Corporate Philosophy and Basic StanceContents

Editorial Policy
Hulic has published various forms of communication tools to
help investors and other stakeholders gain an understanding

3

Highlights

5

Top Message

7

Hulic's Value Creation

9

Strategy

11

Progress of Priority Items

13

SPECIAL FEATURE 01

and objectively view its initiatives that seamlessly blend
strategy with CSR. This year's version adds financial information
to the conventional CSR report to further improve two-way
communication. The GRI Sustainability Reporting Guidelines
Ver. 4 (G4) was referenced during the editing of this reportto carry out a materiality analysis and disclose priority items.
Information that could not be included in this publication canbe found on our corporate website. The third-party review andG4 comparison table appear on Hulic's CSR website. Details ofinvestor relations activities can also be found on our corporatewebsite.
IR

http://www.hulic.co.jp/en/ir/

CSR

http://www.hulic.co.jp/en/csr/● Mega Solar Project Initiatives

15● Business Continuity Initiatives for Disasters

Materiality Analysis
17

High

We take an honest approach to all our stakeholders. To this end;

1

2

3

We take complianceseriously, respect humanrights, and transparently
conduct business activities
based on high ethicalstandards.

We strive to protect
the local environment while
contributing to local
revitalization through ourbusinesses.

By providing highvalue-added products andservices, we are giving ourcustomers security andlaying the foundation
for the future.

Importance for stakeholders

By putting our corporate philosophy into practice we're contributing to the betterment of society.

● Encouraging Greening● Providing Eco-friendly
Products and Technologies● Reducing Waste● Initiatives in the Local
Community

Environmental Initiatives● Taking Steps toward Enhanced
Environmental Management● Curbing GHG Emissions/
Conserving Energy● Biodiversity / Encouraging Greening● Providing Eco-friendly Products andTechnologies/Reducing Waste● Biodiversity

CSR Vision

SPECIAL FEATURE 02● Curbing GHG Emissions● Conserving Energy● Economic performance● Safeguarding Customer

Health and Safety27● Improving Customer Satisfaction● Worker Diversity andSocial Initiatives● Safeguarding Customer Health andEqual Opportunities● Non-discrimination● Work-life Balance

Safety/Improving Customer Satisfaction● Worker Diversity and Equal
Opportunities/Non-discrimination● Work-life Balance● Initiatives in the Local Community

High

Importance for Hulic● Time of Issuance

June 2014 (Previous issue: June 2013, Next issue: June 2015 (scheduled))● Reporting Period
Fiscal year 2013 (from January 1, 2013 to December 31, 2013)
Regarding a portion of the priority items, the activity report before andafter the 2013 fiscal year is included.

35

Corporate Governance39

Consolidated Financial Statements● Reporting Organization
The scope of this Report is the Hulic Group. The tally of environmental
performance data was provided primarily by the "power consumption,""gas consumption," "CO₂ emissions," "waste emissions," and "water
consumption" of the main 20 buildings.

Stakeholders of Hulic Group

Environmental Performance Data / Scope

The Hulic Group iscommitted to realizing

Total ﬂoor area (㎡)Total ﬂoor area (㎡)Head Office
Hulic Co., Ltd.
●

Headquarters: 7-3 Nihonbashi Odenmacho, Chuo-ku, Tokyo, 103-0011●

Established: March 1957●

Business Outline: Real estate holding, leasing, sales and brokerage

Nihonbashi Fuji Building

8,475

Hulic Nakano Building

4,319

●

Paid-in Capital: 22,205 million yen (as of end of December 31, 2013)

Toranomon First Garden

10,155

Hulic Kawasaki Building

6,004

●

Memberships: Japan Federation of Economic Organizations

Hulic Head Ofﬁce Building

7,688

Hulic Aoyama Building

8,790

environmental, social

Hulic Shinbashi Building

13,983

Hulic Mita Building

6,228

and economic value

Ginza Fuji Building

8,579

Hulic Osaka Building

30,353

Higashi Ote Building

7,207

Hulic Nanba Building

9,147

Hulic Kabutocho Building

6,579

Hulic Kobe Building

8,354

Hulic Kobunacho Building

17,172

Hulic Sapporo Building

14,254

Hulic Kakigaracho Building

4,697

Hulic Hamamatsu Building

5,538

Hulic Torigoe Building

5,954

Hulic Fukuoka Building

12,646

Customersa sustainable society

Employees

by delivering

through two-way
communication with

Business
Partners

Government
and Public
Administration

Shareholders

all of its stakeholders.
GlobalEnvironment

Local
Communities※ Waste emissions from Toranomon First Garden, Hulic Kawasaki Building, Hulic
Hamamatsu Building, and Hulic Fukuoka Building are not contained in this report.
※ The scope of environmental performance data on properties we own※ The ﬂoor space of buildings listed here does not necessarily match the ﬂoor spacecorresponding to our share of ownership.

The Real Estate Companies Association of Japan
The Association for Real Estate Securitization
Japan Building Owners and Managers Association
Japanese Association of Real Estate Appraisal

Major Group Companies (as of June, 2014)
Hulic Build Co., Ltd
Hulic Building Management Co., Ltd.
Hulic Insurance Service Co., Ltd.
Hulic Hotel Management Co., Ltd.
Hulic Office Service Co., Ltd.
Hulic Reit Management Co., Ltd.
Hulic Proserve Co., Ltd.

1

Corporate Social Responsibility Report2Highlights▲

Changes in Major Consolidated
Management Index, etc.

Unit

FY12/09

FY12/10

FY12/11

FY12/12FY12/13(Million Yen)

31,22933,61674,73894,319108,444

Real estate business(Million Yen)

28,32030,42868,096

84,346

95,726300

Insurance agency business(Million Yen)

2,088

2,186

2,388

2,417

2,631

Other

(Million Yen)

820

1,001

4,253

7,555

10,087250

Operating Income(Million Yen)

14,39015,28919,841

22,571

29,114

Ordinary Income(Million Yen)

10,93912,396

16,896

20,03325,983150

Net Income(Million Yen)

22,042

11,562

9,336

11,487

15,970100

Total Assets(Million Yen)

379,294455,903476,244

637,919

720,344

Net Assets(Million Yen)

69,73998,644

104,356

149,895

177,280

Net cash provided by (used in) operating activities (Million Yen)

9,989

5,537

20,4598,472

11,114

Net cash provided by (used in) investing activities (Million Yen)

9,416

△ 30,380△ 23,667△ 30,554△ 49,548

Net cash provided by (used in) ﬁnancing activities (Million Yen)

△ 30,633

19,707

7,511

20,85442,841

Cash and cash equivalents at end of period (Million Yen)

7,495

7,430

11,733

12,164

16,600

17.9

21.3

21.6

23.2

24.4

Operating Revenue (Net Sales)
Segment Earnings

Consolidated Cash Flow

Equity Ratio ※1(%)

EBITDA ※2(Million Yen)

18,715

20,771

26,49330,09237,809Interest-Bearing Debt to EBITDA Ratio ※3(Times)

13.9

14.5

11.7

13.8

12.2

Net D/E Ratio ※4(Times)

3.7

3.0

3.0

2.8

2.8

Interest Coverage Ratio ※5(Times)

2.1

1.1

4.6

1.7

2.0

Return on Equity ※6

(%)

39.1

13.9

9.3

9.1

9.8

Net Income per Share

(Yen)

151.3

73.0

54.6

22.3

27.0

Dividend per Share

(Yen)

2.6

3.0

3.6

4.5

(Post-merger) 6.5▲

Equity(Times)Return on Equity(Million Yen)

（%）
40.0

20.0

200,000

159

30,00015.0

150,000

30.0

115

114

93

20,00010.0

100,000

20.0

10,0005.0

50,00010.0

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

0

Dividend per Share00

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

6.5

(Post-merger)

630,000(Average rent: Yen/Tsubo)(Vacancy rate: %)Hulic s ofﬁce buildingsin the ﬁve wards ofdowntown Tokyo

8.0
7.0

25,000Market average forthe ﬁve wards ofdowntown Tokyo

6.0
20,000

4.5
4

2.6

3.0

Unit

FY12/09

FY12/10

FY12/11

FY12/12

3.6

5.0

15,0002

Market average forTokyo s 23 wards

4.0
3.0

10,000

(%)

1.4

1.0

0.3

0.6

0.4

20,756

19,933

20,571

20,024

19,817(Yen)

25,827

24,89526,75324,42023,714(Building)

112

129

131

163

161

Tokyo area

(Building)

94

111

113

143

141

Otheｒ

(Building)

18

18

18

20

20

(㎡)

391,571452,474

492,422723,924

679,672

Tokyo area(㎡)

287,745

353,122393,191

553,333

537,582

Other

(㎡)

103,827

99,352

99,231

170,591

142,090

Tokyo central 5 wards
Total

Total

5,000
FY12/ FY12/ FY12/ FY12/ FY12/
10
11
12
13
09

0

Market average forTokyo s 23 wards

On July 1, 2012 our company completed a consolidated (reverse acquisition) with Shoei, Co. Ltd. The numerics in this book before the consolidation are recorded using
K mark are particularly important items for KPI. ※ 1 Equity Ratio=Equity/Total Assets ※ 2 EBITDA=Ordinary Income-Equity in
ex-Hulic's numerics, and the items with the ○Earnings (Losses) of Affiliates+Interest Expenses+Depreciation and amortization ※ 3 Interest-Bearing Debt to EBITDA Ratio ＝ Interest-Bearing Debt/EBITDA ※ 4 Net D/E
Ratio=Net Interest-Bearing Debt/Shareholders ' Equity ※ 5 Interest Coverage Ratio=Operating Cash Flows/Interest Expenses Paid ※ 6 ROE=Net Income/Average Equity ※ 7
Excluding the unsigned floor space which was reserved due to the tenant's demands and reconstruction

All Hulic properties

1.0
FY12/10

FY12/11

Gas Consumption

K

FY12/13(Yen)

Entire country

0

Vacancy Rate※7/Average Rent
（Yen）

8

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

FY12/09

FY12/12FY12/13

0※Excluding real estate
held for resale

Main Non-financial Indicators▲

Vacancy Rate ※7

Rentable Area

EBITDA ratio(Million Yen)

220

50

0

Target: Real estate for rented possessions of this company

Number of Properties

40,000200

0EBITDA¥100 million

Return on Equity

2.0

Changes in Real Estate Business
Related Index

Average Rent

EBITDA/EBITDA Ratio

Net Income

Power Consumption

K
（MWh）

30,00029,843 30,370

27,095 26,028

25,633（㎥）

800,000
600,000

620,086

683,318
561,116

612,235 588,551

Basic Unit of CO₂ Emissions（kg-CO₂/㎡）

100
80
60

20,000400,000

060

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

0

77

56

20

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

0

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

▲

Main Financial Indicators

200,000

68

66

40
10,000K

Operating Revenue (Net Sales)¥100 million

1,200

1,084

1,000

943

800

747

600
400

336

3

K

¥100 million

350

291

300
250

198

200
150

312

200
0

Operating Income

143

225

152

100

Corporate Social Responsibility Report0K¥100 million

300

259

250

200

200

168

150
100

109

123

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

0

Waste Emissions
1,500
1,200

K
（t）

1,317

1,307

1,179

1,145

1,102

K
（％）

80
60

68

64

70

71

71

Employment Ratio of
Persons with Disabilities

（％）

8.00

6.92

6.00

40

4.00

20

2.00

K

5.26

5.66
5.30

500

0

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

Acquisition Rate ofPaid Holiday

900

300

50

50
FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

Ordinary Income

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

0

FY12/ FY12/ FY12/ FY12/ FY12/
09
10
11
12
13

0

2.03
Jun/
09

Jun/
10

Jun/
11

Jun/
12

Jun/
13

4

5

Corporate Social Responsibility Report6

Hulic's Value Creation

Helping Realize a Society Filledwith Peace of Mind and Trust
The Hulic Group provides buildings with excellent safety, environmental performance, and convenience that match the needs ofsociety today (opportunities and risk) through a fusion of management and CSR, creating new added value in the process.

● Boost demand for safe and secure buildings

Opportunities● Demands from society for eco-friendly buildings● The 2020 Tokyo Summer Olympics and urban revitalization has spurred on a recovery in the housing market● Increasing need for public assets and owned properties to be sold and used more effectively● Risk of earthquake occurring in Tokyo where our portfolio is concentrated

Risk● Growing market for seniors following advancements in aging societies

Perspectives on Business
Promotion(capturing business opportunities as they arise)

Shareholders● Bolster stable revenue streams throughthe expansion of the leasing business● Promote PPP projects● Launch publicly traded J-REIT and expand the asset management business● Promote value-added development projects● Enhance the earnings power of owned buildings throughreconstruction/redevelopment● Initiatives toward longer life offices● Install the latest technologies and facilities in new buildings● Acquire properties located close to stations with a focus on convenience

Customers

Employees

Business
Partners
Local
Communities
GlobalEnvironment
Government andPublic Administration

7● Promote the commercial real estate (CRE) business that

accommodates the individualized needs of customers● Property maintenance of high quality Initiatives toward
senior housing with an eye on the aging society of the future● Initiatives toward senior housing with an eye on the aging society of the future● Develop human resources with specialist

knowledge of the real estate business● Carry out joint research with MIT● Build proper transactional relationships with

Perspectives on Reinforcing
the Operating Base Over the Long-term(preparing for risk)● Risk of deteriorating real estate market conditions due to a prolonged

downturn in Japanese economy● Risk of rising financing costs caused by turbulent financial markets

Shared Perspective withSociety(Giving back to society)● Focus on and selection of core competencies ofbusiness operations given changes in social structure● Real estate portfolio concentrated on downtown Tokyo● Accurate and pertinent information disclosure● Build financial strengths and maintain/improveexternal credit ratings● Procure financing using long-term and fixed rate debt
● Encourage long-term lease agreements with tenants● Carry our seismic retrofits and strengthen BCP
response● Focus portfolio on Class A buildings with strong
demand● Reconstructed properties based on seismic
isolation and dampening designs● Provide workplaces friendly to women and persons witha disability in line with the belief of workplace diversity● Develop a workplace environment thatencourages a work-life balance● Strengthen BCP responses by working closely● Offer sustained, consistent dividends andshareholder returns that emphasize dividend
payout ratio● Provide buildings that are highly secure,comfortable and convenient● Carry out initiatives for energy conservation,such as the use of renewable energy

productivity increases● Support volunteer activities● Determine the usage of buildings based on their● Develop a system to accommodate people that

● Promote greening efforts on buildings and● Implement Environmental Management System

Environmental Management Survey conductedby Nikkei Inc. and certification from DBJ Green
Building.

systems● Actively employ the precast concrete
construction method● Acquire external recognition from the● Promote PPP projects with local governments● Install natural lighting and natural ventilation● Strengthen internal controls and compliance● Respond to policy, program and legislativechanges● Fortify financial soundness● Capture market share● Secure stable profits● Enhance expertise of personnel● Improve employee motivation● Co-exist with local communities

business● Operate businesses according to CO₂ reduction targets● Enhance earnings power● Enhance building technologies● Offer compensation and benefits tied towith business partners, such as concluding
agreements on emergency response with generalcontractors

cannot return home on public transit after an
emergency in certain company-owned buildings

Generating Common
Shared Valuefor the Hulic Group● Enhance brand value

general contractors● Secure stable leasing income by utilizing
subletting and long-term lease agreements

locations● Select designs that blend in with the community

Fulfilling Our Corporate
Philosophy by Creating
Common Shared Value interms of the Environment,
Society and Economy● Build win-win relationships for long-term

exterior walls● Host summer festival at the head office● Achieve business continuity, etc.

Generating Common
Shared Valuefor Various Stakeholders● Revitalize local economies● Carry out initiatives for biodiversity● Pursue ongoing initiatives in support ofsatoyama conservation activities● Create employment opportunities● Improve environmental conditions● Help achieve safe and comfortable● Contribute to the local economy andlifestyles, etc.

environment8Strategy

Toward Further Growth

New Medium-term Management Plan (2014-2016)

The Hulic Group achieved the targets of its Medium-term Management Plan from 2012 through 2015 a full two years
ahead of schedule in fiscal year 2013. As a result, we have newly formulated a long-term plan called "Hulic a Decade
Later (2014 – 2023)" and a new Medium-Term Management Plan for 2014 to 2016 as the first step in this vision.
Under this plan we will continue to expand and evolve our business model centered on our core real estate leasing
business as well as seek to boost corporate value over the long term.

Maintain our unique business modelf o c u s e d on t h e l e a sin g b u sin e s swhile also expanding into new areas
such as asset management andproper t y development to sus tainhigh growth.

