(Translation)
Fields Corporation
Summary of Financial Statements (Consolidated)Year Ended March 31, 2005
May 13, 2005
Company Name:

Fields Corporation(URL: http://www.fields.biz)
Listed on:
JASDAQ (Stock code: 2767)
Head Office:Tokyo
Representative Director:
Hidetoshi Yamamoto
President, Representative Director and CEO
Inquiries:
Hiroyuki Yamanaka
General Manager, Administration Division for Board of Directors
Tel: 81-3-5784-2111
Date Approved by Board of Directors:
May 13, 2005
U.S. Accounting Standards Applied (Yes/No): No
1. Business results for the year ended March 31, 2005 (April 1, 2004, to March 31, 2005)(1) Operating results（Rounded down to nearest million）
Net sales
Operating income
Ordinary income
Year ended
March 31, 2005
Year ended
March 31, 2004

Millions of yen(% change)

Millions of yen(% change)

Millions of yen(% change)

81,658(23.3)

12,097(1.9)

12,480(2.2)

66,211(7.0）

11,866(75.0）

12,209(73.9)Net income
Millions of yen(% change)

Net income
per share
Yen

Diluted net
income per
share
Yen

Return on
equityOrdinary
income tototal assets

Ordinary
income tonet sales％％％Year ended
March 31, 2005
6,926
(4.6)
19,888.61
−
28.9
22.8
15.3
Year ended
6,620(87.8)
40,465.97
−
56.9
45.0
18.4
March 31, 2004
Notes: 1.Equity in earnings of affiliates
Year ended March 31, 2005: ¥421 million
Year ended March 31, 2004: ¥292 million
2. Average number of shares outstanding (consolidated)Year ended March 31, 2005: 343,000
Year ended March 31, 2004: 161,500
3. Changes in accounting methods (Yes/No): No
4. Percentages for net sales, operating income, ordinary income and net income denote changes compared withthe previous fiscal year.

-1-(2) Financial position
Total assets

Shareholders’ equity

Shareholders’ equity
ratio

Shareholders’ equity
per share

Millions of yen％

Yen

Millions of yen

Year ended
72,58433,426
March 31, 2005
Year ended
37,115
14,507
March 31, 2004
Note: Number of shares outstanding at year-end (consolidated)Year ended March 31, 2005: 347,000
Year ended March 31, 2004: 161,500

46.0

96,026.73

39.1

89,305.39

Cash flows fromfinancing activities

Cash and cash
equivalents at end ofterm(3) Cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Millions of yen

Year ended
March 31, 2005
Year ended
March 31, 2004

Millions of yen

Millions of yen

Millions of yen

2,965(5,257)

10,177

13,326851(3,190)

2,029

5,437

(4) Scope of consolidation and application of equity method
Number of consolidated subsidiaries: 9
Non-consolidated subsidiaries accounted for under equity method: Affiliates accounted for under equity method: 3(5) Changes in scope of consolidation and application of equity method
Newly consolidated companies: 4
Excluded companies: Newly added equity method companies: 2
Excluded equity method companies: 2. Forecast earnings for the year ending March 31, 2006 (April 1, 2005, to March 31, 2006)
Net sales
Ordinary income
Net income
Millions of yen

Millions of yen

Interim38,5005,200
Full year
94,90014,700
Reference: Projected net income per share for the year ending March 31, 2006: ¥21,887.61-2-

Millions of yen

2,700
7,700

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1.
Outline of Fields GroupThe Fields Group (the Company and its affiliates) comprises Fields Corporation (“the Company”), its 12 subsidiaries,and 3 affiliates.
The Fields Group’s main lines of business are the sales of pachinko/pachislot machines and the development ofpachinko/pachislot machine content based on the marketing data accumulated nationwide.
The Company sells pachinko/pachislot machines through a distribution model and an agency model. Under the
distribution model, it sells the machines directly to pachinko hall operators through the marketing efforts of its branch
offices; while under the agency model, it mediates sales of the machines as an agent.
The pachinko/pachislot machine sales business accounts for more than 90% of the Fields Group’s total net sales andoperating income in all segments, which means that, in accordance with Article 15-2 of the Regulations on Consolidated
Financial Statements, the Company is not required to disclose segment information for each business category.
The business areas of each company in the Fields Group are summarized below.
Business segment

Principal business
Sales and maintenance
Purchase of pachinko/pachislot
machines
Planning and development ofpachinko/pachislot machine software
Copyright licensing (merchandizing
rights)Acquisition of content

Sales ofpachinko/pachislot
machines

Company nameFields Jr. Corporation
Rodeo Corporation
Digital Lord Corporation
Professional Management Co., Ltd.
APE Inc.

Total Workout Corporation
White Trash Charms Japan Co., Ltd.
Database Co., Ltd.
D3 Publisher Inc.
Kadokawa Haruki Corporation
Heart-line Inc.
Entertainment Software Publishing Inc.
D3 Publisher of America, Inc.*
3D-AGES Inc.
D3DB S.r.l.*(Note) D3 Publisher of America, Inc. and D3DB S.r.l. are located overseas.

Others[Business Organization Chart]
Distribution model

Agency model
Nationwide pachinko halls(Users)Nationwide pachinko halls(Users)Payment
collection
Independent sales
agent
Payment ofcommission

Payment
collection
Sales

Subagent

Transfer ofpayment

Payment ofcommission
Delivery ofmachines

Commission
from makerPachislot machine makers

Transfer ofpayment

Fields(As agent)

FieldsPurchase

Payment
collection

Delivery ofmachines

Transfer ofpayment

Pachinko/pachislot machine makers(Rodeo Corporation, etc.)-3-最終更新日時：6/29/2005 2:57 PM 最終印刷日時：6/29/2005 2:57 PM

The chart below provides an overview of the businesses.
Games

Copyright licensing(merchandizing rights)
Content(Consolidated subsidiary）

TV & Movies
Cartoons & Animation
SportsWhite Trash Charms Japan
Co., Ltd.

Entertainers & Artists(Consolidated subsidiary)
Negotiation of copyrights(merchandizing rights)
Total Workout Corporation

Acquisition of copyrights(merchandizing rights)(Consolidated subsidiary)(Non-consolidated subsidiary)
APE Inc.

Professional Management
Co., Ltd.
(Non-consolidated subsidiary)
Database Co., Ltd.

(Affiliate accounted for under

Advertising andpromotion

Consignment of acquisitionof copyrights(merchandizing rights)

equity method)
Kadokawa Haruki Corporation(Consolidated subsidiary)

Software planningand development

Development ofpachinko/pachislot
machine content

Digital Lord Corporation
Product planning

The Company

Pachinko/pachislot machine
maker

Consigned sales(Affiliate accounted forunder equity method）
Rodeo Corporation

Sales of pachinko/pachislot
machines

Product procurement

Consigned
installation(Consolidated subsidiaries)
D3 Publisher Inc.
Heart-line Inc.
Entertainment Software

Product sales
Sales as agent

Publishing Inc.

Independent
sales agent(Consolidated subsidiary)Fields Jr. Corporation

D3 Publisher of America,
Pachinko/pachislot
machine installation,
maintenance, etc.

Inc.
(Affiliate accounted for underequity method)
3D-AGES Inc.
Nationwide pachinko halls（Users）(Non-consolidated subsidiary)
D3DB S.r.l.

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2.

Operating Policies

1.

Fundamental corporate management policy
The Company’s management philosophy is to provide “the greatest leisure for all people.” Based on this, theCompany, taking the pachinko and pachislot field as its starting point, has been expanding its business domain invarious entertainment fields. It has been acquiring copyrights aimed at creating content and providing secondary
use materials by capitalizing on the total strength of the group companies, and providing content derived fromplanning and development activities in line with detailed project design based on strategic marketing.
The Company’s fundamental corporate management policy is to place “shareholders first,” the twin pillars ofwhich are to enhance corporate value and to return profits to shareholders. To do this, we will seek to make
optimal use of our management resources.

2.

Fundamental corporate policy for profit distribution
The Company, which views raising shareholder value as its primary task, carries out a fundamental policy of
paying dividends at an appropriate level in line with profit.
For the fiscal year ended March 2005, the Company paid ¥2,000 per share for the interim dividend, andexpects to pay ¥2,000 for the year-end dividend. As a result, our dividend payout ratio is expected to be 20.7%.
Given due consideration to business development requirements, the Company will make every effort toeffectively use retained earnings to improve its financial condition and strengthen its operational base.

3.

Positions and policies for reducing the minimum investment unit
Management believes that sufficient stock liquidity, which requires a large number of investors to participate inshare trading, is necessary to obtain a rational market price for the Company’s stock. To this end, the Company
implemented a 2-for-1 stock split on September 3, 2004. Management will give full consideration to market
trends, investor opinions, and other factors before deciding future measures to lower the minimum investment
unit. In doing so, our primary perspective is to place the interest of shareholders first.

4.

Management strategies for the medium to long term
Under the management philosophy of providing “the greatest leisure for all people,” the Company is positioning
the development of a wide range of content businesses within the entertainment fields as the foundation forenhancing its competitive advantages.
The Company has determined that the essence of the content business lies in a diverse range of applicationsof content. With the aim of securing diverse distribution channels for the wide range of applications of content,
the Company has set the “content provider” strategy at the core and has proceeded speedily to secure content
distribution channels. For instance, in the pachinko and pachislot field, we entered a business alliance with Bisty
Co., Ltd., part of the SANKYO Group, in addition to the Sammy Group with whom we have worked as analliance partner, and in the game business field we made D3 Publisher Inc. into a subsidiary. In the fiscal year
under review, we quickly achieved positive effects from the alliances through hit products, including the CR Neon
Genesis Evangelion pachinko machine and the Onimusha 3 pachislot machine.
However, our success in the content business hinges not only on securing the channels, but also on extending
the lifetime value of the content. We will proceed with our “content integrator” strategy based on management
and producing capabilities, so that one content can provide success in one field, and also extend greater value
through development into a wider range of fields, thereby securing our competitive advantages.
According to the New Industry Promotion Strategy as laid down by the Ministry of Economy, Trade andIndustry, the content industry in Japan comprises mostly micro content producers, so they lack the management
capabilities to expand into different fields by capitalizing on their content rights, and the producing capabilities toincrease their earnings. Therefore, the basic framework for the industrial structure, in which circulated earnings
bring about expansion and reproduction, has yet to be established.
Targeting a further expansion in the content business, we will accelerate the execution of our “content
provider” strategy to secure content distribution channels, and promote a framework for seamlessly managing thelife cycle of content and producing it. As a result, a content cycle going beyond the boundaries between fields
will be formed and we will be able to build a content production and reproduction structure, enabling us both tocontribute to the development of the content industry, upon which great hopes are pinned in Japan, and toadvance toward the realization of our corporate philosophy of providing “the greatest leisure for all people.”-5-

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5.

Challenges for the future
(1)

(2)

Pachinko/pachislot machine sales business[1]

Product planning and development system
For product planning and development, we have built a system with the aim of implementing a “content
integrator” business model.
The copyright division has continued with activities to respond to copyright needs, primarily incollaboration with affiliated manufacturers, with the aim of acquiring copyrights through a wide variety ofchannels. The current pachinko/pachislot machine development period, including the planning stage, isconsidered to be one to two years. In fact, it is necessary to have at least a two year stock of character
copyrights, and our ability to provide copyrights of both high quality and quantity has further enhanced ourpresence with each stakeholder. Hereafter, we will invest our energies into acquiring superior copyrights
overseas through collaboration with our subsidiary, D3 Publisher Inc., which has bases in the U.S. andEurope.
The product planning division has been active in aiming to create a new world perspective that will
evoke sympathy from many people, based on an understanding of the substance of the character copyrights.
As a result, hit products like CR Neon Genesis Evangelion and CR Ore no Sora were born. Also, in CR
Kahara Tomomi to Minashigo Hatchi, we were highly appreciated for creating a new world perspective
through featuring a top artist and a famous animation character together. At the Company, we assess
product planning in three stages from the viewpoint of secondary utilization of the content. The first is afaithful reproduction of the original, the second is the addition of new value through another or a newinterpretation, and the third is creating a new world view that has the appeal of the original yet goes beyond
it. Hereafter, by focusing on the second and third stages of planning, we will strive to amplify value incontent and enhance its lifetime value. We are targeting a continual spiral upward in new value successively
generated through this process.
At present, in the pachinko and pachislot sector, creative talent is strongly sought after, including theability to plan in image expressions, as a result of the widespread penetration of larger sized liquid crystal
display and character machines. Following the amendments to the laws governing the entertainment
industry in July 2004, there was an easing of type testing for pachinko machines, and consequently eachmaker has been launching various types of machines. We assume it will not be long before the same thing
happens with pachislot machines. In view of the trends within the industry, we believe that an integrated
system of copyright acquisition, product planning and image development will be necessary to adequately
respond to these broader needs. To that end, the Company is establishing an image development andproduction division in-house, and also actively promoting the image development business, by fully
capitalizing on the resources of subsidiaries such as Digital Lord Corporation and D3 Publisher Inc. At thesame time, with the integrated system from copyright acquisition through to image development, theCompany will strive to ensure a higher profitability commensurate with the added value.

[2]

Pachinko/pachislot machine sales system
We have thoroughly reviewed the way the sales system should be to realize synergies from the allianceswith Bisty Co., Ltd., part of the SANKYO Group, following the existing alliance with the Sammy Group,and to prepare to enter new alliances. Strengthening our sales force in response to the increase in products
is a part of that. Also, in order to assure the success of the first attempt within the industry to concurrently
release several products from different makers, we have radically reformed our show rooms nationwide,
shifting emphasis from the product displays themselves, which tend to give priority to the seller’s needs, tohigher customer satisfaction.
Hereafter, with the aim of expanding our market share in the pachinko and pachislot business, we will
strive to raise earnings further in our alliance brands and to expand new alliance brands. At the same time,in preparedness for that, in order to realize efficient sales activities, we will constantly review our sales
channels and invest in training for sales personnel. We will educate the employees to make them experts
who have superior specialist knowledge in pachinko/pachislot machines, and understand deeply about hallmanagement. In addition, we aim to further enhance the information content provided at show rooms tofulfill customer needs, and thereby to raise our presence as a sales organization that earns the great trust of
its client halls.
Other businesses
We are making progress in the collaboration with D3 Publisher Inc., which has established local subsidiaries
in the target markets: the U.S. and European games and licensing markets. We and D3 Publisher enteredbusiness alliances, including a capital alliance, in January 2004, and have further deepened our relationship bymaking D3 Publisher into a consolidated subsidiary in January 2005. In the fiscal year under review, we-6-

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launched the home video game K-1 Premium 2004 Dynamite!!, under the comprehensive agreement for K-1
merchandizing rights which we reached in the process of entering a business alliance with FEG Inc., theoperating company for K-1.
Also, we started the development of simulator software for pachinko and pachislot hit products launchedthrough our copyright acquisition and product planning.
Hereafter, we will focus on the development of games that can be accepted worldwide through the local
subsidiaries in the U.S. and Europe, and enter collaboration in a wide range of fields, including enhancing
synergy effects within the image development field mentioned earlier.
Through the collaboration with our subsidiaries Professional Management Co., Ltd., and Total Workout
Corporation, in April this year, FEG Inc. set up a K-1 official gym within Roppongi Hills (a new fashionableoffice and residential complex in central Tokyo), and established K-1 Dojo, which aims to support the healthy
physical and mental development of children, and K-1 EX, a new type of exercise gym that targets women.
We believe such event-oriented media will be places where a wide variety of content may be conceived.
In March this year, the Company acquired a 30% stake in Kadokawa Haruki Corporation. At present, witha view to a future business alliance between the two companies, collaboration has started in utilizing theabundant original content assets of Kadokawa Haruki Corporation, and a state-of-the-art media mix strategy
for the next generation.
In order to enhance synergy effects with each of the subsidiaries, we have newly established a planningand production division dealing with content outside the pachinko and pachislot field within the productplanning division, and are actively seeking to turn a profit on games, publications, movies, animations, music,
character goods, etc.
6.

