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, 2014
Ichigo Group Holdings Co., Ltd. (JASDAQ, 2337)
Representative: Scott Callon, Chairman and Representative Statutory Executive Officer

Notice of the Fourteenth Annual General Meeting of Shareholders

Dear Shareholders:
We are pleased to invite you to attend the Fourteenth Annual General Meeting of Shareholders 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 General
Meeting of Shareholders attached below and cast your vote by returning the enclosed voting form or
by accessing our voting website (http://www.evote.jp) no later than Friday, May 23, 2014, 6:30 p.m.
JST.
1. Date and Time

Sunday, May 25, 2014 at 10:00 a.m.

2. Place

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

3. Agenda of the Meeting
Matters to be Reported
1.

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 fourteenth term (from March 1, 2013 to February 28, 2014)

2.

Report on the financial statements for the fourteenth term (from March 1, 2013 to February 28, 2014)

Matters to be Resolved
Proposal 1

Election of 8 Directors* If you attend the meeting in person, please submit the enclosed voting form at the venue’s reception.
* Please note that any amendments to the Reference Materials for the Annual General Meeting of Shareholders and thebusiness report, financial statements, and consolidated financial statements will be posted on our website(http://www.ichigo-holdings.co.jp/english).

-1-

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.
(1) 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 23, 2014,
but we would appreciate your promptness in voting. Please contact the help desk below if you
have any questions.
(2) 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 General Meetingof Shareholders.
(4) 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.
4. How to Receive Notices of Future Annual General Meetings of Shareholders
You can be notified by e-mail starting from the next Annual General Meeting of Shareholders, so pleaseapply to receive such notification by accessing the voting website on your PC or smart phone. (Please
note that you may not apply for such notification by mobile phone nor can you designate your mobile
phone e-mail address as the receiving address.)-2-

Inquiries concerning the Voting Process
Mitsubishi UFJ Trust and Banking Corporation, Corporate Agency Division (Help Desk)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 General Meeting of Shareholders of the Company.

-3-

Table of Contents
Business Report
I.

II.

Current Condition of the Company
1.

Business Conditions in the Current Fiscal Year ----------------------------------------

P5

2.

Assets and Earnings in the Past Three Fiscal Years ------------------------------------

P7

3.

Important Parent Company and Subsidiary Information ------------------------------P7

4.

Key Business Priorities --------------------------------------------------------------------P8

5.

Key Business Segments -------------------------------------------------------------------

P8

6.

Principal Offices ----------------------------------------------------------------------------

P8

7.

Employees -----------------------------------------------------------------------------------

P9

8.

Principal Lenders ---------------------------------------------------------------------------

P9

9.

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

P9

10. Other Material Matters Regarding the Company --------------------------------------

P10

Matters Regarding the Current Status of the Company
1.

Matters Regarding Shares in the Company ---------------------------------------------

P11

2.

Stock Acquisition Rights (aka Stock Options) -----------------------------------------

P12

3.

Officers of the Company ------------------------------------------------------------------

P17

4.

Independent Auditor ----------------------------------------------------------------------

P22

5.

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

P22

6.

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

P27

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

P28

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

P29

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

P30

Notes to the Consolidated Financial Statements --------------------------------------------------

P31

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

P43

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

P44

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

P45

Notes to the Parent Financial Statements ----------------------------------------------------------

P46

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

P52

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

P53

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

P54

Reference Materials for the Annual General Meeting of Shareholders
Proposal 1 --------------------------------------------------------------------------------------------

-4-

P56

Business Report
From March 1, 2013
To February 28, 2014I.

Current Condition of the Company

1. Business Conditions in the Current Fiscal Year
(1) Progress and Business Results
As a result of Abenomics’ bold monetary easing and positive fiscal policies, corporate earnings,
manufacturing, consumer spending, and employment conditions in Japan have improved during thecurrent fiscal year, and with the added stimulus of the 2020 Tokyo Olympics, the Japanese economy isexpected to stay on a recovery trend. In the Japanese real estate market, business conditions are picking
up as evidenced by a 0.7% year-on-year increase in land values in the three major cities of Tokyo,
Osaka, and Nagoya announced by the Ministry of Land, Infrastructure, Transport, and Tourism inMarch. This was the first land price increase in six years since the Lehman Brothers bankruptcy andeconomic downturn that began in 2008. Japan’s real estate market environment has changed
dramatically for the better with lower vacancy rates and a rebound in average monthly rents. These
positive developments stem from the continuing favorable financing environment, robust J-REIT
participation in the Japanese real estate market via additional public offerings and new listings, and thegrowing number of real estate transactions. Furthermore, clean energy production is attracting
increased attention both globally and nationally due to growing interest in reducing environmental
footprints and the energy problems Japan faces after the Great East Japan Earthquake and the series ofaccidents at the Fukushima nuclear power plant.
The Company is working to take advantage of this positive business environment to drive higher
earnings for its shareholders. In line with its Shift Up 2016 Mid-Term Business Plan, the Company isproactively investing in value-add and long-term real estate assets and Ichigo’s clean energy businessand establishing bridge funds to support the growth of Ichigo J-REIT. In doing so, the Company isstriving 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 J-REIT
bridge funds, etc.)
 Expanded its clean energy business focusing on megasolar power generation
 Increased its capital to accelerate investment for growth Formulated its Shift Up 2016 Mid-Term Business Plan Expanded stable profitability via public offerings of Ichigo J-REIT to support its growth 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 cutting borrowing costs through refinancing existing loans Strengthened its strategic lending partnerships, including increasing transactions with Japan’s
megabanks
 Recycled capital and generated capital gains via asset sales
 Developed and implemented numerous measures to strengthen the Ichigo brand-5- Strengthened and improved operating efficiencies of its facility management and clean energy
businesses via merging subsidiaries
 Split its shares to improve liquidity and make its shares more accessible to small investors
As a result, the Company recorded revenues of ¥35,101 million in the current fiscal year (214.1%
year-on-year); an operating profit of ¥3,912 million (212.1% year-on-year); a recurring profit of ¥3,597
million (207.4% year-on-year); and a net profit of ¥4,526 million (276.5% 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 proactively secure low-cost debt financing, reduce the cost of its borrowings,
diversify the terms and lengthen the tenor of its borrowing, and work to create a strategic bankformation that supports highly profitable growth. As a result, in the current fiscal year the balance ofinterest-bearing corporate debt was ¥30,200 million (up 337.2% year-on-year), and the balance of
non-recourse debt was ¥24,606 million (down 29.8% year-on-year). The Company reduced the interest
rates on its corporate and non-recourse debt rates by 0.27% and 0.26%, respectively, year-on-year. In
addition, the Company increased the percentage of long-term corporate debt to 86.5% of total debt (up7.5% year-on-year), increased corporate debt that had a tenor of longer than 5 years to ¥8,587 million(up ¥6,695 million year-on-year, with the average borrowing period lengthened to 5.94 years), andincreased the percentage borrowed from Japan’s megabanks to 50.9% (up 25.6%). Thus, the Company
was successful in lengthening financing periods and improving the stability of its financial base. In
addition, to further accelerate investments for growth, the Company raised a total of ¥16,468 million at
the end of 2013 via issuing 40,650,000 new shares through a public offering and 4,831,000 new sharesthrough an underwriter third-party allotment. The paid-in amount was ¥362.1 per share.
(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.

-6-

2. Assets and Earnings in the Past Three Fiscal Years

Category

Fourteenth term

Eleventh term

Twelfth term

Thirteenth term

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

February 28, 2011)

February 29, 2012)

February 28, 2013)

February 28, 2014)

12,7601,616
620
317.64
98,653
27,771
10,920.79(54.65)

18,952979
1,770
775.14
82,17028,187
11,613.85(58.07)

16,3971,734
1,637
731.9880,42831,066
12,704.44(63.52)

Revenues (million yen)
Recurring Profit (million yen)
Net Profit (million yen)
Net Profit per Share (yen)Total Assets (million yen)
Net Assets (million yen)
Net Assets per Share (yen)35,101
3,597
4,526
9.83
114,944
50,84297.42(Note 1) Net Profit 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. Thesefigures do not include treasury shares.
(Note 2) Net Profit and Net Profit 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 current fiscal year. Similarly,
figures in ( ) above are calculated as if the stock split had been implemented at the beginning of the fiscal
year.

3. 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.
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 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

Takara Building Maintenance Co., Ltd.

¥10 million

100.00%Comprehensive facility
management(Note) On June 1, 2013, Nichibei Building Services and Nichibei Security Services merged with Takara Building
Maintenance.
-7-

4. Key Business Priorities
Despite the fact that the world economy continues to be affected by uncertainties and accordingly there aredownside risks to the Japanese economy, it is reasonable to expect that economic conditions in Japan willcontinue to improve due to the government’s proactive economic policies. Abenomics is also generating
positive effects in the real estate industry which is the Company’s primary area of activity.
In light of this positive business environment, the Company is executing on its Shift Up 2016 strategy andaccelerating investments to drive growth. To accelerate this growth, the Company increased its capitalthrough a public offering in December 2013 and raised ¥16,468 million. The Company then announced its
Shift Up 2016 Mid-Term Business Plan in January 2014. The Company is working to maximize
shareholder value by driving significant growth in EPS based on a robust financial foundation and stablerevenue base, and believes that fully realizing its Shift Up 2016 goals is its most important task.
To achieve its goals, the Company expects to (1) accelerate investment to add value to real estate in the
run-up to the 2020 Tokyo Olympics, expand stable earnings by proactively investing in long-term assets tobe owned by Ichigo, grow its earnings base by supporting growth in asset management fee income
generated by Ichigo REIT, and grow its clean energy business focused on solar power generation; (2)secure funds for growth by selling assets to improve its capital efficiency of capital and recycle andreinvest shareholders’ capital at ROIs of 15% or above; (3) use debt finance strategically to strengthen the
Company’s financial stability and improve its earning capacity, including obtaining credit ratings, cutting
borrowing costs, doing uncollateralized borrowing, extending loan maturities, and issuing corporate bonds.
The Company also intends to further reinforce its corporate governance and compliance to ensure soundmanagement for its shareholders, and aims to move to the first section of the Tokyo Stock Exchange by thefiscal year ending in February 2016.
5. Key Business Segments (as of February 28, 2014)
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 management of a J-REIT and private equity investment funds, andalso engages in real estate investment, property management, building maintenance services, and a clean
energy business focused on solar power generation.

6. Principal Offices (as of February 28, 2014)
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 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) On June 1, 2013, Nichibei Building Services and Nichibei Security Services merged with Takara Building
Maintenance.

-8-7. Employees (as of February 28, 2014)(1) Employees of the Company (Consolidated basis)
Number of employees

Increase/decrease from the end of previous fiscal year

206 (602)

24 (53)(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.
2. The average number of non-full-time employees (including part-time and temporary staff) is presented
in parentheses.
3. The number of full-time employees increased by 24 from the previous fiscal year due to businessexpansion.
4. The number of non-full-time employees increased by 53 from the previous fiscal year due to increase in
the number of facility management projects the Company manages.

(2) Employees of the Company (Parent basis)
Number of employees
51

Increase/decrease
from the end of previous fiscal year

(1)

19

(1)

Average age

Average years of
employment

39.5 years old

4 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.
2. The average number of non-full-time employees (including part-time and temporary staff) is presented
in parentheses.
3. On a year-on-year basis the number of employees increased by nineteen; however, this was mainly due
to such employees being moved from a subsidiary pursuant to a corporate reorganization.

8. Principal Lenders (as of February 28, 2014)
Lenders
Sumitomo Mitsui Banking Corporation
Kansai Urban Banking Corporation
The Tokyo Star Bank, Limited
Bank of Tokyo-Mitsubishi UFJ
Mizuho Bank, Ltd.

Amount¥11,391 million¥3,257 million¥3,087 million¥2,500 million¥1,474 million(Note) These amounts do not include non-recourse loans held by funds that the Company manages (e.g., tokumei
kumiai partnerships, etc.)

9. 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 fund stable
growth. During the current fiscal year, the Company considered various methods for distributing profit toshareholders based upon the Company’s earnings outlook and possible future growth in funding needs.
The Company was able to achieve increase in income and profit from rental income, asset management
fees, and building maintenance fees and cover all fixed costs (sales and management expenses as well asinterest expenses) from such stable earnings. Accordingly, as forecast at the beginning of the fiscal
period, the Company expects to pay a dividend of 1.1 yen per share (up 10% year-on-year) at the end of
the fiscal period.