▲

Position of This Plan as seen from Ordinary Income

Basic Policy

900
800

¥38 to ¥40 billion

Establish structure
to grow by around¥5 billion every year

300

+32

+45

200

(Unit: 100
million yen)

2010

2011

2012

2013

2014

2015

Operating Revenue (¥100 million)

1,084

2,000

−

Operating Income (¥100 million)

291

340

420〜450

Ordinary Income (¥100 million)

259

300

380〜400

Net Income (¥100 million)

159

180

230〜250

EBITDA (¥100 million)

378

420

520〜540

Interest-Bearing Debt to EBITDA Ratio (Times)

12.2x

12.5x

Under 12x

Net D/E Ratio (Times)

2.8x

3.0x

Under 3.0x

❸ Launch a J-REIT and establish the asset management businessafter increasing its scale● Aspire to increase the scale of Hulic Reit leveraging strong support¥21 to ¥24 billion
2009

Fiscal Year2016 Plan❷ Generate earnings streams by reinforcing the development business● Promote high quality Hulic-sized development projects situated in ideal locations

2 years aheadof schedule

1000

Hulic is planning onreaching ¥85 billion
after 10 years.

+59

Fiscal Year2014 Forecast❶ Further increase earnings from the leasing business● Enhance portfolio quality by steadily promoting reconstruction projects● Expand portfolio and increase investments in conveniently locatedproperties● Maintain high portfolio utilization rates by further increasing the leasing

New Medium-termManagement Plan

500
400

Basic Strategy

First step to securingconsistent high growth

Achieved Medium-termManagement Targets
ahead of schedule

Fiscal Year2013 Results

Financial Targets

2016

2017

2018

2019

2020

2021

2022

2023

year

New Long-term Plan Hulic a Decade Later: ¥30 billion in 2018
4 years ahead of schedule
New Long-term Plan Hulic a Decade Later: ¥85 billion in 2023
Pursue further CSR management that supports sustainability❹ Promote a broadly focused CRE strategy that ﬂexibly considers alliances withvarious sectors and companies● Collaborate and partner with various sectors and companies to expand thescale of our business and business domains● Focus on M&A that fulﬁlls the intended purpose❺ Develop new business domains● Establish organizations for Koreisha (seniors), Kankyo (environment)
and Kanko (tourism) (3K) businesses.
● Always be half a step ahead in niche markets
P13-14 Mega Solar Project Initiatives

New Long-term Plan - Hulic a Decade Later (2014 to 2023)
Quantitative Target
We will aim to reach ordinary income of 85 billion yen by 2023.

Basic Policy on Business Expansion❶ We will establish a business structure whereby the leasing business secures stable
proﬁts and balances proﬁt growth with consistent and stable earnings, while growing
earnings in segments related to the leasing business. This includes expanding thedevelopment business, management business and CRE business. We will develop andexpand growth domains tied to current needs, with a primary focus on businesses forseniors, businesses for tourism and businesses for the environment (the 3K businesses).
❷ We will earn highly positive trust from the markets by carefully monitoring ﬁnancial
stability and business risk.
❸ We will further expand our CSR management and become a company with a solidpresence in society.
We will strive to be a company where female workers can thrive professionally and wherefemales make up 20% of management positions by 2020.

9Corporate Social Responsibility Report

I n fo r m a tion
In recognition of its CSR
initiatives and efforts
to disclose transparent
information, Hulic's stock
was selected for inclusionin the FTSE4Good IndexSeries in March 2012 andthe Morningstar Socially
Responsible Investment(MS-SRI) Index in January
2014.

❻ Secure ﬁnancial soundness and rigorously manage risk
● Secure ﬁnancial soundness through ﬁnancial controls
and thoroughly manage business risks❼ Further strengthen business expansion as a company
with a solid presence in society● Promote value creation focused on CSR beliefs while addressing
the needs of society
P15-16 Business Continuity Initiatives for Disasters

Information
Portfolio Distribution(As of December 2013)

Total properties: 161
Ofﬁce buildings: 120(including commercial buildings)
Ofﬁce building portfolio distribution basedon distance from the nearest railway station
Nearly 90%
locatedwithina 5-minute
walk

12％
14％

38％
36％

■ Less than 1-minute walk ■ 4- to 5-minute walk■ 2- to 3-minute walk
■ Over 5-minute walkOfﬁce building portfolio
distribution by leasable area
Nearly 80%
11％located11％in Tokyo
16％62％■ Tokyo s 23 wards: 329,000㎡■ Other Tokyo/Greater Tokyo
Metropolitan Area: 86,000㎡■ Kyoto/Osaka/Kobe: 56,000㎡■ Other: 61,000㎡

New Corporate Slogan
To mark the start of our new management plan, we createdthe all new corporate slogan, "Closer to the Station. Closest
to the Future." This slogan shows that our properties are
best characterized for their convenient locations and futureoriented specifications, such as the latest environmental andearthquake-resistance technologies. Under this new slogan,we will aim to be a company that is held in high esteem
among stakeholders for the solid execution of its long-term
and medium-term management plans.

10

Progress of Priority Items

Implementing CSR Management Basedon Quantitative Indicators/KPI
FieldsPriority Items/
Promoted Items（★attached to priority items）

Measures against global
warming at Hulic sbuildings ★

Reduction ofwaste/
Conservation of
resources

Customers

Environment

Prevention of
global warming

Measuresagainstdisasters
Improvement incustomer satisfaction

Employees

SocietyLocal
communities

Gas consumption（㎥）
Basic unit of CO₂ emission※1（ kg-CO₂/㎡）

ScopesReducing 5% for ﬁve years from2009 to 2013 compared with
68.42, an average during
period from 2005 to 2007.
(per unit ﬂoor area)

20 existing primary ofﬁce
buildings

as "Promoted Items." In this way, we can now follow the results of our activities. While reflecting matters required by society afterreferencing the GRI Guidelines, targets were set in the context of our business reality and direction through surveys, hearings, anddiscussions. Furthermore, in fiscal year 2013, the KPIs were enhanced in accordance with the priority items. We will make efforts forconstant improvement using the PDCA Cycle, while disclosing data on the progress of our CSR activities to the stakeholders.

Results
FY2009FY2010FY2011FY2012FY201329,84330,37027,09526,02825,633620,086

683,318

561,116

612,235

588,551

60

66

56

68

77

−

3

3

7

5

Number of capital
investments forrenewable energy

3 investments or more perﬁscal year

All Hulic s buildings

Promotion of greening ★

Number of greening projects

1 project or more perﬁscal year

All Hulic s buildings

Reduction of waste at
Hulic s buildings ★

Amount of waste (t)Reducing 10% for 3 years from 2011
to 2013 compared with averageduring period from 2005 to 2007.

Reduction in water consumptionat Hulic s buildings

Water consumption（㎥）

Reducing 15% for 3 years from 2011
to 2013 compared with averageduring period from 2005 to 2007.

Reduction of waste in
new buildings ★

Number of technological measures(PC construction method/extension oflife span) implemented to reduce theamount of waste in reconstruction projects

1 case or more per ﬁscal year

All Hulic s buildings

1

6

3

5

8

Reduction of paper material svolume in the ofﬁce

Paper consumption per person(10thousand)

20,000 pieces or less per ﬁscal year

Hulic Head ofﬁce Building

−

−

−

0.4 ※3

1.6

Earthquake countermeasuresfor Hulic s buildings ★

Percentage of properties with earthquake-absorbing
structure, earthquake-damping structure, and earthquakeresistance over 1.25 times stronger the standard (%)

100%

All new ofﬁce buildings
completed

Business Continuity Plan
(BCP) ★

Number of inspections for BCP
drills, stockpiled food and goods

Once or more per ﬁscal year

Hulic Group

Improvement in customer
satisfaction ★

Number of surveys on customer
satisfaction

Once or more per ﬁscal year

● Environmental consideration for new buildings (natural lighting/natural ventilation system, adoption of LED
lighting system, advanced heat shield/insulating multilayered glass, and highly efﬁcient air conditioning system)● Renovation works of existing buildings for energy saving (upgrading to highly efﬁcient
lighting equipment and air conditioning systems)● Initiatives toward reduction of power consumption in collaboration with managementcompanies and tenants (setting higher temperature of air conditioners, decreasing thenumber of lights on, adjusting brightness)●●

Acquisition of Solar Power Plant in Hirono Town, Fukushima Prefecture
Usage of natural ventilation, natural lighting
Photovoltaic generation system installation

Certiﬁed JHEP AA Rank for Hulic Residence Nishi Oi and Hospitalment
Musashino, and JHEP A Rank for Granda Gakugeidaigaku and Aria
Yoyogiuehara●

Evaluation Reference○

P20-22○

SPECIALFEATURE 01,
P22

○

P23

−

3

3

8

6

16 existing primary ofﬁce
buildings※2

1,317

1,307

1,179

1,145

1,102

●

Achieved a reduction by 14%○ー

20 existing primary ofﬁce
buildings

177,039

176,715

169,768

164,037

148,508●

Achieved a reduction by 20%

○

ー

○

P26

○

ー

○

P27

○

SPECIALFEATURE 02○

P28● Adopted Long-life structure for Hulic Asakusabashi Building, Nagatacho Hokkaido
Square, Hulic Residence Nishi Oi, Hulic Residence Gotokuji, Granda Gakugeidaigaku,
Sunny Life Funabashi, Aria Yoyogiuehara, and Hospitalment Musashino● Adopted PC (Precast Concrete) method for Hulic Residence Nishi Oi

●

●

1

1

1

1

1

●
●

Hulic Group

Paper consumption reduction implemented at ofﬁces● Adopted earthquake-absorbing structures and
100％
100％
100％
100％
100％
（1 building）（3 buildings）（2 buildings）（3 buildings）（2 buildings） earthquake-damping structures at ofﬁce buildings

1

1

0

1

1

100％
（1 eligible
employee）

100％（1 eligible
employee）

100％（1 eligible
employee）

100％（2 eligible
employees）

0

1

1

0

70% of eligible women or
more in average and one
man or more for four years
from 2012 to 2015

All eligible female employees of
Hulic (As of the end of December)
All eligible male employees of
Hulic

2

Percentage of those who use theChildcare Center Subsidy System.

60% or higher per ﬁscal year

All eligible employees of Hulic(As of the end of December)

Promoting the planned useof paid leaves ★

Usage rate of paid leaves

60% or higher per ﬁscal year

All employees of Hulic

68％

64％

70％

71％

71％

Restraining overtime works

Annual total number of employees
who worked overtime for 45 hours or
longer for three months in average

No target

All employees of Hulic

4

3

1

2

4

Promoting mental health care

Percentage of employees who
received medical checkups (%)

100%

All employees of Hulic (As of theend of December)

100％

100％

100％

100％

100％

Promoting employmentof the disabled ★

Employment rate of the disabled

Maintaining the statutory
employment rate of 2% or more

All employees of Hulic(As of June 1)

2.03％

5.26％

5.66％

5.30％

6.92％

Improvement of systems todevelop women s careers ★

Number of women s career promotion
project team meetings held

No target

Hulic

−

1

7

4

5

Corporate social contribution ★

Number of social action
programs

4 programs or more per ﬁscal year

Hulic Group

3

3

7

7

8

Supporting employees to conductsocial contribution activities ★

Number of social contribution
activities by employees

3 programs or more per ﬁscal year

Hulic Group

2

2

4

5

6

Usage rate ofchildcare leaves(Number of person)

Major Achievements in FY2013●

100％（3 eligible
employees）

Work-life
balance

Contribution
to society

Power consumption (MWh)Targets

contents are established, and we set Key Performance Indicators (KPI) and targets. Items other than the priority items are also positioned

Using renewable energy
and developing
new technology ★

Promoting the use of
the next generation
nurturing support system ★

Diversity andhuman rights

Key Performance
Indicators (KPI)

In order to improve while objectively assessing CSR activities, "Priority Items" which are especially important in light of business

100%
100%
100%
100%
100%
（8 users/8 eligible （5 users/5 eligible （6 users/6 eligible （7 users/7 eligible （8 users/8 eligible
employees）
employees）
employees）
employees）
employees）

Total disaster training and implementation of management articles for movement practice
Implementation of AED operation training
Certiﬁed highest DBJ BCM Rating for the ﬁrst time in the real estate industry● Surveys on satisfaction of tenants were conducted by Hulic Building
Management Co., Ltd. acting as the point of contact● Changed the amounts of celebration money for childbirth to 100,000
yen for ﬁrst child, 200,000 yen for second child, and 1 million yen per
child for third and subsequent children (previously 10,000 yen per child)

Introduced Babysitter Program (Subsidizing all amount of enrollment
fee of 21,000 yen and annual fee of 10,500 yen, as well as monthly
fee up to 15,000 yen, providing discount tickets and coupons)●○○

P31-32

○
○

P31

−

P31

Implemented a Health Committee through cooperation with industrial physicians
100% of employees received checkups○

ー

Newly employed two people with disabilities

○

P30

−

P29

Donations of used postal stamps and clothes, local cleanup activities, and various
donations (Aﬂac National Associates, Keidanren Committee on Nature Conservation,
Red Cross, and Ashinaga Scholarship Society)○

P33

Satoyama conservation activities, donation to Ashinaga Scholarship Society,matching gift, monthly regional cleaning activities, collection of PET bottle caps,
assistance for activities to support disaster-hit areas

○

P34

●

Continued to conduct a campaign to boost the leave usage rate

● Implemented inspections toward full-scale execution of No
Overtime Day●●●● In addition to meetings by the women s career promotion project team, lunch
meetings and meetings with those who had acquired maternity leave were held
for female employees to exchange opinions●●※1 For city gas, CO₂ emission coefficient of the Manual for Calculations and Reports of GHG Emissions”issued by the Ministry of the Environment and the Ministry of Economy,
Trade and Industry is used. For electric power, an actual emission coefficient of a power supplier that relevant building uses is used. The basic unit of CO₂ emission increased
because the CO₂ emission coefficient increased.
※2 16 primary office buildings are included in the scope of waste emissions, of which accurate data can be obtained.
※3 Paper consumption per person in FY2012 is only disclosed from October to December 2012 when accurate data could be obtained.

11

Corporate Social Responsibility Report

12Purpose of
the Project❶

Reduce GHG Emissions through the Use of Renewable Energy

Electricity generated by the solar
power plant will be sold througha Power Producer and Supplier(PPS) for use by the Hulic Head
Office Building, which will assist its
efforts to become a net ZEB.

Background to Hulic's Involvement in this Mega Solar Project

Sell generated
electricity

With environmental issues becoming
more serious, Hulic decided to invest
and become involved in a mega
solar power plant project located in
Hirono Town, Fukushima Prefecture,in order to address society's needfor such facilities and to strengthen
its efforts toward environmental
management, which represents one
aspect of its 3K business. The othergoal of our involvement is to provide
assistance to the rebuilding effort in
the aftermath of the Great East Japan
Earthquake.

Solar Power Plant in Hirono
Town, Fukushima Prefecture
Purchase amount usedby the head ofﬁce
Hulic Head Ofﬁce Building

Purpose of
the Project

Overview of Hulic's Efforts
Hulic and Hulic Building Management
Co., Ltd. together made around 1,200
million yen investment to acquire asolar power plant with a generating
capacity of about 2,300kW situatedon a 37,950㎡ plot of land at a former
quarry in Hirono Town, Fukushima Prefecture,
about 25 kilometers from the Tokyo Electric Power
Company's Fukushima Daiichi Nuclear Power Plant.
This solar power plant will be connected to the
distribution network of electric power companies
in gradual phases, beginning with phase I of 998kW
from the first half of 2014. The share of generated
electricity equivalent to Hulic's stake will be used
to power the Hulic Head Office Building located inTokyo's Chuo Ward.

Solar Power Plant in Hirono
Town, Fukushima Prefecture❷

What is ZEB?
ZEB is an acronym for zero energy building. ZEB means that a building uses zero net
primary energy annually thanks to improvements made in the energy efficiency ofthe building and its facilities as well as the use of renewable energy.

(General Building) (Hulic Head Ofﬁce Building)40%● Improve building envelope

Primaryenergyusage

Hulic will own about a 40% stake in the solar power plant
to be constructed in Fukushima. Hulic's share of the power
generated at the plant will be allocated for use by the
Hulic Head Office Building, which will effectively eliminate
the building's use of power sourced from other powercompanies. The remaining 60% stake in the power plant
will be owned by Hulic Building Management, which willsell its share of the electricity to the open market.

Renewableenergyusage

Operational Points❶ Power generation visualization system: power generation
and CO₂ reduction performance can be checked regularly
over the Internet and web cameras will provide 24-hourviewing capabilities of the facilities.
❷ Remote monitoring system: equipment operations can bemonitored or shutdown remotely, and parameters for voltage controls
can be set up, making it possible to respond quickly in an emergency.
❸ Planting: Vegetation will be planted in the ground along with
low-lying trees in the vicinity, not only creating harmony with thesurrounding environment, but also helping to preserve power
production, strengthen the ground, and reduce CO₂ emissions.

