Company information(as of September 30, 2007)

Executives(as of September 30, 2007)

Name of company

Funai Zaisan Consultants Co., Ltd.

President & CEO

Yoshihito Hirabayashi

Head office

18F, Shinjuku NS Bldg. 2-4-1 Nishishinjuku,
Shinjuku-ku, Tokyo 163-0818

Deputy President

Hideo Murakami

Managing Director

Hisao Nakatsuka

Director, 4th Division Manager

Seiki Noda

Director, 2nd Division Manager

Takahiko Makino

Director, 1st Division Manager

Masayuki Yagi
Yasuhiko Sato

Incorporated

September 17, 1991

Capital stock805.81 million yen

Business line

Individual asset consulting, institutional
consulting, and asset management

asset

Number of employees

122Director, 5th Division Manager

Business network
52 locations
Throughout Japan

Sapporo, Aomori, Sendai, Yonezawa, Koriyama, Mito, Tsukuba, Tochigi, Gunma,Saitama, Kumagaya, Chiba, Johoku, Ginza, Jonan, Kawasaki, Yokohama,Odawara, Niigata, Kanazawa, Fukui, Matsumoto, Takayama, Shizuoka, Nagoya,Mie, Shiga, Kyoto, Osaka, Hyogo, Nara, Wakayama, Tottori, Shimane,Hiroshima, Tokushima, Takamatsu, Matsuyama, Kochi, Fukuoka, Kitakyushu,Nagasaki, Sasebo, Kumamoto, Miyazaki, Kagoshima, Okinawa

Director, 6th Division Manager

Takeshi Matsuura

Director in charge, 3rd Division Manager

Tetsuo Akiyama

Outside Director

Haruo Shimada

Outside Director

Kiyoshi Ohno

Consolidated
subsidiaries

9 companies including Funai Estate, Nippon Real
Estate Rating Service Co., Ltd., and the Centennial
Fund Investment Limited Partnership

Outside Auditor (full-time)

Takao Kitamura

Auditor

Takehiko Yamamura

Affiliated underequity method

4 companies including Nippon Investors Securities
Co., Ltd., Ukai Co., Ltd.

Outside Auditor

Hiroshi Yamagishi

Outside Auditor

Toshio Honda

Notes for shareholders

About our website

Fiscal year

January 1 to December 31

OurGeneral meeting of shareholders

Each MarchZaisan's business activities andAdministrator ofshareholders' register

The Chuo Mitsui trust and Banking Company, Limited
3-33-1 Shiba, Minato-ku, Tokyotrends, including corporate andOffice

The Chuo Mitsui Trust and Banking Company, Limited
2-8-4 Izumi, Suginami-ku, Tokyo 168-0063
Stock Transfer agency department
Phone (toll-free:0120-78-2031)

AgencyThe Chuo Mitsui Trust and Banking Company, Limited Branches throughout Japan
Japan Securities Agents, Ltd. Head office and branchesPublic announcements

Please refer to the Funai Zaisan website

websiteintroduces

Funai

financial data, for all shareholders
and investors.
Please visit our site for furtherdetails.

IR information
http://www.funai-zc.co.jp/ir/eng/index.html※For information on balance sheet and income statements, please see
http://www.funai-zc.co.jp/ir/houtei.html

We will remain your best partner over 100 years

Funai Zaisan Consultants Co., Ltd.

18F, Shinjuku NS Bldg. 2-4-1 Nishishinjuku, Shinjuku-ku,Tokyo 163-0818 Tel. +81 3 5321 7020 Fax. +81 3 5321 7271

We will remain your best partner over 100 years

Funai Zaisan Consultants Co., Ltd.

We will remain your best partner over 100 years
for comprehensive individual consulting
Message from the President
Here is the third quarter report of our business results for the financial year ending
December 2007 (our 17th financial term).
Since incorporation, we have continued to maintain a position for ourselves as one of
the leading comprehensive asset consulting firms in Japan. We are a Japanese-styleprivate banking enterprise and operate under the slogan: We will remain your best
partner over 100 years.
Consistently being one of the leading comprehensive asset consulting firms for highnet-worth individuals in Japan since incorporation, we have gathered theoverwhelming trust of many wealthy clients and received high evaluations regarding
our services. As the Japanese version of a de facto private bank with the slogan "We
will remain your best partner over 100 years," we emphasize "risk diversification" President & CEO
and "higher income" through a balanced holding of assets for the nation's wealthy
individuals, who are apt to overemphasize real estate in their portfolios.
Japan is now experiencing an unprecedented scale of disparities. The rise of foreign capital and fund money has beenremarkable in the commercial areas of city centers where land prices have soared. The value of such real estate has shown
signs of improvement, reminding one of the bubble years. Depending on the region, there are also certain locations whereasset values have declined by double digits compared to a year ago. We are truly in an age of polarized land prices. On theother hand, there are people who argue that this is the advent of another "real estate bubble," comprising a sharp rise inreal estate investment trusts and an increase in vacancy rates in urban properties. Moreover, there is a continuing
momentum reducing the country's population, and with this issue approaching the advent of a super-aging society,discerning the future has become quite difficult.
Nevertheless, the fact is that unless we adapt to these sorts of changes in the times, we will be unable to protect ourassets. Our firm gives serious consideration to the question of how to hold onto assets and provides our clients with
beneficial information through books, seminars, advertising and so on. Furthermore, we are highlighting our "100 bases
concept" in which we have committed to consolidating a network of accounting firms throughout the nation. Based on thesubstantial trust we have built up and the wealth of experience accrued from consulting cases, we are striving to contributeto and develop local communities through a company-wide effort fostering this network.
It has always been our intent to create a "socially-respectable company" and we have continually worked to achieve stable
growth as a firm "pursuing happiness for our clients, shareholders and employees." We are very grateful to you theshareholder for incorporating our stock as part of your valuable managed assets, particularly, in this day and age. At thesame time, all of our employees take the importance of such responsibility seriously and intend to devote themselves tofulfilling that call. We hope that you will continue to extend your thoughtful consideration.