Corporate Governance(1)

Basic position on corporate governanceWith the fundamental philosophy of providing “the greatest leisure for all people” as its mission, theCompany is continually enhancing corporate value and in turn raising shareholder value as its fundamental
management policy. Accordingly, to ensure that the corporate governance system functions effectively, thedevelopment of an organizational structure and framework for management and implementation of thenecessary measures are top priority issues for the Company.

(2)

Corporate governance measures adopted[1]

Details of system within company
Based on the principle that the Board of Directors represents the interests of shareholders, the Company
ensures appropriate and speedy decision-making by the Board, and has introduced an executive officer
system for efficient business execution. Also, in order to ensure fairness and impartiality, and rigorous risk
control required for business operations, a statutory auditor system has been adopted.
The Company’s Board of Directors comprises seven directors, including one outside director. Regular
Board meetings are held once a month, while extraordinary Board meetings are held as required, so a
system is in place to ensure speedy management decisions. In Board meetings, important matters are put on
the agenda, progress in performance is discussed, and measures are considered. Further, a system has been
established to enable the seven executive officers to carry out efficient business execution, based on theappropriate and speedy decision-making of the Board.
While measures to enhance the corporate governance system are continually considered, modifications
to the management structure and system will be further implemented within the framework of governanceby directors and statutory auditors as up to now.

[2]

Internal control system and its operational status
An internal control system has been established covering the various regulations stretching across all
internal operations. Based on clearly stated rules, operations are accomplished through definite authority
and responsibility borne by employees at all levels, and monitoring is effected through internal audits.
Also, in order to expand the functions of the internal control system for the Company and the groupoverall, the auditing company was called on as a consultant, and an internal control system seminar washeld for employees in managerial positions in corporate divisions.
As measures to deal with the Law concerning the Protection of Personal Information, which was fully
enacted on April 1, 2005, we established regulations governing security of personal information and aim tofurther strengthen the information control system through employee training.

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Status of risk management system
An advisory lawyer attends Board meetings in order to give advice and guidance as appropriate regarding
the legal aspects of matters related to management decisions. Also, through the strict and appropriate
operation of a checking system through internal audits, audits by statutory auditors and audits byindependent auditors, we believe that it is possible to eliminate risks in advance.
Regarding the management of legal risks, all contracts are managed by the legal section of the General
Affairs and Personnel Department. Regarding important contracts, legal checks are, in principle, all madeby the advisory lawyer, and we strive to avoid unforeseen risks.

[4]

Status of internal audits, audits by statutory auditors, and audits by individual auditors
Regarding internal audits, the corporate auditors under the direct control of the president regularly carry out
internal audits regarding the business activities of the Company and subsidiaries overall based on theinternal audit schedule set at the start of the fiscal year, and provide advice and recommendations for the
improvement of business operations in consideration of the audit results.
As for audits by statutory auditors, a system that allows the statutory auditors to inspect the status ofbusiness execution by the directors is adopted. The statutory auditors attend Board meetings and otherimportant meetings to state their opinions, and implement audits through hearings with each division andinspections of approved documents.
Regarding the collaboration between the Board of Statutory Auditors and the corporate auditors, thecorporate auditors attend meetings of the Board of Statutory Auditors held every month, and make reports
and exchange views with each other on the results of the audits. In addition, the Board of Statutory Auditors
and the corporate auditors hold a session for exchanging views with the Company’s independent auditors
every quarter, and attend interim and year-end audits by the individual auditors. In this manner, the threeparties conduct audits through mutual collaboration.
The Company has nominated BDO Sanyu & Co. as the auditing company to provide certified public
accountants. The Company provides all the necessary information to the auditing company, which conducts
reliable audits at regular intervals, not only for the interim and year-end periods.
Name of accountant that performs
auditsJun Sugita
Masatoshi Kobayashi

Auditing company
BDO Sanyu & Co.
BDO Sanyu & Co.

(Note) The numbers of years of continuous auditing service are omitted, as all members arewithin seven years in service.
The composition of assistants involved in auditing is decided based on the nomination
criteria of the auditing company. Specifically, there shall be three public certified
accountants and two assistant accountants as main members as well as other assistants,
including a specialist in systems.
An outline of the Company’s management organization and corporate governance system is given below.
General meeting of shareholders
Nomination/
dismissal

Nomination/
dismissal

Board of Statutory
Auditors

Board of Directors
AuditsPresident & CEO
Board of Executive
Officers

Business divisions-8-

Nomination/
dismissal

Accounting
auditInternal
auditsConsent for nomination/
dismissal

Independent
Auditors
Corporate Auditors

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[5]

[6]

Details of remuneration of directors and statutory auditors
Directors
Statutory auditors
No.
of
No. ofCategory
people to Amount people to Amountbe paidbe paidThousands
Thousandsof yenof yenRemuneration based on Articles ofIncorporation or resolution of
7
255,050
3
14,400shareholders’ meeting
Bonuses by appropriation of
5
83,0003
2,000
retained earnings
Retirement benefits based on
resolution of shareholders’−−−−meeting
Total
338,050
16,400(Note) The number of directors as of the end of the fiscal year was seven.

Total
No. ofpeople to Amountbe paidThousandsof yen10

269,450

885,000−−354,450

Details of remuneration for audits
Remuneration paid to independent auditorsa) Aggregate amount of remuneration to be paid by the Company and its subsidiaries, etc., to independent
auditors¥29,398 thousandb) Of the total in a), the aggregate amount of remuneration to be paid as consideration for audit
certification¥21,400 thousandc) Of the total in b), the amount of remuneration to be paid by the Company as auditors’ fees toindependent auditors¥21,400 thousand(Note) Under the auditing contract between the Company and its independent auditors, the amount of
remuneration for audits pursuant to the Law for Special Exceptions to the Commercial Codeconcerning Audit, etc., of Joint Stock Corporations and the amounts of remuneration for audits
pursuant to the Securities and Exchange Law are not demarcated and cannot practically bedemarcated. Therefore, the amount in c) above is the aggregate of these amounts.

(3)

7.

Outline of personnel relationships, capital relationships, business relationships or other relationships ofbeneficial interest between the Company and outside directors and outside statutory auditors
The one outside director held 800 shares in the Company as of the end of the fiscal year under review, while
the one outside statutory auditor held 50 shares. There are no relationships of beneficial interest between these
two and the Company.
Matters relating to relationships with related parties (parent company, etc.)
Not applicable, because there is no company with a majority stake in the Company, including the parent
company.

8.

Other important matters for company management
Not applicable.

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3.

Operating Results and Financial Position

1.

Operating results(1)

Consolidated results for the fiscal year ended March 31, 2005
During the fiscal year, the Japanese economy, which bottomed out in January 2002, continued to grow.
Nevertheless, rising crude oil and other commodity prices, plus global concerns about terrorism, have cast a
cloud of uncertainty over some areas of the economy. Also, the hotter than normal summer in 2004, thefrequent typhoons and the major earthquakes that struck Niigata dampened personal consumption in various
ways.
In our main business sector of pachinko/pachislot machines, some regulations governing
pachinko/pachislot machines were amended, concurrent with the amendments to the laws governing theentertainment industry in July 2004.
As a result of the new regulations, it became possible to provide many different types ofpachinko/pachislot machines within the pachinko segment. Following this, since early November last year,
each maker has launched machines with larger liquid crystal and better quality displays, which aggressively
incorporate advanced technologies, and those with high entertainment value featuring popular characters to
respond to the needs of pachinko fans, thereby leading to a favorable reception by users.
As for pachislot machines, as of May 12, 2005, there are no new machines conforming to the new
regulations that passed the type approval tests by the Security Electronics and Communications Technology
Association. However, for the time being, as each maker has many machine types that can be sold conforming
to the old regulations, it is deemed that, through efficient use of them, makers and hall operators can maintainstable pachislot business. Pachislot machines have more freedom in their casing design, as there are no
physical restrictions in terms of pin alignment like in pachinko machines, and are expected to have larger
liquid crystal displays and better quality screens, and to push the entertainment forward by adopting famous
characters to respond to the strict regulations limiting speculative aspects. As a result, we believe it isinevitable that pachinko and pachislot will undergo unprecedented entertainment competition.
In such an environment, as far as pachinko machine sales are concerned, CR Neon Genesis Evangelion,
the first machine to come out of the full-fledged collaboration with Bisty Co., Ltd., has attracted animationfans as the new pachinko fans, and has gained a warm reception from the market, enjoying an exceptionallylong run. With regard to pachislot machine sales, Onimusha 3, which is highly popular as a new technology
machine, set an all-time record for orders. However, a portion of the delivery has been carried over to thefiscal year ending March 2006, as some materials could not be procured in time.
As a result, net sales rose by 23.3% year-on-year to ¥81,658,011 thousand, operating profit increased by
2.2% to ¥12,480,571 thousand, and net income was up 4.6% to ¥6,926,791 thousand.

(2)

Outline by business segment
In the fiscal year under review, sales of pachinko/pachislot machines rose by 27.2% year-on-year to¥78,336,175 thousand, and sales of other incidental businesses fell by 28.3% to ¥3,321,835 thousand.

(3)

Forecasts for the fiscal year ending March 31, 2006
The “content provider” strategy, a core competitive strategy of the Company, made steady progress in the year
under review. We will put greater emphasis on this strategy for greater profit in a bigger market. To that end,
we will accelerate the groundwork for evolving this strategy into the “content integrator” strategy, thestrengthening of internal systems, and the forming of business alliances, including M&A.
For next fiscal year, we will position the “content integrator” strategy that covers the “content provider”
strategy at the core for strengthening our competitiveness, and strive to improve performance, raise corporate
value, and increase shareholder value.
In light of these efforts to expand business, for the fiscal year ending March 2006, net sales are expected
to rise 16.2% year-on-year to ¥94,900 million. The Company also forecast an operating profit of ¥14,700
million, up 17.8%, and net income of ¥7,700 million, up 11.2%.

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2.

Financial position
Cash flows
At the end of the fiscal year under review, cash and cash equivalents amounted to ¥13,326,256 thousand, a
year-on-year increase by ¥7,888,497 thousand. Factors contributing to this result included a 3% increase inincome before income taxes and minority interest to ¥12,560,847 thousand, and proceeds from the issuance ofcommon stock in June 2004, which offset an increase in notes and accounts receivable-trade, a decrease in notes
and accounts payable-trade, expenditure on establishing or relocating branch offices, and an increase in expenses
related to merchandizing rights (copyrights).
Cash flows from operating activities
Net cash provided by operating activities amounted to ¥2,965,857 thousand. Significant items included anincrease in income before income taxes and minority interest to ¥12,560,847 thousand, a ¥18,363,214 thousand
increase in notes and accounts receivable-trade, a ¥15,920,750 thousand decrease in notes and accounts
payable–trade, a ¥1,592,677 thousand increase in merchandizing right advances, a ¥1,216,687 thousand increasein deposits held, and income taxes paid of ¥6,829,288 thousand.
Cash flows from investing activities
Net cash used in investing activities came to ¥5,257,154 thousand. This was mainly due to purchases of property
and equipment totaling ¥2,245,700 thousand, particularly purchases of land and buildings as well as expenditure
for moving the head office and branches, and purchases of investment securities of ¥3,182,935 thousand.
Cash flows from financing activities
Net cash provided by financing activities amounted to ¥10,177,881 thousand. This was primarily attributable toproceeds from issuance of common stock of ¥13,100,659 thousand, and a net decrease in short-term borrowingsof ¥2,570,000 thousand.

Equity ratio
Equity ratio at market value
Debt redemption years
Interest coverage ratio

Year ended
March 31, 2002
(Fiscal 2001)
20.8%−

Year ended
March 31, 2003
(Fiscal 2002)
51.2%
88.8%

0.9 years
53.6 times

68.8 times−

Year ended
March 31, 2004
(Fiscal 2003)
39.1%
491.7%
3.5 years
271.0 times

Year ended
March 31, 2005
(Fiscal 2004)
46.0%
250.5%
0.7 years
210.3 times

1. Equity ratio: Shareholders’ equity/Total assets
2. Equity ratio at market value: Market capitalization (based on closing share price at end of fiscal year)/Total
assets3. Debt redemption years: Interest bearing debt/Net cash provided by operating activities
4. Interest coverage ratio: Net cash provided by operating activities/Interest expense(Note) 1. Consolidated financial statements have been prepared since fiscal 2002 (ended March 31, 2003). For
fiscal 2002, 2003 and 2004, calculations are based on the figures from the consolidated financial
statements. For fiscal 2001, calculations are based on the figures from the non-consolidated financial
statements.
2. The Company listed its shares on the JASDAQ market on March 19, 2003, so the shares had nomarket value prior to that date.

- 11 -

最終更新日時：6/29/2005 2:57 PM 最終印刷日時：6/29/2005 2:57 PM

4.
Planned and actual application of funds raised through public share offering at market price
The plan for utilizing funds, totaling ¥13,100 million, raised through a public share offering at market price conductedon June 15, 2004, shall extend over two fiscal years: fiscal 2004 (ended March 31, 2005) through fiscal 2005 (ending
March 31, 2006). It is planned to apply those funds as follows: ¥6,000 million for the purchase of merchandizing rights(copyrights), ¥4,000 million for capital spending, and the remainder for investments into subsidiaries and otherapplications.
Utilization of funds during fiscal 2004 proceeded in line with the plan.

- 12 -

最終更新日時：6/22/2005 4:54 PM 最終印刷日時：6/29/2005 2:58 PM

5.
1.

Consolidated Financial Statements
Consolidated Balance Sheets(Thousands of yen, %)PeriodItem

Fiscal year ended March 31,
2004(As of March 31, 2004)
Amount% totalFiscal year ended March 31,
2005(As of March 31, 2005)
Amount% total5,437,758

13,326,256

7,888,497

18,865,138

37,667,536

18,802,397

AssetsI. Current assets
Cash and cash equivalents
Notes and accounts receivable tradeMarketable securities
Inventories
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets

Year-on-yearchangeAmount

−

5,000

5,000

256,541

480,171

223,629

371,033

267,886(103,147)

3,309,085

5,340,996

2,031,911(86,953)
28,152,604(87,140)
75.9

57,000,705

(187)
78.5

28,848,101

II. Fixed assets
1. Tangible fixed assets
Buildings and structures
Accumulated depreciation
VehiclesAccumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land
Construction in progress
Total tangible fixed assets
2. Intangible fixed assets
SoftwareExcess of net assets acquired
over cost
Other intangible fixed assets
Total intangible fixed assets
3. Investments and other assets
Investment securities
Long-term loan receivables
Deposits
OthersDeferred tax assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

1,227,337(309,116)

2,803,718
918,221(416,997)

71,385(47,744)

23,641(44,284)

850,804(325,049)

1,468,499

29,506

5,865

843,004

317,249

1,473,323
525,754(630,319)

1,547,993

1,547,993−

335,744

50,353(285,390)

3,351,355

9.0

4,857,578

6.7

1,506,223

236,838

353,136

116,298−

666,791

666,791

147,746384,585*12,386,720

73,791

686,438
1.0

1,706,367

538,692
2.4

1,321,782

2,824,195

5,545,899

2,721,703

107,599382,300

274,700

1,661,745

2,201,142

539,397503,240

568,889

65,649222,779

500,672

277,893(92,265)
5,227,294(179,008)(86,742)14.1

9,019,895

8,963,234

24.1

15,583,841

21.5

6,620,606

37,115,839

100.0

72,584,547

100.0

35,468,708- 13 -

12.4

3,792,601

最終更新日時：6/22/2005 4:54 PM 最終印刷日時：6/29/2005 2:58 PM(Thousands of yen, %)PeriodItem

Fiscal year ended March 31,
2004

Fiscal year ended March 31,
2005(As of March 31, 2004)(As of March 31, 2005)

AmountLiabilities
I. Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-term debt
Accrued income taxes
Accrued bonuses
Other current liabilities
Total current liabilities% totalAmount% totalYear-on-yearchangeAmount11,645,579

27,479,525

15,833,946

3,000,000

656,600(2,343,400)−

341,768

341,768

3,960,019

2,685,881(1,274,137)

18,60020,0001,400

1,930,638

2,126,332

195,694

20,554,837

55.4

33,310,107

45.9

12,755,270

II. Long-term liabilities
Corporate bonds
Long-term borrowings
Retirement benefit provisions
Reserve for retirement benefits for
directors and statutory auditors
Deposits received
Excess of net assets acquired
over cost
Other long-term liabilities
Total long-term liabilities
Total liabilities

500,000

500,000

593,165

593,165

120,815

139,140

18,325

699,800

568,700(131,100)

1,161,922

2,378,609

1,216,687

1,602

−

(1,602)51,065

Minority interest
Minority interest in consolidated
subsidiaries
Shareholders’ equity
I. Common stock
II. Capital surplus
III. Retained earnings
IV. Unrealized holding gain on
available-for-sale securities
Total shareholders’ equity
Total liabilities, minority interest,and shareholders’ equity

−
−

*2

5,893

(45,171)

2,035,204

5.5

4,185,508

5.8

2,150,304

22,590,042

60.9

37,495,616

51.7

14,905,574

17,9760.0

1,662,657

2.3

1,644,680

1,295,500

3.5

7,948,036

10.9

6,652,536

1,342,429

3.6

7,994,953

11.0

6,652,524

11,631,695

31.3

17,133,487

23.6

5,501,791

238,194

0.7

349,7960.5

111,601

14,507,820

39.1

33,426,273

46.0

18,918,453

37,115,839

100.0

72,584,547

100.0

35,468,708- 14 -

最終更新日時：6/22/2005 4:54 PM 最終印刷日時：6/29/2005 2:58 PM

2.

