Building a richer future together[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.

Ichigo Inc.

Additional Accounting Notes
for the Sixteenth Annual Shareholder Meeting

Notes to the Consolidated Financial Statements



Notes to the Parent Financial Statements

Pursuant to Japanese law and Article 14 of Ichigo’s Articles of Incorporation, notes to the consolidated andparent financial statements are posted on Ichigo’s website at www.ichigo.gr.jp/library/english-1-Notes to Consolidated Financial Statements
I. Material Matters for Preparation of Consolidated Financial Statements
A. Scope of Consolidation
1. Consolidated Subsidiaries– Number of consolidated subsidiaries

69 companies– Major consolidated subsidiaries

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

Fourteen investment associations in which the Company newly invested during the current fiscal
year have been included in the scope of consolidation.
Ten investment associations have been excluded from the scope of consolidation because theirimportance has decreased during the current fiscal year.
Two investment associations have been excluded from the scope of consolidation due to their
extinction by merger by other investment associations which are subsidiaries of the Company
during the current fiscal year.
2.

Major Non-Consolidated Subsidiaries
N/A

3.

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

B. Application of Equity Method
1. Affiliates under Equity Method
N/A
2. Non-Consolidated Subsidiaries under Equity Method
N/A
3. Major Non-Consolidated Subsidiaries not under Equity Method
N/A
4. Affiliates not under Equity Method
N/A
5. Reason Why Some Companies Were Not Classified as Affiliates despite the Company Possessing
20% to 50% or Less of Their Voting Rights
N/A

-2-

C. Fiscal Year of Consolidated Subsidiaries
Fiscal year dates of consolidated subsidiaries are as follows:
End of January

39 companies

End of February

15 companies

End of December

15 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.
D. Accounting Standards
1. 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 (6) 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.

2. 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

3. 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
experiencing financial difficulties.

b. Allowance for Employee Bonuses

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

-3-4. Material Hedge Accounting
a. Hedge accounting method
In principle, the Company adopts the deferral hedge accounting method. However, with respect
to interest rate swaps which meet 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. The evaluation of the effectiveness isomitted for interest-rate swaps that meet requirements for special treatments.
5. 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.
6. Other Material Matters for Preparation of Consolidated Financial Statementsa. Consumption tax
For most items, 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 are classified as "operational investments insecurities” and “operational investments in loans” within current assets. Gains and losses arisingfrom operational investments are shown under operating income and expense.
Although the Company may control the decision-making 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.
d. Consolidated tax treatment
The Company qualifies for consolidated tax treatment.

-4-

E. Changes in Presentation
The item Share Issuance Cost (1 million yen in this fiscal year) which was itemized separately in
Non-Operating Expenses is included in Other Non-Operating Expenses from this fiscal year, because
the amount is minimal.

II. Notes to Consolidated Balance Sheet
A. Assets Provided as Collateral– Assets Provided as Collateral
Cash and cash equivalents
Trade notes and accounts receivable
Operational investments in loans
Real estate assets for sale
Current assets – other
Buildings and structures
Machinery and equipment
Land
Building under construction (reserved for collateral)
Property, plant, and equipment – other
Leasehold rights
Investments and other assets – otherTotal¥3,754¥173¥1,324¥96,398¥1¥1,723¥10,099¥9,537¥2,689¥2¥392¥141¥126,238

millionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion(Note) In addition to the above, ¥2,630 million of shares in affiliates are no longer consolidated arecollateralized. Furthermore, the Company has borrowed securities (market value: ¥1,310 million) to be
used for collateral, but these borrowed securities are not presented in balance sheet as they are not theCompany’s assets.
Figures shown in Buildings and structures, Machinery and equipment, and Property, plant, andequipment – other are net amounts.