-9-10. Other Material Matters Regarding the Company
Construction of The Largest Megasolar Power Plant in Kanto Region (43 MW)
The Company will construct the largest megasolar power plant in Kanto, the region of Japan which
encompasses Tokyo and is the world’s largest regional electricity market. The plant will be constructed in
Showamura, Gunma Prefecture, and is expected to be operational in 2017.
As the culmination of a process to choose the operator of a megasolar plant in Showamura (the“Showamura Plant”), the Company’s subsidiary Ichigo ECO Energy Co., Ltd. (“Ichigo ECO Energy”)
was selected as the operator at a Showamura landowners meeting on December 26, 2013. On April 10,
2014, the Company reached final agreement on the land leases necessary for the project to move forward.
The Showamura Plant has been approved by the Ministry of Economy, Trade and Industry to operate
under Japan’s renewable energy law and has submitted its application to sell electricity to Tokyo ElectricPower Company. Ichigo ECO Energy will next obtain the necessary approvals for large-scale landdevelopment from Gunma Prefecture and Showamura.
The Company is finalizing discussions with Hitachi, Ltd. to be the EPC (Engineering, Procurement, andConstruction) contractor for the Showamura Plant.
The Showamura Plant will more than double the size of the Company’s megasolar operations from
30MW to 73MW, and the Company fully expects it will further grow its clean energy business.
1.

Ichigo Showamura Ogose ECO Power Plant Overview
Address

Ogose & Kainose, Showamura, Tone-gun, Gunma Prefecture

Operator

Ichigo ECO Energy Co., Ltd.

EPC

Hitachi, Ltd.

Area

820,000 m2

Number of Panels

169,000

Panel Output

43 MW

Annual Energy Output

50,000 MWh (provides power for 14,000 households)

Feed-in Tariff (Fixed for 20

36 yen/kWh + consumption tax

years)
Annual CO2 Emissions

33,000 metric tons

Reduction
Total Investment Cost
(Note)

13 billion yen (expected)

2

Annual CO emissions reduction data is based on estimates from the National Institute of Advanced
Industrial Science and Technology.

2. Schedule
Construction start date:
Operation start date:

October, 2014 (expected)
April, 2017 (expected)(Note) Above dates are subject to change depending upon the progress of relevant approvals andconstruction work.

- 10 -

II. Matters Regarding the Current Status of the Company
1. Matters Regarding Shares in the Company (as of February 28, 2014)(1) Number of Authorized Shares:

550,000,000 shares(2) Total Number of Shares Issued:

499,432,200 shares(Including treasury stock of 1,978,000 shares)(3) Number of Shareholders:

45,774(4) Major Shareholders (top 10)
Investment in the Company
Name
Number of shares held (shares)
ICHIGO TRUST PTE. LTD.

Shareholding ratio (%)

346,221,200

69.60%

JAPAN SECURITIES FINANCE CO.,LTD.

7,073,500

1.42%

SBI SECURITIES CO., LTD.

6,856,400

1.38%

MSCO CUSTOMER SECURITIES

2,745,700

0.55%

MELLON BANK TREATY CLIENTSOMNIBUS

1,250,252

0.25%

STATE STREET BANK AND TRUSTCOMPANY 505277

1,200,000

0.24%

MONEX, INC.

1,038,541

0.21%

DEUTSCHE BANK AG LONDON－PB
NON－TREATY CLIENTS 613

955,900

0.19%

DAIWA SECURITIES CO. LTD.

846,600

0.17%

MLI EFG NON TREATY CUSTODYACCOUNT

837,700

0.17%

369,025,793

74.18%

TOTAL(Note) The shareholding ratio is calculated excluding treasury stock (1,978,000 shares).

- 11 -

2. 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, 2013)
9th Stock Acquisition Right Plan
Date of resolution

July 14, 2009

Number of stock acquisition rights

3,367 units (Note 1)

Type and number of shares

673,400 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)¥13,400 per share (¥67 per share) (Note 3)
August 15, 2011 – August 14, 2016
(Note 2)
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:

1,819 units
363,800 shares
2
0 units
0 shares0
10 units
2,000 shares
1(Note 1) Of the total stock acquisition rights, 1,829 have been issued to Directors.
(Note 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 3) Shares of the Company were split at a rate of 200 shares to one effective September 1, 2013.

- 12 -

10th Stock Acquisition Right Plan
Date of resolution

August 8, 2011

Number of stock acquisition rights

8,780 units (Note 1)

Type and number of shares

1,756,000 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) (Note 3)
August 9, 2013 – August 8, 2018
(Note 2)
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:

2,660 units
532,000 shares2
300 units
60,000 shares3
125 units
25,000 shares
1(Note 1) Of the total stock acquisition rights, 3,085 units have been issued to Directors.
(Note 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 3) Shares of the Company were split at a rate of 200 shares to one effective September 1, 2013.

- 13 -

11th Stock Acquisition Right Plan
Date of resolution

August 24, 2012

Number of stock acquisition rights

21,705 units (Note 1)

Type and number of shares

4,341,000 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)¥12,000 per share (¥60 per share) (Note 3)
August 25, 2014 – August 24, 2019
(Note 2)
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:

4,425 units
885,000 shares2
360 units
72,000 shares
4
1,700 units
340,000 shares
6(Note 1) Of the total stock acquisition rights, 6,485 units have been issued to Directors.
(Note 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.
(Note 3) Shares of the Company were split at a rate of 200 shares to one effective September 1, 2013.

- 14 -

12th Stock Acquisition Right Plan
Date of resolution

January 10, 2014

Number of stock acquisition rights

259,400 units (Note 1)

Type and number of shares

259,400 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
Exercise Conditions
Holding by Directors

Directors(excluding External Directors)
External Directors
Statutory Executive Officers(excluding those who are Directors)¥337 per share
January 12, 2016 – January 10, 2021
(Note 2)
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:

159,000 units
159,000 shares
2
19,900 units
19,900 shares
580,500 units
80,500 shares
6(Note 1) Of the total stock acquisition rights, 259,400 units have been issued to Directors.
(Note 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.

- 15 -

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

12th Stock Acquisition Right Plan
Date of resolution

January 10, 2014

Number of stock acquisition rights

800,600 units (Note 1)

Type and number of shares

800,600 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

Holding by
Employees

Exercise Conditions
Employees(excluding those who are Directors
and Statutory Executive Officers)
Directors and Employees of
Subsidiaries¥337 per share
January 12, 2016 – January 10, 2021
(Note 2)
Number of stock acquisition rights:
Number of shares:
Number of holders:Number of stock acquisition rights:
Number of shares:
Number of holders:

800,600 units
800,600 shares187- units- shares-(Note 1) Of the total stock acquisition rights, 800,600 units have been issued to employees.
(Note 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- 16 -

3. Officers of the Company(1) Corporate Directors (as of February 28, 2014)
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.
Chairman of Audit Committee, Nominating Committee Member,Compensation Committee Member
Member of Conciliation of Civil Affairs, Tokyo District Court
Labor Arbitration Member, Yokohama District Court
Chairman of Compliance Committee, Audit Committee Member,
Nominating Committee Member, Compensation Committee
MemberAuditor of St. Thomas University
President of Remark Japan Co., Ltd.
Nominating Committee Member, Compensation Committee
Compliance Committee Member
Partner of Nijubashi Partners
External Director, Meiji-Machine Co., Ltd.
Audit Committee Member
President of CLEA Consulting Co., Ltd.
Employee of Gracia Corporation
External Director, Meiji-Machine Co., Ltd.

Director

Minoru Ishihara

External Director

Katsu Fujita

External Director

Tetsuya Fujita

External Director

Maki Kumagai

External Director

Noriko Kawate

External Director

Daisuke Kotegawa

Research Director of The Canon Institute for Global Studies
External Auditor of Stream Co., Ltd.
Director of SEKIDO CO., Ltd.

External Director

Lee Fitzgerald

Partner of Ichigo Asset Management International, Pte. Ltd.

External Director

Haruhiko Sakaguchi

Partner and COO of Ichigo Asset Management Ltd.

- 17 -

(Note 1) Mr. Katsu Fujita, Chairman of the Audit Committee, in his previous employment served as the head of thedivision in charge of finance and accounting for nine years and thus has extensive knowledge of the financeand accounting fields.
(Note 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.
(Note 3) The Company has registered with Osaka Securities Exchange that Mr. Katsu Fujita, Mr. Tetsuya Fujita, Ms.
Kumagai, and Ms. Kawate, Mr. Daisuke Kotegawa, Mr. Lee Fitzgerald, and Mr. Haruhiko Sakaguchi are
independent directors.

(2) Statutory Executive Officers (as of February 28, 2014)
Position

Name

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 Officerof 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.

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

TakashiMinamikawa

Statutory Executive Officer

Eri Murai

Statutory Executive Officer

Haruki Nakane

Administration
Director (Administration) of Ichigo Estate Co., Ltd.
Compliance

Statutory Executive Officer

Hiroshi Shimazu

Audit

Statutory Executive Officer

Hisayoshi Towata

Finance

Statutory Executive Officer

Kenichi Nagao

Business Development, Special Projects

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

- 18 -

(4) Total Remuneration Paid to Directors and Statutory Executive Officers
Category

Number of
Recipients

Amount Paid

Directors(of whom are External Directors)

7(5)¥149 million(¥34 million)

Statutory Executive Officers

6

N/A

Total
(of whom are External Directors)

13(5)¥149 million(¥34 million)(Note 1) As of the end of the term, there are ten Directors (including seven External Directors) and nine Statutory
Executive Officers (three of whom are also Directors), resulting in a total of sixteen 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 not in therow of Statutory Executive Officers.
(Note 2) The numbers above do not include one Statutory Executive Officer who is also a Director and twoExternal Directors, as they do not receive remuneration from the Company.
(Note 3) The amount paid includes remuneration in the form of stock options of \6 million for Directors (of which\920,000 is for External Directors) and stock options of \4 million for Statutory Executive Officers.
(Note 4) In addition, the Company paid ¥98 million as employee compensation to six Statutory Executive Officers.
This amount includes remuneration in the form of stock options of ¥4 million.

(5) Policy on Determining Remuneration for Directors and Statutory Executive Officers(i) 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.
(ii) 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.

- 19 -

(6) Outside Offices Held(i) 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 an
employee of Gracia Corporation. The Company has no relationship with CLEA Consulting Co.,
Ltd. or Gracia Corporation.

- Daisuke Kotegawa, External Director, is also Research Director of The Canon Institute for Global
Studies. The Company has no relationship with The Canon Institute for Global Studies.
-

Lee Fitzgerald, External Director, is also Partner of Ichigo Asset Management International, Pte.
Ltd. Ichigo Asset Management International, Pte. Ltd. has a Discretionary Investment Contract
with Ichigo Trust Pte. Ltd., the Company’s controlling shareholder (number of shares held:
346,221,200 shares; shareholding ratio:69.60%).

-

Haruhiko Sakaguchi, External Director, is also Partner and COO of Ichigo Asset Management Co.,
Ltd. Ichigo Asset Management Ltd. has an Investment Advisory Agreement with Ichigo AssetManagement International, Pte. Ltd., which has a Discretionary Investment Contract with Ichigo
Trust Pte. Ltd., the Company’s controlling shareholder (number of shares held: 346,221,200
shares; shareholding ratio:69.60%).

(ii) 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 Meiji-Machine Co., Ltd. The
Company has no relationship with Meiji-Machine 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.

(iii) Relationship with the Company or Related Entities of the Company
The seven External Directors, to the best of the Company’s knowledge, have no spouse or relatives
in the third degree or closer who are Statutory Executive Officers of the Company or related entitiesof the Company.

- 20 -

(iv) Principal Activities in the Current Fiscal Year
Activities

Katsu Fujita

Attended 10 out of 10 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 21 out of 21 meetings (attendance
rate: 100%) of the Audit Committee held in the current fiscal year andattended 6 out of 6 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 10 out of 10 meetings (attendance rate: 100%) of the Board of
Directors held in the current fiscal year. Also attended 21 out of 21
meetings (attendance rate: 100%) of the Audit Committee and attended 5
out of 5 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 6 out of 6 meetings (attendance rate: 100%) of theCompensation Committee held while he was a member.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.

Maki
Kumagai

Attended 10 out of 10 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 and attended 5 out of 6 meetings (attendance rate:
83.3%) of the Compensation Committee held in the current fiscal year.
Also, attended 5 out of 5 meetings (attendance rate: 100%) of theCompliance Committee held in the current fiscal year.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.

External
Director

NorikoKawateAttended 10 out of 10 meetings (attendance rate: 100%) of the Board of
Directors held in the current fiscal year. Also attended 20 out of 21
meetings (attendance rate: 95.2%) of the Audit Committee held in thecurrent fiscal year.
Commented and advised on resolutions and discussions from an
objective standpoint independent from the management team.

External
Director

Daisuke
Kotegawa

Attended 4 out of 8 meetings (attendance rate: 50%) 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

Lee Fitzgerald

Attended 8 out of 8 meetings (attendance rate: 100%) 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

Haruhiko
Sakaguchi

Attended 8 out of 8 meetings (attendance rate: 100%) 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
Director- 21 -

(v) 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.

4. Independent Auditor(1) Grant Thornton Taiyo ASG(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)¥74 million

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

Total money and other financial benefits payable by the Company andsubsidiaries to the Independent Auditor¥90 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) Independent Auditor’s Paid Non-Audit Services for the Company
The Company has made payments to the Independent Auditor in consideration for the execution ofagreed processes related to share issuance and secondary distribution of shares , which are services
other than those specified in Paragraph 1 of Article 2 of the Certified Public Accountants Act.
(4) 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 General Meeting of Shareholders pursuant to the Regulations of the
Audit Committee.

