May 30, 2012

Summary of Consolidated Financial Results
For the Year Ended March 2012 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:
Representative
Contact Person

KAGA ELECTRONICS CO., LTD.
8154
URL: http://www.taxan.co.jp/
Tokyo Stock Exchange, First Section
Title: President & COO
Name: Tomohisa Tsukamoto
Title: Executive Officer, Finance &Name: Eiji Kawamura
Administration Headquarters
Phone:+81-(0)3-4455-3111
Date of regular general meeting of shareholders:June 28, 2012 (tentative)
Date of commencement of dividend payment:
June 29, 2012 (tentative)
Date of filing of securities report:
June 28, 2012 (tentative)
Supplementary explanatory documents:
Yes
Earnings presentation:
Yes (For institutional investors)(Yen in millions, rounded down)
1. Financial results for the current fiscal year (April 1, 2011 – March 31, 2012)(1) Result of operations (Consolidated)(Percentage figures represent year on year changes)
Net sales
Fiscal year ended March 2012

Million yen
229,856

Fiscal year ended March 2011

237,811

Operating income

Ordinary income

Net income%
Million yen
(3.3)
2,067

%
Million yen(39.6)
2,569%
Million yen(28.6)
914%(48.3)

(0.7)

116.3

181.0

-

3,423

3,598

1,768

Note: Comprehensive income: FY ended March 31, 2012: 397 million yen (-51.7%), FY ended March 31, 2011: 821 million yen (-%)
Net income per share
Yen
33.13
64.07

Fiscal year ended March 2012
Fiscal year ended March 2011
Note: Equity in losses of affiliates

Net income per share
fully diluted
Yen

FY ended March 2012: -million yen

Return on
equity%2.0
3.8

Ratio of ordinary Ratio of operating
income to assets income to net sales
%
%

2.2
3.1
FY ended March 2011: - million yen

0.9
1.4

(2) Financial Position (Consolidated)
Total assets
As of March 31, 2012
As of March 31, 2011
Note: Shareholders’ equity(3)

Net assets

Equity ratio

Net assets per share

Million yen
Million yen%
Yen114,71447,93640.5
1,681.73
114,599
48,51240.9
1,697.55
FY ended March 2012: 46,410 million yen
FY ended March 2011: 46,848 million yen

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

Net cash providedby (used in)investing activities

Million yen
958
6,321

Fiscal year ended March 2012
Fiscal year ended March 2011

Net cash providedby (used in)financing activities

Million yen(2,645)(6,369)Cash and cash
equivalents at endof period

Million yen
(242)
478

Million yen
9,695
11,796

2. Dividends
AnnualDividends/
Payout ratio
aggregate
net assets(Consolidated)
End of 1Q End of 2Q End of 3Q End of FY Full year
amount(Consolidated)
Yen
Yen
Yen
Yen
Yen Million yen
%
%
15.00
15.00
30.00
827
46.8
1.8
15.00
15.00
30.00
827
90.5
1.8
Dividend per share

Fiscal year ended March 2011
Fiscal year ended March 2012
Fiscal year ending March 2013
(estimated)

-

15.00

-

15.00

30.00

-

3. Forecast for the fiscal year ending March 2013 (Consolidated, April 1, 2012 - March 31, 2013)(Percentage figures represent year on year changes)
Net sales
Operating income
Ordinary income
Net income
Million yen%
Million yen%
Million yen%
Million yen%
Yen
First half
108,000(7.1)
300 (61.1)
500(44.2)
300
(0.4)
10.87
Full year
234,000
1.8
2,200
6.4
2,700
5.1
1,600
75.0
57.98
*

Notes
(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of consolidation):
None(2) Changes in accounting principles and estimates, and retrospective restatement(a) Changes due to revision of accounting standards: Yes(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(3) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury stock)

As of March 31, 2012:

28,702,118

As of March 31, 2011:

28,702,118(b) Treasury stock

As of March 31, 2012

1,105,201

As of March 31, 2011:

1,104,656(c) Average number of shares outstanding
during the year

As of March 31, 2012

27,597,270

As of March 31, 2011:

27,597,906

Non-consolidated Financial Results (For reference)
1. Financial results for the current fiscal year (April 1, 2011 – March 31, 2012)(1) Result of operations (Non-consolidated)(Percentage figures represent year on year changes)
Net sales

Fiscal year ended March 2012
Fiscal year ended March 2011

million yen
95,163
95,194

%
(0.0)
4.3

Net income
per share
yen
95.90
74.96

Fiscal year ended March 2012
Fiscal year ended March 2011

Operating income

Ordinary income

million yen
705
1,125

million yen
4,736
2,852

%
(37.3)
917.5

%
66.0
63.8

Net income
million yen
2,646
2,068

%
27.9
-

Net income per share
fully dilutedyen-(2) Financial Position (Non-consolidated)
Total assets
As of March 31, 2012

million yen
75,486

As of March 31, 2011
71,850Note: Shareholders’ equity
Fiscal year ended March 2012: 35,378 million yen
Fiscal year ended March 2011: 33,924 million yen

Net assets

Equity ratio

Net assets per share

million yen
35,378%46.9

yen1,281.99

33,92447.2

1,229.26*Status of implementation of audit procedures
The financial statements for the fiscal year were under audit procedures at the time this Summary of Financial Results was released.
*Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time this report was
prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements
for a number of reasons.

Index for Supplementary Information
1.

Results of Operations....................................................................................................................................................................1
Overview on consolidated business performance ....................................................................................................................1
Overview of financial condition...............................................................................................................................................2
Fundamental policy for earnings allocations and dividends in the fiscal years 2011 and 2012 ...............................................22.
Corporate Group ...........................................................................................................................................................................3
3.
Management Policies ....................................................................................................................................................................5(1) Fundamental management policy.............................................................................................................................................5(2) Targeted performance indicators..............................................................................................................................................5(3) Medium- and long-term management strategies ......................................................................................................................5(4) Key issues ................................................................................................................................................................................5(5) Other important items concerning management.......................................................................................................................64.
Consolidated Financial Statements ...............................................................................................................................................7(1) Balance sheet ...........................................................................................................................................................................7(2) Statements of income ...............................................................................................................................................................9(3) Statement of changes in consolidated shareholders’ equity ...................................................................................................11(4) Statements of cash flows........................................................................................................................................................13(5) Notes to ongoing concern assumptions..................................................................................................................................15(6) Significant changes in basis of presenting the consolidated financial statements ..................................................................15(7) Notes to consolidated financial statements ............................................................................................................................16(Segment information etc.)..........................................................................................................................................................16(Per-share information) ...............................................................................................................................................................19(Subsequent events) ....................................................................................................................................................................195.
Non-consolidated Financial Statements ......................................................................................................................................20(1) Balance sheets........................................................................................................................................................................20(2) Statements of income .............................................................................................................................................................23(3) Statement of changes in shareholders’ equity......................................................................................................................24
6.
Other Information .......................................................................................................................................................................26
(1)
(2)
(3)

1.

