Creating peace of mind through honest and committed management.

[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

May 8, 2015
Ichigo Group Holdings Co., Ltd. (JASDAQ, 2337)
Representative: Scott Callon, Chairman and Representative Statutory Executive Officer

Notice of the Fifteenth Annual Shareholder Meeting

Dear Shareholders:
We are pleased to invite you to attend the Fifteenth Annual Shareholder Meeting of Ichigo Group Holdings
Co., Ltd. (“the Company”) to be held per the below.
If you are unable to attend the meeting, you may exercise your voting rights via postal mail or theInternet. We would appreciate it if you could review the Reference Materials for the Annual
Shareholder Meeting attached below and cast your vote by returning the enclosed voting form or byaccessing our voting website (http://www.evote.jp) no later than Friday, May 22, 2015, 6:30 p.m. JST.
1. Date and Time

Sunday, May 24, 2015 at 10:00 a.m.

2. Place

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

3. Agenda of the Meeting
Matters to be Reporteda.

Details of the business report, the consolidated financial statements, and the results of the audit ofconsolidated financial statements by the Independent Auditor and the Company’s Audit Committee
for the fifteenth term (from March 1, 2014 to February 28, 2015)b.

Report on the financial statements for the fifteenth term (from March 1, 2014 to February 28, 2015)

Matters to be Resolved
Proposal 1 Amendments to Articles of Incorporation
Proposal 2 Election of 9 Directors* Please submit the enclosed voting form at the venue’s reception if you attend the meeting.
* Please note that any amendments to the Reference Materials for the Annual Shareholder Meeting and the business
report, financial statements, and consolidated financial statements will be posted on our website(http://www.ichigo-holdings.co.jp/english).
-1-

Internet Disclosure
As of this fiscal year, notes to the consolidated financial statement and parent financial statement which had
been included as part of the Notice in the past have been separated into a different document. Please refer tothe notes available on our website (http://www.ichigo-holdings.co.jp/english.)Voting via the Internet
1. Handling of Concurrent Votes via Postal Mail and via the Internet
If you cast overlapping votes by using both the postal voting form and the Internet voting site, only thevotes casted on the Internet will be deemed effective.
2. Handling of Concurrent Votes on the Internet
If you cast multiple overlapping votes on the Internet voting site, only the last vote will be deemed
effective, whether from a PC, smart phone or a mobile phone.
3. Voting via the Internet
If you vote via the Internet, please review the following matters. If you attend the Meeting, voting via
postal mail (voting form) or via the Internet is unnecessary.
a. Voting Website(i)

You can only exercise your voting rights via the Internet by accessing and using the designatedwebsite (http://www.evote.jp/) from a PC, smart phone, or mobile phone (i-mode, EZweb orYahoo! Keitai*). Please note that the website is not available from 2 a.m. to 5 a.m. JST daily.
(*i-mode, EZweb, and Yahoo! are the trademarks or registered trademarks of NTT DoCoMo, Inc.,
KDDI Corporation, and Yahoo! Inc., U.S.A., respectively.)(ii)

Please note that if you use a firewall, have antivirus software installed, or use a proxy server, etc.,
there may be technical difficulties in exercising your voting rights via the Internet.

(iii) To exercise your voting rights from a mobile phone, please use i-mode, EZweb or Yahoo! Keitai.
To ensure security, you may not be able to vote from your mobile phone if the phone does notsupport encrypted transmission (SSL transmission) and mobile phone information transmission.
(iv) We will accept votes submitted via the Internet up until 6:30 p.m. JST on Friday, May 22, 2015,
but we would appreciate your promptness in voting. Please contact the help desk below if you
have any questions.
b. How to Vote via the Internet(i)

Please access our voting website (http://www.evote.jp), and use the log-in ID and temporary
password shown on the enclosed voting form. Follow the on-screen instructions to indicate yourconsent or dissent.

(ii)

To prevent unauthorized access (impersonation) and tampering of votes by third parties, please
note that you will be required to change the temporary password on the voting website.

(iii) We will inform you of a new login ID and temporary password for each Annual Shareholder
Meeting.
c. Fees for Accessing the Voting Website
Please note that you will be responsible for expenses such as dial-up Internet access fees and telephonecharges incurred by accessing the voting website. Please also note that you will be responsible for
expenses for the use of a mobile phone to cast your vote such as packet communication fees and othercharges.

-2-

4. How to Receive Email Notices of Future Annual Shareholder Meetings
For those interested in receiving notices of future Annual Shareholder Meeting, please apply online via
the voting website on your PC or smart phone. (Please note that application via conventional mobile
phones is not available. Also, a mobile phone email address cannot be registered as the receiving email
address.)

Inquiries concerning the Voting Process
Help Desk, Corporate Agency Division, Mitsubishi UFJ Trust and Banking Corporation
Toll-free telephone (within Japan): 0120-173-027 (9:00 a.m. to 9:00 p.m. JST)To Institutional Investors
You may use the electronic proxy-voting platform of the Tokyo Stock Exchange for electronic voting for
the Annual Shareholder Meeting of the Company.

-3-

Table of Contents
Notice of the Fifteenth Annual Shareholder Meeting ----------------------------------------------

P1

Business Report
I.

II.

Current Condition of the Company
A. Business Conditions in the Current Fiscal Year ----------------------------------------P5

B. Assets and Earnings in the Past Three Fiscal Years ------------------------------------P7

C. Important Parent Company and Subsidiary Information ------------------------------

P7

D. Key Business Priorities --------------------------------------------------------------------P8

E. Key Business Segments -------------------------------------------------------------------P8

F. Principal Offices ----------------------------------------------------------------------------P8

G. Employees -----------------------------------------------------------------------------------P9

H. Principal Lenders ---------------------------------------------------------------------------

P9

I.

Dividend and Distribution Policy --------------------------------------------------------

P9

J.

Other Material Matters Regarding the Company --------------------------------------

P10

Matters Regarding the Current Status of the Company
A. Matters Regarding Shares in the Company ---------------------------------------------P12

B. Stock Acquisition Rights (aka Stock Options) -----------------------------------------P13

C. Officers of the Company ------------------------------------------------------------------P19

D. Independent Auditor ----------------------------------------------------------------------

P24

E.

Structure to Ensure Appropriate Business Activity ------------------------------------

P24

F.

Policy on Corporate Control --------------------------------------------------------------

P29

Consolidated Financial Statements
Consolidated Balance Sheet -------------------------------------------------------------------------

P30

Consolidated Income Statement --------------------------------------------------------------------

P31

Consolidated Statement of Changes in Shareholders’ Equity -----------------------------------

P32

Parent Financial Statements
Parent Balance Sheet ---------------------------------------------------------------------------------

P33

Parent Income Statement ----------------------------------------------------------------------------

P34

Statement of Parent Changes in Shareholders’ Equity -------------------------------------------

P35

Auditor’s Report on the Consolidated Financial Statements ------------------------------------

P36

Auditor’s Report on the Parent Financial Statements ---------------------------------------------

P37

Report of Audit Committee -----------------------------------------------------------------------------

P38

Reference Materials for the Annual Shareholder Meeting
Proposal 1 --------------------------------------------------------------------------------------------

P40

Proposal 2 --------------------------------------------------------------------------------------------

P41

-4-

Business Report
From March 1, 2014
To February 28, 2015
I.