Yoshinori Izumi
Special ProjectManager,
Asset Solutions
Department,
Hulic Co., Ltd.

13

I was involved in the mega solar project as
the project manager in charge of all aspects,
from schedule management to contract
procedures. In October 2013, we received aproposal from our partner Advance Co., Ltd.
and the schedule called for the contract to besigned before the end of the year, which was
rather tight. This was also the first time Hulic
was involved in such a project, so there wasa lot of hard work involved. Nevertheless, I

Corporate Social Responsibility Report

felt a great deal of motivation knowing the
project will end up reducing environmental
impacts and helping out the earthquake
reconstruction effort. We will soon bereaching the climax of the project, including
the start of operations in fiscal year 2014 andthe supply of electricity to our head officebuilding. I plan on continuing to give myutmost efforts going forward, as this projectwill help Hulic to realize its CSR goals.

Purpose of
the Project❸● Use natural lighting

60%● Use natural ventilation● High efﬁciency air conditioning● High efﬁciency lighting

Utilization of renewable energy
30%● Utilize renewable energy

to reduce the net use of
primary energy to as close tozero as possible

Electricity Sales and Maintenance BusinessV O I C E

My Involvement in the Mega Solar Project

performance

100%

This project includes 20 years of maintenance costs and Hulic
Group company Hulic Building Management will, in addition
to receiving income from electricity sales, gain knowledge andexpertise in the ancillary maintenance business, which it willthen make inroads in and expand as a new business segment.

Collaboration with Hulic Group Companies

Improvement of energy efﬁciency

The Hulic head ofﬁce isa very energy efﬁcientbuilding that employs
natural lighting, natural ventilation andother energy saving
technologies, whichhelps it use around
40% less energy than
general buildings. Of
the remaining 60%,
30% will be sourced
from renewableenergy, bringing it
close to a ZEB.

Illustration of electricity sales business
Hulic Building Management Co., Ltd.
Purchase facilities
Solar power

Sales
agreement(directly with
regional powercompany)Monthly income
from electricity
sales(20 years)

Photovoltaic
generation system
Electricity sales

Power company

Assisting the Rebuilding Effort after the Great East Japan Earthquake

Owning and operating a power plant in Fukushima Prefecture
after the Great East Japan Earthquake will effectively utilize theland and contribute to the local economy, while the construction
work and maintenance operations will be farmed out to local
businesses, creating employment opportunities. In turn, this willserve as proactive contributions to the local rebuilding efforts.
The development work for this power plant will be entrusted to
local engineering and construction companies. Local individuals
will also be hired to operate the power plant once it is completed,which will promote a revitalized local economy over a sustained
and prolonged period.

14

Facilities and Stockpiles for Sustaining Business Operations
We are proactively carrying out measures tostrengthen the business continuity capabilitiesof our core head office functions during an
emergency. The following measures have beentaken at the Hulic Head Office Building.

Hulic’s Approach
Hulic is a real estate company that engages in the development,
reconstruction, and operation of office buildings andcondominiums primarily in Tokyo's 23 wards. We are constantly
working to generate new added value by offering properties
that are superior in terms of safety, environmental performance,and convenience. We have established various emergency
and disaster scenarios for which we have created measures toimprove the structural performance of our buildings as well as
operational and management aspects.

BCP Training and Cooperative Structure
We have formulated the Fundamental Business Continuity Plan,
under which we carry out regular BCP training. This allows
us to use the PDCA cycle for our BCP structure. We have alsoestablished an inclusive cooperative structure with outside design
companies, construction companies, property managementcompanies and elevator companies to carry out joint disaster
preparedness training. These highly effective efforts will enable
us to continue the operation of our real estate business during an
emergency situation. ● See pages 27 and 28

Improving the Earthquake Resistance
Performance of Buildings
Hulic ensures that its new office buildings meet the highest
earthquake resistance standards and feature advanced
earthquake resistance or seismically isolated designs, in orderto protect lives and operation of facilities in the event of amajor earthquake. These standards are made known to the
public in our KPI. Additionally, for existing office buildings, we
carry out seismic retrofitting to ensure full compliance withnew earthquake resistance standards, whereby ensuring thesafety of occupants. ● See pages 27 and 28

Seismic isolation apparatus

Immediate Conﬁrmation of Damages

Response Aimed at Recovery of Operations

Emergency notiﬁcation system using wirelesscommunications (agreement with three companies)

Emergency repair agreements (21 companies)

HULIC
Real estate
managementcompany(Company A)

Real estate
managementcompany(Company B)

Companies that
constructedeach building(general contractors)

V O I C E

Nobuyoshi Tanaka
General Manager,
Technology andEnvironment
Development
Department,
Hulic Co., Ltd.

15

Corporate Social Responsibility Report1
2

Features emergency generators that canoperate continuously for up to six days;3

Has food and drinking water stores to lastmore than seven days, and4

Uses wireless equipment for communications between the management
office of other company-owned properties, etc.

The Hulic Head Office Building, which willserve as a hub during a disaster, has received
the highest rating of DBJ BCM from theDevelopment Bank of Japan for its preparations.
In addition to our head office building, weare steadily stockpiling water resources andestablishing a drainage system, as well as
installing emergency back-up generators thatwill provide power up to three days at ourbuildings currently under construction, or
buildings that completed construction in fiscal
year 2013.

［Seismic Isolation Installation Layout］

PCa
SRC
S

Multilayer rubber isolator
Isolator with tin plug
Cross linear bearing

Maintaining Functions during a DisasterPhotovoltaic panels

Lightning strike

8F: Server Room,Operations
Rooms, andrestrooms havebackup power,
lighting and air
conditioning
Natural ventilation
Natural lighting
1F: Central Control
Room, MDF Roomand restrooms
have backup
power, lighting
and air
conditioning
Vertical damp proof
barrier H=1m
Telecommunications
entrance facility ‒ 2 routes
Seismic isolation pit

Emergency back-up generator

RF: Electricity
receiving andtransformer
equipment/air
conditioner
1 elevator inoperation
2F: Disaster
Response Roomand restrooms
have backup
power, lighting
and air
conditioning
B1F: Water pump andoil tank operations,and disaster
preparedness storage
Telecommunications
entrance facility ‒ 2 routes
Electrical entrance
facility ‒ 2 lines

Emergency shutoff
valve

Hulic was the First in the Real Estate Industry
to Receive the Highest Rating of DBJ BCM

Responding to a Major DisasterWith its head office located in Tokyo, one of the mostimportant factors determining the continuity of Hulic's
business is being prepared for a major earthquake thatstrikes directly below the city. Therefore, in order tomaintain the functions of the head office in a disaster,
we have actively improved the building's earthquake
resistance capabilities, established an emergency contact
system, stockpiled supplies, and installed emergency
back-up generators.
Additionally, Hulic's portfolio is comprised mainlyof real estate assets located in Tokyo's 23 wards, so［Hybrid Structure Model］

Employs seismically isolated design thatenables building functions to operate
even during an earthquake with a seismic
intensity of seven;

HULIC
Real estate
managementcompany(Company C)

Diagram of Hybrid Structure Model

we are aware of the urgent need to have a response
plan in place in case of a major earthquake in thearea. Therefore, we confirm the earthquake resistance
performance of our buildings, carry out seismic retrofits
when necessary, confirm earthquake resistanceduring the design stage of new buildings, and installemergency back-up generators to ensure power supplies
during temporary service outages. Going forward, we
will further leverage our BCP response capabilities
amassed as a real estate company to help various othercompanies improve their business continuity planning.

Hulic's business continuity framework
highlighted above was recognizedwith a DBJ BCM rating from theDevelopment Bank of Japan inNovember 2013. The results of therating praised Hulic for its "particularly
excellent business continuity planning
initiatives." This marks the first timethat a company from the real estateindustry has received the highest ratingfrom Development Bank of Japan.

Quick Summary of the DBJ BCM Rating
The DBJ BCM rating was established by theDevelopment Bank of Japan (DBJ) and recognizes
companies with particularly noteworthy business
continuity management (BCM). The rating isbased on a comprehensive evaluation using
tangible and intangible aspects of a company's
BCM initiatives, including its ability to quickly
restore operations following a natural disaster.

16

Taking Steps toward Enhanced Environmental Management

4

We strive to create a sustainable society
while conforming to environmental laws
and regulations.

With environmental targets set, we
make continuous efforts for improving
them while contributing to theconservation of the global
environment.

Environmental Performance
We reduce as much environmental load
as possible by introducing eco-friendly
design from the planning stage ofdevelopment in order to increase
environmental efﬁciency.

Environmental Management System (EMS)
Hulic Group is smoothly executing the PDCA Cycle with
its unique Environment Management System (EMS) built
based on the "Hulic Environmental Policy." This systemis operated cooperatively with Group Companies,
according to targets set by the environmental project
team headed directly by the President. In order to

TOPICS

Measuresagainstglobalwarming

Systems to
Measures
Resource
promoteagainstrecycling environmental pollution,
management biodiversity

100 100 100 100

Corporate Social Responsibility Report

Environmental Conservation Cost

monitor the progress in environmental activities
of Hulic Group, we use evaluations by the "RiskManagement Committee" for internal matters andby the "Environmental Advisory Council" for external
ones. The result is reported to the CSR Committee andreflected in reviewing the environmental promotion
system and setting targets.

● Calculation method: Calculating based on "Environmental
Accounting Guidelines 2005 (the Ministry of Environment)"● Standards for calculation: Company spends on
depreciable assets for the purpose of environmental
conservation. "Cost amounts" are portions of theCompany's overall expenses and are the amounts used forthe purpose of environmental conservation. Cost amounts
do not include depreciation costs.

※1

Environmental Conservation Cost

Environmental Communication
We widely disclose information on
Hulic s environmental contribution
activities, and communicate withstakeholders including local communities
in order to expand the circleof global environmental conservation.

● Scope: 66 buildings owned by Hulic Co., Ltd.

Categories

Investment Amounts(1) Business area costContents of Major Activities (in FY2013)

633,680（1,359,542）

2,467（2,324）00(1)-1 Pollution
prevention cost(1)-2 Global environmental
conservation cost

Figures in parentheses indicate the cost of FY2012 unit: thousand yen

Cost Amounts

625,558（1,347,881）

1,360 Energy saving design introduced with reconstruction of Hulic's buildings (adopting LED lighting forcommon area s, ins t alling solar panels, e tc .) /Renovation of Hulic's buildings f or energ y（1,360） conservation (adopting LED lighting for common areas, renewing air conditioning equipment, etc.)

8,122（11,662）(1)-3 Resource
recycling cost ※3※2

1,107 Water saving measures at Hulic's buildings（964） Recycling conﬁdential documents(2) Upstream/
downstream cost0（0）(3) Administration cost0（0）5,458 Preparation of CSR Report and ads related to Hulic's environmental（4,293） efforts(4) R & D cost0（0）16,402 Joint research costs with MIT for development of natural ventilation（5,118） and natural lighting for buildings(5) Social activity cost0（0）6,978 Cost for JHEP certiﬁcation（5,779） Activities to conserve secondary forests(6) Environmental
remediation cost

0
（0）

0
（0）

633,680（1,359,542）

31,548（17,606）

Total

242
Cost for recycling toner cartridges（91）❷Our main initiatives evaluated by
the Environmental Management Survey※1 Costs of residential buildings are included.
※2 Pursuant to relevant laws and regulations, appropriate effluent treatment and measurement of gas emission were conducted, but costs were not calculated.
※3 Large investments in the energy efficiency of the Hulic Head Office Building were made in fiscal year 2012. Therefore, figures for fiscal year 2013 declined compared to fiscal year 2012.

Hulic's establishment of targets to reduce total CO₂ emissions andconstruction of eco-friendly buildings to achieve these targets as well as
its planned use of renewable energy through the acquisition of a solar
power plant in Fukushima Prefecture were recognized as "measuresagainst global warming," while our system for incorporating external
expert opinions by the Environmental Advisory Council were evaluatedas "systems to promote environmental management." As for "resource
recycling," our achievements in reducing waste emissions and water
usage at our buildings and efforts to develop long lasting buildings thatcan be continually used for 100 years were recognized, while under"pollution measures/biodiversity," our work to develop properties that
contribute to the conservation of local biodiversity while utilizing the
JHEP certification program was praised.
Our continuing strong recognition through this survey has served
to motivate us even further in integrating our conservation of theenvironment and company growth through environmental management.

Effects of Environmental
Conservation

Environmental Load Index

Economic Effects ofEnvironmental Conservation
Counter-plan
Results in FY2013▲17

We work on environmental education
and awareness activities in order toenable each employee to voluntarily
act toward the improvement inenvironmental performance.

▲

The "Environmental Management Survey," which is a survey thathas been annually conducted by Nikkei Inc. since 1997, announces
rankings of companies excellent in their approach to environmental
management based on their answers to a questionnaire. Hulic
has ranked first in the real estate/warehouse category for four
consecutive years since the 14th Environmental Management
Survey in 2010, and this year we received our first perfect score.

400

6Environmental Awareness andEducation for Employees

Ranking First in the Real Estate/Warehouse Industry
for the Fourth Consecutive Year in an "Environmental Management Survey"❶Environmental Management Survey

Score[Total]5▲

3

Environmental
Management System

We contribute to the creation of arecycling society, promoting 3R,
Reduce, Reuse, Recycle , through alife cycle of building.

● Reporting Period: January 1, 2013. December 31, 2013

FY2013

FY2012FY2013FY2012

Base year(FY2006)

Power consumption per unit ﬂoor area (kWh/㎡)

135

138

‒3

161

Details of Effects

Gas consumption per unit ﬂoor area (㎥/㎡)

1.9

2.1

‒ 0.2

3.7

Electricity charge (Yen/㎡) ※1‒ 362

CO₂ emission (electricity + gas) per unit ﬂoor area (t-CO₂/㎡)

76.0

68.8

7.2

68.4

Gas charge (Yen/㎡) ※1

15

Water consumption per unit ﬂoor area (㎥/㎡)

0.7

0.8

‒ 0.1

1.01

Water charge (Yen/㎡)※1

53

Waste generated per unit ﬂoor area (kg/㎡)

6.8

7.2

‒ 0.4

7.5

58,70730,17628,531−

Solar power generation(Thousand yen) ※2

1,174

9

4

5

−

Contents of Effects

Solar power generation amount (kWh)No. of kinds obtaining biodiversity certiﬁcation (kinds)※ CO₂ emissions per unit floor area from electricity and gas usage increased 7% year on year due to higher CO₂ emission coefficient.
※ As the number of buildings is different from the one in "Progress of Priority Items," the CO₂ emission basic unit is different.
※ Occupancy rate is not taken into account in the calculation of basic unit per floor area.
※ The scope of waste generated per unit floor area includes only Hulic Head Office Building. The base year is FY2008.
※ For city gas, CO₂ emission coefficient of the "Manual for Calculations and Reports of GHG Emissions" issued by the
Ministry of the Environment and the Ministry of Economy, Trade and Industry is used. For electric power, an actual
emission coefficient used by a power supplier of a relevant building is used.

Cost Reduction

2

Recycling Society

Environmental Accounting Reportfor FY2013

We have introduced environmental accounting since 2011,and publicized the result in our CSR Report, in order to
conduct efficient and effective environmental conservation
activities by understanding the costs to protect theenvironment in business activities, as well as the effects ofthese activities. Hulic has established the target to reduce total
CO₂ emissions from all of its office buildings by 25% compared
to 1990 levels by the year 2020, and to that end, we haveactively implemented a number of environmental measures.
By linking this CO₂ reduction plan and our environmental
measures, we expect to achieve even more effective
investments in energy conservation. Managing figures tounderstand what kinds of effects could be obtained fromwhich investment makes it possible to effectively allocate
budgets for environmental investments in subsequent years.

Breakdown

1

Environmental Compliance

Environmental Accounting▲

Hulic Environmental Policy(comparison
with FY2012)※1 Electricity/Gas/Water charges per unit floorarea in FY2012-Electricity/Gas/Water charges
per unit floor area in FY2013※2 This is an amount reduced thanks to solar
power generation in FY2013, which is calculatedon the basis of 20 yen per 1kWh.

18

Curbing GHG Emissions/Conserving Energy

Aspiring to Resolve Environmental Issues
Road Map Toward theReduction in CO₂ Emissions▲

In 2010, we formulated the medium andlong-term plan aiming to reduce total
CO₂ emissions from all the buildings Hulic
owns 25% relative to the figure in 1990
by 2020. In terms of validity of this plan
and accuracy of the figures, we obtained
a third-party certificate from Smart
Energy Co., Ltd., a third-party review
organization, for the first time in the realestate industry.