– Secured Obligations
Long-term loans (due within one year)
Long-term borrowings
Total¥6,917¥92,412¥99,330

millionmillionmillionB. Non-Recourse Loans
Non-recourse loans and corporate bonds are borrowings where funds for repayment are limited only tothe value of the underlying real estate and profits from such real estate. The lender has no recourse to
the Company in the 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:-5-

– Assets Provided as Collateral
Cash and cash equivalents
Real estate for sale
Buildings and structures
Land
Tangible assets – otherTotal¥6,497¥75,329¥736¥1,011¥0¥83,574

millionmillionmillionmillionmillionmillionFigures shown in “Buildings and structures” and “Tangible assets – other” are net amounts.
– Secured Obligations
Short-term non-recourse loans
Long-term non-recourse loans (due within one year)
Non-recourse corporate bonds
Long-term non-recourse loans
Total

¥79
¥2,975¥100¥56,193¥59,347

millionmillionmillionmillionmillion

III. Notes to Consolidated Statement of Changes in Shareholders' Equity
A. Type and Number of Shares Issued and Type and Number of Treasury Shares
Number of sharesat the beginning of
the current fiscal
year

Increase in shares
during the current
fiscal year1

Shares issued
Common stock
500,804,600
1,718,500
Total
500,804,600
1,718,500
Treasury stock
Common stock
1,670,000—
Total
1,670,000—
1
Details of increase in shares issued:
Due to employee exercise of stock options: 1,718,500 shares
2
Details of decrease in treasury shares
Due to employee exercise of stock options: 785,800 shares-6-

Decrease in shares
during the current
fiscal year2

Number of sharesat the end of thecurrent fiscal year——

502,523,100
502,523,100

785,800
785,800

884,200
884,200

B. Stock Acquisition Rights (Stock Options)Shares in the
Company

Balance as of theend of thecurrent fiscal
year

Stock acquisitionrightsType ofshares9th
stock acquisitionright plan

Commonstock

479,000－

365,800

113,200¥3

million10th
stock acquisitionright plan

Commonstock

1,445,000－

785,800

659,200¥10

million11th
stock acquisitionright plan

Commonstock

3,152,000－

1,335,000

1,817,000¥37

million12th
stock acquisitionright plan

Commonstock

1,041,500－

36,5001,005,000¥157

million13th1
stock acquisitionright plan

Commonstock

1,897,800－

38,6001,859,200¥98

million14th1
stock acquisitionright plan

Commonstock－

1,500,000－

1,500,000¥11

million8,015,300

1,500,000

2,561,700

6,953,600¥319

million

－

Total
1

Number of shares to be issued
Decrease
As of theIncrease inin theend of thethe current
current
current
fiscal year
fiscal year
fiscal year

As of theend of theprevious
fiscal year

The exercise dates of the 13th and 14th stock acquisition right plans are in the future.

C. Distribution of Retained Earnings
1. Dividends Paid
In the Regular Meeting of the Board of Directors on April 20, 2015, the following was resolved.
(a) Total Amount to be Distributed

648 million yen(b) Source of Distribution

Retained earnings(c) Amount of Dividend per Share

1.3 yen(d) Record Date

February 28, 2015(e) Payment Date

May 25, 2015

2. 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 on April 19, 2016, the following was resolved.
(a)Total Amount to be Distributed

1,504 million yen(b)Source of Distribution

Retained earnings(c)Amount of Dividend per Share

3.0 yen(d)

Record Date

February 29, 2016(e)

Payment Date

May 30, 2016

-7-

IV. Notes on Financial Instruments
A. Matters Concerning Status of Financial Instruments
1. 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.
2. 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, non-recourse bonds, 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 (4) Material Hedge
Accounting, (D) Accounting Standards of 1. Material Matters for Preparation of Consolidated
Financial Statements for method, objects, policies, and evaluation of effectiveness of hedging
activities.
3. Risk Management of Financial Instruments(a) 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
policies, as necessary and appropriate.
(b) Management of Market Risk
The Company utilizes interest rate swaps for the purpose of reducing interest rate risk on interest
payables. The Company monitors operational investments in securities and investments insecurities, 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 theholding policies as necessary. Derivative transactions are executed and controlled 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-8-

maintaining short-term liquidity.
4. 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.
B. Adjustments to Market Values of Financial Instruments
Amounts recorded on the consolidated balance sheet for market values and their differences as ofFebruary 29, 2016 are shown below. Those which were deemed difficult to obtain the market value
are not included in the table below (See note 2 below).
(Million yen)AmountRecorded on
Consolidated
Balance Sheet

