will strengthen itself as a more credible company. · proved customer service and optimizing...

To our shareholders

Securities code: 2131

Supplementary document

regarding company proposals

to be submitted to the 33rd ordinary

general meeting of shareholders

This material is provided by Accordia Golf Co., Ltd.

Accordia Golf will strengthen itself as a more credible company.As stated in the attached notice, the 33rd ordi-nary general meeting of shareholders of Accordia Golf Co., Ltd. will take place on May 28, 2012. We hope that many shareholders will attend the meeting. These have been prepared as supplemen-tary materials to help our shareholders have a deeper understanding of the Company. Presen-tations of certain shareholder proposals are planned for the meeting and your continued support of Accordia Golf is gratefully appreciated through your understanding of the Company’s circumstances.

June 5, 2012

Message from the candidate for president

We deeply regret the concern and trouble caused to our shareholders by the recent compliance issues involving the Company. We will ensure that we strengthen the governance and compliance systems of the Company by making the majority of directors outside directors, establishing a standing Special Compliance Committee and other measures. Operating revenue for the fiscal year ended March 31, 2012 was maintained al-most at the previous year’s level, despite the effects of the Great East Japan Earth-quake. We will continue to further promote our ongoing innovation in the golf business in order to achieve greater business growth and to maximize the Company’s corporate value and shareholder profits. We would be grateful if our share-holders will extend their continued sup-port to Accordia Golf.

Shareholders’ meeting highlights

Matters to be resolved

Proposal No. 1: Dividend of SurplusDistribution of profits to shareholders is positioned as one of the most important management issues for the Company and the basic policy is to strengthen the profitability of the entire business Group and pay a continuous, stable dividend in line with this in the future. The dividend of surplus at the end of the fiscal year under review will be 1,200 yen per com-mon share.

Proposal No. 2: Election of nine directorsProposal No. 3: Election of two corporate auditorsThe Company requests the election of nine directors and two corporate auditors. The following candidates are named based on examination by the Nomination Committee.

2-1 Ryusuke Kamata Director

2-2 Takabumi Suzuki Director

2-3 Takashi Niino Director

2-4 Fumio Hattori Director

2-5 Isao Sawada Outside Director

2-6 Noriyuki Katayama Outside Director

2-7 Matahiro Daisai Outside Director

2-8 Osamu Sudoh Outside Director

2-9 Yuko Tashiro Outside Director

3-1 Yoshiki Hirowatari Outside Director

3-2 Koji Hatsukawa Outside Director

Proposals No. 4 and 5: Shareholder Proposals (Election of eight directors and three corporate auditors)Please vote “AGAINST” Proposals No. 4 and 5 since the Board of Directors is opposed to all parts of them on the grounds that they do not contain appropriate candidates for executive officers, that there is risk of damaging of corporate value in the case of approval of the shareholder proposals, and that the shareholder proposals focus on an individual with close relations to a rival of the Company.

Ryusuke KamataRepresentative Director, President

and Chief Executive Officer, Board MemberAccordia Golf Co., Ltd.

1

1. Increased profitability through golf business innovationThrough the acquisition of customers based on im-proved customer service and optimizing operations, the Company was able to expand sales, achieve cost structure revolution and strengthen earnings power.

2. Optimization of golf course portfolioThe Company has worked to establish an optimized golf course portfolio that will continue to build revenue for many decades to come in light of geographic regions and course quality. This was achieved by an expansion of size through acquisitions as well as disposals of golf courses with little prospect of any im-provement in returns. Currently, 67.5% of the golf courses held by the Company are located in three large metropolitan areas.

3. Growth in driving range businessThe number of directly managed driving ranges has passed 20, which indicates an improvement not only in the Company’s power to operate driving ranges but also in the synergistic effect between golf courses and driving ranges. As a result, the number of customer transfers from driving ranges to golf courses also increased.

Situation surrounding the Company

Entering into the second competition and an era of service selectionThe golf market has seen rising competition for attract-ing customers and increasingly rigorous service selec-tion by customers. Golf course quality and branding are now important factors for strengthening competi-tive power.

Company’s business direction

Further development of golf business revolutionThe Company aims to further improve its earnings power by promoting management that realizes appro-priate operations and fair prices across the Company and by making revenue management systems more so-phisticated based on demand forecast systems.

Development of comprehensive golf serviceThe Company aims to increase comprehensive income with its customers at its core by expanding the size of the driving range business as well as the golf school and golf shop businesses.

Establishment of the Company’s position in the premium marketThe Company aims to establish its position in the pre-mium market and strengthen its brand by focusing on its high-end golf courses as its core.

Previous measures and achievements of the Company

Company’s growth strategy

2

The lineup of the nine candidates for Director and their messages to shareholders

1 2

To our shareholdersI will make the most of my extensive knowledge and experience in implementing M&A, the Company’s growth strategy, and work to enhance the Company’s corporate value as well as to build good relations with financial institutions. I will continue to improve the efficiency of headquarter operations and management and contrib-ute to improving profitability.

Reasons for the election of the candidate for directorIn addition to his extensive knowledge of finance and accounting as a certified accountant, Mr. Suzuki has considerable knowledge of the golf course business through his work experience in the Company. He is expected to continue his responsibilities in the Company’s accounting and finance operations, including the Company’s financing and M&A strategy, and contribute to the enhancement and strict enforcement of the operational management of the Company’s expenses, resulting in a serious improvement of the Company’s compliance system.

