Number of Weddings

BUILDING THE FUTURE

Prologue

In October 1998 three enthusiastic young people created TAKE AND GIVE. NEEDS Co., Ltd. (“T&G”). The name T&G came from the concept of understanding (taking) customer needs and providing (giving) services corresponding to them.

T&G identiﬁed opportunities and created a niche in a wedding market that had been decreasing in size. In a short period of time T&G established the house wedding market and achieved unprecedented growth, gaining a comprehensive understanding of its customer base.

T&G entered into the wedding market with a focus on the following three possibilities: 1. The potential to become the No. 1 company in the industry 2. The potential to develop wedding-related businesses 3. The potential to develop post-wedding businesses

In the eight years since its launch, T&G has moved from the wedding venue development business to the lifestyle business, beginning a new stage of growth.

This document has been translated from the original Japanese as a guide for non-Japanese investors. It contains forward-looking statements based on a number of assumptions and beliefs made by management in light of information currently available. Actual ﬁnancial results may differ materially depending on a number of factors, including changing economic conditions, delay in the opening of new venues, and pricing and product initiatives of new and existing competitors. ONE MEMORY AT A TIME

SECTION 1 UNDERSTANDING T&G

Message from the President: Yoshitaka Nojiri 6 House wedding business model 16 Development and financial strategy 22 “T&G-isms” culture and history 24

SECTION 2 FINANCIAL SECTION

Financial highlights 34 Management analysis 35 Non-consolidated financial statements 38

SECTION 3 INVESTORS’ GUIDE

Corporate data 50 List of venues and affiliated restaurants 51 The Japanese wedding market 52 The T&G house wedding business 60 FY2005 KEY NUMBERS 41 62 In the year to March 2006, VENUES T&G established 21 new house wedding halls across Japan, bringing the total to 62 and making T&G the largest house weddings company in Japan.

In the year to March 2006, T&G achieved its FCF ﬁrst positive free cash ﬂow since establishment 850 and paid its first dividend of ¥300 plus a commemorative dividend of ¥200.

-169 2 5.9 27.9

ROE has been improving due to strong growth in profit and a large ROE decrease in capital expenditure. Target ROE is over 30%. 2 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

3.5 5.1 ORDINARY INCOME Ordinary proﬁt increased steadily as a result of an increase 4.8 in the number of highly profitable directly managed venues. T&G’s net sales to ordinary income ratio was over 15%, despite the cost of having established 21 new halls during the year. 33.9 21.8 2.5

Net sales in the Since 2005, T&G has opened NET SALES year ended March CAPEX new venues off the balance sheet, 2006 increased by over ¥1.0 billion, with growth at both mainly using SPCs. Compared to the year to March 2005, new and existing venues. T&G is No. 1 in sales among in which T&G opened 19 new halls, capital expenditure has domestic weddings companies. been greatly reduced. 3 1 UNDERSTANDING T&G

2 Section 1 explains T&G’s corporate culture and the sources of its strength, as well as T&G’s basic business model, ﬁnancial strategy and future growth strategy. 3

4 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

6 14 1

20 22

6 Message from the President: Yoshitaka Nojiri President & CEO Yoshitaka Nojiri discusses T&G strategies. Topics range from the reasons why T&G entered the wedding venue development business to future strategies, including new businesses that T&G is currently moving towards. 2 16 Business model of house weddings Explains ‘house weddings’ as the source of eight years of growth, and provides an overview of T&G services, revenue models and key differentiators.

21 Coffee break: T&G house wedding schedule

22 Development and financial strategy Discusses T&G’s policy of balancing profit growth with maintaining a sound financial base, and provides an explanation of strategies to improve ROE and ROA while rapidly increasing net sales and profits.

24 “T&G-isms” culture and history Introduces “T&G-isms”. Describes T&G’s ability to create markets, key to the development of future businesses, and T&G’s current businesses. This section also discusses T&G’s unique culture, which distinguishes the company from 3 the rest of the market, and provides an historical look at T&G’s business development to date.

26 Case study: Creating the house wedding market

32 Coffee break: T&G and the media

5 Basic Strategy of T&G Message from Yoshitaka Nojiri

Why the wedding business? I established T&G in October 1998. I was 26 years old and had just spent three Wedding- years as a businessman with a large insurance group. Born the second son of 10 related market (10 trillion yen) self-employed parents, I was determined to some day run my own business. My school was attended by the children of business owners, entertainers, athletes and several wealthy families. I became aware of what a great thing it was to be Wedding the owner of a listed company, and recall embedding the term listed company in 2 ceremony & reception market my consciousness from a very early age. (2 trillion yen) At junior high school I mixed study with lots of fun and games, planning huge

Japanese wedding market events, working for a second-hand clothing store, and gaining experience of how In 2005, 710,000 couples were married business works. At high school and university I played with what was at the time in Japan. The average price of a wedding ceremony was ¥3,030 thousand (see page 56) Japan’s strongest rugby club, becoming No. 1 in the country. I think that through

DATA: Health, Labour and Welfare Ministry: this I developed the ﬁghting instinct to make more of my future than I might have, Population Dynamics 2005 RECRUIT CO., LTD. ‘Zexy Marriage and developed the habit of winning. Trend Survey 2006’ Looking back, I realize that the experiences I had during my education are helping me to this day. In deciding which industry to establish my own business in I had three key points in mind. The industry I chose had to enable my business to: 1. Rapidly become No. 1 2. Continue long term, and 3. Diversify into related areas.

After graduating, I found a working environment where I could meet with many different business leaders, and for three years researched a wide range of business sectors. At the end of this process I had narrowed my focus down to three areas: human resources, nursing services, and special ceremonies. In the ceremonies sector, the wedding business seemed particularly attractive.

Yoshitaka Nojiri The prevailing wedding ceremony business in Japan had existed for a number Born in Tokyo, 1972. From an early of decades, but for a long time there had been little change in the services offered, age developed an interested in running his own business, inﬂuenced and nothing had happened to shake up the industry structure. Of further interest by his self-employed parents. Twice was the fact that in this large, ¥2 trillion industry there were very few listed or oth- won national university championship as a member of the Meiji University erwise well-ﬁnanced businesses. (Note 1) rugby team. Joined Sumitomo Fire & Another feature of the industry was the lack of real competition between busi- Marine Insurance Co. after graduation, working in venture business support. nesses to secure customers. This stemmed from the fact that, in contrast to the Resigned in 1998 to pursue opportu- restaurant trade or other such businesses, most customers only make use of a nities in the wedding industry, founding T&G in October of that year. wedding service once in their lives.

Note 1: Japan has very few specialized wedding businesses. Most operations are supplementary to the 6 management of hotels or inns. See page 59 for details. TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006 10 2

Dedicated Because of these circumstances, Japan’s so-called second baby boomers were Co-op or wedding venues similar reaching the marrying age to find a wedding industry that was far behind the times. Others facilities 18% 1 At that time I happened to attend my first wedding, invited by a friend. The 5% 28% impact that wedding had on me is a key driver of T&G today. Weddings in Japan at that time were far too formal for the new generation, to the extent that people Hotels, Japanese-style inns wondered why on earth they should pay all that money. The more I looked into the 49% industry, the more I became convinced of the customer support we could gain by providing wedding services that people really wanted. Number and type of wedding venues in Japan I also became aware of how attractive the whole wedding period was from a DATA: METI 2005 Survey of Specialized Service Industries business point of view. For most people, getting married marks a transition from being an individual to being part of a household. A business able to capture customers at this entry point would have the potential to develop a range of other operations. I felt that if I could create a way to become very close to customers during this transition period, there was every chance of being able to quickly grow a company into a lifestyle-related business. Balancing these factors was my awareness that, as everyone knew, Japan 2 was facing an imminent decline in its population, and the bridal market was Japan’s so-called clearly shrinking. In the final analysis, however, I decided that its market size, operating environ- second baby ment and business potential made the bridal market a very attractive sector in which to develop a venture business. boomers were reaching the For seven years, management resources have been focused on the house wedding business marrying age to For the past seven years T&G’s management resources have been focused exclu- sively on the house wedding business. At various stages of sales growth—¥5.0 find a wedding billion, ¥10.0 billion and ¥20.0 billion—we have been invited to take part in a range of activities such as alliances with wedding-related businesses, M&A’s, and third- industry that was party wedding management. Prior to 2005, we declined all such invitations. While still maintaining our vision far behind 3 of becoming a comprehensive lifestyle company, and while believing that this vision was highly achievable, we had made the decision that further challenges the times. would not be pursued until we have established a solid foundation in customer service, personnel and finances.

7 Further, as far as future diversiﬁcation was concerned, we wanted to see as many new business managers as possible come from inside the Company. To achieve this, we implemented the swift training of managers and established the The wedding venues as independent proﬁt centres. Through ongoing activities at the ‘Nojiri School’, a management school that teaches practical management, staff educa- preparation period tion was a top priority. In 2005, T&G began to see results from these efforts, gradually reaching the is characterized stage where the development of new enterprises could begin.

by three to six The characteristics of the Japanese wedding market Understanding the Japanese wedding market is essential to a discussion of our months of intense strategy for becoming a comprehensive lifestyle company. The scale of the Japanese wedding ceremony and reception market is around purchasing activity ¥2 trillion, and taking into account the larger pre- and post-wedding related busi- for Japanese nesses, the overall scale of the market reaches approximately ¥10 trillion. This market is characterized by concentrated purchases in a short period of time. couples As the employment ratio among women increases, wedding preparation time is decreasing, with three to six months having become the norm. During the preparation period, purchases extend well beyond the wedding ceremony to include jewelry, furnishing a new home, and the honeymoon. Further, as over a quarter of weddings take place when the couple is already expecting (Note 2), additional maternity-related purchases, such as maternity clothing and children’s clothing, are also made. Such concentrated consumer activity in a short time span is an attractive characteristic of the Japanese wedding market. 3–6 months Wedding ceremony

Pre-wedding Wedding preparation period New lifestyle

Romance Engagement gifts Wedding rings Booking honeymoon Changing insurance Gift exchange Dress, flowers, gifts for guests, photographs, Choosing the venue hair and make-up, entertainment for the ceremony Purchase of necessities for the event Purchasing furniture, Purchasing of children’s clothes, home electronics and children’s goods moving to new home.

The Japanese wedding market is characterized by concentrated consumer activity in a short time span

Note 2: The proportion of weddings where the date of conception is earlier than the date of the wedding is 8 26.7% according to data gathered in 2005.

Wedding Post-marriage Everyday living Pre-marriage preparation period life & Everyday living 700,000 to 750,000 weddings annually children

1st TARGET

2nd TARGET

FUTURE TARGET 3–6 months Wedding ceremony

Pre-wedding Wedding preparation period New lifestyle

TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

Wedding Post-marriage 1 Everyday living Pre-marriage preparation period life & Everyday living 700,000 to 750,000 weddings annually children

1st TARGET

2nd TARGET

FUTURE TARGET

T&G’s move to a become comprehensive lifestyle company is divided into three stages. The ﬁrst stage targets customers in the wedding preparation period and concentrates on accumulating data and creating the database structure.

From wedding ceremonies to a comprehensive lifestyle company In entering this appealing market of concentrated consumer activity, we began 2 operations by offering wedding ceremonies—the preparation of which spans almost the entire wedding preparation period. The aim was to become the No. 1 business in the sector, and then leverage the knowledge and customer base gained to pursue further business development. We rapidly reached the No. 1 The aim was to position by creating and developing nationwide a new wedding style in Japan: the house wedding. And by establishing a highly profitable branch-opening model we become the maintained a sound financial base while growing profits. As a result of this, in a mere eight years since establishment, we have achieved No. 1 business the highest sales and profits in the wedding ceremony industry while maintaining strong customer relationships. in the sector The key differentiator that distinguishes our house weddings from packaged weddings is the inclusion of the personal wedding planner. The wedding planner is able to uncover the unique needs of each customer to create customized ceremonies. This additional care means that good communications skills are a must for 3 wedding planners. As a result of our efforts in the selection of a training methodology and in training itself, we have created a system that both fully reveals and meets the needs of our customers.

9 Our customer base is our most important resource for developing into a comprehensive lifestyle company. In contrast to many other businesses seeking to diversify, we have the advantage of being able to use close existing customer relationships to develop new opportunities. As such, our large customer database is the cornerstone of future business development. Ongoing expansion of the database is supported by the venue development business and the portal site business. The venue development business includes not only the house weddings business, but also the overseas and domestic resort weddings business (targeting Our customer Japanese customers), and we intend to further develop the Japanese hotel and hall wedding business into a third-party wedding management business. base is our Our house wedding network gives us close, real-time access to customers both prior to and after their weddings, and from this we are gaining business develop- most important ment ideas. The current target is to achieve net sales in excess of ¥100 billion, resource for or about 5% of the ¥2 trillion market. However, there is a limit to the size of a database that a company can create developing into a from the venue development business. Assuming that we achieve the ¥100 billion target, out of the 700,000 weddings annually, we would still only be able to main- comprehensive tain a database of around 40,000 to 50,000 couples. lifestyle company. Venue development business Associated House weddings

Overseas, domestic resort weddings Sougou Seikatsu Co., Ltd. GOOD LUCK Corporation (Established as wholly owned subsidiary in July 2005) (June 2005 33% equity participation)

Orders for wedding management at hotels, etc.

T&G’s DATABASE

Associated businesses

Loans Travel Beauty Arranging Jewelry Toys Children’s Furniture Marriage wear

Life Angel Co., Ltd. T&G Beauty Co., Ltd. Est. July 2005 Est. March 2006 Cards Gifts Insurance New 100% ownership 51% ownership house ANNIVERSARY TRAVEL Co., Ltd. Partner Agent Inc. Est. February 2006 Est. September 2006 51% ownership 100% ownership

T&G aims to broaden the database supported by the venue development business and the portal site. Using this expanded customer base as a foundation, T&G will venture into a range of related businesses.

10 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

In order to maintain as comprehensive a database as possible of the 700,000 couples marrying each year, we will use our portal site as a means of gathering 1 additional data. For this reason, the portal site contains a wide range of information that is also beneﬁcial to those who are not yet customers. Through both the venue development business and the portal site, we aim to broaden our customer database. Further, by leveraging our expertise and wide ranging customer base—from weddings to wedding-related businesses—we will develop as a comprehensive lifestyle company.

The many challenges concerning future growth No matter how Our wedding planners and other staff are the face of the Company, and their skill in identifying customers’ needs and fulﬁlling their expectations is the key to our large a company success and growth. Consequently, in order to foster such personnel, we place great emphasis on our becomes, or how corporate culture. Since the company was launched, we have aimed for something many employees more than just growth: we aim to be a place where people really enjoy their work. 2 No matter how large a company becomes, or how many employees it has, it has, everything everything becomes more effective if people enjoy their work. As the number of employees grows, the level of enjoyment will differ from person to person. But becomes more the pleasure derived from being in business is a precious thing that can only be understood by those who have been part of an organization, serving customers. effective if people Therefore, one of our most important tasks is to ensure that future employees— members of our group—are able to enjoy their jobs. enjoy their work. Our corporate philosophy is expressed in four principles, using plain language that can be easily understood and applied by employees. As long as these principles—T&G-isms—are at the root of the business, we will continue to succeed. That is just how great the potential of the business is. T&G’s growth is just beginning. 3

President and CEO, Yoshitaka Nojiri

11 T&G’s new operations

Take and Give. Needs Co., Ltd. group companies (as of September 30, 2006)

Date Capital Principal Company Name Main business share- Comments established (thousand yen) holders

Developer of domestic house wedding business using dedicated mansions. As Developing the Take and Give. Needs October of FY 2008, focus will shift from the rapid domestic house 2,949,350 — Co., Ltd. 1998 development of over 20 venues annually to wedding business choosing prime locations. Also undertaking bridal management agreements, etc.

Operator of a wedding planning website Creation and operation since September 2005. Aiming to of web portal offering SOUGOU SEIKATSU July T&G: increase members, page views and comprehensive support 10,000 Co., Ltd. 2005 100% introduce special services such as social for marriage planning networking systems. and lifestyle

Take and Give. Arts Management of July T&G: Undertakes collaborative projects with 10,000 Co., Ltd. gallery show rooms 2005 100% leading artists.

Finance of weddings Operations began in October 2005 with July T&G: and related 100,000 the aim of servicing 10% of T&G’s cus- LIFE ANGEL Co., Ltd. 2005 100% lifestyle items tomer base during FY 2007.

A non-store sales joint venture with Sale of products and Anniversary Travel February T&G: JTB (T&G: 51%, JTB: 49% equity services for honeymoon 100,000 Co., Ltd. 2006 51% participation). Aiming to leverage T&G’s and anniversary travel customer base.

Facilities with Lava spa and body treat- Operation and management sets. As of September 2006 venues ment of relaxation T&G Beauty March T&G: had been opened in Daikanyama and facilities (esthetic salon, 10,000 Co., Ltd. 2006 51% Fukuoka. Targeting to have 6 venues by aromatherapy and FY 03/2007. bathing facilities)

Marriage arrangement September T&G: Operations scheduled to begin in 300,000 Partner Agent Inc. services business 2006 100% January 2007.

Two directly managed facilities (Bali and Okinawa) and an exclusive manage- Resort wedding October T&G: ment agreement at one venue (Hawaii). Good Luck Corporation 15,000 Co., Ltd. business 2003 33.3% Further development of directly managed facilities is scheduled primarily in Hawaii and Guam.

12 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

Portal site business Financing business Travel business SOUGOU SEIKATSU Co., Ltd. LIFE ANGEL Co., Ltd. Anniversary Travel Co., Ltd. 1

Since September 2005, T&G has been T&G entered the wedding finance Currently 81.3% of marrying couples operating a wedding preparation-related business after conducting a survey go on honeymoon, and the majority Internet portal site to provide couples in 2004 where respondents ranked of these, 87%, use package tours. with all of the information they need for “installment payment plans for jewelry” However, there has been a growing the wedding preparation stage. second highest among the future tendency for couples to emphasize The site mainly contains wedding services they would like T&G to provide. originality in their wedding ceremonies preparation blogs, written by couples Compared to general consumers, and receptions, and there is increasing themselves, outlining the progress of couples borrowing for wedding demand for services tailored to their wedding preparations, a Q&A area ceremonies tend to be trustworthier individual honeymoon and anniversary where a whole range of questions about and less at risk of failing to pay back travel needs. wedding ceremonies are answered loans. The upper limit of loans is three Anniversary Travel Co., Ltd. aims to by wedding planners and special million yen and interest ranges from provide honeymoon and anniversary guests, and so forth. Currently, as 8.7% to 15.9% (as of September travel event planning for that once-in- the primary focus of wedding sites is 2006). The business model is highly a-lifetime travel experience. To respond introducing users to wedding venues, proﬁtable, as it is a non-store operation in detail to individual customer needs, T&G is engaging in a wide range of new with low advertising costs. Financing it does not limit its services to package customer-oriented initiatives. is procured from financial institutions tour options but also offers high value T&G is now focusing on enhancing with low fund procurement costs, and added order-made services, and by content, but in the future plans to off-balance sheet debt management is doing so aims to differentiate its offering 2 increase advertising revenue and also under consideration. from more conventional, off-the-shelf commissions, the site’s main sources At present T&G is focusing on travel services. of income, by ensuring repeat visitors obtaining more customers from the Anniversary Travel Co., Ltd. is and increasing visitor numbers, through wedding operations, and once an currently focusing on attracting more methods such as developing social operating base has been fully secured, customers from T&G, and aims to networking services, e-commerce and the Company plans to pursue sales establish a unique non store-based membership systems. to non-T&G wedding venues such as business model. hotels and specialist wedding venues.