Plan 2:▲

Plan 1:

We have actively pushed ahead
with reconstruction projects.
Being able to incorporate various
energy-saving technologies
at the stage of design, newbuildings can significantly
reduce CO₂ emissions withoverwhelmingly excellent
energy efficiency.

We have used the natural energy
system (natural ventilationand natural lighting) jointly
researched with Massachusetts
Institute of Technology (MIT)to fundamentally improve theenergy efficiency of lighting andair conditioning and reduce CO₂
emissions by curbing the energy
consumption of buildings.

▲

Road Map Toward the Reduction (as of the end of December 2013)

Total CO₂ emissions

Measures from 2019 to 2020

Comparison with 1990

Promoting reconstruction projects
with energy-saving design

2020

Minus

25

2019

%

2015

25,000㎡

2019〜

Approx.

(Net Zero Energy Building)● Task ambient lighting system● Task ambient air conditioning system

Approx.

Energy-saving renovation of
Hulic s buildings● Challenging ZEB

50,000㎡

Measures from 2016 to 2018

Total CO₂ emissions

2016

%
2015

● Improving heatinsulation capacity withhigher-performance outer coats(external insulation method)

2014

2013〜

Energy-saving renovation of
Hulic s buildings

120,000㎡● Introduction ofrechargeable battery

Promoting reconstruction projects
with energy-saving design

2012

2010〜

● Full-scale introduction of LED lighting system● Effective use of water resource with use of rainwater and water-saving devices, etc.
● Solar power generation, Wind power generation● Completion of period of joint research with MIT →Commercialization of natural ventilation and lighting● Greening of rooftop and walls● Highly efﬁcient air conditioning equipment（t）
40,000

Corporate Social Responsibility Report

Measures from 2010 to 2012

40,000㎡

Approx.

Energy-saving renovation of
Hulic s buildings

45,000㎡

Approx.

Reviews
measures

General Manager of Hulic
Building Management s Building
Management Department

Each Building Ofﬁce Manager
from the outsourced building
management company

Each Building Facilities Supervisor
from the outsourced building
management company(Person in Charge of Energy)

20,000Comparison
with 1990−25%

29,783

028,2752008

In fiscal year 2013, Hulic's buildings consumed 281,176GJ
of energy, decreasing approx. 1% from a year earlier. In
2013, we actively worked to make our buildings andoperations more efficient, including improving our building
management methods through energy conservation
promotion activities, carrying out energy conservation
renovations, and implementing our voluntary action plan on
reducing electricity usage. As a result, we assume that it led
to the reduction in total energy consumption.
CO ₂ e m i ss ion per unit f loor a r e a w as 77.3 k g - C O ₂ /㎡ , increasing approximately 13% compared with theprevious year. As the CO₂ emission coefficient increased,
the CO₂ emission per unit floor area increased despite theachievement of energy consumption reduction.

Energy Consumption and
CO₂ Emission Coefficient
KPI: 5% reduction over the ﬁve-year period from 2009 to 2013(benchmark: average value between 2005 and 2007 of 68.4)
CO₂ Emission Coefﬁcient ■Electricity consumption ■City gas usage

Energy Consumption（Unit: kg-CO₂/㎡）
80.00

2015 2020
(FY)

77.30
60.00

59.83
29,72656.14
24,410300,000● Promoting the Visualization of Energy

Hulic prepares a basic unit chart on the amount of energy usedannually per square meter at each of its company-owned leasebuildings in order to analyze and understand when, where, howmuch and for what reason energy sourced from outside eachbuilding is being used. The basic unit chart contains data for eachyear from fiscal year 2010, which makes it possible to evaluate
current conditions and carry out more evaluates the supply ofelectricity conservation efforts by measuring energy consumption
for each individual year. The basic unit chart also calculates andevaluates electricity, gas, heat (steam, hot water, cold water) andwater usage for each tenant and facility. Going forward, measures
will be considered for how to utilize this data in more energy
efficiency renovations and improved building management practices.

68.34

65.54
400,000

Measures to Enhance the Effectivenessof Energy Conservation Promotion Activities

CO₂ Emission Coefﬁcient(Unit: GJ)
500,000

26,97738,15010,000

Energy Consumption of Hulic's Buildings

Electrical/Mechanical staff

Comparison
with 1990−21%

30,000

Promoting reconstruction projects
with energy-saving design

Corporate Planning
Department supervises,
Technology and Environment
Development Department carries out
management and planning

President of Hulic Building
Management

Reporting/Discussions(total amount)

120,000㎡
35,000㎡

President of Hulic

PM《 PM management company》
outsourcing
agreement●Outline of Reduction

Approx.

Energy-saving renovation of
Hulic s buildings《 Building owner》

Instructions/Orders

Approx.

Approx.

19

Energy Conservation Promotion Facilities
Management Organizational Diagram

Reporting/Discussions

Approx.

Measures from 2013 to 20152010

Hulic has created an energy management indicator that it shares withthe property management companies in charge of its properties inorder to rigorously manage the progress of its energy conservation
efforts. This indicator has been created in order to promote more
efficient energy conservation activities at our company-owned
lease properties and it serves as a guideline for the management,
measurement, recording, maintenance, and inspections related to
the rationalization of energy usage based on building type and size.
This indicator is applied to all forms of energy, including electricity,gas, and water, used at our company-owned lease properties andthe Hulic Head Office Building. Under the supervision of the Real
Estate Planning Department, this indicator is used to manage facility
operations, measurements and recordings, and maintenanceinspections through the property management companies andbuilding maintenance companies for our company-owned leaseproperties in order to rationalize energy use.

Real Estate Planning Department

80,000㎡

2016〜

Minus

2011

We formulated a voluntary action plan to reduce power
consumption, and organized an environmental project
team in order to work on various activities. We will
tackle the further reduction of electricity consumption
by introducing natural lighting and natural ventilation
systems, LED lighting system with sensors to detect people
and day light, and photovoltaic generation system at Hulic
head office building.

Liaison/Consulting

Promoting reconstruction projects
with energy-saving design

2017

Comparison with 1990

2013

● Controlling Energy using the Hulic Energy Management Indicator

▲

2018

21

Voluntary Action Plan toward
a Reduction in Power Consumption

▲

2020

Energy Conservation Promotion
Activities for Our Leased Buildings

297,530

302,791

270,142

26,632
257,10925,611
255,565

200,000

100,000

40.00

20.00

2009

2010

2011

2012

2013 (FY)

0.00※Energy consumption and CO₂ emissions were calculated respectively basedon the Ordinance for Enforcement of Rationalization in Energy Use Act (revisedin November 2007) and the Enforcement Order of Law Concerning thePromotion of the Measures to Cope with Global Warming (revised in June 2008).

20

Curbing GHG Emissions/Conserving Energy

DBJ Green Building※ Certification

Introduction of LED Lighting

Conversion to a New Air Conditioning System

Hulic has received DBJ Green Building Certification for the Hulic
Asakusabashi Building, Hulic Head Office Building, and Sendai
First Tower after it placed particular emphasis on eco-friendly
building practices during the development planning phase. The
Hulic Asakusabashi Building, which was completed in fiscal year
2013, was the first PPP project to receive Platinum Certification,
while the Hulic head office's use of natural ventilation and natural
sunlight systems jointly developed with MIT was also recognizedwith the first Platinum Certification for a small- or medium-sizedbuilding. Meanwhile, Sendai First Tower received high praises forit use of an energy usage monitoring system tied to its BEMS andthe greening efforts in its atrium, receiving Gold Certification.

Use of LED lighting, which is brighter than incandescentlamps and fluorescents and uses less electricity, helps tosignificantly reduce power consumption and CO₂ emissions.
Furthermore, as LED lighting is long lasting, it is possible tonot only save the trouble of maintenance such as changing
bulbs, but also reduce waste and effectively use resources.
The Hulic Head Office Building, Hulic Ginza Sukiyabashi
Building, Hulic Asakusabashi Building, and Nagatacho
Hokkaido Square all exclusively use LED lighting, while thecommon areas of our other recently completed buildings
employ LED lighting as well. We are also steadily switchingover to LED lighting at our existing buildings as part ofenergy efficiency renovation work.

● Desiccant Air Conditioning System※ DBJ Green Building Certification: A system developed by the Development Bank of Japan
to comprehensively evaluate a building's environmental performance, security and disaster
preparedness, user comfort and convenience, in collaboration with stakeholders.

MLIT Residential and Building CO₂
Reduction Leading ProjectIn the CO₂ Reduction Leading Project, measures for CO₂
reduction of housing and building are strongly promoted toboost their market value. In addition, with the aim of improving
the housing and living environment, the Ministry of Land,
Infrastructure, Transport and Tourism (MLIT) invites leading
projects which can effectively reduce CO₂, and subsidizes andsupports excellent proposals. Hulic's Head Office Building andKaminarimon Building were adopted as a CO₂ Reduction Leading
Project for their use of the latest CO₂ reduction technologies.

Installation Results

Hulic has realized a significant reduction in CO₂ emissions byintroducing lighting systems with high energy-saving performancesuch as high efficiency lighting and LED lighting, as well as
illumination control devices including sensors to detect people
and daylight.
Equipment with a brightness sensor

Reﬂected light fromthe equipment withbrightness sensor
Reﬂected light fromother equipment

Outside lightreﬂecting on thesurface of desk
Outside light
Outside light reﬂecting
on the surface of ﬂoor

Desk
Floor

Detection range of thebrightness sensor● Air-cooled Heat Pump Method

The air-cooled heating pump method ensures effective
cooling by circulating refrigerants on each floor in order tomeet the detailed temperature settings of individual tenants
on each floor. This method also enables the temperature
setting and usage time to be set for each floor.

Office Buildings:● Ice Thermal Storage Method● Hulic Head Office Building

The "ice thermal storage method" uses electric power
accumulated with an ice thermal storage tank during thenight for air conditioning during the day. With this method,
economical nighttime electricity is available, and power
consumption at daytime peak hour can be reduced.

● Hulic Kaminarimon Building (hotel and retail)● Hulic Ginza Sukiyabashi Building● Hulic Asakusabashi Building (PPP project)● Nagatacho Hokkaido Square (Joint, PPP project), etc.

Residential Properties:● Hulic Residence Nishi Oi● Hulic Residence Gotokuji● Granda Gakugeidaigaku● Sunny Life Funabashi

Updating to Equipment with High Energy Efficiency

The Hulic Head Office Building uses a desiccant air
conditioning system (humidity controlled air coolingsystem), which provides a more comfortable indoor
environment compared to temperature controlled air
cooling systems, even when the temperature setting ishigh. Using a hybrid control of this air conditioning system
and natural ventilation system, we have been able toreduce our annual CO₂ emissions by about 100 tons.

● Hospitalment Musashino● Aria Yotogiuehara, etc.

Installation Results
Individual Air Conditioning● Hulic Head Office Building (Desiccant air conditioning system)● Hulic Ginza Sukiyabashi Building

Use of Systems that Make it Easier for
Tenants to Conserve Energy
The Hulic Group has begun rolling out a visualization
system that freely controls air conditioning use in orderto provide a better understanding of a building's use ofenergy. This systemenables tenants
to set the optimal
working environment
temperature for theirbusiness and makes it
easier to implement
energy conservation
measures.
Visualization system(Hulic Asakusabashi Building)

Photovoltaic Generation System
When a photovoltaic cell module is installed on therooftop of a building, the power generation status andthe amount of CO₂ reduced are indicated on a "power
generation display panel." The display panel is installed
at a place where building users can easily see topractically visualize CO₂ emissions. The Hulic Residence
Nishi Oi Building has a total of 120 photovoltaic cell
modules installed on its roof. This has resulted inannual power generation capacity of around 23,100kW
and CO₂ reductions of around 10 tons.

● Hulic Ogikubo Building, etc.
● Hulic Asakusabashi Building (PPP project)● Nagatacho Hokkaido Square (Joint PPP project), etc.

Ice Thermal Storage Method● Hulic Osaka Building

Installed Natural Ventilation System at
Nursing Home
We installed a natural ventilation system at Hospitalment
Musashino where outdoor air that flows in from eachroom's windows passes through the hallway to the topof an atrium positioned at the center of the building andthen gradually is ventilated out from the vent window inthe ceiling.

● Hulic Aoyama Building● Hulic Shinbashi Building● Hulic Kabutocho Building, etc.

Installation of Solar Heat Panels
Hospitalment Musashino features a solar water heating
system that uses solar heat panels. Hot water created using
this water heating system is supplied to the facility's main
bathing area, individual bathrooms, and the kitchen.

※ Decreasing light intensity
when there is outside lightto keep brightness
maintained appropriately

Photovoltaic equipment (Hulic Asakusabashi Building)Amount of Electricity Generated by Solar Power(designed value)● Hulic Osaka Building: Approx. 10,000kWh per year
● Ginza Fuji Building: Approx. 6,500kWh per year

Operating principle of a daylight sensor● Hulic Residence Myogadani: Approx. 5,200kWh per year
● Hulic Kyobashi Building: Approx. 4,700kWh per year
● Hulic Aoyama Building: Approx. 4,000kWh per year

Decreasing light intensity
while nobody is there.

● Hulic Court Motoyoyogi: Approx. 4,000kWh per year

Keeping brightness appropriate
when someone is there.

● Hulic Court Yukigaya: Approx. 28,900kWh per year
● Hulic Head Office Building: Approx. 9,400kWh per year
● Hulic Asakusabashi Building (PPP project): Approx. 15,890kWh per year
● Hulic Residence Nishi Oi: Approx. 23,100kWh per year
● Granda Gakugeidaigaku: Approx. 4,600kWh per year
● Sunny Life Funabashi: Approx. 16,800kWh per year

Operating principle of human-detecting sensor

21

Corporate Social Responsibility Report

Atrium (Hospitalment Musashino)

Solar heat panel (Hospitalment Musashino)● Aria Yoyogiuehara: Approx. 4,600kWh per year

22

Biodiversity / Encouraging Greening

Creating Urban Spaces in Harmony
with the Environment

Greening at Our Office Buildings

Approaches to JHEP Certification

Hulic is carrying out initiatives that increase biodiversity
in order to create urban spaces that are in harmony
with the environment. Hulic recognizes the importanceof biodiversity's impact for the living environment, andin order to contribute to biodiversity, we have createdthe Declaration of Biodiversity Conservation and madethis known to all of our organizations.

Hulic carries out efforts to conserve and restore local
vegetation as part of its reconstruction projects forcompany-owned properties from the standpoint ofsafeguarding biodiversity.
Our approach to biodiversity and many
projects have received high praise within the
JHEP certification scheme* operated by the
Ecosystem Conservation Society – Japan.

▲

Declaration of Biodiversity Conservation

Rank ofDate ofCertiﬁcation Certiﬁcation

Name of Project

Biodiversity Guideline
Strongly recognizing the rapidly vanishingbiodiversity worldwide, Hulic strives toconserve biodiversity through activities inharmony with business activities with thegoal of handing over a rich nature to
future generations.

Construction project of Granda Omori Sannou

A

Construction project of Hulic Court Yukigaya

A

October 2011

Construction project of Hulic Residence Senriyama

A

December 2011

Construction project of Hulic Residence
Tsudanuma/Hulic Garden Tsudanuma

AA

December 2011

Kyodo ProjectA

January 2012

Construction project of Hulic Residence Nagaokakyo

A

December 2012

Construction project of Hulic Residence Nishi Oi

AAFebruary 2013

Construction project of Granda Gakugeidaigaku

A

May 2013

Construction project of Aria YoyogiueharaA

June 2013

Construction project of Hospitalment Musashino

AA

August 2013

Construction project of Hulic Residensce Chofu Shibasaki

A+

March 2014

Shin Okubo ProjectA

March 2014

October 2011

※ JHEP (Japan Habitat Evaluation and Certiﬁcation Program): This is a program toevaluate and certify activities to contribute to conservation and restoration of
biodiversity, which was established and is operated by Ecosystem Conservation
Society-Japan. http://www.ecosys.or.jp/

JHEP

This project involved the reconstruction of about 5,000 ㎡ of abuilding located in the Nishikubo district of Musashino City in
Tok yo from 2012 to 2013. The landscaping for the building
features numerous native species, including quercus
myrsinifolia, zelkova serrata, styrax japonica and rhododendron
kaempferi, among others, in order to emphasize the originalnatural surroundings and changing seasons of the Musashinoarea. The site also features an open space that integrates with theadjacent Fuji Park. One corner of the site has an open area andestablished conservation zone of tall grass to promote a habitat
for but ter ﬂies, grasshoppers, and other insec ts, which hasearned it an esteemed reputation. Additionally, Japanese maple,
holly, and other trees that were there prior to the reconstruction

Central courtyard

1F layout

It is possible to achieve energy-saving effects such as
reducing air-conditioning loads and improving heatinsulation performance by blocking sunlight with roof
greening to prevent heat accumulation in concrete. As forgreening of office buildings, we take the improvement ofscenery, the condition of the location, ease of repairs, andvegetation that can withstand strong winds as our main
considerations when selecting a location.