5. 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.

- 22 -

(1) 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 General Meeting of Shareholders, the Regulationsof the Board of Directors, the Ichigo Group’s Code of Corporate Ethics, the Ichigo Group’s Codeof 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 theStandards.
- 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, a Statutory Executive Officer(Compliance), and a division in charge of compliance management (Compliance) directly
reporting to the President & Representative Statutory Executive Officer to promote 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, and Audit Department promote and establish aninternal 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- 23 -

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.
- The Company has appointed a Statutory Executive Officer (Executive Vice President) andCompliance Department to eliminate interaction with anti-social forces by enhancing coordinationand cooperation with the Police Department, lawyers, and other external experts; become amember of police-related institutions; gather information; screen business counterparties; 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).
(2) 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.
(3) 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) Statutory Executive Officer (Business Management), and Business Management and Legal and
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.

- 24 -

(4) 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
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.
(5) When the Audit Committee Requires Directors and Employees to Assist in the Performance of
its Duties
When required by the Audit Committee, Directors and Employees assist in the performance of its
duties.
(6) 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.
(7) 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
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 asmaterial(8) 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, if
it deems necessary, retain any lawyers, certified public accountants, consultants and other outsideadvisors at the Company’s cost without prior approval from the Board of Directors or the Statutory
Executive Officers.
- 25 -

(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.
(9) System to Ensure Appropriate Business by the Company and its Subsidiaries(i) Ichigo Group subsidiaries share the Ichigo Group’s Management Philosophy, Code of Corporate
Ethics, and Code of Conduct.
(ii) The Company’s subsidiaries, pursuant to internal regulations, are managed and controlled by thedivisions that are in charge of managing subsidiaries, which are also responsible for providing
advice on matters of each company’s corporate governance, compliance, and risk management.
(iii) The Audit Committee works closely with Group companies by holding liaison meetings with theauditors of the Group companies to exchange opinions about material matters on internal audit.
(iv) The business activities of the Company’s subsidiaries are subject to an internal audit by the Internal
Audit Office to the extent that they do not conflict with laws and regulations.
(v) The Company undertakes, in the case of a transaction with Ichigo Trust Pte. Ltd., the controllingshareholder of the Company, it takes special care to protect minority shareholders and has in placeand follows appropriate procedures, including Board of Directors resolution or reporting.
(vi) In order to prevent conflicts of interests, the Company has set a Conflict-of-Interest Control Policy,
and takes measures to prevent damage to clients’ interests.

【2】Policies Against Anti-Social Forces
The Company has a policy against anti-social forces included in Ichigo Group’s Code of Corporate
Ethics, as well as established an internal system against anti-social forces based on its Basic Policies on
Internal Control System.
(1) Responsible Departments and Persons
The Company has appointed the Executive Vice President & Statutory Executive Officer as a
responsible manager and Compliance department as a responsible department which handle claims
from anti-social forces in cooperation with relevant departments.
The Company also has lawyers as external directors or advisors who help supervise the Company’s
anti-social forces system.
(2) Cooperation and Coordination with External Experts
The Company has established a system against anti-social forces system in cooperation andcoordination with external experts such as the Organized Crime Investigation Division of Tokyo
Metropolitan Police Department, the Marunouchi Police Department, and external lawyers, and is amember of associations to combat anti-social forces in Tokyo and Osaka to receive guidance andshare information.
(3) Collection and Management of Information on Anti-Social Forces
The Head of Compliance is responsible for managing information on anti-social forces gathered inand outside of the Company, and uses such information to ensure transaction counterparties are notanti-social forces.
(4) No Acceptance of Anti-Social Forces
The Company shall not accept any claims from anti-social forces but shall reject them with a firm
attitude, in cooperation and coordination with external experts.

- 26 -

(5) Implementation of Provisions Against Anti-Social Forces
The Company shall set forth provisions against anti-social forces in standard written agreements, andterminate contracts if the counterparty is discovered to be an anti-social force.
(6) Anti-Social Forces Training
Directors and employees of the Company check their behavior based on the Compliance Check List
submitted to Chairman and Representative Statutory Executive Officer and President andRepresentative Statutory Executive Officer on a yearly basis. This Compliance Check List
contributes to raise awareness and check behavior of directors and employees and reinforce
understanding of procedures against anti-social forces and money laundering. Guidance from external
experts is also delivered to all directors and employees promptly to raise awareness and preventanti-social forces.
6. Policy on Corporate Control (Takeover Defenses)
The Company has not adopted any takeover defense, poison pill, or any other policy with respect topersons who would seek to control decisions with respect to the Company’s financial and business
policies.

- 27 -

Consolidated Balance Sheet(as of February 28, 2014)(Million yen)

Item
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable

Amount
85,761
24,991451

Operational investments in loans

1,100Operational investments in securities

3,583

Real estate for sale54,084

Deferred tax assets

576

Amount
7,588
132
950
3,123
428
96

Accrued bonuses

14

1,384

Deferred tax liabilities

24

(410)

Other current liabilities

2,817

OthersLess: allowance for doubtful
accounts
Fixed Assets
Tangible Assets
Buildings
Machinery and equipment
Land29,183
21,3004,901
2,044
12,433

Construction in progress

1,837

OthersIntangible Assets
Goodwill
Leasehold rights
OthersInvestments and Other Assets
Investments in securities
Long-term loans receivable
Deferred tax assets

84
2,686
2,221
392
71
5,196
4,278
13
222

Other investments

780

Less: allowance for doubtful
accounts(97)

Total Assets

Item
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term borrowings
Long-term borrowings (due within
one year)Long-term non-recourse loans (duewithin one
year)
Income taxes payable

114,944(Amounts less than one million yen have been rounded off.)- 28 -

Long-Term Liabilities
Long-term borrowings
Long-term non-recourse loans
Deferred tax liabilities
Negative goodwill
Long-term security deposits
received
Other long-term liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury stock
Other Comprehensive Income
Unrealized gain on other securities,
net
Foreign currency translation
adjustment
Stock Acquisition Rights
Minority Interests
Total Net Assets
Total Liabilities and Net Assets

56,513
26,12624,178
1,213
180
4,770
44
64,10248,05026,443
10,808
10,891
(92)
409
400
9
121
2,261
50,842
114,944

Consolidated Income Statement
From March 1, 2013
To February 28, 2014
(Million yen)

Item
Revenues
Cost of Revenues
Gross Profit
SG&A
Operating Profit
Non-Operating Profit
Interest income
Dividend income
Amortization of negative goodwill
Others
Non-Operating Expenses
Interest on debt
Stock issuance cost
OthersRecurring Profit
Extraordinary Gain
Gain on sales of fixed assets
Gain on sales of investment securities
Receipt of share trading proceeds
OthersExtraordinary Loss
Loss on sale and retirement of fixed assets
Impairment loss
Office move
OthersProfit before Income Taxes
Income taxes-current
Income taxes-deferred
Profit before Gain on Minority Interest
Gain on minority interests
Net Profit

Amount35,101
27,666
7,435
3,522
3,912
4
112
90
31
370
89
93

7
204
434
33
1
307
21
13
43
(616)

(Amounts less than one million yen have been rounded off.)- 29 -

238

553
3,597

680

344
3,933
(573)
4,506
(19)
4,526

Consolidated Statement of Changes in Shareholders' Equity
From March 1, 2013
To February 28, 2014
(Million yen)

Balance as of March 1, 2013
Changes in the current fiscal year
Share IssuanceDistribution of surplus
Net profit
Change in consolidated subsidiaries
Sale of treasury stock
Changes in items other thanshareholders’ equity
Total changes
Balance as of February 28, 2014

Balance as of March 1, 2013
Changes in the current fiscal year
Share IssuanceDistribution of surplus
Net profit
Change in consolidated
subsidiaries
Sale of treasury stock
Changes in items other thanshareholders’ equity
Total changes
Balance as of February 28, 2014

Commonstock
18,113

Shareholders’ Equity
CapitalRetained
Treasury
reserveearnings
stock
2,429
7,923
(187)

8,329

Total shareholders’equity28,2798,329

94

16,658(447)
4,526(1,110)
144

94
(92)

19,77048,050(447)
4,526(1,110)49

8,329
26,443

8,378
10,8082,967
10,891Other Comprehensive Income
Stock
Foreign
Total Other
Unrealized
acquisition
currency
Comprehensive
gain on otherrightstranslation
Incomesecurities, net
adjustment
160
16
177
143

Minority
interests

2,466

Total net
assets

31,066
16,658(447)
4,526(1,110)
144

240

(7)

232

(21)

(205)

5

240
400

(7)
9

232
409

(21)
121

(205)
2,261

19,77650,842(Amounts less than one million yen have been rounded off.)- 30 -

Notes to the Consolidated Financial Statements
1. Material Matters for Preparation of Consolidated Financial Statements(1) Scope of Consolidation(i)

Consolidated Subsidiaries- Number of consolidated subsidiaries

45 companies- Major consolidated subsidiaries

Ichigo Real Estate Investment Advisors Co., Ltd.
Ichigo Estate Co., Ltd.
Ichigo Global Capital Co., Ltd.
Ichigo ECO Energy Co., Ltd.
Ichigo Marché Co., Ltd.
Miyako City Co., Ltd.
Takara Building Maintenance Co., Ltd.

The former consolidated subsidiary Nichibei Building Services Co., Ltd. and Nichibei Security
Services Co., Ltd. were merged by absorption into Takara Building Maintenance Co., Ltd. in thecurrent fiscal year, and accordingly Nichibei Building Services Co., Ltd. and Nichibei Security
Services Co., Ltd. are no longer included.
The former consolidated subsidiary Solar Way Co., Ltd. was merged by absorption into Ichigo
ECO Energy Co., Ltd. in the current fiscal year, and accordingly Solar Way Co., Ltd. is nolonger included.
Asset Managers (Asia) Company Limited and twelve investment associations have been excluded
from the scope of consolidation because they no longer qualify as being important.
Twenty-two investment associations in which the Company newly invested during the current
fiscal year have been included in the scope of consolidation.
One investment association in which the Company’s control increased during the current fiscal
year has been included in the scope of consolidation.
One investment association has been excluded from the scope of consolidation because theCompany sold all of its investment during the current fiscal year.
One investment association has been excluded from the scope of consolidation because it has beenliquidated during the current fiscal year.
(ii) Major Non-Consolidated Subsidiaries
N/A
(iii)

Reason Why Some Companies Were Not Classified as Subsidiaries in Spite of the Company
Possessing a Majority of their Voting Rights
N/A- 31 -

(iv) Special Purpose Companies Subject to Disclosure
The Company provides loans to and holds preferred shares in one special purpose company(pursuant to Japan’s Asset Liquidation Law) related to its value-add business, and expects to earn
returns on these investments via rental income and capital gains upon disposition. The Company
does not have voting rights nor dispatch its directors/employees in the special purpose company.
Description of the companies and details of transactions are per the following. In addition, below
transaction amount includes transactions with one special purpose company which has beenliquidated during the current fiscal year.
(Million yen)
Profit / Loss

Transaction Amount /Outstanding Amount as of
the End of February 2014
Management
Preferred Shares(Note 1)

Item

Amount-Operating Profit (Note 2)

175

1,316

Operating Profit (Note 3)

5

Operating Profit (Note 4)

115(Note 1) The ¥1,316 million of Preferred Shares includes the outstanding balance of loans as of the end of
February 2014. If any loss occurs in the future, the amount of loss that the Company will bear will
be limited to the above-mentioned amount.
(Note 2) The Company is entrusted with asset management contracts from the special purpose company, andits asset management fee is included in Operating Profit.
(Note 3) The Company includes interest income received from the special purpose company in Operating
Profit.
(Note 4) The Company includes dividend income in relation to preferred shares in Operating Profit.

The below table shows assets and liabilities of the aforementioned funds.
(Million yen)
AssetsReal Estate
Other
Total

Liabilities and Net Assets
6,985
305
7,291

Debts and Other
Deposits Payable
Other
Total

5,342
1,808
140
7,291

(2) Application of Equity Method(i) Affiliates under Equity Method
N/A(ii) Non-Consolidated Subsidiaries under Equity Method
N/A(iii) Major Non-Consolidated Subsidiaries not under Equity Method
N/A(iv) Affiliates not under Equity Method
N/A(v) Reason Why Some Companies Were Not Classified as Affiliates despite the Company Possessing
20% to 50% or Less of Their Voting Rights- 32 -

Company
Upfront Technology Co., Ltd.
Reason not classified as affiliate
Shares are held solely for operational investment purposes.
(3) Fiscal Year of Consolidated Subsidiaries
Fiscal year dates of consolidated subsidiaries are as follows:
End of January

15 companies

End of February

17 companies

End of December

13 companies

For subsidiaries whose fiscal year ends in December or January, financial data as of that date havebeen used. However, necessary adjustments for consolidation have been made with respect tosignificant transactions which occurred by the current fiscal year end in February.
(4) Accounting Standards(i) Valuation of Material Assets
a. Other Securities- With available market quotations

Carried at fair value on the current fiscal year date(unrealized gain or loss is included directly in net assets
and the cost of other shares sold is calculated by themoving average method).

