May 11, 2009

Summary of Consolidated Financial Results
For the Year Ended March 2009
Name of Company:
Stock Code:
Stock Exchange Listing:
URL:
Representative
Title:
Name:
Contact Person
Title:Name:
Phone:
Date of regular general meeting of shareholders:Date of commencement of dividend payment (tentative):
Date of filing of securities report:

KAGA ELECTRONICS CO., LTD.
8154
Tokyo Stock Exchange, First Section
http://www.taxan.co.jp/
President & COO
Tomohisa Tsukamoto
Senior Managing Director, Finance & Administration Headquarters
Waichiro Shimoyama+81-(0)3-4455-3111
June 26, 2009
June 29, 2009
June 29, 2009

(Yen in millions, rounded down)
1. Financial results for the current fiscal year (April 1, 2008 ‐ March 31, 2009)(1) Result of operations (Consolidated)(Percentage figures represent year on year changes)

Fiscal year ended March 2009
Fiscal year ended March 2008

Net sales
MillionYoY
yen Change %273,610(6.1)
291,331
8.3

Operating income
MillionYoY
yen Change %2,249(71.1)
7,786
12.6

Ordinary income
MillionYoY
yen Change %2,208(68.6)
7,040(4.9)

Net income
Returnper shareon equity
fully diluted
Yen
Yen
%
Fiscal year ended March 2009(28.91)(1.6)
Fiscal year ended March 2008
128.937.0
Note: Equity in net income of unconsolidated subsidiaries and affiliated companies
Fiscal year ended March 2009: (3) million yen
Fiscal year ended March 2008: 4 million yen
Net income
per share

Net income
MillionYoY
yen Change %
(806)
3,684
(15.2)

Ratio ofordinary income
to assets
%
1.8
5.5

Ratio ofoperating income
to net sales
%
0.8
2.7

(2) Financial Position (Consolidated)
Total assets
As of March 31, 2009
As of March 31, 2008
Note: Shareholders’ equity
Fiscal year ended March 2009:
Fiscal year ended March 2008:

Million yen
117,251
130,423

Million yen
49,56052,192Equity ratio

Net assets per share
%
40.7
40.0

Yen
1,730.98
1,858.26

47,770 million yen
52,140 million yen(3) Cash flow position (Consolidated)
Net cash providedby (used in)operating activities
Fiscal year ended March 2009
Fiscal year ended March 2008

Net assets

Net cash providedby (used in)investing activities

Million yen
5,435
640

Million yen(4,212)(718)

1

Net cash providedby (used in)financing activities
Million yen(3,407)718

Cash and cash
equivalents at endof period
Million yen
11,36814,011

2. Dividends
Dividends/
AnnualPayout ratio
net assets
aggregate(Consolidated)
End of 1Q End of 2Q End of 3Q End of FY Full year
(Consolidated)amount
Yen
Yen
Yen
Yen
Yen Million yen
%
%
25.00
25.00
50.00
1,417
38.8
2.7
25.00
15.00
40.00
1,115
2.2
Dividend per share

Reference dateFiscal year ended March 2008
Fiscal year ended March 2009
Fiscal year ended March 2010
(est.)
Note: The estimated amount of dividend for FY2010 is not yet determined.

3. Forecast for the fiscal year ending March 2010 (Consolidated, April 1, 2009 to March 31, 2010)
Net income
per share
Million yen% Million yen% Million yen% Million yen%
Yen
First half
120,000(15.0)
100(96.9)
200(94.2)
0 (100.0)
0.00
Full year
263,000
(3.9)
2,600
15.6
2,800
26.8
1,600
57.98
Note: The percentage figures accompanying net sales, operating income, ordinary income, and net income represent year-on-yearchanges.
Net sales

Operating income

Ordinary income

Net income

4. Others(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanies by changes in the scope of consolidation):
None(2) Changes in accounting principles and procedures, presentation methods and other items in the preparation of the consolidated
financial statements (Presented in the section on Changes to the Basis of Presenting the Consolidated Financial Statements)(a) Changes due to revision of accounting standards: Yes(b) Changes other than in (a): None
Note: See the section of the Basis of Presenting the Consolidated Financial Statements and Changes in basis of presenting
the consolidated financial statements for details. (Page 20)(3) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury stock)
As of March 31, 2009 28,702,118
As of March 31, 2008 28,702,118
1,105,038
As of March 31, 2008
643,305(b) Treasury stock
As of March 31, 2009
Note: See the section of the Per Share Information (Page 24) for details on the basis (number of shares) of calculating consolidated net
income per share.
Non-consolidated Financial Results (For reference)
1. Financial results for the current fiscal year (April 1, 2008 ‐ March 31, 2009)(1) Result of operations (Non-consolidated)
Net sales

Fiscal year ended March 2009
Fiscal year ended March 2008

Operating income

Million yen
126,262
133,854% Million yen
(5.7)
3,020
(0.0)
5,914

Net income
per shareYen(156.14)
87.51

Fiscal year ended March 2009
Fiscal year ended March 2008%
(48.9)
71.9(Percentage figures represent year on year changes)
Ordinary income
Million yen
4,378
6,842

%
(36.0)
47.6

Net income
Million yen(4,358)
2,500

%
(1.0)

Net income
per share
fully diluted
Yen-(2) Financial Position (Non-consolidated)
Total assets
As of March 31, 2009
As of March 31, 2008
Note: Shareholders’ equity
Fiscal year ended March 2009:
Fiscal year ended March 2008:

Net assets

Equity ratio

Net assets per share

Million yen
83,138Million yen
34,253%
41.2

Yen
1,241.14

93,38840,75943.6

1,452.65

34,253 million yen
40,759 million yen

2*Cautionary statement regarding forecasts of operating results and special notes
1. 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.
Please refer to 1. Results of Operations (1) Analysis of results of operations on page 4 for information concerning assumptions
used for forecasts and precautions concerning the use of forecasts.
2. There is no dividend forecast for the fiscal year ending on March 31, 2010 because of the uncertain outlook for the operating
environment. An announcement will be made promptly once a dividend forecast becomes possible due to future changes in operating
results and other factors.

31. Results of Operations(1) Analysis of results of operations
A severe global economic recession began during the 2009 fiscal year, as consumer spending and private-sector capital expenditures
dropped sharply. The major causes were turmoil in financial markets and plummeting stock prices worldwide triggered by the U.S.
subprime loan crisis, the rapid increase in the cost of crude oil, and foreign exchange rate volatility.
The Japanese economy as well is facing unprecedented difficulties. Corporate earnings plunged along with drops in exports andconsumer spending as the global economy weakened following the failure of a large U.S. securities company.
In the electronics industry, there was a rapid drop in demand because of the global economic recession. Manufacturers of digital
home electronics and all other types of electronic devices cut their production sharply. As a result, demand for electronic components
used in these products declined, producing significant changes in the operating environment for the KAGA ELECTRONICS Group.
In response, the companies of the KAGA ELECTRONICS Group worked even more closely together and increased operating
efficiency while working on handling more new products and expanding sales routes.
Consolidated net sales decreased 6.1% to 273,610 million yen. Operating income was down 71.1% to 2,249 million yen mainly
because of a lower gross profit margin and higher selling, general and administrative expenses. Operating income fell 68.6% to 2,208
million yen. Net income was held down by valuation losses on investment securities due to the rapid drop in stock prices and by
restructuring expenses, including asset impairment charges for equipment at unprofitable subsidiaries. The result was a net loss of
806 million yen compared with net income of 3,684 million yen in the previous fiscal year.
Net sales by business segment