SOUGOU SEIKATSU Co., Ltd. website (Wedding preparation room)

Anniversary Travel Co,. Ltd. (My page) LIFE ANGEL Co., Ltd. website 3

13 Beauty business Marriage arrangement Resort wedding business T&G Beauty Co., Ltd. services business GOOD LUCK Corporation Partner Agent Inc.

At present the proportion of new brides The annual number of weddings in that receive bridal esthetic (pre-care) Japan has been in the 700,000-750,000 services prior to the wedding ceremony range, with people increasingly and reception is a high 74.8%, and tending to marry late or not marry at the period prior to the ceremony and all. Changes in individuals’ awareness reception in particular is a time when about marriage, reduced opportunities interest in beauty care increases to meet prospective partners resulting among women. from changes in the social environment, Among T&G’s future strategic a mismatch in values between men lifestyle-related businesses, the and women and other factors are company recognizes that the beauty considered to be exerting a major business has both high latent demand inﬂuence on this trend. and ample growth potential. T&G’s In September 2006, T&G established strategic response to this has been to Partner Agent Inc. with the objective of open the Spa business (also targeting engaging in the marriage arrangement non-T&G customers). services business, bringing together By combining high-quality treatment prospective marriage partners at the services with the latest in popular stage prior to the wedding ceremony “lava bath”detox services, T&G is and reception business. providing a unique service offering. By providing ﬁne-tuned services that The Company plans to develop the respond to customers’ needs, through business mainly in major metropolitan rediscovering market needs and areas in the initial stages. channeling the wide-ranging expertise The business has started smoothly, it has gained to date, such as the with the opening of “magma relaxation ability to make compelling proposals spas” in Daikanyama and Fukuoka (as to customers, T&G will pioneer new of September 2006). ground to tap into latent demand and Potential overseas wedding market create a new marriage arrangement (Tokyo metropolitan region) services market. Partner Agent Inc. is scheduled to 7.7% start business in January 2007. 27.5% Partner Agent Inc. website

■ Had overseas wedding ■ Considered overseas wedding ■ Did not consider overseas wedding

DATA: RECRUIT CO., LTD. “Zexy Marriage Trend Survey 2006”

14 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

T&G’s Stance on New Business 1 Go it alone or M&As? In June 2005, T&G acquired 33.3% of GOOD events take place on Saturdays, Sundays LUCK Corporation (GL), a corporation targeting or national holidays means that the the Japanese overseas wedding market. number of actual operating days is limited. T&G has a range of options available T&G’s strategy is to determine customer In contrast, overseas weddings typically for future business development, needs and to use the Company’s venue involve a smaller number of guests who including establishing new companies, development expertise and financing ability have traveled on vacation from Japan, forming business alliances, and to accelerate the speed of GL’s development. which allows resorts to host weddings engaging in M&A activity. The method Unlike current wedding services offered throughout the year. Turnaround times in overseas, the focus of GL’s concept is on the ceremony-only business are rapid, chosen will be governed by the providing wedding ceremonies at wedding and depending on the management prevailing business environment, T&G's resorts. Currently, there are several dress hire approach used a resort may be able to financial status, and other factors. The and travel companies offering both overseas host five times more weddings a year than basic stance, however, is to: and domestic resort ceremony services a house wedding venue. secondary to their core operations. As such, Overseas weddings are typically attended • Ensure high profitability couples using these overseas wedding by 8 to 10 guests, comprising close friends, • Limit inventory and other risks services are subject to a limited schedule family and relatives of the couple. As a while spending much of their time moving to result, the unit price for these ceremony- M&A activities would create various locations. only events tends to range between opportunities for: Like the domestic wedding ceremony ¥800,000 and ¥1,000,000, comparatively 2 business, overseas and domestic resort- lower than the lavish ceremony-and- • New businesses derived from the based wedding operations provide high banquet weddings in Japan. wedding business levels of profitability. Domestic wedding However, the kinds of products and • New businesses linked to wedding ceremonies usually have 80 to 100 people services purchased for overseas weddings receptions, such as products in attendance, and the fact that almost all do not differ greatly from domestic related to the venues and the weddings. Combined with the high reception itself. capacity utilization achievable in overseas Potential domestic resort wedding market resorts, profitability at a well-managed As part of T&G’s strategy to generate overseas resort can potentially exceed (Tokyo metropolitan region) growth outside of the house weddings that of a domestic location, despite the 4.3% lower unit prices. business, the Company has been At GL’s wedding resorts the emphasis considering manufacturing products 14.1% is on a sense of luxury, and weddings can in-house. Following the conclusion of proceed at a leisurely pace and last the the rapid expansion stage of venue whole day. The idea is to create a unique network development in the fiscal year day using the finely-tuned services and original presentation and products of a to March 2008, T&G will gradually ■ Had domestic specialist wedding business, while—like begin in-house manufacturing of resort wedding ■ Considered domestic T&G’s house weddings—also placing products such as flowers and dresses, resort wedding importance on customer needs. which are currently outsourced, in ■ Did not consider domestic In the future, GL aims to effectively use 3 resort wedding order to increase profitability. T&G’s venue development expertise and real DATA: RECRUIT CO., LTD. estate liquidation to actively develop chapels “Zexy Marriage Trend Survey 2006” in resort areas in Japan and overseas.

15 House wedding business model

16 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

House wedding concept Chapel Waiting rooms 1 T&G’s house wedding concept is based on the idea of exclu- 2nd floor sive personal time and space. Couples marrying within T&G’s facilities have exclusive private use of everything they require for a luxurious wedding, including a glamorous mansion, a garden and swimming pool and café space. 1st floor Each wedding hall facility is restricted to only two weddings per day, and because each house contains a chapel, party room, lobby, waiting room and all necessary services, couples Pool Garden can hold their entire wedding event in one location. Kitchen Party room Lobby

Profit model CAPEX Two key factors drove T&G’s success in creating a new market for house weddings T&G engages leading designers while at the same time 2 using a variety of measures to strictly control construc- in Japan in a short period of time: its highly profitable venue management model, tion costs. Materials may be imported from China and other Asian countries, for example, and rather than and a structure that allowed rapid network development. New venues are estab- paying for the many middlemen typically associated lished on the basis of being able to generate a 30% plus ROI post tax. T&G has with general construction companies T&G places orders with a range of individual contractors. As a particular skills and experience to support this highly profitable business model, result, T&G’s construction costs are significantly lower in everything from construction through to management. than those of other companies. REVENUE TARGETS T&G’s venues are generally only available for bookings Profitability of house wedding operations (million yen) on weekends and public holidays. Capacity utilization 1-hall type 2-hall type and revenue targets are set for each venue model after taking into account O-bon and New Year seasonal holi- CAPEX (Building etc.)–1 312 616 days and management efficiency. Examples of revenue targets are as follows. Sales ratio Sales ratio Single-hall venue—Maximum potential operating days Net sales 590 100.0% 1,085 100.0% (120 days x 2 weddings per day) x 57-60% (utilization rate) x ¥4.35 million = approximately ¥600 million Gross Profit 348 59.0% 640 59.0% Twin-hall venue—Maximum potential operating days (120 days x 2 weddings per day) x 2 halls x 52-55% SG&A 200 33.9% 348 32.1% (utilization rate) x ¥4.35 million = approximately ¥1,000 million Staff 56 9.5% 97 8.9% Advertising 32 5.4% 52 4.8% GROSS PROFIT RATIO One characteristic common to most operators in the Land rent 42 7.1% 66 6.1% wedding industry in Japan is that they produce high prof- 3 itability. The gross profit ratio at T&G’s directly managed Depreciation 16 2.9% 34 3.1% venues is 57–60%. T&G currently outsources nearly all Other 8.0% 99 9.1% wedding-related products other than food and bever- 52 ages, and after completing its directly managed network Operating income 147 25.1% 292 26.7% and in-house production of products and services, will be seeking to increase the gross profit ratio. Net income 85 13.0% 169 15.6% SG&A EXPENSES Income before T&G is committed to maintaining high standards of 101 15.9% 203 18.7% depreciation–2 quality and management efficiency at each venue, and ROI (1÷2) 32.5% 32.4% therefore has a balanced SG&A expenses structure. Each venue is managed with the aim of keeping staff Note 1: For operations using a term land lease, T&G only owns the building. costs under 10% of net sales, advertising costs within Note 2: T&G operates two kinds of directly managed venues: those with facilities for one wedding, 5%, and rental costs within 7–10%. Further, each venue the “1-hall type”, and those with facilities for two simultaneous weddings, the “2-hall type”. operates under an individual accounting system, allowing accurate analysis of goals and progress. 17 What’s the difference? House wedding business model

Japanese weddings of old… The term ‘house wedding’ reached a milestone in 2003 From the 60s onward, Japanese weddings were typically when it was included in the Nikkei publishing group’s Book held in hotels or other banquet halls that handled dozens of of New Economic Terms, defined as: “a western style of weddings a day. They were sold as packages and formality wedding in which the wedding couple has exclusive use of was emphasized over originality. a guest-house style facility, and can create an atmosphere From 1990 this style began to change, driven by the of inviting guests into their own home. Becoming popular second baby boom generation. Zexy and a number of other with couples shunning the standardized formality of hotel or wedding magazines entered the market with new ideas and banquet hall weddings.” In the same year, Japan’s largest options. Suddenly, couples had access to far more informa- wedding magazine, Zexy, specified ‘guest house wedding’ as tion, and their latent demands began to surface. These young a new category and published its market share. The house couples wanted a wedding free of the formality on which wedding market has grown—from 4.7% and 8.3% in 2003 ceremonies had hitherto been based. and 2004 respectively, to 14.2% in 2005 and 15.7% in 2006. A Recruit survey carried out in 2006 clearly identified the T&G’s research has shown that more than 78% of young current generation’s key preferences with regard to weddings, couples would prefer a house wedding style of marriage namely: “creating an at-home atmosphere”, “expressing indi- ceremony. With an actual market share of only 15.7%, these viduality”, and “making sure that guests aren’t bored.” T&G’s finding highlight the size of the unmet demand. The causes house wedding style is the perfect match for these needs. of this gap likely include the fact that house weddings inher- ently do not target the large number of guests catered for by hotels and large-scale banquet halls, and the construction of house wedding facilities has not kept pace with the trend. Given this, two things are apparent: house weddings have become firmly established in the market, and the potential for further expansion is high. Several weddings occur at the same time and place Guests are seated far away from the wedding couple

Demand for house weddings Important points to consider for the wedding banquet (multiple responses allowed) ‘At home’ wedding style 66.0% Individualistic 58.4% Entertainment for attendees 56.8%

DATA: RECRUIT CO., LTD. ‘Zexy Marriage Trend Survey 2006’

A comparison of traditional and T&G wedding styles Traditional weddings T&G house weddings 78.1% Scale of event Large scale Small scale Weddings per day Many Few (max. of 2 per day) Products Packaged Customized Percentage of respondents who would prefer a house wedding Price Low/standard High

DATA: T&G homepage questionnarie (April 1, 2005 to March 31, 2006) Customer freedom/choice Low High

18 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

T&G’s strategic differentiation are always located within the wedding mansion, based on a Since T&G introduced house weddings, several imitators compact design that allows a maximum of two chapels to be 1 have entered the market. Despite this, T&G has managed built on the same premises. to continue earnings growth and achieve higher unit prices that its competitors. The secret to this ongoing competitive 2. MIDDLE PERIOD: strength is the Company’s focus on differentiation strategies ‘Intangible’ (soft) differentiation aligned with the market and with its own business. As house weddings began to gain popularity in Japan, T&G differentiated its services by focusing on the soft, or service, The key elements that differentiate T&G’s business are: elements of the business—and in particular, food. Typically, at hotels or large banquet hall weddings preparation times 1. Providing new and innovative services (differentiation through both tangible (‘hard’) and conceptual means) and scheduling were given priority over taste and presentation. For this reason, wedding food was seldom an object of 2. Continually improving quality and pursuing new pleasurable anticipation by guests. service approaches (differentiation through intangible (soft) means) In establishing its network of directly managed venues T&G elected to supply everything internally. Every T&G facility 3. Strengthening personal services to individual has a kitchen on premises headed by French-trained chefs customers (differentiation through T&G’s personnel) operating as regular employees of T&G. During weekdays 2 1. INITIAL PERIOD: these chefs are busy preparing for the weekend’s maximum ‘Tangible and conceptual’ differentiation of four weddings. T&G’s wedding feasts make no use of When T&G first introduced house weddings to the Japanese frozen or packaged food; everything is freshly made by market, its major points of differentiation were the service hand in the genuine French style. concept and the type of buildings used. To further differentiate the Company, T&G focused on Other house wedding operators in Japan would typically developing unique products and services such as special build one freestanding chapel on a large property, surrounded video messages recorded by celebrities, magic shows, and by four or five large banquet halls (see diagram). This con- a succession of innovative ceremony and product ideas. trasts with T&G’s fundamental concept of providing exclusive This approach continues today, with a continuous flow of use and total freedom to every customer. At T&G, chapels new ideas. 3

Chapel Lobby Pool Banquet room Waiting room

Examples of other companies Large-scale hotel T&G house wedding Independent mansion-style Contains several wedding halls. Chapel (wedding room), banquet room, lobby, waiting room, etc., ceremony halls in the vicinity of a Because the chapel is shared, complete facilities for wedding ceremony services large-scale chapel. Banquet must private parties cannot be held. be held elsewhere.

19 3. LATER PERIOD: Personnel differentiation the skill of wedding planners, as they must uncover and meet As the house wedding concept spread throughout Japan and the needs of the wedding couple in order to provide T&G’s similar services began to emerge, T&G furthered its differenti- unique Happy Surprise service—a special surprise uniquely ation through a structural approach to personnel training and designed for either the marrying couple or one of the guests. information sharing. In order to maintain T&G’s core policy of This system has been used continually since the establish- creating all services from the customer point of view, a single ment of the Company. wedding planner is responsible for all aspects of the wedding Moreover, in addition to wedding planners, each T&G ceremony. This often appears risky to other companies, who wedding calls on the services of waiting staff, dress and hair sell weddings mainly as packages where different people are care specialists, and a whole host of other personnel. Other responsible for different aspects of the service, reducing the than the chef and the wedding planner, all such staff are out- skill range required of each supervisor. sourced. In order to ensure quality, T&G works closely with T&G’s system of a dedicated wedding planner, handling its vendors and periodically includes them in Company everything from the preparation period onward, has the training sessions. advantage of allowing close communication with the cus- T&G believes that the quality of its personnel will become tomer, but it demands great wedding planning experience an increasingly important differentiator in the market place, and communication skill. Despite this, T&G has chosen to and has been updating its training methods as business commit the necessary resources to fostering personnel, expands. T&G currently handles the most weddings per year under the catchphrase 100 different weddings for 100 of any single wedding provider in Japan and collects all infor- different couples. mation on a nationwide database. At quarterly conferences Every T&G wedding is customized, with different products staff are awarded for excellent performance, and key scenes and different ways of expressing the unique personalities of from events are shown as a practical way for wedding plan- each marrying couple. The key to satisfying customers lies in ners to exchange ideas.

20 T&G house wedding schedule A typical example of how a T&G house wedding reﬂects the unique traits of each of its customers Time schedule 09:00

07:30 Wedding couple arrive at wedding venue

Make-up preparations for the bride begin

08:30 Preparations for the groom begin 10:00 1 09:00 Guests arrive A stained glass is built piece by piece by each of the guests as they arrive.

09:30 Wedding rehearsal

10:00 Wedding During the ceremony the 11:00 wedding couple performs the completion of the stained glass by inserting the ﬁnal heart shaped piece.

Photographs of the wedding couple are taken

11:00 Wedding reception begins

Congratulatory speech 12:10

11:20 Drinking begins

Wedding cake is cut 12:00 Bride changes her dress 2 12:10 Stained glass illumination ceremony Stained glass is illuminated during the reception 12:30

12:30 Surprise for the bride The surprise for the bride is a video message from her students. The bride is surprised and delighted.

12:40 Desert buffet

13:00 Surprise for the groom 12:40 13:00 The surprise for the groom is a video message showing the places where he his wife used to visit. The groom is deeply moved by the video.

13:10 Bride: Final words

Groom: Address of thanks 13:25 13:20 Event ends 3 13:25 End roll video

Guests depart

21 Development and financial strategy

T&G’s expansion the Company. From August 2001, T&G began to develop a A rapid rate of business expansion is one of the reasons why network of directly managed house wedding venues. T&G climbed to the top of the Japanese wedding ceremony This expansion began in well-known areas of Tokyo. market in only five years after its founding in 1998. Among young Japanese, the recognition rate of Daikanyama, T&G has adapted its network development model to Azabu and Shiragane is high. These parts of Tokyo are match the company’s stage of growth, and has varied its strongly associated with being fashionable and high class. speed of business expansion. In December 2001, T&G listed on the Tokyo Stock In the first two years, T&G opted for a method of business Exchange, gaining further credibility and financial strength expansion that did not require facility investment. T&G held its to energize its expansion nationwide. In 2003, T&G began to house wedding services through affiliations with restaurants expand regionally. At present, over half its venues are in cities that fitted the Company’s service concept. During this period, outside the main centers throughout Japan. T&G accumulated experience in the wedding ceremony In choosing a city, T&G looks for a population of more than business and achieved good business results. T&G’s busi- 300,000 people and 2,000 or more weddings annually, and ness performance during this period became recognized, where an after-tax return on investment (ROI) of at least 30% and in December 2000 a third party invested ¥500 million in can be projected.

1998–2000 2001–2002 2003–

Provided inner city Opened directly managed Developed venues house-style venues within Tokyo mainly in regional cities restaurant weddings

Affiliate restaurant house weddings

Directly managed venue house weddings

Trends of number of venues, average unit price by region, etc.

FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 Halls at end of term 8 22 41 62 Within Tokyo 4 3 5 6 Major cities 2 8 15 24 Other regions 2 11 21 32

Price per wedding (Thousand yen) 3,796 4,248 4,350 4,349 Average number of guests 81 89 83 79 per wedding

Price achieved per guest (yen) 46,907 47,730 52,410 55,063

● In operation ● In preparation (As of October 2006)

22 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

Method of expansion agreements. Nevertheless, times change. Since 2005, when T&G decided how many venues to open each year based T&G reached an expansion rate of at least 20 venues per 1 not only on the state of funding procurement, but also on the year, the company developed its own SPC (Special Purposes number of managers available to run the new venues. This Company) real estate securitization program. By basing its policy reduced the risk that service quality might deteriorate expansion on this process, T&G has succeeded in maintain- due to too rapid an expansion. ing a sound ﬁnancial base. T&G’s approach to venue expansion has been to keep In future, T&G aims to maintain a good balance between capital investment expenses as low as possible by owning venues that it owns outright, and those that it leases, while the buildings rather than the land underneath them. In prin- maintaining ﬁnancial security. ciple, the company has entered into long-term land lease

Method requiring capital investment Method not requiring capital investment

Banks, etc. Build Loan/Invest Build SPC (Special Purposes Rent or buy Rent or buy Company) 2 Rent

Trends in venue type, procurement of funds and other key ratios FY to 3/02 FY to 3/03 Change FY to 3/04 Change FY to 3/05 Change FY to 3/06 Change Venue type Venues at the end of term 3 8 +5 22 +14 41 +19 62 +21 Fixed-term land leasing 2 6 +4 9 +3 16 +7 16 — Fixed-term building leasing 1 2 +1 11 +9 17 +6 17 — Land purchase lease 0 0 — 0 — 2 +2 5 +3 Building-type SPC 0 0 — 0 — 4 +4 12 +8 Land purchase and development SPC 0 0 — 2 +2 2 +2 4 +2 Number of new venues 3 5 +2 14 +9 19 +5 21 +2 New venues type: On-balance sheet 3 5 +2 12 +7 13 +1 0 -13 Off-balance sheet 0 0 — 2 +2 6 +4 21 +15 CAPEX and procurement of funds (million yen) 3 CAPEX 395 3,645 +3,250 6,262 +2,617 4,899 -1,363 2,510 -2,389 Bank borrowings 450 2,630 +2,180 5,830 +3,200 — -5,830 — — Direct funding 306 — -306 4,886 +4,886 — -4,886 — — Key ratios ROE 13.8% 18.1% 4.3% 16.5% -1.6% 25.9% 9.4% 28.4% 2.5% ROA 8.2% 6.0% -2.2% 6.9% 0.9% 13.0% 6.1% 16.0% 3.0% FCF (million yen) -162 -3,426 -3,264 -2,298 +1,128 -169 +2,129 850 +1,019

Land was temporarily acquired during the ﬁscal year ended March 2003 for two venues that opened in the following year using an off-balance sheet method. On-balance sheet Off-balance sheet

23 “T&G-isms” culture and history

Creating a Proﬁt as a market resource 1 2 Pleasant A caring surprises environment Creating T&G moments 3 4

“T&G-isms”, which permeate the Company, are behind the Company’s rapid growth and success. T&G-isms consist of four simple concepts, and include T&G’s goals and the source of its strength. In future T&G Group expansion, the sharing and fostering of T&G-isms will play a vital role.

24 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

Creating a market 1 1

The “Take” and “Give” in T&G’s name come from the notion of the Company “taking needs” and “giving service” in return. T&G’s goal is deﬁned as “creating markets.”

What does this mean in today’s Japan, where the period of presentation. These enterprises have expanded rapidly and high economic growth has ended and market principles have successfully established their new business styles. become established in many sectors? The answer: discover- T&G constantly searches to identify customer needs. ing needs, re-deﬁning services and establishing them in the The Company makes sure that it always has the ability to market. In the existing restaurant and clothing industries, there conceptualize, plan, produce and deliver new services— are many examples of businesses that have discovered latent while continuing to create new markets. customer needs and redeﬁned their services and market 2

Expansion

“Catch the Needs”

New market New New style style T&G has No. 1 share

Competitors 3

25 Case study CREATING THE HOUSE WEDDING MARKET

T&G’s brand strategy when creating a new market As mentioned above, T&G affected changes in the old, satu- rated wedding market in Japan by bringing out its new house wedding service. In the process of establishing the house wedding as a single market, T&G’s brand strategy played a crucial role, along with the service content and the approach to business expansion. Not only did T&G place advertisements for each venue in wedding magazines, it also gained exposure in the media.

(1) Awareness of the house wedding style One of T&G’s objectives in obtaining a listing on the stock exchange early in its expansionary phase was to gain recognition for both T&G and the house wedding style. After listing, T&G has continued to gain exposure through the media T&G was ready for the attention of television, radio, newspa- while actively publicizing the details of its services and style per, magazine and other media seeking to find out about the through the appearance of the T&G house wedding buildings, new company, and made efforts to boost levels of recognition the plans, proposals and products suggested by its wedding of the house wedding style. planners, and by its earnings structure. New, fast-growing companies like T&G are gaining a lot (2) Permeation of the T&G brand through the market of attention in Japan. By publicizing information on never- After decades of the same old wedding and reception style, before-seen services, they are forcing a change among the young Japanese were becoming dissatisfied with the stan- status quo—from an industry structure that gives priority to dard formula of “wedding = hotel/wedding plaza = formal and the supply side, to one that gives careful consideration to stuffy—no fun at all.” T&G responded to this gloomy land- products and services from the customer’s point of view— scape and appealed to young people, not only through adver- and have revitalized the entire wedding industry in Japan. tising in wedding magazines but also in ordinary general- Business approaches vary, from the renovation of hotel readership magazines, women’s magazines, newspapers, facilities to the presentation of various sales programs. television, radio and other media, spreading the message that Some hotels have built house wedding-styled venues within “weddings can be fun.” For example, on its corporate website their grounds. in 2001, T&G set up a section with photographs showing cus- The diversification of wedding styles in Japan is expected. tomers’ wedding ceremonies and receptions, to give impres- “Super-cheap” weddings have entered the market, offering sions of these events. T&G also used its website to introduce just the ceremony and photography—all at very low prices. surprises to its audience. Although the history of the wedding industry in Japan goes T&G developed products such as video messages from back decades, it is finally providing services to suit the cus- Japanese celebrities, as well as a range of products devel- tomer rather than itself. oped in collaboration with Armani and other companies in Since T&G went public in 2001, other companies in the various industries, and introduced them to the public through wedding industry have followed suit. In 2004 the wedding the media. By spreading its message through these new ceremony hall operator Best Bridal Inc., listed its shares on products, T&G was able to strengthen the appeal of its brand. the stock exchange, followed by Ravis Inc. in 2005, and then Claudia Corporation (which mainly rents wedding dresses but (3) Recognition of the wedding planner also manages wedding ceremony halls). In 2006 Novarese The T&G wedding planner is an integral part of the house Inc. gained a public listing. wedding concept. Until recently, Japanese weddings have Compared with other market sectors, the wedding indus- been sold as a package, so there has hardly been any need try has not been understood by the general public in Japan. for a wedding planner to listen to the special wishes of the The listing of wedding companies on the stock market has clients or to propose new ideas. Until recently there has been gradually helped raise levels of awareness. no recognition of wedding planning as an occupation. The By understanding customer needs in a market where little wedding planners that T&G employs and trains are mostly change was ever evident, and defining a new style of wedding, women of around the same marriageable age as its clients. T&G has created a new and expanding market. By establish- This policy has created a cadre of planners who are better ing a new style, T&G has revitalized the market as a whole. able to take on board the customers’ needs and wishes. At present, the job of wedding planner is one of the most Market share of house weddings popular for young women in Japan. (%) 15.7 16 14.2 (4) Changes in the wedding industry, 14 12 from the arrival of T&G until the present 10 8.3 The market share of the house wedding grew tremendously 8 from 2003 to 2006. From 2003 onwards, over 100 house 6 4.7 wedding venues (including newly established and remodeled 4 venues) have opened annually. 2 Since the arrival of T&G, changes in the market have not 0 been confined to the establishment of the house wedding; 2003 2004 2005 2006 the wedding industry has begun to move. DATA: RECRUIT CO., LTD. ‘Zexy Marriage Trend Survey 2006’

26 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

Proﬁt as a resource 2 1

Although T&G aims to provide customers with high levels of service, this goal is closely matched with a strong commitment to proﬁtability.

Companies sometimes lose focus on profitability as they T&G’s quarterly assessments and annual assessments strive to create and promote new services; at T&G, however, of branches identify strong performers, and incentives particular effort is made to ensure that the entire organization are provided. understands the importance of profit as a resource. As a result, profit awareness at T&G is high, and a T&G employs a system whereby each venue acts as a comprehensive appraisal system supports staff motivation. profit center, which instills employees with constant profit consciousness. Wedding planners are taught the cost of each product and learn how to calculate gross profits, and chefs manage the costs for each wedding party. Further, managers 2 provide monthly operating reports using income statements.

T&G holds a variety of training sessions, along with weekly, monthly and quarterly presentations. Every week, all branch and group managers take part in an Internet conference, reporting on such things as operations and progress in dealing with customers. Monthly division meetings include a training component, and at quarterly general employee meetings top performers receive companywide recognition. 3

27 Pleasant surprises Creating T&G moments 3

‘T&G moments’ are at the heart of the Company’s success. T&G’s mission is to exceed expectations in all its operations and services, not just the wedding ceremony itself.

People tend to have fixed ideas about what to expect at a For most people, getting married is one of the biggest wedding, so wedding planners at T&G are constantly asking, days of their lives. In contrast to regular day-to-day activities, a “How can we make this wedding exceed the expectations of wedding combines many out-of-the ordinary elements. One of everyone attending? How can we think outside the box?” these elements is the role a wedding plays in allowing couples This ability to deliver T&G moments and exceed expecta- to express appreciation to friends and family for their support. tions is the true measure of T&G’s customer service. And so Based on a clear understanding of this role, T&G’s wedding long as this approach can be continued, T&G will be able to planners take great pains to plan customized ceremonies that leverage its strengths across all its business ventures. reflect the personalities of the couples involved. Weddings T&G moments are also a measure of added value. As cannot be purchased from a store, and regardless of price Japanese society has become more materially wealthy, have a special, deeply personal significance. people have developed a new appreciation for experiences T&G takes particular efforts to instill in all employees the that are out of the ordinary. T&G believes that the key to ability to create special moments, including hosting creative success in this environment is to deliver an emotionally internal events that ordinary companies would consider well resonant and extraordinary experience—the added value outside the box. that goes beyond the material. This is the power T&G will harness as it moves into its second phase of growth.

A T&G moment Happiness T&G’s services

Wedding

Reality Fantasy

Customers’ Unhappiness anticipated value

28 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

A caring environment 4 1

T&G believes that a good working atmosphere keeps staff motivation high and creates a virtuous cycle of success, and supports this belief with a range of initiatives.

T&G’s aim is to have a corporate climate that beneﬁts not only its customers, but also its vendors, shareholders and investors, along with staff and their families. For as long as T&G can maintain a highly motivating and enjoyable work atmosphere, the company’s future growth is assured. 2 Family

Shareholders’ Partners Appreciate and be appreciated. Employees This is the environment that T&G is striving for.

Customers Lovers/ Friends A caring environment 3

29 T&G HISTORY from 1998–2005

Marketing & Promotion Organization & Personnel Finance

Advertised in wedding magazines Actively sought Conducted an partners to enhance allocation of shares FY1998–00 Conﬁrmed market needs for house product line-up for primarily to venture weddings through surveys Started house weddings customers capitalists who understood the T&G Began hiring business model. wedding planners, Funds raised applied primarily those of to venue development. marrying age (¥470 million in Focused on December 2000) providing customized wedding ceremonies Established October 1998 (Capital ¥20 million) Began to offer house weddings through afﬁliations with house-style restaurants

Coordinated with a television station Established a Raised ¥306 million FY2001–02 in producing wedding ceremonies venue development for venue development demonstrating T&G’s strength in this model (Systems (December 2001) Began directly area (December 2002) and schedule for A rise in credibility venue opening, managed venues Began selling a revised edition of the led to an increase in employment and book ‘Wedding Planner’ (April 2002) sources for funds. management) Procured a syndicate Raised T&G’s wedding planner Began training loan for venue devel- profile with the supervision of a TV managers in opment (¥800 million drama. (April to June, 2002) December 2001: preparation for in November 2002 Listed on NASDAQ Japan Began a fixed-term training school rapid development. and ¥1,500 million in (Hercules) for wedding planners (June 2002 March 2003) to March 2003) Began to offer directly managed house weddings (June 2001). Venues were Confirmed market needs for house opened primarily in central Tokyo weddings in regional cities

Collaborated with celebrities in effort Began training Raised ¥4,886 million FY2003–04 such as making video messages from from the CEO in through a secondary celebrities. (October 2003) order to strengthen share offering Expanded management training (January 2004) Began advertising on TV, radio, and for managers house weddings media other than wedding magazines Enhanced wedding Conducted questionnaires to planner training determine needs in markets system February 2004: outside of the wedding ceremony Listed on the second section market (2004) of the Tokyo Stock Exchange Developed directly managed venues regionally (February 2003) Began development of 2-hall type venues (February 2003)

Produced and directed a short Selected managers Implemented full scale FY2005 TV show for new operations off-balance sheet venue development Began sales of ‘Love and Wedding’ Strengthened On to the next stage through efforts such compilation albums employee evaluation as the SPC scheme. system (January 2005)

March 2006: Listed on the ﬁrst section of the Tokyo Stock Exchange Pursued rapid development of directly managed venues Established new operations

30 TAKE AND GIVE. NEEDS CO., LTD. ANNUAL REPORT 2006

Systems in place for continued growth and rapid development of new markets

Cost-effective Cost savings through construction purchase of cheaper overseas materials Creating High-profit Reduced managers introductory fees business for new model operations Management Systems for Building a sense of methods independent management in our estimates managers One-to-one customer Establishing a strong 1 to wedding planner sense of profitability system

Venue ROI of over 30% development standards Population exceeds Sound 300,000 and the financial number of weddings Rapid exceed 2,000 annually base expansion

Venue Variety of sources development Stock market for funding method Ensuring funding from continued healthy finances Create the market Next stage and grow Off-balance sheet Developed with 2 venues unique SPC scheme rapidly

Facilities developed Concept according to the region Developing A strong Renovation of services Infrastructure existing venues advantage for customers’ needs Systems to bring new Quality products products to the market Systems to capture details of customers Product/ needs Service line up Skilled in addressing customer needs All party details provided through cooperation with partners 3 Advertising Appearance in methods media outside of the wedding industry Enhanced profile Effective Promotion from collaboration with celebrities promotions