Current Condition of the Company

A. Business Conditions in the Current Fiscal Year
1. Progress and Business Results
As a result of Abenomics’ bold monetary easing, positive fiscal policies, and a weakening of the yen
against the US dollar, corporate earnings, capital expenditures, and employment conditions in Japan
have improved during the current fiscal year. Even though consumer spending has not yet fully
recovered since the consumption tax hike in April 2014, the Japanese economy overall is expected tostay on a recovery trend. In the Japanese real estate market, business conditions are picking up as
evidenced by the recovery in occupancy rates and monthly rents among high-grade assets. Japan’s realestate market is seeing a slightly overheated competition in acquiring large-scale real estate in central
Tokyo, as domestic real estate companies and foreign funds are seeking acquisitions despite the low
expected yields. Although total acquisitions have decreased year-on-year, J-REITs continue to be an
active market, with a wave of new REIT IPOs and a rise in the TSE REIT Index in reaction to the Bankof Japan’s boost in J-REIT purchases, resulting in a total J-REIT market capitalization exceeding ¥10
trillion.
With respect to clean energy, the increased number of solar plants and the furtherance of retail power
liberalization have led to more operators entering the market. However, since the number of solar
operators has outgrown the capacity of the grid, the Ministry of Economy, Trade, and Industry is now
reviewing the operation of its Feed-in Tariff program, which is expected to accelerate therationalization of solar operators. At the same time, the Tokyo Stock Exchange is making progress in
preparation of launching a listed infrastructure fund market that would include solar assets. The launchof such a market is expected to expand business opportunities in clean energy in Japan.
The Company and its group companies are working to take advantage of this positive businessenvironment to drive higher earnings for its shareholders. To fully achieve its Shift Up 2016 Mid-TermBusiness Plan, the Company is proactively investing in value-add and long-term real estate assets andIchigo’s clean energy business, and establishing REIT asset incubation funds to support the growth of
Ichigo REIT. Furthermore, the Company has supplied value-add and incubation assets to Ichigo REIT
to support the strategic restructuring of its portfolio in line with its growth strategy. In doing so, theCompany is striving to grow as an integrated, full-service real estate group while simultaneously
strengthening its stable profitability.
Specifically, in the past year the Company has carried out the following major initiatives:
 Expanded investments for growth (value-add and long-term real estate assets, Ichigo REIT
incubation funds, etc.)
 Expanded its clean energy business focusing on solar power generation
 Improved the environmental characteristics of the real estate it operates as well as the earthquake
resistance and functionality of such assets
 Provided high-quality asset management services and strengthened tenant leasing activities via
thorough hands-on management
 Improved borrowing terms including prolonging borrowing periods and cutting borrowing costs
through refinancing existing loans Strengthened its strategic lending partnerships, including increasing transactions with Japan’s
megabanks and building new relationships with banks that are new to the Company
 Recycled capital and generated value-add profits on asset sales-5- Developed and implemented numerous measures to strengthen the Ichigo brand Continued work on the Company’s initiative to move from JASDAQ to the Tokyo Stock
Exchange (TSE) First Section.
As a result, the Company recorded revenues of ¥42,705 million in the current fiscal year (+21.7%
year-on-year); an operating profit of ¥8,189 million (+109.3% year-on-year); a recurring profit of¥7,255 million (+101.7% year-on-year); and a net income of ¥6,761 million (+49.4% year-on-year).
2. Capital Expenditures
There were no material capital expenditures during the current fiscal year.
3. Financing
In order to further boost its profitability and the stability of its financial base, the Company has madesignificant efforts to secure low-cost debt financing, reduce the cost of its borrowings, diversify theterms and lengthen the tenor of its borrowing, and work to create a strategic lender base by increasingtransactions with megabanks and building new relationship with other banks. As a result, in the current
fiscal year, the balance of interest-bearing corporate debt was ¥58,313 million (+93.1% year-on-year),and the balance of non-recourse loans was ¥43,838 million (+78.2% year-on-year). The interest rates
on these corporate and non-recourse loans rates declined 0.23% and 0.32%, respectively, year-on-year.
In addition, the Company increased the percentage of long-term corporate loans to 91.6% of total debt(+5.1% year-on-year), increased corporate loans that had a tenor of longer than 5 years to ¥27,612
million (+ ¥19,025 million year-on-year), with the average loan period lengthened to 8.98 years (+3.04
years year-on-year), and increased the amount borrowed from Japan’s megabanks to ¥21,167 million(+¥5,800 million year-on-year). Thus, the Company was successful in lengthening loan maturity andimproving the stability of its financial base.
4 Business Transfers, Absorption-Type Splits or Incorporation-Type Splits
N/A
5 Transferred Businesses from Other Companies
N/A
6. Succeeding to Rights and Obligations relating to the Business of Other Companies by Absorption-Type
Merger or Absorption-Type Split
N/A
7. Acquisition and Disposition of Shares and Other Interests in Other Companies and Stock Acquisition
Rights, etc.
N/A

-6-

B. Assets and Earnings in the Past Three Fiscal Years
Fifteenth term

Twelfth term

Thirteenth term

Fourteenth term

(Year ending(Year ending(Year ending(Year ending

February 29, 2012)

February 28, 2013)

February 28, 2014)

February 28, 2015)

Revenues (million yen)
Recurring Profit(million yen)
Net Income (million yen)
Net Income per Share (yen)Total Assets (million yen)
Net Assets (million yen)
Net Assets per Share (yen)18,952

16,39735,10142,705

979

1,734

3,597

7,255

1,770
775.14(3.88)
82,17028,187
11,613.85(58.07)

1,637
731.98(3.66)
80,42831,066
12,704.44(63.52)

4,526

6,761

9.83

13.58

114,944
50,842

172,744
58,37797.42

111.54(Note 1) Net Income per Share is calculated based on the average number of shares issued during the term. Net
Assets per Share is calculated based on the number of outstanding shares as of the end of the fiscal year.
These figures do not include treasury shares.
(Note 2) Net Income and Net Income per Share are calculated as if the split of each of the Company’s shares into
200 shares as of September 1, 2013 had been implemented at the beginning of the Fourteenth Term.
Similarly, figures in ( ) above are calculated as if the stock split had been implemented at the beginning of
the fiscal year.

C. Important Parent Company and Subsidiary Information(1) Parent Company
N/A(2) Important Subsidiaries
Name

Percentage Ownershipof Voting Rights

CapitalBusiness Segment
J-REIT and private equity
real estate fund asset
management
Real estate-related business(Small sized assets andground leases)
Clean energy businessgenerating and supplying
power, environmental
conservation engineeringand consulting, andconsulting for introductionof LEDs, etc.
Real estate leasing,management, and purchaseand sale in Kyushu
Formation of investment
funds for overseas
investments andcross-border M&A advisory

Ichigo Real Estate Investment
Advisors Co., Ltd.

¥400 million

100.00%Ichigo Estate Co., Ltd.

¥500 million

100.00%Ichigo ECO Energy Co., Ltd.

¥100 million

100.00%Ichigo Real Estate Services Fukuoka
Co., Ltd.

¥50 million

100.00%Ichigo Global Capital Co., Ltd.

¥10 million

100.00%Ichigo Marché Co., Ltd.

¥95 million

100.00%Wholesale market property
management

Miyako City Co., Ltd.

¥50 million

100.00%Large-scale retail store
management-7-

Takara Building Maintenance Co., Ltd.

¥10 million

100.00%Comprehensive facility
management(Note) Ichigo Real Estate Services Fukuoka Co., Ltd. has been established as a 100% subsidiary of the Company
on April 8, 2014.