Business segment

FY 2008(Fiscal year ended March 31, 2008)

FY 2009(Fiscal year ending March 31, 2009)

Amount (million yen)Amount (million yen)

Proportion

Proportion

Electronic components business
210,911
72.4%
196,574
71.8%
Information equipment business
80,41927.6%
77,035
28.2%
Total
291,331100.0%
273,610100.0%*Electronic components business: Development, manufacture and sale of semiconductors, general electronic components, EMS andothers. (Electronics Manufacturing Service is a term used for companies that design, test, manufacture, distribute, and provide
return/repair services.)*Information equipment business: Sale of personal computers and peripherals.
Net sales by product category
FY 2008(Fiscal year ended March 31, 2008)

FY 2009(Fiscal year ended March 31, 2009)

Amount (million yen)

Proportion

Amount (million yen)

Proportion

Information equipment
EMS

63,19290,281

21.7%
31.0%

66,197
77,465

24.2%
28.3%

Semiconductors
General electronic components

65,54433,065

22.5%
11.3%

61,83736,024

22.6%
13.2%

Others39,246291,33113.5%
100.0%

32,084
273,61011.7%
100.0%

Product category

Total

4

Information equipment
Sales activities were conducted to increase sales of PCs and peripherals to current customers of the KAGA ELECTRONICS Group.
Other sales activities were aimed at increasing sales of new products, such as products used in rental condominiums and security
system products. Segment sales increased 4.8% to 66,197 million yen.
EMS
There was a large downturn in EMS operations mainly because of lower production volumes at client companies. In Japan, there
was a decline in output of LCD units for manufacturers of amusement equipment manufacturers. Overseas, there were declines in
output of circuit boards for Japanese office equipment manufacturers and in other products. The result was a 14.2% decrease insegment sales to 77,465 million yen.
Semiconductors
This segment includes the operations of semiconductor trading company ADM Inc. starting in August 2008, when this company
became a member of the KAGA ELECTRONICS Group. Despite this new contribution to segment sales, there was a 5.7%
decrease in segment sales to 61,837 million yen because of declines in the volume handled of sound ICs for cell phone
manufacturers, image processing ICs for amusement equipment manufacturers and other products.
General electronic components
Segment sales increased 8.9% to 36,024 million yen mainly because of higher sales of electronic components for PCs.
OthersSales of educational electronic toys were lower overseas due to sluggish consumer spending. There was also a decline in sales ofphotography products because of a change in market conditions. The result was an 18.2% decrease in segment sales to 32,084
million yen.
Performance by geographic segment was as follows.
1) Japan
In Japan, the electronics industry was severely impacted by the economic downturn. Companies cut capital expenditures asearnings fell and consumer spending weakened as unemployment rose and income fell. Demand for high-end digital homeelectronics dropped sharply. In response, the KAGA ELECTRONICS Group worked on increasing sales of electronic components
used in PCs. Sales in Japan also benefited from the inclusion of a newly consolidated subsidiary. However, there were large
declines in the volume handled of sound ICs for overseas cell phone manufacturers and in orders for image processing ICs and
EMS services from amusement equipment manufacturers in Japan. Total sales in Japan decreased 5.0% to 238,138 million yen andoperating income was down 72.1% to 1,509 million yen.
2) North America
The U.S. economic recession caused declines in orders received at group companies for semiconductors used in digital homeelectronics, components used in amusement equipment and other products. The result was a 62.5% drop in sales to 530 million yen
and an operating loss of 98 million yen compared with a 133 million yen loss one year earlier.
3) Europe
Economies in Europe are extremely weak as rising unemployment and other problems caused by global volatility in financial
markets hold down consumer spending. However, sales increased 36.9% to 3,679 million yen as operations in Europe were
supported by consistently strong orders in the EMS business for components used in climate control equipment and in otherproducts. Despite the higher sales, there was an operating loss of 51 million yen compared with 184 million yen one year earlier
mainly because of asset impairment expenses in Russia.
4) East Asia
The global economic recession caused a steep fall in exports from China that slowed the growth rate of the nation’s economy,
which had been sustaining rapid growth. In this environment, orders were lower in the EMS business from manufacturers of officeequipment, climate control equipment and other products. Sales decreased 11.6% to 55,792 million yen and operating income fell
65.1% to 816 million yen.
(2) Forecast for fiscal year ending March 2010
The economic outlook is extremely uncertain due to the possibility that the worldwide recession sparked by the global financial
crisis will not end soon. In Japan, the economy will probably remain weak for some time. As corporate earnings fall, companies
are canceling capital expenditures while rising unemployment and falling personal income are exerting pressure on consumer
spending.
In the electronics industry, the global recession is expected to bring down demand for digital products like PCs and high-end cell
phones even more. Consequently, market conditions in the industry will probably remain challenging.
In response, the companies of the KAGA ELECTRONICS Group are working more closely together and raising operating
efficiency. At the same time, group companies are adding new products while restructuring operations, such as by downsizing or
shutting down unprofitable subsidiaries.
Based on this outlook, the Group’s current forecast for the fiscal year ending in March 2010 is as follows.

5

Net sales by product category (FY2009 Actual vs. FY2010 Projection)
FY 2009 Actual(Fiscal year ended March 31, 2009)

FY 2010 Projection(Fiscal year ending March 31, 2010)

Amount (million yen)Amount (million yen)

Product category

Share

Share

Information equipment
EMS

66,197
77,465

24.2%
28.3%

63,90083,600

24.3%
31.8%

Semiconductors
General electronic components

61,83736,024

22.6%
13.2%

62,50024,500

23.8%
9.3%

Others32,084
273,61011.7%
100.0%

28,500263,000

10.8%
100.0%Total(3) Analysis of financial conditiona. Assets, liabilities and net assets
Total assets were 117,251 million yen at the end of March 2009, 13,172 million yen less than one year earlier. This was mainly
attributable to a decline in notes and accounts receivable-trade.
Liabilities decreased 10,540 million yen to 67,690 million yen mainly because of a decrease in notes and accounts payable-trade.
Net assets decreased 2,631 million yen to 49,560 million yen mainly because of dividend payments and the net loss.
b. Cash flows
Cash and cash equivalents at the end of March 2009 totaled 11,368 million yen, a decline of 2,642 million yen, or 18.9%,
compared with one year earlier.
A summary of fiscal 2009 cash flows and major components follows.
(Operating activities)
Net cash provided by operating activities increased from 640 million yen to 5,435 million yen mainly because of a decrease innotes and accounts receivable-trade.
(Investing activities)
Net cash used in investing activities increased from 718 million yen to 4,212 million yen mainly because of payments for thepurchase of property, plant and equipment.
(Financing activities)
Net cash used in financing activities was 3,407 million yen compared with a positive cash flow of 718 million yen one year earlier.
The main reason was a net decrease in short-term bank loans.
Cash flow index trends (for reference)
Fiscal year
ended
March 2005

Fiscal year
ended
March 2006

Fiscal year
ended
March 2007

Fiscal year
ended
March 2008

Fiscal year
ended
March 2009

Shareholders’ equity ratio
35.1%
41.7%
42.1%
Shareholders’ equity ratio at market value
57.1%
72.0%
48.2%
Debt repayment multiple
0.59 years
Interest coverage ratio
62.8
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.