Related to other industries

31 International Herald Tribune ** 16 Saturday-Sunday, April 8-9, 2006 WEEKEND BUSI NESS

SPOTLIGHT ON THE RECORD

‘‘GM is having to throw A wedding planner furniture into the Coffee break: T&G in the media T&G has worked closely with the media, raising its public proﬁle via print fireplace to keep the for a new Japanand broadcast coverage of its management, wedding planners and venues. house warm.’’ International Herald Tribune ** John Casesa, a consultant, on the sale by 16 Saturday-Sunday, April 8-9, 2006 WEEKEND BUSI NESS General Motors of its credit subsidiary, Entrepreneur finds making a break General Motors Acceptance Corp. (NYT) SPOTLIGHT ON THE RECORD with tradition pays off handsomely ‘‘GM is having to throw A wedding planner furniture into the ‘‘History is filled with By Miki Tanikawa the year that ended in March, the com- fireplace to keep the defendants who had pany expects to postfor a profit a of new ¥3 bil- Japan house warm.’’ TO KYO lion on revenue of ¥33 billion. John Casesa, a consultant, on the sale by General Motors of its credit subsidiary, their testimony blow up ay the words ‘‘wedding day’’ to a The JapaneseEntrepreneur bridal industry, finds at ¥2 making a break General Motors Acceptance Corp. (NYT) Japanese bride, and a certain vi- trillion in revenuewith a year, tradition has been pays stag- off handsomely in their face.’’ S sion used to come to mind: big nant for the past decade. Take & Give ‘‘History is filled with By Miki Tanikawa the year that ended in March, the com- Stephen Meagher, a former U.S. prosecutor, white dress, lots of relatives and Needs became a hit with youngpany expects to post a profit of ¥3 bil- defendants who had friends and a rigidly choreographed, couples by putting the fun intoTO KYO wed- lion on revenue of ¥33 billion. their testimony blow up on the risks in the fraud trial of the former ay the words ‘‘wedding day’’ to a The Japanese bridal industry, at ¥2 assembly-line ceremony in an imper- dings, making themJapanese more bride, and like a certain parties vi- trillion in revenue a year, has been stag- in their face.’’ Enron chiefs, Kenneth Lay and Jeffrey Skilling, S sion used to come to mind: big nant for the past decade. Take & Give sonal hotel dining room, followed by a than business events.white dress, Its lots wedding of relatives plan- and Needs became a hit with young Stephen Meagher, a former U.S. prosecutor, who are scheduled to testify. (NYT) friends and a rigidly choreographed, couples by putting the fun into wed- on the risks in the fraud trial of the former staid reception to which the boss was ners sometimesassembly-line recommend ceremony in adding an imper- dings, a making them more like parties Enron chiefs, Kenneth Lay and Jeffrey Skilling, sonal hotel dining room, followed by a than business events. Its wedding plan- who are scheduled to testify. (NYT) always invited. few twists, likestaid tossing reception to thewhich thebride boss was intoners sometimes recommend adding a A decade ago, as a young university the pool fully alwaysdressed invited. or setting up fewa twists, like tossing the bride into A decade ago, as a young university the pool fully dressed or setting up a ‘‘If housewives in the graduate in his 20s, Yoshitaka Nojiri group of friendsgraduate to in pose his 20s, as Yoshitaka pesky Nojiri re-group of friends to pose as pesky re- ‘‘If housewives in the went to many such weddings. They porters to badger the couple with ques- West own mutual went to many such weddings. They porters to badgercompletely the turnedcouple him off. with ques-tions about their marriage. Franck Robichon/International Herald Tribune ‘‘I would say to myself, ‘I don’t want But Nojiri owes the company’s suc- Yoshitaka Nojiri at headquarters in Tokyo, with a wall of thank-you notes from couples whose weddings his company organized. funds, bonds, shares, West own mutual completely turned him off. tions about theirto do marriage. that type of wedding,’ and all my cess to more than a few flamboyant Franck Robichon/International Herald Tribune friends said the same thing,’’ he said. gimmicks. He also caught a wave of why should we be ‘‘I would say to myself, ‘I don’t want But Nojiri owesSo eight the years company’s ago, Nojiri — a former suc-change inYoshitaka Japanese social customs.Nojiri at peopleheadquarters are mentally craving,’’ in Tokyo, he said. electricalwith a engineer,wall of would thank-you ask the in notes Tokyo who from follows couples the company. whose weddings his company organized. teenage entrepreneur and collegiate As recently as 10 years ago, Japanese His first business, started when he young Nojiri to peel the plastic sheath- ‘‘But he tells us that the company’s d i f fe re n t ? ’’ funds, bonds, shares, to do that type of wedding,’ and all my cess to more rugby than star a who few was working flamboyant at an in- weddings were family affairs where was 15, was selling black leather jackets ing off unused copper wire so that the wedding business is going to come to a surance company — rounded up ¥20 the bride and the groom had little or no emblazoned with school names and metal could be resold for scrap — screeching halt at around ¥50 billion a Vladimir Savin, a doctor attending a recent friends said the same thing,’’ he said. gimmicks. He million, also or caught $170,000, from a waveinvestors ofcontrol over the proceedings, and symbols to other teenagers in Shibuya, Nojiri is known as a penny-pincher. year. He is a manager who thinks 5 investing exhibition in Moscow. (Reuters) why should we be So eight years ago, Nojiri — a former change in Japaneseand started social a company customs. to produce the where omiai,people or introductions are mentally ar- a popular craving,’’ youth enclave he in Tokyo.said. electricalAs chief executive, heengineer, shares an of- years, would 10 years ahead.’’ ask the in Tokyo who follows the company. type of weddings he and his friends did ranged by the couple’s parents, were Nojiri, who fancied himself a fash- fice with four other people. Employees Nojiri, who is still single, said his next teenage entrepreneur and collegiate As recently aswant 10 to do:years informal, ago, party-style Japanese cere- still practiced.His But as firstthat custom business, faded ion leader, started was approached when by clothing he sayyoung he posts copiesNojiri of telephone to peel and thestep plastic would be to start sheath- up a loan service‘‘But‘‘It’s he like tells a tube us of that the company’s d i f fe re n t ? ’’ monies, held in elegant surroundings. and couples initiated their own stores to help sell the jackets. Inspired electric bills on office walls with ex- to help young couples finance their rugby star who was working at an in- weddings wereThe family company started affairs out by renting wherematches,was ‘‘there 15,was awas new generationsellingby black the 1999 leatherfilm ‘‘The Warriors,’’ jackets about hortationsing off to economize unused written copper in the weddings. wire Theso national that average the is ¥2.8weddingtoothpaste. business You have is going to to come to a fashionable restaurants in Tokyo, then of people who wanted something dif- street gangsters in New York who wore ma rgins. million, including the reception; a Take Vladimir Savin, a doctor attending a recent surance company — rounded up ¥20 the bride and thestarted groom to build itshad own little facilities or — noferent andemblazoned original,’’ Nojiri said. with personalized school leather names jackets like and a uni- metal‘‘I switch off couldlights beforebe he arrives resold& Give forwedding scrap costs ¥4.3 million. — screechingsqueeze at halt the at bottom around ¥50 billion a country-club-like wedding ‘‘palaces’’ Analysts said the trend toward cus- form, Nojiri said he ‘‘went to kids from here,’’ confided Megumi Shibata, 25, a He also wants to start a wedding investing exhibition in Moscow. (Reuters) million, or $170,000, from investors control overwith the large proceedings, gardens and swimming andtomizationsymbols was true of Japan to otherin gener- teenagersdifferent schools in and Shibuya, said, ‘Let’s do weddingNojiri planner is knownat a company as facility a penny-pincher.portal to allow couples and their famil-year.toHe get something is a manager out who thinks 5 pools. Nojiri and his staff also take on al, as consumers turned away from the ‘The Warriors’ and hang out in the in Shibuya. ies to gather information and order and started a company to produce the where omiai,pretty or much introductions everything from produ- ar-mass-produceda popular goods and youth services enclavestreets of Shibuya.’ in Tokyo. ’’ He earned a com- Now,As Nojiri chief said, he executive, thinks his wed- goods he and shares services froman one of- online lo-years,at 10the years top.’’ ahead.’’ type of weddings he and his friends did ranged by thecing couple’s the wedding to parents, cooking the food werethat characterizedNojiri, the Japanese who econo- fanciedmission on himself every jacket sold, a pocketing fash- dingfice business with is reaching four a other size where people.c at i o n . Employees Nojiri,Uwe Hück, who the top employee is still representative single, said his next and finding the bride’s dress. my in the 1970s and 1980s. about ¥1 million a month. growth will start slowing down. ‘‘The one who will establish the at a Porsche plant in Stuttgart, where want to do: informal, party-style cere- still practiced. ButToday, as Nojiri’s that company, custom Take & GivefadedNojiri,ion 33, regardsleader, his was talent approached as Partly because by he is clothingused to working say‘‘One would he think posts that his copies business ofwedding telephone portal first,’’ Nojiri and predicted,stepworkers would staged abe warning to strike start this past up a loan service ‘‘It’s like a tube of Needs, organizes 8,000 weddings a year identifying undiscovered needs. ‘‘I for- for himself, partly because he comes could still keep growing,’’ said Yasushi ‘‘will rule the wedding business.’’ week for higher pay. (IHT) monies, held in elegant surroundings. and couplesand initiated employs more than their600 people. For ownmulate stores and turn into to helpreality whatsellfrom the ajackets. frugal family —Inspired his father, an Yokoyama,electric analyst bills at Toyo on Securities office wallsInternational with Herald Tribune ex- to help young couples finance their The company started out by renting matches, ‘‘there was a new generation by the 1999 film ‘‘The Warriors,’’ about hortations to economize written in the weddings. The national average is ¥2.8 toothpaste. You have to fashionable restaurants in Tokyo, then of people whoInternational wanted Herald something Tribune, April dif- 2006 street gangsters in New York who wore ma rgins. million, including the reception; a Take started to build its own facilities — ferent and original,’’ Nojiri said. personalized leather jackets like a uni- ‘‘I switch off lights beforeOFF heTHE arrives CHARTS & Give wedding costs ¥4.3 million. squeeze at the bottom country-club-like wedding ‘‘palaces’’ Analysts said the trend toward cus- form, Nojiri said he ‘‘went to kids from here,’’ confided Megumi Shibata,Floyd Norris 25, a He also wants to start a wedding with large gardens and swimming tomization was true of Japan in gener- different schools and said, ‘Let’s do wedding planner at a company facility portal to allow couples and their famil- to get something out pools. Nojiri and his staff also take on al, as consumersDramas turned away from the ‘The Warriors’ and hang outMagazines in the in Shibuya. ies to gather information and order pretty much everything from produ- mass-producedT&G goods has produced and services weddingsstreets for three of Shibuya.’ dramas ’’ Heon earnedTV T&G a com- is frequentlyNow, covered NojiriA in said, apoorer wide he thinksrange ofhis Italy magazines, wed- goodsvotes and services from one online lo- at the top.’’ Tokyo, Fuji Television and Yomiuri Television. including business, fashion, general news and wedding cing the wedding to cooking the food that characterized the Japanese econo- mission on every jacket sold, pocketing dinghen business Silvio Berlusconi is was reachingmany European a size countries. where As the c atcurrency i o n . devaluation. But now that it Uwe Hück, the top employee representative and finding the bride’s dress. my in the 1970s and 1980s. about ¥1 million a month. magazines. T&Ggrowth campaigninghas will appeared to start be prime slowing in acharts number show,down. Italy’s of real influential gross domes- ‘‘Theis in the euro, one that is impossible. who will Since establish the W minister of Italy in 2001, he tic product in the final quarter of 2005 Berlusconi took office, Italian infla- at a Porsche plant in Stuttgart, where Today, Nojiri’s company, Take & Give Nojiri, 33, TV regards his talent as Partly because he is used to publicationsworking offered such‘‘One a series as ofNikkeiwould promises aboutVenture, think thatwas GQ just his1.6Japan percent business aboveand the MISS, figure wedding tion has run portal above that offirst,’’ other Euro- Nojiri predicted, what he would accomplish in the next for the second quarter of 2001, when pean countries, and he has taken to workers staged a warning strike this past Needs, organizes 8,000 weddings a year identifying undiscoveredT&G has appeared needs. ‘‘Ion for-severalfor of Japan’s himself, top partly TV programs because hein addition comes tofivecould ayears. large still number keep growing,’’of publicationshe won thesaid election, whoseYasushi well below target the av-‘‘will blaming rule his opponent the wedding this year, Ro- business.’’ At the time, it seemed safe. The idea erage for countries using the euro, mano Prodi, for allowing the country week for higher pay. (IHT) and employs more than 600 people. For mulate and turnand on into all major reality television what channelsfrom a frugal including family NHK, — TVhis father,readership an isthat Yokoyama,similar an Italian to prime T&G’s minister analyst customers. would atwhich Toyo was 5.7 Securities percent. to join the Internationaleuro at a euro-lira exchangeHerald Tribune survive for five years seemed absurd. Even that growth has come because rate that was too high. Tokyo, Fuji Television and Asahi TV. No Italian government since World the government was willing to run Italian exports have risen, but not as War II had managed that feat. budget deficits. Households are spend- fast as imports, and the current account But Berlusconi did. The election ing for consumption at a rate just 1.7 surplus that Italy enjoyed before the Increasingthis levels weekend comesof coverage only a few weeks in Japan’spercent above topthe rate media when Berlusconi last election has turned into a deficit. Newspapers short of five years after the last one. was elected. But the government con- Prodi, a former Italian prime minis- There were cabinet upheavals and as- sumption number is up 6.9 percent. ter and former president of the Euro- From the Nikkei (Japan’s national business newspaper) to 300 sorted quarrels with coalition part- All this means that Italy, on a rela- pean Commission, has ridiculed Ber- ners, but Berlusconi, a media baron tive basis, is getting26 0poorer. In 2000, its lusconi for making new promises after smaller regional publications, T&G regularly appears in the 250 said to be the richest man in the coun- GDP239 per person was 2 percent higher failingOFF to keep promises THE he made CHARTS five try, stayed atop the heap. than the average of all 25 countries years ago. Japanese press. Recent news coverage includes the Nikkei So how did he do? He did cut taxes, now in the European Union. Last year But economic newsFloyd has not domina-Norris 200 but not by as much as promised,179 and he it was 2 percent below that average. ted the campaign. Perhaps the most Financial, Mainichi Shimbun, Asahi Shimbun, and other presided over an economy that did bet- On that per-person basis its economy discussed incident came when Ber- ter than other European countries in was 24 percent larger than Spain’s in lusconi, angered by hostile questions major newspapers. 150 terms of adding jobs, although the in- 2000. Now the margin is 15 percent. during a live interview on a state- crease of a little11 3over one million jobs That slow growth has come as Italy owned television station, walked out fell short of the 1.5 million he promised. has struggled to stay competitive, both of the studio. At least that indicated 100 But Italy also suffered from eco- within Europe and abroad. Italy used that fears he would dominate all Itali- nomic growth that was even slower to periodically regain its competitive an media had not yet been realized. 43than the disappointing rate shown by position through a sometime violent International Herald Tribune 50 A poorer Italy votes 0 2001 2002 2003 2004 2005 EU tries to corral military spending BAE henseeks Silvio Berlusconito sell wasits stakemany in European Airbus countries. As the currency devaluation. But now that it campaigning to be prime charts show, Italy’s real gross domes- is in the euro, that is impossible. Since DEFENSE, From Page 15 When it comes to naval activities, Italy and Spain. Chirac lost that battle, AIRBUS, Fromminister Page 1 of Italy in 2001, he tic product in the final quarter of 2005 Berlusconi took office, Italian infla- there are about 20 shipyards active and the system of twin chiefs, one each W Industry executives acknowledge the across the region. In the United States, from France and Germany, was kept. offeredtary analyst ata theseries Lexington of Institute promises about was just 1.6 percent above the figure tion has run above that of other Euro- problem but also contend that it was not by contrast, there are just two major But the battle was a bruising one, and in Arlington, Virginia. ‘‘They’re of their making. Fragmentation ‘‘is shipbuilders and two manufacturers of left French and German executives whatalready halfwayhe would there.’’ accomplish in the next for the second quarter of 2001, when pean countries, and he has taken to mainly a question of politics,’’ said Al- naval components and systems — a feeling ill at ease. He predicted that BAE could exander Reinhardt, a spokesman for marketplace that maintains some com- There are cross-border tensions in fivestrengthen years. its position in the United he won the election, well below the av- blaming his opponent this year, Ro- EADS. ‘‘Our governments are ready to petition but avoids the situation in the naval sector, too. Last year, France States by acquiring L3 Communica- go for uniting their currencies — in fact Europe where dozens of projects over- supported the emergence of a French- tionsAt Systems, the atime, New York it City-based seemed safe. The idea erage for countries using the euro, mano Prodi, for allowing the country they are ready to unite a great deal of l a p. led, European naval titan that could surveillance and technology com- their economic activities — but they are Some of the most serious concerns rival U.S. companies like Northrop thatpany, oran by mergingItalian with prime the missile minister would which was 5.7 percent. to join the euro at a euro-lira exchange 32 not ready for Europewide defense pro- in Europe focus on armored personnel Grumman. But French ambitions were survivemaker Raytheon. for five years seemed absurd. Even that growth has come because rate that was too high. cu rement.’’ carriers, like the Boxer. Stork still dealt a blow when German submarine BAE has long been rumored to be Defense has long been a no-go area hopes to sell about 500 vehicles to the and frigate makers, fearing too much Nointerested Italian in L3, butgovernment the British com- since World the government was willing to run Italian exports have risen, but not as for champions of closer integration in Netherlands and Germany, said Van French influence, successfully lobbied pany specifically denied an acquisi- Europe. One reason is the North At- Vliet, of the Dutch defense association, to keep a leading sonar maker, Atlas Wartion was II in had the works managed on Friday. BAE that feat. budget deficits.Liam Creedon/The Households Associated Press are spend- fast as imports, and the current account lantic Treaty Organization, which has but the potential for exporting the Elektronic, firmly in German hands. will ‘‘continue to look at investments The Airbus plant near Bristol, England. BAE Systems said Friday it was in talks to long been the core alliance to maintain product, he added, would be a great One way the European Defense thatBut fit its Berlusconistrategic goals,’’ said did. John Thesell its 20election percent stake in Airbus, raisinging concerns for consumption about 13,000 jobs in Brita at in. a rate just 1.7 surplus that Italy enjoyed before the security in Europe. But the rules of EU deal better with ‘‘more countries in the Agency is trying to break down barriers Neilson, a company spokesman. membership play a role by giving each same basket.’’ is by starting an online bulletin board, thisAnalysts weekend and airline comes executives onlyBAE’s a few decision weeks to withdraw frompercentAirbus above employs the 13,000 rate people when in Berlusconi last election has turned into a deficit. EU country a sovereign right to equip Even EADS, a leading example of set to go live July 1, where governments said that BAE might have chosen the the Airbus partnership comes just Britain to manufacture the wings of its military in order to protect ‘‘the es- cross-border cooperation when it was are expected to post tenders and shortperfect time of tofive pull out years of the Airbus afterdays the after last EADS’s one. two largest share-wasits elected. aircraft, and But Friday’s the announce- government con- Prodi, a former Italian prime minis- sential interests of its security.’’ Critics created in 2000, has been strained by companies identify bid opportunities. partnership. Airbus booked record holders, DaimlerChrysler and the ment raised concerns that local jobs say governments have used this doc- tugs of war along national lines. Last Witney sees ‘‘big possibilities for an Thereorders for were 1,055 passenger cabinet planes last upheavalsFrench publisher and Lagardère, as- said theysumptionmay suffer. Airbusnumber recently isawarded up a6.9 percent. ter and former president of the Euro- trine to award contracts to favored na- year President Jacques Chirac of electronic marketplace in which buyers sortedyear, versus quarrels 1,002 for Boeing with — a re- coalitioneach would sellpart- 7.5 percent stakes in Allcontract this for ameans portion of thethat A350 toItaly, a on a rela- pean Commission, has ridiculed Ber- tional suppliers, rather than to the low- France backed Noël Forgeard, a French and sellers and smaller and larger cord it is unlikely to repeat, they said. EADS, in part to cash in on the com- German factory — the first time that est bidder — short-changing taxpayers executive, to take sole control of the companies across Europe can meet.’’ ners,Airbus hasbut sold Berlusconi, 159 of its enormous a mediapany’s soaring baron stock price. tiveit basis,has gone outside is getting Britain. poorer. In 2000, its lusconi for making new promises after on items from boots and food to rifles company, which groups defense Reinhardt, the EADS spokesman, A380 jets, which can carry as many as Taken together, the moves could The secretary of state for Britain’s and armored carriers. companies from France, Germany, said he expected the billboard to get off said800 passengers to be on the long-haul richest flights. manhave ain far-reaching the coun- impact on theGDP re- Department per person of Trade andwas Industry, 2 percent higher failing to keep promises he made five Now the mood may be changing, in to a slow start. ‘‘We are not talking big But the initial rush of orders for the sources and competitiveness of Air- Alan Johnson, met Friday morning part because of the need to find region- budgets and big business opportuni- try,A380 stayedhas slowed beforeatop the the airplane heap.bus, according to analysts and indus-thanwith the BAE’s average chief executive, of all Mike 25 countries years ago. al solutions to regional problems like ties yet,’’ he said. ‘‘But we hope that will actually comes to market, as some air- try executives. Turner, to discuss the situation. The terrorism and border unrest. cha nge.’’ linesSo wait how to see did whether he terminalsdo? He did‘‘EADS cut has to taxes, got to pay for the BAEnowgovernment in the agencyEuropean said in a state-Union. Last year But economic news has not domina- Military officials like Klaus Nau- Even if the EU projects do go for- can handle the super-jumbo effi- shares, and they’ve got to worry about ment that the meeting was ‘‘construc- mann, the former chief of defense in ward, analysts said, the region is un- butc i e n t ly.not by as much as promised,the Daimler and and Lagardère he shares go-it wastive and 2 furtherpercent discussions below will take that average. ted the campaign. Perhaps the most Germany, have warned that while likely to close the technology gap with presidedAirbus also isover facing ansome economy trouble ing on that the global did market,‘‘ bet- said Rich-On placethat with per-person the parties involved.’’ basis its economy discussed incident came when Ber- Europe is spending around 60 percent the United States soon. in its rivalry with Boeing, as demand ard Aboulafia, an analyst at the Teal Airbus moved quickly to quash of the amount spent by the United Tony Edwards, a former head of the terfor itsthan midsize other wide-body European plane, the Group, countries an aerospace in consulting firmwasconcerns 24 percent Friday. larger than Spain’s in lusconi, angered by hostile questions States on defense, it is achieving only 20 defense exports arm of the British gov- A350, is lagging behind Boeing’s 787. in Fairfax, Virginia. ‘‘There are no implications for jobs percent of the capability because government, said consolidation, rather termsIn recent of days, adding two major jobs, Airbus althoughUntil now, the ‘‘they’ve in- had the luxury2000.and AirbusNow is recruitingthe margin heavily in the is 15 percent. during a live interview on a state- ernments are spending so inefficiently. than coordination, was the only way customers, Singapore Airlines and In- of very stable ownership,’’ Aboulafia U.K. to build up its high-tech know- European governments spend less forward for Europe. He noted that creaseternational of Lease a Financelittle Corp., over have onesaid, million which has allowed jobs Airbus to in- Thathow,’’ anslow Airbus growth spokesman inhas Lon- come as Italy owned television station, walked out than 5 percent of their research and EADS and Thales, which both receive expressed doubts about how well the vest heavily in new planes like the don said. ‘‘The U.K. will remain a fun- technology budgets on collaborative strong backing from the French gov- fellA350 shortwould compete of the against 1.5 the million 787. double-decker he promised. A380, which has runhasdamental struggled part of to the stay Airbus competitive, busi- both of the studio. At least that indicated efforts. Not surprisingly, duplication is ernment, were well positioned to ma- Also, the Airbus A340, a four-en- up $16 billion in development costs, or n e ss . ’’ rife. Europe boasts three competing ture into companies on the scale of gineBut long-range Italy plane, also is facingsuffered big like from the A350. eco- withinThe companyEurope has been and managed abroad. by Italy used that fears he would dominate all Itali- fighter jets: the Swedish Gripen, the Boeing and Northrop Grumman. challenges, with carriers preferring Nonetheless, EADS is in a strong fi- EADS since 2001, he added, so BAE’s French Rafale, and the EADS-backed ‘‘If Europe is serious,’’ Edwards ad- nomicBoeing’s two-engine growth 777. Nonetheless,that was nancialeven position slower to buy the rest of Air-to periodicallysale of its stake is unlikely regain to result its in competitive an media had not yet been realized. Eurofighter. There are at least three ded, ‘‘one of the pragmatic solutions is thanthe value the of Airbus disappointing has tripled since bus.rate The shownFrench, German by and Spanishpositionbig changes through to the way the a company sometime is violent International Herald Tribune different projects to build intelligence- to just let the French take over.’’ 2003, analysts estimate. Airbus is not company has more than ¤5 billion of r un. gathering pilotless airplanes. International Herald Tribune publicly traded. cash on hand. The New York Times EU tries to corral military spending BAE seeks to sell its stake in Airbus