D. Key Business Priorities
Despite the fact that there is a delay in the recovery of consumer spending post-consumption tax increase
and accordingly there are downside risks to the Japanese economy, it is reasonable to expect that economic
conditions in Japan will continue to improve gradually due to increase in corporate revenues andimprovements in employment as a result of monetary easing and the government’s proactive economic
policies.
Since business conditions are picking up in the real estate industry, the Company’s primary area of activity,
J-REITs, developers, and companies are showing strong interest in acquiring assets, and demand of theoverseas investors is expected to increase due to the weakening of the yen against the US dollar.
In light of this positive business environment, the Company is executing on its Shift Up 2016 strategy andaccelerating investments to drive growth. The Company is working to maximize shareholder value by
driving significant growth in EPS based on a robust financial foundation and stable revenue base, andbelieves that fully realizing its Shift Up 2016 goals is its most important task.
To achieve its goals, the Company expects to (1) accelerate growth investments by supporting the growthof Ichigo REIT to increase stable asset management fees, develop new REITs focused on specialized asset
classes, continue to expand its track record in real estate value-add, and grow its solar power clean energy
business; (2) secure funds for growth by profitably disposing existing assets and reinvesting at ROIs ofover 15%; (3) lower its cost of debt to strengthen the Company’s financial stability, and drive higher
earnings by obtaining credit ratings, expanding uncollateralized borrowing, extending loan maturities, andissuing corporate bonds to diversify the Company’s funding base.
The Company also intends to further reinforce its corporate governance and compliance to ensure soundmanagement for its shareholders, and aims to move from JASDAQ to the Tokyo Stock Exchange First
Section by its February 2016 fiscal year-end.
In addition, the Company is seeking to become a constituent of the JPX-Nikkei Index 400 as of the annual
rebalance in August 2016. Furthermore, the Company aims to increase its ROE to 15% or more by the
February 2016 fiscal year, following the guideline established in the Ito Review (Ministry of Economy,
Trade, and Industry) for Japanese companies to set ROE targets.
E. Key Business Segments (as of February 28, 2015)
As a full-service Japanese real estate owner/operator and clean energy producer, the Company has as its
vision “Creating peace of mind through honest and committed management.”
The Company is principally engaged in three real estate businesses: 1) asset management, including a
J-REIT and private equity investment funds; 2) real estate value-add, making the most of its engineeringand real estate know- how to improve the value of assets; and 3) clean energy, focused on long-term solar
power generation on real estate assets nationwide.

F. Principal Offices (as of February 28, 2015)
Ichigo Group Holdings Co., Ltd.
Ichigo Real Estate Investment Advisors Co., Ltd.
Ichigo Estate Co., Ltd.
Ichigo ECO Energy Co., Ltd.
Ichigo Global Capital Co., Ltd.

Headquarters: Chiyoda-ku, Tokyo

Ichigo Real Estate Services Fukuoka Co., Ltd.

Headquarters: Fukuoka City, Fukuoka Prefecture-8-

Ichigo Marché Co., Ltd.

Headquarters: Chiyoda-ku, Tokyo
Office:Matsudo City, Chiba Prefecture

Miyako City Co., Ltd.

Headquarters: Miyazaki City, Miyazaki Prefecture

Takara Building Maintenance Co., Ltd.

Headquarters: Ryugasaki City, Ibaraki Prefecture(Note) Ichigo Real Estate Fukuoka was established as a 100% subsidiary of the Company as of April 8, 2014.

G. Employees (as of February 28, 2015)
1 Employees of the Company (Consolidated basis)
Number of employees

Increase/decrease from the end of previous fiscal year

218 (614)

Increase by 12 (12)(Note 1) The number of employees is the number of full-time employees (excluding workers dispatched from
Ichigo Group to other companies and including workers dispatched from other companies to Ichigo
Group) including directors who are also employees.
(Note 2) The average number of non-full-time employees (including part-time and temporary staff) is presented inparentheses.

2 Employees of the Company (Parent basis)
Number of employees

Increase/decrease
from the end of previous fiscal year

Average age

Average years of
employment

65 (1)

Increase by 14 (-)

40.8 years old

4.1 years(Note 1) The number of employees is the number of full-time employees (excluding workers dispatched from theCompany to other companies and including workers dispatched from other companies to Ichigo Group)
including directors who are also employees.
(Note 2) The average number of non-full-time employees (including part-time and temporary staff) is presented inparentheses.
(Note 3) On a year-on-year basis the number of employees increased by fourteen; however, this was mainly due
to such employees being moved from a subsidiary pursuant to a corporate reorganization.

H. Principal Lenders (as of February 28, 2015)
Lenders
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.
Kansai Urban Banking Corporation
The Tokyo Star Bank, Limited
Bank of Tokyo-Mitsubishi UFJ

Amount¥10,722 million¥6,677 million¥6,588 million¥4,782 million¥3,767 million(Note) These amounts do not include non-recourse loans held by funds that the Company manages (e.g., tokumei
kumiai partnerships, etc.)

I. Dividend and Distribution Policy
The Company views distributions to its shareholders via dividends and share repurchases as one of its
most important priorities, and has the basic principle of carrying out shareholder distributions in line with
the Company’s financial performance while securing a level of retained earnings necessary to fundgrowth investments. During the current fiscal year, the Company considered various methods for
distributing profit to shareholders based upon the Company’s earnings outlook and possible future
growth in funding needs. In this past year, the Company delivered on higher stable revenues from rental
income, asset management, and building maintenance fees to drive increased revenues and profits.
-9-

Accordingly, as forecast at the beginning of the fiscal period, the Company expects to pay a dividend of
1.3 yen per share (up 18% year-on-year) at the end of the fiscal period.
J. Other Material Matters Regarding the Company
1. Changes in Representative Statutory Executive Officers
The Nominating Committee and the Board of Directors of Ichigo Group Holdings (“Ichigo”) havedecided on the following changes to representative statutory executive officers of the Company.
a. Purpose of the Changes in Representative Statutory Executive Officers
Since October 2008, Chairman Scott Callon and President Kenji Iwasaki have led Ichigo’s businessexpansion, including the development and growth of Ichigo’s real estate value-add and asset
management businesses and the launch of Ichigo’s clean energy business. In this final year of Ichigo’s
Shift Up 2016 Mid-Term Business Plan (MTP) and with the expectation of moving forward under a new
MTP from next year, Ichigo has decided to broaden its senior management team and push operating
authority further into that management team in order to increase the speed of decisions and accelerate
Ichigo’s earnings growth. Under the new structure, President Iwasaki will join Callon as a Chairman andwork to drive earnings across the full breadth of Ichigo’s businesses. Executive Vice President Takuma
Hasegawa will become President with primary responsibility for leading and growing Ichigo’s real estatevalue-add and clean energy businesses. Wataru Orii, President of Ichigo Real Estate Investment Advisers,
the manager of the Ichigo REIT, will lead Ichigo’s asset management business, focusing on Ichigo REIT
and the development of new specialized asset class REITs. Executive Vice President Minoru Ishihara
will take on the additional role of group COO and continue to lead Ichigo’s tenant-focused real estateservices and economic revitalization activities in regional areas.
b. Changes in Representative Statutory Executive Officers
i. New Representative Statutory Executive Officer
Takuma Hasegawa, President and Representative Statutory Executive Officer
Please refer to Proposal 2 “Election of 9 Directors” for the profile of the new representative
statutory executive officer.
ii. Change in Representative Statutory Executive Officer
Kenji Iwasaki
New: Chairman and Representative Statutory Executive Officer
Old: President and Representative Statutory Executive Officeriii. Date of Change: May 24, 2015 (expected)