40.0%
28.4%
19.24 years
4.8

40.7%
18.8%
2.38 years
28.1

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.
5. No debt repayment multiple and interest coverage ratio are shown for the fiscal years ended March 2005 and 2007 because
operating cash flows were negative in these fiscal years.

6(4) Fundamental policy for earnings allocations and dividends in the fiscal years 2009 and 2010
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.
However, based on performance in the past fiscal year and the outlook for the current and following fiscal years, the Company plansto pay a year-end dividend of 15 yen per share. With the interim dividend of 25 yen per share, this will result in an annual dividend of
40 yen per share.
There is no dividend forecast for the fiscal year ending on March 31, 2010 because of the uncertain outlook for the operating
environment. An announcement will be made promptly once a dividend forecast becomes possible due to future changes in operating
results and other factors.

7

2. Corporate GroupThe KAGA ELECTRONICS group of companies (the Group) is made up of KAGA ELECTRONICS CO., LTD. (the Company), 48
consolidated subsidiaries (23 in Japan, 25 overseas) and 13 equity-method affiliates (4 in Japan, 9 overseas). These companies areengaged primarily in the following activities: the electronic components business, including the development, manufacture and saleof semiconductors and general electronic components and EMS (electronic manufacturing services); and the information equipment
business, including the sale of personal computers and peripherals, sporting goods, films and optical devices. A diagram showing
business activities and Group companies is shown below.

<Overseas>[Electronic components business]

Sales
KAGA DEVICES CO., LTD.
AD DEVICE CORPORATIONKAGA IMPEX, CO., LTD.
OTSUKA ELECTRIC CO., LTD.
ADM INC.

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 (EUROPE) ELECTRONICS B.V.
KAGA ELECTRONICS (USA) INC.
HANZAWA （HK） LTD.
KAGA (SHENZHEN) TRADING CO., LTD.
KAGA IMPEX, LLC
AD DEVICE (H.K.) LIMITEDADM ELECTRONICS HONG KONG LTD.
ADM SINGAPORE PTE. LTD.

Manufacturing and sales
KAGA TECH CO., LTD.
KAGA COMPONENTS CO., LTD.
MICRO SOLUTION CO., LTD.
DIGITAL MEDIA LAB., INC.
ACCESS GAMES INC.
KAGA AMUSEMENT CO., LTD
WORKBIT CORPORATIONSI ELECTRONICS LTD.

KAGA ELECTRONICS CO., LTD.
(procurement and sales)<Japan>[Electronic components business]

Sales
KAGA SOLUTION NETWORK CO., LTD.
KAGA SPORTS CO., LTD.
KAGA HIGHTECH CO., LTD.
KGF CO., LTD.
KAGA EDUCATIONAL MARKETING CO., LTD.
Three other companies

Manufacturing and sales
KAGA ELECTRONICS (THAILAND) CO., LTD.
KAGA (SHANGHAI) ELECTRONICS CO., LTD.
KAGA (DALIAN) ELECTRONICS CO., LTD.
KAGA COMPONENTS (HONG KONG) LTD.
GUANGZHOU KEIDENKI LTD.
KAGA (SHENZHEN) ELECTRONICS LTD.
KAGA COMPONENTS (MALAYSIA) SDN. BHD.
DONGGUAN POWERTEK ELECTRONICS
CO., LTD.
KAGA INSTRUMENTS SHANTOU CO., LTD.
Design and development
KAGA (SHENZHEN) ELECTRONICSTECHNOLOGY DEVELOPMENT CO., LTD.
HANZAWA (SZ) LTD.

* CyberFront Corporation* Three other companies*Elatec Vertriebs GmbH
*Eight other companies

Sales promotion products and other planning anddevelopment
KAGA CREATE CO., LTD.
[Information equipment business]

Manages and operates facility for employees

KASHIMURA AGENCY CO., LTD.
(insurance agency)

Uses
TAXAN GUAM LTD.
Uses
Japanese and overseas customers

Note: An asterisk (*) indicate equity-method affiliates. All other companies are consolidated subsidiaries.

8(1) The following consolidated subsidiaries became our group company during the fiscal year that ended in March 2009.
I-O DATA DEVICE USA, INC., which was a consolidated subsidiary until the fiscal year that ended in March 2008, has beenliquidated.
Relationship with the Company
Name

Address

CapitalActivities

Voting rights
held

%

Joint
Financialdirectors support
No.

Leasing offacilities andequipment

Businessrelationship

Millionyen[Electronic components
business]
Development, design,
manufacture and saleof memory devices,
phase conversion LSIs,
LSI modules, andmeasurement andinspection equipment
Development, design,
manufacture and saleof imaging and display
devices for gamemachines.

WORKBITCORPORATION(Note 4)

Yamato-city
Kanagawa

20,000,000
yen

SI ELECTRONICS LTD.
(Note 6)

Minato-ku
Tokyo244,400,000
yen

ADM INC.
(Note 1, 8)

Chuo-kuOsaka

560,330,000
yen

Purchase and sale ofelectronic devices andcomponents

51.7

AD DEVICE(H.K.)
LIMITED(Note 5)Hong Kong,
China

HK$2,000,000

Sale of semiconductors
and electronic
components(Note 2)ADM Electronics
Hong Kong Limited(Note 8)Hong Kong,
China

Sale of semiconductors(Note 2)

ADM Singapore Pte. Ltd.
(Note 8)Singapore

100.0

88.1

2

2

-

Mutual supply ofcertain products soldby this company andthe Company-

524

Mutual supply ofcertain products soldby this company andthe Company

-

2

-

Mutual supply of
Leases partcertain products soldof aby this company andbuilding
the Company

-

-

-

-

-

-

-

-

-

-

Leases partof abuilding(Note 3)-

Mutual supply of
Leases partcertain products soldof aby this company andbuilding
the Company

100.0(100.0)100.0

HK$1,700,000(100.0)
100.0
S$390,000

Sale of semiconductors(Note 2)-(100.0)[Informationequipment business]

KAGA EDUCATIONAL
MARKETING CO., LTD.
(Note 7)

Bunkyo-ku
Tokyo30,000,000yenComputer hardware
and software sales andafter service

100.0

2

Notes:
1. ADM Inc. files official securities documents with the Ministry of Finance. All other companies in the above table do not file
official securities documents or reports.
2. Figures in parentheses in the column showing voting rights of the subsidiary are the indirect percentages.
3. Leasing agreement between KAGA (SINGAPORE) ELECTRONICS PTE. LTD. and ADM Singapore Pte. Ltd.
4. WORKBIT CORPORATION became a subsidiary on April 1, 2008 when the Company purchased its stock.
5. AD DEVICE (H.K.) LIMITED was established on June 11, 2008 for the purpose of strengthening operations serving customers in
China and establishing relationships with new customers.
6. SI ELECTRONICS, LTD. became a subsidiary on July 1, 2008 when the Company purchased its stock.
7. KAGA EDUCATIONAL MARKETING CO., LTD. was established on July 1, 2008 for the purpose of providing support for
using computers and systems and selling equipment and software to academic institutions, instructors and students.
8. ADM Inc. became a subsidiary of the Company on August 1, 2008 when the Company used a public tender offer to purchase 51%
of ADM's stock. This acquisition made ADM Electronics Hong Kong Limited and ADM Singapore Pte. Ltd. indirect subsidiaries of
the Company. On January 30, 2009, KAGA DEVICES (H.K.) LTD. purchased all shares of ADM Electronics Hong Kong Limited
and KAGA (SINGAPORE) ELECTRONICS PTE. LTD. purchased all shares of ADM Singapore Pte. Ltd.