Consolidated Statements of Income(Thousands of yen, %)ItemFiscal year ended March 31,
Period2004(April 1, 2003− March 31, 2004)
Amount% salesI. Net sales
II. Cost of sales
Gross profit
III. Selling, general andadministrative expenses
Advertising expenses
Salaries
Provision for accrued bonuses
Outsourcing expenses
Travel expenses
Depreciation and amortization
Rents
Retirement benefit expenses
Provision to reserve forretirement benefits for directors
and statutory auditors
Provision to allowance for
doubtful accounts
OthersOperating income
IV. Non-operating income
Interest income
Dividend income
Discounts on purchases
Lease income
Amortization of excess of net
assets acquired over cost
Equity in earnings of affiliates
OthersV. Non-operating costs
Interest expense
Issuance of corporate bonds
Issuance of new stock
Capital increase-related expense
Lease expenses
OthersOrdinary income
VI. Extraordinary income
Gain from liquidation ofguarantees
Gain on sale of investment
securities
Gain on sale of fixed assets
Gain from investment inanonymous association
Reversal of reserve forretirement benefits for directors
and statutory auditors
Gain from changes in equity ofaffiliates
VII. Extraordinary loss
Loss on sale of fixed-assets
Loss on disposal of fixed-assets
Valuation loss on investment
securities
Valuation loss on equity
investment
Income before income taxes andminority interest
Current income taxes
Deferred income taxes
Minority interest
Net income

66,211,589
44,633,469
21,578,120

100.0
67.4
32.6

1,422,609
2,759,504
18,600495,431463,518
257,393
666,555
20,2492,873,523
3,535,458
20,000745,562503,664
468,471
835,296
26,668148,500−

79,0933,380,085

14.7
17.9

−
1,481

1,481
421,667
17,804

369,784

0.6

2,197

−
2,290

−

*2
*3

3,626,259

292,330
28,723

26,853
12,209,509

0.0
18.4

14,783
10,75091,906112,494
16,84825,81917,4002,600−

162,685

6,447

4,726

22,16645,171−

131,100−

46,014

0.1

−

610

23,735

1,666
89,416−

175,534

42,587

5,768,861(211,184)

100.0
69.7
30.3

15,446,422
12,272,145
3,174,277

12,655,173
12,097,224

15.5
14.8

2,943,631
230,645655,950

0.8

286,166

272,60212,480,571

0.3
15.3

245,749
271,062

346,8930.4

300,879

266,6180.3

200,295

12,560,847

15.4

371,647

5,621,553
12,502
6,926,791

6.9
0.0
8.5

63,876
1,232
306,537

7,135
10,021
159,760
38,07934,90817,137
5,228

81,658,011
56,905,614
24,752,397

20,2689,711,541
11,866,578

6,060
6,280

*1

Fiscal year ended March 31,
Year-on-year
2005change(April 1, 2004 − March 31, 2005)
Amount% salesAmount

66,3220.1

12,189,200

18.4

5,557,676
11,2696,620,253- 15 -

8.4
0.0
10.0

−

5,403,841
217,712

最終更新日時：6/22/2005 4:54 PM 最終印刷日時：6/29/2005 2:58 PM

3.

Consolidated Statements of Shareholders’ Equity(Thousands of yen)

Period Fiscal year ended March 31, 2004

Fiscal year ended March 31, 2005

(April 1, 2003 − March 31, 2004)
Amount(April 1, 2004 − March 31, 2005)
Amount

1,342,429

1,342,429

Item

Capital surplus
I. Capital surplus at beginning of period
II. Increase in capital surplus
1. Capital increase from issue of new stock
III. Balance of capital surplus at end of period
Retained earnings
I. Retained earnings at beginning of period
II. Increase in retained earnings
Net income
III. Decrease in retained earnings
1. Cash dividends paid
2. Bonuses to directors and statutory auditors
Decrease due to newly consolidated
3.
subsidiaries
IV. Retained earnings at end of period−

6,620,253

1,342,429

6,652,524
7,994,953

6,060,735

11,631,695−

6,620,253

969,000
77,0003,293

6,926,791

6,926,791

1,340,000
85,0001,049,293
11,631,695- 16 -

6,652,524−

1,425,000
17,133,487

最終更新日時：6/22/2005 4:54 PM 最終印刷日時：6/29/2005 2:58 PM

4.

Consolidated Statements of Cash Flows(Thousands of yen)

Item

Fiscal year ended March
31, 2004
Period(April 1, 2003 − March
31, 2004)
AmountFiscal year ended March
31, 2005(April 1, 2004 − March
31, 2005)

Year-on-yearchangeAmountAmountI.

Cash flows from operating activities

1.

Income before income taxes and minority interest

12,189,200

12,560,847

371,6472.

Depreciation and amortization
Amortization of excess of net assets acquired overcost
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in accrued bonuses

317,565568,604

251,039(1,481)(1,481)064,5402,729(61,810)

600

1,400

800

14,816

9,110(5,705)130,800(131,100)(261,900)

8.

Increase (decrease) in retirement benefit provisions
Increase (decrease) in reserve for retirement
benefits for directors and statutory auditors
Interest and dividend income

9.

Discounts on purchases

10.

Equity in earnings of affiliates

11.

Interest expense

12.

Corporate bond issuance expense

13.

Stock issuance expense

14.

Capital increase-related expense

15.

Gain on sale of investment securities

16.

Gain on sale of fixed assets

17.

Gain from investment in anonymous association

3.
4.
5.
6.
7.

18.

Loss on changes in equity of affiliates

19.

Loss on sale of fixed assets

20.

Loss on disposal of fixed assets

21.

Valuation loss on investment securities

22.

Valuation loss on equity investment
Decrease (increase) in notes and accounts
receivable - trade

23.
24.

(12,340)(17,157)(4,817)−(159,760)(159,760)(292,330)(421,667)(129,337)

2,197

14,783

12,586−−−−−

10,75010,75091,90691,906112,494

112,494(162,685)(162,685)(4,726)(4,726)(22,166)(45,171)(23,005)

−
−

(610)

(610)

1,666

1,666

23,73589,416

65,680−175,534

175,534

42,587−(42,587)(14,546,569)(18,363,214)(3,816,645)

7,919(54,621)(62,540)(1,457,951)(1,592,677)(134,726)
90,15125.

Decrease (increase) in inventories
Decrease (increase) in merchandizing rightadvances

26.

Decrease (increase) in prepaid expenses(55,300)

34,85027.

Decrease (increase) in advance payments(72,860)(74,885)(2,025)

28.

4,168

122,482

118,314(318,724)(415,283)(96,558)(265,576)(10,000)

255,57631.

Decrease (increase) in notes held
Decrease (increase) in non-operating notes
receivable
Decrease (increase) in deposits as security for
dealing
Increase (decrease) in notes and accounts payable

8,823,448

15,920,750

7,097,302

32.

Increase (decrease) in unpaid consumption tax

219,056(269,189)(488,245)

33.

Increase (decrease) in deposits received

83,971

3,529(80,441)

34.

Increase (decrease) in deposits held
Payments of bonuses to directors and statutory
auditors

298,114

1,216,687

918,573(77,000)(85,000)(8,000)

29.
30.

35.
36.
37.

OthersTotal

134,904

641,685506,7815,235,325

9,769,999

4,534,674

Interest and dividends received

33,31939,2485,929

38.

Interest paid

(3,140)(14,103)(10,962)

39.

Income taxes paid
Net cash provided by (used in) operating activities(4,414,311)(6,829,288)(2,414,976)

851,192

2,965,857

2,114,664- 17 -

最終更新日時：6/22/2005 4:54 PM 最終印刷日時：6/29/2005 2:58 PM(Thousands of yen)

Fiscal year ended March
31, 2004
Period(April 1, 2003 − March
31, 2004)

Item

AmountII.

Cash flows from investing activities

1.

Purchases of property and equipment

2.

Sale of property and equipment

3.

Fiscal year ended March
31, 2005(April 1, 2004 − March
31, 2005)

Year-on-yearchangeAmountAmount(1,520,955)(2,245,700)

6,964

38,761(724,745)
31,797Purchases of intangible fixed assets(287,452)(629,298)(341,846)

4.

Purchases of investment securities(1,356,059)(3,182,935)(1,826,876)

5.

Sale of investment securities−

238,024

238,024

6.

Redemption of investment securities

200,700−(200,700)

7.

Expenditures for acquiring shares in affiliates

8.

10.

Expenditures for capital procurement
Proceeds from acquiring newly consolidated
subsidiaries *2
Expenditure for loans

11.

Proceeds from repayment of loans

12.

−(10,000)(10,000)(1,050)

−

1,050

−

896,150

896,150(461,020)(24,000)

437,020

108,250

83,158(25,092)

Refund of deposits and guarantees

74,495

103,463

28,968

13.

Payment of deposits and guarantees(278,753)(466,414)(187,660)

14.

Payment for long-term prepaid expenses(65,304)(33,727)

31,576

15.

Cancellation of insurance policies

422,076−(422,076)

16.

Payments to insurance reserve9.

17. Other
Net cash provided by (used in) investing activities
III.

Cash flows from financing activities

1.

Increase (decrease) in short-term borrowings

2.

Proceeds from long-term borrowings

3.

Repayment of long-term borrowings

4.

Proceeds from issuance of corporate bonds

5.

Payment of long-term borrowings

6.

Proceeds from issuance of new stock

7. Cash dividends paid
Net cash provided by (used in) financing activities
IV.

Effect of exchange rate changes on cash and cash
equivalents(1,092)(1,092)−(30,993)(23,543)

7,450(3,190,193)(5,257,154)(2,066,961)

3,000,000(2,570,000)(5,570,000)−−−

520,000

520,000(27,000)(27,000)

489,250

489,250(3,790)

−

3,790

−

13,100,659

13,100,659(966,210)(1,335,027)(368,817)

2,029,999

10,177,881

8,147,881(1,892)

1,913

3,806

V.

Increase (decrease) in cash and cash equivalents(310,893)

7,888,497

8,199,390

VI.

Cash and cash equivalents at beginning of period

5,739,061

5,437,758(301,303)

VII.

Increase (decrease) in cash and cash equivalents
due to change in scope of consolidation

9,590

−

(9,590)VIII.

Cash and cash equivalents at end of period

5,437,758

13,326,256

7,888,497- 18 -

最終更新日時：6/29/2005 3:01 PM 最終印刷日時：6/29/2005 3:01 PM

Significant Accounting Policies for the Preparation of Consolidated Financial Statements
Item
1. Scope of consolidation

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)(1) Number of consolidated subsidiaries: 5
Names of consolidated subsidiaries:
Professional Management Co., Ltd.
Fields Jr. Corporation
Total Workout Corporation
White Trash Charms Japan Co., Ltd.
Digital Lord Corporation

Note that, given its significance, Digital Lord
Corporation has been consolidated, beginningwith this fiscal year.

(2) Names of significant non-consolidated
subsidiaries:
Database Co., Ltd.
APE Inc.

2. Application of equity method

Reason for exclusion from the scope of
consolidation:
Non-consolidated subsidiaries have been left
out of consolidation due to their small size,with none of their total assets, net sales, net
income (proportionate to equity stakes held)
and retained earnings (proportionate to equity
stakes held) having a material effect on the
consolidated financial statements.
(1) Number of equity-method affiliates: 1
Rodeo Corporation- 19 -

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)(1) Number of consolidated subsidiaries: 9
Names of consolidated subsidiaries:
Professional Management Co., Ltd.
Fields Jr. Corporation
Total Workout Corporation
White Trash Charms Japan Co., Ltd.
Digital Lord Corporation
D3 Publisher Inc.
Heart-line Inc.
Entertainment Software Publishing Inc.
D3 Publisher of America, Inc.
D3 Publisher Inc., which was an affiliate notaccounted for under the equity method, hasbeen consolidated, as a result of theCompany’s acquiring additional shares in D3
Publisher. Concurrently, Heart-line Inc.,Entertainment Software Publishing Inc., andD3 Publisher of America, Inc., all consolidated
subsidiaries of D3 Publisher Inc., have been
consolidated.
Since D3 Publisher Inc., Heart-line Inc.,Entertainment Software Publishing Inc., andD3 Publisher of America, Inc. are deemed tohave come under the control of the Company
at the end of the current fiscal year, they are
consolidated only in the balance sheet.
Meanwhile, given its significance, D3
Publisher Inc., which was an affiliate notaccounted for under the equity method in theprevious fiscal year, became an equity-method
affiliate in this fiscal year, and the Company’s
equity in earnings of D3 Publisher is reflectedin the consolidated financial statements.
(2) Names of significant non-consolidated
subsidiaries:
Database Co., Ltd.
APE Inc.
D3DB S.r.l.
Reason for exclusion from the scope of
consolidation:
Non-consolidated subsidiaries have been left
out of consolidation due to their small size,with none of their total assets, net sales, net
income (proportionate to the equity stakes held)
and retained earnings (proportionate to equity
stakes held) having a material effect on the
consolidated financial statements.
(1) Number of equity-method affiliates: 3
Rodeo Corporation
Kadokawa Haruki Corporation
3D-AGES Inc.
As a result of acquiring additional shares in D3
Publisher Inc. and converting it into a
subsidiary in the current fiscal year, 3D-AGES
Inc., an affiliate of D3 Publisher Inc., has
become an equity-method affiliate.

最終更新日時：6/29/2005 3:01 PM 最終印刷日時：6/29/2005 3:01 PM

2. Application of equity method

3. Balance sheet dates of
consolidated subsidiaries

4. Accounting standards
1) Valuation standards andmethods for important assets

Previous fiscal year
Fiscal year ended March 31, 2005
(April 1, 2003 − March 31, 2004)(April 1, 2004 − March 31, 2005)(2) Names of non-consolidated subsidiaries and(2)Names of non-consolidated subsidiaries andaffiliates not accounted for under the equity
affiliates not accounted for under the equity
method:method:Database Co., Ltd.
Database Co., Ltd.
APE Inc.
APE Inc.
D3 Publisher Inc.
D3DB S.r.l.
Reason for non-application of the equity method: Reason for non-application of the equity method:
These companies have a negligible impact on
These companies have a negligible impact on
net income (proportionate to equity stakes held)
net income (proportionate to equity stakes held)
and retained earnings (proportionate to theand retained earnings (proportionate to equity
equity stakes held) and have no significance as
stakes held) and have no significance as aa whole, so have been excluded from thewhole, so have been excluded from theapplication of the equity method.
application of the equity method.
Of the consolidated subsidiaries, D3 Publisher
The year-end balance sheet dates ofInc., Heart-line Inc., Entertainment Software
consolidated subsidiaries are identical with theconsolidated year-end balance sheet date.
Publishing Inc., and D3 Publisher of America,
Inc., have October 31 as their year-end balance
sheet date.

