Summary(Translation)
Fields Corporation
Summary of Financial Information and Business Results
for the Year Ended March 31, 2008
May 14, 2008
Company Name:

Fields Corporation(URL: http://www.fields.biz)
Listed on:
JASDAQ (Stock code: 2767)
Representative Director:
Takashi Oya
President and COO
Inquiries:
Hideaki Hatanaka
Executive Officer and General Manager, Investor and Public Relations OfficeTel.:+81-3-5784-2111
Planned Date for Ordinary General Meeting of Shareholders:June 26, 2008
Planned Date for Start of Dividend Payment:
June 27, 2008
Planned Date for Submittal of the Financial Statements Report:
June 27, 2008
(Rounded down to the nearest million)
1. Consolidated Business results for the year ended March 31, 2008 (April 1, 2007, to March 31, 2008)(1) Operating results(Percentage figures denote year-over-year changes.)
Net sales
Operating income
Ordinary income
Millions of yen%
Millions of yen%
Millions of yen%
Year ended
101,818( 19.3)
13,158 ( 47.1)
11,705 ( 27.2)
March 31, 2008
Year ended
85,321( -11.9)
8,944( -27.6)
9,202( -29.9)
March 31, 2007
Net income
Millions of yen
Year ended
March 31, 2008
Year ended
March 31, 2007%

Net income per share
Yen

Diluted net income per share
Yen

5,296

( 42.8)15,263.76

—

3,710

( -47.6)

10,692.29—

Return on equity%

Ordinary income to total assets%

Year ended
12.4
March 31, 2008
Year ended
9.2
March 31, 2007
(Reference) Equity in earnings of affiliates
Year ended March 31, 2008: (¥557) million
Year ended March 31, 2007: (¥92) million

Operating margin
%

17.3

12.9

12.0

10.5

(2) Financial position
Total assets
Millions of yen
Year ended
69,168March 31, 2008
Year ended
66,081March 31, 2007
(Reference) Shareholders’ equity
Year ended March 31, 2008: ¥44,485 million
Year ended March 31, 2007: ¥41,115 million

Millions of yen

Shareholders’ equity
ratio%

46,331

64.3

128,201.49

42,836

62.2

118,487.37

Net assets-1-

Net assets per shareYen(3) Cash flows

Year ended
March 31, 2008
Year ended
March 31, 2007

Cash flow fromoperating activities

Cash flow frominvesting activities

Cash flow fromfinancing activities

Millions of yen

Millions of yen

Millions of yen

Cash and cash
equivalents at end ofyear
Millions of yen

11,127(14,604)(1,384)

12,693

5,293(4,772)

1,488

17,8192. Dividends
Dividend per share(Record date)

InterimYear-end

Annual

Total
Dividend on
Payout ratio
dividend
equity ratio(consolidated)(annually)(consolidated)
Millions of yen
%
%

Yen
Yen
Yen
Year ended
2,000.00
2,000.00
4,000.00
1,388
37.4
March 31, 2007
Year ended
2,000.00
2,500.00
4,500.00
1,561
29.5
March 31, 2008
Year ending
2,000.00
2,500.00
4,500.00
29.5
March 31, 2009
(Projections)
Note: Year-end dividend for the year ended March 31, 2008, consists of an ordinary dividend of ¥2,000 and acommemorative dividend of ¥500.

3.5
3.6

3. Forecast earnings for the year ending March 31, 2009 (April 1, 2008, to March 31, 2009)(Percentages denote year-over-year changes versus the corresponding year-earlier period.)
Net sales
Operating income
Ordinary income
Millions of yen%
Millions of yen%
Millions of yen%
First half
37,000 ( -42.8)
2,500 ( -68.0)
2,500 ( -66.5)
Full year
75,000 ( -26.3)
10,000 ( -24.0)
10,000 ( -14.6)

First half
Full year

Net income
Millions of yen%
700( -77.3)
5,300
(0.1)

Net income per shareYen
2,017.29
15,273.78

4. Other Information(1) Transfer of important subsidiaries during the year under review (Transfer of specific subsidiaries that results in achange in the scope of consolidation): None
(2) Changes in accounting principles, accounting procedures, presentation method and others in association with the
preparation of consolidated financial statements (Those which are stated in the “Basis of Presentation of theConsolidated Financial Statements”)
1) Changes due to the revision to the accounting standards, etc.: Yes
2) Changes due to any reason other than those in 1) above: Yes
Note: For details, see “Basis of Presentation of the Consolidated Financial Statements” on page 24.
(3) Number of shares issued (common stock)1) Number of shares issued (including treasury stock)
Year ended March 31, 2008: 347,000 shares Year ended March 31, 2007: 347,000 shares
2) Number of treasury stock at end of year
Year ended March 31, 2008: — shares Year ended March 31, 2007: — shares
Note: For the number of shares as the calculation basis for net income per share (consolidated), see the “Per-Share Data”
on page 58.

