May 9, 2014

Summary of Consolidated Financial Results
For the Year Ended March 2014 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:
Representative
Contact Person

KAGA ELECTRONICS CO., LTD.
8154
URL: http://www.taxan.co.jp/
Tokyo Stock Exchange, First Section
Title: President & COO
Name: Ryoichi Kado
Title: Director, Finance & Administration
Name: Eiji Kawamura
Headquarters
Phone:+81-(0)3-5657-0111
Date of regular general meeting of shareholders:June 27, 2014 (tentative)
Date of commencement of dividend payment:
June 30, 2014 (tentative)
Date of filing of securities report:
June 27, 2014 (tentative)
Supplementary explanatory documents:
Yes
Earnings presentation:
Yes (For institutional investors)(Yen in millions, rounded down)
1. Financial results for the current fiscal year (April 1, 2013 – March 31, 2014)(1) Result of operations (Consolidated)(Percentage figures represent year on year changes)
Net sales
Operating income
Ordinary income
Net income
Fiscal year ended March 2014
Fiscal year ended March 2013
Note: Comprehensive income:Million yen%

Million yen%

Million yen%

Million yen%

257,852

19.2

5,106

305.2

5,847

202.8

3,877

771.8

1,931
(24.8)
122.2%
499.6%

444(51.4)

216,405(5.9)
1,260(39.0)FY ended March 31, 2014:
5,290 million yen
FY ended March 31, 2013:
2,381 million yen
Net income per
share
fully diluted

Net income per
share
Yen

Fiscal year ended March 2014
Fiscal year ended March 2013
Note: Equity in income/losses of affiliates

Return on
equityRatio of ordinary
income to assets

%

%

Yen

137.22
16.09
FY ended March 2014: -million yen

Ratio ofoperating income
to net sales
%

7.6
4.9
0.9
1.7
FY ended March 2013: - million yen

2.0
0.6

(2) Financial Position (Consolidated)
Total assets
As of March 31, 2014
As of March 31, 2013
Note: Shareholders’ equity(3)

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

126,028

52,82541.9

1,868.07

111,888
48,80643.5
1,721.86
FY ended March 2014: 52,786 million yen
FY ended March 2013: 48,656 million yen

Cash flow position (Consolidated)
Net cash providedby (used in)operating activities

Net cash providedby (used in)investing activities

Net cash providedby (used in)financing activities

Cash and cash
equivalents at endof period

Million yen

Million yen

Million yen

Million yen

3,334
7,041

(3,339)(4,910)

1,024
(403)

13,361
11,878

Fiscal year ended March 2014
Fiscal year ended March 2013
2. Dividends
End of
1Q

Dividend per share
End of End of End of
Full year
2Q
3Q
FY

Yen

Yen

Fiscal year ended March 2013

-

15.00

Fiscal year ended March 2014

-

15.00

Yen

Annualaggregate
amountPayout ratio(Consolidated)

Dividends/
net assets(Consolidated)

Yen

Yen

Million yen

%

%

-

15.00

30.00

837

186.5

1.8

-

20.00

35.00

989

25.5

1.9

Fiscal year ending March 2015
15.00
15.00
30.00
21.2
(estimated)
Note: Yearend dividend for FY2014 includes 15 yen ordinary dividend and 5 yen dividend to commemorate the completion of the
new head office building.

3. Forecast for the fiscal year ending March 2015 (Consolidated, April 1, 2014 - March 31, 2015)(Percentage figures represent year on year changes)
Net income per
Net sales
Operating income
Ordinary income
Net income
shareMillion yen%

Million yen%

Million yen%

Million yen%

Yen

First half
115,000(5.8)
600(72.7)
900 (63.1)
400(70.4)
14.16
Full year
260,000
0.8
5,300
3.8
6,000
2.6
4,000
3.2
141.56* Notes(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of consolidation):
None(2) Changes in accounting principles and estimates, and retrospective restatement(a) Changes due to revision of accounting standards: Yes(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
Note: For more information, please refer 4. Consolidated Financial Statements (5) Note to the consolidated financial statements (Changes inaccounting policies) on page 16.

(3) Number of shares outstanding (common stock)(a) Shares outstanding
As of March 31, 2014:(including treasury stock)

28,702,118

As of March 31, 2013:

28,702,118(b) Treasury stock

As of March 31, 2014:

445,002

As of March 31, 2013:

443,831(c) Average number of shares
outstanding during the year

As of March 31, 2014:

28,257,761

As of March 31, 2013:

27,647,603(Reference) Non-consolidated Financial Results
1. Financial results for the current fiscal year (April 1, 2013 – March 31, 2014)(1) Result of operations (Non-consolidated)(Percentage figures represent year on year changes)
Net sales
Fiscal year ended March 2014
Fiscal year ended March 2013

Operating income

Million yen%

94,51782,75414.2(13.0)Net income

Million yen%

Million yen%

Million yen

%

115
(68)

-

2,152
2,506

(14.1)(47.1)

678
27(99.0)Net income
per share

Net income per share
fully diluted
Yen

Fiscal year ended March 2014
Fiscal year ended March 2013

Ordinary income

Yen

24.00
1.00

-

Note: Percent change of net income for FY2014 is shown as “–” because it exceeded 1000% (2359.5%), and percent change of operating income
is shown as “–” because the previous year’s number was negative.

(2) Financial Position (Non-consolidated)
Total assets
Million yen

As of March 31, 2014
73,149As of March 31, 2013
71,109Note: Shareholders’ equity
Fiscal year ended March 2014: 35,656 million yen

Net assets

Equity ratio

Net assets per share

Million yen%

Yen

35,65635,49448.7
49.9

1,261.85
1,256.07

Fiscal year ended March 2013:35,494 million yen*Status of implementation of audit procedures
The rule mandating audit procedures (under the Financial Instruments and Exchange Act) does not apply to this Summary of
Financial Results. It is under the review procedure process based upon the Financial Instruments and Exchange Act at the time of
disclosure of this report.
*Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time this report was
prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements
for a number of reasons. For information about the forecasts, please see “Results of Operations” on page 2 of Supplementary
Information.

Index for Supplementary Information
1.