(1) Marketable securities
Other marketable securitiesThose with market value:
Stated at market value based on market
price as of the balance sheet date(unrealized gains or losses are directly
charged or credited to shareholders’ equity,with the cost of securities sold determinedby the moving-average method).
Those with no market value:
Stated at cost determined by themoving-average method.
(2) Inventories
Merchandize
Fields Corporation:
Used pachinko/pachislot machines
Stated at cost determined by the specificidentification method.
OthersStated at cost determined by themoving-average method.
Consolidated subsidiaries:
Stated at cost determined by theaverage-cost method.

The financial statements based on theprovisional settlement on March 31 are used in
the preparation of consolidated financial
statements.
(1) Marketable securities
Other marketable securitiesThose with market value:Same as leftThose with no market value:Same as left(2) Inventories
Merchandize
Fields Corporation:
Used pachinko/pachislot machines
Same as left
OthersSame as left
Consolidated subsidiaries:
Same as left
Products
Consolidated subsidiaries:
Stated at cost determined by the first-in
first-out method.
Material in process
Consolidated subsidiaries:
Same as left

2) Depreciation methods forimportant depreciable assets

Material in process
Consolidated subsidiaries:
Stated at cost determined by the specificidentification method.
Supplies
Supplies
Stated at cost determined by the lastSame as left
purchase price method.
(1) Tangible fixed assets(1) Tangible fixed assets
Declining-balance method
Declining-balance method
However, the straight-line method is applied
However, the straight-line method is applied
to buildings (excluding building fixtures)to buildings (excluding building fixtures)acquired after April 1, 1998.
acquired after April 1, 1998.
The estimated useful lives of depreciable
The estimated useful lives of depreciable
assets are as follows.
assets are as follows.
Buildings: 6-50 years
Buildings: 6-50 years
Structures: 10-27 years
Structures: 10-50 years
Vehicles: 4-6 years
Vehicles: 4-6 years
Tools and equipment: 3-20 years
Tools and equipment: 3-20 years- 20 -

最終更新日時：6/29/2005 3:01 PM 最終印刷日時：6/29/2005 3:01 PM

2) Depreciation methods forimportant depreciable assets

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)(2) Intangible fixed assets
Straight-line method
The straight-line method is applied tosoftware for company use, based on its
useful life within the company (five years).

(3) Long-term prepaid expenses
Straight-line method
3) Treatment of important deferred (1) New stock issuance expenses
These expenses are charged in full at the time
charges
they are incurred.

(2)4) Accounting standards forimportant reserves(1) Allowance for doubtful accounts
To provide for losses from doubtful accounts,
allowances for ordinary receivables areprovided using a rate determined by pastcollection experience, and allowances for
specific debts considered doubtful areaccounted for by calculating the estimatedamounts deemed uncollectible after
individually reviewing collectibility of thedebts.
(2) Accrued bonuses
To provide for employee bonuses, theCompany recognizes the amounts out of the
projected bonus payments to be allocated to
the fiscal year.

- 21 -

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)(2) Intangible fixed assets
Straight-line method
The straight-line method is applied tosoftware for company use, based on its
useful life within the company (five years).
Software for sale by consolidated
subsidiaries is depreciated at the
depreciation rate determined by theCompany over the estimated payback period(12 months for games software, 36 months
for others).
(3) Long-term prepaid expenses
Same as left
(1) New stock issuance expenses
These expenses are charged in full at the timethey are incurred.
The issuance of 12,000 new shares of common
stock on June 15, 2004, through public
offering was carried out by the underwriting
companies purchasing and underwriting theshares at ¥1,108,755 per share, which differedfrom the share issue price of ¥1,161,000—theoffering price paid by ordinary investors.
The gross spread or differential between thetwo prices was, in this case, ¥626,940
thousand—the de facto underwriting
commission. If, as was previously the case, theunderwriting and share issue prices were thesame, the underwriting commission would
have been charged as new stock issuance
expenses.
Consequently, compared to the previous
method of accounting for underwriting
commission, new stock issuance expenses andthe total of common stock and capital surplus
are each reduced by ¥626,940 thousand, while
ordinary income and income before income
taxes and minority interest are each increasedby the same amount.
(2) Corporate bond issuance expenses
These expenses are charged in full at the timethey are incurred.
(1) Allowance for doubtful accounts
Same as left

(2) Accrued bonuses
Same as left

最終更新日時：6/29/2005 3:01 PM 最終印刷日時：6/29/2005 3:01 PM

Fiscal year ended March 31, 2004
Fiscal year ended March 31, 2005
(April 1, 2003 − March 31, 2004)(April 1, 2004 − March 31, 2005)(3) Retirement benefit provisions4) Accounting standards for(3) Retirement benefit provisions
To provide for employees’ retirement benefits,
important reserves
To provide for employees’ retirement benefits,
the Company and some of the consolidated
the Company, on the basis of projected benefit
subsidiaries, on the basis of projected benefit
obligations as of the end of the fiscal year,
obligations as of the end of the fiscal year,
recognizes benefit obligations accrued as ofrecognize benefit obligations accrued as of thethe end of fiscal year.
end of the fiscal year.
Also, actuarial differences are proportionately
Also, actuarial differences are proportionately
amortized by the straight-line method over aamortized by the straight-line method over a
fixed number of years (five years) within the
fixed number of years (five years) within the
average remaining period of service of
average remaining period of service of
employees as of the time of origination of such
employees as of the time of origination of suchdifferences.
differences.
Amortization amounts are expensed beginning
Amortization amounts are expensed beginningwith the fiscal year following that in which thewith the fiscal year following that in which thedifference originated.
difference originated.
(4) Reserve for retirement benefits for directors(4) Reserve for retirement benefits for directors
and statutory auditorsand statutory auditors
To provide for directors’ retirement bonuses,
Same as left
the Company, in accordance with the internal
regulations, recognizes the amounts to be paid
at the end of the fiscal year.
5) Translation of important
Foreign currency receivables and payables areforeign- currencytranslated into Japanese yen using the spot
denominated assets andcurrency exchange rate on the balance sheet
liabilities into Japanese yen
date, and translation differences are recorded
as gains or losses.
6) Treatment of important lease
Finance lease transactions, other than thoseSame as lefttransactions
where the ownership of the leased assets isdeemed to be transferred to the lessee, areaccounted for as ordinary operating leasetransactions.
(1) Method for hedge accounting7) Important hedge accounting
Special accounting methods are adopted formethods
interest rate swaps that satisfy therequirements for hedge accounting at some of
the consolidated subsidiaries.
(2) Means and scope of hedging
Means of hedging
Interest rate swap transactions
Scope of hedging
Interest on borrowings(3) Hedge policy
At some of the consolidated subsidiaries, ahedge policy is implemented to avoid any
impact of fluctuations in market interest rates
on fund raising costs (interest expense).
(4) Method for assessing hedging effectivenessAs the interest rate swap transactions are
deemed to come under the requirements for
special accounting methods, that becomes thecriterion for assessing the hedging as effective.
(5) Other risk management methods
The management division bears the
responsibility for concluding contracts relating
to hedge accounting at some of theconsolidated subsidiaries. There are no
particular stipulations relating to suchtransactions, but these are controlled inaccordance with the office regulations
concerning authority.
Accounting for consumption tax8) Other significant standards for
Accounting for consumption tax
financial statements
Consumption tax is accounted for by theSame as left
tax-excluded method.
Same as left
5. Valuation of assets and liabilities
The full fair value method is adopted to valueof consolidated subsidiaries
assets and liabilities of consolidated
subsidiaries.
Same as left
6. Amortization of excess of net
Excess of net assets acquired over cost is
assets acquired over costamortized evenly over five years.

- 22 -

最終更新日時：6/29/2005 3:01 PM 最終印刷日時：6/29/2005 3:01 PM

7. Treatment of items forappropriation of retained
earnings
8. Scope of funds in consolidated
statements of cash flows

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
The methods of appropriation of retained
earnings and loss disposition are determined inaccordance with the appropriation of retained
earnings determined during the consolidated
fiscal year.
Funds include cash on hand, demand deposits,
and investments maturing within three months
from acquisition that are highly liquid, easy toconvert into cash, and exposed to low pricerisk.

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Same as left

Same as left

Changes in accounting treatment
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)(Change in accounting policies for sales and cost of sales)
For distribution sales of pachinko/pachislot machines, accounting
recognition previously followed delivery to users and completionof installation. Beginning this fiscal year, this method has beenchanged to the effect that accounting recognition follows
shipment. This change became possible because the delivery ofmachines to users is stated as the time of shipment in the sales
agreements, and because shipping data can be quickly grasped due
to improvements in computer systems.
Compared with the previous method, the change resulted in an
increase of ¥5,956,372 thousand in net sales, an increase of¥3,916,219 thousand in cost of sales, and an increase of¥2,040,152 thousand each in operating income, ordinary income,and income before income taxes and minority interest.

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)

Change in disclosure methods
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)(Consolidated statements of cash flows）
Until the end of the previous fiscal year, decrease (increase) inmerchandizing right advances was included in “increase (decrease)in accounts payable-trade” under cash flows from operating
activities. Owing to an increase in the financial importance of this
item, it is now presented as a separate item. For the previous fiscal
year, the increase in merchandizing right advances amounted to¥262,125 thousand.

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)

Additional information
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Accompanying the promulgation of the Law for Partial Amendment
to the Local Tax Law, etc. (Law No. 9 of 2003) on March 31, 2003,
and the consequent introduction of the pro forma standard taxation
system, which applies to fiscal years commencing on or after April
1, 2004, from the current fiscal year, the Company includes charges
for the value-added and capital portions of corporate enterprise tax
in selling, general and administrative expenses in accordance with
the Practical Procedures for Indication of Pro Forma Taxation in
Income Statement concerning Corporate Enterprise Tax(Accounting Standards Board of Japan, Accounting Practices Report
No. 12 dated February 13, 2004).
As a result, SG&A expenses increased by ¥108,422 thousand, andoperating income, ordinary income, and income before income
taxes and minority interest decreased by ¥108,422 thousand.

- 23 -

最終更新日時：6/29/2005 3:01 PM 最終印刷日時：6/29/2005 3:01 PM

Notes(Consolidated Balance Sheets)
Fiscal year ended March 31, 2004
(As of March 31, 2004)

Fiscal year ended March 31, 2005
(As of March 31, 2005)*1. Items for non-consolidated subsidiaries and affiliates are as
follows.
Investment securities (shares)¥2,069,975 thousand*1. Items for non-consolidated subsidiaries and affiliates are as
follows.
Investment securities (shares)¥3,554,981 thousand*2. Number of shares outstanding*2. Number of shares outstanding

161,500 shares

347,000 shares

3. Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on an agency
basis for pachinko/pachislot machine makers.

3. Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on an agency
basis for pachinko/pachislot machine makers.

Gaia Co., Ltd.
K.K. Sunvic
Asahi Shoji K.K.
Y.K. Sanei
Gunkay Co., Ltd.
Sankei Shoji K.K.
K.K. Vivre
K.K. Toei Kanko
Meihou Jitsugyo K.K.
Matsuoka Shoji K.K.
Others 222
Total¥28,059 thousand¥26,264 thousand¥24,688 thousand¥22,194 thousand¥21,429 thousand¥20,848 thousand¥16,121 thousand¥15,910 thousand¥15,821 thousand¥15,435 thousand¥537,721 thousand¥744,496 thousand

Asahi Shoji K.K.
Daiei Kanko K.K.
Meiplanet K.K.
Kouki Co., Ltd.
Iwamoto Development Co., Ltd.
BOSS Co., Ltd.
Niimi Co., Ltd.
Y.K. Daiko
The City Co., Ltd
K.K. Toei Kanko
Others 176
Total

4. Notes receivable endorsed¥591,657 thousand

4.

5. Overdraft agreements and loan commitments
To efficiently raise working capital, the Company has
concluded overdraft and loan commitment agreements with six
banks. As of the end of the fiscal year, unutilized amounts
under these agreements were as follows:
Overdraft limit plus total
amount of loan commitments¥6,000,000 thousand
Borrowings outstanding¥3,000,000 thousand
Difference¥3,000,000 thousand¥59,985 thousand¥58,480 thousand¥33,698 thousand¥30,571 thousand¥28,551 thousand¥24,910 thousand¥23,739 thousand¥23,293 thousand¥19,622 thousand¥18,677 thousand¥475,519 thousand¥797,050 thousand

5. Overdraft agreements and loan commitments
To efficiently raise working capital, the Company has
concluded overdraft and loan commitment agreements withthree banks. As of the end of the fiscal year, unutilized
amounts under these agreements were as follows:
Overdraft limit plus total
amount of loan commitments¥4,310,000 thousand
Borrowings outstanding¥630,000 thousand
Difference¥3,680,000 thousand(Consolidated Statements of Income)Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)*1. Gain on sale of fixed assets arose from sale of land.
*2.
____________*3. Details of loss on disposal of fixed assets are as follows:
Buildings and structures¥6,422 thousand
Vehicles¥2,680 thousand
Tools, furniture and fixtures¥13,855 thousand
Long-term prepaid expenses¥777 thousand
Total¥23,735 thousand

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)*1. Gain on sale of fixed assets arose from sale of vehicles.
*2. Loss on sale of fixed assets arose from sale of tools, furnitureand fixtures.
*3. Details of loss on disposal of fixed assets are as follows:
Buildings and structures¥54,837 thousand
Vehicles¥29 thousand
Tools, furniture and fixtures¥20,961 thousand
Long-term prepaid expenses¥361 thousand
Software¥13,151 thousand
Other intangible fixed assets¥74 thousand
Total¥89,416 thousand- 24 -

最終更新日時：6/29/2005 3:01 PM 最終印刷日時：6/29/2005 3:01 PM(Consolidated Statements of Cash Flows)
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
1. Relationship between cash and cash equivalents as of the endof the fiscal year and cash amounts stated on the consolidatedbalance sheets(As of March 31, 2004)
Cash and deposit accounts¥5,437,758 thousand
Cash and cash equivalents¥5,437,758 thousand

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
1. Relationship between cash and cash equivalents as of the endof the fiscal year and cash amounts stated on the consolidatedbalance sheets(As of March 31, 2005)
Cash and deposit accounts¥13,326,256 thousand
Cash and cash equivalents¥13,326,256 thousand*2.