DEFENSE, From Page 15 When it comes to naval activities, Italy and Spain. Chirac lost that battle, AIRBUS, From Page 1 there are about 20 shipyards active and the system of twin chiefs, one each Industry executives acknowledge the across the region. In the United States, from France and Germany, was kept. tary analyst at the Lexington Institute problem but also contend that it was not by contrast, there are just two major But the battle was a bruising one, and in Arlington, Virginia. ‘‘They’re of their making. Fragmentation ‘‘is shipbuilders and two manufacturers of left French and German executives already halfway there.’’ mainly a question of politics,’’ said Al- naval components and systems — a feeling ill at ease. He predicted that BAE could exander Reinhardt, a spokesman for marketplace that maintains some com- There are cross-border tensions in strengthen its position in the United EADS. ‘‘Our governments are ready to petition but avoids the situation in the naval sector, too. Last year, France States by acquiring L3 Communica- go for uniting their currencies — in fact Europe where dozens of projects over- supported the emergence of a French- tions Systems, a New York City-based they are ready to unite a great deal of l a p. led, European naval titan that could surveillance and technology com- their economic activities — but they are Some of the most serious concerns rival U.S. companies like Northrop pany, or by merging with the missile not ready for Europewide defense pro- in Europe focus on armored personnel Grumman. But French ambitions were maker Raytheon. cu rement.’’ carriers, like the Boxer. Stork still dealt a blow when German submarine BAE has long been rumored to be Defense has long been a no-go area hopes to sell about 500 vehicles to the and frigate makers, fearing too much interested in L3, but the British com- for champions of closer integration in Netherlands and Germany, said Van French influence, successfully lobbied pany specifically denied an acquisi- Europe. One reason is the North At- Vliet, of the Dutch defense association, to keep a leading sonar maker, Atlas tion was in the works on Friday. BAE Liam Creedon/The Associated Press lantic Treaty Organization, which has but the potential for exporting the Elektronic, firmly in German hands. will ‘‘continue to look at investments The Airbus plant near Bristol, England. BAE Systems said Friday it was in talks to long been the core alliance to maintain product, he added, would be a great One way the European Defense that fit its strategic goals,’’ said John sell its 20 percent stake in Airbus, raising concerns about 13,000 jobs in Brita in. security in Europe. But the rules of EU deal better with ‘‘more countries in the Agency is trying to break down barriers Neilson, a company spokesman. membership play a role by giving each same basket.’’ is by starting an online bulletin board, Analysts and airline executives BAE’s decision to withdraw from Airbus employs 13,000 people in EU country a sovereign right to equip Even EADS, a leading example of set to go live July 1, where governments said that BAE might have chosen the the Airbus partnership comes just Britain to manufacture the wings of its military in order to protect ‘‘the es- cross-border cooperation when it was are expected to post tenders and perfect time to pull out of the Airbus days after EADS’s two largest share- its aircraft, and Friday’s announce- sential interests of its security.’’ Critics created in 2000, has been strained by companies identify bid opportunities. partnership. Airbus booked record holders, DaimlerChrysler and the ment raised concerns that local jobs say governments have used this doc- tugs of war along national lines. Last Witney sees ‘‘big possibilities for an orders for 1,055 passenger planes last French publisher Lagardère, said they may suffer. Airbus recently awarded a trine to award contracts to favored na- year President Jacques Chirac of electronic marketplace in which buyers year, versus 1,002 for Boeing — a re- each would sell 7.5 percent stakes in contract for a portion of the A350 to a tional suppliers, rather than to the low- France backed Noël Forgeard, a French and sellers and smaller and larger cord it is unlikely to repeat, they said. EADS, in part to cash in on the com- German factory — the first time that est bidder — short-changing taxpayers executive, to take sole control of the companies across Europe can meet.’’ Airbus has sold 159 of its enormous pany’s soaring stock price. it has gone outside Britain. on items from boots and food to rifles company, which groups defense Reinhardt, the EADS spokesman, A380 jets, which can carry as many as Taken together, the moves could The secretary of state for Britain’s and armored carriers. companies from France, Germany, said he expected the billboard to get off 800 passengers on long-haul flights. have a far-reaching impact on the re- Department of Trade and Industry, Now the mood may be changing, in to a slow start. ‘‘We are not talking big But the initial rush of orders for the sources and competitiveness of Air- Alan Johnson, met Friday morning part because of the need to find region- budgets and big business opportuni- A380 has slowed before the airplane bus, according to analysts and indus- with BAE’s chief executive, Mike al solutions to regional problems like ties yet,’’ he said. ‘‘But we hope that will actually comes to market, as some air- try executives. Turner, to discuss the situation. The terrorism and border unrest. cha nge.’’ lines wait to see whether terminals ‘‘EADS has to got to pay for the BAE government agency said in a state- Military officials like Klaus Nau- Even if the EU projects do go for- can handle the super-jumbo effi- shares, and they’ve got to worry about ment that the meeting was ‘‘construc- mann, the former chief of defense in ward, analysts said, the region is un- c i e n t ly. the Daimler and Lagardère shares go- tive and further discussions will take Germany, have warned that while likely to close the technology gap with Airbus also is facing some trouble ing on the global market,‘‘ said Rich- place with the parties involved.’’ Europe is spending around 60 percent the United States soon. in its rivalry with Boeing, as demand ard Aboulafia, an analyst at the Teal Airbus moved quickly to quash of the amount spent by the United Tony Edwards, a former head of the for its midsize wide-body plane, the Group, an aerospace consulting firm concerns Friday. States on defense, it is achieving only 20 defense exports arm of the British gov- A350, is lagging behind Boeing’s 787. in Fairfax, Virginia. ‘‘There are no implications for jobs percent of the capability because government, said consolidation, rather In recent days, two major Airbus Until now, ‘‘they’ve had the luxury and Airbus is recruiting heavily in the ernments are spending so inefficiently. than coordination, was the only way customers, Singapore Airlines and In- of very stable ownership,’’ Aboulafia U.K. to build up its high-tech know- European governments spend less forward for Europe. He noted that ternational Lease Finance Corp., have said, which has allowed Airbus to in- how,’’ an Airbus spokesman in Lon- than 5 percent of their research and EADS and Thales, which both receive expressed doubts about how well the vest heavily in new planes like the don said. ‘‘The U.K. will remain a fun- technology budgets on collaborative strong backing from the French gov- A350 would compete against the 787. double-decker A380, which has run damental part of the Airbus busi- efforts. Not surprisingly, duplication is ernment, were well positioned to ma- Also, the Airbus A340, a four-en- up $16 billion in development costs, or n e ss . ’’ rife. Europe boasts three competing ture into companies on the scale of gine long-range plane, is facing big like the A350. The company has been managed by fighter jets: the Swedish Gripen, the Boeing and Northrop Grumman. challenges, with carriers preferring Nonetheless, EADS is in a strong fi- EADS since 2001, he added, so BAE’s French Rafale, and the EADS-backed ‘‘If Europe is serious,’’ Edwards ad- Boeing’s two-engine 777. Nonetheless, nancial position to buy the rest of Air- sale of its stake is unlikely to result in Eurofighter. There are at least three ded, ‘‘one of the pragmatic solutions is the value of Airbus has tripled since bus. The French, German and Spanish big changes to the way the company is different projects to build intelligence- to just let the French take over.’’ 2003, analysts estimate. Airbus is not company has more than ¤5 billion of r un. gathering pilotless airplanes. International Herald Tribune publicly traded. cash on hand. The New York Times 1

FINANCIAL SECTION 2

Financial highlights 34

Management analysis 35

Non-consolidated ﬁnancial statements

Non-consolidated balance sheet 38

Non-consolidated statements of income 40 Non-consolidated statements of shareholders’ equity3 41 Non-consolidated statements of cash ﬂows 41

Notes to non-consolidated ﬁnancial statements 42

33 FINANCIAL HIGHLIGHTS TAKE AND GIVE. NEEDS Co., Ltd.

34 MANAGEMENT ANALYSIS TAKE AND GIVE. NEEDS Co., Ltd.

01 Trends in the average cost of wedding receptions

(thousand yen) Affiliated restaurants (T&G) Tokyo metropolitan region 5,000 Directly managed venues (T&G)

4,000

3,000

2,000

1,000

0 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 1

(thousand yen) FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 Affiliated restaurants (T&G) 2,292 2,365 2,532 2,582 2,490 Directly managed venues (T&G) 3,347 3,796 4,248 4,350 4,349 Tokyo metropolitan region 2,542 2,632 2,798 2,911 3,122 DATA: RECRUIT CO., LTD. (Zexy Marriage Trend Survey 2006)

02 Trends in number of halls and weddings handled

10,000 Weddings at directly managed venues 100 Weddings at affiliated restaurants No. of directly managed venues 8,000 No. of affiliated restaurants 80

6,000 60

4,000 40

2,000 20

0 0 2 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06

FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 Total number of weddings handled 1,294 1,794 3,020 5,132 7,945 Weddings at directly managed venues 394 918 2,076 4,109 6,935 Weddings at affiliated restaurants 900 876 944 1,023 1,010 Directly managed venues 3 8 22 41 62 Affiliated restaurants 10 10 11 12 13

03 Trends in sales and gross profit margin

(million yen) (%) 40000 Directly managed venue sales 70 Affiliated restaurant sales Other sales Gross profit margin 30000

20000 50

10000 3

0 30 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06

(million yen) FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 Total sales 2,959 5,275 11,444 21,830 33,962 Directly managed venue sales 851 2,903 8,363 17,967 30,433 Affiliated restaurant sales 2,070 2,098 2,412 2,666 2,532 Other sales 38 273 668 1,195 996 Gross profit margin 36.0% 46.0% 53.3% 55.4% 54.8%

35 MANAGEMENT ANALYSIS (cont.) TAKE AND GIVE. NEEDS Co., Ltd.

04 Trends in ordinary income and ordinary income ratio (million yen) (%) 6,000 Ordinary income 20.0 Sales to management expense ratio 5,000 16.0

4,000 12.0 3,000 8.0 2,000

4.0 1,000

0 0.0 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06

FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 Ordinary income (million yen) 229 467 1,447 3,501 5,153 Ordinary income ratio 7.7% 8.9% 12.7% 16.0% 15.2% SG&A ratio 27.4% 36.6% 39.3% 39.6% 40.1% Sales to pre-opening preparation expense ratio 2.5% 5.6% 6.8% 4.1% 3.0% Sales to management expense ratio 8.7% 10.0% 9.3% 6.1% 5.1% Sales to rent ratio 2.4% 4.9% 6.1% 7.8% 9.2%

05 Trends in CAPEX

(million yen) CAPEX: Venues opened this term 7,000 CAPEX: Venues to be opened next term Other CAPEX

6,000

5,000

4,000

3,000

2,000

1,000

0 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06

06 Trends in cash flow

(million yen) CF from operating activities–1 CF from financing activities 8,000 CF from investing activities–2 Free cash flow 1+2

6,000

07 Trends in ROE, ROA and Shareholders’ equity ratio 4,000 (%) 70 ROE Shareholders’ equity ratio ROA Interest-bearing debt ratio 2,000

60 0

50 -2,000 40 -4,000 30 -6,000 20 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06

10 (million yen) FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 Total CAPEX 395 3,645 6,261 4,899 2,510 0 CAPEX: Venues opened this term 210 1,513 4,780 3,992 1,065 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 CAPEX: Venues to be opened next term 148 2,003 1,397 675 287 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 Other CAPEX 37 129 84 231 1,157 ROE 13.8% 18.1% 16.5% 25.9% 27.9% CF from operating activities–1 247 794 2,155 4,737 4,277 ROA 8.2% 6.0% 6.9% 13.0% 16.0% CF from investing activities–2 (409) (3,521) (4,453) (4,907) (3,427) Shareholders’ equity ratio 54.9% 24.6% 48.3% 52.1% 61.8% CF from financing activities 632 2,453 7,163 (1,733) (1,795) Interest-bearing debt ratio 23.5% 55.7% 36.6% 20.2% 8.7% Free cash flow 1+2 (162) (2,727) (2,298) (169) 850

36 08 Trends in the number of venues by region

Within Tokyo Other regions (%) 80 Major cities Share of house wedding market 20

60 15

40 10

20 5

0 0 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 1 Halls at end of term 3 8 22 41 62 Within Tokyo 3 4 3 5 6 Major cities — 2 8 15 24 Other regions — 2 11 21 32 Share of house wedding market* — — 4.7% 8.3% 14.2% *DATA: RECRUIT CO., LTD. (Zexy Marriage Trend Survey 2006)

09 Trends in sales of new and existing venues per wedding hall

(million yen) New hall sales Sales per existing venue (million yen) 35,000 Existing venue sales Sales per new venue 700

30,000 600

25,000 500

20,000 400

15,000 300

10,000 200

5,000 100

0 0 FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 2

(million yen) FY to 3/02 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 Existing hall sales — 1,844 5,004 12,525 24,232 New hall sales 851 1,059 3,359 5,442 6,200 No. of new halls 3 5 +14 19 21 Sales per new hall 284 212 240 286 295 No. of existing halls — 3 +8 22 41 Sales per existing hall — 615 626 569 591

10 Trends in unit price and capacity utilization rate (thousand of yen) (%) 4,000 Unit price Utilization ratio 66

4,300 64 4,200 62 4,100

4,000 60

3,900 58

3,800 56 3,700 3 54 3,600

3,500 52 FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06

FY to 3/03 FY to 3/04 FY to 3/05 FY to 3/06 Unit price (thousand yen) 3,796 4,248 4,350 4,349 Utilization ratio 64.7% 63.9% 56.8% 58.0% Price achieved per guest (yen) 47,450 48,828 52,410 55,063 Average number of guests per wedding 80 89 83 79

37 Non-consolidated balance sheet Thousand yen Thousands of U.S. dollars Description As of March 31, 2005 As of March 31, 2006 As of March 31, 2006 Amount % Amount % Amount Assets I Current assets 1. Cash and deposits (Note 5) 3,821,725 2,877,181 24,493 2. Trade accounts receivable 56,356 40,210 342 3. Inventories (Note 1) 15,997 53,733 457 4. Supplies 6,661 38,285 326 5. Prepaid expenses 225,513 366,691 3,122 6. Deferred tax assets (Note 7) 235,242 128,064 1,090 7. Other 116,362 114,769 978 8. Allowance for doubtful accounts (Note 1) (4,133) (7,344) (63) Total current assets 4,473,725 26.0 3,611,591 18.8 30,745 II Fixed assets 1. Tangible assets (Note 1) (1) Buildings (Note 2) 6,536,725 7,156,604 60,923 Accumulated depreciation 367,494 6,169,231 638,120 6,518,483 5,432 55,491 (2) Structures 1,282,112 1,676,981 14,276 Accumulated depreciation 177,207 1,104,905 329,301 1,347,680 2,803 11,473 (3) Vehicles 11,685 11,685 99 Accumulated depreciation 8,606 3,079 9,700 1,985 83 16 (4) Furniture and fixtures 577,881 972,271 8,277 Accumulated depreciation 221,648 356,233 433,598 538,672 3,691 4,586 (5) Land 107,507 107,507 915 (6) Construction in progress 95,561 16,072 137 Total tangible assets 7,836,517 45.6 8,530,401 44.4 72,618 2. Intangible assets (Note 1) (1) Software 103,430 84,988 723 (2) Other 19,347 17,955 153 Total intangible assets 122,777 0.7 102,944 0.5 876 3. Investments and other assets (1) Investment securities (Note 1, 3) 208,729 782,878 6,664 (2) Investments in subsidiaries and affiliates (Note 1, 3) − 91,100 776 (3) Investments in capital 5,610 5,610 48 (4) Long-term loans 1,800,240 1,697,321 14,449 (5) Long-term prepaid expenses (Note 1) 352,812 411,396 3,502 (6) Deferred tax assets (Note 7) 43,314 57,222 487 (7) Leasehold deposits 2,296,528 3,922,132 33,388 (8) Other 45,507 — — Total investments and other assets 4,752,743 27.7 6,967,661 36.3 59,314 Total fixed assets 12,712,038 74.0 15,601,007 81.2 132,808 Total assets 17,185,764 100.0 19,212,598 100.0 163,553