- Without available market quotations

Moving average cost method
However, investments in investment associations aredetailed in (vi) Other Material Matters for Preparationof Consolidated Financial Statements, c. Investment
associations.

b. Derivatives

Mark-to-market

c. Inventories- Real estate for sale:Stated at cost determined by the individual cost
method:Some consolidated subsidiaries amortize real estate
for sale in the same way as that of property andequipment.

(ii) Depreciation and Amortization Methods for Material Depreciable Assets- Fixed assets:

Straight-line method (in principal)- Useful lives:

Buildings and structures 7–52 years
Machinery and equipment 7–20 years(iii) Accounting Standards for Material Allowancesa. Allowance for Doubtful Accounts

Reserved based on the record of bad debts with respect
to ordinary receivables, plus an estimate of
uncollectible amounts determined with reference tospecific doubtful receivables from customers- 33 -

experiencing financial difficulties.
b. Allowance for Bonus

Reserved based on an estimated amount for the current
fiscal year.

(iv) Material Hedge Accounting
a. Hedge accounting method
In principle, the Company adopts the deferral hedge accounting method. However, with respect
to certain foreign currency forward contracts, interest rate swaps, and interest rate caps whichmeet certain criteria, the Company may use another appropriate method.
b. Hedging instruments and hedged items
Hedging instruments

Interest rate swaps

Hedged items

Borrowingsc. Hedging policy
The Company hedges the risk from changes in foreign exchange rates and interest rates in its
operating and financing activities based on internal policies.
d. Evaluation method for the effectiveness of hedging activities.
The Company evaluates the effectiveness of hedging activities with reference to the accumulated
gain or loss on the hedging instruments and related hedged items for a period from thecommencement of the hedges to the time of evaluation.
(v) Amortization periods and methods for Goodwill and/or Negative Goodwill
Goodwill and negative goodwill are amortized on a straight-line basis for a period of 10 to 20
years depending on specific factors of individual subsidiaries.
(vi) Other Material Matters for Preparation of Consolidated Financial Statementsa. Taxes including consumption tax
Consumption taxes are excluded from the relevant revenues, costs, or expenses.
Non-deductible consumption taxes are generally accounted for as periodic costs in the current
fiscal year; however, certain items paid in connection with the acquisition of assets are amortizedbased on the straight-line method over five years.
b. Operational investments
Operational investments conducted by the Company as operations of the real estate fundbusiness and the M&A business are classified as "operational investments in securities” and“operational investments in loans” within current assets. Gains and losses arising fromoperational investments are shown under operating income and expense.
Although the Company may control the decisionmaking body of investment vehicles or holdsignificant influence over them by holding shares, shares are held solely for operational
investment purposes and the Company has no intention of holding them as subsidiaries oraffiliates. Therefore such investment vehicles are excluded from subsidiaries or affiliates.
c. Investment associations
The Company accounts for investments in investment associations as “operational investments insecurities.” Such investments are recorded at the time the investments are made. Gains and losses
distributed from the investment associations are recorded as Revenues and the investments inassociations increase or decrease by the same amount. Refunds received from the investment
associations are credited to the Investments in associations.

- 34 -

d. Consolidated tax treatment
The Company qualified for consolidated tax treatment.
(5) Changes in Presentation(Consolidated Balance Sheet)
The item “Machinery and Equipment” which was included in “Others” in the “Property, Plant andEquipment” entry in the last current fiscal year (21 million in the last year), has been indicatedseparately for the current fiscal year due to an increase in significance of this item.
The item “Construction in Progress” which was included in “Others” in the “Property, Plant andEquipment” entry in the last current fiscal year (3 million in the last year), has been indicatedseparately for the current fiscal year due to an increase in significance of this item.
The item “Deferred Tax Assets” which was included in “Others” in the “Investment and Other Assets”
entry in the last current fiscal year (0 million in the last year), has been indicated separately for thecurrent fiscal year due to an increase in significance of this item.
(Consolidated Income Statement)
The item “Stock Issuance Cost” which was included in “Others” in Non-Operating Expenses in theprior fiscal year (0 million in the last year) has been itemized separately because it exceeds ten percentof the total of Non-Operating Expenses in this current fiscal year.
(6) Additional Information(Future Application of Accounting Standards)-

Accounting Standard for Consolidated Financial Statements (Guidelines for Application of
Financial Accounting Standards No. 22, March 25, 2011)-

Guidelines for Application of Disclosure for Specific Special Purpose Companies (Guidelines forApplication of Financial Accounting Standards No. 15, March 25, 2011)-

Guidelines for Determining the Scope of Subsidiary and Affiliated Company in Consolidated
Financial Statements (Guidelines for Application of Financial Accounting Standards No. 22,
March 25, 2011)-“Practical Solution on Application of Control Criteria and Influence Criteria to Investment
Associations” (Accounting Standards Board of Japan Practical Issues Task Force No. 20, March
25, 2011)(1) Overview
A special purpose company which meets certain conditions is not regarded to be a subsidiary of its
investor nor a company from which an asset is transferred to the special purpose company.
However, such standard will be applicable only to the company from which an asset is transferredto the special purpose company after the application of revised “Accounting Standard forConsolidated Financial Statements” (Guidelines for Application of Financial AccountingStandards No. 22) and other relevant standards.
(2) Effective Date
Beginning of the fiscal year ending February 2015 (expected)(3) Future Outlook
Due to this change, Total Assets and Total Liabilities are expected to increase by ¥5,653 millionand ¥5,614 million, respectively.

- 35 -

2. Notes to Consolidated Balance Sheet(1) Investments in SecuritiesThose related to non-consolidated subsidiaries and affiliates are as follows:
Accumulated depreciation of fixed assets¥2,637 million(2) Assets Provided as Collateral- Assets Provided as Collateral
Cash and cash equivalents
Cash and cash equivalents (reserved for collateral)
Real estate assets for sale
Real estate assets for sale (reserved for collateral)
Current Assets – Others
Current Assets – Others (reserved for collateral)
Buildings and structures
Machinery and equipment
Machinery and equipment (reserved for collateral)
Land
Construction in progress (reserved for collateral)
Property, Plant and Equipment – Others
Leasehold rights
Leasehold rights (reserved for collateral)
Investments in securities
Investments and Other Assets – Others
Investments and Other Assets – Others (reserved for collateral)
Total¥1,054 million¥111 million¥22,054 million¥6 million¥0 million¥15 million¥2,633 million¥400 million¥1,062 million¥ 9,755million¥1,470 million¥1 million¥62 million¥330 million¥320 million¥0 million¥6 million¥39,287 million(Note) In addition to the above, ¥3,879 million of Shares in Affiliates no longer consolidated are collateralized.
In addition, the Company has borrowed securities (market value: ¥2,148 million) to be used forcollateral but these borrowed securities are not presented in balance sheet as they are not the Company’s
assets.

- Secured obligations
Short-term loans
Long-term loans (due within one year)
Long-term borrowings
Total¥400 million¥2,642 million¥25,673 million¥28,715 million(3) Non-Recourse Loans
Non-recourse loans are borrowings where funds for repayment are limited only to the value of theunderlying real estate and profits from such real estate. The lender has no recourse to the Company inthe event of a failure of payment.
Debts where funds for repayment are likely to fall short are presented excluding such shortfall on the
consolidated balance sheet. The valuation amounts presented in the prior fiscal year are omitted fromthe current fiscal year, because they no longer qualify as being important.
Assets provided as collateral and secured obligations with respect to the non-recourse loans andnon-recourse bonds are as follows:- 36 -

- Assets Provided as Collateral
Cash and cash equivalents
Real estate for sale
Buildings and structures
Land
Total

¥3,715 million¥31,992 million¥791 million¥1,011 million¥37,510 million- Secured obligations
Long-term non-recourse loans (due within one year)
Long-term non-recourse loans
Total¥428 million¥24,178 million¥24,606 million

3. Notes to Consolidated Income Statement(Receipt of share trading proceeds)
The Company’s major long-term shareholder transferred part of its shares to its subsidiary, as
announced in the release on November 8, 2012. Since the sale of shares was conducted after suchtransfer and during the short-swing sale period stipulated in Japan’s Financial Instruments andExchange Law, the shareholder transferred gains the on sales to the Company.
(Impairment Loss)
During the current fiscal year, the Ichigo Group recorded the following impairment losses.
1. Details of Impairment Loss
Use

Type

Location

Underutilized Land

Land

Isumigun, Chiba
Prefecture

Amount of Impairment
Loss (in millions)307

2. Background of Impairment Loss
These losses were recorded as an Extraordinary Loss, with the book value lowered to an amountreasonably realizable in the event of sale.
3. Grouping of Impairment Assets
The assets have been grouped based on minimum cash flow criteria applicable to each type of asset.
4. Calculation Method for Amounts Reasonably Realizable
The amount reasonably realizable for Underutilized Assets has been calculated based on the
expected net value pursuant to an appraisal of value.

- 37 -

4. Notes to Consolidated Statement of Changes in Shareholders' Equity(1) Type and Number of Shares Issued and Type and Number of Treasury Stock
Number of sharesat the beginning of
the current fiscal
year

Increase in shares
during the current
fiscal year

Decrease in shares
during the current
fiscal year

Number of sharesat the end of thecurrent fiscal year

Shares issued
Common stock
451,986,800
47,445,400
499,432,200
Total
451,986,800
47,445,400
499,432,200
Treasury stock
Common stock
4,000,000
2,022,000
1,978,000
Total
4,000,000
2,022,000
1,978,000(Note 1) On September 1, 2013, Ichigo split each of its shares into 200 shares. For ease of comparison, the above
share amounts assume the stock split occurred at the beginning of the fiscal period Feb 14.
(Note 2) Details of increase in shares issued:
Public offering:
40,650,000 shares
Underwriter third-party allotment: 4,831,200 shares
Exercise of stock option:
1,964,200 shares(Note 3) Details of decreased number of treasury shares
Sale in exercise of stock option:
2,022,000 shares(2) Stock Acquisition Rights

Category

The
Company

Stock acquisitionrightsType ofshares

As of theend of theprevious
fiscal year

Number of shares to be issued
Increase
Decrease
As of thein thein theend of thecurrent
current
current
fiscal year fiscal year
fiscal year

Balance asof the end of
the current
fiscal year

9th
stock acquisitionright plan

Commonstock

2,637,000－

1,964,200

673,400¥20 million

10thstock acquisitionright plan

Commonstock

3,778,000－

2,022,000

1,756,000¥28 million

11thstock acquisitionright plan

Commonstock

4,374,000－

33,0004,341,000¥65 million

12thstock acquisitionright plan

Commonstock－

1,066,000－

1,060,000¥7 million

10,789,600

1,066,000

4,019,200

7,830,400¥121 million

Total

－

(Note 1) On September 1, 2013, Ichigo split each of its shares into 200 shares. For ease of comparison, the above
share amounts assume the stock split occurred at the beginning of the fiscal period Feb 14.
(Note 2) The exercise dates of 11th stock acquisition right plan and 11th stock acquisition right plan have not arrived
yet.