【Initiatives at the Hulic Asakusabashi Building】
The Hulic Asakusabashi Building features planters withvaried foliage representative of the four seasons located on
the western side of the building
to create a comfortable andattractive environment. The wallon the west-facing low rise part ofthe building has been greened toprovide a sense of lushness to theWall greening
exterior and to sooth passersby.

Styrax japonica

Rhododendron kaempferi【Initiatives at Toranomon First Garden】
At Toranomon First Garden completed in August 2010,
Hulic addressed urban greening with the large scale green
wall reaching the 8th floor andplanting plants on the ground,in addition to a green roof which
tenants can use. Toranomon First
Garden won the "9th Minato Ward
Creation of Green Town Award" inGreen Wallrecognition of this activity.

【Initiatives at Nagatacho Hokkaido Square】
Nagatacho Hokkaido Square used a PPP scheme where land
owned by Hokkaido Prefecture was leased back to construct andoperate a building containing the Tokyo Office of the Hokkaido
Prefectural Government and other private sector businesses.
Wood from Hokkaido was used for parts of the building inorder to achieve the project concept of enhancing the value of
Hokkaido Prefecture. The building's rooftop greening features
mountain pine grown in Hokkaido and Hokkaido herbs inone section that can be freely harvested by tenants, providing
a place of recreation and relaxation for all building tenants.
Additionally, the wood deck on the rooftop was made fromlarch timber from forest thinning, which provides a sense of
harmony with the natural environment of Hokkaido.

Overview

project were preserved and transplanted to other parts of thesite in order to pass on the original views of the communityand help reduce the burden placed on the environment.

Sendai First Tower has greened the 499㎡ wall surface of theopen ceiling atrium space and the rooftop plaza by combining
plants in containers. The atrium space has a structure whereplanting bases made of ceramic balls are stored in 1-5 levelsof shelves installed on the indoor walls of containers. 24 kinds
of foliage plants have been randomly arranged, which areresistant to conditions in cold areas, such as cold temperature
in winter, temperature variation in summer, as well as low
brightness. In recognition ofthese greening activities, we
won the judging committee's
special prize in the category of
special wall greening in the "10thRoof, Wall, and Special Greening
Technology Contest" hosted by
the Organization for Landscapeand Urban Green Infrastructure.
Open ceiling atrium

Rooftop greening

Herbs

Mountain pine

Wood deck

Site greening

Rooftop garden

Green Wall▲AA

Hospitalment Musashino
Construction ProjectGreening on Rooftops and Premises▲

Approaches to Biodiversity

We have put emphasis on greening which can effectively
ease the heat-island phenomenon as a part of ourmeasures against global warming. Proactively planting
trees and plants on premises, we provide places where
people living in the town can relax, for example, in theshade of a tree providing comfort in the summer. Our
greening project aims to create lush green urban spaces
and harmonize with nature, while considering biodiversity.

【Initiatives at Sendai First Tower】

Covering the building exterior with plants, the wall
greening can be a countermeasure against the heat-islandeffect by utilizing the transpiration effect. In addition, as it
improves amenity, the soothing affect to people walking
on the street can be expected.

【Initiatives at the Hulic Head Office Building】
On the rooftop garden of Hulic Head Office Building, seven kindsof plants including Canarian ivy and Evergold were used to cover
the wall surface, surrounding terrace benches for approximately
20 people, as measures against the heat-island effect use atranspiration effect. With this green wall over approximately 106㎡ , the rooftop garden is a space where employees can relax andrest, and feeling the nature while working in Tokyo.

Acer palmatum
Green wall

Rooftop garden

Photos courtesy of: Ecosystem Conservation Society

23

Corporate Social Responsibility Report24

Providing Eco-friendly Products and Technologies/Reducing Waste

Working to Enhance Environmental
Technologies
Natural Ventilation and Natural Lighting System
Developed through Joint Research with the
Massachusetts Institute of Technology (MIT)Natural Ventilation System

From the standpoint of a business owner, we proactively adopt the
PC method* which can significantly reduce the amount of waste.
This method, which can shorten a construction period, and minimize
impacts on surrounding environments during a period of construction,is highly appreciated in terms of longer service life. In fiscal year 2013,
the PC method was used for Hulic Residence Nishi Oi.

Hulic Guidelines for Longer Life Service

Image ofnatural lighting

Solar elevation andorientation change
depending on times
and seasons.

Wooden blindSound absorbing chamber

Exterior

Natural ventilation air outlet＜ Calculations at the Hulic Head Office Building ＞

Office2

Corporate Social Responsibility Report

Concreteplacement
at worksite

Small truck
Commuter s car● As the number of vehicles to carry temporary materials and concrete

to be casted at worksite decreased, loads on surrounding environment
such as noise and exhaust gas during idle time was reduced.

37%
decrease

Wall-typePC method

Concrete/Mortar/Patterned tile
Cut piece of woods and plywood
Piece of reinforcing bar forbuilding base and frame

Concreteplacement
at worksite

Heat insulating materials,
Vinyl sheets, Cushioned ﬂoor

● Reduce industrial waste by 37% compared to the conventional
reinforced concrete (RC) method, in general.

3

CO₂ Reduction(Helpful for curbing global warming)

Ease ofmaintenance25%
decrease

Wall-typePC method

Materials
Construction
Renovation

Concreteplacement
at worksite

Disposal

Simulation of light reflection

Source: Taisei U-LEC Corporation

40% Reduction of CO₂ Emission● Improvement inouter coat -11％（-79t-CO₂）● Natural lighting -12％（-86t-CO2）

Planned building
Primar y energy
consumption:
1,352MJ/㎡ per year
CO₂ emission:
59kg-CO2/㎡ per year
(432t-CO2 per year)● Natural ventilation -8％（-58t-CO2）● High ef ﬁciency air
conditioning -6％（-36t-CO2）● High ef ﬁciency
lighting -4％（-29t-CO2）

LCCO₂（Life-cycle CO₂）

Amount of Resources Input■

Standard
proposal

85

New
construction■■

Standard
proposal

263.26

Longer life
building
proposalAmount of
Resources Input
Reduced by 52%

41

0

20

40

60

Repair■Renovation

■

5.7

2

4

6

8

10

12
14
(kg/㎡ per year)

100

Target for comparison

150

200

■

Renovation

■

LCCO2
Reducedby 6%

Maintenance■

Energy■■Effects

Reconstruction

Amount of Waste
Generated
Reduced by 56%

247.95

Standard proposal: The case of reconstruction twice in 40 years
Long life building proposal: The comparison of long life building which
can be renovated without the need to move tenants out

New

12.7 construction

Longer life
building
proposalRepairLonger life
building
proposal

80
100(kg/㎡ per year)

Standard
proposal■■

050(kg-CO₂/year ㎡)

Amount of Waste Generated

New
construction
Reconstruction

Reconstruction

■

0

25

Raw concrete mixer/Pumper truck
Large truck

Environmental Advantages of Longer Life Buildings（comparison over a 100-year span）※※ PAL=An assessment indicator for the energy efficiency of building plans andenvelope (exterior walls and roof, etc.)※ ERR= Shows the percentage by which primary energy consumption has
been reduced in facilities and systems

Heavy machinery/Dump truck● Reduce CO₂ derived from construction and demolition works by 25%

Anidolic louvers

CO₂ can be effectively reduced by introducing such
top-level environmental technologies. In CASBEE(Comprehensive Assessment System for Built Environment
Efficiency), BEE scored 3.3, corresponding to rank S.
● PAL ＝ 225MJ/year ㎡ … Standard value of office buildings minus 25%● ERR ※＝ 35% … The highest class in the energy-saving
performance standard of Tokyo metropolitan government● CO₂ emissions reduction ＝ 40% reduction compared to an
average office building in the Tokyo Metropolitan Government's
energy efficiency performance standards.
＝ CO₂ emissions throughout the building's entire life cycle
were reduced by 30％

21%
decrease

Wall-typePC method▲

Effects of CO₂ Reduction(Number of raw concrete mixers and pumper trucks decreased by half)● Reduce loss of concrete and use of mortar.

LongerLife
Buildings

Smoother
updating andrenovation
Controlling temperatureof air blown out when air
conditioners operating

Reduction in Construction Trafﬁc● Reduce plywood formworks for mold making.

Balancednaturalventilation
window
Automatically stopped whennatural ventilation working

Effect of the PC Method(Waste reduction with effective use of valuable resources)

High earthquake
resistance andhigh durability

Light reaches thesurface of ceilingeven if solar
elevation changes.

※ PC (Precast Concrete) method: Precast panels produced at a plant underconsistent quality control are carried in a worksite and assembled.

Reduction in Industrial Waste

1

Lightreflecting
surface on
the ceilingLighting louver unit

Cross-sectional View of Natural Ventilation
Naturalventilation

We are approaching a turning point from "the flowtype consumption in which buildings are constructed
and demolished one after another" to "the stocktype consumption in which high-quality buildings
are constructed, meticulously maintained in a timely
manner, and carefully used for a long period of time."
In this context, considering longer service life duringbuilding construction is essential, we formulated the"Hulic Guideline for Longer Service Life."
This guideline is composed of three ideas, 1) highearthquake resistance and high durability; 2) smootherupdating and renewal; and 3) ease of maintenance.
High-grade building frames are ensured so as tocontinue to be used over 100 years in safety, and on theother hand we have created the possibility to reform abuilding's exterior to be up-to-date through a flexibly
modified layout.

▲

If the load from air conditioning can be lessened by making the
maximum use of natural energy to curb energy consumption,
CO₂ emissions can be reduced significantly. To introduce a naturalventilation system, joint research with MIT was conducted, in which
the flow of air and other factors were meticulously simulated.
The natural ventilation used by the Hulic Head Office Building
enables hybrid control with the air conditioning in which themost efficient of the following three operational methods isselected automatically by the system.
● Operating with only natural ventilation● Operating the natural ventilation and the air conditioning equipment(high sensible heat-type multi-air conditioning system for buildings)● Operating the air conditioning equipment and air processors withmoisture adjustment function (desiccant air conditioning system)

Our natural lighting system uses specially shaped naturallighting anidolic louvers co-developed with MIT to capture
constantly changing sunlight on the ceiling of rooms duringchanging seasons and times (elevation and orientation)
without the use of power. Highly reflective metal panels areused for interior ceilings, which supply a consistent amountof pleasant natural light to the top of office desks. This system
was first introduced at the Hulic Head Office Building and has
been installed on the ceilings of office space located on thefifth floor and higher. We currently have a patent pending forthis natural lighting system.

Adoption of the PC Method▲＜Initiatives at the Hulic Head Office Building＞

Natural Lighting System

Longer Life Buildings

Repair■Renovation■

Demolition

As 3/4 of LCCO₂ or more is CO₂ accompanies energy consumption, the effect of
reduction in CO₂ emission thanks to extended service life is underestimated. However,
the amounts of resources injected and waste generated are reduced 50% or more.
※ Calculated with LCA tool of Architectural Institute of Japan

26

Safeguarding Customer Health and Safety/Improving Customer Satisfaction

Providing a Comprehensive Package of Business Continuity Consulting

Thorough Implementation of Earthquakeresistance Diagnosis and Seismic Reinforcement

Proactive Adoption of Earthquake-absorbing
and Earthquake-damping Structures

As Japan is one of the countries where earthquakes
most frequently occur, Hulic, a real estate business
operator, regards earthquake countermeasures as oneof the top priorities in its CSR initiatives. We believe it is
our responsibility to strive to ensure earthquake-proof
building safety, in order to enable tenants to conductsocial activities with ease.

In order to protect human life and functions of facilities from large
scale earthquakes, we have imposed high seismic capacity on
newly constructed buildings. With the aim of protecting customers'
lives and contributing to business continuity, we have proactively
adopted an earthquake-absorbing or earthquake-damping
structure which is effective at ensuring a high seismic capacity, in
addition to other methods to improve the seismic capacity.

Earthquake-resistance diagnosis,
Reinforcement Works, and Confirmation of
Validity of Structural Calculation
We diagnosed the earthquake resistance of all Hulic's
properties that were built before the new earthquake
resistance standards established ※1, and almost all buildingsthat did not meet the earthquake resistance standards
underwent seismic reinforcement. In relation to the officebuildings which were determined to require reconfirmation※ 2 although constructed after the new earthquake resistancestandards, we also rechecked their structural calculations toconfirm the validity of their structural design.
※ 1 Excludes buildings with box frame type concrete construction andbuildings that will be demolished※ 2 Includes office buildings for which appropriate structural calculations
could not be reconfirmed. For example, if the architectural firm that
implemented the structural calculation had already discontinued its business.

Tangible Countermeasures
Hulic● Seismic reinforcement of building and facilities● Measures against lifeline dependence
through use of natural, renewable energy● Countermeasures against Tsunami, etc.

By separating the building from the ground with a mechanism
called an isolator, seismic energy is absorbed to reduce theintensity of shaking to 10% 〜 50% compared to other generalearthquake-resistant structures. It is also a characteristic that
there is hardly a difference in shaking between upper floors andlower floors. Sendai First Tower, a jointly developed building
completed in Sendai where earthquakes frequently occur, is oneof the few buildings with this earthquake-absorbing structure.
This stance toward security has been highly admired.
General Building

Earthquake-absorbing Structure

Slow andparallelshaking

Shakingviolently[Deforming laminated rubber]

Earthquake-damping StructureWith earthquake-damping materials (earthquake damper) installedinside the building, internal seismic energy is absorbed to reducethe intensity of shaking from half to one thirds compared with othergeneral earthquake-resistant structures. In addition to the case ofincreasing the safety further by combining this with a earthquakeabsorbing structure, we preferentially employ the earthquakedamping structure in the case that the earthquake-absorbing
structure is physically unavailable due to constraints including land
contours. Hulic has incorporated this method in many properties.
General Building

27

Corporate Social Responsibility Report

Sompo Japan Nipponkoa Risk
Management● Preparation of risk scenarios● BCP formulation● BCP training

Analysis❷ Phase● Determine policy● Specify which disasters areapplicable● Assess impacts● Forecast damages● Identify bottlenecks● Carry out earthquake resistance diagnosis

Drafting● Formulate Basic BusinessContinuity Plan
● Propose countermeasures

Implementation● Execute measures

Operations● Carry out countermeasures❸ Phase❹ Phase❺ Phase● Carry out work

● Make revisions to countermeasures

Quality Control of Office Buildings

Customer Satisfaction Survey

Hulic's personnel responsible for buildings conducts visits ofthe property management companies which manage Hulic's
buildings once a year to inspect management conditions. Items
to be evaluated include legal compliance, inspection of building
and facilities, risk management, cleanup situation, and security.
By providing feedback to the property management company
about improvement plans, when needed, we are taking steps in allbuildings to maintain high quality.
Additionally, we strive to carry out maintenance and preventive
measures as well as systematically repair and make improvements
to facilities, and in order to respond to complaints from customers,such as a temporary breakdown in equipment, personnel from therelevant property management company and Hulic's engineers
with expertise would quickly head to the customer's site. Throughour early response capabilities, we support the comfortable life ofcustomers. In terms of safety, our persons in charge of each building
travel to these buildings each year to take part in disaster training
and disaster preparedness training, in order to ensure visitors areable to use the building with added peace of mind.
In relation to ongoing reconstruction projects, we are working on
enhanced design standards and rules in order to ensure superior
quality in terms of the environment, longer service life, disaster
response, and design. A check sheet or regular discussions
are used to check the progress, which enables us to better
management quality, including designs, structures, and facilities.

We conduct a customer satisfaction survey once a year
to ensure tenants of Hulic's office buildings (corporate
tenants) are able to utilize the buildings comfortably.
Survey items include matters concerning building
hardware and software, and customer views on theireveryday life. We check the responses of customers andthen take steps to identify latent customer needs andmake improvements.
As a result of the survey in fiscal year 2013, some 95%
of corporate tenants or more were satisfied overall. Thishas helped us earn a highly positive reputation for ourquick response to troubles and facility reinforcement forresolving issues, such as eliminating odors, as well as our
systematic approach to facilities
Moderately
improvement (upgrading of
Othersatisﬁed
air-conditioning and parking
5.0％
49.6％
facilities), which leads to evengreater overall satisfaction forthe building.
Furthermore, responsible staff
Results
explained individually about orof Survey inresponded to matters requested
FY2013by customers in relation to thesurvey items.