2. Execution of Memorandum of Understanding for Additional Sponsor Support with Ichigo Real
Estate Investment Corporation
The Company and Ichigo Real Estate Investment Corporation (“Ichigo REIT”) have signed a
Memorandum of Understanding for additional fee-based credit support from the Company to Ichigo
REIT as of April 9, 2015 to supplement the unpaid Sponsor Support Agreement executed on March 26,
2014. This new Memorandum of Understanding aims to support Ichigo REIT’s stable growth through theCompany’s provision of supplementary credit support to allow Ichigo REIT to carry out transactions on
an as-needed basis.
a. Reason for Additional Sponsor Support
In its current Stage IV Increase Size & Scale (November 2014 – October 2015) of its multi-year growthstrategy, Ichigo REIT is working to drive further dividend increases and maximize shareholder value by
strategically focusing its portfolio on mid-size offices, an asset class that offers both stability of returns- 10 -

and upside potential. The Company signed this new Memorandum of Understanding with Ichigo REIT
on April 9, 2015 with aims to support Ichigo REIT’s stable growth through the Company’s provision of
supplementary credit support to allow Ichigo REIT to carry out transactions on an as-needed basis.
The Company believes that offering such support will have a positive effect on sellers’ decision making
in the process of their sales of assets to Ichigo REIT which contributes to the growth of Ichigo REIT. The
continuous and stable growth of Ichigo REIT is unnecessary to strengthening Ichigo’s asset managementbusiness, and Ichigo group companies will continue to offer necessary support Ichigo REIT.
b. Details of the Memorandum of Understanding
i. If Ichigo REIT believes that the Company’s credit support is necessary to carry out a certain Ichigo
REIT transaction, Ichigo REIT may notify the Company of the specifics of the transaction and Ichigo
REIT’s judgment as to a reasonable fee to be paid to the Company to provide credit support for the
Ichigo REIT transaction, discuss and agree with the Company on the nature of the credit support andfee, and request the Company’s credit support for the Ichigo REIT transaction. Covered transactions
include the following:(1) New borrowings from financial institutions(2) New investments from equity investors(3) Acquisitions of assets and trust beneficiary interests in real estate(4) Services related to the aforementioned transactions(5) Other transactions related to the operations of Ichigo REIT

ii. When Ichigo REIT makes a request and the request does not violate any laws and regulations and isdeemed to meet the purpose of this Memorandum of Understanding, upon signing a credit support
agreement the Company will provide credit support to the extent of the agreement, including providing
a sponsor support letter, signing a financial guarantee contract for Ichigo REIT, etc.
iii. Ichigo REIT will provide materials and information at the request of the Company for the purpose of
making a judgment on the provision of the support.

- 11 -

II. Matters Regarding the Current Status of the Company
A. Matters Regarding Shares in the Company (as of February 28, 2015)
1. Number of Authorized Shares: 550,000,000 shares
2. Total Number of Shares Issued: 500,804,600 shares(Including treasury stock of 1,670,000 shares)
3. Number of Shareholders:

40,605

4. Major Shareholders (top 10)
Investment in the Company
Name
Number of shares held (shares)
ICHIGO TRUST PTE. LTD.

Shareholding ratio (%)

321,721,200

64.46%

13,221,965

2.65%

7,867,200

1.58%

SBI SECURITIES CO., LTD.

3,047,600

0.61%

MSCO CUSTOMER SECURITIES

3,005,000

0.60%

2,812,000

0.56%

2,683,500

0.54%

2,475,600

0.50%

2,176,900

0.44%

1,715,800

0.34%

360,726,765

72.27%BARCLAYS CAPITAL SECURITIESLIMITEDCHASE MANHATTAN BANK GTS
CLIENTS ACCOUNTS ESCROWJAPAN TRUSTEE SERVICES BANK,LTD.
GOLDMAN SACHS INTERNATIONALJAPAN TRUSTEE SERVICES BANK,LTD.
NORTHERN TRUST CO. (AVFC) SUB
A/C NON TREATYSTATE STREET BANK AND TRUSTCOMPANYTOTAL(Note) The shareholding ratio is calculated excluding treasury stock (1,670,000 shares).

- 12 -

B. Stock Acquisition Rights (aka Stock Options)
1. Stock Acquisition Rights Issued as Consideration for Execution of Duties by Officers of the Company(as of February 28, 2015)
9th Stock Acquisition Right Plan
Date of resolution

July 14, 2009

Number of stock acquisition rights

2,395 units1

Type and number of shares

479,000 common shares (200 shares per unit)
No payment is required in exchange for stock acquisitionrightsIssue Price
Amount due upon exercise of each stockacquisition right
Period for exercise of rights¥13,400 per share (¥67 per share)
August 15, 2011 – August 14, 2016

Exercise Conditions2
Holding by Directors

Directors(excluding External Directors)
External Directors
Statutory Executive Officers(excluding those who are Directors)

Number of stock acquisition rights:
Number of shares:
Number of holders:Number of stock acquisition rights:
Number of shares:
Number of holders:Number of stock acquisition rights:
Number of shares:
Number of holders:

924 units
184,800 shares
2
0 units
0 shares0
100 units
20,000 shares
1

1

Of the total stock acquisition rights, 1,024 have been issued to Directors. (905 units have been exercised in thefiscal year ending February 2015.)

2

Exercise Conditions(i)

Any person who is allotted stock acquisition rights is required to remain in the position of Director,
Statutory Executive Officer, Advisor or employee of the Company, or Director, Statutory Executive Officer,
Auditor or Employee of the Company’s subsidiaries and other similar positions until the rights are exercised,
except for retirement due to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.

(ii) Pledges and other disposition of stock acquisition rights are not permitted.
(iii) If a person who is allotted stock acquisition rights should become deceased, their heir may exercise therights subject to the conditions provided for in the Stock Acquisition Rights Allotment Agreement as
described in (iv).
(iv) Other conditions are subject to the Stock Acquisition Rights Allotment Agreement entered into between the
Company and recipient of stock acquisition rights pursuant to the resolution of the Company’s Board of
Directors.
(Note) Shares of the Company were split at a rate of 200 shares to one effective September 1, 2013.

- 13 -

10th Stock Acquisition Right Plan
Date of resolution

August 8, 2011

Number of stock acquisition rights

7,225 units1

Type and number of shares

1,445,000 common shares (200 shares per unit)
No payment is required in exchange for stock acquisitionrightsIssue Price
Amount due upon exercise of each stockacquisition right
Period for exercise of rights
Exercise Conditions
Holding by Directors

Directors(excluding External Directors)
External Directors
Statutory Executive Officers(excluding those who are Directors)¥11,000 per share (¥55 per share)
August 9, 2013 – August 8, 2018
2

Number of stock acquisition rights: 2,660 units
Number of shares:
532,000 shares
Number of holders:2
Number of stock acquisition rights:
200 units
Number of shares:
40,000 shares
Number of holders:2
Number of stock acquisition rights:
100 units
Number of shares:
20,000 shares
Number of holders:
1

1

Of the total stock acquisition rights, 2,960 units have been issued to Directors. (225 units have been exercised in
the fiscal year ending February 2015.)

2

Exercise Conditions(i) The Company must fully complete its buyback of either 61,693 shares or 616,930,000 yen in the sharebuyback approved on August 8, 2011.
(ii) Any person who is allotted stock acquisition rights is required to remain in the position of Director,
Statutory Executive Officer, Advisor or employee of the Company, or Director, Statutory Executive Officer,
Auditor or employee of the Company’s subsidiaries and other similar positions until the rights are exercised,
except for retirement due to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(iii) Pledges and other disposition of stock acquisition rights are not permitted.
(iv) If a person who is allotted stock acquisition rights should become deceased, their heir may exercise therights subject to the conditions provided for in the Stock Acquisition Rights Allotment Agreement as
described in (v).
(v) Other conditions are subject to the Stock Acquisition Rights Allotment Agreement entered into between the
Company and recipient of stock acquisition rights pursuant to the resolution of the Company’s Board of
Directors.

(Note) Shares of the Company were split at a rate of 200 shares to one effective September 1, 2013.

