Appendix 1.

Saito Solar, Profit and Loss Statement

(millions of Yen, year ending June 30)

Income Item 2009 2010 2011 2012

Sales 6,833.2 6,755.7 6,345.1 6,234.1
COGS 4,323.7 4,298.1 4,112.0 4,041.9
Gross margin 2,509.5 2,457.6 2,233.1 2,192.2
Gross margin (%) 36.7% 36.4% 35.2% 35.2%

Marketing & selling 1,210.8 1,199.6 1,083.1 1,030.2

G&A expenses 586.2 570.7 560.6 569.0
EBITDA 712.5 687.3 589.4 593.0
EBITDA margin (%) 10.4% 10.2% 9.3% 9.5%

Depreciation 150.4 167.2 140.3 156.4

EBT 562.1 520.1 449.1 436.6
EBT margin (%) 8.2% 7.7% 7.1% 7.0%

Taxes 222.0 205.4 177.4 172.5

Net Income 340.1 314.7 271.7 264.1
Return on sales (%) 5.0% 4.7% 4.3% 4.2%

Dividends 150.0 150.0 150.0 150.0

Retained earnings 190.1 164.7 121.7 114.1
 2009 2010 2011 2012
Revenue ¥6,833.20 ¥6,623 ¥6,345 ¥6,234
Net Profit Mar 5.0% 4.8% 4.3% 4.2%

Net Income 340.1 314.7 271.7 264.1

Exhibit 2. Saito Solar's Revenue and Net Profit

Margin
¥6,900.00 5.2%
¥6,800.00 5.0%
5.0%
Revenue (millions of Yen)

¥6,700.00
¥6,600.00 4.8% 4.8%

Net profit Margin

¥6,500.00 4.6%
¥6,400.00 ¥6,833.20
¥6,300.00 4.3% 4.4%
¥6,623 4.2%
¥6,200.00 4.2%
¥6,100.00 ¥6,345
¥6,234 4.0%
¥6,000.00
¥5,900.00 3.8%
2009 2010 2011 2012

Revenue Net Profit Margin

Appendix 2. Saito Solar, Balance Sheets
(millions of Yen, as of June 30)

Assets 2009 2010 2011 2012

Cash 120.3 83.3 40.6 140.7
Accounts Receivable 1,828.0 1,895.7 2,045.0 2,121.3
Inventory 1,127.7 1,100.8 1,010.2 1,065.0
Prepaid Expenses 97.6 90.1 89.2 95.8
Current Assets 3,173.6 3,169.9 3,185.0 3,422.8

Net fixed assets 2,210.1 2,250.2 2,246.6 2,090.2

Total Assets 5,383.7 5,420.1 5,431.6 5,513.0

Liabilities & Net Worth 2009 2010 2011 2012

Accounts Payable 1,270.6 1,098.2 1,001.1 999.2
Accrued expenses 143.0 187.1 174.0 143.2
Current Liabilities 1,413.6 1,285.3 1,175.1 1,142.4

Equity 3,970.1 4,134.8 4,256.5 4,370.6

Liabilities & Net Worth 5,383.7 5,420.1 5,431.6 5,513.0

Working Capital Requireme 1,639.7 1,801.3 1,969.3 2,139.7

As % of Sales 24% 27% 31% 34%
Appendix 3. Saito Solar, Projected Profit & Loss and Cash Flows
(millions of Yen, year ending June 30)

Actual Projected
Income Item 2012 2013 2014 2015 2016 2017
Sales 6,234.1 7,792.6 9,351.2 10,753.8 11,829.2 12,420.7
COGS 4,041.9 4,994.8 5,993.8 6,892.8 7,582.1 7,961.2
Gross margin 2,192.2 2,797.8 3,357.4 3,861.0 4,247.1 4,459.5
Gross margin (%) 35.2% 35.9% 35.9% 35.9% 35.9% 35.9%

Marketing & selling 1,030.2 1,202.0 1,344.2 1,504.4 1,722.9 1,875.0

G&A expenses 569.0 660.2 960.0 1,134.2 1,180.2 1,200.0
EBITDA 593.0 935.6 1,053.2 1,222.4 1,344.0 1,384.5
EBITDA margin (%) 9.5% 12.0% 11.3% 11.4% 11.4% 11.1%

Depreciation 156.4 174.4 190.0 200.0 220.5 250.0

EBT 436.6 761.2 863.2 1,022.4 1,123.5 1,134.5
EBT margin (%) 7.0% 9.8% 9.2% 9.5% 9.5% 9.1%

Taxes 172.5 289.3 328.0 388.5 426.9 431.1

Net Income (NI) 264.1 472.0 535.2 633.9 696.6 703.4
Return on sales (%) 4.2% 6.1% 5.7% 5.9% 5.9% 5.7%

Operating Cash Flows 420.5 646.4 725.2 833.9 917.1 953.4

(NI + Depreciation)

Change in NWC - (200.0) (210.0) (245.0) (260.0) (275.0)

Change in CAPEX 0 (50.0) (50.0) (50.0) (50.0) (50.0)