Results of Operations ....................................................................................................................................................................2
(1)
(2)
(3)

Overview on consolidated business performance ....................................................................................................................2
Overview of financial condition ...............................................................................................................................................3
Fundamental policy for earnings allocations and dividends in the current and next fiscal yeas ...............................................32.
Corporate Group ...........................................................................................................................................................................4
3.
Management Policies ....................................................................................................................................................................6(1) Fundamental management policy.............................................................................................................................................6(2) Targeted performance indicators ..............................................................................................................................................6(3) Medium- and long-term management strategies ......................................................................................................................6(4) Key issues ................................................................................................................................................................................6(5)
4.

Other important items concerning management .......................................................................................................................7
Consolidated Financial Statements ...............................................................................................................................................8(1) Consolidated balance sheet ......................................................................................................................................................8(2) Consolidated statements of income and comprehensive income ............................................................................................10(3) Statements of changes in net assets ........................................................................................................................................12(4) Consolidated statements of cash flows ...................................................................................................................................14(5) Notes to consolidated financial statements ............................................................................................................................16(Notes to going concern assumptions) ........................................................................................................................................16(Changes in accounting policies) ................................................................................................................................................16(Segment information etc.)..........................................................................................................................................................17(Per-share information) ...............................................................................................................................................................20(Subsequent events) ....................................................................................................................................................................20
5.
Non-consolidated Financial Statements ......................................................................................................................................21(1) Balance sheets ........................................................................................................................................................................21(2) Statements of income .............................................................................................................................................................24(3) Statement of changes in shareholders’ equity ........................................................................................................................25
6.
Other Information .......................................................................................................................................................................27

1

1.

Results of Operations(1) Overview on consolidated business performance
In the fiscal year that ended on March 31, 2014, the Japanese economy staged a slow recovery as Japanese government
economic stimulus measures and monetary easing by the Bank of Japan led to a weaker yen and higher stock prices as well as
growth in corporate earnings. The recovery was also supported by a rebound in consumer spending and an upturn in demand
as consumers rushed to make purchases late in the fiscal year prior to the April 2014 consumption tax hike.
In the electronics industry, demand continued to grow in the high-performance portable device market, consisting mainly ofsmartphones and tablets, and in the automobile market as vehicles use an increasing amount of electronics. In addition, salesof electronics were strong in the environmental and energy sector and the heath care sector. However, the market for
information equipment, chiefly PCs and peripherals, remained challenging as sales were held down by the popularity ofsmartphones and tablets. However, there was a rebound in sales in some product categories in the fiscal year’s second half
due to replacement demand for Windows XP computers and buying prior to the April 2014 consumption tax hike.
In this environment, the KAGA ELECTRONICS Group reinforced collaboration among group companies, worked onincreasing sales to major current customers, added new products and took other actions. At the same time, there were actions
involving unprofitable subsidiaries, such as mergers and liquidations, and cost-cutting measures.
Consolidated net sales increased 19.2% from one year earlier to 257,852 million yen. Operating income increased 305.2% to5,106 million yen, ordinary income increased 202.8% to 5,847 million yen. After the inclusion of gains on sales of idle assets
and other items, net income increased 771.8% to 3,877 million yen.
Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components and otherproducts, electronics manufacturing service (EMS*), and other activities)
In Japan, there were higher sales of electronic components and semiconductors used in communication, automotive andother products and higher EMS sales involving electronic devices and amusement equipment. Overseas, EMS demand forelectronic devices continued to grow. The result was an 18.7% increase in segment sales to 194,782 million yen and an
86.5% increase in operating income to 3,805 million yen.
* Electronics manufacturing service is a term used for the provision of product development and manufacturing services on an
outsourcing basis.

(b) Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, andother products)
Demand for PCs and other consumer products in the information equipment category have declined because of the
popularity of smartphones, tablets and other mobile devices. However, there was a small rebound in sales in the fiscal
year’s second half mainly due to replacement demand for Windows XP computers and buying prior to the April 2014
consumption tax hike. Furthermore, the Japanese government’s economic stimulus measures raised sales of housing
products and environmental products. As a result, segment sales increased 21.4% to 46,505 million yen and operating
income was 866 million yen compared with an 836 million yen loss one year earlier.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
Activities in this segment focused mostly on the production of computer graphics for animation applications and thedevelopment and manufacture of electronic toys. There were also business reorganization measures that included theliquidation of poorly performing subsidiaries. Segment sales increased 15.0% to 3,306 million yen and operating income
was 79 million yen compared with a 61 million yen loss one year earlier.
(d) Others (Electronic device repairs and support, sales of sporting goods, and other activities)
The manufacture and sale of amusement machines to arcades in Japan had a strong performance and there were higher
sales of golf products and other products in this segment. Segment sales increased 19.9% to 13,258 million yen andoperating income increased 160.6% to 410 million yen.
In the fiscal year ending on March 31, 2015, in the electronics industry, more growth is anticipated in the demand forsmartphones, tablets and other high-performance mobile devices. Higher demand is forecast for automotive electronics, too.
Furthermore, faster growth is expected in the markets for environmental and energy products, including the solar power andsmart grid sectors, and for medical equipment and other health care products.
To improve its performance, the KAGA ELECTRONICS Group will further strengthen sales activities for electronic
components and semiconductors, primarily for automotive devices, communication products and other categories with goodprospects for growth. Group companies will also concentrate on increasing sales in the EMS business and environmental
business, which are operations where the group can add value.
Based on this outlook, the current forecast for consolidated performance in the fiscal year ending on March 31, 2015 is asfollows(Consolidated performance forecast)
Net sales
260,000 million yen
up 0.8%Operating income
5,300 million yen
up 3.8%
Ordinary income
6,000 million yen
up 2.6%
Net income
4,000 million yen
up 3.2%2

(2) Overview of financial condition(a) Assets, liabilities and net assets
Assets increased 14,140 million yen from one year earlier to 126,028 million yen at the end of the fiscal year mainly
because of a increase in notes and accounts receivable-trade.
Liabilities increased 10,120 million yen to 73,202 million yen mainly because of an increase in notes and accounts
payable-trade.
Net assets increased 4,019 million yen to 52,825 million yen mainly because of net income.
(b) Cash flows
There was a net increase of 1,482 million yen in cash and cash equivalents to 13,361 million yen at the end of the fiscal
year.
(Operating activities)
Net cash provided by operating activities was 3,334 million yen compared with 7,041 million yen one year earlier. The
income before income taxes and minority interest was the major reason.
(Investing activities)
Net cash used in investing activities was 3,339 million yen compared with 4,910 million yen one year earlier. The
primary use of cash was payments for the purchase of property, plant and equipment.
(Financing activities)
Net cash provided by financing activities was 1,024 million yen compared with the negative cash flow 403 million yen
one year earlier. This was primarily an increase in short-term loans payable.
(Reference) Cash flow index trends
Fiscal year
ended
March 2010