Shakingviolently

Providing Comfortable Office Spaces

Building with Earthquake-damping StructureLightshaking

Satisﬁed
45.4％

V O I C E

Measures against Water Damage
When electric facilities, etc. are damaged by flood in abasement, the supply of power which is essential forthe use of buildings may stop. We investigate the statusof buildings with power receiving and transforming
facilities and private power generators installed in thebasement, and implement necessary flood control
measures, in preparation for unexpected tsunamis.

Intangible Countermeasures

Preparation❶ Phase

Earthquake-absorbing Structures

Liquefaction Countermeasures
After the Great East Japan Earthquake, extensive
regions including coastal areas suffered from theoccurrence of liquefaction phenomena which caused
leaning and sinking of buildings. According to theliquefaction map, it was found that 11 buildings owned
by Hulic are located on the ground with a possibilityof liquefaction. When designing those buildings, we
carefully checked the possibility of liquefaction, andimplemented endurance tests as needed. As they
were also constructed on a pile foundation resistant toliquefaction, it can be considered that Hulic's buildings
would not be influenced by liquefaction.

Hulic and Sompo Japan Nipponkoa Risk Management Inc. have concluded a business tieup agreement to develop and commercialize a service for jointly supporting the business
continuity planning of companies that own office buildings and other business facilities andfor providing consultations regarding building and facility earthquake resistance measures.
This service will be provided in a comprehensives package of business continuity consulting
solutions. This arrangement fully leverages the strengths of both Hulic and Sompo Japan
Nipponkoa Risk Management to provide business continuity planning support to customers
that must maintain a high degree of business continuity.

Service Implementation Steps▲

Aiming for Value Creation Filled with
Peace of Mind and Trust

Jun Ikeda
Deputy General Manager,
Building Management
Department, Hulic Building
Management Co., Ltd.

Hulic is carrying out a number of tangible measures inorder to improve customer satisfaction.
Specifically, we carry out preventative maintenance to ensure
customers never have to be inconvenienced by problems
with building facilities or other aspects of the property.
We regularly visit buildings to visually check thecondition of equipment and exterior appearance anddevelop improvement work plans based on the resultsof various inspections and interviews with the property

management company. This helps us to prevent issues
before they happen.
By systematically replacing air conditioning andlighting based on their service life, we are able toenhance comfort as well as achieve greater energy
efficiency through improved performance realized
from new equipment.
Going forward, I am committed to providing the most
comfortable office space possible to our customers.

28

Worker Diversity and Equal Opportunities/ Non-discrimination

Hulic’s Approach to Diversity, Equal
Opportunities and Non-discrimination
We aim to create an environment in which employees with a variety of backgrounds, such as first-class architects, real-estateappraisers, engineers, lawyers, certified public accountants, and tax accountants, can work lively. It is considered possible todifferentiate us from competitors because we proactively take advantage of diversity in our business, which leads us to thesustainable growth of the Company.

Employment of Diverse Human Resources

Enhancement of the Training Systems

Participating in the joint declaration on the charter ofcorporate ethics concerning employment made by
KEIDANREN (Japan Business Federation), we have proactively
employed new graduates in accordance with the purposeof the charter. When hiring new graduates, we make efforts
for widely ensuring diverse human resources based on theirability, regardless of backgrounds and gender.
The rate of female managers has increased, as a resultof active efforts for adopting female employees withthe enhanced system to support the development of
the next-generation. One of our goals under the newlong-term plan Hulic a Decade Later (2014 to 2023) is tobecome a company where female employees can thrive
professionally and have females account for 20% of ourmanagerial positions by the year 2020.
Going forward, in addition to our previous efforts, we will
also focus on hiring more professionals, such as first-classarchitects, real-estate appraisers, lawyers, certified public
accountants, and tax accountants.

As it is important to focus on human resource development
aiming to be a professional team with a selected few, as well
as strengthening of each employee's ability in order to takeadvantage of diversity, Hulic has put in place training systems.
In Hulic, employees with various specialties are active, such as
first-class architects, real-estate appraisers, engineers, lawyers,certified public accountants, and tax accountants. We put
emphasis on acquisition of qualifications which support suchspecialties, and subsidize their costs. Aiming to obtain multiple
qualifications by 30 years of age, young employees formulatea plan to obtain qualifications under instruction of their boss.
In addition, we offer a variety of menus, such as dispatchingthem to graduate schools, English conversation classes in theearly morning, and encouraging of reading, etc. in order to help
employees enlighten themselves.
New comer -(up to around 30 years old)Mid-career -(up to around 40 years old)

Employment of the Disabled

Reemployment System for Seniors

The Hulic Suginami Office marked its 6th anniversary, and as ofJune 2013 its employment rate of persons with disabilities was
6.9%. Currently, 6 employees with disabilities, instructors withexperience of coaching, and a chief administrator are working
at the Hulic Suginami Office, where they carry out operations
such as the dispatch of direct mail for Hulic Group companies. A
monthly meeting with the Human Resources Department is held
to ensure operations integrated with the head office are being
put into practice. In recognition of our activities to play a leadingrole in employing persons with disabilities and proactively
develop their abilities, in September 2010 Hulic was certified
as an excellent corporation in employment of the disabled inTokyo. Additionally, in 2013 we wererecognized as an excellent corporation in
the employment of the disabled for the
FY2013 Tokyo district (Chairman's Prize) by
the Japan Organization for Employment of
the Elderly, Persons with Disabilities and Job
Seekers (JEED), administered by the Ministry
Logo of excellent
of Health, Labour and Welfare. We will makecorporation inefforts for improving the workplace where
employment of thepeople with disabilities can feel something
disabled in Tokyo
worth living through their work.

We have introduced a reemployment system for seniors inaccordance with the revised Act on Stabilization of Employment
of Elderly Persons. Under this system we rehire any employeethat has reached the mandatory retirement age but who wishes
to continue working until the age of 65.
In 2010, we made changes to our reemployment system tomake the working environment more comfortable for seniors.
For example, systems of staggered commuting and a half-day
leave were introduced for rehired employees. Full-time rehired
employees can use the leave and absence systems almost equal
to the ones for active employees. We expect various knowledge
and expertise to be inherited through communication beyond
generations between employees with abundant knowledge andexperience and younger employees.

Veteran/Manager -(50 years old or older)

System to support acquisition of qualiﬁcations

Enhancement of Systems to Develop
Women's Careers

29

Corporate Social Responsibility Report

System to encourage
early acquisition

Dispatch to graduate school

Job Return System

Dispatch to outsidecompany

Hulic has instituted a job return system that allows employees wholeft the company due to marriage, giving birth, childcare, caring fora family member, or other unavoidable reason, to return to theirsame job within a five year period with the same compensation
and benefits as before. The purpose of this system is to support abalance between work and childcare as advocated in the Act on
Advancement of Measures to Support Raising the Next Generationand to secure human resources that have wide ranging experienceand a depth of professional knowledge.

● Obtaining multiple

qualiﬁcations by 30 years old● Well-planned setting of target

Overseas visit program
Study abroad program
Human resource development program

Project review, Project by theme, etc. (incorporated in works)

Period of educational
assignment
New comer
training

My Experience as a Member of the Women's Career Promotion Project TeamTop seminar ‒Get-together for President and young employees (monthly in principle)

English conversation class（held by the Company at meeting rooms in the Company)

Self-development seminar

Trends in Average Training Cost per Person (Non-consolidated)
FY

2010

Total Amount 134,075 yen

Hulic is run by a small workforce, which enables a close distance
between employees, as well as between top management andforemen.
The company-wide trends are communicated to all employees
through "Message from President" every month. As it is possible
to know what other departments are doing through themessage, the horizontal communication beyond the borders of
departments can be made.
In order to promote vertical communication, employees share
their opinions directly with the President through the "President
Questionnaire" conducted twice a year, in consideration of
the interactive communication with the President. Employees
write down their views and opinions on the prescribed formand submit it to a post box, and then the President responds
to each in writing. Examples of changes made based on these
employee opinions include improvements to our benefits
system (subsidies for single employees to use the company
dormitory and next generation nurturing support system),
digitization of internal documents, greater information sharing,
improvements in operating methods of the head officebuilding, implementation of social contribution activities,
and enhancement of the self-improvement support system.
Additionally, an environment has been established at the head
office cafeteria that enables wide ranging interaction between
executives and employees as a means to promoting open
communication that transcends management and departments.

V O I C E

Assigned
to 2
Enhancement departmentsof fundamental in 4 years,
ability ofin principle
ﬁnance andaccounting▲

Hulic's basic approach is for the work of each employee to bealigned with their abilities, aptitude, and personality. For thisreason it is imperative to provide opportunities and assignments,
irrespective of gender, and in particular we are strengthening
initiatives for women's career development. With the aim ofenhancing the environment in which women can comfortably
work, the women's career promotion project team was established
as an organization to make proposals, conduct researches, andpromote planning from women's viewpoint. The project teamdiscuss in line with each theme once in two months.
Project members are chosen at random, regardless of if they
belong to the real estate business division or the planning andadministration division. Project members are swapped in and out
as part of a rotation system, presenting them with opportunities tothink about the development of their respective careers. In fiscal
year 2013, we held lunch meetings for female employees centeredon members of the women's career promotion project team
where views were exchanged on the theme of developing female
managers. Additionally, in order to hold discussions on balancing
childcare with one's professional life, we organized a meetingwith female employees that had taken childcare leave. Based on
views shared during this meeting, we started an initiative to secure
a communication channel with the company to ensure that thetransition back to work is easier for employees on childcare leave,
by giving them an opportunity to learn about what is new at theirworkplace during their leave and right before they return to work.

The Company bears costs for registration and renewal (of ﬁrst-class architecture, real-estateappraiser, etc.), and in principle, bears costs for external seminars on the premise of passing an exam.

Promoting Communication between
Various Employees

2011
213,690 yen

2012

2013

227,108 yen 217,788 yen

Ayano Tsukada
Finance
Department,
Hulic Co., Ltd.

The goal of the women's career promotion project
team is to create a workplace environment wherefemale employees can maximize their skills andtalent, based on the themes of female manager
development and work-life balance. Every two or
three months we meet to discuss issues and whennecessary work closely with related departments tocreate or modify company systems. Occasionally,
we will meet with other female employees
outside the project team to hear their views andreflect these in our activities. As Japan's working
population declines due to its decreasing birthrate
and aging society, Hulic has been stepping up its
hiring of female employees, and I feel that offering
an environment where we get the most out of
our employees is essential to raising productivity
as well. Going forward, I hope to contribute to abetter workplace environment by focusing our
discussions on the perspective of diversity-focusedmanagement as well.

30

Work-life Balance

Our Approach to Work-life Balance▲

Relation between Age of Child and the System to Support Employees to the Next Generation

The falling birth rate and aging population, and women's social
advancement are important issues for Japan's economy. In relation
to the support for development of the next generation, Hulic
aims at a higher level than the legal standard and has establishedvarious systems. Additionally, we have established an action plan
to encourage more male employees to take childcare leave andbecome a company where male employees, too, can achieve awork-life balance and take part in childcare. Under this action
plan we are providing additional economic support to employeesthat take childcare leave. In recognition of our efforts, Hulic hasreceived certification as a“first-grade business owner conforming
to the standard”based on the Act on Advancement of Measures to
Support the Next Generation by the Tokyo Labor Bureau for four
consecutive years. This recognition also earned us the right to use
the“Kurumin”next-generation accreditationlogo. By creating an environment that is easy for
all employees to work in and where employees
can balance work and childcare, so that all
employees can fully display their abilities, wehave drawn up action plans as follows.

In order to boost the rate of leave taken by employees andbe further conscious about their health, we have conducteda campaign to improve the rate of leave taken. The purposesof the campaign include making all employees take a threeday vacation once a year and making all employees takea one-week vacation once a year. Individual departments
discuss plans to take vacations in consideration of theplanned use of leave. In FY2013, while the rate of paid
leave taken was 71.0% and the average of discretionary
and overtime work hours per person was 34.7 hours. Four
employees worked over 45 overtime hours on averageover three months. This was caused by organizational
restructuring and other factors. We will strive to allow
employees to take more paid leave and reduce overtime
working hours through guidance and advice provided by the
Risk Management Committee and the Health Committee.

Preparations to Open an Onsite Daycare
We are currently moving forward with preparations
to open the Odenma Fureai Daycare inside the Hulic
Head Office Building sometime around October 2014.
By opening this daycare at our head office, we will beable to provide an environment for employees to raisechildren and work productively. The daycare will also be
open to children in the local
community, which will help
to alleviate the problem ofchildren having to be waitlisted for daycare.
(Image)31

Corporate Social Responsibility Report

Childcare
time

Leave after childbirth

Rules of employment

1 yearold

8 weeks after

2 yearsold

4 yearsold

5 years after
retirement

After entering
an elementary school

At end of third year atelementary school

Rules on support for development of the next generation

Special childcare
leave (one month)Childcare leave
Reduced working hours

Rules on support
for developmentof the next
generation

Restraint of overtime work
Use of Job-return system

Special payment for childbirthFirst child: 100,000 yen
Second child: 200,000 yen
Third child and thereafter:
1,000,000 yen

Rules of employment
Leave for childbirthof spouse (paid)

Subsidy system for charge of childcare center (until entering elementary school)
Babysitter promotion programChild vacation (10 days)
Rules on support for development of the next generation
Special childcare leave (one month)Childcare leave
Reduced working hours
Restraint of overtime work

The rate of paid leave taken ※1

80
68.2

70.8
64.7

71.5
34.1

60

71.0

40

34.7

30

40

20

20
8.7
0

2009

11.9

2010

14.2

2011

10

2012

2013

0
(FY)

The Average of Discretionary andOvertime Work Hours per Person (h)The average of discretionary and overtime work hours per person ※2

The Rate of Paid Leave Taken (%)

すい環境を作ることによって、すべての従業員がその能力を十分に発● Period: January 1, 2014 to December 31, 2016
揮できるようにするため、次のように行動計画を策定しています。
● Details● 計画期間／平成 26 年 1 月 1 日～平成 28 年 12 月 31 日
Goal 1. Encourage more than one eligible male
● 内容
employee to take childcare leave and ensure at least
70% of eligible female employees take childcare leave[Measures] Starting January 2014 educate employees
about the childcare leave system and opportunities
Goal 2. Further expand assistance for balancing
childcare with work
[Measures] Starting January 2014 begin preparations
on the opening of onsite daycares at Hulic offices

Child vacation

6 weeks after※1 Calculated with limit of 20 days excluding leave carried forward※2 Excluding Hulic Insurance Service Co., Ltd. in and after 2010

Implementation of No Overtime Day
Every Wednesday has been set aside as No Overtime
Day, with the aim of preventing health issues arisingfrom excessive work. Each Wednesday we use
our intranet system to remind employees about
leaving work on time. The status of implementation
is inspected and grasped every month. In FY2013,
the rate of implementation increased 11% year
on year to 59% on average. Going forward, we
will also review the way of working, for example,
by making operations well-modulated and more
efficient, to increase the implementation rate of No
Overtime Day. We will also issue more proactive
reminders to employees of departments with a low
implementation rate.

Personnel Performance Data

※ Data of Hulic Co., Ltd. Only (except Number of employees (consolidated))※ Excluding transfer between the Group companies▲

General Business Owner Action Plan underthe Act on Advancement of Measures to
Support the Next Generation
従業員が仕事と子育てを両立させることができ、従業員全員が働きやOutpatient
leave

MotherPlanned Use of Leaves and Restraint of
Overtime Work

Pregnancy 6 weeks before Childbirth

Leave before
childbirthParents

Efforts to Support Employees Foster
the Next Generation

Age of child

FatherHulic is aiming to be a professional team consisting of a selected few who sincerely work on all issues with a senseof ownership. In order to attract excellent employees and provide them the environment in which they can make thebest use of their abilities, efforts to strike a work-life balance are essential.

Item
Number of employees (non-consolidated)

Unit

FY2009FY2010FY2011FY2012FY2013

Men

Person

172

83

77

96

90

Women

Person

76

31

29

33

35

Total

Person

248

114

106

129

125

Number of employees (consolidated)
Annual salary in average

327

298

375

429

461

725

908

1,023

1,086

1,120

Person

6

1

1

1

2

Men

Person

68

38

37

56

53

Women

Person

4

3

4

5

4

％

2.03

5.26

5.66

5.30

6.92

Number of employees who left their job
Number of employees in managerial position(excluding executive ofﬁcers)

PersonTen thousand yen

Employment rate of the disabled

Person

3

1

1

1

1

Men

Person

2

0

1

1

0

Women

Person

3

1

1

1

2

％

100

100

100

100

100

Number of employees who took day off for family care

Person

0

0

0

2

2

Number of employees who took family care leave

Person

0

0

0

0

0

Number of employees who took day off for nursing care (absorbed previous nursing care leave)

Person

-

20

17

15

17

Number of employees who took leave to take part in volunteer activities

Person

24

22

39

3

21

Number of employees who took childbirth leave
Number of employees who took childcare leave

Number of employees who returned to work after childcare leave

V O I C E

Using the Next Generation Nurturing Support System

Yuji Harada
Associate DirectorGeneral, Appraisal
Department,
Hulic Co., Ltd.