Ryusuke Kamata(Birth date: December 22, 1947)

Candidate for Outside Director

Takabumi Suzuki(Birth date: August 9, 1969)


To our shareholdersIn the role of Representative Director and President of the Company, I will promote the innovation of the corporate culture for the new and improved Accordia Golf, and proactively cultivate adherence to compliance systems. I will also steadily develop the Company’s cur-rent management policies to advance the Company to one that can prevail in the medium- to long-term, and enhance its systems so they help our people onsite to demonstrate their capabilities. I am com-mitted to exerting my best efforts to improve customer satisfaction, corporate value and shareholder profits.

Reasons for the election of the candidate for directorMr. Kamata has more than 40 years of work experience in the golf course industry, and a track record of approximately 25 years in the management of golf course business. He also has extensive knowl-edge and experience as a specialist in the renovation of golf courses. In the role of Representative Director and President of the Company, he is expected to continuously and strongly lead the medium- to long-term growth strategies of the Company and deploy measures to fundamentally strengthen the Company’s compliance structure.

Brief CV, position in the company, responsibilities, and status of significant concurrent postsMarch 1970 Joined Nitto Kogyo Co., Ltd.May 1987 Director of Nitto Kogyo Co., Ltd.December 2001 Representative Director of Nitto Kogyo Co., Ltd.April 2003 Director of Accordia Golf Co., Ltd. (“the Company”)August 2003 Director and CEO of the CompanyMarch 2005 Representative Director and Vice President of the

CompanyJune 2006 Representative Director and Vice President, Executive

Officer of the CompanyMay 2012 Representative Director, President and Chief Executive

Officer of the Company (ongoing)Status of significant concurrent postsMr. Kamata serves as the Representative Director and President of 16 subsidiaries of the Company, including Accordia Asset Holding 11 Co., Ltd.

Number of the Company’s shares owned by the candidate

946 shares

Brief CV, position in the company, responsibilities, and status of significant concurrent postsOctober 1995 Joined Hajime Auditing Company (now Grant Thornton

Taiyo ASG LLC)April 1998 Joined Tohmatsu (now Deloitte Touche Tohmatsu LLC)April 2003 Registered as a Certified AccountantMarch 2005 Joined the Company as the Manager of Finance and

Accounting, Administration Division of the CompanyDecember 2007 Assistant Division Manager of Administration Division and

Manager of the Accounting of the CompanyJanuary 2009 Deputy Division Manager of Finance and Accounting

Division of the CompanyJune 2009 Executive Officer, Deputy Division Manager of Finance

and Accounting Division of the CompanyJune 2010 Director and Executive Officer of the Company (ongoing)


43 shares

Re-election Re-election

3

3 4

To our shareholdersBy making the most of my experience in the management of domes-tic and overseas golf courses and in the development of Course Management Headquarters, I will rebuild the restaurant business and revitalize Golf Alliance Co., Ltd., thereby contributing to the improvement of the Company’s corporate value. I will promote course development by improving the quality of course conditions and safety in golf playing, with the aim of providing golf courses that customers enjoy and feel comfortable playing golf on.

Reasons for the election of the candidate for directorMr. Niino has many years of work experience in the golf course indus-try and has been involved in the management of both domestic and overseas golf courses. He has extensive experience in managing over-seas golf courses, and has contributed significantly to the establishment of the Company’s basic philosophy in golf course management. He has also made a substantial contribution to the growth of the Company’s business by promoting the modernization and streamlining of golf course management. Mr. Niino is expected to enhance and revitalize the business of the Group and contribute to human resource develop-ment as well as to improve the Company’s governance structure.

To our shareholdersI will take the lead to implement the compliance innovations being promoted by the new president, Mr. Kamata, in the new and improved Accordia Golf. In addition, as measures to support the Company’s medium- to long-term growth, I will devote all my efforts to securing the appropriate number of members and establishing a more efficient operating system, as well as to increasing the motiva-tion of onsite employees and their service capabilities.

Reasons for the election of the candidate for directorAs a central onsite figure in the golf course operation division and the membership sales division, Mr. Hattori has contributed signifi-cantly to the development of the Company since it was established. He is expected to firmly implement the Company’s medium- to long-term development strategy and contribute to improving its gov-ernance system, uniting the head office and location sites.

Takashi Niino(Birth date: October 31, 1948)


Fumio Hattori(Birth date: January 1, 1952)


Brief CV, position in the company, responsibilities, and status of significant concurrent postsMarch 1972 Joined Nitto Kogyo Co., Ltd.November 1982 Director of Nitto America Co., Ltd.April 1987 Director of Nitto Kogyo Co., Ltd.March 2003 Director of the CompanyMarch 2005 Director, Deputy Office Manager for Special Projects of

the CompanyJuly 2005 Director, General Manager of Course Conditions Division

of the CompanyJune 2007 Managing Executive Officer, General Manager of Course

Conditions Division of the Company. (ongoing)January 2009 Representative Director and President, Golf Alliance Co.,

Ltd. (ongoing)Status of significant concurrent postsRepresentative Director and President of Golf Alliance Co., Ltd.