9

(2) The following equity-method affiliates became our group company during the fiscal year that ended in March 2009.
Relationship with the Company
Name

CyberFront Corporation(Note 1)

Address

Shinagawa-ku
TokyoCapitalActivities

Votingrights held

Shareddirectors

Financialsupport%

No.

Million yen

Businesstransactions

Leasing offacilities andequipment

98,000,000
yen

Development andmarketing ofcomputer software

25.1

-

78

-

-

204,000
euro

Sale of electronic
devices andinformationequipment

24.2

-

-

-

-

Four other companies(Note 2)

Elatec Vertriebs GmbH

MunichGermany

Seven other companies(Note 3)

Notes:
1. CyberFront Corporation became an equity-method affiliate following the purchase of additional shares by the Company on
March 9, 2009.
2. Four other companies are subsidiaries of CyberFront Corporation.
3. Seven other companies are subsidiaries of Elatec Vertriebs GmbH.

10

3. Management Policies(1) Fundamental management policy
The fundamental management policy is to take to the actions needed to continue growing and respond with agility to globalizationof economies and the rapid pace of change in the electronics industry. The Company will expand its network in Japan and overseas
and deepen ties among Group companies to enhance collective strengths. Concurrently, while reflecting environmental issues,
operations will be aimed at remaining a company that contributes to the happiness of all stakeholders, including shareholders,customers and employees, and fulfills its responsibilities to society.
Active primarily in the electronics industry, all Group companies cooperate with one another based on a common philosophy:
improving operating results by managing operations in a speedy manner that places the highest priority on rapid decision-making.
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 existing products
going out of date faster. Companies are moving production bases out of Japan faster, too. Amid these changes, more growth isforeseen for the electronics industry.
The Group has grown with KAGA ELECTRONICS, an independent electronics trading company, as its nucleus by working with alarge number of suppliers and customers and handling a broad spectrum of products. The Group is distinguished by its ability tohandle all aspects of the electronics business, from upstream to downstream, including product planning, development andprocessing (EMS). Backed by these distinctive strengths, the Group will work even more closely together to capture synergies withthe 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
As is stated in its fundamental management policy, the Group conducts operations with the goal of optimizing consolidated
performance. To achieve further growth, group management will be upgraded in accordance with the FYT and 3G concepts
described above. The Group is dedicated to raising its enterprise value while preserving strong relationships with all stakeholders.
Additionally, the Group is constantly working on building an organization that can quickly adapt to changes in market conditions
and customer needs. Another goal is enhancing the ability to gather information quickly. At the same time, the Group aims tocapture more synergies by building stronger ties among group companies and fostering more collaboration and mutual assistancewithin the group, thereby expanding operations and raising efficiency.
Based on the following environmental policy, all members of the Group are working together to build a framework that can tackle
environmental issues from many perspectives. (ISO 14001 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 improve the natural environment.
At present, the Group is concentrating on the following issues:
1. Updating and establishing group oversight systems to improve operating efficiency
2. Strengthening relationships, collaboration and mutual assistance among Group companies to realize greater synergies
3. Reinforcing operations overseas and expanding the global network
4. Upgrading technological skills and improving the ability to gather information with speed
5. Revitalizing underperforming subsidiaries
6. Tackling environmental problems
7. Thorough operation of internal control systems

11

(5) Other important items concerning management
Not applicable124. Consolidated Financial Statements(1) Balance sheet(million yen))
FY 2008(As of March 31, 2008)ASSETS
Current assets
Cash and cash equivalents
Notes and accounts receivable – tradeMarketable securities
Inventories
Merchandize and furnished goods
Goods in progress
Raw materials and other supplies
Deferred tax assets
OthersAllowance for doubtful receivables
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

FY 2009(As of March 31, 2009)

14,021
72,53084
20,177
−
−
−
570
5,924
(161)

11,37861,05358−
13,969
577
3,749
994
8,017
(159)

113,147

99,639

1,886
(873)

3,348
(1,026)

Buildings and structures, net

1,012

2,321

Machinery, equipment and vehicles
Accumulated depreciation

3,759(1,839)3,622(2,135)

Machinery, equipment and vehicles, net

1,919

1,486

1,946
(1,394)2,759(1,729)

552

1,029

Land
Construction in progress

1,324
606

1,324
6

Total property, plant and equipment

5,415

6,168

745
593
219

884
878
152

1,559

1,914

Investments and other assets
Investment securities
Deferred tax assets
Security deposits
Insurance reserve
OthersAllowance for doubtful receivables

6,596
213
1,945
871
1,820
(1,146)

4,854
346
2,410
964
2,300
(1,347)

Total investments and other assets

10,301

9,528

Tools and office furniture
Accumulated depreciation
Tools and office furniture, net

Intangible assets
Goodwill
Software
OthersTotal intangible assets

Total fixed assets
Total assets

13

17,276

17,612

130,423

117,251

(million yen)
FY 2008(As of March 31, 2008)
LIABILITIESCurrent liabilities
Notes and accounts payable – trade
Short-term bank loans
Accrued expenses
Income taxes payable
Allowance for directors’ and corporate auditors’ bonuses
Others

FY 2009(As of March 31, 2009)

56,109
11,697
2,226
2,238
137
2,052

44,772
9,291
1,835
949
9
3,663

74,461

60,521

625
546
1,159

3,620
354
1,342

1,004
434

1,122
729

3,769

7,168

Total liabilities

78,231

67,690

NET ASSETS
Shareholder’s equity
Paid-in capital
Capital surplus
Retained earnings
Treasury stock

12,133
13,912
27,413(843)

12,133
13,91225,158(1,331)

52,61549,873

36
2
(514)

(364)
(0)
(1,737)(475)(2,103)

Total current liabilities
Long-term liabilities
Long-term bank loans
Deferred tax liabilities
Allowance for retirement benefits for employees
Allowance for retirement benefits for directors andcorporate auditors
OthersTotal long-term liabilities

Total shareholder’s equity
Valuation and translation adjustments
Valuation differences on available-for sales securities
Deferred gain or losses on hedges
Foreign currency translation adjustments
Total valuation and translation adjustments
Minority interests
Total net assets
Total net assets

14

51

1,790

52,192

49,560130,423

117,251

(2) Statements of income(million yen)
FY 2008
FY 2009(Fiscal year ended March 31, 2008) (Fiscal year ended March 31, 2009)
Net sales
Cost of sales

291,331
256,090273,610
243,226

Gross profit

35,24030,383

Selling, general and administrative expenses

27,45428,134

Operating income

7,786

2,249

209
104
152
502

130
109
133
479

969

854

128
111
1,275
200

192
93
495
114

1,715

896

Ordinary income

7,040

2,208

Extraordinary income
Gain on sale of fixed assets
Gain on sale of investment securities
Cancellation refund of insurance policies
Gain on liquidation of affiliates
Others