Fiscal year
ended
March 2011

Fiscal year
ended
March 2012

Fiscal year
ended
March 2013

Fiscal year
ended
March 2014

Shareholders’ equity ratio
41.1%
40.9%
40.5%
43.5%
41.9%
Shareholders’ equity ratio at market value
24.4%
23.6%
20.9%
19.4%
32.0%
Debt repayment multiple
2.01 years
2.12 years
14.97 years
2.15 years
5.17 years
Interest coverage ratio
43.6
52.0
6.6
51.6
25.2
Shareholders’ equity ratio is shareholders’ equity divided by total assets.
Shareholders’ equity ratio at market value is market capitalization divided by total assets.
Debt repayment multiple is interest-bearing debt divided by operating cash flows.
Interest coverage ratio is operating cash flows divided by interest expenses.
Notes:
1. All figures are calculated based on consolidated financial data.
2. Market capitalization uses the number of shares issued less treasury stock.
3. Cash flows are operating cash flows.
4. Interest-bearing debt is the sum of all liabilities on the balance sheet on which the Group is obligated to pay interest.
(3) Fundamental policy for earnings allocations and dividends in the current and next fiscal yeas
The Company’s fundamental policy is to pay a steady and consistent dividend to shareholders that reflect consolidated
performance as well as the need to establish a more powerful financial position and base of operations from a long-term
stable perspective.
Based on performance in the fiscal year that ended on March 31, 2014, KAGA ELECTRONICS plans to pay a year-end
dividend of 20 yen per share. This is the sum of a 15 yen ordinary dividend and a 5 yen dividend to commemorate thecompletion of the new head office building. With the interim dividend of 15 yen per share, this will result in an annual
dividend of 35 yen per share.
For the fiscal year ending on March 31, 2015, a dividend per share of 30 yen, including an interim dividend of 15 yen, isplanned.

3

2.

Corporate GroupThe KAGA ELECTRONICS group of companies (the Group) is made up of KAGA ELECTRONICS CO., LTD. (the Company),
48 consolidated subsidiaries (21 in Japan, 27 overseas) and 2 affiliates that are not accounted for using the equity method (1 inJapan, 1 overseas). These companies are engaged primarily in the following activities: the electronic components business,
including the development, manufacture and sale of semiconductors and general electronic components and EMS (electronic
manufacturing services); and the information equipment business, including the sale of personal computers and peripherals,
photography and imaging products, and original-brand products; and the software business includes the production of computer
graphics for animation, the planning and development of products for amusement devices, and other activities. Other businesses
include repair and support services for electronic devices, the sale of sporting goods, and other activities.
<Japan>[Electronic components business]
Sales
KAGA DEVICES CO., LTD.
AD DEVICE CORPORATION<Overseas>[Electronic components business]
Sales
KAGA (H.K.) ELECTRONICS LTD.
KAGA (SINGAPORE) ELECTRONICS PTE.LTD.
KAGA (KOREA) ELECTRONICS CO., LTD.
KAGA (TAIWAN) ELECTRONICS CO., LTD.
KAGA DEVICES (H.K.) LTD.
KAGA ELECTRONICS (USA) INC.
KAGA (SHENZHEN) TRADING CO., LTD.
HANZAWA (HK) LTD.
AD DEVICE (H.K.) LIMITEDKAGA (EUROPE) ELECTRONICS LTD.
NUMATA (H.K.) CO.,LTD.
KAGA DEVICES INDIA PRIVATE LIMITEDAD DEVICE (Thailand) CO., Ltd.

Manufacturing and sales
KAGA TECH CO., LTD.
KAGA COMPONENTS CO., LTD.

[Software business]
DIGITAL MEDIA LAB., INC.
ACCESS GAMES INC.
WORKBIT CORPORATIONSI ELECTRONICS LTD.
CyberFront Corporation
Dreams.Co.,LTD.
Two other companies

KAGA ELECTRONICS CO., LTD.
(procurement and sales)[Information equipment business]
Sales
KAGA SOLUTION NETWORK CO., LTD.
KAGA HIGHTECH CO., LTD.
KAGA EDUCATIONAL MARKETING CO.,LTD.
KAGA TECHNO SERVICE CO., LTD.

AD DEVICE (SHANGHAI) CO., Ltd.
Manufacturing and sales
KAGA COMPONENTS(HONG KONG)LIMITEDKAGA (SHENZHEN) ELECTRONICS CO.,LTD.
KAGA COMPONENTS (MALAYSIA) SDN.
BHD.
KAGA (SHANGHAI) ELECTRONICS CO., LTD.
KAGA ELECTRONICS (THAILAND) CO., LTD.
DONGGUAN POWERTEK ELECTRONICS CO., LTD.
KAGA (DALIAN) ELECTRONICS CO., LTD.
KD TEC s.r.o.
KAGA TAXAN ELECTRONICS (SUZHOU) CO.,LTD.
SUZHOU KAGA TAXAN TRADING CO., LTD.
KAGA ELECTRONICS (SUZHOU) CO., LTD.

[Other business]
KAGA CREATE CO., LTD.
MICRO SOLUTION CO., LTD.
KAGA SPORTS CO., LTD.
KAGA AMUSEMENT CO., LTD[Other business]
KAGA AMUSEMENT MALAYSIA SDN.BHD.

# Explay Japan Co., Ltd.

# One other company

KAGA AGENCY CO., LTD.
(insurance agency)

Manages and operates facility for employees
Uses
TAXAN GUAM LTD.
Uses
Japanese and overseas customers(Notes) #: Affiliates that are not accounted for using the equity method.
All other companies are consolidated subsidiaries.
4

(1) The following consolidated subsidiaries became our group company during the fiscal year that ended in March 2014.
Relationship with the Company

Name

Address

CapitalActivities

Voting rights
held%[Electronic components business]
KAGA
ELECTRONICS
Jiangsu(SUZHOU) CO.,Province,
LTD
China(Note 4)AD DEVICE(SHANGHAI) CO.,LTD.
(Note 5)

Shanghai,
China

Joint
directors

FinancialsupportBusinessrelationship

Leasing offacilities andequipment

Persons Million yen

6,139
thousand
RMB

Manufacture andsale of electronic
components andequipments etc.

