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(a) The reconciliation of beginning and ending balances of the benefit obligation (excluding the defined benefit plans applied based on the simplified method) are as follows.

Thousands of U.S. dollars (Note 1) Fair value of plan assets at April 1 ··· ¥ 6,923 $ 67,266 Expected return on plan assets ··· 122 1,185 Actuarial (gain) loss ··· 389 3,780 Company contribution ··· 506 4,916

Benefit payments ··· (432 ) (4,197 ) Other (foreign currency translation adjustments, etc.) ··· 69 670

Fair value of plan assets at March 31 ··· ¥ 7,577 $ 73,620 Millions of yen

2014 2014

Thousands of U.S. dollars (Note 1) Liabilities for retirement benefit at April 1 ··· ¥ 417 $ 4,052 Begenning balance of new consolidated subsidiary ··· 62 602 Retirement benefit cost ··· 165 1,603

Retirement payments ··· (43 ) (418 ) Contribution for the plan ··· (71 ) (690 ) Other (foreign currency translation adjustments, etc.) ··· (11 ) (106 ) Liabilities for retirement benefit at March 31 ··· ¥ 519 $ 5,043

Millions of yen

2014 2014

(c) The reconciliation of beginning and ending balances of liabilities for retirement benefit applied based on the simplified method are as follows.

(b) The reconciliation of beginning and ending balances of the fair value of the plan assets (excluding the defined benefit plans applied based on the simplified method) are as follows.

Thousands of U.S. dollars (Note 1) Benefit obligation on funded scheme ··· ¥ 11,223 $ 109,046

Plan assets ··· (8,135 ) (79,042 )

¥ 3,088 $ 30,004

Benefit obligations on non-funded scheme ··· ¥ 857 $ 8,327 Net assets (liabilities) on the consolidated balance sheet ··· 3,945 38,331 Net defined benefit liability ··· 4,043 39,283

Net defined benefit asset ··· (98 ) (952 ) Net assets (liabilities) on the consolidated balance sheet ··· ¥ 3,945 $ 38,331

Millions of yen

2014 2014

(d) The reconciliation of ending balance of the benefit obligation and the fair value of the plan assets, and liabilities and assets for retirement benefit are as follows.

Thousands of U.S. dollars (Note 1) Service cost ··· ¥ 676 $ 6,568 Interest cost ··· 152 1,477

Expected return on plan assets ··· (122 ) (1,185 ) Amortization of actuarial ··· 259 2,517

Amortization of past service obligation ··· 91 884 Retirement benefit cost based on the simplified method ··· 165 1,603 Other ··· 98 952 Total ··· ¥ 1,319 $ 12,816

Millions of yen

2014 2014

(e) The breakdown of net pension and severance costs are as follows.

(*) Including the defined benefit plans applied based on the simplified method

Thousands of U.S. dollars (Note 1) Unrecognized prior service cost ··· ¥ 274 $ 2,662 Unrecognized actuarial (gain) loss ··· 271 2,633 Total ··· ¥ 545 $ 5,295

Millions of yen

2014 2014

(f) Remeasurements of defined benefit plans

The breakdown of the items recorded in adjustments to defined benefit plans are as follows.

Bonds ··· 35%

Equities ··· 27%

Cash and deposits ··· 0%

General account ··· 34%

Others ··· 4%

Total ··· 100%

2014 (g) Items concerning the pension assets 1) The breakdown of the pension assets The ratio of the plan assets are as follows. Discount rate ··· Primarily 1.2% Expected long-term rate of return ··· Primarily 1.5% 2014 (h) Calculation basis of actuarial methods The main calculation basis of actuarial methods at the end of the period is as follows. 2) Setting of the long-term expectated rate of return The long-term expected rate of return is to be determined considering the current and future allocation of plan assets, and the current and expected long-term rate of return from the diverse assets composing the plan assets.

(2) Defined Contribution Retirement Plans

The amounts of necessary contributions to defined contribution retirement plans within the company and consolidated subsidiaries were ¥326 millions (US$3,168 thousand). (*) Including the defined benefit plans applied based on the simplified method The breakdown of net pension and severance costs for the years ended March 31, 2013 was as follows: 1) Projected benefit obligation ··· ¥ (10,739 ) 2) Fair value of plan assets ··· 7,375 3) Projected benefit obligation in excess of plan assets 1)+2) ··· (3,364 ) 4) Unrecognized actuarial (gain) loss ··· 532

5) Unrecognized past service obligation ··· (6 )

6) Total 3)+4)+5) ··· (2,838 ) 7) Prepaid pension cost ··· 17

8) Accrued pension and severance liabilities 6)–7) ··· ¥ (2,855 ) Millions of yen 2013 Service cost ··· ¥ 665

Interest cost ··· 174

Expected return on plan assets ··· (110 )

Amortization of actuarial gain ··· 358

Amortization of past service obligation ··· (3 )

Other ··· 419 Net pension and severance costs ··· ¥ 1,503 Millions of yen

2013

The following table sets forth the project benefit obligation, plan assets and funded status of the Company and its consolidated subsidiaries at March 31, 2013.