Market Value

28,77928,779

—

691

691

—

1,324

1,324

—

18

18

—

1,058

1,058

—

2

2

0

31,87531,875

0

80

80

—

2,188

2,188

—

79

79

—

(4) Long-term loans (due within one year)

8,161

8,161

—

(5) Non-recourse loans (due within one year)

2,975

2,975

—

(6) Corporate tax payable

631

631

—

(7) Non-recourse bonds

100

100

—

(8) Long-term corporate debt

94,40994,995585(9) Long-term non-recourse loans

56,19356,652459

Total Debt

164,818

165,863

1,044

(373)

(373)

—

(1) Cash and cash equivalents(2) Notes receivable and accounts receivable(3) Operating loans(4) Operating investments in securities1(5) Investments in securities

1(6) Long-term loans1
Total Assets(1) Notes payables and accounts payable(2) Short-term borrowings(3) Short-term non-recourse loans

Derivatives

2

Difference

1

Excluding allowance for doubtful accounts which are recorded separately.

2

The receivables and payables related to derivative transactions are shown as a net amount.

-9-(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 due to short settlement period.
(2) Notes Receivables and Accounts Receivable
Carried at book value less allowance for doubtful accounts due to short settlement
period and because allowance for doubtful accounts appropriately takes into
consideration credit risks.
(3) Operating Loans Receivable
Carried at book value less allowance for doubtful accounts due to short settlement
period and because allowance for doubtful accounts appropriately takes into
consideration credit risks.
(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) Short-Term
Non-Recourse Loans, (4) Long-Term Loans with Maturity within 1 Year, (5)Long-Term Non-Recourse Loans with Maturity within 1 Year, and (6) Income Tax
PayableCarried at book value due to short settlement period.
(7) Non-Recourse Corporate Bonds, (9) Long-Term Non-Recourse Loans
Variable-rate borrowings for non-recourse corporate bonds and long-term non-recourse
loans are carried at book value because of the market value’s closeness to the book value
due to the variable-rate nature of the debt. The market values of partial variable-rate
non-recourse borrowings are subject to the special accounting treatment of interest rate
swaps. They are therefore calculated based on the present value of the total amount of theprincipal reflecting the interest rate swap arrangements using an interest rate expected forsimilar 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.
(8) Long-Term Loans
Floating-rate borrowings are carried at book value, because of the market value’s
closeness to the book value due to the variable-rate nature of the debt. The market valuesof partial variable-rate borrowings are subject to the special accounting treatment ofinterest rate swaps. They are therefore 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.
Derivative Transactions
The market values of derivative transactions are the prices presented by financial- 10 -

institutions. The market value of interest rate swap under special treatment is included inloan-term loans and long-term non-recourse loans since it is handled as a whole with its
hedging loans.
(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*

1, 354(2) Investments in securities*

4,322(3) Long-term security deposits received

8,707*After deduction of allowance for bad debts.
(1) Operational investments in securities are not subject to the market value disclosure despite being
investment securities, because they are not priced in the market and it is difficult to estimate theirmarket values.
(2) Investments in securities are not subject to market value disclosure despite being non-listed securities,
because they are not priced in the market and 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, because they are not priced in the market and it
is difficult to know in advance the security deposit period.

V. Notes on Leased Real Estate not Currently Held for Sale
A. Income from Leased Real Estate not Currently Held for Sale
The Company and certain of its consolidated subsidiaries hold leased real estate in Tokyo and otherlocations that are not currently held for sale. Income on this leased real estate in the current fiscal yearis ¥956 million.
B. Market Value of Leased Real Estate not Currently Held for Sale(Million yen)Book Value on Consolidated Balance Sheet1
Mar 1, 2015

Increase/Decrease

16,1462

Feb 29, 2016

(176)

1

15,969Market Valueas of Feb 20163
17,715

Book Value on Consolidated Balance Sheet = Acquisition Cost – (Cumulative Depreciation + Cumulative
Impairment)
2
The decrease of 176 million yen is primarily due to 54 million yen capital expenditure of leased real estate and
231 million yen depreciation of leased real estate.
3Market value as of February 2016 is primarily based upon external real estate appraisals.