(3) Distribution of Retained Earnings(i) Amount of Dividends Paid
In the Regular Meeting of the Board of Directors on April 19, 2013, the following was resolved.
(1) Total Amount to be Distributed

447 million yen(2) Amount of Dividend per Share

200 yen(3) Calculation Date

February 28, 2013

(4) Effective Date

May 27, 2013- 38 -

(ii) Dividends where Record Date is in the Current Fiscal Year but the Effective Date is in the Next
Fiscal YearIn the Regular Meeting of the Board of Directors scheduled for April 17, 2014, the following was
resolved.
(1)

Total Amount to be Distributed

547 million yen(2)

Source of Distribution

Retained earnings(3)

Amount of Dividend per Share

1.1 yen(4)

Calculation Date

February 28, 2014

(5)

Effective Date

May 26, 2014

5. Notes on Financial Instruments(1) Matters Concerning Status of Financial Instruments(i) Policies on Financial Instruments
The Company finances its necessary operating capital mainly via bank loans and corporate bonds inlight of new investment and asset disposition plans. Short-term excess funds are managed in liquid
financial instruments such as bank deposits, and short-term working capital is financed via bankloans. As Company policy, derivatives transactions are used for the purpose to avert risks mentioned
below. Speculative derivatives transactions are not conducted.
(ii) Details and Risks of Financial Instruments
Notes receivable and accounts receivable are operating receivables that are exposed to customer
credit risks. Foreign currency-denominated financial instruments in overseas business operations are
exposed to currency risks.
Operational investments in securities include investments in corporate equities both inside andoutside of Japan and domestic real estate funds, and investments in securities mainly take the form ofequity and are typically investments in companies with which the Company has a business
relationship. All of these investments are exposed to issuer credit risk, interest rate risk and pricefluctuation risks. Financial instruments denominated in foreign currencies are exposed to currency
risk.
Most of notes payable and accounts payable are operating payables that are due within three months
and denominated in Japanese yen.
Borrowings and non-recourse loans are for the purpose of financing investments and capital
expenditures, and are expected to be redeemed or repaid within approximately thirty years after the
fiscal year end. Floating-rate loans are exposed to interest rate risk, a part of which is hedged utilizing
derivatives transactions (e.g., interest rate swaps). Please refer to (iv) Material Hedge Accounting, (4)Accounting Standards of 1. Material Matters for Preparation of Consolidated Financial Statements formethod, objects, policies, and evaluation of effectiveness of hedging activities.
(iii) Risk Management of Financial Instrumentsa)Management of Credit Risk
Operating receivables exist mainly at subsidiaries. Responsible departments monitor thecollection status pursuant to the designated procedure for mitigation of collection risk. Other
operating receivables arise irregularly, e.g., at a time of investment monetization, the responsible
department determines the execution of the transaction based on the term needed for dispositionand credit worthiness of the counterparty, and monitors the receivable until it is collected inaccordance with the agreement. The Company monitors operational investments in securities andinvestments in securities with respect to the financial status of the issuers and reviews holding- 39 -

policies, as necessary and appropriate.
b) Management of Market Risk
The Company utilizes interest rate swaps and interest rate caps for the purpose of reducing
interest rate risk on interest payables. The Company monitors operational investments insecurities and investments in securities, which have market risks (e.g., real estate funds) or are
denominated in foreign currencies regularly for the impact from the market value and currency
rate and review the holding policies as necessary. Derivative transactions are executed andcontrolled in the Finance Department in accordance with the designated procedure.
c) Management of Liquidity Risk
The Company establishes and updates its funding plan as necessary based on new investment anddisposition plans established by the responsible departments, as well as manages liquidity risk by
maintaining short-term liquidity.
(iv) Supplement to Matters Concerning Market Values of Financial Instruments
Market values of financial instruments include prices based on the market price as well as prices
calculated based on rational assumptions if the market price is not available. Such prices may
fluctuate, since they reflect the fluctuating variables and assumptions in the calculation process.
(2) Adjustments to Market Values of Financial Instruments
Amounts recorded on the consolidated balance sheet for market values and their differences as ofFebruary 28, 2013 are shown below. (Note that there are no differences recorded for this fiscal year.)Those which were deemed difficult to obtain the market value are not included in the table below(Refer to Note 2).
(Million yen)Amount Recordedon Consolidated
Balance Sheet

Market Value

24,991

24,991

-

451

451

-

1,100

1,100

-

(4) Operating investments in securities (*)

193

193

-

(5) Investments in securities (*)

410

410

-

3

3

0

27,15027,1500(1) Notes Payable and Accounts Payable

132

132

-

(2) Short-Term Borrowings

950

950

-

(3) Long-Term Loans (due within one year)

3,123

3,123

-

(4) Non-Recourse Loans (due within one
year)

428

428

-

(5) Corporate Tax Payable

96

96

-

(6) Long-Term Corporate Debt

26,126

26,285

158(7) Long-Term Non-Recourse Loans

24,17824,570392

Total Debt

55,03655,587550

Derivatives

-

-

-

(1) Cash and cash equivalents(2) Notes Receivables and Accounts
Receivable (*)(3) Operating Loans(6) Long-Term Loans (*)
Total Assets(*) Excluding allowance for doubtful accounts which are recorded separately.
- 40 -

Difference(Note1) Calculation Method of Market Value of Financial Instruments and Matters Concerning
Securities and Derivatives Transactions
Assets(1) Cash and Cash Equivalents
Carried at book value because of the market value’s closeness to book value due to ashort settlement period.
(2) Notes Receivables and Accounts Receivable
Carried at market value which is the book value less any provision for loan losses.
(3) Operating Loans Receivable
Generally, loans are carried at book value because of the market value’s closeness tobook value due to a short settlement period.
(4) Operational Investments in Securities and (5) Investments in Securities
The market values of equities are the last traded exchange price, and bonds are thelast-traded exchange price or dealer-indicated price.
(6) Long-Term Loans
The market values of long-term loans are calculated based on the present value of thetotal amount of the principal using an interest rate expected for similar new loans.
Certain debts such as loans with default risk are at book value less the estimateddoubtful accounts.
Debt(1) Notes Payable and Accounts Payable, (2) Short-Term Loans, (3) Long-Term Loans withMaturity within 1 Year, (4) Long-Term Non-Recourse Loans with Maturity within 1
Year, and (5) Income Tax Payable within 1 Year
Carried at book value because of the market value’s closeness to book value due to ashort settlement period.
(6) Long-Term Loans
Floating-rate borrowings among long-term borrowings are carried at book value becauseof the market value’s closeness to the book value due to the floating-rate nature of thedebt. The market values of partial variable-rate borrowings are subject to the special
accounting treatment of interest rate swap, therefore it is calculated based on the present
value of the total amount of the principal reflecting the interest rate swap arrangements
using an interest rate expected for similar new loans.
The market values of fixed-rate borrowings are calculated based on the present value ofthe total amount of the principal using an interest rate expected for similar new loans.
(7) Long-Term Non-Recourse Loans
Floating-rate borrowings among long-term non-recourse loans are carried at book value
because of the market value’s closeness to the book value due to the floating-rate natureof the debt. The market values of partial variable-rate non-recourse borrowings are
subject to the special accounting treatment of interest rate swap, therefore it is calculated
based on the present value of the total amount of the principal reflecting the interest rate
swap arrangements using an interest rate expected for similar new loans.
The market values of fixed-rate borrowings are calculated based on the present value ofthe total amount of the principal using an interest rate expected for similar new loans.
The borrowings with shortfalls in repayment funds are calculated by subtracting theshortfall from present value, since the obtained value is close to market value.
Derivative Transactions
The market value of interest rate swap under special treatment is included in loan-termloans and long-term non-recourse loans since it is handled as a whole with its hedging
loans.

- 41 -

(Note 2) Financial Instruments for which it is Difficult to Obtain Market Values(Million yen)Amount Recorded in
Consolidated Balance SheetClassification(1) Operational investments in securities*

3,021(2) Investments in securities*

3,792(3) Long-term security deposits received

4,770*Allowance for bad debts deducted.
(1) Operational investments in securities are not subject to the market value disclosure despite being
investment securities, since they are not priced in the market and it is difficult to estimate theirmarket values.
(2) Investments in securities are not subject to the market value disclosure despite being securities of
non-listed securities, since they are not priced in the market, it is difficult to estimate their market
values.

(3) Long-term security deposits received which are security deposits received from tenants of rental
properties are not subject to market value disclosure, since it is deemed highly difficult to estimate areasonable cash flow since they are not priced in the market and it is difficult to know in advance thesecurity deposit period.

6. Notes on Rental Properties(1) Conditions with respect to Rental Properties
The Company and certain of its consolidated subsidiaries hold rental offices and retail properties inTokyo and other locations. Profit and Loss on rental properties (Rental profit is presented in Revenues
and Rental Cost is presented in Cost of Revenues.), Gain on Sales (presented in Extraordinary Profit),and Impairment Loss (presented in Extraordinary Loss), in the current fiscal year is ¥974 million, ¥7
million, and ¥307 million, respectively.
(2) Market Value of Rental Properties(Million yen)Book Value on Consolidated Balance Sheet
Balance
Balance
Increase / Decrease
as of Mar 2013
as of Feb 2014
9,962

+7,357

Market Valueas of Feb 2014

17,32019,517(Note) 1. Book Value on Consolidated Balance Sheet = Acquired Cost – (Cumulative Depreciation + Cumulative
Impairment Loss)
2. Market Value as of February 2014 is mainly assessed by the External Real Estate Appraisers.

7. Per Share Data
(1) Net assets per share¥97.42(2) Net profits per share¥9.83(3) Net profit per share (fully diluted)¥9.71

8. Material Subsequent Events
N/A- 42 -

Parent Balance Sheet(as of February 28, 2014)(Million yen)

Item
AssetsCurrent Assets
Cash and cash equivalents
Receivables

Amount29,581
18,039126

Operating loans

2,458Real estate for sale
Operating investment insecurities
Short-term loans to affiliates
Advance payment
Accounts receivable - other
Deferred tax assets
Other
Allowance for doubtful
accounts

1,100

Fixed Assets

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

3,290

Expenses payable

3,161
52
464
524
755

Income taxes payable
Advances received
Deposits received
Other
Long-Term Liabilities(391)
36,640Long-term borrowings
guaranteed
Other
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalAdditional paid-in capital

Tangible Assets
Buildings and structure
Land
Other
Intangible Assets
SoftwareInvestments and Other
AssetsInvestment in securities
Investment in securities ofsubsidiaries and affiliates
Investment in securities ofother affiliates
Long-term investments in
loans

30,357

Capital reserve

4,188

Other capital reserve

Long-term loans to affiliates

6,692

Deferred Tax Assets
Other
Allowance for doubtful
accounts

Total Assets

6,270
1,423
4,831
15
12
12

Long-term borrowings

Amount
5,661
860
1,348
2,538
606
18
61
154
14
58
14,57814,262301
14
20,23945,51826,443
10,80810,75949

5,410

Retained earnings

8,359

14,295

Earnings reserve

44

10

483
259
(982)

66,221Other retained earnings
Carried forward retained
earnings
Treasury stock
Revaluation and Adjustment
Valuation adjustment inother securities
Acquisition Rights
Total Net Assets
Total Liabilities and Net Assets(Amounts less than one million yen have been rounded off.)- 43 -

8,314
8,314
(92)
341
341
121
45,981
66,221Parent Income Statement
From March 1, 2013
To February 28, 2014
(Million yen)

Item
Revenues
Cost of Revenues
Gross profit
SG&A
Operating profit
Non-Operating Profit
Interest income
Dividend income
Other
Non-Operating Expenses
Interest on debt
Stock issuance cost
Provision of allowance for doubtful accounts
Other
Recurring Profit
Extraordinary gain
Gain on redemption of shares of subsidiaries
Gain on sales of investment in securities
Receipt of share trading proceeds
Other
Extraordinary Loss
Office move expenses
Other
Profit before Income Taxes
Income taxes, etc.
Adjustment in income taxes
Net Profit(Amounts less than one million yen have been rounded off.)- 44 -

Amount
5,346
787
4,558
1,319
3,238
96
107
16
320
88
306
81

88
204
434
60
17
1
(168)
(424)

220

795
2,663

788

18
3,433
(593)
4,027

Statement of Parent Changes in Shareholders' Equity
From March 1, 2013
To February 28, 2014
(Million yen)
Shareholders’ Equity
Capital surplus

Commonstock

Balance as of March 1, 2013
Changes in the current fiscal year
New share issuanceDistribution of surplus
Earnings reserve
Sale of treasury stock
Net profit
Changes in items other thanshareholders’ equity (net)
Changes in the current fiscal year
Balance as of February 28, 2014

Retained earnings

Capitalreserve

Other
capitalsurplusTotal
capitalsurplus

Earnings
reserve

18,113

2,429

-

2,429

-

8,329

8,329

44

8,329
10,75949
49

shareholders’

4,780

4,780

(187)

25,136

(447)
(44)

(447)
-

4,027

4,027

3,534
8,314

3,579
8,359

Carriedforward/retainedearnings

94

44
44

Revaluation andadjustment
Unrealized gain on Total revaluation
other securities, net and adjustment
Balance as of March 1, 2013
Changes in the current fiscal year
New share issuanceDistribution of surplus
Earnings reserve
Sale of treasury stock
Net profit
Changes in items other thanshareholders’ equity (net)
Changes in the current fiscal year
Balance as of February 28, 2014

Treasury
Stock

49

8,378
10,80862

62

Stock acquisitionrights

143

94
(92)

Total net assets

25,341
16,658
(447)
144
4,027

279

279

(21)

257

279
341

279
341

(21)
121

20,63945,981(Amounts less than one million yen have been rounded off.)- 45 -

Total

Total
retainedearnings

8,329

49

8,329
26,443

Otherretainedearnings

equity16,658
(447)
144
4,027

20,38245,518

Notes to the Parent Financial Statements
1. Material Accounting Policies(1) Valuation Standards and Method for Securities(i) Shares in subsidiaries and affiliates:

Moving average cost method(ii) Other securities
Shares with market value:

Mark-to-market on the last date of fiscal year (valuationdifference is reported as a component of shareholders’equity and cost of revenues is calculated with moving
average cost method)

Shares without market value:

Moving average cost method. The valuation forinvestment associations is noted in (6) Material Changes
in Presentation at (iii) Investment Associations.