Results of Operations(1) Overview on consolidated business performance
In the fiscal year that ended on March 31, 2012, there was an improvement in U.S. employment and consumer spending
because of strength in the corporate sector. But the U.S. economic upturn was lackluster due to increasing concerns about aslowdown caused mainly by a weak housing market, the debt crisis in Europe and the U.S. budget deficit. In Europe,
economies were weak because of mounting concerns about financial system instability caused by financial market turmoil as
the debt crisis deepened in several countries. In Southeast Asia as well, where economic growth continued, economies were
under pressure from financial tightening to control inflation in major emerging countries like China and India and fromflooding in Thailand. As a result, global economic growth slowed during the fiscal year.
In Japan, there was a sharp economic downturn as manufacturing activity stopped after the Great East Japan Earthquake. The
Japanese economy subsequently began to recover along with restoration of supply chains and demand backed by earthquake
reconstruction activity. However, the economic outlook remained uncertain during the fiscal year for a number of reasons,
including the steep drop in exports after the earthquake, slowing overseas economic growth because of the European debt crisis,
the increase in the yen’s value, and flooding in Thailand.
In the electronics industry, there was growth in demand for smartphones, tablet computers and other mobile devices anddemand for flat-panel televisions as consumers rushed to buy them as Japan started terrestrial digital television broadcasts. But
sales of flat-panel televisions and other consumer electronics started falling in the summer of 2011 and impact of flooding in
Thailand on production activity had an impact on the supply of electronic components and semiconductors. The operating wasdifficult throughout the fiscal year.
In this environment, the KAGA ELECTRONICS Group responded to the rapid changes in the electronics industry by taking
actions based on its management philosophy of “Everything we do, we do for our customers.” To increase the speed, flexibility
and efficiency of the entire group, there were organizational changes that strengthened solidarity among group companies. In
addition, new products were added, the product lineup was enlarged and other actions were taken.
Despite these initiatives, consolidated net sales decreased 3.3% to 229,856 million yen, operating income was down 39.6% to2,067 million yen and ordinary income fell 28.6% to 2,569 million yen. A loss of 1,050 million yen for property and equipment
and inventories was recorded in the third quarter in association with damage from flooding in Thailand. However, since there
was insurance for this damage, there were insurance payments of 1,295 million yen in the fourth quarter. Including these items,
net income was 914 million yen, down 48.3% from one year earlier.
Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components and otherproducts, electronics manufacturing service (EMS)*, and other activities)
In Japan, the Great East Japan Earthquake and flooding in Thailand caused shortages of semiconductors and electronic
components. But group companies secured procurement channels for these products and focused on increasing sales tocurrent customers and enlarging sales channels for LED products and solar panels in the environmental business. Overseas,
there were extensive sales activities that targeted Japanese companies and companies in China.
However, in Japan, there were declines in sales of electronic components and semiconductors as well as in EMS orders
mainly because client manufactures reduced output in response to falling consumption after the Great East Japan
Earthquake. Overseas, performance was impacted by lower output by client manufacturers because of flooding in Thailand.
As a result, segment sales decreased 3.0% to 166,468 million yen. Operating income was down 30.3% to 2,021 million yen
because of the lower gross profit margin caused primarily by the downturn in the EMS business.
* Electronics manufacturing service is a term used for the provision of product development and manufacturing services on an outsourcing
basis.

(b) Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, and otherproducts)
Sales in this segment benefited from measures to increase sales of PCs, PC peripherals and other existing products and to
add new products. In addition, orders for terrestrial digital TV broadcast tuners increased due to the July 2011 end ofterrestrial TV broadcasts in Japan. However, there was a drop in sales of consumer electronics in Japan after the Great East
Japan Earthquake and the supply of products sold by group companies fell because of flooding in Thailand. The result wasa 2.7% decrease in segment sales to 49,360 million yen. The decline in sales, an addition to the allowance for doubtful
accounts and other factors caused an operating loss of 533 million yen compared with a 67 million yen loss one year earlier.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
In the software business, group companies focused on the production of computer graphics for animation, the developmentof image processing ICs for amusement devices, and sales of game and application software. However, additional timerequired for development projects and the resulting delay in sales from these projects caused segment sales to fall 32.2% to3,854 million yen and operating income to decrease 17.4% to 402 million yen.
(d) Others (Electronic device repairs and support, sales of sporting goods, and other activities)
The Great East Japan Earthquake impacted sales in the golf product sales business because of falling demand and reducedorders in the recycling business and other activities in this segment. But in the fiscal year’s second half, aggressive sales
activities produced a recovery in orders associated with amusement devices and other products. As a result, sales increased
3.8% to 10,173 million yen and operating income was up 38.9% to 319 million yen.

1

In the fiscal year ending on March 31, 2013, the global economy is expected to be uncertain because of concerns about slowing
U.S. economic growth, the European debt crisis, and declining economic growth rates in China and other emerging countries.
In Japan, there are expectations for an economic recovery along with growing public-works expenditures for earthquake
reconstruction and upturns in exports and consumer spending. But the yen’s prolonged strength and the electricity supply
limitations caused by the shutdown of nuclear power plants pose problems. The European debt crisis and upcoming direction of
the U.S. economy make the outlook for the Japanese economy even more difficult to determine.
In the electronics industry, more growth in demand is foreseen for smartphones and other tablet devices. But operating
environment for the industry is expected to be challenging because of soft demand for consumer electronics, particularly flatscreen televisions.
In this environment, KAGA ELECTRONICS Group companies will work more closely together and use synergies to operate
more efficiently. For business sectors, resources will be focused on automotive, communications and environmental products.
In another step to improve efficiency, new products will be added and unprofitable businesses will be restructured.
Based on this outlook, the current forecast for the fiscal year ending on March 31, 2013 is net sales of 234,000 million yen, up
1.8%, operating income of 2,200 million yen, up 6.4%, ordinary income of 2,700 million yen, up 5.1%, and net income of
1,600 million yen, up 75.0%.
(2) Overview of financial condition(a) Assets, liabilities and net assets
Assets increased 114 million yen from one year earlier to 114,714 million yen at the end of the fiscal year. The purchase ofproperty, plant and equipment was mainly responsible for this increase.
Liabilities increased 690 million yen to 66,777 million yen mainly because of an increase in loans.
Net assets decreased 575 million yen to 47,936 million yen mainly because of an increase in retained earnings.
(b) Cash flows
There was a net decrease of 2,100 million yen in cash and cash equivalents to 9,695 million yen at the end of the fiscal year.
(Operating activities)
Net cash provided by operating activities was 958 million yen compared with 6,321 million yen one year earlier. A increasein notes and accounts receivable-trade was a major source of cash.
(Investing activities)
Net cash used in investing activities was 2,645 million yen compared with 6,369 million yen one year earlier. The primary
use of cash was payments for the purchase of property, plant and equipment.
(Financing activities)
Net cash used in financing activities was 242 million yen. compared with 478 million yen provided in the previous fiscal
year. Repayment of long-term loans payable was the primary source of cash.
Cash flow index trends (for reference)
Fiscal year
ended
March 2008