- 14 -

11th Stock Acquisition Right Plan
Date of resolution

August 24, 2012

Number of stock acquisition rights

15,760 units1

Type and number of shares

3,152,000 common shares (200 shares per unit)
No payment is required in exchange for stock acquisitionrightsIssue Price
Amount due upon exercise of each stockacquisition right
Period for exercise of rights¥12,000 per share (¥60 per share)
August 25, 2014 – August 24, 20192

Exercise Conditions
Holding by Directors

Directors(excluding External Directors)
External Directors
Statutory Executive Officers(excluding those who are Directors)

Number of stock acquisition rights: 4,425 units
Number of shares:
885,000 shares
Number of holders:2
Number of stock acquisition rights:
160 units
Number of shares:
32,000 shares
Number of holders:2
Number of stock acquisition rights:
430 units
Number of shares:
86,000 shares
Number of holders:
4

1

Of the total stock acquisition rights, 5,015 units have been issued to Directors. (1,850 units have been exercised in
the fiscal year ending February 2015.)

2

Exercise Conditions(i)

The Company completes the allotment of interim or year-end dividend in the 13th fiscal year (March 1,
2012-February 28, 2013)(ii) Any person who is allotted stock acquisition rights is required to remain in the position of Director,
Statutory Executive Officer, Advisor or employee of the Company, or Director, Statutory Executive Officer,
Auditor or employee of the Company’s subsidiaries and other similar positions until the rights are exercised,
except for retirement due to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.
(iii) Pledges and other disposition of stock acquisition rights are not permitted.
(iv) If a person who is allotted stock acquisition rights should become deceased, their heir may exercise therights subject to the conditions provided for in the Stock Acquisition Rights Allotment Agreement as
described in (v).
(v) Other conditions are subject to the Stock Acquisition Rights Allotment Agreement entered into between the
Company and recipient of stock acquisition rights pursuant to the resolution of the Company’s Board of
Directors.
(Note) Shares of the Company were split at a rate of 200 shares to one effective September 1, 2013.

- 15 -

12th Stock Acquisition Right Plan
Date of resolution

January 10, 2014

Number of stock acquisition rights

1,041,500 units1

Type and number of shares

1,041,500 common shares (1 share per unit)
No payment is required in exchange for stock acquisitionrightsIssue Price
Amount due upon exercise of each stockacquisition right
Period for exercise of rights¥337 per share
January 12, 2016 – January 10, 2021

2

Exercise Conditions
Holding by Directors

Directors(excluding External Directors)
External Directors
Statutory Executive Officers(excluding those who are Directors)

Number of stock acquisition rights: 159,000 units
Number of shares:
159,000 shares
Number of holders:2
Number of stock acquisition rights:
16,800 units
Number of shares:
16,800 shares
Number of holders:4
Number of stock acquisition rights:
102,600 units
Number of shares:
102,600 shares
Number of holders:
91

Of the total stock acquisition rights, 278,400 units have been issued to Directors.

2

Exercise Conditions(i)

Any person who is allotted stock acquisition rights is required to remain in the position of Director,
Statutory Executive Officer, Advisor or employee of the Company, or Director, Statutory Executive Officer,
Auditor or employee of the Company’s subsidiaries and other similar positions until the rights are exercised,
except for retirement due to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.

(ii) Pledges and other disposition of stock acquisition rights are not permitted.
(iii) If a person who is allotted stock acquisition rights should become deceased, their heir may exercise therights subject to the conditions provided for in the Stock Acquisition Rights Allotment Agreement as
described in (v).
(iv) Other conditions are subject to the Stock Acquisition Rights Allotment Agreement entered into between the
Company and recipient of stock acquisition rights pursuant to the resolution of the Company’s Board of
Directors.

- 16 -

13th Stock Acquisition Right Plan
Date of resolution

January 13, 2015

Number of stock acquisition rights

1,897,800 units1

Type and number of shares

1,897,800 common shares (1 share per unit)
No payment is required in exchange for stock acquisitionrightsIssue Price
Amount due upon exercise of each stockacquisition right
Period for exercise of rights¥382 per share
January 14, 2017 – January 13, 2022

2

Exercise Conditions
Holding by Directors

Directors(excluding External Directors)
External Directors
Statutory Executive Officers(excluding those who are Directors)

Number of stock acquisition rights:
Number of shares:
Number of holders:Number of stock acquisition rights:
Number of shares:
Number of holders:Number of stock acquisition rights:
Number of shares:
Number of holders:1

Of the total stock acquisition rights, 495,000 units have been issued to Directors.

2

Exercise Conditions(i)

280,000 units
280,000 shares
2
33,000 units
33,000 shares
4
182,000 units
182,000 shares
9

Any person who is allotted stock acquisition rights is required to remain in the position of Director,
Statutory Executive Officer, Advisor or employee of the Company, or Director, Statutory Executive Officer,
Auditor or employee of the Company’s subsidiaries and other similar positions until the rights are exercised,
except for retirement due to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.

(ii) Pledges and other disposition of stock acquisition rights are not permitted.
(iii) If a person who is allotted stock acquisition rights should become deceased, their heir may exercise therights subject to the conditions provided for in the Stock Acquisition Rights Allotment Agreement as
described in (iv).
(iv) Other conditions are subject to the Stock Acquisition Rights Allotment Agreement entered into between the
Company and recipient of stock acquisition rights pursuant to the resolution of the Company’s Board of
Directors.

- 17 -

2. Stock Acquisition Rights Issued for the Consideration for Execution of Duties by Employees during theCurrent Fiscal Year

13th Stock Acquisition Right Plan
Date of resolution

January 13, 2015

Number of stock acquisition rights

1,900,000 units1

Type and number of shares

1,900,000 common shares (1 share per unit)
No payment is required in exchange for stock acquisitionrightsIssue Price
Amount due upon exercise of each stockacquisition right
Period for exercise of rights¥382 per share
January 14, 2017 – January 13, 2022

2

Holding by
Employees

Exercise Conditions
Employees(excluding those who are Directors
and Statutory Executive Officers)
Directors and Employees of
Subsidiaries

Number of stock acquisition rights:
1,405,000 units
Number of shares:
1,405,000 shares
Number of holders:196
Number of stock acquisition rights:- units
Number of shares:- shares
Number of holders:-1

Of the total stock acquisition rights, 1,405,000 units have been issued to employees.

2

Exercise Conditions(i)

Any person who is allotted stock acquisition rights is required to remain in the position of Director,
Statutory Executive Officer, Advisor or employee of the Company, or Director, Statutory Executive Officer,
Auditor or employee of the Company’s subsidiaries and other similar positions until the rights are exercised,
except for retirement due to expiration of term, mandatory retirement, and other cases approved by the
Board of Directors.

(ii) Pledges and other disposition of stock acquisition rights are not permitted.
(iii) If a person who is allotted stock acquisition rights should become deceased, their heir may exercise therights subject to the conditions provided for in the Stock Acquisition Rights Allotment Agreement as
described in (v).
(iv) Other conditions are subject to the Stock Acquisition Rights Allotment Agreement entered into between the
Company and recipient of stock acquisition rights pursuant to the resolution of the Company’s Board of
Directors.

3. Other Material Matters regarding Stock Acquisition Rights
N/A- 18 -

C. Officers of the Company
1. Corporate Directors (as of February 28, 2015)
Position

Director

Director

Name

Responsibility and Other Business Affiliations

Scott Callon

Chairman of the Board of Directors, Nominating Committee
Member, Compensation Committee Member, Vice-Chairman ofCompliance Committee
Chairman & Representative Statutory Executive Officer of Ichigo
Group Holdings Co., Ltd.
Partner and Chief Executive Officer of Ichigo AssetManagement, Ltd.
Audit & Supervisory Board Member of Chiyoda Co., Ltd.