100.0
(Note 1)(70.0)

3

-

-

-

2,444
thousand
RMB

Sale of electronic
components andequipments etc.

100.0
(Note 1)(100.0)

-

-

-

-

Notes:
1. Percentages of voting rights in parentheses show indirectly owned voting rights.
2.
NUMATA (SHENZHEN) TRADING CO., LTD., which was until March 31, 2013 a subsidiary of NUMATA (H.K.) CO.,LTD., a subsidiary of consolidated subsidiary KAGA DEVICES CO., LTD., was liquidated on April 28, 2013.
3.
On October 1, 2013, consolidated subsidiaries KAGA DEVICES CO., LTD. and ADM INC. merged with KAGA DEVICES
the remaining company and ADM was dissolved.
4.
On October 11, 2013, consolidated subsidiary KAGA (SHANGHAI) ELECTRONICS CO., LTD. established a subsidiarycalled KAGA ELECTRONICS (SUZHOU) CO., LTD. in the Chinese province of Jiangsu for the purpose of expanding
operations in China and improving efficiency.
5.
On November 26, 2013, consolidated subsidiary AD DEVICE CORPORATION established wholly owned subsidiary AD
DEVICE (SHANGHAI) CO., LTD. in Shanghai, China, for the purpose of meeting the needs of customers in China.

53.

Management Policies(1) Fundamental management policy
Based on the management philosophy of “Everything we do, we do for our customers,” the KAGA ELECTRONICS Group is
guided by the fundamental policy of “remaining a company that contributes to the happiness of all stakeholders, including
shareholders, customers and employees, and fulfills its responsibilities to society.” The Group is dedicated to growing
consistently by responding with speed and agility to globalization of the economy and the rapidly changing electronics
industry. To accomplish this, the Group will expand its network in Japan and overseas and deepen ties among Group
companies to enhance collective strengths. The Group also has a strong commitment to corporate social responsibility,
positioning compliance and protecting the global environment as important elements of its operations.
Based on the above management philosophy and fundamental management policy, the companies of the KAGAELECTRONICS Group, which are active primarily in the electronics industry, seek to improve their results of operations
while cooperating with each other by doing business in a speedy manner that places the highest priority on rapid decisionmaking.
The key word is “F.Y.T.”
F = Flexibility (adapting adeptly to external changes)
Y = Young (staying young in thought and action)
T = Try (the spirit of always taking on challenges)(2) Targeted performance indicators
As the electronics industry, where the Group is active, is expected to continue to grow, priority will continue to be placed on
raising the rate of sales growth and improving the return on equity.
(3) Medium- and long-term management strategies
The rapid pace of change in the electronics industry is expected to continue. New products are appearing and existingproducts going out of date faster. Companies are moving production bases out of Japan faster, too. Amid these changes, more
growth is foreseen for the electronics industry.
In this environment, The Group is aiming to grow with KAGA ELECTRONICS, an independent electronics trading company,as its nucleus by utilizing its ability to handle all aspects of the electronics business, from upstream to downstream, including
product planning, development and processing (EMS). Backed by these distinctive strengths, the Group will work even moreclosely together to capture synergies with the goal of increasing sales and earnings while growing on a global scale.
The key word is “3G.”
General (covering everything)
Global (worldwide coverage)
Group (leveraging the collective power of the Group)(4) Key issues
The KAGA ELECTRONICS Group is determined to continue growing while adhering to its fundamental management policy.
Based on the “F.Y.T.” and “3G” management policies explained earlier as well as on the reinforcement of compliance, theGroup’s management will be strengthened with the aim of increasing enterprise value while preserving strong relationships
with all stakeholders.
Additionally, the Group conducts reorganizations whenever needed in order to respond rapidly to changes in market
conditions and customer needs. Another goal is enhancing the ability to gather information quickly. At the same time, theGroup aims to capture more synergies by building stronger ties among Group companies and fostering more collaborationand mutual assistance within the Group, thereby expanding operations and improving efficiency.
Based on the following environmental policy, all members of the Group are working together to build a framework that cantackle environmental issues from many perspectives. (ISO14001 certification was received on November 15, 2002.)(Environmental Policy)
Always looking ahead to the future of electronics, the KAGA ELECTRONICS Group is dedicated to meeting the needs ofcustomers while protecting the Earth in order to preserve and to improve the natural environment.
 At present, the Group is concentrating on the following issues:i)Updating and establishing group oversight systems to improve operating efficiencyii) Strengthening relationships, collaboration and mutual assistance among Group companies to realize greater synergiesiii) Reinforcing operations overseas and expanding the global networkiv) Upgrading technological skills and improving the ability to gather information with speedv)
Revitalizing underperforming subsidiariesvi) Tackling environmental problemsvii) Rigorous implementation of systems for internal controls
 Major initiatives of the fiscal year that ended in March 2014 were as follows.
i)
Strengthening relationships, collaboration and mutual assistance among Group companies to realize greater synergies
The KAGA ELECTRONICS Group is engaged in a diverse array of business activities in the electronics industry. In
some cases, different group companies conduct activities that are very similar. To consolidate these activities, they
were reorganized to form business units in April 2010. The objective of this reorganization was to increase synergies
and efficiency and group companies are continuing to take actions aimed at achieving this goal.
ii) Reinforcing operations overseas and expanding the global network
6

iii)

iv)

The operating environment for KAGA ELECTRONICS is constantly changing. Management believes that theperformance of the group’s overseas operations will significantly influence results of operations in the future.
Consequently, the group is taking actions to strengthen its business network in eastern Asia. Activities include
establishing EMS bases in China and Thailand, using mergers and acquisitions, establishing overseas subsidiaries,
and other measures.
Revitalization of poorly performing subsidiaries
The causes of poor performance and potential of the associated businesses will be examined so that revitalization
measures can be taken while drawing on synergies with other group companies.
Rigorous implementation of systems for internal controls
In the fiscal year that ended in March 2012, improper transactions and accounting procedures were discovered atconsolidated subsidiary KAGA HIGHTECH CO., LTD. (“KAGA HIGHTECH”). To ensure that this type of incident
will not reoccur, The KAGA ELECTRONICS Group implemented the rigorous use of internal control systems and aretraining program, and established an organizational framework for the continuous operation and improvement ofthese internal control systems.
The KAGA ELECTRONICS Group is committed to continuing to implement compliance programs rigorously
throughout the Group and to strengthening corporate governance.