(iii) Derivatives:

Mark-to-market(iv) Inventory assets:
Real estate for sale:Individual cost method (write-down method for the low
profitable assets on balance sheet)(2) Depreciation Method for Property and Equipment(i) Fixed assets:

Mainly straight-line method

Main useful lives are as follows:
Buildings and Structures

8-39 years(ii) Intangible assets:

Straight-line method

Main useful life is as follows:
Software5 years(3) Amortization of Deferred Assets
Issuance cost of corporate bonds:

Full amount is recorded as cost.

(4) Accounting Standards for Allowances
Allowance for doubtful accounts
The allowance is provided for doubtful accounts based on the historical experience for normal
receivables and an estimate of the collectability for receivables from companies which areexperiencing financial difficulties.

- 46 -

(5) Hedge Accounting Method(i) Hedge accounting method
In principle, the Company adopts the deferral hedge accounting method. However, with respect tosome interest rate swaps which meet certain criteria, the Company uses an alternative accounting
method, as reasonable and appropriate.
(ii) Hedging instruments and hedged items
Hedging instruments:

Interest rate swaps

Hedged items:

Borrowings(iii) Hedging Policy
The Company uses derivative financial instruments in its financing activities to hedge possible
future movements in interest rates.
(iv) Assessment of Hedge Effectiveness
The Company omits evaluating hedge effectiveness since it only applies to interest rate swaps
which meet certain criteria.

(6) Material Changes in Presentation(i) Consumption Tax
Consumption taxes are excluded from the relevant revenue, costs or expenses. Non-deductible
consumption taxes are generally accounted for as expenses depreciated equally over five years.
(ii) Operating Investments
Operating investments in securities are included in operating investments in securities andoperating loans in current assets, separate from non-operating investments. Profits and losses
incurred from operating investments are recorded as operating profits and losses. Operating
investments in which the Company has a control stake are not considered as subsidiaries oraffiliates since the Company does not have an intention to control management.
(iii) Investment Associations
Assets held by investment associations are categorized as operating investments in securities andinvestment in securities of other affiliates (“Investments in investment associations”) inproportion to the holding percentage. Profits on dividends are recorded as revenues and an
adjustment to Investments in investment associations. Redemption of principle is recorded as adecrease of Investments in investment associations.
(iv) Consolidated Tax Treatment
The Company qualifies for consolidated tax treatment.
2. Changes in Presentation(Income Statement)
The item “Stock issuance cost” was included in “Other” in “Non-Operating Expenses” in the priorfiscal year, but since it exceeds ten percent of the total of Non-Operating Expenses, it has beenitemized separately in this fiscal year.
On the other hand, the item “Redeemed reserve for doubtful accounts,” which was itemized separately
in “Non-Operating Profit” in the prior fiscal year, is no longer significant and has been included in“Other” from this fiscal year.

- 47 -

3. Balance Sheet(1) Assets Provided as Collateral and Secured Obligations
Assets provided as collateral are as follows:
Cash and cash equivalents
Real estate for sale
Buildings and structure
Land
Investments in securities
Shares of affiliated companies
Total¥131 million¥2,458 million¥1,383 million¥4,831 million¥320 million¥3,879 million¥13,004 million

In addition, the Company has borrowed securities (market value: ¥2,148 million) to be used forcollateral but these borrowed securities are not presented in balance sheet as they are not theCompany’s assets.
Secured obligations are as follows:
Short-term borrowings
Long-term borrowings (due within one year)
Long-term borrowings
Total¥400 million¥1,943 million¥7,655 million¥9,999 million(2) Accumulated Depreciation of Fixed Assets¥264 million(3) Contingent Liabilities(i) The Company guarantees the following companies' borrowings from financial institutions.
Ichigo Estate Co., Ltd.
Ichigo ECO Energy Co., Ltd.
Takara Building Maintenance Co., Ltd.
GK Azabu Juban Jisho
GK Ebisu Holdings
GK Omiya Holdings
GK Sendai Holdings
GK Shijo Holdings
GK Ichigo ECO Power Plant Holdings 1
GK Ichigo ECO Ichigo Fuchu Jogecho YanoECO Power Plant
GK Ichigo Nago Futami ECO Power Plant
GK Ichigo Motomombetsu ECO Power Plant
GK Ichigo Higashi-Hiroshima Saijocho
Taguchi ECO Power Plant¥2,136 million¥637 million¥73 million¥270 million¥4,700 million¥2,100 million¥1,200 million¥365 million¥475 million¥90 million¥50 million¥300 million¥570 million(ii) The Company guarantees the payment of a construction assistance fund and the return of security
deposit by GK Myodani Fudosan¥453 million
Total¥13,419 million(4) Debts to Affiliates (excluding items separately indicated)
Short-term receivables from affiliates¥652 million

Long-term receivables from affiliates¥70 million

Short-term debt to affiliates¥18 million

Long-term debt to affiliates¥45 million- 48 -

4. Income Statement(i) Transactions with affiliates
Revenue
Revenue¥4,092 million

Cost of Sales¥124 million

Non-operational transactions¥489 million(ii) Receipt of share trading proceeds
The Company’s major long-term shareholder transferred part of its shares to its subsidiary, as
announced in the release on November 8, 2012. Since the sales of shares was conducted after suchtransfer and during the short-swing sale period stipulated in Japan’s Financial Instruments andExchange Law, the shareholder transferred gains on the sales to the Company.
5. Statement of Changes in Shareholders' Equity
Types and Amounts of Treasury Stock
Ordinary shares

1,978,000

6. Tax Effect(1) Breakdown of Cause of Deferred Tax Assets and Liabilities
Deferred tax assets
Maximum amount of allowance for doubtful accounts
Write-down of operating investments in securities
Write-down of investments in securities
Write-down of investments in real estate
Write-down of securities of affiliates
Loss carried forward
Other
Subtotal
Allowance for valuation
Deferred tax assets¥489 million¥71 million¥1,062 million¥2,532 million¥876 million¥7,638 million¥415 million¥13,085 million- ¥12,065 million¥ 1,020 million

Deferred tax liabilities
Unrealized gain on other securities, net¥9 million

Asset retirement obligation expense
Total¥2 million¥12 million

Net deferred tax assets¥ 1,008 million(2) Change of Tax Rate of Corporate Tax after Current Fiscal Year
A Partial Amendment of the Income Tax Act became effective March 31, 2014, and the Special
Corporate Tax for Reconstruction is waived from the fiscal year starting April 1, 2014. Reflecting thischange, the effective statutory tax rate used for the calculation of deferred tax assets and liabilities isreduced from 38.01% to 35.64%. The impact from the change on the Company’s financial position is
expected to be minimal.

- 49 -

7. Related Party Transactions(Million yen)Type

Subsidiary

VotingConnection with
Name
RightsTransaction Typethe Related Party
Held (%)
Service
Ichigo Real Estate
contract;
Receipt ofInvestment
100
Managerial management fee
Advisors Co., Ltd.
guidance
Loans (Note 1)

Interest received

Subsidiary

Ichigo Estate Co.,
Ltd. (Note 6)100Servicecontract;
Managerial
guidance

Provision of guaranteeof liabilities (Note 2)
Receipt Guarantee of
liabilities (Note 3)(Note 4)
Receipt of guaranteeof liabilities andcollateral (Note 5)

Payment to guarantor

Subsidiary

Subsidiary

Subsidiary

Ichigo ECOEnergy Co., Ltd.
(Note 6)

Miyako City Co.,Ltd.

A. F. Co., Ltd.

Subsidiary

KK Kimura
Building

Subsidiary

GK Minami
Ikebukuro Jisho

Subsidiary

GK Mita Holdings

100

100

100

Servicecontract;
Managerial
guidance
Financialsupport;Servicecontract;
Managerial
guidance
Financialsupport100-

0(Note 9)-0(Note 9)Loans (Note 1)
Interest received

GK Hamamatsu
Holdings0(Note 9)Balance
Outstanding

855 Receivables

85

Short-term loans
to affiliates
8,682
Long-term loans
to affiliates“Others” inCurrent Assets
66“Others” inCurrent Assets

1,176
4,617
11
5

2,136 --

2,440 --

4,118 --

Advance
Payment
0 “Others” inInvestments andOther Assets
Short-term loans
2,946
to affiliates“Others” in18
Current Assets

0
6
1,985
14

637 -

Loans (Note 1 and 7)

100

Long-term loans
to affiliates

867

Interest received

1“Others” inCurrent Assets

0Loans (Note 1)-

Interest received
Receipt of guaranteeof liabilities andcollateral (Note 4 and5)Receipt of guaranteeof liabilities andcollateral (Note 4 and5)Receipt of guaranteeof liabilities andcollateral (Note 5)--

Account

Provision of guaranteeof liabilities (Note 2)

Payment to guarantor

Subsidiary

Transaction
AmountReceipt of collateral(Note 10)- 50 -

Long-term loans
to affiliates“Others” in- Investments andOther Assets

-

1,207
61

2,440 --

2,440 --

1,150 --

Advance
Payment
0 “Others” inInvestments andOther Assets
991 -

0
2
-

GK Ebisu
Holdings
GK Omiya
Holdings
GK Sendai
Holdings0(Note 9)0(Note 9)0(Note 9)-

Major
Ichigo Trust
shareholder

69.60%
Owner oftheCompany-

Subsidiary
Subsidiary
Subsidiary--

Provision of guaranteeof liabilities (Note 2)
Provision of guaranteeof liabilities (Note 2)
Provision of guaranteeof liabilities (Note 2)
Receipt of collateral(Note 4 and 10)
Payment to guarantor

4,700 --

2,100 --

1,200 --

5,930 --

25 Accounts payable

969.60%
Receipt of share
Ownerof
Ichigo Trust Pte. Ltd.
trading proceeds (Note434 the11)
Company(Note) 1. The interest rate on loans is determined reasonably with respect to the interest rate the Company actually pays, withspecial consideration of the circumstances for certain affiliates.
2. The Company has become guarantor for loans from banks.
3. The Company has received guarantees for loans from banks.
4. The Company has received guarantees and collateral from its subsidiaries for a loan of ¥2,440 million from banks.
5. The Company has received both guarantees and collateral for loans from banks.
6. Solar Way Co., Ltd. was merged by absorption into Ichigo ECO Energy Co., Ltd. on September 1, 2013.
7. During the current fiscal year, the Company amended the agreement to reclassify the bond of ¥350 million to a loan,
while the above table shows new loans and excludes the reclassified loan.
8. The Company has reserved ¥897 million of allowance for bad accounts for long-term loans to affiliates. In addition,
The Company reversed ¥306 million if allowance for bad accounts for the current fiscal year.
9. The Company holds 0% of voting rights and the subsidiary holds 100% of execution power of the Tokumei Kumiai initself. However, it is considered as the Company’s subsidiary because the Company adopted “Practical Solution on
Application of Control Criteria and Influence Criteria to Investment Associations” (Accounting Standards Board ofJapan Practical Issues Task Force No. 20, September 8, 2006).
10.The Company has received collateral for loans from banks.
11.The Company’s major long-term shareholder transferred all of its shares to its subsidiary, as announced in the releaseon November 8, 2012. Since the sale of shares was conducted after such transfer and during the short-swing sale
period stipulated in Japan’s Financial Instruments and Exchange Law, the shareholder transferred gains on the sales to
the Company.
12.The above transaction amounts do not include consumption and other taxes. The amounts recorded on the balance
sheet as of fiscal year-end do include consumption and other taxes.

Major
shareholder

8. Per Share Data
(1) Net assets per share¥92.19(2) Net profits per share¥8.75(3) Net profits per share (diluted)¥8.64

9. Material Subsequent Events
N/A- 51 -

Auditor's Report on the Consolidated Financial Statements
Report of Independent Auditors
April 13, 2014
To the Board of Directors of Ichigo Group Holdings Co., Ltd.

Grant Thornton Taiyo ASG
Satoshi Kirikawa, CPA, Designated and Engagement Partner(seal)

Hiroaki Ohkane, CPA, Designated and Engagement Partner(seal)We have audited the consolidated financial statements of Ichigo Group Holdings Co., Ltd., namely the
consolidated balance sheet, the consolidated income statement, the consolidated statement of changes inshareholders' equity and the notes to consolidated financial statements, for the fiscal year from March 1,
2013 to February 28, 2014 pursuant to Article 444, paragraph 4 of the Company Law.
Management’s Responsibility with respect to the Financial Statements
Management is responsible for compiling and indicating the consolidated financial statements inaccordance with the generally accepted accounting principles of Japan. This includes the operation andmaintenance of an internal compliance structure which management deems necessary to ensure that theconsolidated financial statements are compiled and indicated free of material misstatement in the form offraud or error.
Auditor’s Responsibility
The responsibility of the Auditor is to perform an independent audit and declare an opinion with respect
to the consolidated financial statements. We conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that we obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement.
We conducted our audit by carrying out auditing procedures on amounts in the consolidated financial
statements and information we received from the Company. These procedures included sampling andtesting based on our assessment of the potential risk of material misstatement in the form of fraud or
error. Although our intent is not to express an opinion regarding the appropriateness of the internal
compliance structure, we did assess operation of the internal compliance structure to the extent it affects
the accuracy of the consolidated financial statements. This included an overall assessment of theconsolidated financial statements and any assumptions made by management with respect to theCompany’s accounting policies or their application, and any estimates indicated in the consolidated
financial statements.
We believe we received sufficient and appropriate information to have a reasonable basis to express ouropinion.
Auditing Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of the Ichigo Group consisting of Ichigo Group Holdings Co., Ltd. and its
consolidated subsidiaries for the period for the consolidated financial statements in conformity withaccounting principles generally accepted in Japan.
Potential Conflicts of Interest
There are no interests to be specified pursuant to the provisions of the Certified Public Accountant Law
between the Company and us or the engagement partner.