-2-

(Reference) Summary of Business Results (Non-Consolidated)
1. Business results for the year ended March 31, 2008 (April 1, 2007, to March 31, 2008)(1) Operating results(Percentage figures denote year-over-year changes.)
Net sales
Operating income
Ordinary income
Millions of yen%
Millions of yen%
Millions of yen%
Year ended
82,758(16.0)
12,634(40.4)
12,463(32.7)March 31, 2008
Year ended
71,314 ( -19.2)
8,999( -28.0)
9,393 ( -26.8)
March 31, 2007
Net income
Millions of yen
Year ended
March 31, 2008
Year ended
March 31, 2007%

Net income per share
Yen

Diluted net income per share
Yen

4,153

( -13.0)

11,970.60

—

4,773

( -31.2)

13,755.49—(2) Financial position
Millions of yen

Shareholders’ equity
ratio%

44,36775.7

127,861.20

42,00173.0

121,042.25

Total assets
Millions of yen
Year ended
58,622
March 31, 2008
Year ended
57,509March 31, 2007
(Reference) Shareholders’ equity
Year ended March 31, 2008: ¥44,367 million
Year ended March 31, 2007: ¥42,001 million

Net assets

Net assets per shareYen

2. Forecast earnings for the year ending March 31, 2009 (April 1, 2008, to March 31, 2009)(Percentages denote year-over-year changes versus the corresponding year-earlier period.)
Net sales
Operating income
Ordinary income
Millions of yen%
Millions of yen%
Millions of yen%
First half
29,000( -50.6)
4,500 ( -47.5)
4,500 ( -48.0)
Full year
55,000( -33.5)
9,500 ( -24.8)
9,500 ( -23.8)

First half
Full year

Net income
Millions of yen
2,500
5,300

%
(1.3)
(27.6)Net income per shareYen
7,204.61
15,273.78

Caution regarding forward-looking statements
The forward-looking statements made in this report such as performance perspective are based on currently available
information and certain premises that are judged reasonable by management. There are many uncertain factors inherent
in forecasting, and there might be cases in which actual results of future business operations and/or events differ fromour forecasts depending on changes in diverse conditions. Please see “Operating Results and Financial Position, 1.
Analysis of Operating Results” on page 4 with regard to the cautions in using assumptions as the premise for forecast
earnings.

