to MIRARTH HOLDINGS, Inc.

The Group has continued to grow as a general real estate business developer by providing customers with ideal, affordable housing that anyone can buy with confidence and peace of mind. Leveraging the strengths built on our real estate business, we will endeavor to secure sustainable growth by nurturing the energy business and asset management business into second and third pillars of business; evolving into a company that makes the future of people and the Earth happier.

	Our Purpose
	To design sustainable
Our Values	environments for a happier
future for both people and
Passion & Inspiration	our planet.

To be passionate about creating vibrant environments and to inspire and be inspired by people who share our vision.

Sustainability

To create a sustainable world where people, nature, and society coexist in harmony.

Value Creation

To continue to evolve and keep up with the rapid change around us to create new value.

Diversity & Co-creation

To value each individual's ideas and co-create a diverse and equitable environment with the local communities.

Integrity & Trust

To generate a trusting relationship among people and society through protection of our safety and security.

About Our New Name

MIRARTH

Mirai (Future) + Earth

This new moniker embodies our desire to evolve into a company that makes a happier future for the Earth and its people by contributing to all communities everywhere.

CONTENTS

Introduction

• 2 At a Glance
• 4 History of the MIRARTH HOLDINGS Group

MIRARTH's Value Creation Story

• 6 Value Creation Process
• 8 Explanation of the Value Creation Process
  10 Risk & Opportunity
  12 Materiality
  14 Financial/Non-Financial Highlights
  16 A Message from the CEO

MIRARTH's Strategy

1. Review of Previous Medium-Term Management Plans
2. Progress under the Medium-Term
   Management Plan (FY2021 to FY2024)
3. A Message from the CFO

27 Strategies by Business Segment

MIRARTH's Foundation

36 Sustainability in the MIRARTH HOLDINGS Group

38 Together with Employees

42 Together with Customers and Local Communities

46 Environment

48 Corporate Governance

1. Board of Directors, Auditors and Executive Officers
2. Compliance
3. Risk Management
4. Interview with an Outside Director

Data

1. Eleven-YearFinancial/Non-Financial Summary

1. Corporate Data
2. Stock Information

Other Disclosure Information

https://mirarth.co.jp/en/ir/

 Financial Reports	 Ordinary General Meeting of
 Medium-term Management Plan	Shareholders Information
Materials	 Others
 Annual Securities Reports

Editorial Policy and Cautionary Statements Regarding Forward-Looking Statements

This report, which for the most part provides details of the Takara Leben Group's (currently MIRARTH HOLDINGS Group) operations in fiscal 2021, the fiscal year ended March 31, 2022, has been designed to provide stakeholders with a deeper understanding of our business activities, management strategies, performance, and other non-financial information, including interaction with society and the environment.

• This document was prepared to provide information regarding the Compa- ny's consolidated results in fiscal 2021 and should not be construed as a solicitation for investment in securities issued by MIRARTH HOLDINGS, Inc. The information provided in this report is fundamentally based on data avail- able as of March 31, 2022. Any forward-looking statements including opinions and forecasts are based on the best judgments of management as of the time this report was prepared. Accordingly, HIRARTH HOLDINGS does not guaran- tee or promise that any forward-looking statements will be realized or achieved or provide any assurance as to the accuracy or integrity of information. More- over, the content of this report is subject to change without prior notice.

MIRARTH HOLDINGS Integrated Report 2022

1

At a Glance

From fiscal 2022, the MIRARTH HOLDINGS Group reorganized its operations into the four business segments, real estate, energy, asset management, and other businesses. Going forward, we will work to build a well-balanced portfolio by expanding our energy and asset management businesses while maintaining our real estate business

Introduction	MIRARTH's Value Creation Story	MIRARTH's Strategy	MIRARTH's Foundation	Data

MIRARTH HOLDINGS Group by the Numbers

as a core pillar of operations.

Real Estate Business 76.4%

With the new built-for-sale condominium business as a core pillar of our operations, we are engaged in a host of other endeavors including the sale of detached houses, renewal and resale of condominiums, liquidation of profit- generating real estate for both residences and offices, as well as the real estate rental and management businesses.