Notes to the ﬁnancial statements begin on page 42

38 Thousand yen Thousands of U.S. dollars

Description As of March 31, 2005 As of March 31, 2006 As of March 31, 2006 Amount % Amount % Amount Liabilities I Current liabilities 1. Trade accounts payable 1,308,780 1,852,659 15,771 2. Current portion of long-term borrowings (Note 4) 1,595,066 1,346,666 11,464 3. Current portion of bonds (Note 4) 200,000 — — 4. Other payable 714,641 1,133,628 9,650 5. Accrued expenses 10,273 5,326 45 6. Accrued income taxes 1,379,474 1,277,507 10,875 7. Accrued consumption taxes 159,851 308,335 2,625 8. Advances from customers 1,120,752 1,012,203 8,617 9. Withholdings 53,454 73,470 625 1 10. Other current liabilities 341 449 5 Total current liabilities 6,542,637 38.1 7,010,248 36.5 59,677 II Long-term liabilities 1. Long-term borrowings (Note 4) 1,680,000 333,333 2,838 2. Other 3,500 3,500 29 Total long-term liabilities 1,683,500 9.8 336,833 1.7 2,867 Total liabilities 8,226,137 47.9 7,347,081 38.2 62,544

Contingent liabilities (Note 8) — — —

Shareholders’ equity (Note 9) I Common stock 2,491,200 shares authorized 722,700 shares issued and outstanding 2,949,350 17.2 2,949,350 15.4 25,108 II Capital surplus 2,895,550 16.8 2,895,550 15.1 24,649 III Retained earnings 3,114,726 18.1 6,020,616 31.3 51,252 Total shareholders’ equity 8,959,626 52.1 11,865,516 61.8 101,009 Total liabilities and shareholders’ equity 17,185,764 100.0 19,212,598 100.0 163,553 Notes to the ﬁnancial statements begin on page 42 2

39 NON-CONSOLIDATED FINANCIAL STATEMENTS (cont.) TAKE AND GIVE. NEEDS Co., Ltd.

Non-consolidated statements of income Thousand yen Thousands of U.S. dollars For the year ended For the year ended For the year ended Description March 31, 2005 March 31, 2006 March 31, 2006 Amount % Amount % Amount

I Net sales 21,830,109 100.0 33,962,742 100.0 289,118 II Cost of sales 9,741,162 44.6 15,345,004 45.2 130,629 Gross profit 12,088,947 55.4 18,617,738 54.8 158,489 III Selling, general and administrative expenses 1. Advertising expenses 1,847,616 2,511,281 21,378 2. Directors’ remuneration 75,700 98,100 835 3. Salary for employees 1,922,434 2,862,868 24,371 4. Welfare expenses 248,723 455,861 3,881 5. Rental fee 1,698,443 3,090,100 26,305 6. Supply cost 210,669 230,622 1,963 7. Depreciation and amortization 549,017 724,770 6,170 8. Commission fee 621,937 878,587 7,479 9. Other 1,460,140 8,634,683 39.6 2,783,894 13,636,086 40.1 23,699 116,081 Operating income 3,454,263 15.8 4,981,651 14.7 42,408 IV Other income 1. Interest income 19,280 21,482 183 2. Dividend income 3 3 0 3. Investment return from anonymous association 109,841 152,731 1,300 4. Rent income 5,410 22,019 187 5. Commission income 304 — — 6. Income from book sales 371 — — 7. Other 3,274 138,486 0.6 7,936 204,172 0.6 68 1,738 V Other expenses 1. Interest expenses for borrowings 52,380 30,666 261 2. Interest expenses for bonds 1,889 465 4 3. Amortization of stock issuance cost (Note 1) 25,357 — — 4. Other 11,571 91,199 0.4 1,329 32,461 0.1 11 276 Ordinary income 3,501,551 16.0 5,153,363 15.2 43,870 VI Extraordinary loss 1. Loss on termination of leases — 77,076 656 2. Expenditure related to closure of affiliate restaurants — 17,126 146 3. Loss on disposal of fixed assets 2,491 2,491 0.0 — 94,203 0.3 — 802 Income before income taxes 3,499,059 16.0 5,059,160 14.9 43,068 Income taxes — current (Note 1) 1,646,000 2,060,000 17,536 Income taxes — deferred (Note 7) (196,529) 1,449,471 6.6 93,270 2,153,270 6.3 795 18,331 Net income 2,049,588 9.4 2,905,890 8.6 24,737

Per share data (Note 11) Net income 2,839.56 4,020.88 34.23 Diluted net income 2,802.82 3,973.26 33.82 Cash dividends applicable to the period — — —

Notes to the ﬁnancial statements begin on page 42

40 Non-consolidated statements of shareholders’ equity Thousand yen Thousands of U.S. dollars For the year ended For the year ended For the year ended Description March 31, 2005 March 31, 2006 March 31, 2006 Amount Amount Amount

Common stock Beginning balance 2,937,350 2,949,350 25,108 Exercise of stock purchase warrants 12,000 — — Ending balance 2,949,350 2,949,350 25,108

Capital surplus Beginning balance 2,883,549 2,895,550 24,649 Exercise of stock purchase warrants 12,000 — — Ending balance 2,895,550 2,895,550 24,649 1 Retained earnings Beginning balance 1,065,137 3,114,726 26,515 Net income 2,049,588 2,905,890 24,737 Ending balance 3,114,726 6,020,616 51,252

Notes to the ﬁnancial statements begin on page 42

Non-consolidated statements of cash ﬂows Thousand yen Thousands of U.S. dollars For the year ended For the year ended For the year ended Description March 31, 2005 March 31, 2006 March 31, 2006 Amount Amount Amount

I Cash flows from operating activities 1. Income before income taxes 3,499,059 5,059,160 43,068 2. Depreciation and amortization 549,017 724,770 6,170 3. Interest and dividend income (19,283) (21,485) (183) 4. Interest expenses 54,270 31,131 265 6. Loss on disposal of fixed assets 2,491 — — 7. Increase/decrease in trade accounts receivable 613,084 (92,402) (787) 8. Increase in trade accounts payable 661,612 543,878 4,630 2 9. Increase in prepaid expenses (90,678) (141,191) (1,202) 10. Increase in other payable 274,127 384,719 3,275 11. Other, net 51,227 (39,594) (337) Sub-total 5,594,929 6,448,986 54,899 12. Interest and dividends received 14,793 19,112 162 13. Interest paid (54,802) (36,066) (307) 14. Income taxes paid (817,676) (2,154,190) (18,338) Net cash provided by operating activities 4,737,243 4,277,841 36,416 II Cash flows from investment activities 1. Increase in time deposits (18,009) (4,505) (38) 2. Proceeds from repayment of time deposits — 50,010 426 3. Payment of loan receivables (489,790) (70,000) (596) 4. Collection of loan receivables 76,999 164,946 1,404 5. Expenditures for tangible assets (3,344,062) (1,324,545) (11,276) 6. Expenditures for investment securities — (437,000) (3,720) 7. Expenditures for stocks of related companies — (91,100) (776) 8. Expenditures for software (23,082) (4,120) (35) 9. Expenditures for leasehold deposits (1,018,129) (1,770,773) (15,074) 10. Proceeds from leasehold deposits 44,845 145,168 1,236 11. Increase in long-term prepaid expenses (135,144) (100,987) (860) 3 12. Other, net (647) 15,583 133 Net cash used in investment activities (4,907,022) (3,427,322) (29,176) III Cash flows from financing activities 1. Repayment of long-term borrowings (1,433,973) (1,595,066) (13,578) 2. Repayments of straight bonds (300,000) (200,000) (1,703) Net cash used in financing activities (1,733,973) (1,795,066) (15,281) IV Effect of exchange rate changes on cash and cash equivalents — — — V Net decrease in cash and cash equivalents (1,903,751) (944,547) (8,041) VI Cash and cash equivalents at beginning of year 5,685,461 3,781,709 32,193 VII Cash and cash equivalents at end of year (Note 1, 5) 3,781,709 2,837,161 24,152

Notes to the ﬁnancial statements begin on page 42 41 NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS TAKE AND GIVE. NEEDS Co., Ltd.

1. Signiﬁcant Accounting and Reporting Policies

(a) Basis of Presenting Non-Consolidated Financial Statements The accompanying non-consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese Securities and Exchange Law and its related accounting regulations, and in conformity with accounting principles generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards. The accompanying non-consolidated financial statements have been restructured and translated into English (with some expanded descrip- tions and the inclusion of non-consolidated statements of shareholders’ equity) from the non-consolidated financial statements of the Company prepared in accordance with Japanese GAAP and filed with the appropriate Local Financial Bureau of the Ministry of Finance as required by the Securities and Exchange Law. Some supplementary information included in the statutory Japanese language non-consolidated financial statements, but not required for fair presentation, is not presented in the accompanying non-consolidated financial statements. The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside Japan, using the prevailing exchange rate at March 31, 2006, which was ¥117.47 to one U.S. dollar. The convenience translations should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.

(b) Change in Accounting Method On August 9, 2002, the Business Accounting Council of Japan issued new accounting standards entitled “Statement of Opinion on the Estab- lishment of Accounting Standards for Impairment of Fixed Assets”. Further, on October 31, 2003, the Accounting Standards Board of Japan issued Financial Accounting Standards Implementation Guidance No. 6 — “Application Guidance on Accounting Standards for impairment of Fixed Assets”. Effective April 1, 2005, the Company have adopted these new accounting standards for impairment of ﬁxed assets. As a result of adopting the new accounting standards, there was no effect on the non-consolidated ﬁnancial statements.

(c) Securities Equity securities issued by subsidiaries and afﬁliates are stated at cost determined by the moving average method. Available-for-sale securities with no available fair values are stated at cost.

(d) Inventories Inventories that are related to wedding services are stated at cost using the identiﬁed method, and those related to food and drinks are stated at cost determined by the moving average method.

(e) Tangible Assets Depreciation is computed on the declining-balance method over the following estimated useful lives of the assets except for buildings, which are computed on a straight-line method. The estimated useful lives of depreciable assets are as follows: Buildings 3 years to 41 years Structures 10 years to 45 years Vehicles, furniture and ﬁxtures 2 years to 15 years Ordinary maintenance and repairs are charged to income as incurred; major replacements and improvements are capitalized.

(f) Intangible Assets Intangible assets are amortized using the straight-line method. Software is amortized using the straight-line method over a period of up to ﬁve years in accordance with estimated useful lives.

(g) Long-term Prepaid Expenses Long-term prepaid expenses are amortized using the straight-line method over a period of two years to twenty years.

(h) Stock Issuance Cost Stock issuance cost is charged to income as incurred.

42 (i) Allowance for Doubtful Accounts Under the Japanese accounting standard for financial instruments, all companies are required to classify receivables into the following three categories and make provision for possible losses. For receivables from insolvent customers who are undergoing bankruptcy or other collection proceedings or in a similar financial condition, the allowance for doubtful accounts is provided in the full amount of such receivables, excluding the portion that is estimated to be recoverable due to the existence of collateral or guarantees. For the unsecured portion of receivables from customers not presently in the above circumstances, but for which there is a high probability of so becoming, the allowance for doubtful accounts is provided for individually estimated uncollectable amounts, primarily determined after an evaluation of collaterals, guarantees and the respective customer’s overall financial condition. For other receivables, the allowance for doubtful accounts is provided based on the Companies’ actual rate of receivable losses in the past.

(j) Finance Leases Finance leases that do not transfer ownership to the lessee are accounted for in the same manner as operating leases in accordance with Japanese GAAP. Under Japanese accounting policies for leases, finance leases that are deemed to transfer ownership of the leased property to 1 the lessee are to be capitalized, while other finance leases are permitted to be accounted for as operating lease transactions on condition that certain “as if capitalized” information is disclosed in the notes to the lessee’s financial statements.

(k) Income Taxes Income taxes comprise corporation tax, inhabitant taxes and enterprise taxes. The provision for income taxes is computed based on the pretax income including in the non-consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for ﬁnancial reporting purposes and the amounts used for income tax purposes.

(l) Cash and cash equivalents Cash and cash equivalents include cash on hand, readily available deposits and short-term investments, which are easily convertible into cash and present insigniﬁcant risk of changes in value, with original maturities of three months or less.

(m) Reclassifications Certain reclassifications have been made to the prior years’ non-consolidated financial statements to conform to the presentation used for the year ended March 31, 2006. 2 2. Pledged Assets

Assets pledged as collateral for long-term debt at March 31, 2005 and 2006 are as follows:

Thousand yen Thousands of U.S. dollars 2005 2006 2006 Buildings — Less accumulated depreciation 247,985 244,586 2,082 Total 247,985 244,586 2,082

3. Securities

(a) Investments in subsidiaries and afﬁliates with no available fair values as of March 31, 2005 and 2006 are as follows:

Thousand yen Thousands of U.S. dollars 2005 2006 2006 Share of subsidiaries — 86,100 733 3 Share of afﬁliates — 5,000 43 Total — 91,100 776

(b) Book value of available-for-sale securities with no available fair values as of March 31, 2005 and 2006 are as follows:

Thousand yen Thousands of U.S. dollars 2005 2006 2006 Investments in anonymous association 208,729 758,878 6,460 Share of unlisted securities — 24,000 204 208,729 782,878 6,664

43 NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS (cont.) TAKE AND GIVE. NEEDS Co., Ltd.

4. Long-term Debt

Long-term debt at interest rates ranging from 1.23% to 2.54% as of March 31, 2005, and from 1.23 % to 1.61 % as of 2006, were as follows:

Thousand yen Thousands of U.S. dollars 2005 2006 2006 Unsecured loans, representing obligations principally to banks 2,976,316 1,598,750 13,610 Secured loans, representing obligations principally to banks 298,750 81,250 692 4.0% Unsecured bonds 200,000 — — Sub-total 3,475,066 1,680,000 14,302 Less portion due within one year (1,795,066) (1,346,666) (11,464) Total 1,680,000 333,333 2,838

Annual maturities of long-term debt subsequent to March 31, 2005 and 2006 were as follows:

Thousand yen Thousands of U.S. dollars 2006 2006 March 31, 2007 333,333 2,838 March 31, 2008 — — March 31, 2009 — — March 31, 2010 — — March 31, 2011 and thereafter — — Total 333,333 2,838

5. Cash and Cash Equivalents

Reconciliation between the balance of cash and deposits in the balance sheets and the balance of cash and cash equivalents in the statements of cash ﬂows is as follows:

Thousand yen Thousands of U.S. dollars 2005 2006 2006 Cash and deposits accounts per balance sheets 3,821,725 2,877,181 24,493 Deposits to mature in excess of three months (40,016) (40,019) (341) Cash and cash equivalents per statements of cash ﬂows 3,781,709 2,837,161 24,152

44 6. Leases

(a) Information on ﬁnance leases accounted for as operating leases (1) A summary of assumed amounts of acquisition cost, accumulated depreciation and net book value at March 31, 2005 and 2006 of ﬁnance leases that do not transfer ownership to the lessee is as follows:

Thousand yen Thousands of U.S. dollars 2006 2006 Accumulated Accumulated Acquisition depreciation Net book Acquisition depreciation Net book cost equivalent equivalent value equivalent cost equivalent equivalent value equivalent

Buildings 6,112,016 369,859 5,742,157 52,030 3,149 48,881 Furniture and Fixtures 1,759,647 434,179 1,325,467 14,980 3,696 11,284 Total 7,871,664 804,039 7,067,625 67,010 6,845 60,165 1

Thousand yen 2005 Accumulated Acquisition depreciation Net book cost equivalent equivalent value equivalent

Buildings 1,210,000 17,625 1,192,375 Furniture and Fixtures 894,274 211,877 682,396 Total 2,104,274 229,502 1,874,771

(2) Future lease payments inclusive of interest

Thousand yen Thousands of U.S. dollars 2005 2006 2006 Amount due within one year 247,841 684,174 5,824 Amount due after one year 1,636,840 6,466,698 55,050 Total 1,884,681 7,150,873 60,874 2 (3) Lease payments, Depreciation equivalent and Interest equivalent

Thousand yen Thousands of U.S. dollars 2005 2006 2006 Lease payments 167,684 823,817 7,013 Depreciation equivalent 148,164 541,157 4,607 Interest equivalent 23,851 321,074 2,733

(4) Calculation of depreciation equivalent Depreciation equivalent is computed using the straight-line method over the lease terms assuming no residual value.

(5) Calculation of interest equivalent The difference between total lease payments and acquisition cost equivalents are regarded as amounts representing interest payable equivalents and are allocated to each period using the interest method.