400 shares

Brief CV, position in the company, responsibilities, and status of significant concurrent postsApril 1974 Joined Nitto Kogyo Co., Ltd.November 1993 Director of Nitto Service Co., Ltd.October 1997 General Manager of Soen West Tokyo Division, Nitto

Service Co., Ltd.May 2003 Joined the CompanySeptember 2005 Deputy General Manager of Operations Division of the

Company (in charge of Business Operations)June 2006 Executive Officer, General Manager of Operations

Division of the CompanyJune 2007 Managing Executive Officer, General Manager of

Operations Division of the CompanyMarch 2012 Managing Executive Officer, General Manager of Sales

cum Business Promotion Divisions of the Company (ongoing)


1 share

New candidate for director New candidate for director

4

5 6


Isao Sawada(Birth date: February 9, 1941)

Candidate for Outside Director*Member of Special Compliance Committee*Member of Nomination Committee

Noriyuki Katayama(Birth date: October 28, 1964)

Candidate for Outside Director*Chairperson of Special Compliance Committee*Chairperson of Nomination Committee

To our shareholdersI have performed my duties as an outside director of the Company from a standpoint of protecting investors, while at the same time giv-ing instruction and supervision for increasing the Company’s corpo-rate value from my perspectives as an accounting and taxation expert. Drawing on the experience with the recent compliance issues, I intend to continue putting forth efforts for consolidating the Company’s compliance systems and even further strengthening the transparency of disclosure.

Reasons for the election of the candidate for directorMr. Sawada has extensive professional knowledge and experience as a certified public accountant and tax accountant, along with keen insight into governance and corporate management. As a member of the Special Compliance Committee, he has led efforts to resolve and respond to recent compliance issues. Mr. Sawada has had no involvement with any of the Company’s major stockholders or major clients, sufficiently ensuring his independence as an outside director. His attendance ratio at the Company’s board of directors’ meetings has been high. The term of his external directorship as of the end of this General Meeting of Shareholders is 5 years, 9 months.

To our shareholdersI intend to strive to contribute to the realization of compliance and consolidation of governance systems, taking the compliance issue that has surfaced as a serious matter, and to reflect on the points that require rethinking so as to avoid recurrence of similar issues. I would greatly appreciate the continued guidance and support of sharehold-ers and other stakeholders.

Reasons for the election of the candidate for directorAs an attorney at law, Mr. Katayama has abundant experience in corporate management, banking, corporate governance and other areas, as well as legal knowledge. As the chairperson of the Special Compliance Committee, he has led efforts to resolve and respond to the recent compliance issues. Mr. Katayama has had no involvement with any of the Company’s major stockholders or major clients, suf-ficiently ensuring his independence as an outside director. His atten-dance ratio at the Company’s board of directors’ meetings has been high. The term of his external directorship as of the end of this General Meeting of Shareholders is 5 years, 9 months.

Brief CV, position in the company, responsibilities, and status of significant concurrent postsApril 1964 Joined Kazuo Kawashima Certified Accountant OfficeOctober 1965 Registered as a Certified AccountantJanuary 1969 Joined Audit Company Otemachi OfficeApril 1977 Partner, Nihombashi Corporation Certified Public AccountantsJuly 1990 Partner, Showa Ota & Co. (now Ernst & Young Shinnihon LLC)May 1994 Representative Partner, Showa Ota & Co.August 2005 Auditor, SPL Co., Ltd. (ongoing)July 2006 General Manager of Isao Sawada Certified Accountant

Office (ongoing)September 2006 Outside Director of the Company (ongoing)Status of significant concurrent postsGeneral Manager of Isao Sawada Certified Public Accountant Office


73 shares

Brief CV, position in the company, responsibilities, and status of significant concurrent postsApril 1990 Joined Nagashima & Ohno (now Nagashima, Ohno &

Tsunematsu)October 1996 Joined Tokyo City Law & Tax PartnersFebruary 2003 Partner of City-Yuwa Partners (ongoing)October 2004 Outside Auditor of Deutsche Asset Management (Japan)

Ltd. (ongoing)July 2005 Outside Auditor of Deutsche Securities Inc. (ongoing)September 2006 Outside Director of the Company (ongoing)Status of significant concurrent postsPartner of City-Yuwa Partners; Outside Auditor of Deutsche Asset Management (Japan) Ltd.


88 shares

Re-election Re-election

5

7 8

Matahiro Daisai(Birth date: September 25, 1951)


To our shareholdersI believe that solid compliance and governance are among the require-ments for strengthening the financial markets’ and society’s trust in the Company, along with improvement of corporate performance. In view of the experience from the unseemly event, I intend to contribute to the establishment of systems for objectives worthy of a company with its stock listed on the first section of the Tokyo Stock Exchange by increasing the functions of outside directors mainly for compliance.

Reasons for the election of the candidate for directorMr. Daisai was involved in administrative supervision in taxation and cor-porate finance at both the former Ministry of Finance and the National Tax Agency, and has abundant experience and extensive knowledge of taxation, accounting, and auditing. He has been the Company’s outside auditor and now the Company wishes him to become its outside director to take on the foundation of monitoring and supervision regarding the Company’s compliance. Mr. Daisai has had no involvement with any of the Company’s major stockholders or major clients, sufficiently ensuring his independence as an outside director. His sufficient attendance at the Company’s board of directors’ meetings is also seen as possible.