Discount rate ··· Primarily 1.2%

Expected rate of return on plan assets ··· Primarily 1.5%

Amortization period of past service obligation ··· Primarily 5 years Amortization period of actuarial differences ··· Primarily 5 years The assumptions used in the accounting for the above benefit plans were as follows:

12. Commitments and Contingent Liabilities

The Company and its consolidated subsidiaries had the following commitments and contingent liabilities:

Thousands of U.S. dollars (Note 1) Export drafts discounted ··· ¥ — ¥ 37 $ — Trade notes receivable discounted ··· 36 350 Total ··· ¥ 36 ¥ 37 $ 350

Millions of yen 2013

2014 2014

2013

13. Stock Options

The stock options outstanding as of March 31, 2014 and 2013 were as follows:

Consolidated subsidiary (Goodman Co., Ltd.)

Class and 878,500 shares of 6,500 shares of 31,000 shares of 7,000 shares of

number of share common stock of Goodman common stock of Goodman common stock of Goodman common stock of Goodman

Grant date December 5, 2005 January 6, 2006 April 14, 2006 April 28, 2006

Exercise period From December 6, 2005 to From September 23, 2007 to From September 23, 2007 to From April 28, 2006 to

August 31, 2015 August 31, 2015 August 31, 2015 August 31, 2015

Terms for vesting — — — — Specified term of

years before vesting — — — — November 25, 2005

at board of directors’ meeting January 6, 2006

at board of directors’ meeting April 14, 2006

at board of directors’ meeting April 27, 2006 at board of directors’ meeting Directors of Goodman Co., Ltd: 4

Persons granted Employees of Goodman Co., Ltd: 348 Employees of Goodman Co., Ltd: 2 Employees of Goodman Co., Ltd: 16 Employees of Goodman Co., Ltd: 6

Others: 4

2014

In addition to the aforementioned information of the stock options outstanding, the stock option activity is as follows:

Consolidated subsidiary (Goodman Co., Ltd.)

Class and 878,500 shares of 6,500 shares of 31,000 shares of 7,000 shares of

number of share common stock of Goodman common stock of Goodman common stock of Goodman common stock of Goodman

Grant date December 5, 2005 January 6, 2006 April 14, 2006 April 28, 2006

Exercise period From December 6, 2005 to From September 23, 2007 to From September 23, 2007 to From April 28, 2006 to

August 31, 2015 August 31, 2015 August 31, 2015 August 31, 2015

Terms for vesting — — — — Specified term of

years before vesting — — — — November 25, 2005

at board of directors’ meeting

January 6, 2006 at board of directors’ meeting

April 14, 2006 at board of directors’ meeting

April 27, 2006 at board of directors’ meeting Directors of Goodman Co., Ltd: 4

Persons granted Employees of Goodman Co., Ltd: 348 Employees of Goodman Co., Ltd: 2 Employees of Goodman Co., Ltd: 16 Employees of Goodman Co., Ltd: 6

Others: 4

2013

April 27, 2006 at board of directors’ meeting April 14, 2006

at board of directors’ meeting January 6, 2006

at board of directors’ meeting November 25, 2005

at board of directors’ meeting Non-vested shares

At the beginning of the year — — — —

Granted during the year — — — —

Forfeited and expired during the year — — — —

Vested during the year — — — —

At the end of the year — — — —

Vested shares

At the beginning of the year 709,000 6,500 28,500 2,500

Vested during the year — — — —

Exercised during the year — — — —

Forfeited and expired during the year 456,000 6,500 28,500 500

Unexercised at the end of the year 253,000 — — 2,000

2014

April 27, 2006 at board of directors’ meeting April 14, 2006

at board of directors’ meeting January 6, 2006

at board of directors’ meeting November 25, 2005

at board of directors’ meeting Non-vested shares

At the beginning of the year — — — —

Granted during the year — — — —

Forfeited and expired during the year — — — —

Vested during the year — — — —

At the end of the year — — — —

Vested shares

At the beginning of the year 709,000 6,500 28,500 2,500

Vested during the year — — — —

Exercised during the year — — — —

Forfeited and expired during the year — — — —

Unexercised at the end of the year 709,000 6,500 28,500 2,500

2013

April 27, 2006 at board of directors’ meeting April 14, 2006

at board of directors’ meeting January 6, 2006

at board of directors’ meeting November 25, 2005

at board of directors’ meeting

Exercise price ¥ 2,169 ¥ 2,410 ¥ 2,490 ¥ 2,415

Average stock price at exercise — — — —

Fair value price at the grant date — — — —

2014 Yen

April 27, 2006 at board of directors’ meeting April 14, 2006

at board of directors’ meeting January 6, 2006

at board of directors’ meeting November 25, 2005

at board of directors’ meeting

Exercise price ¥ 2,169 ¥ 2,410 ¥ 2,490 ¥ 2,415

Average stock price at exercise — — — —

Fair value price at the grant date — — — —

2013 Yen

April 27, 2006 at board of directors’ meeting April 14, 2006

at board of directors’ meeting January 6, 2006

at board of directors’ meeting November 25, 2005

at board of directors’ meeting

Exercise price $ 21 $ 23 $ 24 $ 23

Average stock price at exercise — — — —

Fair value price at the grant date — — — —

2014 U.S. dollars (Note 1) The number of stock options were converted into that of common stocks.

14. Business Combination

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