(b) Future lease payments under operating leases at March 31, 2005 and 2006

Thousand yen Thousands of U.S. dollars 2005 2006 2006 3 Amount due within one year 197,076 197,076 1,678 Amount due after one year 1,379,532 1,182,456 10,066 Total 1,576,608 1,379,532 11,744

45 NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS (cont.) TAKE AND GIVE. NEEDS Co., Ltd.

7. Income Taxes

The difference between the statutory tax rates and the Company’s effective tax rates for ﬁnancial statement purposes for the year ended March 31, 2005 and 2006 is not disclosed as it is immaterial. Signiﬁcant components of deferred tax assets and liabilities as of March 31, 2005 and 2006 are as follows:

Thousand yen Thousands of U.S. dollars 2005 2006 2006 Deferred tax assets: Accrued enterprise taxes 106,459 98,229 836 Amortization for leasehold 43,123 62,875 535 Excess amortization for long-term prepaid expenses 9,784 11,907 101 Accrued ofﬁce taxes 6,094 11,463 98 Advances from customers 114,949 6,103 52 Other 8,210 13,286 113 Total deferred tax assets 288,621 203,865 1,735 Deferred tax liabilities: Interest on long-term loans 9,848 18,434 157 Other 216 144 1 Total deferred tax liabilities 10,065 18,578 $ 158 Net deferred tax assets 278,556 185,286 1,577

8. Contingent Liabilities

The company has the following contingent liabilities for afﬁliates at March 31, 2005 and 2006. Thousand yen Thousands of U.S. dollars 2005 2006 2006 Real-estate lease agreement — 502,846 4,281 Total — 502,846 4,281

46 9. Shareholders’ Equity

The Japanese Commercial Code requires at least 50% of the issue price of new shares to be designated as stated common stock as determined by resolution of the Board of Directors. Proceeds in excess of amounts designated as stated capital are credited to additional paid-in capital. Effective October 1, 2001, the amended Japanese Commercial Code provides that an amount of at least 10% of the aggregate amounts of cash dividends and other cash appropriation which are made as an appropriation of retained earnings allocable to each fiscal period shall be appropriated and set aside as a legal reserve until such reserve plus additional paid-in capital equals 25% of stated capital. The legal reserve and additional paid-in capital may be used to eliminate or reduce a deficit by resolution of the shareholders’ meeting or may be capitalized by resolution of the Board of Directors. On condition that the total amount of legal reserve and additional paid-in capital remains equal to or exceeding 25% of common stock, they are available for distribution and certain other purposes by the resolution of shareholders’ meeting. In accordance with the Japanese Commercial code, a year-end dividend or an interim dividend may be approved by the shareholders’ meeting after the end of each fiscal period or declared by the Board of Directors after the end of each interim six-month period. These dividends and the related appropriations of retained earnings are not reflected in the non-consolidated financial statements at the end of such fiscal or interim six-month period but are recorded at the time they are approved. 1 The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of the Company in accordance with the Commercial Code of Japan. During the Board of Directors Meeting held on April 12, 2004, the Company approved a three-for-one stock split, which increased the number of 48,012 shares on June 18, 2004. And at the Board of Directors Meeting held on September 10, 2004, the Company approved a ten-for-one stock split, which increased the number of 650,187 shares on November 19, 2004. The Company yielded a capital increase for exercise of stock option, which increased 555 of shares issued and outstanding for the year ended March 31, 2005.

10. Related Party Transaction

The company purchased shares of subsidiaries in the amount of ¥10,000 thousand ($85 thousand) from Director of the company in the year ended March 31, 2006. 11. Per Share Data 2 Net income and cash dividends per share are based on the weighted average number of outstanding shares of common stock, as retroactively adjusted for free share distribution and stock splits. The diluted net income per share is based on the weighted average number of outstanding shares of common stock and common stock equivalents.

12. Stock Option Plan

At the extraordinary meeting of shareholders held on September 17, 2001, the Company’s directors and certain employees were granted options in respect of a total of 9,000 shares. The option exercise price is ¥5,556 per share. The options are exercisable between September 17, 2003 and September 16, 2011.

13. Subsequent Events On June 29, 2006, at the annual shareholders’ meeting, the shareholders of the Company approved the payment of a year-end cash dividend of ¥500 ($4.26) per share, aggregating ¥361,350 thousand ($3,076 thousand). 3

47 INDEPENDENT AUDITORS’ REPORT TAKE AND GIVE. NEEDS Co., Ltd.

To the Board of Directors of TAKE AND GIVE. NEEDS Co., Ltd.:

We have audited the accompanying non-consolidated balance sheets of TAKE AND GIVE, NEEDS Co., Ltd. as of March 31, 2006 and 2005, and the related statements of income, shareholders’ equity and cash flows for the years then ended, expressed in Japanese yen. These non-consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to independently express an opinion on these non-consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the non-consolidated financial statements referred to above present fairly, in all material respects, the financial position of TAKE AND GIVE. NEEDS Co., Ltd. as of March 31, 2006 and 2005, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in Japan.

The U.S. dollar amounts in the accompanying non-consolidated ﬁnancial statements with respect to the year ended March 31, 2006 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis described in Note 1 to the non-consolidated ﬁnancial statements.

Tokyo, Japan June 29, 2006

48 1 2

INVESTORS’ GUIDE 3

Corporate data 50

List of venues and afﬁliated restaurants 51

The Japanese wedding market 52

The T&G house wedding business 60

49 CORPORATE DATA TAKE AND GIVE. NEEDS Co., Ltd.

Shareholder composition (As of March 31, 2006) Major shareholders

Other corporate entities Yoshitaka Nojiri 152,350 21.08% Japan Trustee Services Bank, Ltd. 49,424 6.83% Financial 7.5% institutions and Individuals WELD Trading Co., Ltd. 48,000 6.64% and others securities firms The Master Trust Bank of Japan, Ltd. 38,043 5.26% 20.4% 34.7% The Chase Manhattan Bank N.A., 20,673 2.86% London S.L. Omnibus Account Lehman Brothers International Europe 14,158 1.95% Foreign 37.4% BBH for Fidelity Japan Small Fund 13,667 1.89% corporations The Nomura Trust and Banking Co., Ltd. 13,613 1.88% JPMCB Omnibus US Pension Treaty 12,232 1.69% JASDEC 380052 Stock code 4331 Bank of New York GCM Client 12,199 1.68% Shares authorized 2,491,200 Accounts EISG Shares issued 722,700 shares Share trading unit 1 share Number of shareholders 10,028

Corporate outline

Company name TAKE AND GIVE. NEEDS Co., Ltd. Officers (As of June 28, 2006) Main business Development and management of President & C.E.O Yoshitaka Nojiri wedding venues Director Tetsuya Minobe Head office location 4-12-24 Nishi-Azabu, Minato-ku, Director Daisuke Kiriyama Tokyo 106-0031 Director Hideki Hayashi URL (main) http://www.tgn.co.jp* (IR) http://www.tgn.co.jp/ir/english Statutory Auditor Isao Ninomiya Established October 19, 1998 Auditor Hidekazu Kubokawa Capital 2,949,350 thousand yen Auditor Komei Sasaki Fiscal year end March 31 Stock exchange listings Tokyo stock exchange first section Employees 797 (As of March 31, 2006)

*Only available in Japanese

Organization chart (As of April 1, 2006) Finance division Wedding department Accounting division

Board of Internal General affairs division auditors audit office Personnel department Systems division

Personnel administration division Board of Administration Shareholders President directors department Personnel & employment division

Food & beverage division Accounting President’s department office Sales division

Network development department

50 T&G LIST OF VENUES AND AFFILIATED RESTAURANTS TAKE AND GIVE. NEEDS Co., Ltd.

(As of August 31, 2006) Names of directly managed venues Address Telephone Open Venue type Development type

a ARKANGEL GEIHINKAN SENDAI 1-6-1, Ichiban-chou, Aoba-ku, Sendai City, Miyagi Prefecture 022-713-0421 June 2003 1-hall Term building lease & e r o A

d ARTHENTIA SENDAI 1-5-1, Narita, Tomiya-machi, Kurokawa-gun, Miyagi Prefecture 022-348-3850 November 2003 2-hall Term building lease i u a k k o k ARK CLUB GEIHINKAN KORIYMA 25, Aza-Jyobunai, Arai, Asaka-machi, Koriyama City, Fukushima Prefecture 024-937-0280 April 2004 1-hall Term land lease h o o H T GARDEN HILLS GEIHINKAN SAPPORO 13-1-8, Miyanomori 3 jou, Chuo-ku, Sapporo City 011-633-6290 August 2006 1-hall Term land lease a /

e ARK CLUB GEIHINKAN NIIGATA 2-24-7, Shinmatsuzaki, Niigata City, Nigata Prefecture 025-279-5890 March 2004 2-hall Term building lease u r s A t e

u ARVERIR GEIHINKAN TOYAMA 3-2-30, Shinjyouhonmachi, Toyama City, Toyama Prefecture 076-452-5770 July 2004 2-hall Term building lease n k i i r h u s ARK CLUB GEIHINKAN KANAZAWA 856-1, Chikaoka-machi, Kanazawa City, Ishikawa Prefecture 076-239-4360 July 2004 2-hall Term building lease k o o K

H GARDEN HILLS GEIHINKAN NAGANO 5-14-3, Nagagoshyou, Nagano City, Nagano Prefecture 026-268-1790 March 2006 2-hall SPC ARTHENTIA GEIHINKAN 251-1, Kashiwa, Kashiwa City, Chiba Prefecture 04-7168-3033 September 2002 1-hall Term land lease ARKANGEL GEIHINKAN UTSUNOMIYA 3511, Hiraide-machi, Utsunomia City, Tochigi Prefecture 028-613-6511 February 2003 2-hall Term land lease ARTHENTIA GEIHINKAN TAKASAKI 38-1, Aza-Tenjin, Kamiorui-machi, Takasaki, Gunma Prefecture 027-350-1470 December 2003 2-hall Term building lease ARK CLUB GEIHINKAN MITO 166, Sumiyoshi-chou, Mito City, Ibaraki Prefecture 029-304-0800 January 2004 2-hall Term land lease ARVERIR GEIHINKAN OMIYA 3-11-6, Kamikizaki, Urawa-ku, Saitama City, Saitama Prefecture 048-823-3610 September 2004 1-hall Term land lease a e r

A YAMATE GEIHINKAN YOKOHAMA YAMATE 184-1, Yamate-chou, Naka-ku, Yokohama City, Kanagawa Prefecture 045-628-0850 September 2004 1-hall Term land lease o t

n BAYSIDE GEIHINKAN YOKOHAMA MINATO MIRAI 045-640-5470

a 1 5-1-5 Minato Mirai, Nishi-ku, Yokohama City, Kanagawa Prefecture October 2004 2-hall Term land lease K BAYSIDE GARDEN CLUB YOKOHAMA MINATO MIRAI 045-640-5471 HILLSIDE CLUB GEIHINKAN HACHIOJI 1-7-8, Minamino, Hachioji City, Tokyo 0426-32-0701 November 2004 2-hall Real estate lease GARDEN HILLS GEIHINKAN SAITAMA SHINTOSHIN 4-230-1, Kishiki-chou, Omiya-ku, Saitama City, Saitama Prefecture 048-658-0440 August 2005 2-hall Real estate lease BAYSIDE PARK GEIHINKAN CHIBA 1-26-3, Chuokou, Chuo-ku, Chiba City, Chiba Prefecture 043-301-7550 January 2006 2-hall SPC AQUA TERRACE GEIHINKAN SHINYOKOHAMA 3-7-15 Shinyokohama, Kohoku-ku, Yokohama City, Kanagawa Prefecture 045-470-7470 June 2006 1-hall SPC ARKANGEL DAIKANYAMA 1-4-6, Aobadai, Meguro-ku, Tokyo 03-5728-1677 August 2001 1-hall Term land lease n o i o g AZABU GAIHINKAN 7-12-29, Roppongi, Minato-ku, Tokyo 03-3408-9222 June 2002 1-hall Term building lease y e k r o . t T ARFERIQUE SHIROGANE 4-19-19, Shiroganedai, Minato-ku, Tokyo 03-5449-0950 December 2002 1-hall Term building lease e m SHOTO GALLERY SHIBUYA SHOTO 1-5-4, Shoto, Shibuya-ku, Tokyo 03-5784-1060 November 2005 1-hall Real estate lease ARKANGEL GEIHINKAN NAGOYA 4-37, Shirakabe, Higashi-ku, Nagoya City, Aichi Prefecture 052-936-0670 April 2003 1-hall SPC ARVERIR GEIHINKAN NAGOYA 11-4, Aza-Ishizaka, Hiroji-chou, Shouwa-ku, Nagoya City, Aichi Prefecture 052-861-0970 June 2004 1-hall Term land lease a e r ARTHENTIA GEIHINKAN HAMAMATSU 33-15, Funakoshi-chou, Hamamatsu City, Shizuoka Prefecture 053-411-7671 December 2004 2-hall Term building lease A i a

k ARFERIQUE GEIHINKAN GIFU 1-10, Koran, Gifu City, Gifu Prefecture 058-254-8550 September 2005 2-hall SPC o T AQUA GARGEN GEIHINKAN NUMAZU 3-37, Yoneyama-chou, Numazu City, Shizuoka Prefecture 055-920-5200 July 2006 1-hall SPC GARDEN CLUB GEIHINKAN YOKKAICHI 2-10-2, Kubota, Yokkaichi City, Mie Prefecture 059-359-6560 September 2006 2-hall SPC ARTHENTIA GEIHINKAN OSAKA 1-5-13, Edobori, Nishi-ku, Osaka City, Osaka Prefecture 06-6225-9862 December 2003 1-hall Term land lease ARVERIR GEIHINKAN HIMEJI 1-48-7, Houjyou, Himeji City, Hyogo Prefecture 0792-84-7880 May 2004 1-hall Term land lease BAYSIDE GEIHINKAN KOBE 2-302-4, Hamabedori, Chuo-ku, Kobe City, Hyogo Prefecture 078-262-4560 February 2005 1-hall SPC

a YAMATE GEIHINKAN KOBE SANNOMIYA 3-1-1, Nunobiki-chou, Chuo-ku, Kobe City, Hyogo Prefecture 078-271-3650 March 2005 1-hall SPC e r A

i ARTHENTIA TAISHIKAN OSAKA 1-18-8, Minami-Senba, Chuo-ku, Osaka City, Osaka Prefecture 06-6265-0020 April 2005 1-hall SPC

k 2 n i

K KITAYAMA GEIHINKAN KYOTO 5-5, Matsugasakiimakaido-chou, Sakyo-ku, Kyoto City, Kyoto Prefecture 075-706-6690 June 2005 1-hall SPC / i a

s ARFERIQUE GEIHINKAN OSAKA 1-5-25, Utsubononmachi, Nishi-ku, Osaka City, Osaka Prefecture 06-6479-0050 July 2005 1-hall SPC n a

K BAYSIDE PARK GEIHINKAN OSAKA 2-2-15, Hagoromo, Takaishi City, Osaka Prefecture 072-267-7590 October 2005 2-hall SPC AQUA GARGEN TERRACE OSAKA 2-4-20, Noninbashi, Chuo-ku, Osaka city, Osaka Prefecture 06-6966-1430 April 2006 1-hall SPC BAYSIDE GEIHINKAN WAKAYAMA 1508-2, Kemi, Wakayama City, Wakayama Prefecture 073-446-8160 August 2006 2-hall SPC ACQUA TERRAS GEIHINKAN OTSU 4-8-23, Hamaotsu, Otsu City, Shiga Prefecture 077-510-0390 October 2006 1-hall Land and building fund

a ARK CLUB GEIHINKAN HIROSHIMA 2-1-45, Inokuchidai, Nishi-ku, Hiroshima City, Hiroshima Prefecture 082-270-3950 February 2004 2-hall Term building lease e / r u A k ARVERIR GEIHINKAN OKAYAMA 342, Ofuku, Okayama City, Okayama Prefecture 086-282-8140 January 2005 2-hall SPC o u g k u o h k ARK CLUB GEIHINKAN FUKUYAMA 1-6-28, Nishi-machi, Fukuyama City, Hiroshima Prefecture 084-973-1380 November 2005 1-hall SPC i C h

S BAYSIDE GEIHINKAN MATSUYAMA 1382-1, Umezudera-chou, Matsuyama City, Ehime Prefecture 089-967-6860 May 2006 2-hall SPC ARKANGEL GEIHINKAN FUKUOKA 1-23-1, Heiwa-ku, Minami-ku, Fukuoka City, Fukuoka Prefecture 092-534-8225 March 2003 1-hall Term land lease ARFERIQUE GEIHINKAN FUKUOKA 6-29, Gionmachi, Hakata-ku, Fukuoka City, Fukuoka Prefecture 092-282-7060 August 2003 1-hall SPC a e

r ARFERIQUE GEIHINKAN KUMAMOTO 2-2-12, Kasuga, Kumamoto City, Kumamoto Prefecture 096-312-8620 October 2003 1-hall Term land lease A u

h BAYSIDE GEIHINKAN KAGOSHIMA 2-4-10, Yojiro, Kagoshima City, Kagoshima Prefecture 099-214-2070 May 2005 2-hall Real estate lease s u

y ARFERIQUE GEIHINKAN KOKURA 12-2, Otemachi, Kokurakita-ku, Kitakyushu City, Fukuoka Prefecture 093-563-2180 December 2005 2-hall SPC K BAYSIDE GEIHINKAN NAGASAKI 91, Nami-no-hira-machi, Nagasaki City, Nagasaki Prefecture 095-811-4690 February 2006 2-hall SPC GARDEN HILLS GEIHINKAN OITA 1607-1, Aza Ohnishi, Ohaza Shimogoori, Oita City, Oita Prefecture 097-554-8310 October 2006 2-hall Land purchase Names of affiliate restaurants Address Telephone Open Antico Buttero 5-13-3, Hiroo, Shibuya-ku, Tokyo 03-5424-6710 October 1998 Riva Degli Entruschi 3-15-13, Minami-Aoyama, Minato-ku, Tokyo 03-5469-8558 February 1999 3 Terakoya 3-33-32, Maehara-cho, Koganei City, Tokyo 042-388-9555 May 1999 Manoir D’inno 4-1-13, Shibuya, Shibuya-ku, Tokyo 03-5469-8561 January 2000 s t

n Agape 4-11-12, Minami-Azabu, Minato-ku, Tokyo 03-5798-3535 June 2000 a r u

a Queen Alice Ikspiari IKSPIARI 405, 1-4, Maihama, Urayasu City, Chiba Prefecture 047-305-5786 July 2000 t s e

R Felicita 3-18-4, Minami-Aoyama, Minato-ku, Tokyo 03-5772-1707 December 2000 d e

t Il Buttero 5-13-3, Hiroo, Shibuya-ku, Tokyo 03-5424-6736 December 2000 a i l i f

f Blue point 4-19-9, Shiroganedai, Minato-ku, Tokyo 03-5795-4195 February 2004 A Tanga Wakabayashi Building, 2-8-5, Akasaka, Minato-ku, Tokyo 03-5575-6870 September 2004 Xex Daikanyama 3rd Floor, La Fuente DAIKANYAMA, Sarugaku-chou, Shibuya-ku, Tokyo 03-5728-5591 July 2005 Xex (Osaka) 7th Floor, Herbis ENT, 2-2-22, Umeda, Kita-ku, Osaka City, Osaka Prefecture 06-4795-0068 July 2005 Xex (Atago) 42nd Floor, Atago Green Hills, 2-5-1 Atago, Minato-ku, Tokyo 03-5777-0360 October 2005 51 THE JAPANESE WEDDING MARKET

52 THE JAPANESE WEDDING MARKET TAKE AND GIVE. NEEDS Co., Ltd.

01 Trends and forecasts in number of marriages in Japan 02 Trends in re-marrying

1,200,000 Number of re-marriages as a percentage of all domestic marriages. First baby boomer generation reaches marrying age Groom Bride 1975 9.1% 7.5% 1,000,000 Second baby boomer generation 1980 10.8 9.5 reaches marrying age (lengthened due to delaying marriage) 1985 12.2 10.8 1990 13.4 11.7 800,000 1995 13.2 11.6 1997 13.6 12.1 1998 13.9 12.4 600,000 1999 14.4 12.8 2000 15.0 13.4 1 2001 15.7 14.0 400,000 2002 16.3 14.8 2003 17.1 15.4 2004 17.8 15.9

200,000 2005 18.2 16.0

0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

03 Trends in number of divorces 04 Distribution of age at first marriage (%) 16 300,000 14 1985

12 250,000 1995 10 2 8 2005 200,000 6

150,000 2

0 16 18 20 22 24 26 28 30 32 34 36 38 40 100,000 Trends in average age at first marriage Groom Bride 1989 28.5 age 25.8 age 50,000 1994 28.5 26.2 1999 28.7 26.8 2003 29.4 27.6 2004 29.6 27.8 0 2005 29.8 28.0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

01–04 Trends in Japanese weddings: Later marriages and remarriages In Japan, the second generation of baby boomers has reached marrying age, with the number of marriages trending around 700,000–800,000 annu- 3 ally. The gradually increasing average age at which women ﬁrst marry means that this level of marriages is likely to continue for several more years.