The Group regards other key issues as well as matters that require constant attention and initiatives and will work on
making the necessary refinements and improvements.
(5) Other important items concerning management
Not applicable74.

Consolidated Financial Statements(1) Consolidated balance sheet(Million yen)
FY 2013(As of March 31, 2013)ASSETS
Current assets
Cash and deposits
Notes and accounts receivable-trade
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts

FY 2014(As of March 31, 2014)12,25854,580111
14,075
637
4,065
482
3,823
(90)

14,19260,667
114
16,378
848
3,991
993
5,836
(93)

89,945102,930

5,227(2,100)8,089(2,351)

Buildings and structures, net

3,126

5,737

Machinery, equipment and vehicles
Accumulated depreciation

4,166(2,451)

4,615(2,903)

1,714

1,711

4,036
(3,230)4,442(3,438)

805

1,004

Land
Construction in progress

4,305
606

4,038
133

Total property, plant and equipment

10,55912,625

799
435
991

715
486
332

2,226

1,533

Investments and other assets
Investment securities
Deferred tax assets
Guarantee deposits
Insurance funds
Other
Allowance for doubtful accounts

4,491
472
2,100
1,295
1,843
(1,046)

5,377
562
821
1,357
1,836
(1,017)

Total investments and other assets

9,157

8,938

Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

Intangible assets
Goodwill
Software
Other
Total intangible assets

Total noncurrent assets
Total assets

8

21,94323,098111,888

126,028

(Million yen)
FY 2013(As of March 31, 2013)
LIABILITIESCurrent liabilities
Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Provision for directors' bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Deferred tax liabilities
Provision for retirement benefits
Provision for directors' retirement benefits
Net defined benefit liability
Asset retirement obligations
Other
Total noncurrent liabilities

FY 2014(As of March 31, 2014)

37,423
9,567
2,683
1,055
74
2,551

41,695
12,172
3,133
1,525
174
4,708

53,35563,410

5,121
559
1,643
1,398
227
775

4,681
686
1,437
1,954
123
909

9,726

9,792

Total liabilities

63,082

73,202NET ASSETS
Shareholder’s equity
Capital stock
Capital surplus
Retained earnings
Treasury stock

12,133
13,912
24,384(535)

12,133
13,912
27,414(536)

49,89552,923

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

(180)
(6)
(1,052)
-

161
0
5
(304)

Total accumulated other comprehensive income(1,238)(137)

Total shareholder’s equity

Minority interests

149

39

Total net assets

48,80652,825

111,888

126,028

Total liabilities and net assets

9(2) Consolidated statements of income and comprehensive income(Million yen)
FY 2013(April 1, 2012 – March 31, 2013)

FY 2014(April 1, 2013 – March 31, 2014)

Net sales
Cost of sales

216,405
188,943

257,852
225,330

Gross profit

27,46232,522

Selling, general and administrative expenses

26,202

27,416

Operating income

1,260

5,106

49
71
212
112
81
107
320

68
79
219
29
255
121
251

955

1,025

135
79
69

132
80
71

Non-operating income
Interest income
Dividends income
Commission fee
Amortization of negative goodwill
Foreign exchange gains
House rent income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on investments in partnership
Other

284

284

1,931

5,847

39
86
522
6
385
18

613
5
-

1,058

619

25
72
152
80
55
166
2

28
46
177
67
412
74

Total extraordinary loss

555

807

Income before income taxes

2,434

5,659

Income taxes-current
Income taxes-deferred

1,594
559

2,220
(447)

Total income taxes
Income before minority interests

2,154

1,772

279

3,887

Minority interests in income (loss)

(164)

9

Net income

444

3,877

Minority interests in income (loss)

(164)

9

Income before minority interests

279

3,887

Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Gain on bargain purchase
Gain on sales of subsidiaries and affiliates' stocks
Insurance income
Other
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
impairment loss
Loss on liquidation of subsidiaries and affiliates
Office transfer expenses
Litigation settlement
Business structure improvement expenses
Special retirement expenses
Other

10

(Million yen)
FY 2013(April 1, 2012 – March 31, 2013)

FY 2014(April 1, 2013 – March 31, 2014)

478
18
1,604

341
6
1,054

2,101

1,403

2,381

5,290

2,547

5,283

(166)

7

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners of theparentComprehensive income attributable to minority
interests11

(3) Statements of changes in net assets
Previous fiscal year (Apr. 1, 2012 –Mar. 31, 2013)(Million yen)
Shareholders' equity
Capital stock
Balance at the beginning of current period

Capitalsurplus12,133Retainedearnings

13,91225,038Treasurystock

Total shareholders'equity(1,333)49,751

Changes of items during the period
Dividends from surplus

(827)

(827)

Net income

444

444

Purchase of treasury stock
Disposal of treasury stock

(0)

(0)

(0)

(271)

798

526

-

(0)

(654)

797

143

12,133

13,912

24,384(535)

49,895

Net changes of items other thanshareholders' equity
Total changes of items during the period
Balance at the end of current period

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at the
beginning of current
periodChanges of items
during the period(653)

Deferred
gains orlosses onhedges(24)

Foreigncurrencytranslation
adjustment

Total
accumulated
othercomprehensive
incomeSubscription
rights tosharesMinority
interests

Total net
assets(2,663)(3,341)0

1,526

47,936

Dividends fromsurplus(827)

Net income

444

Purchase of treasury
stock

(0)

Disposal of treasurystock
Net changes of
items other thanshareholders' equity
Total changes of items
during the period

526
472

18

1,611

2,102

(0)

(1,376)

726

472

18

1,611

2,102

(0)

(1,376)869

Balance at the end ofcurrent period

(180)

(6)

(1,052)(1,238)-149

48,80612

Current fiscal year (Apr. 1, 2013 –Mar. 31, 2014)(Million yen)
Shareholders' equity
CapitalsurplusCapital stock
Balance at the beginning of current period

