June 28, 2018
Name of Company:
Stock Code:Head Office:Representative:

KAGA ELECTRONICS CO., LTD.
8154 Tokyo Stock Exchange, First Section
20 Kandamatsunagacho, Chiyoda-ku, Tokyo
Ryoichi Kado, President & COO

Contact:

Eiji Kawamura, Managing Director,
Head of Administration Headquarters
Phone: 03-5657-0111

Notification of the Dissolution of a Consolidated Subsidiary, and of the Risk That Debts
May Not be Recoverable
KAGA ELECTRONICS CO., LTD. (T SE: 8154; the “ Company”) announced that, at a meeting of the Board ofDirectors held on June 28, 2018, the Company resolved to dissolve its consolidated subsidiary KAGACOMPONENT S CO., LTD. (hereinafter, “KAGA COMPONENT S”), and to implement a special liquidation, inaddition to which it has emerged that there is a risk that some of the debts owed by KAGA COMPONENT Sto theCompany may not be recoverable.

1． Reasons leading up to the dissolution of KAGACOMPONENTS
In April 1991, the Company made a subsidiary of the predecessor to KAGA COMPONENT S, VOLTEKCORP. In May 1997 it changed the company name to KAGA COMPONENT S CO., LTD. and made it aconsolidated subsidiary. In addition to developing, manufacturing and selling power supply equipment,switching power supplies, and transformers, which were its main business, the company began developing,manufacturing, and selling projectors in April 2006. However, due to price declines caused by intensifying
competition and weak demand, management of the business became extremely challenging, andthe company’sliabilities came to exceed its assets.
Accordingly, the Company proceeded to dissolve the operations of KAGA COMPONENT S, and because
there is no longer a role for the KAGA COMPONENT S as entity, it has recently implemented a specialliquidation of the firm.
2． Outline of the subsidiary being dissolved (KAGACOMPONENTS)(As of March 31, 2018)
(1)

Name

KAGACOMPONENTSCO., LTD.

(2)

Location

20 Kandamatsunagacho, Chiyoda-ku, Tokyo(3)

T itle and name of representative

President Suguru Moriguchi(4)

Business details

Manufacture and sale of electronic equipment(5)

Capital

400 million yen(6)Date establishedMarch 18, 1968

(7)

Major shareholder & percentage
owned by major shareholder

KAGAELECT RONICSCO., LTD.
100%- 1 -(8)Relationships between the listedcompany and the company inquestion(9)

Capitalrelationships

T he Company holds 100% of thevoting rights of the company inquestion.

Personnel
relationships

One employee of the Company
concurrently serves as a Director(President) of KAGACOMPONENTS.

T ransactional
relationships

T he Company conducts transactions
involving financial loans with KAGACOMPONENTS.

Status with regard
to related parties

KAGACOMPONENTSis a
consolidated subsidiary of theCompany, and is a related party.

Operating results for the most recent
three years
Financialposition
Fiscal year

March 2016

March 2017

March 2018

Net assets-4,548 million yen -4,314 million yen -4,588 million yen

Total assets

4,639 million yen

5,711 million yen

1,329 million yen-5,686.03 yen-5,393.56 yen-5,735.46 yen

8,989 million yen 9,305 million yen

8,825 million yen

Net assets per share
Net sales
Operating income

54 million yen

141 million yen

133 million yen

Ordinary income

24 million yen

173 million yen

122 million yen

Profit attributable to owners of parent

22 million yen

231 million yen-273 million yen

Earnings per share

27.84 yen289.50 yen-342.47 yen

Dividends per share---3． Outline of debts owed to the Company by KAGACOMPONENTS
Type and value of debt
Loans4,692 million yen
Percentage of consolidated net assets

6.64%

4． Schedule for dissolution and special liquidation
June 28, 2018
Resolution to dissolve passed by Board of Directors of the Company
Resolution to dissolve passed by extraordinary General Meeting of Shareholders ofKAGACOMPONENTS
June 28, 2018
July 2, 2018 (planned)

Date of dissolution
Application for special liquidation

October 2018 (planned) Completion of special liquidation
5． Outlook going forward
As a result of the procedure for special liquidation following the dissolution of KAGA COMPONENT S, it isexpected that the above-mentioned debts will not be recoverable, but the expected value of unrecoverable debts
has already been posted to the allowance for doubtful debts in the non-consolidated accounts. In addition,
because the above-mentioned debts are eliminated in the consolidated accounts, the impact on the consolidated
and non-consolidated accounts of the Company is negligible.
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