Osamu Sudoh(Birth date: January 24, 1952)


To our shareholdersDrawing on many years of experience as an attorney at law and as an outside director and outside auditor of other companies, I intend to strive to consolidate the Company’s governance and establish compli-ance systems.

Reasons for the election of the candidate for directorAs an attorney at law, Mr. Sudoh has abundant experience in corporate management, compliance and other areas, as well as legal knowledge. Though he was involved in the settlement proceedings filed in December 1997 concerning Nitto Kogyo Co., Ltd., the Company’s wholly owning parent company, his independence as an outside direc-tor is sufficiently ensured since he has had no relationship whatsoever with the applicable company since then. His sufficient attendance at the Company’s board of directors’ meetings is also seen as possible.

Brief CV, position in the company, responsibilities, and status of significant concurrent postsApril 1974 Joined Ministry of FinanceJuly 1995 Director, Corporation Finance Division, Ministry of FinanceJuly 1999 Head of Sendai Regional Taxation BureauJuly 2001 Deputy Director General, National Tax AgencyJuly 2004 Chief Professor, Research Department, National Tax CollegeOctober 2004 Special Research Fellow, Financial Research Center,

Financial Services AgencyApril 2008 Outside Director, Lifenet Insurance Company (due to

resign on June 24, 2012)April 2008 Special Contract Professor, Yokohama City UniversityJune 2008 Outside Company Auditor of the Company (ongoing)April 2012 Affiliate Professor, Yokohama City University (ongoing)Status of significant concurrent postsDirector, Lifenet Insurance Company; Affiliate Professor, Yokohama City University


49 shares

Brief CV, position in the company, responsibilities, and status of significant concurrent postsApril 1980 Registered as a lawyer. Joined TOKYO YAESU

HOURITUJIMUSYOApril 1983 Partner of TOKYO YAESU HOURITUJIMUSYOApril 1993 Founder/partner of Asahi Law Offices (now Asahi Law

Offices and Nishimura & Asahi)June 1999 Founder/partner of Sudoh & Takai Law Offices (ongoing)June 2003 Outside Company Auditor of NAMCO LIMITEDJune 2005 Outside Director of WORLD CO., LTD.September 2005 Outside Company Auditor of NAMCO BANDAI Holdings

Inc. (ongoing)June 2009 Outside Director of eBank Corporation (now Rakuten

Bank, Ltd.) (ongoing)November 2009 Outside Company Auditor of USEN CORPORATIONJune 2011 Outside Company Auditor of Mitsui-Soko Co, Ltd. (ongoing)Status of significant concurrent postsFounder/partner of Sudoh & Takai Law Offices; Outside Auditor of Namco Bandai Holdings Inc.; Outside Director of Rakuten Bank, Ltd.; Outside Auditor of Mitsui-Soko Co., Ltd.


No shares

New New

6

9

To our shareholdersDrawing on an extensive history of results and knowledge in global business management in the golf course business and several other industries within Japan and abroad, I intend to contribute to even further development of the Company through strengthening the cor-porate governance systems and increasing corporate value.

Reasons for the election of the candidate for directorMs. Tashiro has abundant hands-on experience and expert knowl-edge in international accounting and tax affairs and corporate gover-nance, as well as corporate management in areas including golf course businesses. She would be able to provide us with specific advice regarding the strengthening of the Company’s governance system and the Company’s business growth from the viewpoint of corporate management. It is also expected that Ms. Tashiro would make valuable contributions to expansion of the female golfing popu-lation. Ms. Tashiro has had no involvement with any of the Company’s major stockholders or major clients, sufficiently ensuring her independence as an outside director. Her sufficient attendance at the Company’s board of directors’ meetings is also seen as possible.


Brief CV, position in the company, responsibilities, and status of significant concurrent postsJune 1986 Joined KPMG LLPJuly 1995 Partner of KPMG LLPNovember 2000 Sourcing Leader of General Electric International Inc. GE

Corporate JapanJuly 2003 Chief Financial Officer of Phoenix Resort CorporationApril 2005 Director, Chief Operating Officer and Chief Financial

Officer of Aon Holdings Japan, Ltd.April 2010 Representative Director of TS Associates Ltd.


No shares

Yuko Tashiro(Birth date: March 14, 1954)


New

7

1 2

Profile of two candidates for auditor and their messages

To our shareholdersDuring my eight years of service as an outside auditor with Sky Perfect Communications Inc. and Semba Corporation I have strived to help ensure transparency in business administration, strengthen the legal compliance system, ensure appropriateness of balance sheets, and other matters. Drawing on this experience, I intend to contribute to the establishment of a quality corporate governance system that ensures the Company’s sound and sustainable growth and responds to society’s trust.

To our shareholdersAt the auditing corporations I worked with, I was mainly involved in increasing quality of practical services offered to clients, human resources development, and strengthening of the systems for risk management and compliance. Drawing on this experience, I intend to contribute to strengthening the Company’s governance and com-pliance, as well as enhancing monitoring concerning performance audits and accounting audits.

Reason for naming the person a candidate for auditorBased on his business experience at major companies and service as a director, Mr. Hirowatari has expert overall knowledge of corporate management, with a focus on financial affairs and accounting. He would be able to strictly audit the Company’s directors’ management and contribute to the strengthening of the Company’s governance system. Mr. Hirowatari has had no involvement with any of the Company’s major stockholders or major clients, sufficiently ensuring his independence as an outside auditor.