12,133Retainedearnings

13,912

Treasurystock

24,384

Total shareholders'equity(535)

49,895

Changes of items during the period
Dividends from surplus

(847)

(847)

Net income

3,877

3,877

Purchase of treasury stock
Disposal of treasury stock

(1)

(1)

(0)

0

0

Net changes of items other thanshareholders' equity
Total changes of items during the period
Balance at the end of current period

-

-

3,029

(1)

3,028

12,133

13,912

27,414(536)

52,923

Accumulated other comprehensive income

Balance at the
beginning of current
periodChanges of items
during the period

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensiv
e income

(180)

(6)

(1,052)-(1,238)Subscription
rights tosharesMinority
interests

Total net
assets-149

48,806

Dividends fromsurplus(847)

Net income

3,877

Purchase oftreasury stock(1)

Disposal oftreasury stock
Net changes of
items other thanshareholders' equity
Total changes of items
during the period

0
341

6

1,057

(304)

1,100

-

(110)

990

341

6

1,057

(304)

1,100

-

(110)

4,019

Balance at the end ofcurrent period

161

0

5

(304)

(137)

-

39

52,82513

(4) Consolidated statements of cash flows(Million yen)
FY 2013(April 1, 2012 – March 31, 2013)
Operating activities
Income before income taxes and minority interest
Depreciation and amortization
Impairment loss
Amortization of goodwill
Gain on bargain purchase
Increase (decrease) in provision for retirement
benefits
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors'
retirement benefits
Increase (decrease) in provision for directors' bonuses
Increase (decrease) in allowance for doubtful accounts

FY 2014(April 1, 2013 – March 31, 2014)

2,434
2,303
152
72
(522)

5,659
2,418
177
128
-

62

(1,630)

-

1,467

(0)

38

22
(569)
(121)
135
(38)
25
(86)
72

94
13
(147)
132
(609)
28
(0)
46

7,424

(5,326)

4,014(8,912)
945
137
724

(1,708)
2,998
48
320
(389)

267

(359)

Decrease (increase) in other current assets
Increase (decrease) in other current liabilities
Other, net

150
(375)
(424)

2
1,460
382

Sub total

7,895

5,246

Interest and dividends income received
Interest expenses paid
Proceeds from insurance income on disaster
Income taxes paid
Other, net

121
(136)
1,198
(1,966)
(70)

145
(132)
(1,810)(114)

Net cash provided by (used in) operating activities

7,041

3,334

Interest and dividends income
Interest expenses
Loss (gain) on sales of property, plant and equipment
Loss on retirement of noncurrent assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable–
trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable–trade
Decrease (increase) in accounts receivable–other
Increase (decrease) in accrued expenses
Decrease (increase) in advance payments
Decrease (increase) in consumption taxes refund
receivable14

(Million yen)
FY 2013(April 1, 2012 – March 31, 2013)
Investing activities
Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of investments in subsidiaries

FY 2014(April 1, 2013 – March 31, 2014)

Merger expenses
Payments of short-term loans receivableCollection of short-term loans receivable
Purchase of insurance funds
Payments of long-term loans receivable
Proceeds from cancellation of insurance funds
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other payments
Other proceeds(267)(2,529)
47
(312)
(557)
435
(87)
(350)
(1,205)
5
(73)
100
(49)
39
(138)
33

(430)
(2,997)
1,228
(259)
(830)
548
(184)
(4)
1
(61)
(37)
(263)
137
(222)
35

Net cash provided by (used in) investing activities(4,910)(3,339)Financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Other, net(2,126)5,000(2,305)
(0)
(828)
(38)
(105)

3,221
1,000
(2,223)
(1)
(847)
(5)
(119)

(403)

1,024

456

463

2,183

1,482

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period

9,695

11,878Cash and cash equivalents at end of period

11,87813,36115

(5) Notes to consolidated financial statements(Notes to going concern assumptions)
None(Changes in accounting policies)(Accounting Standard for Retirement Benefits)
Beginning at the end of the fiscal year that ended on March 31, 2014, KAGA ELECTRONICS is using AccountingStandard for Retirement Benefits (ASBJ Statement No. 26, May 17, 2012) and Guidance on Accounting Standard for
Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012). However, KAGA ELECTRONICS is not using theprovisions of paragraph 35 of this accounting standard and paragraph 67 of this guidance. As a result, KAGAELECTRONICS has changed to the method of posting net defined benefit liability by subtracting pension plan assets fromretirement benefit liabilities. Unrecognized actuarial difference and the unrecognized prior service cost are included in net
defined benefit liability.
Due to the application of this accounting standard and guidance, as prescribed in paragraph 37 of the standard for the
retroactive treatment of past items, the monetary effect of this change has been incorporated in remeasurements of defined
benefit plans of valuation and translation adjustments.
As a result, net defined benefit liability was 1,954 million yen as of March 31, 2014, and there was a 304 million yen
decrease in total accumulated other comprehensive income.
In addition, net asset per share decreased by 10.79 yen.

16

(Segment information etc.)
a. Segment information
1. Summary of reporting segments
Segments used for financial reporting are the constituent units of KAGA ELECTRONICS for which separate financial
information is available and for which the board of directors performs regular reviews for the purposes of determining the
distribution of resources and evaluating results of operations.
KAGA ELECTRONICS conducts business activities by grouping affiliated companies based on products and services
and based on comprehensive strategies for operations in Japan and overseas for products and services handled.
Consequently, KAGA ELECTRONICS and its affiliated companies have four reporting segments that are made up ofdifferent categories of products and services: electronic components, information equipment software, and others.
The electronic components segment includes the development, manufacture and sale of semiconductors, generalelectronic components and other products, the electronics manufacturing service (EMS), and other activities. The
information equipment segment includes sales of PCs, PC peripherals, photograph and imaging products, original brandproducts, and other products. The software segment includes the production of computer graphics, planning anddevelopment of amusement products, and other activities. The others segment includes the maintenance and support forelectronics equipments, and sales of sports goods, and others.
2. The accounting method used for reporting business segments
The accounting method used for reporting business segments is the same as the method of presenting the consolidated
financial statements.
3. Information concerning sales, earnings or losses, assets, liabilities and other items for individual reporting segments
For the previous fiscal year ended March 2013 (April 1, 2012 – March 31, 2013)
Reporting segments
Electronic Information
components equipment
Net salesof which to outside
customersof which intersegment