VI. Per Share Data
A. Net assets per share¥134.54

B. Net income per share¥25.86

C. Net income per share (fully diluted)¥25.75

VII. Material Subsequent Events
N/A- 11 -

Notes to Parent Financial Statements
I. Material Accounting Policies
A. Valuation Standards and Method for Securities
1. Shares in subsidiaries and affiliates:

Moving average cost method

2. 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 (F) Material Changes
in Presentation at (3) Investment Associations.

3.

Derivatives:

4.

Inventory assets:
Real estate for sale:

Mark-to-market

Individual cost method (write-down method for the low
profitable assets on balance sheet)

B. Depreciation Method for Property and Equipment
1. Fixed assets:

Mainly straight-line method

Main useful lives are as follows:2.

Buildings and Structures

8-39 years

Intangible assets:

Straight-line method

Main useful life is as follows:
Software5 years

C. Amortization of Deferred Assets
Issuance cost of corporate bonds: Full amount is recorded as cost.

D. 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.

- 12 -

E. Hedge Accounting Method
1. 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.
2. Hedging instruments and hedged items
Hedging instruments:

Interest rate swaps

Hedged items:

Borrowings

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

F. Material Changes in Presentation
1. 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.
2. 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.
3.

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.

4.

Consolidated Tax Treatment
The Company qualifies for consolidated tax treatment.

II. Changes in Presentation
This item has already been discussed in E. Changes in Presentation, 1. Material Matters for Preparationof Consolidated Financial Statements under, and thus the explanation is omitted here.

- 13 -

III. Balance Sheet
A. 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
Tangible assets – other
Shares of affiliated companies
Long-term loans to affiliates
Total

¥128
¥4,344¥218¥2,094¥1¥2,632¥1,399¥10,819

millionmillionmillionmillionmillionmillionmillionmillionIn addition, the Company has borrowed securities (market value: ¥1,310 million) to be used forcollateral. However, these borrowed securities are not presented on the balance sheet, because they
are not the Company’s assets.
Figures in “Buildings and structures” and “Tangible assets – other” are net amounts.
Secured obligations are as follows:
Long-term borrowings (due within one year)
Long-term borrowings
Total- 14 -¥2,761¥3,023¥5,784

millionmillionmillionB. Contingent Liabilities
1. The Company is guaranteeing the following companies’ borrowings from financial institutions:
Ichigo Estate Co., Ltd.
Ichigo Real Estate Services Fukuoka Co, Ltd.
Ichigo ECO Energy Co., Ltd.
GK Shinsaibashi Jisho
GK Nishinihon Holdings
GK Ichigaya Jisho
GK Naha Holdings
GK Azabu Juban Jisho
GK Ichigo Showamura Ogose ECO Power Plant
GK Ichigo ECO Nago Futami Power Plant
GK Ichigo Hamanaka Bokujo ECO Power Plant
GK Ichigo Yonago Izumi ECO Power Plant
GK Ichigo ECO Power Plants Holdings 1
GK Ichigo Higashi Hiroshima Saijocho Taguchi ECOPower Plant
GK Ichigo Nakashibetsu Midorigaoka ECO Power Plant
GK Ichigo Miyakonojo Yasuhisacho ECO Power Plant
GK Ichigo ECO Motomonbetsu Power Plant
GK Ichigo ECO Muroran Hatchodaira Power Plant
GK Ichigo Toyokoro ECO Power Plant
GK Ichigo Betsukai Kawakamicho ECO Power Plant
GK Ichigo Engaru Kiyokawa ECO Power Plant
GK Ichigo Akkeshi Shirahama ECO Power Plant
GK Ichigo Yamaguchi Aionishi ECO Power Plant
GK Ichigo Yamaguchi Sayama ECO Power Plant
GK Ichigo ECO Fuchu Jogecho Yano Power Plant
GK Ichigo Toyokoro Sasadamachi ECO Power Plant¥14,269¥4,473¥2,516¥15,500¥5,200¥2,502¥550¥468¥1,959¥1,662¥1,324¥628¥561

millionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion¥529

million

¥412
¥398
¥260
¥260
¥242
¥233
¥216
¥212
¥209
¥192
¥179
¥163

millionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion

2. The Company is guaranteeing the payment of a construction assistance fund and the return of asecurity deposit by GK Myodani Fudosan.
Total