Reason for naming the person a candidate for auditorAs a certified public accountant, Mr. Hatsukawa has extensive knowledge and practical experience in accounting audits, risk management and the strengthening of compliance systems. He is expected to assist the Company in fundamental strengthening of its governance and compliance system, and to provide the Company with advice for strengthening monitoring concerning performance audits and accounting audits. Mr. Hatsukawa has had no involvement with any of the Company’s major stockholders or major clients, suffi-ciently ensuring his independence as an outside auditor.

Yoshiki Hirowatari(Birth date: March 23, 1947)

Candidate for Outside Auditor

Koji Hatsukawa(Birth date: September 25, 1951)

Candidate for Outside Auditor

Brief CV, position in the company, responsibilities, and status of significant concurrent postsApril 1969 Joined Sony CorporationJanuary 1983 Controller at a British subsidiary of Sony CorporationJanuary 1986 Director Manager of the International Accounting

Division at the head office of Sony CorporationNovember 1995 Executive Director of Sony Koda Inc.January 1999 Director Manager of the Planning Control Division and Vice

President of the Home TV Company, Sony CorporationApril 2001 Director of Aiwa Co., Ltd.June 2003 Full-time Outside Company Auditor of SKY Perfect

Communications Inc.July 2007 Advisor of SKY Perfect Communications Inc.January 2008 Full-time Outside Company Auditor of SEMBA

CORPORATION


5 shares

Brief CV, position in the company, responsibilities, and status of significant concurrent postsMarch 1974 Joined Price Waterhouse Accounting OfficeJuly 1991 Representative Partner of Aoyama Audit CorporationApril 2000 Representative Partner of ChuoAoyama

PricewaterhouseCoopersSeptember 2006 Quality Control Director and Representative Partner of

PricewaterhouseCoopers AarataJuly 2008 Representative Partner in charge of human capital and Risk

and Compliance Director at PricewaterhouseCoopers Aarata

May 2009 Representative Partner and Representative Executive Officer of PricewaterhouseCoopers Aarata (scheduled to retire at the end of May 2012)


No shares

New New

8

Profile of the two Continuing Outside Auditors

Tsuneo Taida(Birth date: November 2, 1941)

Outside AuditorMember of Nomination Committee

1 2

Brief CV, position in the company, responsibilities, and status of significant concurrent postsDecember 1967 Joined Sony CorporationFebruary 1987 Director and General Manager of Accounting, Aiwa Co.,

Ltd.June 1994 Executive Director and General Manager of Accounting

and Finance, sameJune 1999 Vice President and Representative Director, sameJune 2000 Vice President and Director, sameFebruary 2001 Group Headquarters, Sony CorporationApril 2001 Joined Terumo Corporation; Board MemberJune 2002 Director and Senior Executive Officer, sameJune 2005 Fulltime Outside Auditor of the Company (ongoing)


73 shares

Brief CV, position in the company, responsibilities, and status of significant concurrent postsApril 1967 Joined Asahi Breweries, Ltd.September 1992 General Manager of Oita Branch, sameSeptember 1998 Board Member and General Manager of Hokkaido

Branch Office, sameMarch 1999 Director and General Manager of Hokkaido Branch

Office, sameMarch 2002 Managing Director, Operating Officer and General

Manager of Sales Promotion Headquarters, sameSeptember 2003 Managing Director, Operating Officer and General

Manager of Market Development, sameJanuary 2005 Executive Director and Operating Officer in Charge of

East Japan, sameMarch 2006 Executive Director and Operating Officer in Charge of

Market Development, sameMarch 2010 Co-worker, same (ongoing)June 2010 Outside Auditor of the Company (ongoing)


6 shares

Masaru Kuraguchi(Birth date: March 21, 1945)

Outside Auditor

Ongoing Ongoing

9

Under its new management, Accordia Golf Co., Ltd. is determined to build an administrative organization that makes further improvement of its corporate values possible by strengthening its governance and compliance sys-tems and accelerating business growth at the same time. We sincerely ask for the support of all our shareholders at this year’s General Shareholders’ Meeting.

Q & A

Q: What will become of Accordia Golf Co., Ltd. from now on? A: We sincerely apologize to our shareholders about the compliance issue. We regard these circumstances as a starting point for fundamentally improving the Company’s governance and compliance systems, and our employees are determined to work together to lead Japan’s golf industry and improve corporate values. We sincerely ask for your continued support of our Company.

Q: Please explain the Shareholder Proposals. A: The Shareholder Proposals have been made by subsidiar-ies of Heiwa Corporation, which oversees PGM Holdings, one of our competitors. The Company believes that these propos-als could negatively affect our corporate value. The candidates the Company has proposed for the positions of director and corporate auditor are capable of acting in the best possible in-terests of the Company and its shareholders. Accordingly, we ask you to give your approval to the Company Proposals.

Q: I heard that the Nomination Committee consists of outside people. Does that mean that the Company’s administration issues have been entrusted to outside people? A: The Company’s Nomination Committee consists of outside directors and outside auditors. The Nomination Committee has taken the results of the survey by the Special Compliance Committee seriously, has interviewed shareholders, creditors, employees, and possible candidates for positions as Company officer, and selected the candidates through a strict and trans-parent process. In response to the nominations, the Company’s Board of Directors is responsible for selecting the candidates. Many excellent global companies and forward-looking

Japanese companies appoint independent outside directors and auditors to enhance shareholder value. The Company will be run by management comprising in-house directors and operating officers, and outside directors and auditors will supervise management from an independent standpoint to confirm that appropriate business administration is being carried out to enhance shareholder value.