Software

Others

Total

Adjustments*1(Million yen)Amount in the
consolidated
statement ofincome *2

164,164

38,305

2,874

11,060216,405-

216,405

1,396

650

3,265

1,964

7,276

(7,276)-

Total

165,560

38,955

6,139

13,025

223,682(7,276)

216,405

Segment income(loss)

2,040

(836)

(61)

157

1,299

(39)

1,260

Segment assets

99,087

11,156

4,241

6,498

120,984(9,095)

111,888

808

94

554

113

1,570

(3)

1,567

2,097

131

269

371

2,870

(28)

2,841

OthersDepreciation andamortization
Increase inproperty, plant andequipment andintangible assets

17

For the current fiscal year ended March 2014 (April 1, 2013 – March 31, 2014)
Reporting segments(Million yen)Amount in the
consolidated
statement ofincome *2

Electronic
components

Informationequipment

Software

Others

Total

Adjustments*1

194,782

46,505

3,306

13,258257,852-

257,852

1,439

1,144

5,430

2,047

10,061(10,061)-

196,22147,6498,737

15,306

267,914(10,061)

257,852

Segment income(loss)

3,805

866

79

410

5,161

(54)

5,106

Segment assets

109,007

15,614

3,138

7,110

134,871(8,842)126,028

1,962

(4)

1,957

3,274

(17)

3,257

Net salesof which to outside
customersof which intersegment
Total

OthersDepreciation and
1,051
78
727
105
amortization
Increase inproperty, plant and
2,695
105
195
278
equipment andintangible assets
Notes:
1. The adjustment for segment information is as follows(1) Segment income

Elimination of inter-segment trade
Amortization of goodwill
Total
(2)

Fiscal year ended March 2013
27
(67)
(39)

(Million yen)
Fiscal year ended March 2014
(37)
(16)
(54)

Segment assets(Million yen)
Fiscal year ended March 2013
Fiscal year ended March 2014
Elimination of inter-segment trade(11,639)(11,563)
Corporate *
2,544
2,720
Total
(9,095)(8,842)* Major component of corporate assets is investment of idle assets (cash and investment securities etc.).

(3)

Depreciation and amortization

Elimination of inter-segment trade
Total
(4)

Fiscal year ended March 2013
(3)
(3)

(Million yen)
Fiscal year ended March 2014
(4)
(4)

Increase in property, plant and equipment and intangible assets

Elimination of inter-segment trade
Total

Fiscal year ended March 2013
(28)
(28)

(Million yen)
Fiscal year ended March 2014
(17)
(17)

2. Segment income is adjusted with operating income on the consolidated statements of income and comprehensive
income18

b. Associated information
For the previous fiscal year ended March 2013 (April 1, 2012 – March 31, 2013)
1. Information about individual products and services
This information is not presented because KAGA ELECTRONICS Group prepares reports in accordance with amanagement approach based on individual products and services.
2. Geographic information(1) Net sales
Japan
North America
Europe152,3032,428
3,392
Note: Net sales are classified based on the client’s geographic location.
(2)

Property, plant and equipment
Japan
North America
7,766
35

EuropeEast Asia
58,281

East Asia
75

2,681

(Million yen)Total
216,405(Million yen)Total
10,559Notes:
1.
2.

Countries and regions are classified according to geographical proximity.
Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand
3. Information by major customers
Information by major customers is not presented because outside sales for major customers accounted for less than 10%of net sales on the consolidated statements of income.
For the current fiscal year ended March 2014 (April 1, 2013 – March 31, 2014)
1. Information about individual products and services
This information is not presented because KAGA ELECTRONICS Group prepares reports in accordance with amanagement approach based on individual products and services.
2. Geographic information(1) Net sales(Million yen)Japan
North America
EuropeEast Asia
Total
180,170
3,918
2,430
71,333257,852
Note: Net sales are classified based on the client’s geographic location.
(2)

Property, plant and equipment
Japan
North America
9,742
36

EuropeEast Asia
74

2,771

(Million yen)Total
12,625

Notes:
1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand and India
3. Information by major customers
Information by major customers is not presented because outside sales for major customers accounted for less than
10% of net sales on the consolidated statements of income.

19(Per-share information)(Yen)
FY 2013(April 1, 2012 – March 31, 2013)
Net assets per share

FY 2014(April 1, 2013 – March 31, 2014)

1,721.86

1,868.07

16.09

137.22

Net income (loss) per share

Note: 1. Net income per share (diluted) is not presented, since there is no potential stock which has dilution effect.
2. The basis for calculating net income (loss) per share is as follows.
FY 2013
FY 2014
Item(April 1, 2012 – March 31, 2013) (April 1, 2013 – March 31, 2014)
Net income per share
Net income (loss) (million yen)
Net income (loss) not available to commonshareholders (million yen)
Net income (loss) available to commonshareholders (million yen)
Weighted average number of shares
outstanding
Outline of potential stock which does nothave dilution effect and has not been
included in net income per share-(Subsequent events)
None

20

444

3,877

-

-

444

3,877

27,647,603

28,257,761-

5.

Non-consolidated Financial Statements(1) Balance sheets(Million yen)
FY 2013(As of March 31, 2013)ASSETS
Current assets
Cash and deposits
Notes receivable-trade
Accounts receivable-tradeMarketable securities
MerchandiseWork in process
Supplies
Advance payments-trade
Prepaid expenses
Deferred tax assets
Short-term loans receivable
Short-term loans receivable from subsidiaries andaffiliates
Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation

FY 2014(As of March 31, 2014)

6,488
3,515
23,758
111
3,197
74
29
348
219
545
17

5,826
3,813
21,588
114
3,693
190
30
856
149
587
-

17,521

17,154

2,239
160(6,316)

2,215
1,474
(6,182)

51,91251,512

877
(605)

3,678
(668)

272

3,010

71
(41)

71
(45)

30

26

119
(111)

118
(113)

7

4

859
(733)

1,264
(851)

125

413

3,191
218
(71)

3,213
102
(102)

Lease assets, net

1470Construction in progress

606

-

4,382

6,668

10
156
125

9
200
68

293

278

Structures, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation

Total property, plant and equipment
Intangible assets
Right of trademark
Software
Other
Total intangible assets

