FinTech Global : Summary of Financial Statements For the First Two Quarters of Fiscal 2015(Update to Completed Version on May 25,2015)

The official press release is in Japanese.

May 13, 2015
Company Name: FinTech Global Incorporated (Code Number: 8789 TSE Mothers) (URL: http://www.fgi.co.jp/) TEL: +81-3-5733-2121
Representative: President and Chief Executive Officer Name: Nobumitsu Tamai
Contact: Member of the Board, Senior Executive Officer, in charge of Business Management Department and Business Planning Department
Scheduled date for filing of securities report: May 15, 2015
Scheduled date of commencement of dividend payment: －
Preparation of explanatory materials for quarterly financial results: Yes
Information meetings arranged related to quarterly financial results: None
Name: Seigo Washimoto
1. Consolidated results for the first two quarters of fiscal 2015 (October 1, 2014 - March 31, 2015)
(Rounded down to the nearest million)

(1) Business results （The percentages in the table indicate year-on-year changes.）

(Note) Comprehensive income: 65 million yen (93.7)% for the first two quarters of fiscal 2015

1,035 million yen (－)% for the first two quarters of fiscal 2014

(Note) FGI split each share of common stock held by shareholders of registry as of March 31, 2014, into 100 shares, effective April 1, 2014. Consequently, quarterly net income per share and quarterly net income per share after adjustment for diluted shares have been calculated as if the aforementioned stock split had occurred at the beginning of the preceding consolidated fiscal year.

(2) Consolidated financial position

(Reference) Shareholders' equity: 5,394 million yen for the first two quarters of fiscal 2015
5,507 million yen for fiscal 2014

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2. Dividends

(Note) Change from the latest dividend forecast: No

3. Consolidated Performance forecasts for the full-fiscal 2015 (October 1, 2014 - September 30, 2015)

(Percentages indicate amount of change from the same period in the previous fiscal year.)

4. Notes
(1) Transfer of principal consolidated subsidiaries during the term
(Transfer of any specified subsidiary causing change in scope of consolidation.): N/A
(2) Adoption of simplified and special accounting policies for quarterly financial statements: N/A (3) Changes in accounting policies
1. Changes due to changes in accounting standard: N/A
2. Other changes in accounting standard: N/A
3. Changes in accounting estimates: N/A
4. Restatement of corrections: N/A
(4) Number of shares issued (common stock)
1. Number of shares issued (including treasury stock): 147,205,600 shares in the first two quarter of fiscal 2015
147,196,800 shares in fiscal 2014
2. Number of treasury shares: － shares for the first two quarter of fiscal 2015

－ shares for fiscal 2014

3. The average number of shares issued during the first two quarter:
147,199,713 shares for the first two quarters of fiscal 2015
121,868,376 shares for the first two quarters of fiscal 2014

(Note) FGI split each share of common stock held by shareholders of registry as of March 31, 2014 into 100 shares, effective April 1, 2014. Consequently, number of shares has been calculated as if this stock split occurred at the beginning of the preceding consolidated fiscal year.

*Implementation status of quarterly review processes

This summary of financial statements is not subject to quarterly review procedures based upon the Financial Instruments and
Exchange Act. Thus, at the time of disclosure of the financial statements, quarterly financial statement review procedures based upon the Financial Instruments and Exchange Act have not been completed.

* Information concerning proper use of forward-looking statements and other special instructions

Forward-looking statements in this document are based on data available to management as of May 13, 2015, and certain reasonable assumptions. Actual results may differ from these estimates due to unforeseen factors.