Fiscal year
ended
March 2009

Fiscal year
ended
March 2010

Fiscal year
ended
March 2011

Fiscal year
ended
March 2012

Shareholders’ equity ratio
40.0%
40.7%
41.1%
40.9%
40.5%
Shareholders’ equity ratio at market value
28.4%
18.8%
24.4%
23.6%
20.9%
Debt repayment multiple
19.24 years
2.38 years
2.01 years
2.12 years
14.97 years
Interest coverage ratio
4.8
28.1
43.6
52.0
6.6
Shareholders’ equity ratio is shareholders’ equity divided by total assets.
Shareholders’ equity ratio at market value is market capitalization divided by total assets.
Debt repayment multiple is interest-bearing debt divided by operating cash flows.
Interest coverage ratio is operating cash flows divided by interest expenses.
Notes:
1. All figures are calculated based on consolidated financial data.
2. Market capitalization uses the number of shares issued less treasury stock.
3. Cash flows are operating cash flows.
4. Interest-bearing debt is the sum of all liabilities on the balance sheet on which the Group is obligated to pay interest.
(3) Fundamental policy for earnings allocations and dividends in the fiscal years 2011 and 2012
The Company’s fundamental policy is to pay a steady and consistent dividend to shareholders that reflect consolidated
performance as well as the need to establish a more powerful financial position and base of operations from a long-term stable
perspective.
Based on performance in the fiscal year 2012, the Company plans to pay a year-end dividend of 15 yen per share. With theinterim dividend of 15 yen per share, this will result in an annual dividend of 30 yen per share.
For the fiscal year ending on March 31, 2013, to show appreciation to shareholders for their support, a dividend per share of 30
yen, including an interim dividend of 15 yen, is planned.

2

2.

Corporate GroupThe KAGA ELECTRONICS group of companies (the Group) is made up of KAGA ELECTRONICS CO., LTD. (the Company), 49
consolidated subsidiaries (22 in Japan, 27 overseas) and 2 affiliates that are not accounted for using the equity method (1 in Japan, 1overseas). These companies are engaged primarily in the following activities: the electronic components business, including thedevelopment, manufacture and sale of semiconductors and general electronic components and EMS (electronic manufacturingservices); and the information equipment business, including the sale of personal computers and peripherals, photography andimaging products, and original-brand products; and the software business includes the production of computer graphics for animation,
the planning and development of products for amusement devices, and other activities. Other businesses include repair and support
services for electronic devices, the sale of sporting goods, and other activities.
<Japan>[Electronic components business]
Sales
KAGA DEVICES CO., LTD.
AD DEVICE CORPORATIONADM INC.
Manufacturing and sales
KAGA TECH CO., LTD.
KAGA COMPONENTS CO., LTD.

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

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

<Overseas>[Electronic components business]
Sales
KAGA (H.K.) ELECTRONICS LTD.
KAGA (SINGAPORE) ELECTRONICS PTE.LTD.
KAGA (KOREA) ELECTRONICS CO., LTD.
KAGA (TAIWAN) ELECTRONICS CO., LTD.
KAGA DEVICES (H.K.) LTD.
KAGA ELECTRONICS (USA) INC.
KAGA (SHENZHEN) TRADING CO., LTD.
HANZAWA (HK) LTD.
AD DEVICE (H.K.) LIMITEDKAGA (EUROPE) ELECTRONICS LTD.
NUMATA (H.K.) CO.,LTD.
NUMATA (SHENZHEN) TRADING CO., LTD.
KAGA DEVICES INDIA PRIVATE LIMITEDKAGA AMUSEMENT MALAYSIA SDN.BHD.
Manufacturing and sales
KAGA COMPONENTS(HONG KONG)LIMITEDKAGA (SHENZHEN) ELECTRONICS CO.,LTD.
KAGA COMPONENTS (MALAYSIA) SDN. BHD.
KAGA (SHANGHAI) ELECTRONICS CO., LTD.
KAGA ELECTRONICS (THAILAND) CO., LTD.
DONGGUAN POWERTEK ELECTRONICS CO., LTD.
KAGA (DALIAN) ELECTRONICS CO., LTD.
KAGA INSTRUMENTS SHANTOU CO., LTD.
KD TEC s.r.o.
KAGA TAXAN ELECTRONICS (SUZHOU) CO., LTD.

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

Design and development
HANZAWA (SZ) LTD.
[Software business]
CyberFront Korea Corporation# Explay Japan Co., Ltd.

# One other company
KAGA AGENCY CO., LTD.
(insurance agency)

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

3(1) The following consolidated subsidiaries became our group company during the fiscal year that ended in March 2012.

Businessrelationship

Leasing offacilities
andequipment--

Relationship with the Company
Name

Address

CapitalActivities

Voting rights
held%[Electronic components business]
KAGA DEVICESINDIA PRIVATE
Bangalore,
LIMITED
India(Note 6)15 mn INR

KAGA AMUSEMENTMALAYSIA
Kuala Lumpur,
1mn MYR
SDN.BHD.
Malaysia(Note 7)

Joint Financial
directors support
Persons

Millionyen

Sales of electronic
components andelectronic devices

100.0(Note 1)(90.0)--

Sales of arcade gamemachines,
consumables andmaintenance parts,;
leasing of video gamemachines, periodic
maintenance service;and sales ofequipment foramusement facilities