*2. Details of assets and liabilities of companies that have been
newly consolidated through an acquisition of shares
Details of the assets and liabilities at the time when
consolidation started concurrent with coming under the scopeof consolidation through the additional acquisition of shares,
and the relationship between the acquisition cost of the sharesand the income from acquisition (net amount) are as follows.
D3 Publisher Inc. and its three subsidiaries(As of March 31, 2005)
Current assets¥3,715,900 thousand
Fixed assets¥1,113,546 thousand
Excess of net assets acquired over cost ¥446,834 thousand
Current liabilities(¥784,740 thousand)Long-term liabilities(¥217,380 thousand yen)
Minority interest in consolidated subsidiaries(¥1,632,177 thousand)Acquisition cost
¥2,641,982 thousand
Book value after application of equity method at end of fiscal
year¥854,882 thousand
Less: acquisition cost for current fiscal year
¥1,787,100 thousand
Cash and cash equivalents(¥2,683,250 thousand)Less: income from acquisition (net amount)(¥896,150 thousand)- 25 -

最終更新日時：6/29/2005 3:01 PM 最終印刷日時：6/29/2005 3:01 PM(Leases)
Fiscal year ended March 31, 2004
Fiscal year ended March 31, 2005
(April 1, 2003 − March 31, 2004)(April 1, 2004 − March 31, 2005)
1. Finance lease transactions other than those where the ownership 1. Finance lease transactions other than those where the ownershipof the leased assets is deemed to be transferred to the lesseeof the leased assets is deemed to be transferred to the lessee(1) Acquisition cost, accumulated depreciation, and net book value (1) Acquisition cost, accumulated depreciation, and net book valueof leased assets at the end of the fiscal yearof leased assets at the end of the fiscal year
(Thousands of yen)(Thousands of yen)
Acquisition
Accumulated
Net book
Acquisition
Accumulated
Net book
cost
depreciation
value
cost
depreciation
value
Tools,
219,370
121,037
98,333Tools,
216,628
158,948
57,680
furniture andfurniture andfixturesfixtures
Software
18,851
15,275
3,575
Software
39,7101,441
38,269Total
238,222
136,313
101,908
Total
256,339
160,389
95,949Note that acquisition cost has been calculated by theinterest-inclusive method, since the balance of future minimum
lease payments accounts for a minimal portion of tangible
fixed assets at the end of the fiscal year.
(2) Future minimum lease payments(2)
Due within one year
¥52,170 thousand
Due after one year
¥49,738 thousand
Total¥101,908 thousand

Note that acquisition cost has been calculated by theinterest-inclusive method since the balance of future minimum
lease payments accounts for a minimal portion of tangible
fixed assets at the end of the fiscal year.
Future minimum lease payments
Due within one year
¥41,005 thousand
Due after one year
¥54,944 thousand
Total¥95,949 thousand

Note that future minimum lease payments at the end of the
fiscal year have been calculated by the interest-inclusive
method, since the balance of future minimum lease payments
accounts for a minimal portion of tangible fixed assets at theend of the fiscal year.
(3) Lease payments and depreciation(3)
Lease payments¥58,378 thousand
Depreciation¥58,378 thousand(4) Calculation method for depreciation(4)
Depreciation is based on the straight-line method over the leaseterm of the leased assets with no residual value.
2. Operating lease transactions
2.
Future minimum lease payments
Due within one year
¥1,644 thousand
Due after one year
¥2,466 thousand
Total¥4,110 thousand

Note that future minimum lease payments at the end of the
fiscal year have been calculated by the interest-inclusive
method, since the balance of future minimum lease payments
accounts for a minimal portion of tangible fixed assets at theend of the fiscal year.
Lease payments and depreciation
Lease payments¥50,540 thousand
Depreciation¥50,540 thousand
Calculation method for depreciation
Depreciation is base on the straight-line method over the leaseterm of the leased assets with no residual value.

- 26 -

最終更新日時：6/29/2005 3:03 PM 最終印刷日時：6/29/2005 3:04 PM(Marketable Securities)
1. Other marketable securities with market value

Category

Fiscal year ended March 31, 2004
(As of March 31, 2004)
Carrying value on
Acquisition consolidated balance
Difference
costsheet at balance sheet
date(Thousands of yen)
Fiscal year ended March 31, 2005
(As of March 31, 2005)
Carrying value on
Acquisition consolidated balance
Difference
costsheet at balance sheet
date

Securities whose carrying
value exceeds theiracquisition cost(i)
Shares
88,419538,464
450,044773,307
1,363,984
590,676
(ii)
Bonds
−
−
−
−
−
−
(iii)
Others−−−−−−
Sub total
88,419538,464
450,044773,307
1,363,984
590,676
Securities whose carrying
value does not exceed theiracquisition cost(i)
Shares234,952
186,584(48,367)
734,952
558,616(176,335)
(ii)
Bonds
−
−
−
−
−
−
(iii)
Others−−−−−−
Sub total
234,952
186,584(48,367)
734,952
558,616(176,335)
Total
323,371725,048401,677
1,508,259
1,922,600
414,340(Note) The book values after write-downs are taken as the acquisition costs. The amount for write-downs in the fiscal year ended March 31,
2005, was ¥175,534 thousand.

2. Other marketable securities sold during the fiscal year under review
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)−−−

Category
Proceeds from sales
Gains on sales
Losses on sales(Thousands of yen)
Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
238,024
162,685−

3. Major securities with no available market value(Thousands of yen)
Fiscal year ended March 31, 2004
(As of March 31, 2004)

Category

Fiscal year ended March 31, 2005
(As of March 31, 2005)

Carrying value on consolidated balance sheet Carrying value on consolidated balance sheet
1. Shares of subsidiaries and affiliates
Shares of subsidiaries
Shares of affiliates
2. Other securities
Unlisted shares (excluding shares tradedover the counter)
Unlisted corporate bonds
Unlisted securities with stockacquisition rights

100,000
1,969,975

100,000
3,454,981

23,8805,000
291

68,3175,000−

4. Redemption schedule of other securities with maturities and bonds classified as held-to-maturity
Fiscal year ended March 31, 2004 (April 1, 2003 − March 31, 2004)(Thousands of yen)
1 year or less
1. Bonds(1) Japanese government andlocal government bonds(2) Japanese corporate bonds(3) Others
2. Others
Total

1 to 5 years

5 to 10 years

Over 10 years

−

−

−

−

−
−
−
−

5,000
−
−
5,000

−
−
−
−

−
−
−
−

- 27 -

最終更新日時：6/29/2005 3:03 PM 最終印刷日時：6/29/2005 3:04 PM

Fiscal year ended March 31, 2005 (April 1, 2004 – March 31, 2005)(Thousands of yen)
1 year or less
1. Bonds(1)Japanese government andlocal government bonds(2)Japanese corporate bonds(3)Others
2．Others
Total

1 to 5 years

5 to 10 years

Over 10 years

−

−

−

−

5,000
−
−
5,000

−
−
−
−

−
−
−
−

−
−
−
−

(Derivative Transactions)
1. Matters relating to transaction status
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
As the Company does not enter into any derivative transactions, no
pertinent disclosures have been made.

(1)
(2)

(3)

(4)

(5)

(6)

- 28 -

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Description of transactions
Derivative transactions entered into by some of theconsolidated subsidiaries are interest rate swaps.
Policy for transactions
Derivative transactions entered into by some of theconsolidated subsidiaries are aimed at reducing the risks frominterest rate fluctuations, and it is our policy that they are notfor speculative purposes.
Purposes of transactions
Derivative transactions entered into by some of theconsolidated subsidiaries are aimed at reducing their
exposure to interest rate fluctuations on borrowings.
Hedge accounting is carried out using derivative transactions.
Method for hedge accounting
Special accounting methods are adopted for interest rate
swaps that satisfy the requirements for hedge
accounting.
Means and scope of hedging
Means of hedging: Interest rate swap transactions
Scope of hedging: Interest on borrowings
Hedge policy
At some of the consolidated subsidiaries, a hedge policy
is implemented to mitigate the interest rate risks andimprove the financial account balance, and hedging iscarried out within the scope of the relevant debt.
Method for assessing hedging effectivenessAs the interest rate swap transactions are deemed tocome under the requirements for special accounting
methods, that becomes the criterion for assessing thehedging as effective.
Details of risk relating to transactions
Interest rate swap transactions entered into by some of theconsolidated subsidiaries have risks from fluctuations in themarket interest rates.
Risk management system relating to transactions
The management division bears the responsibility forconcluding contracts relating to hedge accounting at some of
the consolidated subsidiaries. There are no particular
stipulations relating to such transactions, but these arecontrolled in accordance with the office regulations
concerning authority.
Supplementary explanation on matters relating to market
value of transactions
As all derivative transactions entered into by some of theconsolidated subsidiaries are subject to hedge accounting, a
supplementary explanation has been omitted.

最終更新日時：6/29/2005 3:03 PM 最終印刷日時：6/29/2005 3:04 PM

2. Matters relating to market value of transactions
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
As the Company does not enter into any derivative transactions, no
pertinent disclosures have been made.

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
As all derivatives transactions entered into by some of theconsolidated subsidiaries are subject to hedge accounting, thesematters have been omitted.

(Deferred Tax Accounting)
Fiscal year ended March 31, 2004
(As of March 31, 2004)
1. Main components of deferred tax assets and deferred tax
liabilities(Deferred tax assets)
Unrecognized reserve for retirement¥284,818 thousand
benefits for directors and statutory
auditors
Unrecognized accrued enterprise¥323,159 thousand
taxes
Excess reserve for retirement benefits¥47,392 thousand
Excess allowance for doubtful
accounts
Excess reserve for accrued bonuses
Operating loss carryforwards ofsubsidiaries
Others¥7,570 thousand¥255,026 thousand

Sub total deferred tax assets
Valuation allowance¥1,029,607 thousand(¥272,311 thousand)Total deferred tax assets¥757,295 thousand(Deferred tax liabilities)
Unrealized gains (losses) on othermarketable securities
Total deferred tax liabilities
Net deferred tax assets¥23,354 thousand¥88,285 thousand(¥163,482 thousand)(¥163,482 thousand)¥593,812 thousand

Fiscal year ended March 31, 2005
(As of March 31, 2005)
1. Main components of deferred tax assets and deferred tax
liabilities(Deferred tax assets)
Unrecognized reserve for retirement¥231,460 thousand
benefits for directors and statutory
auditors
Unrecognized accrued enterprise¥161,041 thousand
taxes
Excess reserve for retirement¥55,593 thousand
benefits
Excess allowance for doubtful¥55,763 thousandaccounts
Excess reserve for accrued bonuses¥9,096 thousand
Operating loss carryforwards for¥524,700 thousand
subsidiaries
Unrecognized excess depreciation of¥118,720 thousand
softwareExcess amortization of royalty¥268,125 thousand
Unrecognized valuation loss on¥45,195 thousand
investment securities
Unrecognized valuation loss on¥40,608 thousand
merchandize
Others¥63,261 thousand
Sub total deferred tax assets¥1,573,566 thousand
Valuation allowance(¥564,928 thousand)Total deferred tax assets¥1,008,637 thousand(Deferred tax liabilities)
Unrealized gains (losses) on othermarketable securities
Total deferred tax liabilities
Net deferred tax assets(¥240,079 thousand)(¥240,079 thousand)¥768,558 thousand

2. Breakdown of main items causing differences between thestatutory tax rate and the effective rate for income taxes after
applying deferred tax accounting

2. Breakdown of main items causing differences between thestatutory tax rate and the effective rate for income taxes after
applying deferred tax accounting

Statutory tax rate
(Adjustments)
Accumulated earnings tax
Per capita levy of local resident
income tax
Entertainment expenses notdeductible for tax purposes
Non-taxable dividend income
Tax deductions
Others
Effective income tax rate after
application of deferred tax
accounting

Statutory tax rate
(Adjustments)
Accumulated earnings tax
Per capita levy of local resident
income tax
Entertainment expenses not deductible
for tax purposes
Non-taxable dividend income
Tax deductions
Others
Effective income tax rate after
application of deferred tax accounting

42.0 %
3.0 %
0.2 %
0.5 %
(0.1
(0.2
0.2
45.6

%)
%)
%
%

- 29 -

40.7 %
2.4 %
0.3 %
0.8 %
(0.1
(0.1
0.8
44.8

%)
%)
%
%

最終更新日時：6/29/2005 3:03 PM 最終印刷日時：6/29/2005 3:04 PM(Retirement Benefit Provisions)1.

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
Outline of retirement benefit system adopted
The Company has adopted a defined benefit planconsisting of a lump-sum retirement payment.

1.

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Outline of retirement benefit system adopted
The Company has adopted a defined benefit planconsisting of a lump-sum retirement payment.

2.

Details of retirement benefit obligations
Projected benefit obligations(¥ 123,506 thousand)Unrecognized net actuarial loss
¥ 2,691 thousand
Retirement benefit provisions(¥ 120,815 thousand)2.

Details of retirement benefit obligations
Projected benefit obligations(¥ 145,040 thousand)Unrecognized net actuarial loss
¥ 5,899 thousand
Retirement benefit provisions(¥ 139,140 thousand)3.

Details of retirement benefit expenses
Retirement benefit expenses
Service cost
Interest cost
Amortization of net actuarial
loss

3.

Details of retirement benefit expenses
Retirement benefit expenses
Service cost
Interest cost
Amortization of net actuarial loss

¥ 17,166 thousand¥ 2,232 thousand¥ 851 thousand¥ 20,249 thousand

4.

Basis for calculation of retirement benefit obligation
Discount rate:
2.0 ％Periodic allocation method for projected benefits:
Straight-line standard
Years over which actuarial gains or losses are amortized:
Five years from the fiscal year after the year of occurrence¥ 23,904 thousand¥ 2,470 thousand¥ 293 thousand¥ 26,668 thousand4.

- 30 -

Basis for calculation of retirement benefit obligation
Discount rate:
2.0 ％Periodic allocation method for projected benefits:
Straight-line standard
Years over which actuarial gains or losses are amortized:
Five years from the fiscal year after the year of occurrence最終更新日時：6/29/2005 3:03 PM 最終印刷日時：6/29/2005 3:04 PM(Segment Information)
1. Segment information by business category
Fiscal year ended March 31, 2004 (April 1, 2003 − March 31, 2004)
Since sales of pachinko/pachislot machines account for over 90% of net sales and operating income of all segments, no
pertinent disclosures have been made.

Fiscal year ended March 31, 2005 (April 1, 2004 − March 31, 2005)
Since sales of pachinko/pachislot machines account for over 90% of net sales and operating income of all segments, no
pertinent disclosures have been made.

2. Segment information by region
Fiscal year ended March 31, 2004 (April 1, 2003 − March 31, 2004)
Since no branch offices and consolidated subsidiaries exist in countries or regions outside Japan, no pertinent disclosures havebeen made.

Fiscal year ended March 31, 2005 (April 1, 2004 − March 31, 2005)
Since no branch offices and consolidated subsidiaries exist in countries or regions outside Japan, no pertinent disclosures havebeen made.
3. Overseas sales
Fiscal year ended March 31, 2004 (April 1, 2003 − March 31, 2004)
Since no overseas sales exist, no pertinent disclosures have been made.

Fiscal year ended March 31, 2005 (April 1, 2004 − March 31, 2005)
Since no overseas sales exist, no pertinent disclosures have been made.

- 31 -

最終更新日時：6/29/2005 3:03 PM 最終印刷日時：6/29/2005 3:04 PM(Transactions with Related Parties)
Fiscal year ended March 31, 2004(April 1, 2003 – March 31, 2004)
1. Directors and major individual shareholders(Thousands of yen)
Attribute

Name

Location CapitalBusiness or
occupation

Relationship
Votingrights Concurrent
Businessholding
posts ofrelationship(held)
directors

Transaction
details

Transaction
amountAccount Balance at
item
year-end

Director, Executive
Officer, General
Manager of
Accounting
Division
Fields Corporation
Director
Database Co., Ltd.
Directors
andHiroyuki
their close Yamanaka
relatives(Notes) 1.
2.

Statutory Auditor(Held)
Professional−
1,170
Corporate
direct−−−−Management Co.,
housing rent
0.2％
Ltd.
Total Workout
Corporation
White Trash
Charms Japan Co.,Ltd.
Fields Jr.
Corporation
Digital Lord
Corporation
The above transaction amounts are net of consumption tax.
Transaction conditions and principles of the decision(1) Corporate housing rent is the amount borne by individuals as rent of the leased corporate housing. 50% of the total rent is borne.

−

2. Subsidiaries, etc.
(Thousands of yen)
Attribute

Name ofcompany

Location CapitalBusiness or
occupation

Development andToshimaRodeomanufacture ofAffiliateward, 100,000
pachinko/pachislot
CorporationTokyomachines(Notes) 1.
2.

Relationship
Votingrights Concurrent
Businessholding
posts ofrelationship(held)
directors

Holding,
direct35.0％−

Development
andmanufactureof pachinko/
pachislot
machines

Transaction
details
Sale of usedpachinko/pachislot
machines
Purchase ofpachinko/pachislot
machines

Transaction
amountAccount
item

Balance at
year-end

2,364,855

Accounts
receivable 2,479,632- trade33,103,396

Accounts
payable-trade7,957,693

Provision ofguarantee− Deposits
500,000
deposits
The above transaction amounts are net of consumption tax, but the balance at year-end is inclusive of consumption tax.
Transaction conditions and principles of the decision(1) For the sale of used pachinko/pachislot machines and the purchase of merchandize, the transaction conditions are determined in thesame manner as those generally applied.