2021: Nationwide ranking of condominium units supplied sold by developer group

5th (2021)

* Source: Real Estate Economic Institute Co., Ltd.

This ranking was first collated as a group in 2021. The Takara Leben Group (now MIRARTH HOLDINGS Group), which comprised the three companies: Takara Leben Co., Ltd., Takara Leben Tohoku Co., Ltd., and Takara Leben

Ranking: Top 10
Ranking	2021 Ranking	(Units)
1	Open House Group	5,423
2	Daiwa House Group	4,045
3	Nomura Real Estate Group	4,014
4	Mitsui Fudosan Group	3,982
5	Takara Leben Group	2,472
6	Anabuki Group	2,350
7	Mitsubishi Estate Group	2,214
	Sumitomo Realty Group	2,211

Energy Business 21.0%

West Japan Co., Ltd., ranked 5th with a total of 2,472 condominium units. (Takara Leben ranked 11th in the number of condominium units by seller/operator in 2020.)

8
9	Mori Trust Group	2,198
10	Iida Group	2,086

Consolidated Net Sales

162.7billion yen

(FY2021)

The MIRARTH HOLDINGS Group generates a stable flow of earnings by selling electricity to electric power companies. The Group also works diligently to contribute to society by producing renewable energy. In addition to revenue gained from the sale of electric power, we are also conducting sales of power generation facilities to the Takara Leben Infrastructure Fund.

Business	0.8%
Asset Management

New built-for-sale condominium supply areas

Nationwide areas expanded to 35prefectures

The MIRARTH HOLDINGS Group aims to expand its supply area. To this end, the Group will strengthen its system for purchasing land throughout Japan by proactively establishing bases in areas where it does not currently have a

New built-for-sale condominium nationwide network

Bases

Supplied and purchased area

Real Estate Business

	New built-for-sale	42.3%
	condominium
 New detached house	5.3%
 Renewal resale	3.5%
 Liquidation	15.9%
 Real estate rental	3.7%
	Real estate	5.0%
	management
 Real estate other	0.7%

Utilizing the Group's wealth of expertise, knowledge, and networks in real estate and renewable energy, MIRARTH HOLDINGS Group is entrusted with the management of infrastructure, J-REIT, private placement, and other funds. Through its asset management business, the Group provides excellent investment opportunities and solid asset management services.

Other Businesses

1.8%

Through its other businesses, the Group engages in a wide range of activities including construction subcon- tracting, hotel management, and the provision of rehabilitation -oriented day care facility services.

* Data for fiscal 2021 has been reclassified and presented in each new segment.

presence. We newly expanded into Kyoto prefecture in fiscal 2021.

Cumulative number of new built-for-sale condominium units supplied nationwide

36,638units (As of March 31, 2022)

The MIRARTH HOLDINGS Group's supply area extends over roughly 30 cities of the approximately 280 cities in Japan with a population of 100,000. We will continue to actively participate in local development projects to contribute to the revitalization of the regions and increase the number of cities in our supply area.

Flow Businesses

The core of flow businesses is the new built-for-sale condominium business, which mainly targets fami- lies, dual-income and single-person households in metropolitan areas such as the Tokyo metropolitan area, and active seniors in regional city centers. In addition, the MIRARTH HOLDINGS Group is engaged in renovating and redeveloping buildings in partnership with government.

2	MIRARTH HOLDINGS Integrated Report 2022

Stock and Fee-Based Businesses

In the stock business, the MIRARTH HOLDINGS Group is building stable revenue from rent, and revenue generated from over 60,000 properties managed on con- signment. In addition, in the fee-based business, at two listed investment corporations, investment management compensation was increased and thereby established a system that does not rely on flow businesses.

Number of managed housing units	Rental revenues
69,335units (As of March 31, 2022)	¥5.9billion (FY2021)
Current power generation
310MW (As of March 31, 2022)
* Including wholesale portion
	MIRARTH HOLDINGS Integrated Report 2022	3

History of the MIRARTH HOLDINGS Group

Established as Takara Komuten Co., Ltd. in 1972, the MIRARTH HOLDINGS Group celebrated its 50th anniversary in September 2022. The Group began selling proprietarily branded condominiums in the 1990s and has steadily increased the number of units supplied as well as net sales by quickly responding to changes in cus- tomers' lifestyles and the demands of the times. From October 2022, we as MIRARTH HOLDINGS, a company that makes the future of people and the Earth happier, will work toward creating new value.