100.0(Note 1)(100.0)---Notes:
1. Figures in parentheses in the column showing voting rights of the subsidiary are the indirect percentages.
2. On April 1, 2011, consolidated subsidiaries KAGA TECH CO., LTD. and OTSUKA ELECTRIC CO., LTD. merged with KAGATECH CO., LTD. the surviving company.
3. On April 1, 2011, CyberFront Corporation absorbed consolidated subsidiary DS Press Corporation.
4. On April 1, 2011, KAGA DEVICES (H.K) LTD. and NUMATA (H.K.) CO., LTD. were integrated with KAGA DEVICES(H.K.) LTD. the surviving company. On the same day, KAGA (SHENZHEN) TRADING CO., LTD., a consolidated subsidiaryof KAGA DEVICES (H.K.) LTD., and NUMATA (SHENZHEN) TRADING CO., LTD., a consolidated subsidiary of
NUMATA (H.K.) CO., LTD., were integrated with KAGA (SHENZHEN) TRADING CO., LTD. the surviving company. In
addition, KAGA (H.K.) ELECTRONICS LTD. and HANZAWA (HK) LTD. merged with KAGA (H.K.) ELECTRONICS LTD.
the surviving company. On the same day, KAGA (SHENZHEN) ELECTRONICS CO., LTD., a consolidated subsidiary of
KAGA (H.K.) ELECTRONICS LTD., and HANZAWA (SZ) LTD., a consolidated subsidiary of HANZAWA (HK) LTD., were
integrated with KAGA (SHENZHEN) ELECTRONICS CO., LTD. the surviving company.
5. On May 10, 2011, GUANGZHOU KEIDENKI LTD., which was a consolidated subsidiary until the end of March 2012, wasliquidated.
6. On July 13, 2011, consolidated subsidiary KAGA DEVICES CO., LTD. established KAGA DEVICES INDIA PRIVATELIMITED in India to start business operations in this country.
7. On December 5, 2011, consolidated subsidiary KAGA AMUSEMENT CO., LTD. established KAGA AMUSEMENTMALAYSIA SDN. BHD. as a sales subsidiary in Malaysia to expand overseas operations.

4

-

3.

Management Policies(1) Fundamental management policy
Based on the management philosophy of “Everything we do, we do for our customers,” the KAGA ELECTRONICS Group
is guided by the fundamental policy of “remaining a company that contributes to the happiness of all stakeholders, including
shareholders, customers and employees, and fulfills its responsibilities to society.” The Group is dedicated to growing
consistently by responding with speed and agility to globalization of the economy and the rapidly changing electronics
industry. To accomplish this, the Group will expand its network in Japan and overseas and deepen ties among Group
companies to enhance collective strengths. The Group also has a strong commitment to corporate social responsibility,
positioning compliance and protecting the global environment as important elements of its operations.
Based on the above management philosophy and fundamental management policy, the companies of the KAGAELECTRONICS Group, which are active primarily in the electronics industry, seek to improve their results of operations
while cooperating with each other by doing business in a speedy manner that places the highest priority on rapid decisionmaking.
The key word is “F.Y.T.”
F = Flexibility (adapting adeptly to external changes)
Y = Young (staying young in thought and action)
T = Try (the spirit of always taking on challenges)(2) Targeted performance indicators
As the electronics industry, where the Group is active, is expected to continue to grow, priority will continue to be placed on
raising the rate of sales growth and improving the return on equity.
(3) Medium- and long-term management strategies
The rapid pace of change in the electronics industry is expected to continue. New products are appearing and existingproducts going out of date faster. Companies are moving production bases out of Japan faster, too. Amid these changes, more
growth is foreseen for the electronics industry.
The Group has grown with KAGA ELECTRONICS, an independent electronics trading company, as its nucleus by working
with a large number of suppliers and customers and handling a broad spectrum of products. The Group is distinguished by its
ability to handle all aspects of the electronics business, from upstream to downstream, including product planning,development and processing (EMS). Backed by these distinctive strengths, the Group will work even more closely together
to capture synergies with the goal of increasing sales and earnings while growing on a global scale.
The key word is “3G.”
General (covering everything)
Global (worldwide coverage)
Group (leveraging the collective power of the Group)(4) Key issues
In the fiscal year that ended on March 31, 2012, in response to the discovery of improper transactions and accounting
procedures at consolidated subsidiary KAGA HIGHTECH CO., LTD. (“KAGA HIGHTECH”), the KAGA ELECTRONICS
Group established an Investigation Committee that included experts from outside the Group to determine all of the facts
involving this incident.
This investigation showed that there was no involvement in the improper transactions and accounting procedures by KAGAHIGHTECH as an organization. Furthermore, no improper transactions and accounting procedures were discovered at otherconsolidated subsidiaries.
The Group has taken very seriously the recommendations for preventive measures that were submitted by the Investigation
Committee. To prevent a reoccurrence of this type of incident, preventive measures will be implemented continuously as oneof the highest management priorities. Furthermore, actions will be taken to ensure strict compliance with laws andregulations and to strengthen corporate governance.
Preventive measures are as follows.
1) Rigorous implementation of internal controls and retraining programs at KAGA HIGHTECH(a) All executives and employees of KAGA HIGHTECH will reconfirm and share knowledge about the risks associatedwith every business process and the purpose of internal control activities, including the details of procedures that mustbe followed. Retraining will place particular emphasis on the following two points.
i. Strict implementation of deletions of individual entries when cross-checking for accounts receivable calculation
errors for sales discounts.
ii. Strict implementation of confirmations for consistency of internal checks and vouchers when approval is granted
for posting a sales discount.
(b) Ensure that all executives and employees of KAGA HIGHTECH fully understand the contents and behavior associatedwith the improper transactions as well as the background. In addition, everyone will reconfirm their understanding in a
concrete manner of the magnitude of the effect of the failure to implement internal controls on improper accounting
procedures and on the reliability of information the Group discloses to the public. Retraining programs will be
conducted as well. Training programs will thoroughly cover the following four points in particular.
i. The process for determining discounts and prices with counterparties, processing discounts, managing receivables,
handling mistaken calculations for receivables and handling returned products
ii. The importance of performing accounting procedures in a timely and appropriate manner5