- 32 -

最終更新日時：6/29/2005 3:03 PM 最終印刷日時：6/29/2005 3:04 PM

Fiscal year ended March 31, 2005 (April 1, 2004 − March 31, 2005)
1. Directors and major individual shareholders(Thousands of yen)
Attribute

NameBusiness or
occupation

Location Capital

Votingrightsholding(held)

Relationship
Concurrent posts
Businessofrelationshipdirectors

Vice President,
General Manager,of Administrative
Management
Division
Fields Corporation
Director
Database Co., Ltd.

Hiroyuki
Yamanaka−

Directors
and their
close
relatives−

Statutory Auditor
Professional
Management Co.,Ltd.
Total Workout
Corporation
White Trash
Charms Japan Co.,Ltd.
Fields Jr.
Corporation
Digital Lord
Corporation(Held)
direct0.1％−

Transaction
details

Transaction
amountCorporate
housing rent
(Notes 1,2)

2,953

Account Balance at
item
yearend−−−Vice President,
General Manager ofCorporate(Held)
1,430−−
ShigemiProduct
housing rent
direct−−−−ShimadaDevelopment
0.1％
Division(Notes 1,2)
Fields Corporation(Notes) 1. The above transaction amounts are net of consumption tax.
2. Transaction conditions and principles of the decision(1) Corporate housing rent is the amount borne by individuals as rent of the leased corporate housing. Until December 2004, 50% of thetotal rent was borne, but from January 2005 the system was changed so that individuals bear the full amount. The corporate housing
rent was terminated on April 1, 2005.

2. Subsidiaries, etc.
(Thousands of yen)
Attribute

Name ofcompany

Location

Subsidiary

D3
Publisher
Inc.

Shibuya
ward,
Tokyo

CapitalBusiness or
occupation

833,240

Design and saleof games
software andpackaged
software

Votingrightsholding(held)

Relationship
Concurrent
Business
posts ofrelationshipdirectors

Transaction
details

Transaction
amountSubscription
Holding, Concurrent
Acquisition of new shares
directpost,
privatelyof shares
57.3％
1 person
allocated

1,787,100

Account Balance at
item
year-end−−(Notes 1,2)

Affiliate

Rodeo
Corporation(Notes) 1.
2.

Toshima
ward,
Tokyo

100,000

Development
andmanufacture ofpachinko/pachislot
machines

Holding,
direct35.0％−

Development
andmanufactureofpachinko/pachislot
machines

Purchase ofmachines

44,579,677

Accounts
payable 22,637,049-trade(Notes 1,2)

The above transaction amounts are net of consumption tax, but the balance at year-end is inclusive of consumption tax.
Transaction conditions and principles of the decision(1) The number of shares issued was 7,000, and the issue value was set at ¥255,300, the average of closing prices in ordinary trading forthe most recent three months up to the day before the resolution of the Board of Directors (November 15, 2004, to February 14,2005), disclosed by Jasdaq Securities Exchange, Inc. (during the period from November 15, 2004, to December 10, 2004, disclosedby the Japan Securities Dealers Association).
(2) For the purchase of machines, the transaction conditions are determined in the same manner as those generally applied.

- 33 -

最終更新日時：6/29/2005 3:03 PM 最終印刷日時：6/29/2005 3:04 PM(Per Share Data)
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
Book value per share¥ 89,305.39
Net income per share¥ 40,465.97

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Book value per share¥ 96,026.73
Net income per share¥ 19,888.61

Since no latent shares exist, diluted net income per share isnot stated.

Since no latent shares with dilution effects exist, diluted net
income per share is not stated.

The Company implemented a 5-for-1 stock split on
November 20, 2003.
Per share data for the previous fiscal year assuming thestock split was implemented at the beginning of theprevious fiscal year are given below.

The Company implemented a 2-for-1 stock split on
September 3, 2004.
Per share data for the previous fiscal year assuming thestock split was implemented at the beginning of theprevious fiscal year are given below.

Book value per share¥ 53,720.11
Net income per share¥ 23,446.73
Since no latent shares exist, diluted net income per share isnot stated.

Book value per share¥ 44,652.69
Net income per share¥ 20,233.98
Since no latent shares exist, diluted net income per share isnot stated.

(Note) The calculation basis for net income per share is as follows.

Net income
Amount not allocable to commonshareholders(Of which, directors’ bonuses byappropriation of retained earnings)
Net income allocable to common shares
Average number of shares of common stock
outstanding
Outline of latent shares not reflected in thecalculation of diluted net income per sharesince there are no dilution effects from them

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)¥ 6,620,253 thousand¥ 85,000 thousand

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)¥6,926,791 thousand¥105,000 thousand(¥ 85,000 thousand)(¥105,000 thousand)¥ 6,535,253 thousand
161,500 shares¥6,821,791 thousand
343,000 shares____________

Stock acquisition rights
Resolution on June 27, 2003
Number of latent shares 3,180 shares(Assumption of a Going Concern)
Fiscal year ended March 31, 2004 (April 1, 2003 − March 31, 2004)
Not applicable.

Fiscal year ended March 31, 2005 (April 1, 2004 − March 31, 2005)
Not applicable.

- 34 -

最終更新日時：6/22/2005 5:11 PM 最終印刷日時：6/29/2005 3:04 PM(Subsequent Events)
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
Resolution for stock options

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)

The Board of Directors, at the meeting on April 14, 2004, resolved
the following details regarding the issuance of stock acquisitionrights as stock options pursuant to the provisions of Articles 280-20
and 280-21 of the Commercial Code, and based on the resolutionof the 15th ordinary general meeting of shareholders on June 27,
2003.
1. Issue date of stockacquisition rights
2. Number of stock acquisitionrights to be issued
3. Issue value of stockacquisition rights
4. Class and number of sharesfor which stock acquisitionrights are to be issued
5. Amount to be paid upon
exercise of stock acquisitionrights
6. Exercise period for stockacquisition rights
7. Number of persons eligible
for stock acquisition rights
allotment

April 14, 2004
681 rights(five shares per stockacquisition right)
Gratis3,405 shares ofcommon stock¥1,520,000 per share
From July 1, 2005, toJune 30, 2008
Directors, statutory
auditors and employeesof the Company
Total of 115 people

Resolution for stock split (gratis issue)
On May 25, 2004, the Board of Directors passed a resolution
authorizing a stock split (gratis issue).
Stock split (gratis issue)
1. A 2-for-1 common stock split will be implemented as follows
on September 3, 2004.
(i) Number of shares to be increased through the stock split
As common stock, the number of shares to be increased
will be the same as the number of shares outstanding as ofJuly 15, 2004.
(ii) Split method
Common stock held by shareholders recorded orregistered in the shareholder register or the effective
shareholder register as of July 15, 2004, will be split on a
2-for-1 ratio.
2. Dividend reckoning date
April 1, 2004
Per share data for the previous fiscal year and the current fiscal
year, assuming such a stock split was implemented at the beginningof the each fiscal year, are as follows.
Previous fiscal year
Current fiscal year
Book value per share
Book value per share¥26,860.06¥44,652.69
Net income per share
Net income per share¥11,723.36¥20,232.98
Since no latent shares exist,
Since no latent shares exist,
diluted net income per sharediluted net income per shareis not stated.
is not stated.

- 35 -

最終更新日時：6/22/2005 5:11 PM 最終印刷日時：6/29/2005 3:04 PM

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
Resolution for issuance of new shares in overseas markets

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)

On May 25, 2004, the Board of Directors passed a resolution
authorizing the issuance of new shares in overseas markets.
(1) Number of shares to be issued
12,000 shares of common stock(2) Issue value¥1,108,755(3) Amount transferred to paid-in capital (per share)¥554,378(4) Issue dateJune 15, 2004
(5) Method of issuance
HSBC Bank plc will act as lead manager of anunderwriting syndicate, which will purchase the sharesfrom the Company. Shares will be sold mainly in Europe
through public offering (but only to qualifying
institutional investors in the United States).
(6) Dividend reckoning date
April 1, 2004
(7) Use of funds raised
Of the approximately ¥13.1 billion raised through theissue of new shares, ¥4 billion will be used to expand
and upgrade the Company’s sales network and internalsales management systems; ¥6 billion will be used for
acquiring and investing in merchandizing rights; and theremainder will be used for investments and loans to
subsidiaries, etc.

- 36 -

最終更新日時：6/22/2005 5:11 PM 最終印刷日時：6/29/2005 3:04 PM

6.

Production, Orders Received and Sales(1)

Production
Not applicable.

(2)

Procurement
Products purchased by item in the fiscal year under review are as follows.

Item

Fiscal year ended March 31, 2004

(Thousands of yen)
Fiscal year ended March 31, 2005

(April 1, 2003 − March 31, 2004)(April 1, 2004 − March 31, 2005)

Pachinko/pachislot machines

37,064,637

49,064,230

Others1,614,927

1,127,785

38,679,564

50,192,015

Total(Notes) 1. The above amounts are based on the procurement prices.
2. The above amounts are net of consumption tax.

(3)

Orders received
Not applicable.

(4)

Sales
Sales by item in the fiscal year under review are as follows.

Item

Fiscal year ended March 31, 2004

(Thousands of yen)
Fiscal year ended March 31, 2005

(April 1, 2003 − March 31, 2004)(April 1, 2004 − March 31, 2005)

Pachinko/pachislot machines

61,579,192

78,336,175

Others4,632,396

3,321,835

66,211,589

81,658,011

Total(Note)

1. “Others” includes pachinko/pachislot machine parts as well as used pachinko/pachislot machines.
2. The above amounts are net of consumption tax.

- 37 -

(Translation)
Fields Corporation
Summary of Financial Statements (Non-Consolidated)Year Ended March 31, 2005
May 13, 2005
Company Name:

Fields Corporation(URL: http://www.fields.biz)
Listed on:
JASDAQ (Stock code: 2767)
Head Office:Tokyo
Representative Director:
Hidetoshi Yamamoto
President, Representative Director and CEO
Inquiries:
Hiroyuki Yamanaka
General Manager, Administration Division for Board of Directors
Tel: 81-3-5784-2111
Date Approved by Board of Directors:
May 13, 2005
Interim Dividend System (Yes/No):
Yes
Date of Commencement of Dividend Payment: June 30, 2005
Ordinary General Meeting of Shareholders: June 29, 2005
Unit Stock System (Yes/No):No
1. Business results for the year ended March 31, 2005 (April 1, 2004, to March 31, 2005)(1) Operating results(Rounded down to nearest million)
Net sales
Operating income
Ordinary income
Year ended
March 31, 2005
Year ended
March 31, 2004

Millions of yen(% change)

Millions of yen(% change)

Millions of yen(% change)

79,970(22.8)

12,275(2.7)

12,312(2.1)

65,140(6.7)

11,951(65.1)

12,054(65.5)

Return on
equityOrdinary
income tototal assets

Ordinary
income tonet sales％％％

Net income
Millions of yen(% change)

Net income
per share
Yen

Diluted net
income per
share
Yen

Year ended
March 31, 2005
6,721
(3.1)
19,289.46
−
27.9
23.3
15.4
Year ended
6,520(72.2)
39,846.27
−
54.9
44.3
18.5
March 31, 2004
Notes: 1. Average number of shares outstanding
Year ended March 31, 2005: 343,000
Year ended March 31, 2004: 161,500
2. 12,000 new shares were issued through book building process on June 15, 2004.
3. Shares increased by 173,500 through a 2-for-1 stock split carried out on September 3, 2004.
4. Changes in accounting methods (Yes/No): No
5. Percentages for net sales, operating income, ordinary income and net income denote changes compared withthe previous fiscal year.

-38-

(2) Dividend information
Annual dividend per share
InterimYear-end

Year ended
March 31, 2005
Year ended
March 31, 2004

Annualdividend paid

Payout ratio

Dividend as
percentage ofshareholders’equityMillions of yen

％

％

Yen

Yen

Yen

4,000.00

2,000.00

2,000.00

1,388

20.7

4.2

24,000.00

20,000.00

4,000.00

1,292

20.1

8.8

(3) Financial position
Total assets

Shareholders’ equity

Shareholders’ equity
ratio

Shareholders’ equity
per share

Millions of yen％

Yen

Millions of yen

Year ended
March 31, 2005
68,35433,41448.9
95,993.86
Year ended
37,114
14,701
39.6
90,507.27
March 31, 2004
Notes:
1. Number of shares outstanding at year-end
Year ended March 31, 2005:
347,000
Year ended March 31, 2004:
161,500
2. 12,000 new shares were issued through book building process on June 15, 2004.
3. Shares increased by 173,500 through a 2-for-1 stock split carried out on September 3, 2004.
4. Treasury stock at year-end
Year ended March 31, 2005: Year ended March 31, 2004: 2. Forecast earnings for the year ending March 31, 2006 (April 1, 2005, to March 31, 2006)
Ordinary
Annual dividend per share
Net income
Net sales
incomeInterimYear-end
Millions of yen

Millions of yen

Millions of yen

Yen

Interim34,5005,100
2,700
2,000.00
Full year
85,80014,0007,400−
Reference: Projected net income per share for the year ending March 31, 2006: ¥21,023.05

-39-

Yen

Yen

−
2,000.00−
4,000.00

最終更新日時：6/22/2005 4:57 PM 最終印刷日時：6/29/2005 3:05 PM

7.
1.

Non-consolidated Financial Statements
Non-consolidated Balance Sheets
PeriodItem

AssetsI. Current assets
Cash and cash equivalents
Notes receivable - trade
Accounts receivable - trade*1
Marketable securities
Merchandise
Supplies
Advances
Merchandizing right advances*1
Prepaid expenses
Deferred tax assets
Other accounts receivable*1
Advance payments*1
Notes held
Non-operating notes receivable
Other current assets*1
Allowance for doubtful accounts
Total current assets
II. Fixed assets
1. Tangible fixed assets
Buildings
Accumulated depreciation
Structures
Accumulated depreciation
VehiclesAccumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land
Construction in progress
Total tangible fixed assets
2. Intangible fixed assets
Software
Software under development
Telephone subscription rights
OthersTotal intangible fixed assets
3. Investments and other assets
Investment securities
Investments in subsidiaries andaffiliates
Equity investment
Long-term loans receivable
Long-term loans receivablefrom shareholders, directors or
employees
Long-term loans receivablefrom affiliates
Claims in bankruptcy
Long-term prepaid expenses
Deferred tax assets
Deposits*1
OthersAllowance for doubtful
accounts
Allowance for investment
lossesTotal investments and otherassetsTotal fixed assets
Total assets(Thousands of yen, %)Fiscal year ended March 31,
2004(As of March 31, 2004)
Amount% total4,865,913
1,596,052
17,236,355−
76,591
23,5242,105
1,720,076
203,116
350,606
12,578135,391
214,418
463,050
420,340(86,800)
27,233,322

989,024(256,437)
19,245(11,673)
41,775(25,550)704,018(255,878)

2,347,171(315,720)
65,794(17,792)
27,128(16,548)
1,106,171(419,139)

76.9

5,007,073
1,636,519
16,825,495
5,000
70,09976,25530,266
1,663,987
11,582(150,233)(1,357)74,475(122,482)
415,283(215,244)
2,500
25,329,219

2,031,450

1,298,864

48,00240,430

10,579(5,645)8.0

687,032
1,547,993−
4,325,058

6.3

238,893−(243,251)
1,329,290

0.7

260,219442,446
18,53956,700777,906

1.2

41,991
433,371
102
56,700532,166

7,572
16,224

218,228
9,075
18,437−245,740

9,872,987
3,232,572
34,061,850
5,000
146,691
99,77932,371
3,384,063
214,699
200,372
11,220209,866
91,936878,333
205,095(84,300)
52,562,541

73.4

732,586

448,139
1,547,993
243,251
2,995,767

Fiscal year ended March 31,
Year-on-year
2005change(As of March 31, 2005)
Amount% totalAmount754,220

1,946,480

1,192,260

1,790,450

5,510,550

3,720,100

24,286
104,404

22,830103,804(1,456)
(600)

2,111

539

(1,571)2,150,000

1,222,856(927,143)

98,194
63,198
222,813
1,463,804
60,393102,952
34,699174,587
1,774,97886,486

4,757(28,499)(48,225)
311,174
26,092(93,901)(97,206)(3,304)−(195,000)(195,000)