¥324

million¥55,448

millionC. Affiliate Receivables and Payables (excluding items separately indicated)
Short-term receivables from affiliates¥1,029millionLong-term receivables from affiliates¥52

million

Short-term payables to affiliates¥7

millionLong-term payables to affiliates¥42

million¥10,151

million¥103

million¥486

millionIV. Income Statement
Transactions with affiliates
Revenue
Revenue
Operating Expenses
Non-operational transactions- 15 -

V. Statement of Changes in Shareholders' Equity
Types and Amounts of Treasury Shares
Ordinary shares

884,200

VI. Taxes
A. Breakdown of Deferred Tax Assets and Liabilities
Deferred Tax Assets
Unpaid business tax
Excess amount of allowance for doubtful accounts
Valuation loss on operational investments in securities
Valuation loss on investments in securities
Valuation loss on investments in real estate
Valuation loss on securities of affiliates
Deferred gain (loss) on hedges
Loss carried forward
Other
Subtotal
Allowance for valuation
Deferred tax assets

¥52
¥461
¥63
¥401
¥2,179¥851¥100¥2,042¥310¥6,464(¥4,924¥1,540

millionmillionmillionmillionmillionmillionmillionmillionmillionmillionmillion)millionUnrealized gain on other securities, net(¥68

million)Asset retirement obligation expense
Deferred Tax Liabilities Total

(¥1
(¥69

million)million)¥1,470

millionDeferred Tax Liabilities

Net Deferred Tax Assets

B. Revisions to Deferred Tax Assets and Liabilities Due to Change in Corporate Tax Rate
Based on the Partial Amendment of the Income Tax Act (Law No. 9, 2015) and the Partial Amendment
to Regional Tax Act (Law No.2, 2015) issued on March 31, 2015, corporate taxes will decrease fromthe fiscal year from April 1, 2015. Reflecting this change, the effective statutory tax rate used for the
calculation of deferred tax assets and liabilities has been reduced from 35.64% to 33.06% for the fiscal
year beginning on March 1, 2016, and from 35.64% to 32.26% for the fiscal year beginning on March
1, 2017.
In addition, with regards to loss carry forwards, the maximum amount of deduction of the losses
against current year income has been decreased from 80% of income to 65% for the fiscal years from
April 1, 2015 through March 31, 2017 and 50% for fiscal years from April 1, 2017.
As a result of these changes, deferred tax assets decreased by 370 million yen, while income taxes
deferred, unrealized gains on other securities, and deferred gains on hedges increase by 370 million
yen, 7 million yen, and 10 million yen, respectively.

- 16 -

C. Change in Corporate Tax Rate after Current Fiscal Year
Based on the Partial Amendment of the Income Tax Act (Law No. 15, 2016) and the Partial
Amendment to Regional Tax Act (Law No.13, 2016) issued on March 29, 2016, corporate taxes will
decrease from the fiscal year from April 1, 2016. Reflecting this change, the effective statutory tax rateused for the calculation of deferred tax assets and liabilities is reduced from 33.06% to 30.86% for the
fiscal years beginning on March 1, 2017 and March 1, 2018 and from 33.06% to 30.62% for the fiscal
year beginning on March 1, 2019.
Based on the effective statutory tax rate after these changes, deferred tax assets decrease by 76 million
yen, while income taxes deferred, unrealized gains on other securities, and deferred gains on hedges
increase by 76 million yen, 3 million yen, and 5 million yen, respectively.

- 17 -

VII. Related Party Transactions(Million yen)
Type

Name

VotingRightsConnection with
Held (%)
the Related Party
byCompany

Transaction

1

Lending

Interest received

Subsidiary

Ichigo Estate Co.,
Ltd.

100

Servicecontract

Provision of credit
guarantee2
Receipt of credit
guarantee3,4Receipt of credit
guarantee andcollateral5
Payment of credit
guarantee fee
Lending1

Subsidiary

Subsidiary

Ichigo ECOEnergy Co., Ltd.

Ichigo Real Estate
Services Fukuoka
Co., Ltd.