iii. Internal training about the importance of quick consultations and reports when strange transactions or behavior is
discovered.
iv. Education to make people aware of the extremely grave consequences for themselves if they engage in improper
behavior
2) Make internal controls even stronger and more effective(a) Study and implement periodic personnel changes and job rotations at KAGA HIGHTECH as well as measures for thesuitable transfer of tasks to individuals newly assigned to a post.
(b) Study and implement the greater use of IT and data systems at KAGA HIGHTECH to prevent salespeople from usinge-mail or other means to handle discount consultations or requests on their own and to ensure the accurate processingof business tasks that take place mainly at the end and beginning of each month.
(c) In addition to the “Report Box” on the intranet that serves as an internal reporting system, allow employees to submit
reports by postal mail and other channels. Strengthen the reporting system while continuing to protect the identities ofindividuals who provide information. Make everyone at the Group aware of these measures.
(d) To reinforce the ability of KAGA ELECTRONICS CO., LTD. to supervise and support the operations of subsidiaries,
determine and verify the status of operations at subsidiaries, perform risk analysis for subsidiaries and then study andimplement measures that are needed.
The KAGA ELECTRONICS Group is determined to continue growing while adhering to its fundamental management
policy. Based on the “F.Y.T.” and “3G” management policies explained earlier as well as on the reinforcement ofcompliance, the Group’s management will be strengthened with the aim of increasing enterprise value while preserving
strong relationships with all stakeholders.
Additionally, the Group conducts reorganizations whenever needed in order to respond rapidly to changes in market
conditions and customer needs. Another goal is enhancing the ability to gather information quickly. At the same time, theGroup aims to capture more synergies by building stronger ties among Group companies and fostering more collaborationand mutual assistance within the Group, thereby expanding operations and improving efficiency.
Based on the following environmental policy, all members of the Group are working together to build a framework that cantackle environmental issues from many perspectives. (ISO14001 certification was received on November 15, 2002.)(Environmental Policy)
Always looking ahead to the future of electronics, the KAGA ELECTRONICS Group is dedicated to meeting the needs ofcustomers while protecting the Earth in order to preserve the improve the natural environment.
At present, the Group is concentrating on the following issues:(a) Updating and establishing group oversight systems to improve operating efficiency(b) Strengthening relationships, collaboration and mutual assistance among Group companies to realize greater synergies(c) Reinforcing operations overseas and expanding the global network(d) Upgrading technological skills and improving the ability to gather information with speed(e) Revitalizing underperforming subsidiaries(f) Tackling environmental problems(g) Thorough operation of internal control systems(5) Other important items concerning management
Not applicable64.

Consolidated Financial Statements(1) Balance sheet(million yen)
FY 2011(As of March 31, 2011)ASSETS
Current assets
Cash and cash equivalents
Notes and accounts receivable-tradeMarketable securities
Merchandize and furnished goods
Goods in progress
Raw materials and other supplies
Deferred tax assets
OthersAllowance for doubtful receivables

FY 2012(As of March 31, 2012)

11,92654,02571
15,775
555
3,189
1,029
6,399
(182)

9,775
55,97974
17,104
334
4,115
861
6,272
(144)

92,78994,374

4,132(1,637)

4,818(1,872)

Buildings and structures, net

2,494

2,945

Machinery, equipment and vehicles
Accumulated depreciation

3,787(2,186)

3,408(1,916)

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

1,601

1,492

3,889
(2,872)

3,752(2,826)

1,016

926

Land
Construction in progress

4,099
511

4,077
45

Total property, plant and equipment

9,724

9,487

464
790
1,344

253
800
1,191

2,599

2,245

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

4,493
619
2,359
1,129
2,511
(1,627)

4,032
341
2,068
1,384
2,458
(1,678)

Total investments and other assets

9,485

8,607

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

Intangible assets
Goodwill
Software
OthersTotal intangible assets

Total fixed assets
Total assets

7

21,81020,340114,599

114,714

(million yen)
FY 2011(As of March 31, 2011)
LIABILITIESCurrent liabilities
Notes and accounts payable-trade
Short-term bank loans
Lease obligations
Accrued expenses
Income taxes payable
Provision for directors' bonuses
Others

FY 2012(As of March 31, 2012)

40,790
8,505
2,547
1,511
138
3,494

41,74811,084
75
2,443
1,082
52
2,986

56,98759,474

Others

4,636
350
1,556
1,294
226
1,034

2,833
326
228
1,579
1,399
245
691

Total long-term liabilities

9,099

7,303

Total liabilities

66,087

66,777NET ASSETS
Shareholder’s equity
Paid-in capital
Capital surplus
Retained earnings
Treasury stock

12,133
13,912
24,952(1,332)

12,133
13,91225,038(1,333)49,66549,751(246)
0(2,571)(653)(24)(2,663)(2,817)(3,341)

Subscription rights to shares
Minority interests

0
1,664

0
1,526

Total net assets

48,51247,936

114,599

114,714

Total current liabilities
Long-term liabilities
Long-term bank loans
Lease obligations
Deferred tax liabilities
Provision for retirement benefits
Provision for directors' retirement benefits
Asset retirement obligations

Total shareholder’s equity
Valuation and translation adjustments
Valuation differences on available-for-sales securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Total valuation and translation adjustments

Total liabilities and net assets8(2) Statements of income(million yen)
FY 2011(As of March 31, 2011)

FY 2012(As of March 31, 2012)

237,811207,298

229,856
201,350

Gross profit

30,51228,506

Selling, general and administrative expenses

27,08926,438Operating income

3,423

2,067

70
67
208
77
114
337

59
67
205
90
107
318

876

850

113
488
99

145
80
121

Net sales
Cost of sales

Non-operating income
Interest income
Dividend income
Commission income
Amortization of negative goodwill
House rent income
OthersTotal non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Others

701

348

3,598

2,569

21
12
140

17
255
-

101

-

-

1,295
0

275

1,567

14
383
0

42
23
69

38

-

213

1,044
154

651

1,334

Income before income taxes and minority interests

3,223

2,802

Income, inhabitants and enterprise taxes
Income tax adjustment

2,026
(563)

1,784
95

Total taxes

1,462

1,879

Income before minority interests

1,760

922

Minority interests in income (loss)

(7)

8

1,768

914

Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investment securities
Compensation income
Gain on adjustment of foreign currency translation
adjustment by liquidation of affiliates
Insurance income
OthersTotal extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on revaluation of investment securities
Loss on impairment of fixed assets
Loss on adjustment for changes of accounting standard
for asset retirement obligations
Loss on disaster
OthersTotal extraordinary losses

Net income (loss)

9

(million yen)
FY 2011(As of March 31, 2011)

FY 2012(As of March 31, 2012)

Minority interests in Gain(loss)(7)

8

Income before minority interests

1,760

922

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment

(55)
(9)
(874)

(408)
(25)
(91)

(938)

(525)

821

397

835

390

(13)

6

Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners of theparentComprehensive income attributable to minority
interests10

(3) Statement of changes in consolidated shareholders’ equity(million yen))
FY 2011(As of March 31, 2011)
Shareholders’ equity
Paid-in capital
Balance at the bigining of previous period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Capital surplus
Balance at the bigining of previous period
Changes during the period
Disposal of treasury stock

FY 2012(As of March 31, 2012)12,133

12,133

12,133

12,133

13,912

13,912(0)--Total changes during the period(0)-Balance at the end of current period

13,912

13,91224,012

24,952

(827)
1,768

(827)
914

Retained earnings
Balance at the bigining of previous period
Changes during the period
Dividends paid
Net income (loss)
Total changes during the period

940

86

Balance at the end of current period

24,95225,038(1,332)(1,332)

(0)
0

(0)
-

Total changes during the period

(0)

(0)

Balance at the end of current period(1,332)(1,333)