Kenji Iwasaki

Chairman of Nominating Committee, Chairman of Compensation
Committee, Vice-Chairman of Compliance Committee
President & Representative Statutory Executive Officer of Ichigo
Group Holdings Co., Ltd.
Chairman & Statutory Executive Officer of Ichigo Real Estate
Investment Advisors Co., Ltd.
Chairman & Director of Ichigo ECO Energy Co., Ltd.
Compliance Committee Member
Executive Vice President & Statutory Executive Officer (Real
Estate Services) of Ichigo Group Holdings Co., Ltd.
Executive Vice President & Statutory Executive Officer of Ichigo
Real Estate Investment Advisors Co., Ltd.
President & Representative Director of Miyako City Co., Ltd.
Chairman & Director of Ichigo Marché Co., Ltd.
Chairman & Director of Takara Building Maintenance Co., Ltd.
Nominating Committee Member, Audit Committee Member,Compensation Committee Member
Member of Conciliation of Civil Affairs, Tokyo District Court
Labor Arbitration Member, Yokohama District Court
Chairman of Audit Committee, Nominating Committee Member,Compensation Committee Member, Compliance Committee
MemberAuditor of St. Thomas University
President of Remark Japan Co., Ltd.

Director

Minoru Ishihara

External Director3

Katsu Fujita1

External Director3

Tetsuya Fujita

External Director3

Maki Kumagai

Chairman of Compliance Committee
Partner of Nijubashi Partners
External Director, Japan Best Rescue System Co., Ltd.

External Director3

Noriko Kawate2

Nominating Committee Member, Audit Committee Member,Compensation Committee Member
President of CLEA Consulting Co., Ltd.
External Director, Meiji-Machine Co., Ltd.
Partner, Cast Group

External Director3

Kenichiro Yoshida

Partner and Executive Vice President of Ichigo AssetManagement, Ltd.

1

Mr. Katsu Fujita, Audit Committee Member, in his previous employment served as the head of the division in
charge of finance and accounting for nine years and thus has extensive knowledge of the finance and accounting
fields.

2

Ms. 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

The Company has registered to the Tokyo Stock Exchange that Mr. Katsu Fujita, Mr. Tetsuya Fujita, Ms. Kumagai,
and Ms. Kawate, and Mr. Yoshida are independent directors.

- 19 -

2. Statutory Executive Officers (as of February 28, 2015)
Position

Name

Chairman & Representative
Statutory Executive Officer

Scott Callon

President & Representative
Statutory Executive Officer

Kenji Iwasaki

Executive Vice President &Statutory Executive Officer

Minoru Ishihara

Executive Managing Director& Statutory Executive Officer
Senior Statutory Executive
Officer
Statutory Executive Officer

Responsibility and Other Business Affiliations
Overall Group Management
Partner and Chief Executive Officer of Ichigo AssetManagement, Ltd.
Overall Group Management
Chairman & Statutory Executive Officer of Ichigo
Real Estate Investment Advisors Co., Ltd.
Chairman & Director of Ichigo ECO Energy Co.,Ltd.
Administration
Executive Vice President & Statutory Executive
Officer (Real Estate Services) of Ichigo Group
Holdings Co., Ltd.
Executive Vice President & Statutory Executive
Officer of Ichigo Real Estate Investment Advisors
Co., Ltd.
President & Representative Director of
Miyako City Co., Ltd.
Chairman & Director of Ichigo Marché Co., Ltd.
Chairman & Director of Takara Building MaintenanceCo., Ltd.

Takashi Minamikawa

Finance

Eri Murai

Administration and HR

Katsuhiko Hattori

Engineering

Statutory Executive Officer

Haruki Nakane

Compliance

Statutory Executive Officer

Hiroshi Shimazu

Audit

Statutory Executive Officer

Hisayoshi Towata

Finance

Statutory Executive Officer

Kenichi Nagao

Business Development, Special Projects

Statutory Executive Officer

Takeyuki Yoshimatsu

Business Management

Statutory Executive Officer

Masaaki Yajima

Real Estate Services

3. Directors and Statutory Executive Officers who Retired during the Current Fiscal Year
N/A

4. Total Remuneration Paid to Directors and Statutory Executive Officers
Number of
Recipients

Amount Paid

Directors(of whom are External Directors)

7(5)¥151 million(¥33 million)

Statutory Executive Officers

9

N/A

Total
(of whom are External Directors)

16(5)¥151 million(¥33 million)(Note 1) As of the end of the term, there are eight Directors (including five External Directors) and twelve
Statutory Executive Officers (three of whom are also Directors), resulting in a total of seventeen officers.
Since those who are both a Statutory Executive Officer and a Director do not receive Statutory Executive
Officer's remuneration, the total amount and number of recipients are shown in the row of Directors and- 20 -

not in the row of Statutory Executive Officers.
(Note 2) The numbers above do not include one Statutory Executive Officer who is also a Director and one
External Director, as they do not receive remuneration from the Company.
(Note 3) Since there is one director who retired, there is a difference between the eighteen officers which is thesum of two officers not receiving remuneration (one who is Director and Statutory Executive Officer, andthe one External Director) and the sixteen officers in the table above, and the total of seventeen officers asof the end of the current fiscal year.
(Note 4) The amount paid includes remuneration in the form of stock options of ¥16 million for Directors (ofwhich ¥ 2 million is for External Directors) and stock options of ¥9 million for Statutory Executive
Officers.
(Note 4) In addition, the Company paid ¥140 million as employee compensation to nine Statutory Executive
Officers. This amount includes remuneration in the form of stock options of ¥9 million.

5. Policy on Determining Remuneration for Directors and Statutory Executive Officers
a Basic Policy
Remuneration for Directors and Statutory Executive Officers of the Company is determined based on
the duties of each person, contribution to the Company, base compensation, prior experience, etc.
b. Specific Policies- Remuneration for Directors
Remuneration for Directors consists of a monthly base salary and a performance-based bonus. The
monthly base salary is a fixed amount based on the role and responsibilities of each Director, while
the performance-based bonus is based on the Company’s performance.
- Remuneration for Statutory Executive Officers
Remuneration for Statutory Executive Officers consists of a monthly base salary and aperformance-based bonus. The monthly base salary is a fixed amount based on the role andresponsibilities of each Statutory Executive Officer, whereas the performance-based bonus is basedon the performance of the Company and the department and individuals for which each Statutory
Executive Officer is responsible.
- Stock Options
Stock options are granted to Directors and Statutory Executive Officers to strengthen theirmotivation to improve performance for the benefit of shareholders. These stock options are granted
in addition to the remuneration described above.

6. Outside Offices Helda. Positions in Other Companies and the Relationship between the Company and these Other Companies- Tetsuya Fujita, External Director, is also President of Remark Japan Co., Ltd. The Company has
no relationship with Remark Japan Co., Ltd.
-

Maki Kumagai, External Director, is also Partner of Nijubashi Partners. The Company has no
relationship with Nijubashi Partners.

-

Noriko Kawate, External Director, is also President of CLEA Consulting Co., Ltd. and Partner ofCast Group. The Company has no relationship with CLEA Consulting Co., Ltd. or Cast Group.