1,169
31
500
−
65

4
17
−
38
10

1,766

70

91
179
14
237
740
−
131

130
1,202
350
−
−
330
216

Non-operating income
Interest income
Dividend income
Commission income
OthersTotal non-operating income
Non-operating expenses
Interest expense
Management loss at investment association
Loss in foreign exchange
OthersTotal non-operating expenses

Total extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on revaluation of investment securities
Loss on impairment of fixed assets
Transfer to allowance for doubtful receivables
Withdrawal fees paid to an employees' pension fundHead office moving expenses
Others

1,394

2,229

Income before income taxes and minority interests

Total extraordinary losses

7,412

49

Income, inhabitants and enterprise taxes
Income tax adjustment

3,693
99

1,459
(364)

Total taxes
Minority interests in income/(loss) of consolidated
subsidiaries
Net income/(loss)

3,793

1,094

(64)

(238)

3,684

(806)

15

(3) Statement of Changes in Consolidated Shareholders Equity(million yen))
FY 2008
FY 2009(Fiscal year ended March 31, 2008) (Fiscal year ended March 31, 2009)
Shareholders equity
Common stock
Balance at the end of previous period

12,133

12,133

Balance at the end of current period

12,133

12,133

13,912

13,912

Capital surplus
Balance at the end of previous period
Changes during the period
Disposal of treasury stock00

Total changes during the period

00Balance at the end of current period

13,912

13,912

25,161

27,413−(44)(1,432)
3,684(1,402)(806)

Total changes during the period

2,251(2,209)Balance at the end of current period

27,41325,158

(80)

(843)

(770)
7

(489)
0

Retained earnings
Balance at the end of previous period
Increase/(decrease) due to changes in accounting
treatment at overseas subsidiaries
Changes during the period
Dividends paid
Net income/(loss)

Treasury stock
Balance at the end of previous period
Changes during the period
Acquisition of treasury stock
Disposal of treasury stock
Total changes during the period

(762)

(488)

Balance at the end of current period(843)(1,331)

51,12752,615−(44)(1,432)
3,684
(770)
7

(1,402)
(806)
(489)
0

Total changes during the period

1,488(2,698)

Balance at the end of current period

52,61549,873

Total Shareholders equity
Balance at the end of previous period
Increase/(decrease) resulted from changes inaccounting methods for subsidiaries
Changes during the period
Dividends paid
Net income/(loss)
Acquisition of treasury stock
Disposal of treasury stock16

(million yen))
FY 2008
FY 2009(Fiscal year ended March 31, 2008) (Fiscal year ended March 31, 2009)
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Balance at the end of previous period
Changes during the period
Changes in items other than shareholders equity, net

758

36

(721)

(401)

Total changes during the period

(721)

(401)

Balance at the end of current period

36

(364)

(1)

2

Deferred gains and losses on hedged
Balance at the end of previous period
Changes during the period
Changes in items other than shareholders equity, net

3(3)

Total changes during the period

3(3)Balance at the end of current period

2

(0)

1,029

(514)

(1,544)(1,223)

Total changes during the period(1,544)(1,223)

Balance at the end of current period(514)(1,737)

1,787

(475)

Translation adjustment
Balance at the end of previous period
Changes during the period
Changes in items other than shareholders equity, net

Total valuation and translation adjustments
Balance at the end of previous period
Changes during the period
Changes in items other than shareholders equity, net(2,262)(1,627)

Total changes during the period(2,262)(1,627)

Balance at the end of current period(475)(2,103)

134

51

Minority interests
Balance at the end of previous period
Changes during the period
Changes in items other than shareholders equity, net

(83)

1,739

Total changes during the period

(83)

1,739

Balance at the end of current period

51

1,790

53,04952,192−(44)(1,432)
3,684
(770)
7
(2,345)(1,402)
(806)
(489)
0
111

Total changes during the period(857)(2,586)

Balance at the end of current period

52,192

49,560Total shareholders equity
Balance at the end of previous period
Increase/(decrease) resulted from changes inaccounting methods for subsidiaries
Changes during the period
Dividends paid
Net income/(loss)
Acquisition of treasury stock
Disposal of treasury stock
Changes in items other than shareholders equity, net

17

(4) Statements of cash flows(million yen)
FY 2009(Fiscal year ended
March 31, 2009)

FY 2008(Fiscal year ended
March 31, 2008)
Operating activities
Income before income taxes and minority interest
Depreciation and amortization
Loss on impairment of fixed assets
Amortization of goodwill
Increase/(decrease) in allowance for retirement benefits for
employees
Increase/(decrease) in allowance for retirement benefits for
directors and corporate auditors
Increase/(decrease) in accrued bonuses for directors andcorporate auditors
Increase/(decrease) in allowance for doubtful receivable
Interest and dividend income
Interest expenses
Loss/(gain) on sale of fixed assets
Loss/(gain) on retirement of fixed assets
Cancellation refund of insurance policies
Withdrawal fees paid to an employees' pension fundLoss/(gain) on sale of investment securities
Loss/(gain) on revaluation of investment securities
Decrease/(increase) in notes and accounts receivable – trade
Decrease/(increase) in inventories
Decrease/(increase) in accounts receivable – other
Increase/(decrease) in accrued expenses
Decrease/(increase) in uncollected consumption tax
Increase(decrease) in notes and accounts payable – trade
Decrease/(increase) in other current assets
Increase/(decrease) in other current liabilities
Others

7,412
1,215
14
222

49
1,709
350
269

78

42

(144)

84

(19)
267
(365)
128
(1,163)
91
(500)
740
(31)
179
(6,051)(1,265)
218
10
389
2,783
(73)
(134)
102

(128)
198
(240)
192
(3)
130
−
−
(15)
1,202
13,149
2,980
(262)
319
363
(11,578)
(88)
582
180

Sub-total

4,108

9,487

Decrease/(increase) in advances
Decrease in deposits and guarantees relating to business
operations
Interests and dividend received
Interests paid
Cancellation refund of insurance policies received
Withdrawal fees paid to an employees' pension fund
Income taxes – paid
Other income

(430)

(311)

283
374
(132)
500
(740)
(3,319)
(3)

−
239
(193)
−
−
(3,817)
29

640

5,435

Net cash provided by (used in) operating activities― 18 ―

(million yen)
FY 2009(Fiscal year ended
March 31, 2009)

FY 2008(Fiscal year ended
March 31, 2008)
Investing activities
Payment for purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payment for purchase of intangible assets
Payment for purchase of marketable securities
Proceeds from sale of marketable securities
Payment for purchase of investment securities
Proceeds from sale of investment securities
Proceeds from acquisition of securities of subsidiaries,
which changed the scope of consolidation
Payment for acquisition of securities of subsidiaries,
which changed the scope of consolidation
Payment from sale of securities of subsidiaries,
which changed the scope of consolidation
Short term loans provided
Short-term loans collected
Long-term loans provided
Insurance reserve funded
Insurance reserve cancelled
Security deposits provided
Security deposits collected
Others(1,503)
2,120
(320)
(850)
960
(1,400)330(2,540)
229
(656)
−
−
(195)
120

(150)

−

−

(440)

(2)
(66)
143
(90)
(102)
59
(56)
120
88

−
(1,244)
1,043
(72)
(95)
19
(549)
278
(109)