48,726

49,665

(827)
1,768
(0)
0

(827)
914
(0)
-

Treasury stock
Balance at the bigining of previous period
Changes during the period
Acquisition of treasury stock
Disposal of treasury stock

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

939

85

Balance at the end of current period

49,66549,75111

(million yen))
FY 2011(As of March 31, 2011)
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Balance at the biginning of previous period
Changes during the period
Net changes of items other than shareholders' equity

FY 2012(As of March 31, 2012)

(195)

(246)

(51)

(406)

Total changes during the period

(51)

(406)

Balance at the end of current period

(246)

(653)

8

0

(8)

(25)

(8)

(25)

0

(24)

(1,697)(2,571)

(873)

(92)

Total changes during the period

(873)

(92)

Balance at the end of current period(2,571)(2,663)(1,884)(2,817)

(933)

(523)

Deferred gains or losses on hedges
Balance at the biginning of previous period
Changes during the period
Net changes of items other than shareholders' equity
Total changes during the period
Balance at the biginning of current period
Foreign currency translation adjustments
Balance at the biginning of previous period
Changes during the period
Net changes of items other than shareholders' equity

Total valuation and translation adjustments
Balance at the bigining of previous period
Changes during the period
Net changes of items other than shareholders' equity
Total changes during the period

(933)

(523)

Balance at the end of current period(2,817)(3,341)-0

Subscription rights to shares
Balance at the bigining of previous period
Changes during the period
Net changes of items other than shareholders' equity

0-

Total changes during the period

0-Balance at the end of current period

0

0

1,711

1,664

(47)

(138)

Minority interests
Balance at the bigining of previous period
Changes biginning the period
Net changes of items other than shareholders' equity
Total changes during the period

(47)

(138)

Balance at the end of current period

1,664

1,526

48,55348,512

(827)
1,768
(0)
0
(980)

(827)
914
(0)
(661)

Total changes during the period

40

(575)

Balance at the end of current period

48,51247,936

Total net assets
Balance at the bigining of previous period
Changes biginning the period
Dividends paid
Net income (loss)
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders' equity12(4) Statements of cash flows(million yen)
FY 2011(As of March 31, 2011)
Operating activities
Income before income taxes and minority interest
Depreciation and amortization
Loss on impairment of fixed assets
Amortization of goodwill
Increase (decrease) in provision for retirement benefits
Increase (decrease) in provision for directors' retirement
benefits
Increase (decrease) in provision for directors' bonuses

FY 2012(As of March 31, 2012)

3,223
2,242
0
192
99

2,802
2,181
69
87
24

72

104

Increase (decrease) in allowance for doubtful receivable
Interest and dividend income
Interest expenses
Loss (gain) on sales of property, plant and equipment
Loss on retirement of fixed assets
Loss (gain) on sales of investment securities
Loss (gain) on revaluation of investment securities
Decrease (increase) in notes and accounts receivable–trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable–trade
Decrease (increase) in accounts receivable–other
Increase (decrease) in accrued expenses
Decrease (increase) in advance payments
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in other current assets
Increase (decrease) in other current liabilities
Others

121
259
(138)
115
(14)
14
2
383
4,910
(1,378)(2,683)
262
454
88
(15)
104
69
(220)

(86)
107
(127)
146
(15)
42
(233)
23
(2,561)(2,522)
1,235
1,734
(144)
(123)
(257)
65
26
(124)

Sub-total

8,164

2,456

Interests and dividend received
Interests paid
Income taxes–paid
Others151(121)(1,591)
(281)

123
(145)
(2,230)755

Net cash provided by (used in) operating activities

6,321

958

13

(million yen)
FY 2011(As of March 31, 2011)
Investing activities
Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payment from acquisition of securities of subsidiaries, whichchanged the scope of consolidation
Payment for acquisition of securities of subsidiaries, whichchanged the scope of consolidation
Proceeds from acquisition of securities of subsidiaries,
which changed the scope of consolidation
Payments of short-term loans receivableCollection of short-term loans receivable
Payments of long-term loans receivable
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other payments
Other proceeds
Net cash provided by (used in) investing activities
Financing activities
Increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
OthersNet cash provided by (used in) financing activities

FY 2012( As of March 31, 2012)(112)(4,875)71(1,013)(646)
281(2,274)
39
(637)
(88)
558

-

(21)

(227)

-

64

-

(143)
125
(5)
(107)
35
(23)
150
(79)
137

(1)
9
(298)
27
(77)
77
(76)
117

(6,369)(2,645)(1,154)4,011(1,463)
(0)
(831)
(34)
(49)

2,607
1
(1,828)
(0)
(828)
(103)
(89)

478

(242)

(431)

(171)

Increase (decrease) in cash and cash equivalents(1)(2,100)Cash and cash equivalents, beginning of period

11,797

11,796

Cash and cash equivalents, end of period

11,796

9,695

Effect of exchange rate changes on cash and cash equivalents

14(5) Notes to ongoing concern assumptions
None(6) Significant changes in basis of presenting the consolidated financial statements
None

15

(7) Notes to consolidated financial statements(Segment information etc.)
Segment information
1. Summary of reporting segments
Segments used for financial reporting are the constituent units of KAGA ELECTRONICS for which separate financial
information is available and for which the board of directors performs regular reviews for the purposes of determining
the distribution of resources and evaluating results of operations.
KAGA ELECTRONICS conducts business activities by grouping affiliated companies based on products and services
and based on comprehensive strategies for operations in Japan and overseas for products and services handled.
Consequently, KAGA ELECTRONICS and its affiliated companies have three reporting segments that are made up ofdifferent categories of products and services: electronic components, information equipment and software.
The electronic components segment includes the development, manufacture and sale of semiconductors, generalelectronic components and other products, the electronics manufacturing service (EMS), and other activities. The
information equipment segment includes sales of PCs, PC peripherals, photograph and imaging products, original brandproducts, and other products. The software segment includes the production of computer graphics, planning anddevelopment of amusement products, and other activities.
2. The accounting method used for reporting business segments is generally the same as the method explained in “Basis ofpresenting the consolidated financial statements.”
3. Information concerning sales, earnings or losses, assets, liabilities and other items for individual reporting segments
For the previous fiscal year ended March 2011 (April 1, 2010 – March 31, 2011)(million yen)Amount in theReporting segments
Adjustments
consolidated
Electronic
Information*1
statement of income
Software
Others
Total
components
equipment*2
Net salesof which to outside
customersof which intersegment
Total
Segment(loss)

incomeSegment assets
OthersDepreciation andamortization
Increase inproperty, plant andequipment andintangible assets

171,576

50,745

5,687

9,801

237,811-

237,811

1,342

778

2,418

3,159

7,698

(7,698)-172,919

51,523

8,105

12,961

245,509(7,698)237,811

2,901

(67)