- 52 -

Auditor's Report on the Parent Financial Statements

Report of Independent Auditors
April 13, 2014
To the Board of Directors of Ichigo Group Holdings Co., Ltd.

Grant Thornton Taiyo ASG
Satoshi Kirikawa, CPA, Designated and Engagement Partner(seal)

Hiroaki Ohkane, CPA, Designated and Engagement Partner(seal)We have audited the fourteenth term financial statements of Ichigo Group Holdings Co., Ltd., namely thebalance sheet, the income statement, the statement of changes in shareholders' equity and the notes to thefinancial statements and schedules, for the fiscal year from March 1, 2013 to February 28, 2014 pursuant
to Article 436, paragraph 2, item 1 of the Company Law.
Management’s Responsibility with respect to the Financial Statements
Management is responsible for compiling and indicating the financial statements and notes and schedules
thereto in accordance with the generally accepted accounting principles of Japan. This includes theoperation and maintenance of an internal compliance structure which management deems necessary toensure that the financial statements and notes and schedules are compiled and indicated free of material
misstatement in the form of fraud or error.
Auditor’s Responsibility
The responsibility of the Auditor is to perform an independent audit and declare an opinion with respect
to the financial statements and the notes and schedules. We conducted our audit in accordance with theauditing standards generally accepted in Japan. Those standards require that we obtain reasonableassurance about whether the financial statements and schedules are free of material misstatement.
We conducted our audit by carrying out auditing procedures on amounts in the financial statements andnotes and schedules and information we received from the Company. These procedures included
sampling and testing based on our assessment of the potential risk of material misstatement in the form offraud or error. Although our intent is not to express an opinion regarding the appropriateness of theinternal compliance structure, we did assess operation of the internal compliance structure to the extent it
affects the accuracy of the financial statements and notes and schedules. This included an overall
assessment of the consolidated financial statements and notes and schedules and any assumptions madeby management with respect to the Company’s accounting policies or their application, and any estimatesindicated in the financial statements and notes and schedules.
We believe we received sufficient and appropriate information to have a reasonable basis to express ouropinion.
Auditing Opinion
In our opinion, the financial statements and schedules referred to above present fairly, in all material
respects, the financial position of Ichigo Group Holdings Co., Ltd. for the period for the financial
statements and schedules in conformity with accounting principles generally accepted in Japan.
Potential Conflicts of Interest
There are no interests to be specified pursuant to the provisions of the Certified Public Accountant Law
between the Company and us or the engagement partner.

- 53 -

Report of Audit Committee
Audit Report
April 17, 2014
Audit Committee, Ichigo Group Holdings Co., Ltd.
Katsu Fujita, Audit Committee Member(seal)

Tetsuya Fujita, Audit Committee Member(seal)

Noriko Kawate, Audit Committee Member(seal)The Audit Committee has audited the execution of the duties of the Directors and Statutory Executive Officers
during the fourteenth fiscal year from March 1, 2013 to February 28, 2014. We report the method and results ofthis audit as follows:
1. Method and Description of Audit
The Audit Committee has received regular reports and has made requests for explanations as necessary fromthe Directors, Statutory Executive Officers, and employees of the Company regarding the details of
resolutions by the Board of Directors with respect to Article 416, paragraph 1, item 1, b and e of theCompany Law and the system established under the resolutions (internal control system) and in accordancewith audit policy and duties prescribed by the Audit Committee. In cooperation with the Internal Audit
Office and other internal control related departments of the Company, the Audit Committee has investigatedthe process and details of decision-making at important meetings, the details of principal-approved
documents and other material documents relating to the execution of business, the execution of duties by
Statutory Executive Officers and employees and reviewed the Company's business and assets. With respect
to subsidiaries, we have communicated and exchanged information with directors and auditors ofsubsidiaries and received business reports from subsidiaries as necessary.
With respect to the internal control framework for financial disclosures required under the Financial
Instruments and Exchange Law, we received appraisals and auditing reports from the Statutory Executive
Officer and Grant Thornton Taiyo ASG, and as necessary we requested further clarifications.
In addition, we have supervised and verified that the Independent Auditor was independent and conducting
an appropriate audit and received reports on the execution of duties from the Independent Auditor andrequested explanations as necessary. We have also received a report from the Independent Auditor that thestructure to ensure appropriate performance of duties (matters described in Article 131, each item of theCompany Calculation Rules) has been established pursuant to laws and regulations including the Standardsfor Quality Control of Audits (issued by Business Accounting Council on October 28, 2005) and thatmanagement structures have been properly established within the audit firm.
By these methods, we have reviewed the Company’s own business report, financial statements (balance
sheet, income statement, statement of changes in shareholders’ equity and notes) and their schedules, alongwith the Company’s consolidated financial statements (including the consolidated balance sheet,consolidated income statement, consolidated statement of changes in shareholders’ equity and consolidated
notes).
2. Results of Audit(1) Audit Results of Business Report
1 We note that the business report and its schedules present the Company's status correctly pursuant to alllaws and regulations and the Articles of Incorporation.
2 We note that there has been no misconduct with respect to the execution of duties by Directors andStatutory Executive Officers, nor have we discovered any material facts which violate laws and- 54 -

regulations or the Articles of Incorporation.
3 We note that the details of the resolution by the Board of Directors with respect to the internal control
system are reasonable. Also, there is nothing material to be pointed out with respect to the execution ofduties on the internal control system by Statutory Executive Officers.
(2) Audit Results of Financial Statements and their Schedules
We note that the method and results of the audit conducted by the Independent Auditor, Grant Thornton
Taiyo ASG, were reasonable.
(3) Audit Results of Consolidated Financial Statements
We note that the method and results of the audit conducted by the Independent Auditor, Grant Thornton
Taiyo ASG, were reasonable.
(Note) All members of the Audit Committee are External Directors as provided in Article 2, item 15 andArticle 400, paragraph 3 of the Company Law.

- 55 -

Reference Materials for the Annual General Meeting of Shareholders
Proposal 1

Election of 8 Directors

The terms of office of all ten Directors will expire at the conclusion of the Annual General Meeting of
Shareholders. Accordingly, the Company proposes the election of the following eight Directors.
The candidates for Directors are as follows:- 56 -

No.

Name(Date of Birth)

History, Position, and Responsibility in the Company(Other Positions)
April 1988
September 1991
March 1994

August 1994
March 1997
June 2000

May 2001

April 2002
January 2003
May 2006
October 2008

November 2008

November 2011

1
Scott Callon(Note 2)(December 6, 1964)

May 2012

July 2012

MIPS Computer Systems, Inc.
Asia-Pacific Research Center, Stanford
University
Visiting researcher, Research Institute of
Capital Formation, Japan Development
Bank
Tokyo Branch, Bankers Trust Asia
Securities Co., Ltd.
Morgan Stanley Japan Limited
Representative of resident officers,
Representative office in Japan, Prudential
PLC
Representative Director, PCA ASSETManagement Limited of the Prudential
plc Group
Morgan Stanley Japan Limited
Head of Equities, Morgan Stanley Japan
LimitedPartner and Chief Executive Officer,
Ichigo Asset Management, Ltd. (current)
Chairman & Representative Statutory
Executive Officer of the Company(current)
Director (current), Chairman ofNominating Committee, Chairman ofCompensation Committee, Vice
Chairman of Compliance Committee of
the Company (current)
Member of Nominating Committee(current) and Member of Compensation
Committee of the Company (current)
Associate Director of Japan Associationof Corporate Directors,
Audit & Supervisory Board Member of
Chiyoda Co., Ltd. (current)
Director (current), Member ofNominating Committee (current) andMember of Compensation Committee of
Ichigo Real Estate Investment Advisors
Co., Ltd. (current)
Director of Ichigo Global Capital Co.,
Ltd. (current)(Other Positions)
Partner and Chief Executive Officer of Ichigo AssetManagement, Ltd.
Audit & Supervisory Board Member of Chiyoda Co., Ltd.

(Aspiration as Director)
This is your company. Our job at Ichigo is to repay thetrust of our shareholders and to contribute to society bydelivering tenant and client services at the highest global
standards. In the last year, thanks to our shareholders’support, we were able to raise funds via a public offering
which will be used to fund transformational growth. I will
work to strengthen our full-service real estate service andclean energy businesses through growth investments andincrease shareholder value on behalf of all of ourshareholders.

- 57 -

Number ofCompany's
Shares Held

0

No.

Name
(Date of Birth)

History, Position, and Responsibility in the Company(Other Positions)
April 1992
May 2001
May 2004

May 2005
May 2007

October 2008

November 2008
May 2009

November 20112
Kenji Iwasaki(April 10, 1968)

July 2012

November 2012

Joined Fujita Corporation
Joined the Company
Director, General Manager of FundBusiness Division, Merchant Banking
Group of the Company
Representative Director and Vice
President of the Company
Director, Chairman of Nominating
Committee and Chairman ofCompensation Committee of theCompany
President & Representative Statutory
Executive Officer of the Company(current)
Vice Chairman of Compliance
Committee of the Company (current)
Director (current), Member ofNominating Committee and Memberof Compensation Committee of theCompany
Chairman of Nominating Committee,(current) and Chairman ofCompensation Committee of theCompany(current)
Chairman & Statutory Executive
Officer Director (current), Chairmanof Nominating Committee (current)
and Chairman of Compensation
Committee of Ichigo Real Estate
Investment Advisors Co., Ltd.
(current)
Director of Ichigo Global Capital Co.,
Ltd.
Chairman & Director of Ichigo ECOEnergy Co., Ltd. (current)(Other Positions)
Chairman & Statutory Executive Officer Director of
Ichigo Real Estate Investment Advisors Co., Ltd.
Chairman & Director of Ichigo ECO Energy Co., Ltd.
(Aspiration as Director)
In order to repay the expectations of shareholders,
together with all Ichigo employees I am committed toachieving the Shift Up 2016 Mid-Term Business Plan as
announced in January 2014.

- 58 -

Number ofCompany's
Shares Held633,000

No.

Name(Date of Birth)

History, Position, and Responsibility in the Company(Other Positions)
April 1990
October 2005
May 2007

March 2008

October 2008

November 2008

May 2009

October 2009

November 2009

May 2010

3
Minoru Ishihara(October 5, 1967)

January 2011

April 2011
May 2011

November 2011
July 2012

November 2012

Joined Hazama Corporation
Joined Creed Corporation
Joined the Company as Head of
Human Resources and General
Administration department
Executive Officer and Head of Human
Resources and General Administration
department of the Company
Chief Administrative Officer &Statutory Executive Officer and Headof Business Management of theCompany
Director, Asset Investment Advisors
Co., Ltd. (now Ichigo Real Estate
Investment Advisors Co., Ltd.)
Senior Managing Director & Statutory
Executive Officer (Administration)and Member of Compliance
Committee of the Company (current)
Senior Managing Director(Administration), Asset Investment
Advisors Co., Ltd. (now Ichigo Real
Estate Investment Advisors Co., Ltd.)
President & Representative Director,
Asset Logistics Co., Ltd. (now Ichigo
Marché Co., Ltd.)
Director, Senior Managing Director &Statutory Executive Officer(Administration) and Member ofCompliance Committee of theCompany
Senior Executive Managing Director& Statutory Executive Officer(Administration, Environmental &Architectural Solutions) andSenior Managing Director(Administration), Ichigo REITManagement Co., Ltd.
President & Representative Director,
Miyako City Co., Ltd.
Senior Managing Director(Administration), Ichigo Real Estate
Investment Advisors Co., Ltd.
Executive Vice President & Statutory
Executive Officer (Administration)
Director and Executive Vice President& Statutory Executive Officer of
Ichigo Real Estate Investment
Advisors Co., Ltd. (current)
Director, Ichigo Global Capital Co.,Ltd.
Director of Ichigo ECO Energy Co.,Ltd.

- 59 -

Number ofCompany's
SharesHeld63,000No.

Name(Date of Birth)

History, Position, and Responsibility in the Company(Other Positions)
March 2013

Head of Real Estate Services Division(current)
Chairman & Representative Director andPresident of Miyako City Co., Ltd.
(current)
Chairman & Director of Ichigo MarchéCo., Ltd. (current)
Chairman & Director of Takara Building
Maintenance Co., Ltd. (current)
Chairman & Director of Nichibei
Building Services Co., Ltd.
Chairman & Director of Nichibei
Security Services Co., Ltd.