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The economic environment in Japan during the first two quarters of fiscal 2015-the consolidated accounting period for the FinTech Global Incorporated (FGI) Group ended March 31, 2015-was characterized by sustained, gradual recovery, amid better corporate earnings brought about by national economic policies and monetary easing by the Bank of Japan. The employment situation continued to improve, as did income conditions, and consumer spending showed more resilience. Against this backdrop, FGI, as a boutique investment bank for all companies in all industries, focused on investment banking services and corporate investment to expand Group business while supporting growth through various solutions matched to the needs of corporate clients. An emphasis was also placed on activities to promote the development of local industry. In the investment banking business, FGI encountered brisk arrangement activity, especially for renewable energy projects, and provided arrangement transaction services for solar power generation projects as well as arrangement transaction services involving invitations attracting investors to small and midsized hydroelectric power generation projects.
In corporate investment activity, the venture capital fund FinTech GIMV Fund, L.P. (FGF), in which FGI has maintained a capital position since 2006, made progress on investment exits. However, some investments in this fund generated losses, leading to the booking of valuation losses on investments in securities, trade. With regard to Moomin Monogatari, Ltd., a company in FGI's own investment portfolio, increased significance prompted management to turn the company into a consolidated subsidiary, effective from the second quarter of the fiscal year ending September 30, 2015. This reflects such factors as the Company's equity stake of
75% and the connection between Moomin Monogatari and the FGI Group, through business, including FGI's pivotal role in discussions on candidate sites for the theme park. The FGI Group is involved in final negotiations on conditions and other issues concerning a possible site for the Moomin theme park as well as working out a plan for the theme park business on the assumption that this site will be where the park is built.
In addition, seeking to accelerate growth, the Board of Directors at FGI resolved at its meeting on March 20, 2015, that the Company would issue a 14th Series of Share Warrants, and this was done on April 7, 2015, after the books for the second quarter were closed. Funds procured through the issue and exercise of these share warrants-estimated net balance of proceeds reaching
¥2,539,740 thousand if all share warrants are exercised at the initial exercise price-will be used to facilitated the business activities described below.
1. Investment and loans to Moomin theme park business
Preparation costs and capital expenses related to the theme park featuring the Moomin characters so popular in Finland, where they were created, as well as Japan
2. Investment and loans for renewable energy projects and venture companies
Investment and loans for renewable energy projects, and investment into venture companies as well as funds that invest in venture companies emphasizing renewable energy projects
For the first two quarters of fiscal 2015, FGI achieved consolidated revenues of ¥2,400 million, up 43.8% over the corresponding period a year ago. The Company did not book any revenue from investment exits, only income from some partnerships. But this was more than offset by a huge year-on-year increase in revenue from arrangement activity in the investment banking business along with revenue from five consolidated subsidiaries in the real estate and construction businesses that only just began contributing to consolidated results from the third quarter of fiscal 2014. Cost of revenue reached ¥1,374 million, reflecting real estate purchase costs in the real estate business and material costs and contracting expenses in the construction business. As a result, gross profit retreated
38.4% year-on-year, to ¥1,026 million. Selling, general and administrative expenses jumped 31.9% year-on-year, to ¥1,087 million. The Company had no arbitration-related costs, as booked in the corresponding period a year ago, which reduced payment fees. The steep rise is due to an increase in the number of subsidiaries and heightened recruiting efforts, which pushed up personnel costs and rent, as well as higher advertising costs in the real estate business. This outflow led to an operating loss of ¥61 million for the first two quarters of fiscal 2015, a reversal from an income position-¥841 million-for the first two quarters of fiscal 2014. Ordinary income tumbled 93.3%, to ¥60 million, but stayed in the black because of a ¥133 million gain on foreign exchange. Net income retreated
93.0%, to ¥71 million.
A breakdown of performance by business segment is presented below. Note that reporting segments were changed, effective from the third quarter of fiscal 2014. To facilitate year-on-year comparisons, performance figures for the first two quarters of
fiscal 2014 have been restated under the new segment breakdown.

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In the investment banking business, FGI continued to benefit from favorable interest in arrangement transaction services, mainly for renewable energy projects. The Company gained access to excellent projects, through cooperation with prominent EPC (engineering, procurement and construction) providers and through loans to finance development of power production facilities, and was able to offer higher-quality investment opportunities to power providers. Segment revenue was further enhanced by investment arrangement services to attract investors to hydroelectric power generation projects.
In corporate investment activities, revenue was limited to income from some partnership investments. Investment in FGF, a venture capital fund emphasizing investment into IT- and life science-related companies, provided dividends at the end of December-the fund's fiscal year-end-and even though there were some exits, a valuation loss on investment in securities, trade was booked because some companies in the investment portfolio showed losses. The balance of investment in securities, trade decreased ¥200 million, to ¥2,118 million, because of a net decrease of ¥53 million in FGF, as additional investment into FGF and foreign exchange gains on the dollar-denominated fund were offset by lower dividends received and valuation loss on investments in securities, trade, and also because of a change in the status of Moomin Monogatari to consolidated subsidiary, which turned shares in the company into shares in subsidiaries and affiliates, on a non-consolidated basis.
In asset management services, the balance of assets under management as of March 31, 2015, was ¥7,295 million, not much different from the balance at the end of fiscal 2014 on September 30, 2014. But seeking to expand services, subsidiary FinTech Asset Management Incorporated (FAM) acquired permission from the Financial Services Agency and the Ministry of Land, Infrastructure, Transport and Tourism, effective March 18, 2015, for services related to Article 2, Paragraph 4-3 of the Real Estate Specified Joint Enterprise Law. Duly authorized to conduct operations entrusted by a special enterprise operator regarding real estate transactions that are carried out in accordance with a real estate specified joint enterprise contract to which the said special enterprise operator is a party, FAM was entrusted with such operations by a special purpose company with assisted-living housing for seniors. Meanwhile, FGI
was entrusted with arrangement transaction services to support scheme formation. Also, through this business, FAM was selected by the Japan Real Estate Institute as a specified provider for the real estate securitization model projects utilizing real estate specified joint enterprises.
Although fee income on services increased in the first two quarters of fiscal 2015, there were no large investment exits from investment business limited partnerships as in the corresponding period a year ago-which contributed ¥1.2 billion to revenue and to operating income-and so the investment banking business saw revenue tumble 52.8% year-on-year, to ¥671 million, while operating income dropped 67.0%, to ¥405 million.