6,639,975

17.9

10,688,559

15.6

4,048,583

9,881,483
37,114,805

26.6
100.0

15,791,524
68,354,065

23.1
100.0

5,910,040
31,239,259- 40 -

最終更新日時：6/22/2005 4:57 PM 最終印刷日時：6/29/2005 3:05 PM(Thousands of yen, %)PeriodItem
Liabilities
I. Current liabilities
Accounts payable - trade
Short-term borrowings
Other accounts payable
Accrued expenses
Accrued income taxes
Unpaid consumption tax
Advances received
Deposits
Accrued bonuses
Other current liabilities
Total current liabilities

Fiscal year ended March 31,
2004

Fiscal year ended March 31,
2005(As of March 31, 2004)(As of March 31, 2005)

Amount*1

Amount11,551,154
3,000,000
970,7172,000
3,925,000
381,391
14,188474,373
18,60010,727
20,348,153

II. Long-term liabilities
Retirement benefit provisions
Reserve for retirement benefits todirectors and statutory auditors
Deposits received
Other long-term liabilities
Total long-term liabilities
Total liabilities
Shareholders’ equity
I. Common stock
II. Capital surplus
Additional paid-in capital
Capital surplus total
III. Retained earnings
Legal reserve
Voluntary reserve
General reserve
Unappropriated retained
earnings
Total retained earnings
IV. Unrealized holding gain on
available-for-sale securities
Total shareholders’ equity
Total liabilities andshareholders’ equity% total*2% total27,479,545−
981,2742,200
2,609,000
132,032
123,314477,574
20,000−54.8

31,824,942

Year-on-yearchangeAmount15,928,391(3,000,000)
10,557200(1,316,000)(249,359)
109,1253,201
1,400(10,727)46.6

11,476,788

120,815

129,9259,110

699,800

568,700(131,100)

1,193,049
51,0652,064,729

5.6

2,409,736
5,893
3,114,255

4.5

1,216,687(45,171)
1,049,525

22,412,882

60.4

34,939,197

51.1

12,526,314

1,295,500

3.5

7,948,036

11.6

6,652,536

1,342,429

3.6

7,994,953

11.7

6,652,524

1,342,429

7,994,953

9,580

9,580

5,000,000

10,000,000

6,816,219

7,112,502
11,825,799

31.9

17,122,082

25.1

5,296,283

238,194

0.6

349,7960.5

111,601

14,701,923

39.6

33,414,868

48.9

18,712,944

37,114,805

100.0

68,354,065

100.0

31,239,259- 41 -

最終更新日時：6/22/2005 4:57 PM 最終印刷日時：6/29/2005 3:05 PM

2.

Non-consolidated Statements of Income(Thousands of yen, %)PeriodItem
I. Net sales
II. Cost of sales*1
Gross profit
III. Selling, general andadministrative expenses
Advertising expenses
Remuneration of directors andstatutory auditors
Salaries
Bonuses
Provision for accrued bonuses
Legal welfare expenses
Other welfare expenses
Outsourcing expenses
Travel expenses
Depreciation and amortization
Rents
Recruitment and training
expenses
Provision to allowance for
doubtful accounts
Retirement benefit expenses
Provision to reserve forretirement benefits for directors
and statutory auditors
OthersOperating income
IV. Non-operating income
Interest income*1Interest on securities
Dividend income*1
Discounts on purchases*1
Lease income*1
Administrative services fees*1
received
Others*1
V. Non-operating costs
Interest expense
Issuance of new stock
Capital increase-related expense
Lease expenses
OthersOrdinary income

Fiscal year ended March 31,
2004

Fiscal year ended March 31,
2005(April 1, 2003 – March 31, 2004) (April 1, 2004 – March 31, 2005)
Amount% salesAmount100.0

79,970,015

100.0

14,829,283

67.5

55,787,766

69.8

11,811,923

21,164,888

32.5

24,182,248

30.2

3,017,359

258,710

269,450

2,656,545

3,365,690

36,48338,846

18,60020,000305,922

390,424

34,86744,272547,998

756,856445,075

436,646

232,425

448,930

606,381790,199

468,067

332,716

69,977

18,343

20,24926,668148,500−
9,213,303

14.1

11,951,585

18.4

33,4962,245,171

11,906,358

14.9

2,693,055

12,275,890

15.3

324,304

289,650

0.4

160,777

34,926

1,513

175

27,28033,021−

159,760

34,90838,07913,440−128,873

0.2

23,686

2,197

7,351

2,290

91,906−112,494

17,137
4,272

Amount43,975,843

2,722,140

18,234% sales

65,140,732

1,428,615

1,934,882

Year-on-yearchange16,84825,8970.1

12,054,561

18.5- 42 -

24,354

252,9560.3

227,058

12,312,584

15.4

258,022

最終更新日時：6/22/2005 4:57 PM 最終印刷日時：6/29/2005 3:05 PM(Thousands of yen, %)PeriodItem
VI. Extraordinary income
Gain from sale of fixed assets*2
Gain from investment inanonymous association
Gain from liquidation ofguarantee liabilities
Gain on sale of investment
securities
Reversal of reserve forretirement benefits for directors
and statutory auditors
VII. Extraordinary loss
Loss on sale of fixed assets*3
Loss on disposal of fixed assets *4
Valuation loss on investment
securities
Valuation loss on equity
investment
Provision to reserve forinvestment losses
Income before income taxes
Current income taxes
Deferred income taxes
Net income
Earnings carried over fromprevious period
Interim dividends paid
Unappropriated retained earnings

Fiscal year ended March 31,
2004

Fiscal year ended March 31,
2005(April 1, 2003 – March 31, 2004) (April 1, 2004 – March 31, 2005)
Amount% salesAmount

6,447

4,726

22,16645,171

17,4002,600−

162,685−

46,0140.1

131,100−

1,666

17,63889,039−175,534

42,587−−60,2250.1

12,040,349

18.5

5,733,846(213,669)

195,000% salesYear-on-yearchangeAmount346,2830.4

300,269

461,2400.6

401,015

12,197,626

15.2

157,276

5,354,480
5,520,177

8.5

6,520,172

10.0

942,046

121,8635,476,343

6.8(43,833)

6,721,283

8.4

201,110

1,085,219

143,172

646,000

694,000

48,0006,816,219

7,112,502

296,283- 43 -

最終更新日時：6/22/2005 4:57 PM 最終印刷日時：6/29/2005 3:05 PM

Appropriation Statement (Tentative)(Thousands of yen)

PeriodFiscal year ended March 31, 2004

Fiscal year ended March 31, 2005

(June 29, 2004)(June 29, 2005)

Item
I. Unappropriated retained
earnings at end of current
fiscal year
II. Appropriation amount1.
Dividends
Bonuses to directors
2.
and statutory auditors(Of which, to statutory
auditors)
3.
Voluntary reserve(1) General reserve
III. Earnings carried over tonext fiscal year

6,816,219

7,112,502

646,000

694,000

85,000105,000(2,000)(3,000)5,000,000

5,731,000

5,000,000

5,799,000

1,085,219

1,313,502(Note) Dates within parentheses under the period are the scheduled dates for approval at the general meeting ofshareholders.

(Note) Details of dividends per share
Fiscal year ended March 31, 2004

Full year
Common stock(details)
Ordinary dividend
Commemorative
dividend

InterimFiscal year ended March 31, 2005

Year-end

Full year

InterimYear-end

Yen

Yen

Yen

Yen

Yen

Yen

14,00010,000

4,000

4,000

2,000

2,000

10,00010,000−−−−- 44 -

最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM

Significant Accounting Policies for the Preparation of Non-consolidated Financial Statements
Significant Accounting Policies
Fiscal year ended March 31, 2004
Fiscal year ended March 31, 2005
(April 1, 2003 − March 31, 2004)(April 1, 2004 − March 31, 2005)
1. Valuation standards and methods (1) Shares of subsidiaries and affiliates(1) Shares of subsidiaries and affiliates
for marketable securities
Stated at cost determined by theSame as left
moving-average method.
(2) Other marketable securities(2) Other marketable securitiesThose with market value:Those with market value:Same as left
Stated at market value based on market
price as of the balance sheet date(unrealized gains or losses are directly
charged or credited to shareholders’equity, with the cost of securities solddetermined by the moving-averagemethod).
Those with no market value:Those with no market value:Same as left
Stated at cost determined by themoving-average method.
(1) Merchandize
2. Valuation standards and methods (1) Merchandize
for inventories
Used pachinko/pachislot machines
Used pachinko/pachislot machines
Same as left
Stated at cost determined by the specificidentification method.
OthersOthersSame as left
Stated at cost determined by themoving-average method.
(2) Supplies(2) Supplies
Stated at cost determined by the lastSame as left
purchase price method(1) Tangible fixed assets
3. Depreciation methods for fixed (1) Tangible fixed assets
assetsDeclining-balance method
Declining-balance method
However, the straight-line method is
However, the straight-line method isapplied to buildings (excluding building
applied to buildings (excluding building
fixtures) acquired after April 1, 1998.
fixtures) acquired after April 1, 1998.
The estimated useful lives of
The estimated useful lives ofdepreciable assets are as follows:depreciable assets are as follows:
Buildings: 6-50 years
Buildings: 6-50 years
Structures: 10-50 years
Structures: 10-27 years
Vehicles: 4-6 years
Vehicles: 4-6 years
Tools and equipment: 3-20 years
Tools and equipment: 3-20 years(2) Intangible fixed assets(2) Intangible fixed assets
Same as left
Straight-line method
The straight-line method is applied tosoftware for company use, based on its
useful life within the Company (fiveyears).
(3) Long-term prepaid expenses(3) Long-term prepaid expenses
Straight-line method
Same as left
New stock issuance expenses
4. Treatment of deferred charges
New stock issuance expenses
These expenses are charged in full at theThese expenses are charged in full at the time
time they are incurred.
they are incurred.
The issuance of 12,000 new shares ofcommon stock on June 15, 2004, throughpublic offering was carried out by
underwriting companies purchasing andunderwriting the shares at ¥1,108,755 pershare, which differed from the share issue
price of ¥1,161,000—the offering price paidby ordinary investors.
The gross spread or differential between thetwo prices was, in this case, ¥626,940
thousand—the de facto underwriting
commission. If, as was preciously the case,the underwriting and share issue prices were
the same, the underwriting commission
would have been charged as new stock
issuance expenses.
Consequently, compared to the previous
method of accounting for underwriting
commission, new stock issuance expenses
and the total of common stock and capitalsurplus are each reduced by ¥626,940
thousand, while ordinary income and income
before income taxes are each increased by
the same amount.
Item- 45 -

最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM

Category
5. Accounting standards forreserves

6. Accounting standards forrevenues and expenses

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)(1) Allowance for doubtful accounts
To provide for losses from doubtful
accounts, allowances for ordinary
receivables are provided using a rate
determined by past collection experience,
and allowances for specific debts
considered doubtful are accounted for by
calculating the estimated amounts
deemed uncollectible after individuallyreviewing collectibility of the debts.
(2)(3) Accrued bonuses
To provide for employee bonuses, theCompany recognizes the amounts out ofthe projected bonus payments to beallocated to the fiscal year.
(4) Retirement benefit provisions
To provide for employees’ retirement
benefits, the Company, on the basis ofprojected benefit obligations as of theend of the fiscal year, recognizes benefit
obligations accrued as of the end of the
fiscal year.
Also, actuarial differences areproportionately amortized by thestraight-line method over a fixed numberof years (five years) within the averageremaining period of service of employees
as of the time of origination of suchdifferences.
Amortization amounts are expensed
beginning with the fiscal year followingthat in which the difference originated.
(5) Reserve for retirement benefits for
directors and statutory auditors
To provide for directors’ retirement
bonuses, the Company, in accordancewith the internal regulations, recognizes
the amounts to be paid at the end of the
fiscal year.
Accounting standards for sales and cost of sales
Distribution sales
These are recognized at the time of
shipment of pachinko/pachislot
machines.
(Changes in accounting methods)
Accounting recognition previously
followed delivery to users andcompletion of installation. Beginning
this fiscal year, this method has beenchanged to the effect that accounting
recognition follows shipment. Thischange became possible because thedelivery of machines to users is statedas the time of shipment in the sales
agreements, and because shipping
data can be quickly grasped due toimprovements in computer systems.
Compared with the previous method,
the change resulted in an increase of¥5,956,372 thousand in net sales, anincrease of ¥3,916,219 thousand incost of sales, and an increase of¥2,040,152 thousand each inoperating income, ordinary income,and income before income taxes.
Agency sales
These are recognized when thepachinko/pachislot machines aredelivered to users, and the payments
for the machines are made to themachine makers.

- 46 -

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)(1) Allowance for doubtful accounts
Same as left

(2) Reserve for investment losses
To provide for possible losses frominvestments into affiliates, this reserve isprovided in consideration of the financial
conditions of the affiliates.
(3) Accrued bonuses
Same as left

(4) Retirement benefit provisions
Same as left

(5) Reserve for retirement benefits for
directors and statutory auditors
Same as left

For agency sales, when thepachinko/pachislot machines are delivered
to users, and the payments for the machines
are made to the machine makers, these arerecognized as commission income andcommission cost.

最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM

Category
7. Treatment of lease transactions

8. Other significant standards
fundamental to the preparationof financial statements

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
Finance lease transactions, other than thosewhere the ownership of the leased assets isdeemed to be transferred to the lessee, areaccounted for as ordinary operating leasetransactions.
(1) Accounting for consumption tax
Consumption tax is accounted for by the
tax-excluded method.

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Same as left

(1) Accounting for consumption tax
Same as left

Change in disclosure methods
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)(Non-consolidated balance sheets)
Until the previous fiscal year, merchandizing right advances was
included in “advances” under current assets. Owing to an increase in
the financial importance of this item, it is now presented as aseparate item. For the previous fiscal year, merchandizing rightadvances amounted to ¥262,125 thousand.

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)

Until the previous fiscal year, insurance reserve was presented as aseparate item (the balance at the end of the current fiscal year was¥14,801 thousand). Owing to the item falling to below 1% of total
assets, it is now included in “others” under fixed assets.
(Non-consolidated statements of income)
Until the previous fiscal year, outsourcing expenses and recruitment
and training expenses were included in “others” under sales, generaland administrative expenses. Owing to this item exceeding 5% of
SG&A expenses, it is now presented as a separate item. Outsourcing
expenses and recruitment and training expenses for the previous
fiscal year amounted to ¥340,493 thousand and ¥206,313 thousand,respectively.

(Non-consolidated statements of income)
Until the previous fiscal year, administrative services fees received
was stated as a separate item under non-operating income. Owing tothis item falling below 10% of non-operating income, it is now
included in “others” under non-operating income. Administrative
services fees received in the current fiscal year amounted to ¥15,452
thousand.

Additional information
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Accompanying the promulgation of the Law for Partial Amendment
to the Local Tax Law, etc. (Law No. 9 of 2003) on March 31, 2003,
and the consequent introduction of the pro forma standard taxation
system, which applies to fiscal years commencing on or after April
1, 2004, from the current fiscal year, the Company includes charges
for the value-added and capital portions of corporate enterprise tax
in selling, general and administrative expenses in accordance with
the Practical Procedures for Indication of Pro Forma Taxation in
Income Statement concerning Corporate Enterprise Tax(Accounting Standards Board of Japan, Accounting Practices Report
No. 12 dated February 13, 2004) .
As a result, SG&A expenses increased by ¥107,461 thousand, andoperating income, ordinary income, and income before income
taxes decreased by ¥107,461 thousand.