Real Estate-Related Milestones

Introduction	MIRARTH's Value Creation Story	MIRARTH's Strategy	MIRARTH's Foundation	Data

Net Sales

¥162.7

billion

2020

Coinciding with the development of SDGs in Japan, ZEH (Net Zero Energy House)-standard housing needs accelerated

Surpassed

¥100

billion mark

1970s

1980s

1990s

2001

2006

New availability of

Land prices soared in

After the bubble bursts, corporate factories and

The J-REIT market was

With formulation and enactment

home loans

the bubble economy

housing were sold off and the development of con-

established enabling real

of the Basic Act for Housing,

dominium buildings on vacant land moved forward

estate investment trusts to

Japan's policy shifted to encour-

list on the Tokyo Stock

age use of existing housing

Net sales and cumulative number of new built-for-sale condominium units supplied

Exchange for the first time

stock with refurbishment and

renovation

(Billions of yen)

100

Surpassed

Net sales

¥50

billion mark

Cumulative number of units supplied

2008

The financial crisis sparked by the Lehman Shock led to ongoing consolidation among real estate companies

2011

The Great East Japan Earthquake and other disasters spurred strengthened efforts to adopt seismic isolation and vibration control structures for condominiums, as well as securing emergency sources of power and other features

Over 20,000 units

2016

Compliance with energy conservation standards became mandatory, in line with the enactment of the Building Energy Conservation Act, a law concerned with building energy consumption performance

Cumulative number of new built-for-sale condominium units supplied

36,638 units

(As of March 31, 2022)

(Unit)

Over 30,000 units40,000

	Surpassed
50
¥10
	billion mark

10th	20th	30th
		Over 10,000 units
anniversary	anniversary	anniversary

0

1972

1982

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

History

20,000

40th	50th
anniversary
anniversary
			0
2007 2008 2009 2010 2011 2012		(For the period
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ended March 31)

1972 Established as Takara

Komuten Co., Ltd. in

Yamato-cho,Itabashi-ku

1975 Purchased the Company's head office to the Nakaitabashi Head Office Buildings (Dai-ichi Takara Building)

1982 Launched the real estate rental business

1986 Established Takara Jyuhan Co., Ltd. in an effort to expand sales and intermediary operations

1988 Established Takara Management Co., Ltd. as a real estate management company

1994 Commenced sales of the "Leben Heim" series of condominiums

1996 Changed the name of Takara Management Co., Ltd. to Leben Community Co., Ltd.

1999 Undertook the absorption-type merger of Takara Jyuhan Co., Ltd.

2000 Changed the name of Takara Komuten Co., Ltd. to Takara Leben Co., Ltd.

2001 Relocated the Company's head office to Ikebukuro following completion of the Takara Leben Head Office Building

Listed on the JASDAQ market

Established TAFUKO Co., Ltd. (currently Leben Zestock Co., Ltd.)

2003 Listed on the Second Section of the Tokyo Stock Exchange

2004 Listed on the First Section of the Tokyo Stock Exchange

2006 Relocated the Company's

head office to the Shinjuku

Sumitomo Building

2008 Launched the new Takara Leben brand

2010 Launched the detached house business with detached house built by the Company in its own right

2011 Commenced sales of custom- built houses; exhibited products at the Tachikawa Housing Exhibition Center

2012 Launched the new LEBEN condominium brand

Made the real estate rental and management business Takara Housing Co., Ltd. (formerly Takara Property Co., Ltd.) into a subsidiary company

2013 Entered the electric power generation business

Established Takara Asset Management Co., Ltd. as an investment management business

2014 Set up the Hokuriku Office

Made Oasis Co., Ltd. (currently Takara Leben Realnet Co., Ltd.) into a subsidiary company

Made Nikko Kensetsu Co., Ltd. (currently Leben Home Build Co., Ltd.) into a subsidiary company

2015 Made Live Net Home Co., Ltd. (formerly Takara Leben Tohoku Co., Ltd.) into a subsidiary company; relocated to Sendai City, Miyagi Prefecture