At Better Life Support Co., Ltd. (BELS), homeowner support services, under corporate employee welfare services, marked favorable expansion but real estate services made sluggish progress. Going forward, the plan is to continue to secure new clients for corporate housing services and homeowner support services and to put real estate services on a growth track by extending the range of employee welfare services.
Real estate brokerage services at Unihouse Co., Ltd., utilized a stronger corporate network for building introductions. The number of clients under corporate alliance agreements increased, and the number of people viewing properties grew significantly. To expand the base of alliance companies, Unihouse will reinforce its corporate division and plans to pursue a variety of approaches, including a full revision of its website for building introductions.
In the real estate sales business, hinging on Better Life House Co., Ltd., services benefited from a bigger inventory of land for homes. Some land for purchase was sold, with revenue booked. Construction work began in the second quarter, and plans are to start sales from May 2015, as the houses are gradually completed.
Buoyed by these results, segment revenue skyrocketed 512.2% year-on-year, to ¥1,281 million. The operating loss deepened, to
¥54 million, from ¥13 million a year ago, due to higher selling, general and administrative expenses, mainly due to expanded recruiting to strengthen the corporate division and also due to building procurement.

In the construction business, a large-scale project applicable under the percentage of completion method got started during the first two-quarters of fiscal 2015, while another large-scale project applicable under the completed contract method wrapped up. This led to revenue of ¥423 million and an operating loss of ¥500,000. Note that comparison with the corresponding period a year ago has
been omitted because FGI only added this segment to its operations in the third quarter of fiscal 2014.

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From the second quarter of fiscal 2015, Moomin Monogatari, Ltd., and Adacotech Incorporated, both in the Company's corporate investment portfolio, fall under the scope of consolidation due to increased significance. Moomin Monogatari is involved in the
theme park business and will establish and operate a Moomin theme park. Discussions with relevant parties on the selection of a candidate site for the theme park are currently in progress. Adacotech develops and markets software for pattern recognition and autocorrelation/prediction and detection systems using images, audio, vibrations and sensor signals. Autocorrelation, based on pattern recognition technology developed by the independently administered National Institute of Advanced Industrial Science and Technology, is attracting the attention of big corporations because it has wide-ranging applications in such areas as production processes, crime-prevention, and medicine and nursing care.
Note that FGI transferred some Company-held shares in Public Management Consulting Corporation (PMC), a consolidated subsidiary, to Local Public Accounting Research Center, Inc., which dropped the Company's stake in PMC to 48.7%. PMC was thus removed from the scope of consolidation, as of the end of the first quarter.
All told, the other segment showed revenue of ¥33 million, down 14.0% year-on-year, and an operating loss of ¥26 million, compared with operating income of ¥1 million for the first two quarters of fiscal 2014.