When my two year old son was six months old
I began using our subsidy system for daycare. I
have found that raising a child requires a lot ofmoney and the monthly 30,000 yen stipend has
been been a very big help. Also, I have taken
advantage of our child leave system to take myson to the hospital instead of my wife. In thismanner, Hulic's clear support for supportingchildcare is very encouraging and it has made me

think about how I can give back to the company
by working even harder.
The next generation nurturing support system
assists not only economically, but also helps toalleviate mental burdens, too. I hope that others
raising children at Hulic will take advantageof this system to achieve a diverse work-lifebalance, which in turn will contribute to ways toprevent Japan's declining population.

32

Initiatives in the Local Community

Social Contribution Activities
Policy for Social Contribution Activities has
been established as a basic policy of Hulic's
social contribution activities.
The policy expresses our determination to
devote ourselves to resolving difficult social
problems, such as the global environmental
issues and the falling birth rate and aging
population, through individual activities inhope of leading to a sustained developmentof the entire society.

Social Contribution as a Company
Held the 1st Hulic Student Design
Competition called Tokyo Complex 2020
As a real estate company, this contest was held to provide
an opportunity for students to propose urban planningand architectural ideas. The 1st Hulic Student Design
Competition received innovative new ideas from various
fields on the theme of mixed use buildings planned for
downtown Tokyo in 2020. A total of 182 submissions
were received and during the secondary screening session
held in September 2013 students made passionate
presentations of their ideas and answered questions fromthe contest judges. In the end, the idea called“Urban
Planter”presented by a graduate school student from the
Kyoto Institute of Technology was selected as the winner.

Supporting Employees to Conduct Social
Contribution Activities

Policy for Social Contribution Activities

Matching Gift Program

Social Contribution as a Company

Launching the matching gift program in June 2008, Hulic
established the "Hulic Fureai Fund," which deducts 100 yen
every month from the salary of employees who want to takepart in the program (300 yen for directors), and donates thecollected money to organizations selected by majority vote of
all employees. Hulic, Hulic Insurance Service, Hulic Building
Management, and Hulic Proserve have worked together on thisactivity. We will continue the donation activities, as providing
opportunities of social contribution to employees who cannot
make the first step despite being interested in it.

As a good corporate citizen, Hulic proactively and widely pushes
ahead with social contribution activities inside and outsidebusiness fields. We contribute to the sustained development of
the entire society through each activity.

Support for Employee's Social Contribution Activities
Hulic proactively supports each employee to conduct social
contribution activities.

Hulic Odenma Summer Festival
In October 2012, Hulic moved its head office to Nihonbashi
Odenma-cho. On July 25, 2013, we held the "Hulic Odenma
Summer Festival" at the Hulic Head Office Building, partly
in order to greet people in the community. Various peoplecame to the festival, including local children and workers
in the neighboring area, thanks to the cooperation of thecommunity associations of Odenma-cho and Ninobecho. We hope to be able to deepen ties among people inthe communities through such activities. In addition, we
donated proceeds of 103,900 yen from sales at the festival
to a volunteer organization, in addition to the money
collected through the fifth matching gift program.

As of September 30, 2013, employees had donated a total of
543,124 yen over the previous one-year period. This amount
was combined with a donation from the Company and theproceeds from the Hulic Odenmacho Summer Festival held in
July 2013, bringing the total donation presented to Florence
to one million yen. Florence is an NPO that is working toaddress issues related to childcare for sick children, assist
single parent households and help resolve other childcare
issues facing society. Employees reached a consensus topresent Florence with adonation because of theirhope to make it easierfor people to balancechildcare and work andthe growing emphasis on
helping to develop the nextgeneration.

Community Cleanup Activities

Held Charity Valentine Event

Donation to Ashinaga Scholarship Society
Hulic Group decided to start from June 2011, and continue
for four years to monthly donate to Ashinaga Scholarship
Society 500,000 yen, and a specific amount from directors
and employees who want to join the program, in hopeof providing continuous support to living and learning
children who will play an important role in the future.
Since then, 22,305,500 yen in total has been donatedby the Company and individuals until December 2013.
In order to keep donators interested in it after donation,"Ashinaga Family Tsushin" sent by the Society is posted on
the Company's intranet.

33

Corporate Social Responsibility Report

In February 2014, we partnered with two other major
companies to host a charity Valentine event organized by
the NPO Refugees International Japan (RIJ) that was held at
The Gate Hotel Kaminarimon by Hulic, which is operated
by Hulic Hotel Management. Donations totaling 308,000
yen received at this sociable event were presented to RIJ
for use in its refugee assistance activities.

We have participated in Garbage Zero Emission Day, organized by
Chuo Ward and held every May 30 since fiscal year 2011. Startingin fiscal year 2013, Hulic, Hulic Building Management and Hulic
Proserve have teamed up to take part in Machikado Cleanup Day,
held on the 10th of every month and also organized by Chuo
Ward, on occasion of the head office's relocation to Nihonbashi
Odenma-cho, and a monthly rotation was set up where 10 to 15
employees were selected to participate. This enabled nearly every
employee to take part in these volunteer activities at least oncea year. These activities have gained a strong foothold as a newplace for communication with the local community and other
employees while beautifying the surrounding neighborhood.

Paid Leave for Employees Involved in
Volunteer Activities
The Hulic Group has established paid leave for employees
involved in volunteer activities in order to support and nurture
their efforts to give back to the community and help tofoster an attitude of wanting to address issues facing society.
Employees are eligible to take up to 20 consecutive days of paid
leave (considered a special leave of absence) to take part inphilanthropic activities that give back to society. To encourage
employees to use these leave, we provide not only information
on social contribution activities, but also increase interest by
sharing the volunteer experiences of employees with the entire
company through our in-house intranet system.

V O I C E

My Participation in Satoyama
Conservation Activities
I used the company's paid leavefor volunteer activities to takepart in a satoyama conservation
project. During the project, people
from NPOs instructed participants
Mariko Murata
on how to cut and harvest rice
Asset Solutions
plants and after that we learned
Department,
about the history and nature of
Hulic Co, Ltd.
the local area. A satoyama is anarea surrounded by rich nature and home to myriad
fauna and flora species. Having the chance to experiencesuch an area has made me want to protect it even more.
I hope to use this unique experience in my work byfocusing on ways we can be considerate of biodiversity.

PET Bottle Cap Collection Campaign
Based on feedback from our CSR supporters, we decided toinitiate a campaign to collect the bottle caps of PET bottle
beverages consumed at the Hulic Group. The goal of thiscampaign is to contribute to society by collecting and recycling
bottle caps normally disposed of as garbage, which reduces CO₂
emissions from the garbage incineration process. In fiscal year
2013, we collected a total of 80kg (about 30,600) of PET bottle
caps. In turn, these caps were sold through the NPO Bottle Cap
Coin Bank Promotion Network and the proceeds donated to theJapan Committee Vaccines for the World's Children where they
are used to fund projects for delivering vaccines and healthcare
supplies to children fighting illness around the world.

34

Corporate GovernanceConcept of Corporate Governance
Hulic Group recognizes that it is an important business issue to build a corporate governance system with fully
functioning "risk management," "compliance," and "internal control." We intend to sincerely execute business, fulfilling
accountability to stakeholders, such as shareholders, customers, business partners, local communities, and employees.

Management Decision-making

Policy for Determining Compensation
and Calculation Method

The Board of Directors meets once a month in principle,
and holds extraordinary meetings as needed. Comprisedof nine directors (as of June 2014), the Board of Directors
resolves important matters concerning Hulic's businessactivities, including CSR and comprehensively supervises
the execution of duties by directors and executive
officers. In March 2012, Hulic appointed its first female
outside director, and since then we have been promoting
multifaceted business management based on diversity.
As an advisory organization of the President, themanagement conference is held once a week in principle,
which deliberates especially important matters related tobusiness execution.

Per the approval given at its general shareholders’meeting, Hulic has set a compensation limit of 4.5 million
yen for directors per business year and 1 million yen forcorporate auditors. Director compensation consists of a
fixed component determined based on the importanceof their duties and a variable component that fluctuates
based on their contribution to the company's performancefor the applicable business year.

Director Compensation for the Fiscal Year Ended
December 2013
● 6 Directors (excluding Outside Directors): 254 million yen(base pay of 194 million yen and bonus of 59 million yen)
● 7 Outside Directors: 100 million yen (base pay of 90 million
yen and bonus of 10 million yen)Management Advisory Committee▲

Corporate Governance System Chart（As of June 2014）

Generalmeeting ofshareholders

Accounting auditor

Board ofDirectors

CSR Committee

President

Recommendation•Advice
Management Advisory Committee

35

Corporate Social Responsibility ReportManagement Conference

Scope of internal control
Internal control functions of head ofﬁce
and afﬁliated companies

Audit

Previously, the CSR Task Team was in charge of promoting
CSR activities at workplaces including improving theinternal environment and social action programs. In 2009,
however, with an eye to raising all employees' awarenessof promoting CSR activities, CSR Supporters started to
conduct them in place of CSR Task Team. One person is
appointed as a CSR supporter from a unit composed ofabout ten people, and is relieved by another member ofthe unit after completing one-year term of office. Since
2011, CSR supporters have been appointed also from Hulic
Group companies, and made efforts for establishing CSR
activities in all employees of Hulic Group.
In the environmental field, an environmental project teamconsisting mainly of members of Real Estate Division
discusses environmental measures.

Summary of CSR Committee Meeting

Compliance

Compliance Committee
Risk Management Committee

Risk management
Internal
Control

Disclosure control

Fund ALM Committee
Operations management

Basic rules, etc.

Business Management
Internal control related
to ﬁnancial reporting

Business processcontrol documents

Disclosure working group

Real estatebusiness
division
Planning andadministration
division

CSR Promotion Systems▲

Pursuant to basic rules of risk management, we manage
various risks related to Hulic Group's businesses. In the
Risk Management Committee held once in three months,
a variety of risks are identified, for example, risks peculiar
to real estate business such as soil contamination andasbestos, IT risks including information leaks, and risks inaffiliated companies, in order to enable the president andrelevant departments to understand risks to formulate
and implement countermeasures. The Committee alsocollects and analyzes monitoring indices every month.
Through this PDCA cycle, we carry out risk management on
a continuous basis to stabilize our business. Internal audits
are carried out on all departments and operations in orderto verify the reasonableness and appropriateness of risk
management practices.

We have adopted the corporate auditor system. All four auditors
including the full-time auditor (as of June 2014) are external
auditors stipulated in the Companies Act and the Ordinancefor Enforcement of the Companies Act. In accordance with theaudit basic policy and the audit basic plan formulated by the
Board of Auditors, the audit director executes the duties throughattendance at the Board of Directors meetings, full-time auditor's
attendance at the management conference, hearing about statusof execution of duties, and browsing important documents.

Audit Department

Hulic has established a CSR Committee in order to combine andalign its CSR related initiatives with its business activities.
It is essential for management personnel to be involved inboosting the level of CSR initiatives in the medium- and longterm while striking a balance between CSR-related measures andbusiness activities. Therefore, the CSR Committee is chaired by
the President, consists of Senior Executive Managing Officers, theChief of Human Resources and General Affairs Department, theChief of Real Estate Planning Department, the Chief of Property
Development Department, and the Chief of Corporate Planning
Department. The Committee is held annually in principle, andas needed. Company-wide CSR activities are performed inaccordance with the basic policy decided by the CSR Committee.
To be more specific, the Committee formulates various kinds ofpolicies concerning Company-wide CSR activities and an annual
CSR schedule, sets concrete numerical targets, and considers
and deliberates diverse proposals made by employees, etc. Like
this, in the Committee as a place to practically implement CSR
management, there are a lot of active discussions.
Activities of the CSR Committee are reported to Board of Directors
on a regular basis.

Fiscal year 2012 performance / CSR plan for 2013 / Areas of improvement

Risk Management

Supervision and Audit of Management

Board of Auditors

Activities of CSR Supporters● 7th Meeting (September 2013)

The Management Advisory Committee comprises fivemembers (as of June 2014) selected from legal professionals,
public accountants, academics, and business professionals.
The Management Advisory Committee provides advice andrecommendations to the Board of Directors on all aspects ofmanagement, including matters discussed by the Board of
Directors, in order to ensure the independence of the company
and the interests of stakeholder are not damaged.

Corporate Governance

Establishment of the CSR Committee

Board of Directors
Report to Board of Directors

Proposal on measures
to improve KPI-related
status reports

Making a decision on
allocation of resources(personnel, materials, money)
after receiving a report

CSR Committee
Chairperson: President Committee members: Senior Executive
Managing Ofﬁcers, Chief of Human Resources and General Affairs
Department, Chief of Real Estate Planning Department, Chief of Property
Development Department, and Chief of Corporate Planning Department.

CSR Supporter
Environment Team
＜Priority Items/KPI＞● Measures against global warming● Conservation of resources and reductionof wastes at existing buildings● Reduction of wastes in new construction
and reconstruction works● Earthquake countermeasures for Hulic s buildings● Extending life-span of Hulic s buildings● Using renewable energy and developing
new technologies● Greening buildings to prevent warmingInternal Environmental Improvement TeamSocial Contribution Team

＜Priority Items/KPI＞● Promoting use of supportive systems
to raise children while working● Work-life balance● Promoting employment of the disabled● Preventing crushing labor● Survey on customers satisfaction● Mental health● Activating the reemployment program● Reduction in power and paper
consumption in ofﬁce＜Priority Items/KPI＞● Matching gifts● Volunteer activities● Collection of stamps and meterstamps, etc.
● Taking into account communities
in real estate development

Environmental Project Team● Matching Gift Council

All Employees Participating

Information disclosure

Afﬁliatedcompanies

Communication

Stakeholders
Shareholders

Employees

Customers

Business Partners

Government andPublic Administration

Local communities

Global environment

36

Corporate GovernanceCompliance
Compliance Promotion and
Implementation

Board of Directors & Audit Committee Members of Supervisory Board (as of June 2014)
Compliance Seminar❶ Respect for Human Rights and Prohibition ofDiscrimination and Sexual Harassment

Themes are regularly decided on and implemented by
Hulic, and all employees are provided with complianceseminars. So far, seminars on how to handle anti-social
forces, power harassment, and insider trading regulations
have been conducted.
In addition to these overall themes, in considerationof compliance peculiar to the real estate business, we
conduct a "seminars by theme" concerning important
themes, and place news and Q&A related to compliance on
the Company's intranet once a month.
In addition, we hold discussions within departments on
CSR related themes as needed.
We compile comments on compliance seminars asfeedback, and use them for subsequent seminars.

Compliance Seminars in FY2013▲

In accordance with the compliance rules, we have built
the company-wide system composed of the Boardof Directors at the top, the Compliance Committee,
executive managing directors in charge of legal affairs andcompliance, and compliance officers of each department.
The status of activities following the compliance programis regularly reported to the Board of Directors throughthe Compliance Committee. The "Compliance Manual" isshared across the entire Hulic Group, which familiarizes
employees with matters to be adhered to in day-today operations. The Compliance Manual requires that
employees immediately report compliance issues or
possible issues to the Compliance Office, who will theninvestigate the matter as necessary, identify the cause
and implement the necessary measures to prevent futurereoccurrences.

● Frequency: 4 seminars implemented, transmission of

information 12 times● No. of participants: All employees (including
temporary staff)● President and Chief Executive Officer /Saburo Nishiura❷ Compliance with Laws and Rules❸ Carry Out Duties in an Honest and Fair Manner❹ Proper Handling of Information❺ Insider Trading Regulations❻ Avoid Relationships with Anti-Social Forces❼ Consideration toward
Environmental Conservation❽ Maintain and Encourage
the Best Communication Possible❾ Respect Intellectual
Property Rights❿ Business Entertainment/
Gift Giving andProhibition of Bribery

Compliance through Outsourcing Contractors
As for outsourcing by the real estate business division,
we have made fair trades based on "rules for real estateoutsourcing management," respecting relevant laws
and regulations, as well as instructions by administrative
organizations.
When selecting an outsourcing contractor, we carefully checktheir past performance and abilities to execute operations,the clarity of appropriate procedures in their businessexecution system, the appropriateness of the operation
management system, and other necessary matters.
After selecting an outsourcing contractor through thisconfirmation, the Legal & Compliance Department checks
the relationship for anti-social forces.