487

230

3,551

(128)

3,423

97,21015,668

6,043

5,390

124,312(9,713)

114,599

970

142

407

43

1,563

(8)

1,554

4,336

192

636

724

5,889

-

5,889

16

For the current fiscal year ended March 2012 (April 1, 2011 – March 31, 2012)(million yen)
Reporting segments

Amount in the
consolidated statementof income

Adjustments

Electronic
components

Informationequipment

Software

OthersTotal

166,468

49,3603,854

10,173229,856-

229,856

1,625

798

3,453

2,551

8,429

(8,429)-168,094

50,1597,308

12,724

238,286(8,429)229,856

Segment income(loss)

2,021

(533)

402

319

2,210

(142)

2,067

Segment assets

104,294

14,411

4,569

6,751

130,025(15,311)

114,714

924

133

361

121

1,541

(5)

1,536

1,306

86

388

1,155

2,937

-

2,937

Net salesof which to outside
customersof which intersegment
Total

OthersDepreciation andamortization
Increase inproperty, plant andequipment andintangible assets
Notes:
1.

2.

For assets, eliminations or corporate in the fiscal year that ended in March 2011 include corporate assets of 2,407
million yen that consist primarily of short-term investments (cash and securities, etc.) at the Company. In addition,
eliminations or corporate in the fiscal year that ended in March 2012 include corporate assets of 2,684 million yenthat consist primarily of short-term investments (cash and securities, etc.) at the Company.
The adjustment for segment operating income is as follows(1) Segment income(million yen)
Fiscal year ended March 2011
Fiscal year ended March 2012
Elimination of inter-segment trade
13(62)
Amortization of goodwill
(141)
(79)
Total
(128)
(142)
(2)

Segment assets(million yen)
Fiscal year ended March 2011
Fiscal year ended March 2012
Elimination of inter-segment trade(12,120)(17,995)
Corporate *
2,407
2,684
Total
(9,713)(15,311)* Major component of corporate assets is investment of idle assets (cash and investment securities).

(3)

Depreciation and amortization

Elimination of inter-segment trade
Total

Fiscal year ended March 2011
(8)
(8)

17

(million yen)
Fiscal year ended March 2012(5)(5)

Associated information
For the previous fiscal year ended March 2011 (April 1, 2010 – March 31, 2011)
1. Information about individual products and services
This information is omitted because the same information is presented on Segment Information..
2. Geographic information(1) Net sales
Japan
North America
EuropeEast Asia
170,998
2,182
5,293
59,336(million yen)Total
237,811(2)

Property, plant and equipment(million yen)Japan
North America
EuropeEast Asia
Total
7,534
36
83
2,068
9,724
3. Information by major customers
Information by major customers is not presented because outside sales for major customers accounted for less than 10% of
operating revenue on the consolidated statements of income.
For the current fiscal year ended March 2012 (April 1, 2011 – March 31, 2012)
1. Information about individual products and services
This information is not presented because .KAGA ELECTRONICS Group prepares reports in accordance with amanagement approach based on individual products and services.
2. Geographic information(1) Net sales(million yen)Japan
North America
EuropeEast Asia
Total
164,532
2,394
4,241
58,687
229,856
Note: Overseas sales refer to sales posted by the Company and its consolidated subsidiaries in countries and regions
outside Japan.
(2)

Property, plant and equipment
Japan
North America
7,357
33

Europe74

East Asia
2,021

Notes:
1.
2.

Countries and regions are classified according to geographical proximity.
Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand

18(million yen)
Total
9,487

(Per-share information)
(yen)
Item

FY 2011(For the year ended March 31, 2011)

Net assets per share
Net income (loss) per share

FY 2012(For the year ended March 31, 2012)

1,697.55

1,681.73

64.07

33.13

Net income per share (diluted) is notpresented, since it is net loss and there isno potential stock.

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

Note: The basis for calculating net income (loss) per share is as follows.
FY 2011(For the year ended March 31,
2011)

FY 2012(For the year ended March 31,
2012)

1,768

914

-

-

Net income available to common shareholders(million yen)

1,768

914

Weighted average number of shares outstanding

27,597,906

27,597,270

Number of classes of
Outline of potential stock which does not havesubscription rights to shares
dilution effect and has not been included in net income
for consolidated companies : 4
per share(Number of rights: 4060)

Number of classes ofsubscription rights to shares forconsolidated companies : 4(Number of rights: 4060)

Net income per share
Net income (million yen)
Net income not available to common shareholders(million yen)(Subsequent events)
None

19

5.

Non-consolidated Financial Statements(1) Balance sheets(million yen)
FY 2011(As of March 31, 2011)ASSETS
Current assets
Cash and cash equivalents
Notes receivable-trade
Accounts receivable-tradeMarketable securities
Merchandise
Goods in progress
Supplies
Advance payments-trade
Prepaid expenses
Deferred tax assets
Short-term loans
Short-term loans to affiliates
Accounts receivable-otherConsumption taxes receivable
OthersAllowance for doubtful receivables
Total current assets
Fixed assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
VehiclesAccumulated depreciation

FY 2012(As of March 31, 2012)

6,442
3,191
22,927
71
4,039
132
25
1,131
202
667
131
14,1032,828
199
16(3,480)

4,954
3,055
26,682
74
5,698
77
29
994
206
460
33
15,8513,317
321
41(4,555)52,631

57,243

830
(424)

839
(531)

406

308

71
(30)

71
(36)

40

35

150
(126)

128
(113)

23

14

794
(517)

853
(659)

277

194

2,964
-

2,964
218
(41)

Lease assets, net-

177Construction in progress

4

45

3,716

3,740

13
229
26
259

12
228
26
164

529

431

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

Total property, plant and equipment
Intangible assets
Trade mark rights
SoftwareTelephone rights
OthersTotal intangible assets

20

(million yen)
FY 2011(As of March 31, 2011)
Investments and other assets
Investment securities
Affiliate stock
Contribution to capital
Contribution to affiliate capital
Long-term loans
Long-term loans to affiliates
Long-term prepaid expenses
Claims provable in bankruptcy, claims provable inrehabilitation and other
Deferred tax assets
Guarantee deposits
Insurance reserve
Golf memberships
Allowance for doubtful receivables
Allowance for loss on investment
Total investments and other assets
Total fixed assets
Total assets
LIABILITIESCurrent liabilities
Notes payable-trade
Accounts payable-trade
Short-term bank loans
Short-term loans from affiliates
Current portion of long-term debt
Lease obligations
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Provision for directors' bonuses
OthersTotal current liabilities
Long-term liabilities
Long-term bank loans
Lease obligations
Allowance for retirement benefits for employees
Allowance for retirement benefits for directors andcorporate auditors
Asset retirement obligations
OthersTotal long-term liabilities
Total liabilities