Q: I also received a letter from the Shareholders’ Committee. What should I do? A: The Shareholder Proposals by the Shareholders’ Commit-tee could negatively affect the corporate values of the Com-pany. We ask you to consider the Company’s track record so far, as well as the unique growth strategy formulated by the new management, and cast your vote against the Shareholder Proposals by the Shareholders’ Committee.

Q: I wish to attend the General Shareholders’ Meeting. What should I do? A: Please come to the meeting venue at Tsuru West Room on the Main Banquet Floor (1F in the main wing) of the Hotel New Otani, by 10:00 a.m. on Thursday, June 28. When you arrive, please show the enclosed Voting Right Exercise Form to reception.

Q: How does the Letter of Attorney differ from the Voting Right Exercise Form? Do I need to send back both? A: If you are unable to attend the General Shareholders’ Meeting, please fill out the Letter of Attorney in accordance with the enclosed “Request Regarding Voting by Proxy for the 33rd Ordinary General Shareholders’ Meeting,” and send it back to us.

10

Our Group has established a new system, mainly by re-vising the Compliance Policy, to review and fundamen-tally strengthen our compliance systems.

1. Basic PolicyWe believe that our social responsibility is to conduct corporate activities in line with a sense of values and ethics required to corporations as members of society as well as complying with laws and ordinances, through establishing the charter of corporate behavior and a code of conduct in the compliance policy which is ap-plied to the Accordia Group.

2. Compliance System(1) Permanent establishment of the Special Compliance

CommitteeThe Special Compliance Committee will be permanently established as a consultative body to the Board of Di-rectors for the main purpose of investigating compliance by the Company’s directors. The chairman of the Special Compliance Commit-tee will be an outside director and, in the event of a major compliance violation, will have the authority, under prescribed conditions, to issue a cease and desist order of the said violation. Further, the Company ap-points at least one outside person (outside specialist) to receive advice on investigation methods and investiga-tion results and, in addition, will select a lawyer from an outside law firm to act as an advisor to the Special Compliance Committee and that lawyer will be one of the recipients of whistle-blowing information. In addition, the Company announces that, at today’s Board of Directors meeting, it was resolved to select

Hideki Matsui, Esq. (Marunouchi Sogo Law Office), who is an outside specialist to become a member of the Spe-cial Compliance Committee, and to select Marunouchi Sogo Law Office as the outside law firm that will act as an advisor to the Special Compliance Committee.

(2) Enhance the function of the Compliance CommitteeThe Compliance Committee, as a standing committee under the direct supervision of the company president, deliberates and approves compliance organizations and systems for the Accordia Group and formulates plans for implementing education and indoctrination to make compliance known to all employees. In addition, it will report the operating situation of the compliance system to the Board of Directors at least once every three months. Further, the Compliance Committee will coordi-nate with the Special Compliance Committee, the Board of Statutory Auditors and the Internal Auditing Depart-ment as necessary for compliance purposes.

(3) Fulfillment of the whistle-blowing system (hotline)Reporting obligation:Directors and employees are obligated to report all viola-tions or possible violations of compliance policy. Report-ing should be to one’s supervisor or to the Compliance Committee. Otherwise, in the case of a compliance problem with an employee, reports can be made to the Company lawyer designated as the compliance hotline or, in the case of a compliance problem with a director, to the lawyer on the Special Compliance Committee. Protection of whistle-blowers:The Compliance Committee will investigate items re-ported or consulted and, based upon the result of the investigation, will take appropriate measures and report

Configuration of the New Compliance Systems

11

to the whistle-blower the result of the process. The Com-pany guarantees that there will be no repercussions for the whistle-blower or for executives and employees that cooperate with the investigation.

(4) Promoting complianceThe Compliance Committee and the Special Compli-ance Committee will prevent the dilution of evaluation standards by following only the law, the Articles of Incorporation and company rules. In addition, both committees will maintain the compliance system, as well as permeate the awareness of compliance by exec-utives and employees and ensure that they follow rules.

Both committees shall investigate compliance issues discovered autonomously or through the whistle-blowing system and implement necessary responses.

(5) Important items for inspectionTo prevent a recurrence of the recent compliance issues regarding the use of company expenses, the Company has revised its company expense system, especially for meeting expenses and entertainment expenses but, in addition to this, is reviewing the management and monitoring of the trading conditions of the Company’s customers.