(Other Positions)Executive Vice President & Statutory Executive Officer of
Ichigo Real Estate Investment Advisors Co., Ltd.
Chairman & Representative Director and President of
Miyako City Co., Ltd.
Chairman & Director of Ichigo Marché Co., Ltd.
Chairman & Director of Takara Building Maintenance Co.,Ltd.

(Aspiration as Director)
At Ichigo, we partner with people from other industries
and strive to offer our customers added value through realestate. Along with being the foundation of our company,
it is our utmost pleasure to get positive feedback from ourcustomers on how much they trust us and are pleased with
our high-quality property management. I will endeavor tosincerely pursue not only our customers’ happiness but
also Japan’s development.

- 60 -

Number ofCompany's
Shares
Held

No.

Name
(Date of Birth)

History, Position, and Responsibility in the Company(Other Positions)
April 1968

June 1995

June 1997

June 2002

October 2007
May 2008

November 2008

4

July 2012
Katsu Fujita(June 30, 1944)

April 2013

Joined The Long-Term Credit Bank ofJapan, Limited (now Shinsei Bank,
Limited)Director, General Manager ofInformation System Group andManager of System Planning of The
Long-Term Credit Bank of Japan,
LimitedSenior Managing Director andDirector of Finance & Accounting
Division, Ishihara Sangyo Kaisha, Ltd.
Executive Managing Director andDirector of Corporate Planning &Administration Division, Ishihara
Sangyo Kaisha, Ltd.
Member of Conciliation of Civil
Affairs, Tokyo District Court (current)
External Director (current), Chairmanof Nominating Committee andChairman of Compensation
Committee of the Company
Chairman of Audit Committee(current), Member of Nominating
Committee (current), Member ofCompensation Committee (current) &Chairman of Compliance Committeeof the Company
Director and Chairman of Audit
Committee (current), Member ofNominating Committee (current), andMember of Compensation Committeeof Ichigo Real Estate Investment
Advisors Co., Ltd. (current)
Yokohama District Court, Labor
Arbitration Member (current)(Other Positions)
Member of Conciliation of Civil Affairs, Tokyo District
Court
Yokohama District Court, Labor Arbitration Member(Aspiration as Director)
Ichigo’s management philosophy is to provide aprosperous future for all of our stakeholders by creating
peace of mind through sincere management. As an
independent external director, I intend to use myexperience in corporate management in shaping andimplementing our management strategy. I feel special
responsibility in fulfilling my duties in the supervision ofa strong corporate governance framework. In this way, I
will strive to contribute to the stable growth of Ichigo bysupervising corporate governance and overseeing theother directors and executive officers.

- 61 -

Number ofCompany's
Shares Held

57,900No.

Name(Date of Birth)

History, Position, and Responsibility in the Company(Other Positions)
April 1976

April 2001

April 2002

October 2006
April 2007

October 2009
May 2010

February 2011
March 2011
5

May 2011
Tetsuya Fujita(March 26, 1954)

May 2012

July 2012

Joined Taisho Marine and Fire
Insurance Co., Ltd. (now Mitsui
Sumitomo Insurance Co., Ltd.)
Executive Director, Taisho Marine &Fire Insurance (Malaysia) Bhd. (nowMSIG Insurance (Malaysia) Bhd)
Board Director, Skandia Life
Insurance (Japan) (now Tokyo
Marine Nichido Financial Life
Insurance Co., Ltd.)
Executive Director, AXA Life
Insurance Co., Ltd.
Representative President & CEO,AXA Financial Life Insurance Co.,
Ltd. (now AXA Life Insurance Co.,Ltd.)
Senior Advisor, AXA Life InsuranceCo., Ltd.
External Director (current), Memberof Audit Committee (current), andMember of Compliance Committeeof the Company
Auditor of St. Thomas University(current)
President of Remark Japan Co., Ltd.
(current)
Chairman of Compliance Committeeof the Company (current)
Member of Nominating Committee(current), and Member ofCompensation Committee of theCompany (current)
Director (current), Member ofAuditing Committee (current),
Member of Nominating Committee(current), and Member ofCompensation Committee of Ichigo
Real Estate Investment Advisors Co.,
Ltd. (current)(Other Positions)Auditor of St. Thomas University
President of Remark Japan Co., Ltd.
(Aspiration as Director)
The Ichigo Group has entered a rapid growth stage after
the announcement of its mid-term business plan with its
two business pillars of full-service real estate and clean
energy. While cherishing Ichigo’s corporate culture, as
an independent external director, I will perform myduties with fiduciary responsibility and a duty of care,focusing on corporate governance and increasingly
complex risk management on behalf of all shareholders.

- 62 -

Number ofCompany's
Shares Held

13,400No.

Name(Date of Birth)

History, Position, and Responsibility in the Company(Other Positions)
April 2000
May 2003

May 2005
January 2008
May 2011

July 2011
July 2012
6
Maki Kumagai(February 11, 1974)

Qualified as Attorney at Law, joined
Mitsui, Yasuda, Wani & Maeda
Seconded to International Legal
Affairs Bureau, Ministry of Foreign
Affairs
Joined Mitsui Company
Appointed Partner of Mitsui
Company
Director (current), Member ofNominating Committee (current),
Member of Compensation
Committee (current) and Member ofCompliance Committee of theCompany(current)
Partner of Nijubashi Partners(current)
Director (current), Member ofNominating Committee (current) andMember of Compensation
Committee of Ichigo Real Estate
Investment Advisors Co., Ltd.
(current)(Other Positions)
Partner of Nijubashi Partners
External Director of Meiji-Machine Co., Ltd.
(Aspiration as Director)
Ichigo made significant progress in the year ending in
February 2014, when it announced its Shift Up 2016
strategy and completed its first public offering as the
Ichigo Group. It is very important to control risk during
the decisionmaking process of appropriating the funds
raised in the public offering towards growthinvestments. As an independent external director, I
intend to use my legal knowledge to maximize value
for all Ichigo shareholders.

- 63 -

Number ofCompany's
Shares Held

0

No.

Name
(Date of Birth)

History, Position, and Responsibility in the Company(Other Positions)
April 1999
July 2001
August 2004
November 2004
February 2008
January 2009
May 2011

November 2011

July 2012

June 20137
Noriko Kawate(February 22, 1976)

Joined International Dept., Deloitte
Touche Tohmatsu LLC
Qualified as Certified Public
Accountant
Joined Cast & Itoga (now Soga,
Uryu, Itoga)
Qualified as Certified Tax
Accountant
President of CLEA Consulting Co.,
Ltd. (current)
Joined Gracia Corporation (current)
Director (current), Member of Audit
Committee of the Company(current)
Qualified as American Institute ofCertified Public Accountants(current)
Director (current), Member of Audit
Committee of Ichigo Real Estate
Investment Advisors Co., Ltd.
(current)
Audit & Supervisory Board
Member of Meiji-Machine Co., Ltd.
(current)(Other Positions)
President of CLEA Consulting Co., Ltd.
Employee of Gracia Corporation
Audit & Supervisory Board Member of Meiji-MachineCo., Ltd.
(Aspiration as Director)
I have served as an independent external director as wellas member of the Audit Committee of Ichigo over thelast three years. During my term of office, Ichigo haslaunched new businesses and geared up for further
growth based on its full-service real estate and clean
energy businesses. For Ichigo’s transformational growth,
it is vital to maintain strong corporate governance. I will
fulfill my duties as an independent external director by
executing my auditing role at board meetings in order tocontribute to Ichigo’s development and increase its
corporate value.

- 64 -

Number ofCompany's
Shares Held

0

No.

Name
(Date of Birth)

History, Position, and Responsibility in the Company(Other Positions)
April 1985
August 1996
March 2006
August 2010

January 2014

Number ofCompany's
Shares Held

The Nikko Securities Co., Ltd. (nowSMBC Nikko Securities Inc.)
Salomon Brothers Asia Limited (nowCitigroup Global Markets Japan Inc.)
Goldman Sachs Japan Co. Ltd.
Head of Equity Research of Nikko
Cordial Securities Inc. (now SMBC
Nikko Securities Inc.)
Senior Adviser of Ichigo AssetManagement, Ltd. (current)
08Kenichiro Yoshida(March 9, 1963)(Aspiration as Director)
I will endeavor to fulfill my duties as a director whileaiming for sustainable growth in corporate value. Byleveraging my experience in equity research over aquarter of a century, I will sincerely support Ichigo’scompetitiveness and growth over the long term. I am
fully committed to meeting the expectations of all
stakeholders and realizing strong corporate governancewith an emphasis on social contribution.

- 65 -

(Note 1) There is no special relationship between the Company and any of the candidates for Director.
(Note 2) The name of Mr. Scott Callon, candidate for Director, is written as “Callon Scott Anderberg”
under Japan’s official name registration.
(Note 3) Mr. Katsu Fujita, Mr. Tetsuya Fujita, Ms. Maki Kumagai, Ms. Noriko Kawate, and Mr. Kenichiro
Yoshida are candidates for External Director. They meet the requirements for Independent
Director under the requirements of the Tokyo Securities Exchange. The Company intends toregister them with the Tokyo Securities Exchange as Independent Directors.
(Note 4) The Company’s reasons for proposing Mr. Katsu Fujita, Mr. Tetsuya Fujita, Ms. Maki Kumagai,
Ms. Noriko Kawate, and Mr. Kenichiro Yoshida as candidates for External Directors are as
follows:(i) The Company proposes Mr. Katsu Fujita as a candidate for External Director based upon his
extensive knowledge and experience in the sales and management departments of a leadingbank and in corporate management. He assumed the position of External Director of theCompany in May 2008, and his term of office will have been six years at the close of this
General Meeting of Shareholders.
(ii) The Company proposes Mr. Tetsuya Fujita as a candidate for External Director based upon
his extensive knowledge and experience working for a leading insurance company and aleading life insurance company. He assumed the position of External Director of theCompany in May 2010, and his term of office will have been four years at the close of this
General Meeting of Shareholders.
(iii) The Company proposes Ms. Maki Kumagai as a candidate for External Director based uponher expertise and experience in legal advisory for institutional clients in finance law andcorporate governance. She assumed the position of External Director of the Company in
May 2011, and her term of office will have been three years at the close of this General
Meeting of Shareholders.
(iv) The Company proposes Ms. Noriko Kawate as a candidate for External Director based uponher experience in statutory audit at a major auditing firm and her experience in accounting
and tax advisory as a certified public accountant and tax accountant. She assumed theposition of External Director of the Company in May 2011, and her term of office will havebeen three years at the close of this General Meeting of Shareholders.
(v) The Company proposes Mr. Kenichiro Yoshida as a candidate for External Director based
upon his extensive experience and knowledge of equity research from serving in significant
positions in the securities business and his knowledge and experience in operation
monitoring and risk control which he can use to supervise and guide management.
(Note 5) When the Company proposes a director candidate outside of a business management backgroundexcept for having previously served in a role as an external director or auditor, the Company
provides additional rationale. The Company recommends Mr. Kenichiro Yoshida as a candidate
for External Director based upon his knowledge and experience gained working in foreign anddomestic securities companies and his ability to supervise and guide management while
analyzing and communicating with the companies due to such knowledge and experience.
(Note 6) No candidate for External Director has been involved in inappropriate conduct while serving as a
Director in other companies over the past five years.
(Note 7) The independence of the candidates for External Directors is as follows:(i) No candidate for External Director has managed operations (as defined in Article 2,paragraph 3, item 6 of the Enforcement Regulations of the Company Law; hereinafter thesame) of the Company or its related entities (as defined in Article 2, paragraph 3, item 19
thereof; hereinafter the same) in the past.
(ii) No candidate for External Directors has received in the last two years, nor will they receive,a large amount of money or other financial compensation (excluding any remuneration as
Director or Advisor before assuming the position of External Director) from the Company
or related entities.
- 66 -

(iii) No candidate for External Directors is the spouse of, nor are they within three degrees ofconsanguinity related to the management of the Company or related entities.
(Note 8) In order to retain External Directors of high quality, the Company has entered into limited
liability agreements with Mr. Katsu Fujita, Mr. Tetsuya Fujita, Ms. Maki Kumagai, and Ms.
Noriko Kawate. The extent of liabilities for compensation under the agreements is the minimum
limited liability amount as defined in Article 425, paragraph 1 of the Company Law; provided
that the liability is limited only when the External Directors have performed their duties whichcause liability in good faith and without gross negligence. Upon the re-appointment as External
Director of Mr. Katsu Fujita, Mr. Tetsuya Fujita, Ms. Maki Kumagai and Ms. Noriko Kawate, andthe appointment of Mr. Kenichiro Yoshida as External Director, the Company will enter into a
new limited liability agreement with equivalent terms with each of them.
(Note 9) Mr. Scott Callon and Mr. Kenichiro Yoshida have not received and will not receive anycompensation from the Company.

- 67 -