Net cash provided by (used in) investing activities(718)(4,212)Financing activities
Increase/(decrease) in short-term bank loans, net
Proceeds from long-term bank loans
Repayment of long-term bank loans
Payment for acquisition of treasury stock
Payment of dividends
Payment of dividends to minority shareholders
Payments from minority shareholders
Others

5,583−(2,659)(769)(1,432)
(10)
37
(30)

(4,309)5,000(2,123)(488)(1,402)
(47)
−
(35)

718

(3,407)

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents(1,186)(457)

Increase/(decrease) in cash and cash equivalents(546)(2,642)

Cash and cash equivalents, beginning of period

14,55814,011

Cash and cash equivalents, end of period

14,011

11,368― 19 ―

(5) Events or situations causing serious doubt about going-concern premiseNone(6) Basis of presenting the consolidated financial statements
1. Scope of consolidation(1) Consolidated subsidiaries: 48
Major consolidated subsidiaries are not shown here because they are listed in 2. Corporate Group (1). WORKBIT
CORPORATION, SI ELECTRONICS, LTD., ADM Inc., ADM Electronics Hong Kong Limited and ADM Singapore Pte. Ltd. areconsolidated because they were newly acquired and AD DEVICE (H.K.) LIMITED, KAGA EDUCATIONAL MARKETING CO.,LTD. are consolidated because they were newly established. I-O DATA DEVICE USA, INC. is no longer consolidated because
this company has been liquidated.
(2) Equity-method affiliates: 13
Major equity-method affiliates are not shown here because they are listed in 2. Corporate Group (2). CyberFront Corporationand its four subsidiaries are newly classified as equity-method affiliates due to an additional investment by the Company.
(3) Fiscal years of consolidated subsidiaries
The fiscal year end is December 31 for consolidated subsidiaries KAGA DEVICES (H.K.) LTD., GUANGZHOU KEIDENKI
LTD., KAGA (SHENZHEN) ELECTRONICS LTD., KAGA (SHANGHAI) ELECTRONICS CO., LTD., KAGA (SHENZHEN)ELECTRONICS TECHNOLOGY DEVELOPMENT CO., LTD., DONGGUAN POWERTEK ELECTRONICS CO., LTD.,
KAGA (DALIAN) ELECTRONICS CO., LTD., KAGA (SHENZHEN) TRADING CO., LTD., Kaga Impex, LLC, KAGAINSTRUMENTS SHANTOU CO., LTD., HANZAWA (HK) Ltd., HANZAWA (SZ) Ltd. and three other consolidated
subsidiaries. The financial statements as of the end of this fiscal year are used to prepare the consolidated financial statements.
However, adjustments are made as necessary to the consolidated financial statements for all significant transactions during theperiod from December 31 to March 31, which is the end of the fiscal year for the consolidated financial statements.
Due to changes to their fiscal year ends, WORKBIT CORPORATION had a transitional 13-month fiscal period from March 1,
2008 to March 31, 2009 and ADM Inc. had a transitional 8-month fiscal period from August 1, 2008 to March 31, 2009.
2. Significant Accounting Policies(a) Valuation method for major assets
Inventories
Valuations of inventories held for sale in the ordinary course of business are determined primarily based on the cost method using
the specific identification method (in which the book values of inventories are reduced to reflect declines in profitability) or thecost method using the moving-average method (in which the book values of inventories are reduced to reflect declines in
profitability).
(Change in accounting method)
Beginning with the fiscal year that ended in March 2009, valuations of inventories held for sale in the ordinary course of businessare determined in accordance with Accounting Standard for Measurement of Inventories (ASBJ Statement No. 9, July 5, 2006).
This change resulted in a decrease of 83 million yen each in operating income, ordinary income and income before income taxes.
The effect on business segments is shown in the business segment information section.
(b) Depreciation method for major assets
Leased assets
Financial leases other than where ownership is transferred
Leased assets are depreciated using the straight-line method in which the lease period is the useful life and the residual value iszero. Financial leases other than where ownership is transferred that started prior to April 1, 2008 are accounted for using
accounting methods for rental transactions.
No other notes are provided here because there have been no significant changes from the notes in the most recent official
securities report that was filed June 27, 2008 with the Ministry of Finance.
(7) Changes in basis of presenting the consolidated financial statements(Current treatment of foreign subsidiaries in the consolidated financial statements)
Beginning with the fiscal year that ended in March 2009, the Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for Consolidated Financial Statements (ASBJ Practical Issues Task Force No. 18, May 17, 2006)) has been
applied and the consolidated financial statements revised as necessary. This change resulted in a decrease of 63 million yen each inoperating income and ordinary income and an increase of 68 million yen in the net loss. The effect on business segments is shownin the business segment information section.
(Leasing transactions)― 20 ―

Financial leases other than leases where ownership is transferred were previously accounted for using accounting methods forrental transactions. Beginning with the fiscal year that ended in March 2009, Accounting Standard for Lease Transactions(ASBJ Statement No. 13, June 17, 1993, revised March 30, 2007) and Guidance on Accounting Standard for Lease Transactions(ASBJ Guidance No. 16, January 18, 1994, revised March 30, 2007) were applied. As a result, financial leases other than leases
where ownership is transferred are now accounted for using accounting methods applicable to ordinary buying and sellingtransactions. Financial leases other than where ownership is transferred that started prior to April 1, 2008 will continue to beaccounted for using accounting methods for rental transactions. This change did not have a significant effect on earnings.
(8) Changes in method of presentation(Consolidated balance sheet)
Due to the application of Amendments of Regulations Concerning Terminology, Forms and Method of Preparation for Financial
Statements (Cabinet Ordinance No. 50, August 7, 2008), the item presented as Inventories in the prior fiscal year is divided
into Merchandize and finished goods, Goods in progress, and Raw materials and other supplies beginning with the fiscal
year that ended in March 2009. As of March 31, 2008, Inventories included Merchandize and finished goods, Goods inprogress, and Raw materials and other supplies in the amounts of 15,998 million yen, 506 million yen and 3,672 million yen,respectively.
(Consolidated statement of income)In the previous fiscal year, Cancellation refund of insurance policies was presented as a separate item. However, since this item
was less than one-tenth of total extraordinary losses (these refunds totaled 6 million yen) in the fiscal year that ended in March
2009, it is included in the Others item of extraordinary losses.
(Consolidated statement of cash flows)
In the fiscal year that ended in March 2009, in the operating activities section, the Cancellation refund of insurance policies andCancellation refund of insurance policies received items are included in Others and Other income respectively, because
these items are not monetarily significant. Others includes a 6 million yen deduction for Cancellation refund of insurance
policies and Other income includes a 6 million yen addition from Cancellation refund of insurance policies received.
In the fiscal year that ended in March 2009, in the operating activities section, the Decrease in deposits and guarantees relating tobusiness operations item is included in Other income because this item is not monetarily significant. In the fiscal year that
ended in March 2009, Other income includes Decrease in deposits and guarantees relating to business operations in theamount of 23 million yen.
(9) Precaution concerning the consolidated financial statements(Items not disclosed)
There are no notes concerning the consolidated balance sheet, consolidated statement of income, consolidated statement of changes
in shareholders’ equity, consolidated statement of cash flows, lease transactions, related party transactions, tax-effect accounting,securities, derivative transactions and retirement benefits because the Company believes there is no significant need to disclose thisinformation in this report.