Yoshihito Hirabayashi

1Funai Zaisan Consultants Co., Ltd. HokkaidoFunai Zaisan Consultants Tsuchida Management
Funai Zaisan Consultants Co., Ltd. Fukushima
Funai Zaisan Consultants Sanbe Accounting
Funai Zaisan Consultants Niigata Support
Funai Zaisan Consultants Eguchi Support
Funai Zaisan Consultants Co., Ltd. Gunma
Funai Zaisan Consultants Co., Ltd. Nagano
Funai Zaisan Consultants Co., Ltd. Kanazawa
Funai Zaisan Consultants Kimura Keiei Brain
Funai Zaisan Consultants Co., Ltd. Nagoya
Funai Zaisan Consultants Uesaka CPA
Funai Zaisan Consultants Shiga Support
Funai Zaisan Consultants Co., Ltd. Kyoto
Funai Zaisan Consultants HiroseFunai Zaisan Consultants Co., Ltd. Osaka
Funai Zaisan Consultants Co., Ltd. Hyogo
Funai Zaisan Consultants Tottori Support
Funai Zaisan Consultants Co., Ltd. Takamatsu
Funai Zaisan Consultants Co., Ltd. Tokushima
Funai Zaisan Consultants Shimane Support
Funai Zaisan Consultants Co., Ltd. Hiroshima
Funai Zaisan Consultants Kochi Support
Funai Zaisan Consultants Co., Ltd.
Matsuyama
Funai Zaisan Consultants
Sasebo Support

Funai Zaisan Consultants Co., Ltd. Okinawa

Funai Zaisan Consultants Aomori Support
Funai Zaisan Consultants Co., Ltd. Sendai
Funai Zaisan Consultants Co., Ltd. Tochigi
Funai Zaisan Consultants MMG
Funai Zaisan Consultants Co., Ltd. Saitama
Funai Zaisan Consultants Kujirai Accounting Office
Funai Zaisan Consultants Co., Ltd. Johoku
Funai Zaisan Consultants Masuyama Soken
Funai Zaisan Consultants Co., Ltd. Keiyo
Funai Zaisan Consultants Co., Ltd. Tokyo Ginza
Funai Zaisan Consultants Jonan Support
Funai Zaisan Consultants Co., Ltd.
Funai Zaisan Consultants Kawasaki Support
Funai Zaisan Consultants Co., Ltd. Yokohama
Funai Zaisan Consultants Shonan Support
Funai Zaisan Consultants Co., Ltd. Shizuoka
Funai Zaisan Consultants Tokai Support
Funai Zaisan Consultants Mie Support

Funai Zaisan Consultants Co., Ltd. Nara
Funai Zaisan Consultants Nishioka
Funai Zaisan Consultants Kitakyushu Support
Funai Zaisan Consultants Co., Ltd. Fukuoka
Funai Zaisan Consultants Miyazaki Support
Funai Zaisan Consultants Co., Ltd. Kumamoto
Funai Zaisan Consultants Co., Ltd. Nagasaki
Funai Zaisan Consultants Kagoshima Support

Building 100 Bases
Nationwide by 2010
52 bases established as of September 2007

Contents
Message from the President · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 1
Third Quarter Business Results for the Year Ending December 2007 · · · · · · · 3
Close up · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 42

Third Quarter Business Results for the Year Ending December 2007

Close upOverview of Results
During the third quarter, the nation's economy continued its overall
gradual recovery while maintaining the upward momentum ofstrong corporate earnings and capital investment together with theexpectation for improvement in consumer spending related items,
despite there being areas of concern about the future of theeconomy including the persistent high price levels for crude oil,substantial increases in various raw material costs, and the impactof the sub-prime loan problem, which originated in the UnitedStates. In the real estate market, although there are concerns about
future adjustments, the market continues to expand with the strongdemand for office space, real estate investment trusts (J-REIT) andprivately placed real estate funds spurring the flow of investment
funds. In this kind of environment, our firm has been concentratingon cultivating new clients by actively developing our seminars andpublishing books related to asset consulting. Additionally, because
real estate transaction income has been strong due to sales of Real
Estate Joint Ownership Program and the selling off of large-scale
real estate properties mainly in urban centers, we were able tosignificantly improve performance by ensuring gross profit fromsales that greatly exceeded the initial profit forecasts.
As a result, the third quarter business results produced operating
income of 13,596 million yen (representing year-on-year growth of19.4%), operating profit of 2,790 million yen (growth of 57.9%),
ordinary income of 2,396 million yen (growth of 52.6%), and net
income of the current period of 1,515 million yen (growth of 65.5%).