Divorce rates and remarriage rates, meanwhile, are trending upwards, suggesting the potential for new services targeting the remarriage market in future.

DATA: 01–04 Health, Labour and Welfare Ministry: Population Dynamics 2005 Yano Research Institute Ltd. (White paper on the Bridal Industry: 2005)

53 THE JAPANESE WEDDING MARKET (cont.) TAKE AND GIVE. NEEDS Co., Ltd.

05 Timing of major activities during wedding preparation period

wedding ceremony

6–8 months before 2–5 months before 1–2 months before 1 month after wedding ceremony wedding ceremony wedding ceremony wedding ceremony

Engagement gifts Purchase wedding ring Decide on Change insurance Gifts Banquet preparations, dress, flowers, etc. honeymoon policy Deciding on a wedding venue

Purchase furniture and home electronics Move to new home

06 Wedding venue selection and female employment rate

Wedding venue selection: Trends in when couples make their decision

(%) (10,000 people) Percentage of women in the work force (%) 20 2006 7,000 Employed males and females 45 2005 Employed females The wedding preparation period is tending to 40 shorten as the rate of 6,000 female employment rises

35 15 5,000 30

4,000 25 10 20 3,000

15 2,000 5 10

1,000 5

0 0 0 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 1965 1970 1975 1980 1985 1990 1994 1995 2000 2003 2004 months prior Within 2 weeks

05–06 Characteristics of the Japanese wedding-related market In Japan, preparations for marriage often begin around six months before the actual event, and in this brief period of time it is not unusual for more than ¥6 million to be spent. However, as both the employment rate and number of marriages resulting from the birth of children increase, the time available for couples to prepare for marriage is growing shorter year by year.

DATA: 06 RECRUIT CO., LTD. (Zexy Marriage Trend Survey 2006) Tokyo Metropolitan Region Health, Labour and Welfare Ministry: Statistics of women in the workforce (summary)

54 07 Financial support received from parents or relatives

Yes (75.3%) No (24.7%)

Yes No

Hokkaido 82.3 17.7 Aomori/Akita/Iwate 85.0 15.0 Miyagi/Yamagata 84.8 15.2 Fukushima 88.4 11.6 Kita Kanto 80.9 19.1 Tokyo metropolitan region 73.6 26.4 Niigata 85.4 14.6 Nagano 70.9 29.1 1 Hokuriku 83.0 17.0 Shizuoka 76.4 23.6 Tokai 74.1 25.9 Kansai 72.9 27.1 Okayama/Hiroshima/Yamaguchi 78.6 21.4 Shikoku 72.1 27.9 Kyushu 69.6 30.4

0% 50% 100%

08 Average amount of financial support 09 Average amount of congratulatory cash gifts from parents or family

More than ¥10 million More than ¥5 million ¥5–10 million 0.2% 2.1% 4.7% Less than ¥1 million Less than ¥1 million ¥3–5 million 9.5% 2 ¥3–5 million 15.9% 23.9% 21.6%

55.3% 66.7% ¥1–3 million ¥1–3 million

Domestic average Domestic average ¥1.814 million ¥2.232 million (excluding Hokkaido)

Percentage Percentage Less than ¥1 million 23.9% Less than ¥1 million 9.5% ¥1–3 million 55.3 ¥1–3 million 66.7 ¥3–5 million 15.9 ¥3–5 million 21.6 ¥5–10 million 4.7 More than ¥5 million 2.1 More than ¥10 million 0.2

07–09 Funding of weddings in Japan In Japan most couples either fund the wedding themselves or receive ﬁnancial support from their parents. At the wedding reception itself (excepting 3 Hokkaido) it is customary to receive congratulatory cash gifts intended to help pay for wedding expenses.

DATA: 07–09 RECRUIT CO., LTD. (Zexy Marriage Trend Survey 2006)

55 THE JAPANESE WEDDING MARKET (cont.) TAKE AND GIVE. NEEDS Co., Ltd.

10 Changes in the average cost of wedding 11 Average cost of wedding receptions by region

receptions (Tokyo metropolitan region) (thousand yen)

4,000 4 6 6 7 Average cost of wedding , 0 3 5 4 8 2 (thousand yen) receptions by venue (thousand yen) , 7 7 5 9 5 3 3 9 3 7 3 , 7 , , 2 2 1

3,200 3 , 8 3 , Typical wedding venues 3,250 2 3 4 3 1 3 2 1 5 , 1 1 1 9 , 5 3 3 , Hotels 3,341 3 8 3 0 0 3 0 , , , 3,122 9 , 3 3 3

Restaurants 2,554 2 3,000 0

3,100 House weddings 3,933 5 6 , 2

3,000 2,938 2,000 2,892 9 1

2,911 6 2,900 , 1

2,800 2,798 2,807 1,000

2,700

2,632 2,600 0 o e a a o n a o u a i i / i u u l 2,564 d t t t o t n k k a a a ch k h ta i a a im n i a a ri o k s im u o s o a w g h a g ig g u u o n h g k u t k /I a s K re N a k z T a s a i y n 2,542 k a m u a . N o i K ro m h K a o it a k it t h i a S p H k Y u e H S /H Y a A i/ F K m a J 2,500 i/ g m r a yo a o iy k ay om M To k 1998 1999 2000 2001 2002 2003 2004 2005 2006 A O Note: As it is not customary to give congratulatory gifts in Hokkaido, weddings in that region tend to be lower.

12 Trends in the average number of wedding 13 Average number of wedding attendees attendees (Tokyo metropolitan region) (by region)

(no. of people) 7 1

120 1 (no. of people) 85 2 2 0 0 0 1 0 1 82.0 1 81.3 81.6 100

80.5 9 8 6 8 4

80 8 1 8 8 7 79.4 80 5 7 9 78.3 8 6 6 7 6 1 9 8 75 6 5 60 5

71.5 69.6 40 70 68.7 69.3

67.3 20 65 66.5

0 o e a a o n a o u a i i / i u u l d t t t o t n k k a a a ch k h ta i a a im n i a a ri o k s im u o s o a w g h a g ig g u u o n h g k u t 60 k /I a s K re N a k z T a s a i y n k a m u a . N o i K ro m h K a o it a k it t h i a S p H k Y u e H S /H Y a A i/ F K m a J 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 i/ g m r a yo a o iy k ay om M To k A O

56 14 Important points to consider regarding the 15 The wedding ceremony: banquet (Tokyo metropolitan region) Key considerations of couples At home feeling Economical (Tokyo metropolitan region) Entertainment for attendees Strong parental influence (%) Individualistic Lavish 90 Informal Traditional Untypical Percentage 1. A place that has a good atmosphere for a 62.4% 80 wedding or engagement party 2. Easily accessible 55.7 70 3. Gourmet food 53.0 4. In a desirable location or region 50.3 60 5. Good customer service 46.5 6. Chapels and temples with a good atmosphere 44.5 50 6. Available on the desired date 44.5 8. Reasonable prices 40.7 40 1 9. Lobbies and other facilities with a 31.9 good atmosphere 30 10. Good view 20.6

0 1998 1999 2000 2001 2002 2003 2004 2005 2006

10–15 Trends in Japanese wedding receptions The classic hotel wedding has been popular in Japan since 1960. From 1990, however, a string of wedding magazines was launched and customers began to develop new needs. Couples began to seek wedding styles that allowed them to express their individuality and to entertain their guests. During this phase there was an increase in the number of couples no longer interested in the formality of traditional weddings and an increase in the number of couples that decided to forgo the wedding ceremony all together. As a result, the overall cost of weddings began to decrease slightly. However, with the launch of T&G’s house wedding business and the formal recognition of the service category in 2003, the average amount of money spent on weddings began to increase. One feature of weddings in Japan is the relatively small variation in wedding expenses from region to region. What little variation there is comes largely from the different numbers of guests in attendance. 2 DATA: 10–15 RECRUIT CO., LTD. (Zexy Marriage Trend Survey 2006)

57 THE JAPANESE WEDDING MARKET (cont.) TAKE AND GIVE. NEEDS Co., Ltd.

16 Who chooses the venue for the wedding 17 Information source when selecting a wedding reception? (Tokyo metropolitan region) reception venue (Tokyo metropolitan region) (only one response allowed) (multiple responses allowed)

Groom Husband’s parents Bridal magazines Wedding venue intermediaries 90 Bride Wife’s parents 90 Internet Friends and acquaintances As a couple Other Bridal fairs, etc. Parents

80 80

70 70

Bridal magazines and 60 60 the internet are key sources of information

50 Venues are usually chosen 50 together, or by the bride alone. Parents generally have little 40 influence on the matter. 40

30 30

20 20

10 10

0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 1998 1999 2000 2001 2002 2003 2004 2005 2006

16–17 Wedding organizer and key sources of information In Japan, the wedding venue is usually chosen by the couple or by the bride alone, with the parents having little inﬂuence on the matter. Many couples use both bridal magazines and the internet to gather information, with the internet in particular proving popular in recent years.

DATA: 16–17 RECRUIT CO., LTD. (Zexy Marriage Trend Survey 2006)

58 18 Listed wedding companies

T&G Watabe Wedding BEST BRIDAL Inc. RAVIS INC. NOVARESE Inc. Listed exchange TSE 1st TSE 1st MOTHERS JASDAQ MOTHERS Code 4331 4696 2418 2465 2128 Established October 1998 April 1971 October 1995 June 1986 November 2000 Fiscal year-end March 31 March 31 December 31 March 31 December 31 Consolidated or Non-consolidated Non-consolidated Consolidated Consolidated Non-consolidated Non-consolidated Net sales (million yen) 33,962 31,177 16,153 15,164 3,670 Ordinary income (million yen) 5,153 1,732 1,972 1,612 610 Net income (million yen) 2,905 1,105 894 716 293 Business composition Affiliated restaurant Wedding-related: 73%, Domestic wedding Wedding related Wedding house weddings: 7%, Products: 13%, business: 78%, services: 100% productions: 35%, Directly managed venue Clothing: 12%, Overseas wedding Wedding dresses: 26%, house weddings: 90%, Others: 2% business: 22% Restaurants: 39% 1 Others: 3%

19 Number and type of wedding venues in Japan

Wedding venues by type:

Others Dedicated wedding venues 18% Co-op or similar facilities 28% 5%

49% Hotels, Japanese-style inns 2

1996 2002 2005 Total locations 3,029 2,853 2,822 Dedicated wedding venues 699 695 796 Hotels, Japanese-style inns 1,533 1,496 1,371 Co-op or similar facilities 212 167 153 Others 585 495 502

18–19 Market players in the wedding reception market The Japanese wedding services market is fragmented, with T&G the market leader in net sales (as of June 2006) among the more than 2,800 small- and medium-sized companies present throughout the country. Wedding services is the primary business of only 28% of these companies, meaning that 72% of services are provided by non-specialist vendors. Out of those companies, only a few are listed companies or major corporations.

DATA: 18 T&G research based on ﬁnancial reports of each company 19 METI 2005 Survey of Specialized Service Industries 3

59 THE T&G HOUSE WEDDING BUSINESS

60 THE T&G HOUSE WEDDING BUSINESS TAKE AND GIVE. NEEDS Co., Ltd.

01 T&G’s business flow

Inquiries Business flow from inquiry to contract

Venue visits Customer 3–6 months prior Customer Information Contract signing T&G’s • Wedding magazines Ceremony • Internet • Word of mouth T&G Hall

Consultations 3 months prior (4–5) Inquire 1 Place advertisements

Visit venue

Wedding day Contract

02 T&G house wedding management structure 03 Types of directly managed venues

Customer 1-Hall type

Order wedding services Supply wedding services

T&G

Venues/ Commission Management wedding business Directly Affiliated 2 managed venues restaurants

Product delivery Product Product delivery orders 2-Hall type Product Wedding-related product vendors and services vendors

Differences between affiliated restaurants and directly managed venues Affiliated restaurants Directly managed venues Average number of attendees 50~60 80~100 Average cost (thousand yen) 2,200~3,200 4,000~4,700 Gross profit margin (%) 22~30% 57~60% Ordinary income ratio (%) 13~15% 25~35%

01 T&G’s business ﬂow T&G carries out sales activities directly at each location, with no use of representative agencies. The Company makes effective use of regional advertising, employing large-scale media such as bridal magazines and television commercials. The majority of couples visit T&G’s venues before signing a contract, after which they are introduced to their personal wedding planner. In principle, fees payable by customers are received in full prior to the wedding, with T&G booking the sale on the day of each actual wedding.

02 T&G house weddings management structure 3 T&G offers two types of house weddings: directly managed house weddings and affiliate restaurant weddings. Weddings arranged through affiliate restaurants are less profitable than directly managed weddings, as the restaurant receives about 90% of the highly profitable food and beverage sales. In addition, as the seating capacity at T&G’s directly managed weddings is generally greater, the price achieved per wedding tends to be higher. T&G is currently expanding its house wedding division by increasing the number of directly managed venues.

03 Types of directly managed venues T&G operates two kinds of directly managed venues: those with facilities for one wedding (1-hall venues) and those with separate facilities for two simultaneous weddings (2-hall venues).

61 THE T&G HOUSE WEDDING BUSINESS (cont.) TAKE AND GIVE. NEEDS Co., Ltd.

04 Capacity utilization 05 Seasonal data

140 130

120 114 113 110

100 96 Capacity Number of weddings utilization rate 80 = 74 73 75 (%) Total operation days* x 2 68 62 (*Saturdays, Sundays, holidays) 60 56

39 40

0 Establishing capacity utilization rates T&G sets target capacity utilization rates for each wedding hall after considering potential Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. operating levels, profitability and other factors. Capacity utilization rate (%) Monthly numbers of weddings based on restaurant alliances for fiscal year ended Affiliated restaurants 38~40 March, 2006 Directly operated (1-hall type) 60~65 Directly operated (2-hall type) 50~55

06 T&G product structure

Customer price list (assumes 80 people) Item Price (yen) Notes Ceremony 200,000 Celebrant Flowers 300,000 Decorations, bouquet, etc. Photo—video 200,000 Albums, videos, etc. Printing 150,000 Invitations, place cards, etc. Accessories Dress 250,000 Wedding dresses, etc. Dress, flowers, photos, gifts, etc. Hair styling 50,000 Hair, make-up Presents 240,000 Take-home gifts for attendees, etc. Entertainment 200,000 Hosts, music, etc. Other 400,000 Subtotal A 1,990,000 Food 1,440,000 Full course Food and drink Drink 400,000 Open bar Cake 80,000 Original cake Full course meal, drinks and cake, etc. Subtotal B 1,920,000 Service fee 464,000 Grand total 4,374,000

04 Capacity utilization In Japan, most weddings are held on Saturdays, Sundays and public holidays, so T&G uses these days as the basis for capacity utilization calcula- tions. In order to provide weddings with an exclusive atmosphere, T&G holds no more than two weddings per day at each directly managed facility or afﬁliate restaurant.

Capacity utilization rate (%) = number of weddings / (Number of Saturdays, Sundays and public holidays x 2)

05 Seasonal data As the weather is generally favorable during the Japanese spring (March–May) and autumn (September–November), these are popular periods for weddings. Conversely, during the festival of O-bon and the New Year period (January) there tend to be fewer events. In these periods, however, enquiries and sales at T&G venues tend to increase, as many couples become formally engaged at this time.

06 T&G product structure Apart from the cuisine supplied at directly managed venues, T&G also provides such products as dresses and ﬂowers, which are all offered through alliances with other vendors. As T&G does not offer package deals, unit prices achieved differs between customers, based largely on the number of guest.

62 07 New venue opening schedule

10–12 months 8 months previous previous OPEN!!

t Advertise n e / m e Build on-site office e u g n 1 Determine new site a e Begin bookings V n a

M Design/Construction

Staff Recruiting Training/Staffing

08 Structure of venues

Term land lease model

Term building lease model Capital investment required

Land purchase model

Building type SPC model Capital investment not required Land purchase and development type SPC model 2 Method requiring capital investment Method not requiring capital investment Land lease model, house lease model, land purchase model Building type SPC model/Land purchase and development type SPC model Banks, Build etc. Loan/Invest Build SPC (Special Purposes Company)

Rent or buy Rent Rent or buy

07 New venue opening schedule T&G opens a sales and planning ofﬁce in each new locality eight months before a venue is opened, using models and videos to aid marketing. During this preparation phase, T&G begins to employ and train staff, led by a project supervisor.

08 Structure of venues In 2001 T&G began developing directly managed venues. Until 2005, the main approach was to lease land and construct the buildings. In order to reduce investment costs, however, in January 2005, T&G introduced a new model where in principal, venue development is based on a SPC 3 scheme, which keeps new venue investment off the balance sheet.

63 THE T&G HOUSE WEDDING BUSINESS (cont.) TAKE AND GIVE. NEEDS Co., Ltd.

09 Special Purposes Company (SPC) Scheme

Land owner

Fixed-term lease contract

Fixed-term sub-leasable land contract with condition precedent Fixed-term building lease contract

SPC Construction Tokyo Leasing company (parent) Tokyo Leasing Construction Investment (100% subsidiary) contract (5%)

Non-recourse loan (95%)

Mizuho Bank

09 SPC Scheme Land rented as before under a ﬁxed-term lease; facility construction funded by SPC. New development under this scheme is currently being carried out with Tokyo Leasing Corporation, as announced in May 2004. Tokyo Leasing injects capital into the SPC, and the SPC borrows funds for construction from Mizuho Bank. Following completion of a facility, T&G signs an exclusive management contract. Venues are then operated as usual, although with higher rental costs reﬂecting the lower initial investment required.

Taking into account the reduction in depreciation and other factors, this approach has been implemented with the expectation that it will reduce ordinary income by around ¥20 million per year.