- Kenichiro Yoshida, External Director, is also Partner and Executive Vice President of Ichigo AssetManagement Co., Ltd. Ichigo Asset Management Ltd. has an Investment Advisory Agreementwith Ichigo Asset Management International, Pte. Ltd., which has a Discretionary Investment
Contract with Ichigo Trust Pte. Ltd., the Company’s controlling shareholder (number of shares- 21 -

held: 321,721,000 shares; shareholding ratio: 64.46%).
b. Positions as External Directors in Other Companies- Katsu Fujita, External Director, is a Member of the Conciliation of Civil Affairs for the Tokyo
District Court and Labor Judge for the Yokohama District Court. The Company has no relationshipwith the Tokyo District Court or the Yokohama District Court.
- Tetsuya Fujita, External Director, is an Auditor of St. Thomas University. The Company has no
relationship with St. Thomas University.
-

Maki Kumagai, External Director, is also External Director of Japan Best Rescue System Co., Ltd.
The Company has no relationship with Japan Best Rescue System Co., Ltd.

- Noriko Kawate, External Director, is also External Director of Meiji-Machine Co., Ltd. The
Company has no relationship with Meiji-Machine Co., Ltd.
-

Daisuke Kotegawa, External Director, is also External Auditor of Stream Co., Ltd. and Director of
SEKIDO CO., Ltd. The Company has no relationship with Stream Co., Ltd. or SEKIDO CO., Ltd.

c. Relationship with the Company or Related Entities of the Company
The five External Directors, to the best of the Company’s knowledge, have no spouse or relatives inthe third degree or closer who are Statutory Executive Officers of the Company or related entities of
the Company.

- 22 -

d. Principal Activities in the Current Fiscal Year
Activities

Katsu Fujita

Attended 12 out of 12 meetings (attendance rate: 100%) of the Board of
Directors held in the current fiscal year. Also attended 5 out of 5
meetings (attendance rate: 100%) of the Nominating Committee held in
the current fiscal year. Also attended 22 out of 22 meetings (attendance
rate: 100%) of the Audit Committee held in the current fiscal year andattended 5 out of 5 meetings (attendance rate: 100%) of theCompensation Committee held in the current fiscal year.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.

Tetsuya Fujita

Attended 12 out of 12 meetings (attendance rate: 100%) of the Board of
Directors held in the current fiscal year. Also attended 22 out of 22
meetings (attendance rate: 100%) of the Audit Committee and attended 6
out of 6 meetings (attendance rate: 100%) of the Compliance Committee
held in the current fiscal year. Also attended 5 out of 5 meetings(attendance rate: 100%) of the Nominating Committee held while he wasa member, and 5 out of 5 meetings (attendance rate: 100%) of theCompensation Committee.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.

Maki
Kumagai

Attended 12 out of 12 meetings (attendance rate: 100%) of the Board of
Directors held in the current fiscal year. Also attended 6 out of 6
meetings (attendance rate: 100%) of the Compliance Committee held in
the current fiscal year and attended 2 out of 2 meetings (attendance rate:100%) of the Nominating Committee held while she was a member.
Also, attended 2 out of 2 meetings (attendance rate: 100%) of theCompensation Committee held while she was a member.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.

External
Director

NorikoKawateAttended 11 out of 12 meetings (attendance rate: 91.7%) of the Board of
Directors held in the current fiscal year. Also attended 22 out of 22
meetings (attendance rate: 100%) of the Audit Committee held in thecurrent fiscal year. Also attended 3 out of 3 meetings (attendance rate:100%) of the Nominating Committee and 3 out of 3 meetings (attendance
rate: 100%) of the Compensation Committee held once she became amember.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.

External
Director

Kenichiro
YoshidaAttended 8 out of 9 meetings (attendance rate: 88.9%) of the Board of
Directors since taking office as External Director.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.

External
Director

External
Director

External
Directore. Outline of Limited Liability Agreement with External Directors
The Company has entered into agreements to limit liability under Article 423, paragraph 1 of theCompany Law pursuant to the provisions of Article 427, paragraph 1 thereof in order to retain
talented persons as External Directors.
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 that the liability islimited only when the External Directors have performed their duties in good faith and withoutgross negligence.

- 23 -

D. Independent Auditor
1. Grant Thornton Taiyo LLC(Note) Grant Thornton Taiyo ASG from whom the Company receives audit certificates changed its
corporate name to Grant Thornton Taiyo LLC as of October 1, 2014.
2. Amount of Fees for the Independent Auditor(i) Amount of fees for the Independent Auditor for the current fiscal year
Amount of fees for the services specified in Paragraph 1 of Article 2 of theCertified Public Accountants Act (Act No.103 of 1948)¥75 million

Amount of fees for the services other than those specified in Paragraph 1
of Article 2 of the Certified Public Accountants Act¥- million¥75
million(ii)

Total money and other financial benefits payable by the Company andsubsidiaries to the Independent Auditor¥91
million(Note) Audit agreements between the Company and the Independent Auditor do not clearly itemize the amountsof audit fees for the audits under both the Company Law and the Financial Instruments and Exchange
Law, and, as a matter of practicality, the Company is not able to itemize them. Therefore, the amount offees for the Independent Auditor for the current fiscal year shows the total amount.

3. Policy for the Determination of Removal or Non-Reappointment of the Independent Auditor
If there is any reasonable doubt about the Independent Auditor performing its duties, the Audit
Committee will consider the removal or non-reappointment of the Independent Auditor based on thefacts. If the Audit Committee determines that the removal or non-reappointment is appropriate, it willpropose the same to the Annual Shareholder Meeting pursuant to the Regulations of the Audit
Committee.

E. Structure to Ensure Appropriate Business Activity
1.Basic View on Internal Control System
The Company, pursuant to the Company Law, has set forth a “Basic Policy for the Establishment ofStructure of Internal Controls,” established the required internal policies, ensured the legality andefficiency of the business of the Company, and established an appropriate risk management system.
The Company will strive to improve and reinforce these systems through continuous review. Based on
the enforcement of amendments to the Companies Act on May 1, 2015, partial amendments have been
made to its Basic Policies on Internal Control as of April 20, 2015.
a. Internal Control to Ensure that Statutory Executive Officers and Employees Execute Their Duties
in Conformity with Laws and Regulations and the Articles of Incorporation(i) Corporate Governance- The Board of Directors determines material matters regarding management and supervises theexecution of duties by Statutory Executive Officers pursuant to laws and regulations, the Articles
of Incorporation, the resolutions of the Annual Shareholder Meeting, the Regulations of the Boardof Directors, the Ichigo Group’s Code of Corporate Ethics, the Ichigo Group’s Code of Conduct,
the Regulations of Administrative Authority and other rules. The Board of Directors has
established the Proposal and Reporting Standards to the Board of Directors and makes decisions
on the execution of business to be determined by the Board of Directors pursuant to the- 24 -