21

FY 2012(As of March 31, 2012)

3,897
7,581
80
8
213
2,693
49

3,533
7,357
57
6
76
2,222
80

267

555

1,001
1,009
1,066
396
(3,021)
(268)

839
956
1,344
380
(2,253)(1,085)

14,973

14,07019,21918,242

71,85075,486

2,473
16,733
4,659
2,553
1,761
254
973
576
1,246
54
120
26

2,440
19,079
7,419
1,672
1,761
19
222
1,014
191
1,142
56
40
23

31,43335,083

4,548
457

2,787
190
462

1,094

1,157

188
203

190
235

6,493

5,024

37,926

40,107(million yen)
FY 2011(As of March 31, 2011)

FY 2012(As of March 31, 2012)

NET ASSETS
Shareholder’s equity
Paid-in capital
Capital surplus
Legal capital surplus
Other capital surplus

12,133

12,133

13,912-

13,912-

Total capital surplus

13,912

13,912

618

618

7,000
1,802

7,000
3,620

Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward

9,420

11,239Treasury stock(1,332)(1,333)

Total shareholder’s equity

34,13435,952

(208)
(1)

(560)
(12)

(209)

(573)

33,92435,37871,85075,486

Total retained earnings

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

22

(2) Statements of income

Net sales
Cost of sales
Beginning goods
Cost of purchased goods(million yen)
FY 2011
FY 2012(Fiscal year ended Mar. 31, 2011) (Fiscal year ended Mar. 31, 2012)
95,163
95,194
4,399
85,1284,172
87,749Total

89,52791,921

Transfer to other accountEnding goods

119
4,172

317
5,776

Cost of goods sold85,23685,827Gross profit

9,957

9,336

Selling, general and administrative expenses

8,832

8,630

Operating income

1,125

705

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

102
1,508
284

120
3,856
34
238

1,896

4,251

105
36
26

120
29
70

Total non-operating income
Non-operating expenses
Interest expense
Loss on investments in partnership
Foreign exchange losses
Others

168

220

2,852

4,736

0
183
3

198
9

187

207

1
235
216
41

3
20
173
300
975
63

494

1,537

Income before income taxes and minority interests

2,545

3,406

Income, inhabitants and enterprise taxes
Income tax adjustment

817
(340)

592
167

Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Reversal of allowance for investment loss
OthersTotal extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on revaluation of investment securities
Loss on revaluation of stocks of affiliates
Provision of allowance for investment loss
Provision of allowance for doubtful accounts
OthersTotal extraordinary losses

Total taxes

476

760

Net income

2,068

2,646

23

(3) Statement of changes in shareholders’ equity(million yen)
FY 2011(Fiscal year ended Mar. 31, 2011)

FY 2012(Fiscal year ended Mar. 31, 2012)

Shareholders’ equity
Paid-in capital
Balance at the biginning of previous period
Changes of items during the period
Total changes of items during the period

12,133

12,133--

Balance at the end of current period

12,133

12,133

13,912

13,912--

13,912

13,912

0

-

(0)

-

Total changes during the period(0)-Balance at the end of current period--

13,912

13,912

(0)

-

(0)

-

Capital surplus
Capital legal reserve
Balance at the biginning of previous period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Other capital surplus
Balance at the biginning of previous period
Changes of items during the period
Disposal of treasury stock

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

13,912

13,912Retained earnings
Earned legal reserve
Balance at the biginning of previous period
Changes during the period
Total changes during the period

618

618

-

-

Balance at the end of current period

618

618

Other retained earnings
General reserve
Balance at the biginning of previous period
Changes of items during the period
Reversal of general reserve

12,8607,000(5,860)-Total changes during the period(5,860)-

Balance at the end of current period

7,000

7,000

(5,298)

1,802

5,860
(827)
2,068
(0)

(827)
2,646
-

Retained earnings brought forward
Balance at the biginning of previous period
Changes during the period
Reversal of general reserve
Dividends paid
Net income
Disposal of treasury stock
Total changes during the period

7,100

1,818

Balance at the end of current period

1,802

3,620

Total retained earnings
Balance at the biginning of previous period
Changes during the period

8,179

9,420

24

(million yen)

Reversal of general reserve
Dividends paid
Net income (loss)
Disposal of treasury stock

FY 2011(Fiscal year ended Mar. 31, 2011)
(827)
2,068
(0)

FY 2012(Fiscal year ended Mar. 31, 2012)
(827)
2,646
-

Total changes during the period

1,240

1,818

Balance at the end of current period

9,420

11,239(1,332)(1,332)

(0)
0

(0)
-

Total changes during the period

(0)

(0)

Balance at the end of current period(1,332)(1,333)32,89334,134

(827)
2,068
(0)
0
1,240
34,134

(827)
2,646
(0)
1,818
35,952

(148)

(208)

Net changes of items other than shareholders'equity

(59)

(352)

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

Total Shareholders’ equity
Balance at the end of previous period
Changes during the period
Dividends paid
Net income (loss)
Acquisition of treasury stock
Disposal of treasury stock
Total changes during the period
Balance at the end of current period
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Balance at the end of previous period
Changes during the period

Total changes during the period

(59)

(352)

Balance at the end of current period

(208)

(560)

Deferred gains or losses on hedged
Balance at the end of previous period
Changes during the period

(0)

(1)

Net changes of items other than shareholders'equity(1)(11)

Total changes during the period

(1)

(11)

Balance at the end of current period

(1)

(12)

Total valuation and translation adjustments
Balance at the end of previous period
Changes during the period

(148)

(209)

Net changes of items other than shareholders'equity

(60)

(363)

Total changes during the period

(60)

(363)

Balance at the end of current period

(209)

(573)

25

(million yen)
FY 2011(Fiscal year ended Mar. 31, 2011)

FY 2012(Fiscal year ended Mar. 31, 2012)

32,74433,924

(827)
2,068
(0)
0
(60)

(827)
2,646
(0)
(363)

Total net asset
Balance at the end of previous period
Changes during the period
Dividends paid
Net income (loss)
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders' equity
Total changes during the period
Balance at the end of current period

1,179

1,454

33,92435,378

6. Other Information(1) Change in directors and corporate auditors
1) Change in representative director
Not applicable
2) Changes in other directors and corporate auditors
Candidate for election as new director
Director
Eiji Kawamura (currently Executive Officer, General Manager of Administration
Headquarters and Finance & Accounting Department)
Director to resign
Senior Managing Director
Kazuo Yamana (to become Senior Adviser)
3) Date of election/resignation
June 28, 2012
(2) OtherNone26