● Whistleblowing

● Nomination ● Nomination● Reporting

Compliance Committee

Whistle-blowing System (Hotline)

Special Compliance Committee

● Reporting

● Reporting● Reporting● Education● Inspection● Supervision● Orders

Supervisor Company Lawyer

Directors, Employees

Board of DirectorsRepresentative Director, President & CEO

● Consultation● Whistleblowing

● Reporting

● Reporting

● Reporting

New Compliance Systems (Diagram)

Composed of committee chairman, committee vice-chairman and members

Committee chairman: Outside directorMembers: Must include at least one independent, outside specialistAdvisor: Lawyer from an outside law firm

● Whistleblowing regarding directors

● Right to issue cease and desist orders

(compliance issues involving directors)

(Accordia Golf Group compliance issues)

12

■ Revenues（Millions of Yen） ■ Operating income （Millions of Yen）

● Operating income ratio (%)

■ EBITDANote 1 （Millions of Yen）

● EBITDA margin (%)

■ Ordinary income （Millions of Yen）

● ROANote 2 (%)

■ Net income （Millions of Yen）

● ROANote 3 (%)

■ Total assets （Millions of Yen）

■ Equity （Millions of Yen）

● Equity ratio (%)

■ Interest-bearing debt （including lease obligation）（Millions of Yen）

● Debt/equity ratioNote 4 （Times）

■ Cash dividends per share （Yen）

Major Consolidated Financial Indexes

What is earnings before interest, taxes, depreciation, and amortization (EBITDA)?This is an index for measuring profitability, ob-tained by adding the costs that do not accom-pany cash payments—such as depreciation costs and goodwill amortization costs—to oper-ating income. The Company places importance on the stable growth of cash flow, and regards EBITDA as an important administration index.

What is debt/equity ratio?This indicates the ability of a company to repay its principal by paying its debts with interest, and is an index for measuring financial integrity. Our Company has increased its debt in acquiring golf courses, but it has also built up internal reserves through profit expansion to improve the index.

87,37287,44277,504

14,08612,69312,565

2008.3 2010.32009.3 2011.3 2012.3 2008.3 2010.32009.3 2011.3 2012.3

(Plan)

2008.3 2010.32009.3 2011.3 2012.3 2008.3 2010.32009.3 2011.3 2012.3

2008.3 2010.32009.3 2011.3 2012.3 2008.3 2010.32009.3 2011.3 2012.3

2008.3 2010.32009.3 2011.3 2012.3

2008.3 2010.32009.3 2011.3 2012.3

12,373

10,44211,072

10,438

8,5119,581

56,133 63,588 72,973

101,27792,754

104,981

213,112 228,234 242,303

26.3 27.9 30.1

1.61.71.4 1.4 1.2

1,000 1,000 1,000 1,000

1,200

21,39919,164

17,371

14.516.2 16.1

4.75.9

5.3

14.218.7

15.3

86,693 86,79813,316 12,601

11,475 10,726

8,121

11,293

78,03488,303

109,354 106,715

249,867 253,494

31.234.8

20,664 20,392

15.4 14.5

4.7 4.510.8 13.6

21.922.424.5 23.8 23.5

Note 1: Operating income before depreciation = Operating income + Depreciation costs + Goodwill amortization costs Note 2: Return on assets (ROA) = Ordinary income / Net assets (average during the term)Note 3: Return on equity (ROE) = Net income per share for the term / Net assets per share (average during the term) Note 4: Debt/equity ratio = Debt with interest / Net assets

13

Introduction to Accordia Golf Courses / Driving Ranges (As of June 1, 2012)

■HokkaidoChitose Country ClubOnuma Lake Golf ClubTarumae Country Club■MiyagiMiyagino Golf ClubHananomori Golf ClubOsato Golf Club■YamagataYamagataminami Country Club■FukushimaFukushima Country ClubOnahama Ocean Hotel and Golf ClubLiberal Hills Golf Club

■IbarakiSuifu Golf ClubIshioka Golf Club West CourseIshioka Golf ClubCentral Golf Club New CourseCentral Golf ClubMito Golf ClubTsuchiura Country ClubKasumidai Country ClubWild Duck Country ClubToride Sakuragaoka Golf Club■TochigiOhiradai Country ClubMinagawajo Country ClubKanto Kokusai Country ClubKoryo Country ClubKitsuregawa Country Club■GunmaMyogi Country ClubNorthern Country Club Jomo Golf CourseNorthern Country Club Akagi Golf CourseMidono Country ClubTwin Lakes Country ClubKanra Country ClubVillage Higashi-Karuizawa Golf ClubFujioka Golf ClubKanetsu Highland Golf Club

■SaitamaKodamakamikawa Country ClubSainomori Country ClubTamagawa Country ClubNorthern Country Club Nishikigahara Golf CourseChichibu Kokusai Country ClubYorii Country ClubSaitama Golf Club■ChibaKamogawa Country ClubBoshu Country ClubNaritahigashi Country ClubChibasakuranosato Golf ClubSawara Country ClubTokyowan Country ClubAqualine Golf ClubAccordia Golf GardenNarashino Country Club Kuukou CourseNarashino Country Club King & Queen CourseHanao Country ClubGlenoaks Country ClubOak Hills Country ClubNarita Golf ClubNew Nanso Golf ClubMinami Ichihara Golf ClubLa Vista Golf Resort■KanagawaDaiatsugi Country Club Hon CourseDaiatsugi Country Club Sakura CourseOdawara Golf Club Matsuda Course

■NiigataDainiigata Country Club Sanjo CourseDainiigata Country Club Izumosaki Course■IshikawaHokuriku Greenhill GolfKanazawa Central Country ClubIshikawa Golf Club■FukuiFukui Country ClubEchizen Country Club■YamanashiOtsuki Garden Golf Club