Made Jyutakujyouhoukan Co., Ltd. (formerly Takara Leben West Japan Co., Ltd.) into a subsidiary company

2016 Made Nikko Property Co., Ltd. (currently Leben Trust Co., Ltd.) into a subsidiary company

Completed steps for Takara Leben Infrastructure Fund to be the first to list on the Tokyo Stock Exchange Infrastructure Fund Market

2017 Launched the new condominium brand "NEBEL"

Set up the Osaka Branch and the Sapporo Office

Relocated the Company's head office to the TEKKO BUILDING in Marunouchi, Chiyoda-ku

2018 Made PAG Investment Management Ltd.

(currently Takara PAG Real Estate Advisory Ltd.) into a subsidiary company

Established representative office of TAKARA LEBEN CO., LTD. in Hanoi City

Takara Leben Real Estate Investment Corporation was listed on the Tokyo Stock Exchange Real Estate Investment Trust Securities Market

2019 Leben Trust Co., Ltd. merged (absorption-type) with Takara Property Co., Ltd.

2021 Established Leben Funding LLC.

Made ACA Clean Energy Co., Ltd. (currently Leben Clean Energy Co., Ltd.) a subsidiary

Set up the Nagoya Office

2022 Established Takara Leben

(Thailand) Co., Ltd.

Transitioned to a holding company structure and changed its name to MIRARTH HOLDINGS, Inc.

Takara Leben West Japan Co., Ltd. changed its name to Takara Leben Co., Ltd., took over a portion of the business of the former Takara Leben, and completed the absorption- type merger of Takara Leben Tohoku Co., Ltd.

Origin of "Takara Leben": The "Takara" that we have used in our compa-		Harmonic Circle: The Group's symbol is the
ny name since the days of "Takara Komuten" refers to "treasure," as in a home		representing customers, partners, and employees;
is the treasure of a lifetime. The word "leben" added following the change in our		expanding organically to create harmony while
company name is German for "life, lifestyle and living," which are keywords		hope of carrying out our corporate vision to "THINK
essential when discussing a home. This represents the concept of hoping to		resonating with one another. The gradation of
offer homes that are the treasure of a lifetime to as many people as possible.		and sincerity pursued by everyone in the Group.

Harmonic Circle, which is comprised of three rings,		50th Anniversary logo: As we celebrated the 50th anniversary of our found-
expressing how they are linked to one another;		ing in September 2022, we created a commemorative logo that incorporates a
supporting each other. The three rings convey our		Harmonic Circle and the impression of a city skyline into the design. The circle
HAPPINESS AND MAKE THE HAPPINESS" while		symbolizes the MIRARTH HOLDINGS Group's gentle, sun-like embrace of the
striking blue to deep navy expresses the intelligence		city, while the five lines underneath express its achievements, accumulated over
		the past 50 years, which have led to the further prosperity of cities and the Group.

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MIRARTH HOLDINGS Integrated Report 2022

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Introduction

Value Creation Process

MIRARTH's Value Creation Story

MIRARTH's Strategy

MIRARTH's Foundation

Data

The MIRARTH HOLDINGS Group has continued to achieve sustainable growth by providing products and services that address diversifying housing needs. Through the transition to a holding company, we will endeavor to provide new value by leveraging the strengths of the Group built up over a number of years and by harnessing Group synergies.

External

Environment

Awareness

Details P.10-11

Market environment

• Changes in the direction of economic policy
• Changes in lifestyles
• Segmentation of housing needs
• Deterioration in market conditions including political instability and economic recession
• Low birthrate coupled with an aging and declining population
• Requests by power companies to control output

Business activities

Input

Financial Capital

Ability to generate stable

cash flow

• Shareholders' equity

¥58.5 billion

• Interest-bearing debt

¥127.9 billion

(As of March 31, 2022)

Human Capital

Diverse human resources that

possess expertise

• No. of employees	343
• Real estate notaries	226

• First-classregistered architects 16

• Redevelopment planners

3

Strengths

Develop-

ment

Capabilities

Planning

Capabilities

Materiality	Details	P.12-13

Value Chain

Facilities

Businesses derived from condominiumsmanagement equipped with solar power systems

Real Estate-Related					Rebuilding and	Mega-solar		Infrastructure
				redevelopment
Businesses								funds management