■ Operating income by category(unit: million yen)

Third quarter (16th) ending Third quarter (17th) ending
Increase
December 2006
December 2007(%)
Amount Ratio (%) Amount Ratio (%)
Income from asset consulting

2,361

20.7

2,023

14.9

-14.3

Income from real estate deals

7,992

70.2

10,43676.8

30.6

Income from sublease

851

7.5

831

6.1

-2.4

Other

181

1.6

305

2.2

67.9

11,386100.0

13,596

100.0

19.4

incomeTo t a l■ Highlights of consolidated business results (unit: million yen)
Operating income

Ordinary income

20,0002,500

17,66016,00012,00013,596
11,386

Net income of the current period
2,396

2,470

2,000

2,000

1,500
1,000

8,000

1,000

4,0005000

Third quarter
2006

Third quarter Full Year 2007
2007
(Projected)

01,515

1,500

1,571

1,610915

500

Third quarter
2006

Third quarter Full Year 2007
2007
(Projected)

0

Third quarter
2006

Third quarter Full Year 2007
2007
(Projected)

3

representing year-on-year growth of 28.4%, operating profit of 2,940
million yen, a growth of 51.9%, ordinary income of 2,470 million yen,for growth of 51.6%, net income of the current period of 1,610 million
yen, for growth of 78.3%, and net income per share of 15,359 yen.
※The projected figures appearing above reflect analysis based on information available at thetime of preparation, and are subject to various uncertainties. Actual realized results may varysignificantly from the above projections due to changes in business conditions or other factors.

®

The system allows clients to jointly own real estate that has been carefully selected by our firm
and to share in the revenue. We offer a reliable method for effective land utilization.
Our firm engages in consulting services to provide incomethat is 10% of taxable assets, laying a foundation for
inheritance solutions by high net-worth individuals. To assistin achieving that goal today in an environment of polarized
land prices, we recommend assets be reconfigured into
urban income properties (buildings for lease and rentalcondominiums). The reason is that even if apartments orcondominiums are built in a suburban area and an attempt ismade to effectively utilize them, the risk of vacancy isgreater than in an urban area and there is a higher chancethan in the city center that land prices will fall (collapsingassets). However, for budgets of under ¥300 million, newand quality properties with high grade buildings at premium
locations are currently quite difficult to find.
So, based on the Real Estate Specified Joint Enterprise Law,
we constructed the "Funai Real Estate Joint Ownership®
Program, ADVANTAGE CLUB ," a system in which funds arepooled and superior properties are jointly owned. Our firmsits as the chair and conducts the operations of thevoluntary partnership, which includes forming the voluntarypartnership, recruiting investors, and acquiring properties forinvestment. Thanks to your participation, we have enjoyed afavorable reputation and will continue to work in a mannerthat carefully selects quality proposals.

NEWS®

"ADVANTAGE CLUB Shinbashi"
Sales successfully completed
On November 2007, the organization of"ADVANTAGE CLUB ® Shinbashi," the 20thADVANTAGE CLUB® that our firm has offeredand is the largest proposal so far entailing theformation of a voluntary partnership by our"Funai Real Estate Joint Ownership Program,
A D V A N T A G E C L U B ® ," w a s s u c c e s s f u l l ycompleted. We received numerous applications
for the 285 units available for this subscription,and the partnership formation was completed
as it enjoyed a favorable assessment.

ADVANTAGE CLUB® Shinbashi■ Capital stock ¥2.85 billion■ Actual yield
4.02%■ Nominal yield 5.78%※The yield shown refers to the yield at the time of the voluntary association's organization.
There are no guarantees of future returns.

■ Process through purchase of the property
Property
information

Projection of Fill-Year Results
A decision on the plan for sales of the "Funai Real Estate Joint®
Ownership Program" (ADVANTAGE CLUB Shinbashi) has beenreached. Also, as a result of a review conducted in regard to thetiming of planned real estate sales, real estate transaction revenue is
expected to considerably exceed forecast figures.
Projected full-year consolidated results for the year ending December
2007 are as follows: operating income of 17,660 million yen,

Funai Zaisan's Real Estate Joint Ownership Program, ADVANTAGE CLUB3,000 / year

Principally properties not on themarket, such as those involved with
nonperforming loans at financial
institutions (weekly meetings
concerning properties are held)

Properties
surveyed

Properties
approved

Properties
purchased

600 / year

47 / year

11 / year

Dividend target

Total assets in trust

Actual yield 5%
Nominal yield 6%(As of November 30, 2007)¥18.53 billion
4