― 21 ―

Segment information(a) Operating segment information
Operating segment information is not presented for the previous fiscal year and the current fiscal year since the Kaga Electronics
Group has been engaged in a single sector generally described as the manufacturing and sale of electronics merchandise andproducts.
(b) Geographical segment information
For the previous fiscal year (April 1, 2007 – March 31, 2008)(million yen)
Japan

North
America

Europe

East
Asia

Total

Eliminations
orConsolidated
Corporate

I. Sales and operating income (loss)
Net sales(1) (of which to outside customers)
234,105
1,011
2,545
53,667
291,331291,331(2) (of which inter-segment)
16,504
404
142
9,424
26,476(26,476)
Total
250,610
1,415
2,688
63,092
317,807(26,476)
291,331
Operating expenses
245,201
1,549
2,872
60,755
310,378(26,833)
283,544
Operating income (loss)
5,409
(133)
(184)
2,337
7,429
356
7,786
II. Assets
107,044389
1,852
25,604
134,891(4,467)130,423
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, and Thailand
3. Assets included in Eliminations and Corporate amounted to 4,554 million yen in the current fiscal year,
which primarily consist of surplus working capital (cash and marketable securities) and long-term investment securities(investment securities and contribution to investment partnerships), among others.
4. Change in depreciation methods for property, plant and equipment
Due to amendments to the Corporation Tax Law, beginning with the fiscal year that ended in March 2009, the Company and its
consolidated subsidiaries in Japan are using the method designated in this amended law for the depreciation of property, plant andequipment acquired on or after April 1, 2007. This change did not have a significant effect on earnings.

For the current fiscal year (April 1, 2008– March 31, 2009)(million yen)Japan
1. Sales and operating income (loss)
Net sales(1) (of which to outside customers)(2) (of which inter-segment)

North
America

Europe

East
Asia

Total

Eliminations
orConsolidated
Corporate

223,812
14,326

326
204

3,624
54

45,847
9,945

273,610
24,531(24,531)273,610-238,138
236,628

530
629

3,679
3,731

55,792
54,975

298,141
295,964(24,531)(24,604)

273,610271,360

1,509

(98)

(51)

816

2,176

73

2,249

2. Assets
97,919276
819
20,544
119,559(2,308)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, and Thailand
3. Assets included in Eliminations and Corporate amounted to 3,160 million yen in the current fiscal year,
which primarily consist of surplus working capital (cash and marketable securities) and long-term investment securities(investment securities and contribution to investment partnerships), among others.

117,251

Total
Operating expenses
Operating income (loss)― 22 ―

4. Change in accounting method(Accounting standard for valuation of inventories)
As was stated in Basis of presenting the consolidated financial statements 2. (a), beginning with the fiscal year that ended in
March 2009, Accounting Standard for Measurement of Inventories (ASBJ Statement No. 9, July 5, 2006) has been applied.
This change resulted in a decrease of 83 million yen in operating income in Japan compared with the previous method.
(Current treatment of foreign subsidiaries in the consolidated financial statements)
As was stated in Changes in basis of presenting the consolidated financial statements, beginning with the fiscal year that
ended in March 2009, the Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements (ASBJ Practical Issues Task Force No. 18, May 17, 2006) has been applied and theconsolidated financial statements revised as necessary. This change resulted in a decrease of 63 million yen in operating income in
East Asia compared with the previous method.
Overseas sales
For the previous fiscal year (April 1, 2007 – March 31, 2008)(million yen)
North America

EuropeEast Asia

Total

I. Overseas sales
2,532
4,646
65,26072,439II. Consolidated sales
291,331
III. Share of overseas sales in total sales (%)
0.9
1.6
22.4
24.9
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, and Thailand
3. Overseas sales refer to sales posted by the Company and its consolidated subsidiaries in countries and regions outside Japan.
For the current fiscal year (April 1, 2008 – March 31, 2009)(million yen)
North America

EuropeEast Asia

Total

1. Overseas sales
3,094
4,840
63,08871,023
2. Consolidated sales
273,610
3. Share of overseas sales in total sales (%)
1.1
1.8
23.1
26.0
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, and Thailand
3. Overseas sales refer to sales posted by the Company and its consolidated subsidiaries in countries and regions outside Japan.

― 23 ―

Per-share information
(yen)
Item

Net assets per share

FY 2008(For the year ended March 31, 2008)

FY 2009(For the year ended March 31, 2009)

1,858.26

1,730.98

128.9328.91

Net income per share (basic)

Net income per share (diluted) is not

Net income per share (diluted) is notpresented, since there is no potential stock.

presented, since it is net loss and there
is no potential stock.

Note: The basis for calculating net income (loss) per share is as follows.

Net income per share (basic)
Net income/(loss) (million yen)
Net incomenot available to common shareholders (million yen)
Net income/(loss) available to common shareholders (million yen)
Weighted average number of shares outstanding
Subsequent eventsNone― 24 ―FY 2008(For the year ended
March 31, 2008)

FY 2009(For the year ended
March 31, 2009)

3,684
3,684
28,575,283

(806)
(806)
27,911,323

5. Non-consolidated Financial Statements(1) Balance sheets(million yen)
FY 2008(As of March 31, 2008)ASSETS
Current assets
Cash and cash equivalents
Notes receivable ‐ trade
Accounts receivable ‐ trade

FY 2009(As of March 31, 2009)

4,061
5,251
40,522
84
4,770
−
−
−

Marketable securities
Inventories
Merchandise
Goods in progress
Supplies
Advances
Prepaid expenses
Deferred tax assets
Short-term loans
Short-term loans to affiliates
Accounts receivable ‐ other

3,929
4,297
34,36758−

Consumption taxes uncollected
OthersAllowance for doubtful receivables

493
147
710
52
15,595
3,792
281
20
(985)

3,566
211
11
883
156
929
194
13,6045,000
70
32(1,244)

Total current assets

74,80066,069

505
(199)

516
(239)

305

276

17
(10)

40
(15)

6

25

126
(93)

150
(115)

Fixed assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
VehiclesAccumulated depreciation
Vehicles, net
Tools and office furniture
Accumulated depreciation
Tools and office furniture, net

32

34

332
(227)

581
(276)

104

304

Land

161

161

Total property, plant and equipment

611

801

12
2
319
26
166

96
11
317
26
99

527

553

Intangible assets
Goodwill
Trade mark rights
SoftwareTelephone rights
OthersTotal intangible assets― 25 ―

(million yen)
FY 2008(As of March 31, 2008)
Investments and other assets
Investment securities
Affiliate stock
Contribution to capital
Contribution to affiliate capital
Long-term loans
Long-term loans to employees
Long-term loans to affiliates
Long-term prepaid expenses
Claims in bankruptcy
Deferred tax assets
Security deposits
Insurance reserve
Golf memberships
Allowance for doubtful receivables
Allowance for loss on investment

5,591
10,355
79
103
279
1
−
2
245
1,849
923
834
398
(627)
(2,589)Total investments and other assets
Total fixed assets
Total assets― 26 ―FY 2009(As of March 31, 2009)
4,102
8,335
59
32
271
−
4,223
4
278
973
1,313
921
396
(4,886)(313)