Housing lots	Development	Sales	Real estate	Repair	Brokerage
purchasing	management

Output

Consolidated Net Sales

¥162.7

billion

(FY2021)

 Real Estate Business	¥124.2 billion
 Energy Business	¥34.2 billion

• Asset Management Business ¥1.3 billion

 Other Businesses

¥2.8 billion

Details P.27-35

Outcome

Financial Capital

A sound financial foundation that enables

further investments for growth

• TSR over the past 10 years	116.8%
• Dividend per share	¥18 annually
	(FY2021)

Human Capital

Encouraging the strong roles of

diverse employees

• Acquisitions by type of qualification
Real estate notaries	226
First-class registered architects	16
Redevelopment planners	3
• Percentage of women in management	7.34%

• Percentage of persons with disabilities employed 2.70%

• Surge in land prices as well as raw material and construction (labor) costs
• Difficulty in recruiting human resources, shortage of labor, and decline in employee quality

Climate change, natural disasters, etc.

• Increasingly serious

17.9

* Scope of calculation: Takara Leben

• No. of employees (consolidated)

1,200

(As of March 31, 2022)

Intellectual Capital

Technologies and expertise that respond to customer requests

• No. of trademark registrations

Sales

Capabilities

• Real Estate Business
• • Of which, Real Estate Rental Business
  • Of which, Real Estate Management Business
• Energy Business
• Asset Management Business
• Other Businesses

Real estate	Rental	Repair	Sales
rental	management
Businesses derived from
real estate rental business	REIT and private	Rental
		fund management	management

KPI

Number of units sold

• New built-for-sale condominiums

1,830 units

(FY2021)

• New built-for-sale detached houses
  180 units

(FY2021)

* Scope of calculation: Takara Leben (As of March 31, 2022)

Intellectual Capital

Advanced technologies and services that

respond to diversifying lifestyles

• Housing performance evaluation report
acquisition rate	100%
• Energy-saving rank certification rate
(Flat 35 for detached houses)	100%
	(FY2021)

global environmental

issues

• Incidence of natural

disasters, accidents, etc.

• Acts of terrorism, riots,

and war

• Spread of infectious

diseases

Governance, etc.

• Incidence of unauthorized access and cyberattacks
• Insufficient internal control functions

26

(As of March 31, 2022)

• Proprietarily branded condominiums LEBEN and NEBEL

Social and

Relationship Capital

Trust, reliability and a

collaborative framework

• Group companies	11
• Business locations	9

(Including head office and overseas locations)

(As of March 31, 2022)

Natural Capital

Effective use of resources

• Land and the global environment
• Nationwide power generation facilities

Managerial Capabilities

7 Elements of the Medium-Term Management Plan Details P.23

1.	3.		5.		7.
			Improvement of		Personnel development
Further growth of core	Optimized business		productivity and creation		and establishment of the
businesses	portfolio		of new services through		rewarding workplace
2.		4.	promotion of DX	6.	environment
Maximized group synergies		Establishment of a stable		Proactive ESG
	financial ground		considerations

Foundation supporting		Human		Partners (customers		Corporate		Compliance and
	resources				risk management
		and local communities)		governance
value creation
	P.38-41						P.54-55
			P.42-45		P.48-52

Cumulative number of units supplied

36,638 units

*New built-for-sale condominiums (As of March 31, 2022)

Number of managed housing units

	69,335 units
	(As of March 31, 2022)
Rental revenues	¥5.9 billion
	(FY2021)

Current power generation

310MW

*Including wholesale portion (As of March 31, 2022)

Social and Relationship Capital

Building regional revitalization and relationships of trust for the long term with all stakeholders

• No. of new built-for-sale condominium contracts 2,258
• Increase in the number of units

under management	3,298 units
	(FY2021)

Natural Capital

Effective use of resources and initiatives for

renewable energy to reduce environmental impact

• Increase in renewable energy
generation capacity	104MW
• Greenhouse gas emissions	2,023 t-CO2

• Energy consumption

1,131.9 kL (crude oil equivalent)

(FY2021)

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