Standards.
- The Statutory Executive Officers make decisions on the execution of business that are delegatedby the Board of Directors, and perform their duties pursuant to these decisions, the resolution of
the Board of Directors and internal regulations.
- In order for the Board of Directors to supervise the execution of duties by Statutory Executive
Officers, the Statutory Executive Officers report on the status of the execution of business to theBoard of Directors at least once in three months. Statutory Executive Officers monitor andsupervise the execution of each other’s duties.
- The status of the execution of duties by Statutory Executive Officers will be audited by the Audit
Committee.
(ii) Compliance- The Company has established the Ichigo Group’s Code of Corporate Ethics and the Ichigo
Group’s Code of Conduct which provide rules and regulations for action to be taken by officers
and employees including Directors and Statutory Executive Officers.
- The Company has established the Compliance Committee to deliberate major issues regarding
compliance. The Compliance Committee is independent from the Statutory Executive Officers.
- The Company has appointed a Chairman & Representative Statutory Executive Officer and a
President & Representative Statutory Executive Officer, Statutory Executive Officers (Business
Management and Compliance Officer), and a division in charge of compliance management(Compliance) directly reporting to the President & Representative Statutory Executive Officer topromote compliance.
- The Company maintains an internal reporting system whereby Directors, Statutory Executive
Officers, and employees may report any questionable acts in terms of compliance through internalreporting contacts or outside lawyers.
(iii) Structure to Ensure Appropriate Financial Reports- The Company has established internal systems to ensure lawful, appropriate financial reports by
establishing internal regulations and by complying with the Financial Instruments and ExchangeAct, accounting standards and other related laws and regulations.
- The President, Statutory Executive Officers (Audit, Finance, Administration & HR, and Business
Management), and Audit Department promote and establish an internal structure which complies
with J-SOX.
(iv) Internal Audit
The Company has established a Statutory Executive Officer (Compliance) and an Internal Audit
Department which reports directly to the Audit Committee. The Statutory Executive Officer(Compliance) and Internal Audit Department conduct an internal audit of business with respect tocompliance with laws and regulations, the Articles of Incorporation, internal regulations, and theappropriateness of the execution of duties, and reports the results of such audit to the Audit
Committee, the President & Representative Statutory Executive Officer, and the Board of Directors.
The Statutory Executive Officer (Compliance) and the Internal Audit Office reports on corrective
activities and the improvement of matters indicated at the internal audit to the Audit Committee, theChairman & Representative Statutory Executive Officer, the President & Representative Statutory
Executive Officer, and the Board of Directors.
(v) Rejection of Anti-Social Forces- In order to prevent anti-social forces from entering into the real estate and financial markets, theCompany has established the Ichigo Group’s Code of Corporate Ethics which prohibits interaction
with anti-social forces in cooperation and coordination with the Police Department and otherinstitutions.
- 25 -

- The Company has appointed a Statutory Executive Officer (Business Management andCompliance) and Compliance Department to eliminate interaction with anti-social forces byenhancing coordination and cooperation with the Police Department, lawyers, and other external
experts; become a member of police-related institutions; gather information; screen businesscounterparties; include provisions against anti-social forces in agreements, etc.
- In the event an anti-social force makes a request with respect to the Company, the Statutory
Executive Officer (Compliance) shall promptly contact the police, outside legal advisors, and eachgroup company and take a forceful attitude to reject such request.
(vi) Structure to Prevent Insider Trading- In order to prevent insider trade, Chairman and President have appointed Statutory Executive
Officer (Business Management) as the person responsible for information control with regards toinformation specified by the stock exchange and by the Company’s internal rules. The Statutory
Executive Officer (Finance) responsible for providing the management structure of internal
information and for the management of the sales of specific securities by the employees
thoroughly prevents insider trading within each group company in cooperation with the Statutory
Executive Officer (Business Management).
b.

Systems Regarding the Retention and Control of Information in the Execution of Duties by
Statutory Executive Officers
The Company properly retains and manages documents and other information in the execution ofduties by the Statutory Executive Officers with due care and in compliance with laws and regulations
and internal regulations.

c.

Policies and Other Systems regarding Risk Management(i) The Company controls the risk management of each department, establishes basic policies on risk
management, and determines the execution of risk management and other material mattersthrough the Business Management Department. The Business Management Department also
supports each department in establishing a risk management system and establishes acompany-wide, cross-departmental risk management system.
(ii) The Company, in order to enhance its risk management, has appointed Chairman &Representative Statutory Executive Officer, Statutory Executive Officer (Business Management),and Legal and Risk Management Departments as the risk management head.
(iii) The Statutory Executive Officer (Business Management) and Business Management and Legaland Risk Management Departments ensure risk management of material matters that involve
management decisions. These require approvals from the President & Representative Statutory
Executive Officer.
(iv) With respect to natural disasters and other risk management systems, the Company is establishingsystems with the cooperation of each department, primarily driven by the Business Management
Department. The Company has established a system in which Executive Vice President &Statutory Executive Officer creates a task force, prevents an expansion of damage, and allows for
speedy recovery in the event of crisis.

d. System to Ensure Effective Execution of Duties by Statutory Executive Officers(i) The Board of Directors authorizes the Statutory Executive Officers to make certain discretionary
for the appropriate and agile execution of duties. In addition, in order to comprehensively discussmaterial management matters which require approvals from the Chairman & Representative
Statutory Executive Officer, the President & Representative Statutory Executive Officer and eachdivision head & Statutory Executive Officer, the Senior Statutory Executive Officer (Finance)
convenes meetings including Statutory Executive Officers and ensures a smooth execution ofduties.
(ii) The Company creates a mid-term management plan, an annual President’s objective, annual- 26 -

Group target, and annual division targets based on Ichigo Group principles. The Senior Statutory
Executive Officer (Finance) ensures effective and efficient management by charting the progressagainst these objectives.
e. Directors and Employees Assisting the Performance of the Duties of the Audit Committee(i)

Directors who assist in the performance of the duties of the Audit Committee will be determinedby the Board of Directors in line with the opinions of the Audit Committee.

(ii) Employees assisting the performance of the duties of the Audit Committee are members of the
Audit Department appointed by the head and of the Audit Department and the Audit Committee.
Following the direction of the Audit Committee or a member of the Audit Committee assignedby the Audit Committee, the head of the Audit Department manages the members of thedepartment or leads the execution of assisting in the performance of the duties of the Audit
Committee him/herself.
(iii) Statutory Executive Officers must confirm that the Audit Committee and employees assisting in
the performance of the duties of the Audit Committee receive no undue constraints in carryingout duties. In case such employees receive undue constraints in carrying out duties, theemployees can report to the Audit Committee or one or more Audit Committee Members
appointed by the Audit Committee in advance, and ask to get such undue constraints eliminated.
f. The Independence of Directors and Employees from Statutory Executive Officers
Directors and employees who assist in the performance of the duties of the Audit Committee report to
the Audit Committee. The appointment, transfer, appraisal, and compensation of the relevant
employees require the consent of the Audit Committee. This ensures independence from the Statutory
Executive Officers. Other matters regarding the independence of such Directors and employees fromthe Statutory Executive Officers are pursuant to internal regulations as separately provided.
g. System of Reports by Statutory Executive Officers and Employees to the Audit Committee andOther Systems regarding Reports to the Audit Committee(i) Audit Committee Members may attend the meetings of the Board of Directors, the Compliance
Committee, and other important meetings and hear the status of the execution of duties by Statutory
Executive Officers, inspect related materials, and ask for explanations and reports at the meetings.
(ii) All Statutory Executive Officers, heads of departments, and other staff members must explain andreport to the Audit Committee and Audit Committee Members as required.
(iii) Statutory Executive Officers and employees immediately report to the Audit Committee Members.
In case Statutory Executive Officers and employees report following its internal reporting system(including its external reporting system), such officer or employee follows the rules of the system.
1. Details of decisions which may have a material impact on finance and business (including
matters regarding compliance or risk management)
2. Matters that damage the establishment of internal compliance systems
3. Matters that affect the operation of internal reporting systems
4. Other matters that the Audit Committee or any member of the Audit Committee recognizes asmaterialh. Other Systems to Ensure Effective Audits by the Audit Committee(i) The Internal Audit Office works closely with the Audit Committee and the Audit Committee
Members by discussing the internal audit plan, conducting internal audits, and reporting the results
to the President & Representative Statutory Executive Officer, the Audit Committee and the Audit
Committee Members. Audit Committee Members and the Internal Audit Office also work closelywith the independent auditor and exchange opinions about matters on internal audit.
(ii) The Audit Committee or the Audit Committee Member designated by the Audit Committee may- 27 -

retain any lawyers, certified public accountants, consultants and other outside advisors at theCompany’s cost without prior approval from the Board of Directors or the Statutory Executive
Officers.
(iii) The Audit Committee Member designated by the Audit Committee reports the status of theexecution of duties by the Audit Committee to the Board of Directors at least once every threemonths.

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