17,45015,713

18,58817,06893,388

83,138(million yen)
FY 2008(As of March 31, 2008)
LIABILITIESCurrent liabilities
Notes payable ‐ trade
Accounts payable ‐ trade

FY 2009(As of March 31, 2009)

Short-term bank loans
Short-term loans from affiliates
Current portion of long-term debt
Accounts payable
Accrued expenses
Income taxes payable
Advances received
Deposits received
Accrued bonuses for directors and corporate auditors
Others5,978
27,93010,070
646
1,562
1,445
871
1,659
342
71
120
3

5,265
24,037
6,559
3,267
1,625
1,149
1,081
42
835
97
−

Total current liabilities

50,702

43,962

625
363

3,500
404

935
2

991
26

Long-term liabilities
Long-term bank loans
Allowance for retirement benefits for employees
Allowance for retirement benefits for directors andcorporate auditors
OthersTotal long-term liabilities

1

1,926

4,922

52,62948,884

12,133

12,133

13,912
0

13,912
0

13,912

13,912618

618

11,6603,250

12,860(3,710)15,529

9,767

Treasury stock(843)(1,331)

Total shareholders’ equity

40,731

34,482

25
2

(228)
(0)

Total liabilities
NET ASSETS
Shareholders’ equity
Paid-in capital
Capital surplus
Capital legal reserve
Other capital surplus
Total capital surplus
Retained earnings
Earned legal reserve
Other earned surplus
General reserve
Unappropriated retained earnings
Total retained earnings

Valuation and translation adjustments
Valuation differences on available-for sales securities
Deferred gain or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets― 27 ―

27(228)

40,75934,25393,388

83,138

(2) Statements of income(million yen)
FY 2009(Fiscal year ended
March 31, 2009)

FY 2008(Fiscal year ended
March 31, 2008)
Net sales
Cost of sales
Inventory at the beginning of the period
Purchases during the period
Total
Transfers
Inventory at the end of the period
Cost of sales - Merchandise
Gross profit

133,854

126,2625,754
118,181

4,697
113,328

123,936

118,026

64
4,770

152
3,778

119,100

114,094

14,753

12,167

Selling, general and administrative expenses

8,839

9,147

Operating income

5,914

3,020

Non-operating income
Interest income
Dividend income
Exchange income
Others

252
1,064
−
180

250
1,289
65
156

1,497

1,761

129
69
138
110
81
39

194
25
−

568

403

6,842

4,378

32
500
12

16
−
−

544

16

4
170
317
1,273
344
701
−

12
1,038
4,193
30
2,358
−

Total non-operating income
Non-operating expenses
Interest expense
Loss on revaluation of marketable securities
Exchange loss
Management loss at investment association
Amortization of investments in unconsolidated subsidiaries
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of investment securities
Cancellation refund of insurance policies
OthersTotal of extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on revaluation of investment securities
Loss on revaluation of subsidiaries’ shares
Transfer to allowance for loss on investment
Transfer to allowance for bad receivable to affiliates
Withdrawal fees paid to an employees' pension fundHead office moving expenses
Others41

Total of extraordinary losses

93
79
8

227
36

2,854

7,895

Income/(loss) before income taxes and minority interests

4,532(3,500)

Income, inhabitants and enterprise taxes
Income tax adjustment

2,453
(421)

23
833

Total taxes

2,032

857

Net income/(loss)

2,500(4,358)― 28 ―

(3) Statement of Changes in Shareholders’ Equity(million yen)
FY 2008
FY 2009(Fiscal year ended March 31, 2008) (Fiscal year ended March 31, 2009)
Shareholders’ equity
Common stock
Balance at the end of previous period

12,133

12,133

Balance at the end of current period

12,133

12,133

Capital surplus
Capital reserve
Balance at the end of previous period

13,912

13,912

Balance at the end of current period

13,912

13,912Other capital surplus
Balance at the end of previous period
Changes during the period
Disposal of treasury stock

0

0

0

0

Total changes during the period

00Balance at the end of current period

0013,912

13,91200

Total capital surplus
Balance at the end of previous period
Changes during the period
Disposal of treasury stock
Total changes during the period

00Balance at the end of current period

13,912

13,912Retained earnings
Earned legal reserve
Balance at the end of previous period

618

618

Balance at the end of current period

618

618

Other retained earnings
Reserve for interim dividend
Balance at the end of previous period
Changes during the period
General reserve

10,46011,660

1,200

1,200

Total changes during the period

1,200

1,200

Balance at the end of current period

11,66012,860

3,382

3,250

(1,432)(1,200)2,500(1,402)(1,200)(4,358)Retained earnings brought forward
Balance at the end of previous period
Changes during the period
Dividends paid
General reserve
Net income/(loss)
Total changes during the period(132)(6,961)

Balance at the end of current period

3,250(3,710)14,461

15,529(1,432)2,500(1,402)(4,358)

Total changes during the period

1,067(5,761)

Balance at the end of current period

15,529

9,767

Total retained earnings
Balance at the end of previous period
Changes during the period
Dividends paid
Net income/(loss)― 29 ―

(million yen)
FY 2008
FY 2009(Fiscal year ended March 31, 2008) (Fiscal year ended March 31, 2009)
Treasury stock
Balance at the end of previous period
Changes during the period
Acquisition of treasury stock
Disposal of treasury stock

(80)

(843)

(770)
7

(489)
0

Total changes during the period

(762)

(488)

Balance at the end of current period(843)(1,331)40,426

40,731(1,432)
2,500
(770)
7

(1,402)(4,358)(489)
0Total changes during the period

305(6,249)Balance at the end of current period

40,731

34,482

715

25

(689)

(253)

Total Shareholders’ equity
Balance at the end of previous period
Changes during the period
Dividends paid
Net income/(loss)
Acquisition of treasury stock
Disposal of treasury stock

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Balance at the end of previous period
Changes during the period
Changes in items other than shareholders equity,net
Total changes during the period

(689)

(253)

Balance at the end of current period

25

(228)

(1)

2

3

(2)

Deferred gains and losses on hedged
Balance at the end of previous period
Changes during the period
Changes in items other than shareholders equity,net
Total changes during the period

3(2)Balance at the end of current period

2

(0)

714

27

(686)

(256)

Total valuation and translation adjustments
Balance at the end of previous period
Changes during the period
Changes in items other than shareholders equity,net
Total changes during the period

(686)

(256)

Balance at the end of current period

27

(228)

41,14040,759(1,432)
2,500
(770)
7

(1,402)(4,358)(489)
0Total net asset
Balance at the end of previous period
Changes during the period
Dividends paid
Net income/(loss)
Acquisition of treasury stock
Disposal of treasury stock
Changes in items other than shareholders equity,
net

(686)

(256)

Total changes during the period(381)(6,506)

Balance at the end of current period

40,75934,253― 30 ―

(4) Events or situations causing serious doubt about going-concern premiseNone(5) Changes in method of presentation(Balance sheet)
Due to the application of Amendments of Regulations Concerning Terminology, Forms and Method of Preparation for Financial
Statements (Cabinet Ordinance No. 50, August 7, 2008), the item presented as Inventories in the prior fiscal year is divided
into Inventories and Goods in progress beginning with the fiscal year that ended in March 2009. As of March 31, 2008,
Inventories and Goods in progress were 4,668 million yen and 101 million yen, respectively.
6. OthersNone― 31 ―