(Total assets)
Total assets stood at ¥8,646 million on March 31, 2015, up 16.0% from September 30, 2014. This change is mainly due to increases-¥278 million in accounts receivable, trade; ¥512 million in real estate for sale; ¥383 million in real estate for sale in progress; and ¥243 million in short-term loans receivable (included in "others" under current assets on the consolidated balance sheets)-which offset a decrease of ¥200 million in investments in securities, trade.
(Liabilities)
Liabilities stood at ¥3,184 million as of March 31, 2015, up 66.1% from September 30, 2014. This significant change is primarily due to increases of ¥809 million in short-term loans payable, ¥133 million in current portion of long-term loans payable, ¥460 million in advances received on uncompleted construction contracts, and ¥112 million in bonds payable, which offset decreases of ¥96 million
in notes and accounts payable, trade, and ¥145 million in long-term liabilities.
(Net assets)
Net assets stood at ¥5,462 million as of March 31, 2015, down 1.3% from September 30, 2014. This change reflects a decrease of
¥112 million in retaining earnings owing to profit distribution, even though quarterly income was booked.

The FGI Board of Directors decided at its meeting on April 28, 2015, that the Company would transfer all shares in Okayama Corporation, a consolidated subsidiary in the construction business, to a third party. The transaction was completed on May 1, 2015, and Okayama will be excluded from the scope of consolidation, effective from the third quarter of the current fiscal year, ending September 30, 2015. Consequently, the full-year performance forecast has been revised to reflect the exclusion of anticipated results by Okayama from the consolidated forecast. For details, please refer to the press release "Notice regarding year-on-year changes in cumulative second-quarter results and revised outlook for full-year consolidated performance," dated May 13, 2015.

Not applicable.

Not applicable.

Not applicable.

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FinTech Global Incorporated and Consolidated Subsidiaries

As of and for the Six months ended March 31, 2015

(1) Quarterly Consolidated Balance Sheets

(Assets)

Current assets

(As of September 30, 2014)

(Unit: Thousands of yen)

Cash and time deposits 2,034,917 1,975,306

Accounts receivable, trade 255,142 533,194

Accounts receivable from completed construction

contracts

247,275 421,486

Investments in securities, trade 2,319,357 2,118,599

Loans receivable, trade 857,021 732,212

Real estate for sale 221,332 733,564

Real estate for sale in progress 609,460 993,007

Costs on uncompleted construction contracts 2,387 140,275

Deferred tax assets 4,176 12,656

Other current assets 324,956 577,368

Allowance for doubtful accounts (284,028) (263,934) Total current assets 6,591,999 7,973,736

Noncurrent assets

Property, plant and equipment 121,373 119,839

Intangible assets

Goodwill 151,714 130,016

Other intangible assets 12,617 39,718

Total intangible assets 164,331 169,734

Investments and other assets

Investments in securities, trade 128,614 93,170

Others 445,927 290,450

Total investments and other assets 574,541 383,620

Total noncurrent assets 860,247 673,194

Total assets 7,452,246 8,646,930

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（Liabilities）

Current liabilities

(As of September 30, 2014)

(Unit: Thousands of yen)

Notes and accounts payable, trade 254,826 158,171

Accounts payable for construction contracts 65,396 107,692

Short-term loans payable 628,100 1,437,525

Current portion of bonds 16,000 46,000

Current portion of long-term loans payable 13,068 146,552

Income taxes payable 31,466 29,869

Advances received on uncompleted construction contracts

55,867 516,059

Accrued employee bonuses 32,083 32,296

Other current liabilities 362,717 291,193

Total current liabilities 1,459,524 2,765,360

Long-term liabilities

Bonds payable 24,000 136,000

Long-term loans payable 226,591 81,336

Net defined benefit liability 148,926 153,237

Deferred tax liabilities 45,797 36,075

Other long-term liabilities 12,562 12,434

Total long-term liabilities 457,877 419,083

Total liabilities 1,917,402 3,184,444

（Net assets）

Shareholders' equity

Common stock 3,351,561 3,351,788

Additional paid-in capital 929,373 929,600

Retained earnings 1,226,803 1,114,080

Total shareholders' equity 5,507,738 5,395,469

Accumulated other comprehensive income

Valuation difference on available-for-sale securities (573) (573) Total accumulated other comprehensive income (573) (573) Stock acquisition rights 4,168 9,072

Minority interests 23,510 58,518

Total net assets 5,534,844 5,462,486

Total liabilities and net assets 7,452,246 8,646,930

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(2) Quarterly Consolidated Statements of Income and Quarterly Statements of Comprehensive Income
Quarterly Consolidated Statements of Income

(From October 1, 2013
to March 31, 2014)

(Unit: Thousands of yen)