100

100

Servicecontract

Servicecontract

Interest received

Subsidiary

Subsidiary

A. F. Co., Ltd.

KK Kimura
Building

YK SC13 Limited
Subsidiary
Company

Subsidiary

Subsidiary

GK Minami
Ikebukuro Jisho

GK Gotanda
Holdings

100

100

—

100

Financialsupport

07

07

—

—

Receipt of credit
guarantee andcollateral4, 5
Lending1
Interest received
Receipt of credit
guarantee andcollateral4, 5Receipt of credit
guarantee andcollateral5
Payment of credit
guarantee fee toguarantor- 18 -

8,086
33
6
—

2,282

—

—

7,597

—

—

Advance paid
Other0
investments andassetsShort-term loans
2,520
to affiliates
Other current
78
assets1,509Interest received

2,913

—

Lending1

Lending1

Balance
Outstanding

14,2692,516Interest received

Account

Short-term loans
to affiliates
3,813
Long-term loans
to affiliates
Other current
assets239
Other current
liabilities

Provision of credit
guarantee2

Provision of credit
guarantee2
Financial
SupportTransaction
Amount—Short-term loans
to affiliates
Other current
42
assets4,473—Long-term loans
to affiliates6
Other— investments andassets6
—

2,282

—

Long-term loans
to affiliates
Other current
84
assets
—

0
4
2,440
24
—
1,436
14
—
1,207
52
—
1,399
16

2,282

—

—

1,348

—

—

Advance paid
Other0
investments andassets02Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

GK Shinagawa
Holdings

GK Ichigaya Jisho

GK Ikenohata
Holdings

GK Motoabazu
Holdings

Receipt of credit
guarantee andcollateral5
07

0

7

07

07

0

GK Nishinihon
Holdings

07

Major
Ichigo Trust
shareholder——

Payment of credit
guarantee fee toguarantor
Provision of credit
guarantee2
Receipt of credit
guarantee fee
Receipt of credit
guarantee andcollateral5
Payment of credit
guarantee fee toguarantor
Receipt of credit
guarantee andcollateral5

GK Shinsaibashi
Jisho

GK Ichigo
Showamura
Ogose ECO
Power Plant
GK Ichigo ECONago Futami
Power Plant
GK Ichigo
Hamanaka Bokujo
ECO Power Plant

—

7

—

—

—

Payment of credit
guarantee fee toguarantor
Provision of credit
guarantee2
Receipt of credit
guaranty fee
Provision of credit
guarantee2
Receipt of credit
guarantee fee

1,883

—

Advance paid
Other0
investments andassets

—
0
3

—

—

0 Advance received

6

—

—

2,502

13,500

Advance paid
Other3
investments andassets13,000—

Advance paid
Other3
investments andassets

5
30
—
5
29

—

—

2 Advance received

44

—

—

0 Advance received

15

15,500

5,200

07

—

Provision of credit
guarantee2

1,959

—

—

07

—

Provision of credit
guarantee2

1,662

—

—

07

—

Provision of credit
guarantee2

1,324

—

—

Receipt of collateral4,8

4,476

—

—

59.55%
shareholder of theCompany—

Payment of fee forcollateral9132 Accounts payable

The interest rate on loans from the Company to affiliates is based upon the Company’s actual borrowing costs, with due
consideration to the particular circumstances of certain affiliates.
2
The Company has guaranteed 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 ¥2,282 million from banks.
5
The Company has received both guarantees and collateral for loans from banks.
6
The Company has reserved ¥901 million of allowances for bad accounts for long-term loans to affiliates. In addition, theCompany reversed ¥7 million of allowances for bad accounts in the current fiscal year.
7
The Company holds 0% of voting rights and the subsidiary holds 100% of managerial authority over the Tokumei Kumiai.
However, the subsidiary is considered to be the Company’s subsidiary, because the Company has adopted the accounting
standard “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).
8
The Company has received collateral to be used to for borrowings from banks.
9
The collateral fee is based upon market pricing.
10
The above amounts do not include consumption tax and other taxes. However, the amounts recorded on the balance sheet doinclude consumption tax and other taxes.
- 19 -

7

VIII. Per Share Data
A. Net assets per share¥123.40

B. Net Income per share¥20.07

C. Net Income per share (diluted)¥19.98IX. Material Subsequent Events
N/A- 20 -