Compliance Manual

Information Security Management
Compliance Hotline
When it is expected not to take appropriate corrective
actions after consulting with a compliance officer of thedepartment the person belongs to, or when the person
feels resistance in consulting because of the nature of
the problem, direct reporting to Compliance Hotline isavailable. The Compliance Hotline investigates the fact,
and promptly carries out countermeasures, carefully taking
into account the informer's privacy.
● Internal Contact: Chief of Legal & ComplianceDepartment● External Contact: Law Offices

37

Corporate Social Responsibility Report

Board of Directors

In an attempt to prevent information leaks, one of the criticalrisks in relation to the performance of business, we haveestablished an information security management system, andenhanced operation management in accordance with theinformation management rules included in the information
security policy. We more strictly check the right of access tothe shared server, regulate the use of storage media, andregulate instance where information assets can be taken offsite. In our themed compliance seminars held on a regularbasis, we thoroughly teach the significance of information
management and information security measures in termsof systems, in order to increase each employee's awareness.
Additionally, we carry out internal audits to check compliancewith company rules on information management.
In fiscal year 2013, there was no case and accident related
to information leaks.

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Representative Director(Senior Executive Managing Officer) /Hidehiro Shiga・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Director(Senior Executive Managing Officer) /Shinji Furuichi
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Director(Senior Executive Managing Officer) /Hajime Kobayashi
Chief of Corporate Planning Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Director(Executive Managing Officer) /Takaya Maeda
Chief of Real Estate Planning Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● External Director /Tsukasa Miyajima
Professor of Keio University, Faculty of Law, Doctor of Law
Trustee of Meiji Yasuda Life Insurance Company
Member of Management Advisory Committee, Hulic Co., Ltd.
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● External Director /Hideo Yamada
External Auditor of Taiyo Chemical Industry Co., Ltd.
External Director of Sato Corporation
External Director of Lion Corporation
External Auditor of Ishii Food Corporation
External Auditor of Mikuni Corporation
External Auditor of Seibu Lions Co., Ltd.
Member of Management Advisory Committee, Hulic Co., Ltd.
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● External Director /Atsuko Fukushima
Member of Management Council at Shimane University
Journalist
Member of Management Advisory Committee, Hulic Co., Ltd.
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● External Director /Masatoshi Satou
Chairman of Sompo Japan Insurance Inc.

Audit Committee Members ofSupervisory Board● Corporate Auditor (External) /Manabu Yoshidome
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● External Corporate Auditor /Koichi Nezu
Vice President of Institute for the Fashion
Industries
Board Chairman and Director of The Nezu
MuseumBoard Chairman of Tobu Department Store
Co., Ltd.
Board Chairman of Tobu Utsunomiya
Department Store Co., Ltd.
President of Musashi Academy of the Nezu
Foundation
Member of Management Advisory
Committee, Hulic Co., Ltd.
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● External Corporate Auditor /Nobuyuki Kobayashi
Auditor of the Japan Arts Council
Member of Management Advisory
Committee, Hulic Co., Ltd.
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● External Corporate Auditor /Kenichi Sekiguchi
Special Adviser of Meiji Yasuda Life
Insurance Company

Corporate Officers● Executive Managing Officer /Shigeo Nakane
Chief of Accounting Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Executive Managing Officer /Hiroshi Kitano
Chief of Finance Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Executive Managing Officer /Yasuki Yakabi
Chief of Asset Solutions Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Executive Managing Officer /Takeshi Uratani
Chief of Property Development
Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Managing Officer /Kenkichi Naito
Chief of Human Resources andGeneral Affairs Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Managing Officer /Shin Ito
Chief of Corporate Communications& Investor Relations Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Managing Officer /Takuya Asai
Chief of Legal & ComplianceDepartment
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Managing Officer /Taichi Nakamura
Chief of Development Project
Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Managing Officer /Yoshito Nishikawa
Chief of Real Estate Investment
Department
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・● Managing Officer /Noritaka Takahashi
Chief of Tourism Business
Development Team38

Consolidated Financial Statements(Unit: Million Yen)

●Assets

Previous consolidated
accounting period(ended December 2012)

Current consolidated
accounting period(ended December 2013)

Current assets●Liabilities

Previous consolidated
accounting period(ended December 2012)

Current consolidated
accounting period(ended December 2013)

94,319108,444−

Operating cost

63,68669,732

Income before minority interests

30,63338,711Other comprehensive income

8,062

9,597

22,571

29,114

13,164

Notes and operating accounts receivable

1,795

2,096

Current portion of long-term loans payable

102,380

70,883Operating gross proﬁt−0

Short-term bonds payable

12,99857,994

Selling, general and administrative expenses

52,691

90,116

Accrued expenses

1,589

1,600

Operating income

Real estate for sale in process

−

8,160

Income taxes payable

3,932

3,018

Non-operating income

Costs on uncompleted construction contracts

16

55

Advances received

3,410

3,773

Interest income

Real estate for sale

Valuation difference on
available-for-sale securities

754

12,471

Deferred gains or losses on hedges

△511

221

5

Foreign currency translation adjustment

102

749

1,021

1,487

Share of other comprehensive income ofentities accounted for using equity method

94

492

Total other comprehensive income

440

13,93412,00529,978Comprehensive income
attributable to owners of parent

11,92829,905Comprehensive income
attributable to minority interests

77

72

94

68

Dividend income

1,286

Provision for directors' bonuses

82

103

Equity in earnings of afﬁliates

414

−

7,612

2,552

Other

3,586

5,521

Other revenue - termination of lease contracts

577

422

1,245

1,463

Total current liabilities

128,033

149,264

Other

344

158

△2

△4

Non-current liabilities

2,452

2,074

76,967

123,371

12,10032,100288,943294,657

17,456

21,81441

Operational investment securities

410

Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets

16,04352

34

Bonds payableNoncurrent assets

Long-term loans payable

Property, plant and equipment

Deferred tax liabilities

Total non-operating income
Non-operating expenses

4,618

4,933

−

19

371

252

Total non-operating expenses

4,990

5,205

Ordinary income

20,03325,983
1,759

Interest expenses
Equity in losses of afﬁliates

Buildings and structures

170,780

179,950

Provision for retirement beneﬁts

407

456

Accumulated depreciation△45,143△50,186

Provision for directors' retirement beneﬁts

13

9

Buildings and structures, net

125,636

129,764

Long-term guarantee deposited

39,502

42,862

Machinery, equipment and vehicles

1,233

1,420

Other

1,567

1,897

Accumulated depreciation

△448

△533

Total non-current liabilities 359,990

393,798

Gain on sales of noncurrent assets

263

488,024

543,063

Gain on sales of investment securities

400

829

Gain on investments in silent partnership

−

1,584

Other

784

887
335,364

Construction in progress

8,048

7,287

●Net assets

Gain on negative goodwill

Other

1,575

1,417

Shareholders' equity

Other

Accumulated depreciation

△826

△743

Capital stock

21,951

748

674

Capital surplus

446,635

473,978

Retained earnings
Treasury shares

Land

Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Leasehold right
Other
Total intangible assets

1,120

916

Total shareholders' equity

17,043

12,451

Accumulated other comprehensive income

444

396

Valuation difference on available-for-sale securities

18,60813,764

Investments and other assets
Investment securities
Long-term loans receivable
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets

89,127

101,601

0

−

2,959

3,324

465

539

3,102

3,722

△1

△0

2,312

−

107

324

3,084

4,498

22,205

Total extraordinary income

38,01638,270Extraordinary losses

83,41896,422

Loss on sales of noncurrent assets

200

319

△127

△189

Loss on retirement of noncurrent assets

2,015

2,246

143,258

156,708

Loss arising from building reconstruction

2,132

899

Loss on sales of investment securities

189

0

Loss on valuation of investment securities

462

2

Impairment loss−

907

Provision of allowance for doubtful accounts

0

−

5,773

18,736

Deferred gains or losses on hedges

△511

△289

Foreign currency translation adjustment

102

853

Total accumulated other comprehensive income

5,364

19,299Minority interests

1,272

1,273

Total net assets

149,895

Total liabilities and net assets

637,919

13

76

5,014

4,451

177,280

Income before income taxes and minority interests 18,102

26,030720,344

Income taxes - current

6,689

7,088

Income taxes - deferred

△151

2,898

Total income taxes

6,537

9,986

Other
Total extraordinary losses

95,654

109,188

Income before minority interests 11,564

16,043560,898

596,931

Minority interests in income

77

72

11,487

15,970Net income

Deferred assets
Business commencement expenses

53

41

Total deferred assets

53

41

637,919

720,344

Total assets

Total liabilities

Corporate Social Responsibility ReportComprehensive income
Comprehensive income attributable toExtraordinary income

311,417

Machinery, equipment and vehicles, net

Current consolidated
accounting period(ended December 2013)

11,564

Provision for bonuses

Supplies(Unit: Million Yen)
Previous consolidated
accounting period(ended December 2012)

Operating revenue

Cash and deposits

Short-term loans payable

Current consolidated
accounting period(ended December 2013)

6,300

Current liabilities
17,600

Merchandise

39(Unit: Million Yen)

(Unit: Million Yen)
Previous consolidated
accounting period(ended December 2012)

Consolidated Statements ofComprehensive Income▲▲

Consolidated Statements of Income▲

Consolidated Balance Sheets40

Consolidated Financial Statements▲

Consolidated Statements of Changes in Net Assets(Unit: Million Yen)

Previous consolidated
accounting period(ended December 2012)

Shareholders' equity

Capital stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders' equity

8,207

8,629

8,071

△2,996

21,911

Balance at the end of previous periodof Acquiree△8,207△8,629△8,071

2,996△21,911

Balance at the end of previous periodof Acquirer

12,326

11,966

Increase by merger△4,12812,296

Issuance of new shares

13,677

13,677

75

75

150

Balance at beginning of current period(Unit: Million Yen)

Accumulated other comprehensive income

Current consolidated
accounting period(ended December 2013)

Valuation difference
on available-for-salesecurities

Deferred gains or Foreign currencytranslation
losses on hedges
adjustment

5,773

Balance at the beginning of current period△511

Total accumulated
other comprehensive
incomeMinority interests

Total net assets

5,364

1,272

149,895

102

Changes of items during the period

Changes of items during period

Issuance of new shares - exercise of subscription rights to shares

73,990△123△498,161△2,966

8,163

Net income

15,97027,354Purchase of treasury stock△105

Disposal of treasury stock0

Change in equity in afﬁliates accounted
for by equity method-treasury stock43△2,059△2,059Net income

11,487

11,487

Disposal of treasury stock0507

Dividends from surplus

Dividends of surplus
Purchase of treasury stock

Issuance of new shares - exercise of subscription rights to shares

△0

△0

0

0

Net changes of items other than shareholders' equity
Total changes of items during the period

13,74429,38675,346

2,868

121,346

Balance at the end of current period

21,95138,016

83,418△127

143,258

Net changes of items other than shareholders' equity

12,962221

750

13,9340

13,935

Total changes of items during the period

12,962221

750

13,934027,385

Balance at the end of current period

18,736△289

853

19,2991,273

177,280

Consolidated Statement of Cash Flows▲

Previous consolidated
accounting period(ended December 2012)

Balance at beginning of current period(Unit: Million Yen)

Accumulated other comprehensive income
Valuation difference Deferred gains or Foreign currency Total accumulated
Subscription
Minority interests
on available-for-saletranslation
other comprehensive
losses on hedges
rights to shares
securities
adjustment
income
2,185

−

−

2,185

55

−

24,153

Changes of items during period
Balance at the end of previous periodof Acquiree△2,185△2,185

Balance at the end of previous periodof Acquirer

4,924

4,924

△55

△24,153
1,271

104,356(Unit: Million Yen)

Current consolidated
accounting period(ended December 2013)

Cash ﬂows provided by (used in) operating activities

Previous consolidated
accounting period(ended December 2012)

Current consolidated
accounting period(ended December 2013)

Cash ﬂows provided by (used in) investing activities

Income before income taxes and minority interests

18,102

26,030

Payments into time deposits

Depreciation and amortization

5,855

6,873

Proceeds from withdrawal of time deposits

1,110

1,000

Impairment loss−

907

Purchase of property, plant and equipment△36,199△66,725△1,000△1,000

Increase by merger

8,163

Increase (decrease) in allowance for doubtful accounts

00Proceeds from sales of property, plant and equipment

1,397

9,500

Issuance of new shares

27,354

Increase (decrease) in provision for bonuses

915

Purchase of intangible assets

△461

△171

150

Increase (decrease) in provision for directors' bonuses

17

20

Proceeds from sales of intangible assets

Increase (decrease) in provision for retirement beneﬁts

41

48

Purchase of investment securities

Issuance of new shares - exercise of subscription rights to shares
Dividends of surplus△2,059Net income

11,487Purchase of treasury stock△0

Disposal of treasury stock

0

321

753

△4,700△1,149△58△4

Proceeds from sales of investment securities

3,122

3,426

△1,115△1,493

Proceeds from redemption of investment securities

5,000

−

Interest expenses

4,618

4,933

Equity in (earnings) losses of afﬁliates

△414

19

Increase (decrease) in provision for directors' retirement beneﬁts
Interest and dividend income

Collection of loans receivable
Other, net

2

0

851

4,815

△30,554△49,548

Net changes of items other than shareholders' equity

849

△511

102

440

−

1

441

Loss on retirement of noncurrent assets

2,015

2,246

Total changes of items during the period

3,587

△511

102

3,178

△55

1,272

125,742

Loss (gain) on sales of property, plant and equipment△46△1,053

Balance at the end of current period

5,773

△511

102

5,364

−

1,272

149,895

Loss (gain) on sales of intangible assets

△16

△386

Net increase (decrease) in short-term loans payable△10,450

6,300

Loss (gain) on sales of investment securities

△211

△828

Net increase (decrease) in short-term bonds payable

2,970

44,959Loss (gain) on valuation of investment securities

462

2

Proceeds from long-term loans payable

Loss (gain) on investments in silent partnership−△1,584(Unit: Million Yen)
Current consolidated
accounting period(ended December 2013)

Balance at the beginning of current period

Shareholders' equity

Capital stock
21,951

Capital surplus

Retained earnings

Treasury stock

Total shareholders' equity

38,016

83,418△127

143,258

Gain on negative goodwill
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories

Net cash provided by (used in) investing activities

Cash ﬂows provided by (used in) ﬁnancing activities

122,700

84,300

Repayments of long-term loans payable △119,628△110,082
19,901△2,312−

Proceeds from issuance of bonds

−

198

△301

Proceeds from sales of treasury stock00△6,025△14,080

Proceeds from issuance of common stock

27,248−507

Changes of items during the period

Decrease (increase) in investment securities for sale△410

△5,154

Proceeds from exercise of stock options

150

Issuance of new shares - exercise of subscription rights to shares

507

Decrease (increase) in guarantee deposits△1,050△354

Purchase of treasury stock△0△2

Increase (decrease) in guarantee deposits received

727

3,231

Cash dividends paid

△2,059△2,966

Cash dividends paid to minority shareholders

△74

△72

Other, net△2△2

20,85442,841

253

253

Dividends from surplus△2,966△2,966

Net income

15,97015,970Purchase of treasury stock
Disposal of treasury stock0

Change in equity in afﬁliates accounted
for by equity method-treasury stock

△105

△105

0

0

43

43

Net changes of items other than shareholders' equity

41(Unit: Million Yen)
Previous consolidated
accounting period(ended December 2012)

Total net assets

Increase (decrease) in other liabilities
Subtotal

253

253

13,003△61

13,449Balance at the end of current period

22,20538,27096,422△189

156,708

354

50

△307

2,355

20,434

21,494

Net cash provided by (used in) ﬁnancing activities

1,184

2,975

Effect of exchange rate change on cash and cash equivalents

85

28Interest expenses paid

△4,854△5,382

Net increase (decrease) in cash and cash equivalents△1,141

4,436

Income taxes paid

△8,322△7,972

Cash and cash equivalents at beginning of period

18,364

12,16430−

Cash and cash equivalents at beginning of period of Acquiree△18,364−

8,472

11,114

Cash and cash equivalents at beginning of period of Acquirer

11,733−

Increase in cash and cash equivalents from newly consolidated subsidiary426−

Increase in cash and cash equivalents resulting from merger

1,145

−

Cash and cash equivalents at end of period

12,164

16,600Interest and dividends income received

Income taxes refund

Total changes of items during the period

Corporate Social Responsibility Report

Decrease (increase) in other assets

Net cash provided by (used in) operating activities

42