(From October 1, 2014,
to March 31, 2015)
Revenues 1,670,130 2,400,850

Cost of revenues 4,863 1,374,820
Gross profit/(loss) 1,665,267 1,026,029

Selling, general and administrative expenses 824,227 1,087,395
Operating income/(loss) 841,040 (61,365)

Other income
Interest income 741 4,869

Equity in earnings of affiliates － 2,877
Foreign exchange gains 72,403 133,144

Other 1,744 3,249
Total other income 74,889 144,141

Other expenses
Interest expense 66 12,592

Equity in losses of affiliates 620 －

Provision of allowance for doubtful

accounts

546 3,388

Other 1,298 6,009
Total other expenses 2,532 21,990

Ordinary profit/(loss) 913,396 60,785
Extraordinary profit

Gain on sales of noncurrent assets － 13,206
Gain on bargain purchase 178,062 －
Other 137 203

Total extraordinary profit 178,200 13,410
Extraordinary loss

Loss on sales of stocks of subsidiaries and affiliates
Loss on valuation of stocks of
subsidiaries and affiliates

－ 737

2,127 －

Loss on retirement of noncurrent assets － 542

Loss on valuation of investment securities

－ 1,000

Special retirement expenses 4,033 －
Total extraordinary loss 6,161 2,280

Income/(Loss) before income taxes 1,085,435 71,915
Income taxes 57,188 25,044

Income taxes adjustment (7,459) (18,201)
Total income taxes 49,729 6,843

Income/(Loss) before minority interests 1,035,705 65,072
Minority interests/(loss) 5,726 (6,891)

Net income/(loss) 1,029,979 71,964

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Quarterly Statements of Comprehensive Income

(From October 1, 2013
to March 31, 2014)

(Unit: Thousands of yen)

(From October 1, 2014,
to March 31, 2015)
Income/(loss) before minority interests 1,035,705 65,072

Other comprehensive income
Comprehensive income 1,035,705 65,072
Comprehensive income attributable to
owners of the parent
Comprehensive income attributable to minority interests

1,029,979 71,964

5,726 (6,891)

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(3) Notes to Quarterly Consolidated Financial Statements Assumption (Assumption of Going Concern, for the Six Months ended March 31, 2015) Not applicable.
(Material Change in Shareholders' Equity)
Not applicable.
(Segment Information)
I. Six months ended March 31, 2014 (October 1, 2013, to March 31, 2014)
1. Revenues and profit/loss for each reporting segment

（Thousands of yen）

Notes:
1. Other is a segment for businesses that do not fall under reporting segments. This includes the public accounting consulting business and the reinsurance businesses.

2. Adjustment of segment income (loss), at ¥(375,533) thousand, includes elimination of transactions among segments of ¥59,837 thousand and corporate expenses of ¥(435,370) thousand which are not allocatable to reporting segments. Corporate expenses are mainly general and administrative expenses which do not belong to any reporting segments.

2. Information concerning loss on impairment of loss on fixed assets, goodwill and negative goodwill by reporting segment
(Significant gain on negative goodwill)
In the construction business, the purchase of shares in Okayama Corporation by consolidated subsidiary Okayama Holdings, Ltd., on February 28, 2014, and the subsequent inclusion of Okayama Corporation in the scope of consolidation caused FGI to book ¥178,062 thousand in gain on negative goodwill for the first two quarters of fiscal 2014.

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Ⅱ. Revenues and profit/loss per reporting segment
1. Six months ended March 31, 2015 (October 1, 2014, to March 31, 2015)

（Thousands of yen）

Notes:
1. Other is a segment for businesses that do not fall under reporting segments. This includes the public accounting consulting business and other businesses.

2. Adjustment of segment income (loss), at ¥(385,172) thousand, includes elimination of transactions among segments of ¥36,814 thousand and corporate expenses of ¥(421,986) thousand which are not allocatable to reporting segments. Corporate expenses are mainly general and administrative expenses which do not belong to any reporting segments.

2. Changes in reporting segments
Reporting segments have been changed, as outlined below, to reflect wider business content paralleling the addition of subsidiaries in fiscal 2014. Segment information for the first two quarter of fiscal 2014 has been reclassified under the new structure.
• "Investment Banking Business" and "Asset Management Business" have been combined under "Investment Banking
Business".
• "Portfolio Business" and "Public Finance-related Business" have been eliminated.
• "Real Estate Business" and "Construction Business" have been newly established. Business segments that do not fall into these reporting segments have been put into "Other ".
3. Fixed asset impairment losses and goodwill for each reporting segment
None.

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