Free Cash Flow 420.5 396.4 465.2 538.9 607.1 628.4

NWC 2,339.7 2,549.7 2,794.7 3,054.7 3,329.7

NWC as % of Sales 30% 27% 26% 26% 27%
 2012 2013 2014 2015 2016 2017
Projected Sales ¥6,234 ¥7,793 ¥9,351 ¥10,754 ¥11,829 ¥12,421
Free Cash Flows ¥250 ¥396 ¥465 ¥539 ¥607 ¥628

Exhibit 3: Saito Solar's Actual and Projected Sales

and Free Cash Flows
¥14,000 ¥700
¥607 ¥628
¥12,000 ¥600

Free Cash Flows (millions)

¥539
¥10,000 ¥465 ¥500
Sales (millions)

¥396
¥8,000 ¥400
¥6,000 ¥12,421 ¥300
¥250 ¥10,754¥11,829
¥9,351
¥4,000 ¥7,793 ¥200
¥6,234
¥2,000 ¥100
¥0 ¥0
2012 2013 2014 2015 2016 2017

Projected Sales Free Cash Flows

Exhibit TN1. Valuation of Saito Solar based on Mr. Valuation of Saito Solar based on Grow
Suzuki's Projection (millions of Yen, year ending June 30) (millions of Yen, year ending June 30)

WACC 10% Growth Rate 5% Free Cash Flow (FCF)

WACC
Time Year FCF PV of FCF Growth Rate
0 2012 420.5 420.5 Total Corporate or Firm Value
1 2013 441.5 401.4 Total Corporate or Firm Value
2 2014 463.6 383.1
3 2015 486.8 365.7 Assumes no change in Working Capital
4 2016 511.1 349.1 or Capex for year 0 (2012); thereafter
5 2017 536.7 333.2 increased by a growth factor as
envisaged by Mr. Suzuki
6 2018 563.5 318.1
7 2019 591.7 303.6
8 2020 621.3 289.8
9 2021 652.3 276.7
10 2022 685.0 264.1
11 2023 719.2 252.1
12 2024 755.2 240.6
13 2025 792.9 229.7
14 2026 832.6 219.2
15 2027 874.2 209.3
16 2028 917.9 199.8
17 2029 963.8 190.7
18 2030 1,012.0 182.0
19 2031 1,062.6 173.7
20 2032 1,115.7 165.8

(Using DCF) Total Firm Value 5,347.8

C1 /(r-g) 8,830.5
[1-(1+g)/(1+r)] ^n
0.6
(Using Growing Annuity) Total Firm Value 5,347.8
aito Solar based on Growing Perpetuity Projection
en, year ending June 30)

420.5
10%
5%
or Firm Value 8,830.5 Using C0 as the base, increase it by g
or Firm Value 8,830.5 Using C1 as the base C1/(r-g)
Exhibit TN-2a. Valuation of Saito Solar based on Projected Free Cash Flows
(millions of Yen, year ending June 30)

Actual Projected
Income Item 2012 2013 2014 2015 2016
Sales 6,234.1 7,792.6 9,351.2 10,753.8 11,829.2
COGS 4,041.9 4,994.8 5,993.8 6,892.8 7,582.1
Gross margin 2,192.2 2,797.8 3,357.4 3,861.0 4,247.1
Gross margin (%) 35.2% 35.9% 35.9% 35.9% 35.9%

Marketing & selling 1,030.2 1,202.0 1,344.2 1,504.4 1,722.9

G&A expenses 569.0 660.2 960.0 1,134.2 1,180.2
EBITDA 593.0 935.6 1,053.2 1,222.4 1,344.0
EBITDA margin (%) 9.5% 12.0% 11.3% 11.4% 11.4%

Depreciation 156.4 174.4 190.0 200.0 220.5

EBT 436.6 761.2 863.2 1,022.4 1,123.5
EBT margin (%) 7.0% 9.8% 9.2% 9.5% 9.5%

Taxes 172.5 289.3 328.0 388.5 426.9

Net Income (NI) 264.1 472.0 535.2 633.9 696.6
Return on sales (%) 4.2% 6.1% 5.7% 5.9% 5.9%

Operating Cash Flows 420.5 646.4 725.2 833.9 917.1

(NI + Depreciation)

Change in NWC - (200.0) (210.0) (245.0) (260.0)

Change in CAPEX 0 (50.0) (50.0) (50.0) (50.0)

Free Cash Flow 420.5 396.4 465.2 538.9 607.1

Terminal Value 0.0 0.0 0.0 0.0

WACC 10%
PV of FCF 1,954.5
Terminal Value Growth R 1%
PV of Terminal Value 4,378.5 4,378.5 or using NPV formula
Total Firm Value (EV) 6,333.0
 Exhibit TN-2b. Valuation of Saito Solar with different WACCs and terminal growth ra

Terminal Growth Rate

WACC 1.0% 1.5% 2.0% 2.5%
2017 9% 7,165.8 7,536.7 7,960.7 8,449.9
12,420.7 10% 6,333.0 6,613.5 6,929.1 7,286.8
7,961.2 11% 5,667.8 5,885.7 6,127.7 6,398.3
4,459.5
35.9%

1,875.0
1,200.0
1,384.5
11.1%

250.0
1,134.5
9.1%

431.1
703.4
5.7%

953.4

(275.0)

(50.0)

628.4

7,051.7
Cs and terminal growth ra

e
3.0%
9,020.6
7,695.5
6,702.6