21

(Million yen)
FY 2013(As of March 31, 2013)
Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Investments in capital
Investments in capital of subsidiaries andaffiliates
Long-term loans receivable from subsidiaries
and affiliates
Claims provable in bankruptcy,
claims provable in rehabilitation and other
Long-term prepaid expenses
Deferred tax assets
Other
Allowance for doubtful accounts
Allowance for investment loss
Total investments and other assets
Total noncurrent assets
Total assets

22

FY 2014(As of March 31, 2014)
3,952
7,817
51

4,801
7,657
32

7

8

2,097

1,687

749

1,839

167
974
2,494
(1,758)(2,033)

208
633
1,850
(2,569)(1,461)

14,521

14,68919,197

21,636

71,10973,149(Million yen)
FY 2013(As of March 31, 2013)
LIABILITIESCurrent liabilities
Notes payable-trade
Accounts payable-trade
Short-term loans payable
Short-term loans payable to subsidiaries andaffiliates
Current portion of long-term loans payable
Lease obligations
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Provision for directors' bonuses
Asset retirement obligations
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Provision for retirement benefits
Provision for directors' retirement benefits
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholder’s equity
Capital stock
Capital surplus
Legal capital surplus
Total capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Total retained earnings
Treasury stock

FY 2014(As of March 31, 2014)

2,486
14,755
5,536

1,795
13,979
6,903

1,385

1,637

2,178
28
217
999
167
510
56
60
15

1,428
36
1,339
1,435
144
1,319
49
160
150
207

28,39730,586

5,109
162
474
1,154
192
126

4,681
126
502
1,209
94
293

7,218

6,906

35,61537,493

12,133

12,133

13,912

13,912

13,912

13,912

618

618

7,000
2,548

7,000
2,379

10,167

9,997

(535)

(536)

35,67835,507

Valuation and translation adjustments
Valuation differences on available-for-sales
securities
Deferred gains or losses on hedges

(175)

148

(8)

0

Total valuation and translation adjustments

(183)

148

35,49435,656

71,10973,149Total shareholder’s equity

Total net assets
Total liabilities and net assets

23

(2) Statements of income(Million yen)

Net sales
Cost of sales
Beginning goods
Cost of purchased goods

FY 2013
FY 2014(April 1, 2012 – March 31, 2013) (April 1, 2013 – March 31, 2014)
82,754
94,517
5,776
71,5583,271
85,579

Total

77,33488,850Goods transfer to other accountEnding goods

179
3,271

523
3,883

Cost of goods sold73,88384,443Gross profit

8,871

10,074

Selling, general and administrative expenses

8,939

9,958

Operating income (loss)

(68)

115

Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other

142
2,134
110
372

139
1,640
26
392

2,760

2,199

116
55
13

109
35
17

Total non-operating income
Non-operating expenses
Interest expense
Loss on investments in partnership
Other
Total non-operating expenses

185

162

2,506

2,152

82
2

198
8

85

207

4
1,057
1,309
12

34
590
373
116
59

Total extraordinary losses

2,384

1,175

Income before income taxes

207

1,184

Income taxes-current
Income taxes-deferred

433
(253)

357
148

Total income taxes

179

506

Net income

27

678

Ordinary income
Extraordinary income
Gain on sales of investment securities
Reversal of allowance for investment loss
Other
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Provision of allowance for investment loss
Provision of allowance for doubtful accounts
Office transfer expenses
Impairment loss
Other

24

(3) Statement of changes in shareholders’ equity
Previous fiscal year (Apr. 1, 2012 –Mar. 31, 2013)(Million yen)
Shareholders' equity
Capital surplus

Balance at the beginning of current period

Retained earnings

Capital
stock

Legal
capitalsurplusTotal
capitalsurplusLegalretainedearnings

12,133

13,912

13,912

618

Other retained
earnings
Retained
General earnings
reserve brought
forward
7,000

Total
retainedearnings

3,620

11,239

(827)

(827)

27

27

(271)

(271)

Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders'equityTotal changes of items during the period
Balance at the end of current period

-

-

-

-

-

(1,071)(1,071)

12,133

13,912

13,912

618

7,000

2,548

10,167

Shareholders' equity

Balance at the beginning of current period

Valuation and translation adjustments

Treasury
stock

Total
shareholders'equityValuationdifferenceonavailablefor-salesecurities

1,333

35,952

(560)

Total
valuationandtranslation
adjustments

Deferred
gains orlosses onhedges(12)(573)

Total net
assets35,378Changes of items during the period
Dividends from surplus
Net income

(827)

(827)

27

27

Purchase of treasury stock

(0)

(0)

(0)

Disposal of treasury stock

798

526

526

Net changes of items other than shareholders'equity

385

4

389

389

Total changes of items during the period

797

(273)

385

4

389

115

Balance at the end of current period(535)

35,678

(175)

(8)

(183)

35,49425

Current fiscal year (Apr. 1, 2013 –Mar. 31, 2014)(Million yen)
Shareholders' equity
Capital surplus

Balance at the beginning of current period

Retained earnings

Capital
stock

Legal
capitalsurplusTotal
capitalsurplusLegalretainedearnings

12,133

13,912

13,912

618

Other retained
earnings
Retained
General earnings
reserve brought
forward
7,000

Total
retainedearnings

2,548

10,167

Dividends from surplus

(847)

(847)

Net income

678

678

(0)

(0)

Changes of items during the period

Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders'equityTotal changes of items during the period
Balance at the end of current period

-

-

-

-

-

(169)

(169)

12,133

13,912

13,912

618

7,000

2,379

9,997

Treasury
stock

Total
shareholders'equityValuationdifferenceonavailablefor-salesecurities(535)

35,678(175)

Shareholders' equity

Balance at the beginning of current period

Valuation and translation adjustments
Totalvaluationandtranslation
adjustments

Deferred
gains orlosses onhedges(8)(183)

Total net
assets35,494

Changes of items during the period
Dividends from surplus

(847)

(847)

Net income

678

678

Purchase of treasury stock

(1)

(1)

(1)

Disposal of treasury stock

0

0

0

Net changes of items other than shareholders'equityTotal changes of items during the period
Balance at the end of current period

324

8

332

332

(1)

(170)

324

8

332

161

(536)

35,507

148

0

148

35,65626

6. Other Information
Not applicable27