■GifuShinyo Country ClubForest Mizunami Country ClubSun Classic Golf Club■ShizuokaMishima Country ClubIzukokusai Country ClubAshitaka Six Hundred ClubJuriki Country Club■AichiCastlehill Country ClubTsukude Golf Club■MieMeisho Golf ClubFujiwara Golf ClubSourei Golf Club Seki CourseRoute 25 Golf ClubSuzukanomori Golf ClubKasumi Golf ClubForestgeino Golf ClubYokkaichinosato Golf Club

■ShigaSourei Golf Club Tsuchiyama CourseOtsu Country Club Higashi CourseOtsu Country Club Nishi Course■KyotoKyouwa Golf ClubKameoka Golf ClubKamo Country ClubLake Forest Resort■OsakaKisaichi Country ClubSakai Country ClubIzumisano Country ClubMisaki Country Club■HyogoKasai Country ClubHarima Country ClubYamanohara Golf ClubInagawa Green Country ClubInagawa Kokusai Country ClubAtagohara Golf ClubShirasagi Golf ClubKobe Pine Woods Golf ClubYashiro Tojo Golf ClubTigers Golf Club■NaraNaranomori Golf ClubManju Golf ClubYamato Kougen Country Club■WakayamaLabeam Shirahama Golf Club

■OkayamaOkayamamitsu Country Club■HiroshimaTakehara Country ClubHongo Country ClubHiroshima Asa Golf Club■YamaguchiSuoh Country ClubSanyo Kokusai Golf Club

■FukuokaFukuoka Pheasant Country ClubCentral Fukuoka Golf ClubNijo Country ClubKaho Golf Club■NagasakiNagasaki Park Country ClubSasebo Kokusai Country ClubHuis Ten Bosch Country Club■KumamotoKikuchi Country Club■OitaAmagaseonsen Country ClubBeppu No Mori Golf Club■MiyazakiAoshima Golf ClubRainbow Sports Land Golf Club■KagoshimaYunoura Country Club■OkinawaThe Southern Links Golf ClubPalm Hills Golf Resort

■IbarakiAccordia Garden MitoAccordia Garden Mito Minami■SaitamaAccordia Garden KasukabeAccordia Garden Tsurugashima■GunmaAccordia Garden Fujioka■ChibaAccordia Garden KashiwaAccordia Garden Yotsukaido Sun BigAccordia Garden Chiba ToganeAccordia Garden Chibakita■TokyoAccordia Garden Minami Aoyama (Indoor Golf)Accordia Garden Tokyo Bay■KanagawaAccordia Garden Chigasaki■AichiAccordia Garden Seto■FukuiAccordia Garden Fukui■OsakaAccordia Garden KashiwaraDojima Country Club (Indoor Golf)■HyogoAccordia Garden Kobe KitamachiAccordia Garden KakogawaAccordia Garden SeishinAccordia Garden Koshienhama■NaraAccordia Garden Tezukayama■HiroshimaAccordia Garden Hiroshima Chuo■OkinawaOkita Driving Range

Kyushu/Okinawa Area

15Courses

　＋1

Hokkaido/Tohoku Area

10Courses

Kinki Area

25Courses

＋7

Tokai/Hokuriku/Joshinetsu Area

25Courses

　＋2Chugoku Area

6Courses

＋1

Kanto Area

51Courses

＋12DrivingRanges

DrivingRanges

DrivingRange

DrivingRange

DrivingRanges

Hokkaido/Tohoku Area

Kanto Area

Tokai/Hokuriku/Joshinetsu Area

Kinki Area

Chugoku Area

Kyushu/Okinawa Area

Golf Courses

Driving Ranges/Indoor Golf

14

There are four ways shareholders can exercise their voting rights:1. By attending the General Shareholders’ Meeting2. By sending in the Voting Right Exercise Form3. By sending in the Letter of Attorney4. Through the Internet

Each of the above is explained below.

How to Exercise Your Voting Rights

1. Attending the General Shareholders’ MeetingIf you are able to attend the General Share-holders’ Meeting, please see the Notice of Convocation for details on the venue, time, etc. Please bring the Voting Right Exercise Form with you.

4. Through the InternetWe ask you to exercise your voting right by granting your approval to Proposals No. 1 through No. 3 and indicating your opposition to Proposals No. 4 and No. 5, referring to the “Procedures for Exercising Your Voting Right via the Internet” on pages 4–5 of the Notice of Convocation.

3. Sending in the Letter of AttorneyWe ask our shareholders, if you are willing to support the Company, to choose this method. Please fill in the required items on the Letter of Attorney, and send it to the Company. For in-structions on filling out the form, refer to the “Request Regarding Voting by Proxy for the 33rd Ordinary General Shareholders’ Meeting.”

2. Sending in the Voting Right Exercise FormAfter filling in the required items on the Voting Right Exercise Form, please send it to the Cor-porate Agency Business Unit of Mitsubishi UFJ Trust and Banking Corporation, as instructed on the form. We ask all our shareholders to support the Company and grant your approval to Proposals No. 1 through No. 3 and indicate your opposition to Proposals No. 4 and No. 5.

Shibuya Cross Tower, 15-1, Shibuya 2-chome, Shibuya-ku, Tokyo

Send inquiries on this booklet to:Personnel in charge of the General Shareholders’ Meeting, General Affairs DepartmentTEL: 03-6688-1500 (9:00 a.m. to 5:00 p.m. weekdays)

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