- 47 -

最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM

Notes(Non-consolidated Balance Sheets)
Fiscal year ended March 31, 2004
(As of March 31, 2004)*1. Assets and liabilities for affiliates
Other than the items separately stated, the followings areincluded.
Accounts receivable - trade¥2,480,033 thousand
Deposits¥550,355 thousand
Accounts payable – trade¥8,057,909 thousand

Fiscal year ended March 31, 2005
(As of March 31, 2005)*1. Assets and liabilities for affiliates
Other than the items separately stated, the followings areincluded.
Other assets¥858,911 thousand
Accounts payable – trade¥22,794,079 thousand*2. Number of authorized and outstanding shares
Authorized shares
Common stock
586,000 shares
Outstanding shares Common stock
161,500 shares
3. Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on an agency
basis for pachinko/pachislot machine makers.
Gaia Co., Ltd.
¥28,059 thousand
K.K. Sunvic¥26,264 thousand
Asahi Shoji K.K.
¥24,688 thousand
Y.K. Sanei¥22,194 thousand
Gunkay Co., Ltd.
¥21,429 thousand
Sankei Shoji K.K.
¥20,848 thousand
K.K. Vivre¥16,121 thousand
K.K. Toei Kanko¥15,910 thousand
Meihou Jitsugyo K.K.
¥15,821 thousand
Matsuoka Shoji K.K.
¥15,435 thousand
Others 222¥537,721 thousand
Total¥744,496 thousand*2. Number of authorized and outstanding shares
Authorized shares
Common stock
586,000 shares
Outstanding shares Common stock
347,000 shares
3. Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on an agency
basis for pachinko/pachislot machine makers.
Asahi Shoji K.K.
¥59,985 thousand
Daiei Kanko K.K.
¥58,480 thousand
Meiplanet K.K.
¥33,698 thousand
Kouki Co., Ltd.
¥30,571 thousand
Iwamoto Development Co., Ltd.
¥28,551 thousand
BOSS Co., Ltd.
¥24,910 thousandNiimi Co., Ltd.
¥23,739 thousand
Y.K. Daiko¥23,293 thousand
The City Co., Ltd¥19,622 thousand
K.K. Toei Kanko¥18,677 thousand
Others 176¥475,519 thousand
Total¥797,050 thousand

4. Notes receivable endorsed

4.

¥591,657 thousand

5. Dividend restrictions
As a result of mark-to-market valuation of securities, net assets
increased by ¥238,194 thousand. However, the Company isprohibited from utilizing the said amount for dividend payment
in accordance with Article 124-3 of the Commercial Code
Enforcement Regulations.
6. Overdraft agreements and loan commitments
To efficiently raise working capital, the Company has concluded
overdraft and loan commitment agreements with six banks. Asof the end of the fiscal year, unutilized amounts under these
agreements were as follows:
Overdraft limit plus total amountof loan commitments¥6,000,000 thousand
Borrowings outstanding¥3,000,000 thousand
Difference¥3,000,000 thousand- 48 -

5. Dividend restrictions
As a result of mark-to-market valuation of securities, net assets
increased by ¥349,796 thousand. However, the Company isprohibited from utilizing the said amount for dividend payment
in accordance with Article 124-3 of the Commercial Code
Enforcement Regulations.
6. Overdraft agreements
To efficiently raise working capital, the Company has concluded
overdraft agreements with three banks. As of the end of the
fiscal year, unutilized amounts under these agreements were as
follows:
Overdraft limit¥3,000,000 thousand
Borrowings outstanding
Difference¥3,000,000 thousand最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM(Non-consolidated Statements of Income)*1.

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
Items for affiliates that are included in the statements ofincome are as follows:
Purchases¥33,508,152 thousand
Interest income¥29,858 thousand
Dividend income¥21,000 thousand
Administrative services fees received ¥13,440 thousand*1.

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Items for affiliates that are included in the statements ofincome are as follows:
Purchases¥45,095,320 thousand
Interest income¥30,986 thousand
Discounts on purchases¥159,668 thousand
Other non-operating income¥39,052 thousand*2. Gain on sale of fixed assets arose from sale of land.

*2. Gain on sale of fixed assets arose from sale of vehicles.

*3.

*3. Loss on sale of fixed assets arose from sale of tools, furnitureand fixtures.
*4. Details of loss on disposal of fixed assets are as follows:
Buildings¥54,837 thousand
Vehicles¥29 thousand
Tools, furniture and fixtures¥20,659 thousand
Long-term prepaid expenses¥361 thousand
Software¥13,151 thousand
Total¥89,039 thousand*4. Details of loss on disposal of fixed assets are as follows:
Buildings¥3,442 thousand
Structures¥1,488 thousand
Vehicles¥2,680 thousand
Tools, furniture and fixtures¥10,027 thousand
Total¥17,638 thousand- 49 -

最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM(Leases)
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
1. Finance lease transactions other than those where the ownershipof the leased assets is deemed to be transferred to the lessee(1) Acquisition cost, accumulated depreciation, and net book valueof leased assets at the end of the fiscal year
(Thousands of yen)
Acquisition
Accumulated
Net book
cost
depreciation
value
Tools,
107,055
71,431
35,623furniture andfixtures18,851
15,275
3,575
SoftwareTotal

125,90786,707

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
1. Finance lease transactions other than those where the ownershipof the leased assets is deemed to be transferred to the lessee(1) Acquisition cost, accumulated depreciation, and net book valueof leased assets at the end of the fiscal year
(Thousands of yen)
Acquisition
Accumulated
Net book
cost
depreciation
value
Tools,
104,314
81,26423,049furniture andfixtures39,7101,441
38,269Software39,199Total

144,025

82,70561,319Note that acquisition cost has been calculated by theinterest-inclusive method, since the balance of future minimum
lease payments accounts for a minimal portion of tangible fixed
assets at the end of the fiscal year.
(2) Future minimum lease payments
Due within one year
¥24,091 thousand
Due after one year
¥15,107 thousand
Total¥39,199 thousand

Note that acquisition cost has been calculated by theinterest-inclusive method, since the balance of future minimum
lease payments accounts for a minimal portion of tangible fixed
assets at the end of the fiscal year.
(2) Future minimum lease payments
Due within one year
¥18,568 thousand
Due after one year
¥42,751 thousand
Total¥61,319 thousand

Note that future minimum lease payments at the end of the
fiscal year have been calculated by the interest-inclusive
method, since the balance of future minimum lease payments
accounts for a minimal portion of tangible fixed assets at theend of the fiscal year.
(3) Lease payments and depreciation
Lease payments¥30,170 thousand
Depreciation¥30,170 thousand(4) Calculation method for depreciation
Depreciation is based on the straight-line method over the leaseterm of the leased assets with no residual value.

Note that future minimum lease payments at the end of the
fiscal year have been calculated by the interest-inclusive
method, since the balance of future minimum lease payments
accounts for a minimal portion of tangible fixed assets at theend of the fiscal year.
(3) Lease payments and depreciation
Lease payments¥22,462 thousand
Depreciation¥22,462 thousand(4) Calculation method for depreciation
Depreciation is based on the straight-line method over the leaseterm of the leased assets with no residual value.

(Marketable Securities)
Fiscal year ended March 31, 2004 (As of March 31, 2004)
Shares of subsidiaries and affiliates with market values are as follows.
(Thousands of yen)
Category
Shares of affiliates

Carrying value on
non-consolidatedbalance sheet
883,000

Market value
1,585,000

Difference
702,000

Fiscal year ended March 31, 2005(As of March 31, 2005)
Shares of subsidiaries and affiliates with market values are as follows.
(Thousands of yen)
Category

Carrying value on
non-consolidatedbalance sheet

Market value

Difference

Shares of subsidiaries

2,670,100

3,276,000

605,900- 50 -

最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM(Deferred Tax Accounting)
Fiscal year ended March 31, 2004
(As of March 31, 2004)
1. Main components of deferred tax assets and deferred tax
liabilities(Deferred tax assets)
Unrecognized reserve for retirement¥284,818 thousand
benefits for directors and statutory
auditors
Unrecognized accrued enterprise taxes¥320,659 thousand
Excess reserve for retirement benefits¥47,392 thousand
Excess allowance for doubtful accounts¥24,187 thousand
Excess reserve for accrued bonuses¥7,570 thousand
Others¥52,275 thousand
Total deferred tax assets(Deferred tax liabilities)
Unrealized gains (losses) on othermarketable securities
Total deferred tax liabilities
Net deferred tax assets¥736,903 thousand(¥163,482 thousand)(¥163,482 thousand)¥573,420 thousand

Fiscal year ended March 31, 2005
(As of March 31, 2005)
1. Main components of deferred tax assets and deferred tax
liabilities(Deferred tax assets)
Unrecognized reserve for retirement¥231,460 thousand
benefits for directors and statutory
auditors
Unrecognized accrued enterprise taxes¥155,664 thousand
Excess reserve for retirement benefits¥51,989 thousand
Excess allowance for doubtful accounts¥40,502 thousand
Excess reserve for accrued bonuses¥8,140 thousand
Unrecognized allowance for investment¥79,365 thousand
lossesOthers¥47,916 thousand
Total deferred tax assets¥615,039 thousand(Deferred tax liabilities)
Unrealized gains (losses) on other(¥240,079 thousand)marketable securities
Total deferred tax liabilities(¥240,079 thousand)Net deferred tax assets¥347,960 thousand

2. Breakdown of main items causing differences between thestatutory tax rate and the effective rate for income taxes after
applying deferred tax accounting

2. Breakdown of main items causing differences between thestatutory tax rate and the effective rate for income taxes after
applying deferred tax accounting

Statutory tax rate
(Adjustments)
Accumulated earnings tax
Per capita levy of local resident income
taxEntertainment expenses not deductible
for tax purposes
Non-taxable dividend income
Others
Effective income tax rate after
application of deferred tax accounting

Statutory tax rate
(Adjustments)
Accumulated earnings tax
Per capita levy of local residential
income tax
Entertainment expenses not deductible
for tax purposes
Non-taxable dividend income
Tax deductions
Others42.0 %
3.0 %
0.2 %
0.5 %
(0.1) %
0.2 %
45.8 %

Effective income tax rate after
application of deferred tax accounting- 51 -

40.7 %
2.5 %
0.3 %
0.8 %
(0.1) %
(0.1) %
0.8 %
44.9 %

最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM

Details of Increases in Number of Shares Outstanding during the Fiscal Year under Review
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
Stock split
Issuance of new shares through a stock split on November 20, 2003

Stock split ratio
Number of shares issued

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Issuance of new shares through book building processIssuance of new shares through book building process on June 15,
2004

5-for-1
129,200 shares

Number of shares issued
Issue price
Issue value
Amount transferred topaid-in-capital

12,000 shares¥1,161,000¥1,108,755¥554,378

Stock split
Issuance of new shares through a stock split on September 3, 2004
Stock split ratio
Number of shares issued- 52 -

2-for-1
173,500 shares最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM(Per Share Data)
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31 2004)
Book value per share
Net income per share

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)
Book value per share
Net income per share¥90,507.27¥39,846.27¥95,993.86¥19,289.46

Since no latent shares exist, diluted net income per share is notstated.

Since no latent shares with dilution effects exist, diluted net
income per share is not stated.

The Company implemented a 5-for-1 stock split on November
20, 2003.
Per share data for the previous fiscal year assuming the stock
split was implemented at the beginning of the previous fiscal
year are given below.
Book value per share¥55,521.29
Net income per share¥25,229.18

The Company implemented a 2-for-1 stock split on September
3, 2004.
Per share data for the previous fiscal year assuming the stock
split was implemented at the beginning of the previous fiscal
year are given below.
Book value per share¥45,253.63
Net income per share¥19,923.14

Since no latent shares exist, diluted net income per share is notstated.

Since no latent shares exist, diluted net income per share is notstated.

(Note) The calculation basis for net income per share is as below.

Net income
Amount not allocable to commonshareholders(Of which, bonuses to directors and statutory
auditors by appropriation of retained
earnings)
Net income allocable to common shares
Average number of shares of common stock
outstanding
Outline of latent shares not reflected in thecalculation of diluted net income per sharesince there are no dilution effects from them

Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)¥6,520,172 thousand¥85,000 thousand

Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)¥6,721,283 thousand¥105,000 thousand(¥85,000 thousand)(¥105,000 thousand)¥6,435,172 thousand
161,500 shares¥6,616,283 thousand
343,000 shares
Stock acquisition rights
Resolution on June 27, 2003
Number of latent shares 3,180 shares

Per share data adjusted retroactively
Per-share data stated in the summary of financial statements, based on data for the fiscal year ended March 31, 2005, have beenadjusted for dilution from the stock splits implemented to date as follows.
Fiscal year ended March 31, 2004
InterimYear-end

Fiscal year ended March 31, 2005
InterimYear-end

Yen

Yen

Yen

Yen

10,256.18

19,923.14

5,876.37

19,289.46

Ordinary

1,000.00

2,000.00

2,000.00

2,000.00

Commemorative

1,000.00−−−

37,175.20

45,253.63

84,247.58

95,993.86

Net income per share
Dividend per share

Shareholders’ equity per
share(Note) A 2- for-1 stock split was implemented on September 3, 2004.

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最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM(Subsequent Events)
Fiscal year ended March 31, 2004
(April 1, 2003 − March 31, 2004)
Resolution for stock options
The Board of Directors, at the meeting on April 14, 2004,
resolved the following details regarding the issuance of stockacquisition rights as stock options pursuant to the provisions ofArticles 280-20 and 280-21 of the Commercial Code, and basedon the resolution of the 15th ordinary general meeting ofshareholders on June 27, 2003.
1.
2.
3.
4.
5.
6.
7.

Issue date of stockacquisition rights
Number of stock acquisitionrights to be issued
Issue value of stockacquisition rights
Class and number of sharesfor which stock acquisitionrights are to be issued
Amount to be paid upon
exercise of stock acquisitionrightsExercise period for stockacquisition rights
Number of persons eligible
for stock acquisition rights
allotment

April 14, 2004
681 rights(five shares per stockacquisition right)
Gratis3,405 shares of common
stock¥1,520,000 per share
From July 1, 2005, toJune 30, 2008
Directors, statutory
auditors and employeesof the Company
Total of 115 people

Resolution for stock split (gratis issue)
On May 25, 2004, the Board of Directors passed a resolution
authorizing a stock split (gratis issue).
Stock split (gratis issue)
1. A 2-for-1 common stock split will be implemented as follows
on September 3, 2004.
(i) Number of shares to be increased through the stock split
As common stocks, the number of shares to be increased
will be the same as the number of shares outstanding as ofJuly 15, 2004.
(ii) Split method
Common stock held by shareholders recorded orregistered in the shareholder register or the effective
shareholder register as of July 15, 2004, will be split on a
2-for-1 ratio.
2. Dividend reckoning date April 1, 2004
Per share data for the previous fiscal year and the current fiscal
year, assuming such a stock split was implemented at the
beginning of the each fiscal year, are as follows.
Previous fiscal year
Current fiscal year
Book value per share
Book value per share¥27,760.65¥45,253.63
Net income per share
Net income per share¥12,614.59¥19,923.14
Since no latent shares exist,
Since no latent shares exist,
diluted net income per sharediluted net income per shareis not stated.
is not stated.

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Fiscal year ended March 31, 2005
(April 1, 2004 − March 31, 2005)

最終更新日時：6/22/2005 5:09 PM 最終印刷日時：6/29/2005 3:07 PM

Fiscal year ended March 31, 2004
(April 1, 2003 – March 31, 2004)
Resolution for issuance of new shares in overseas markets
On May 25, 2004, the Board of Directors passed a resolution
authorizing the issuance of new shares in overseas markets.
(1) Number of shares to be issued
12,000 shares of common stock(2) Issue value¥1,108,755(3) Amount transferred to paid-in capital¥554,378(4) Issue dateJune 15, 2004
(5) Method of issuance
HSBC Bank plc will act as lead manager of anunderwriting syndicate, which will purchase the sharesfrom the Company. Shares will be sold mainly in Europe
through public offering (but only to qualifying
institutional investors in the United States).
(6) Dividend reckoning date
April 1, 2004
(7) Use of funds raised
Of the approximately ¥13.1 billion raised through theissue of new shares, ¥4 billion will be used to expand andupgrade the Company’s sales network and internal sales
management systems; ¥6 billion will be used for
acquiring and investing in merchandizing rights; and theremainder will be used for investments and loans to
subsidiaries, etc.

Fiscal year ended March 31, 2005
(April 1, 2004 – March 31, 2005)

8.
Changes in Directors
Changes are as yet undecided. However, any changes in directors will be decided at the meeting of the Board of
Directors to be held in May 2005, and will be notified separately.

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