-3-

Operating Results and Financial Position
1. Analysis of Operating Results(1) Overview of Operations for the Year Ended March 31, 2008
Today, as leisure time increases among all market segments in Japan, the entertainment industry has diversified andthe leisure market is facing radical structural changes.
Foreseeing such environmental change ahead of its competitors, the Group has strategically focused on multiple usesof digital content, which it considers to be an essential base for establishing a competitive edge, mainly in the pachinko
and pachislot field. The Group’s business domains have grown not only in the pachinko and pachislot market but also
in the game software, sports and mobile fields, as well as in movie and animation field, covering a wide range ofentertainment fields.
We are aggressively developing our business and investing in each of these fields.
In the PS (pachinko/pachislot) field, Fields Corporation (the Company) has announced a new business alliance withKYORAKU SANGYO, thereby launching a measure to accelerate launching of products on the market. As part ofefforts for reinforcing product planning and development, the Company made Shin-Nichi Technology Co., Ltd., whichdevelops video software for pachinko and pachislot machines, its subsidiary.
In the game software field, D3 Inc. developed its first original global content title, darkSector, for which sales started
worldwide in March 2008.
In the sports marketing field, we promoted measures to expand to cities outside of the major urban areas in Japan.
For example, Total Workout, which is managed by Japan Sports Marketing Inc., promoted sports marketing, with thefourth branch of its brand opening in Fukuoka in April 2008. In the athlete management business, from which primarycontent is the most likely to be created, we managed such star athletes as Kimiko Date Krumm (tennis), Kazuhiro
Kiyohara (professional baseball), Norifumi “Kid” Yamamoto (mixed martial arts) and Kyoko Iwasaki (swimming) andstrived to acquire additional management contracts with promising athletes.
In the mobile field, business expanded steadily, reflected by the number of paying members exceeding 300,000 forour mobile phone Web site, which is run by FutureScope Corporation. We also entered into a new business to deliver
mobile electronic books by investing in a Web magazine management company.
In the movie and animation field, we aim to commercialize pachinko and pachislot machines that use movie content,
and our investments prioritize this field. Such efforts are producing positive results such as the release of movies andanimation produced through the Group companies and movie funds, with the sale of those DVDs already under way.
We also strove to further strengthen the foundation of our operations by launching Lucent Pictures Entertainment, Inc.,
which engages in the planning and production of animation.
We will continue to maximize synergies among the Group companies and strongly promote cross-media businesses
such as the integration and multifaceted development of content, thereby realizing our corporate philosophy: “TheGreatest Leisure for All People.”
The Group’s business results for the year ended March 31, 2008, were as follows.
(Net sales)
Net sales increased 19.3% year over year to a record ¥101,818 million.
Net sales in the PS (pachinko/pachislot) Field increased 16.1% year over year to ¥82,763 million. Our efforts toemphasize the sale of pachislot machines in response to large-scale replacement demand with pachislot machinescompliant with the new regulations during the first half contributed to this steady progress in net sales.
Net sales in the Game Field jumped 46.1% to ¥14,528 million. A major contributing factor to this outstanding
progress was the good sales performance of our first original global content in overseas game software markets.
-4-Net sales in the Other Field increased 7.2% to ¥5,919 million, mainly due to the full-scale operation of the sitemanagement business, which provides comprehensive entertainment information in the mobile field.
(Operating income)Operating income for this fiscal year jumped 47.1% from a year earlier to a record ¥13,158 million.
Operating income in the PS Field increased 40.5% to ¥12,747 million. In addition to the favorable progress ofpachislot machine sales during the first half, pachinko machines sold well during the second half.
Operating income in the Game Field surged 332.5% to ¥952 million, leveraged by outstanding progress in gamesoftware sales of original global content that was released during the fourth quarter.
Operating loss in the Other Field was ¥516 million, mainly due to prior costs generated by our aggressive
investments to enhance future Group synergies.
(Ordinary income)Ordinary income increased 27.2% to ¥11,705 million.
Non-operating income was ¥313 million and non-operating expenses were ¥1,766 million. Non-operating expenses
were incurred by an equity method investment loss and a foreign exchange loss caused by high yen appreciation in theoverseas Game Field business.
(Net income)Net income for the year under review increased 42.8% year over year to ¥5,296 million.
Despite extraordinary losses resulting from efforts to reinforce the financial structure at some affiliates, our overallfavorable business performance offset such losses.

-5-(2) Analysis by Business Segment
1) PS Field
Status of pachinko machine sales in the year ended March 31, 2008
The total number of pachinko machines sold decreased 20.8% year over year to 273,981.
Major pachinko machine titles
CR LOONEY TUNES BIA
CR Sakura Taisen
CR The Mask of Zorro
CRA Felix the Cat
CR Tomb Raider
CR Neon Genesis Evangelion—The Angels Are Back Again
Total number of pachinko machines soldMonth released

Manufacturer

May 2007
September 2007
October 2007
November 2007
December 2007
January 2008

Bisty Co., Ltd.
Sammy Corporation
Bisty Co., Ltd.
Bisty Co., Ltd.
Bisty Co., Ltd.
Bisty Co., Ltd.

273,981Note: The total number of pachinko machines sold includes the number of machines with titles other than those above sold via
agency sales.

The Company had anticipated that a short-term fund held by pachinko halls would be used to purchase pachislot
machines compliant with the new regulations in the first half and accordingly addressed that replacement demand.
Therefore, we introduced only two titles for pachinko machines during the first half, but during the second half
aggressively introduced four new models by anticipating a surge in replacement demand for pachinko machines. Of
those we introduced, CR Neon Genesis Evangelion—The Angels Are Back Again, which was introduced in late
January in 2008, was highly evaluated by pachinko halls and fans, with a cumulative number of machines sold of
more than 197,000, a record high in the Evangelion series. For the full year, the total number of machines soldsurpassed 270,000.
Status of pachislot machine sales in the year ended March 31, 2008
The total number of pachislot machines sold increased 27.3% year over year to 210,553.
Major pachislot machine titles
Morning MusumeDevil May Cry 3
Neon Genesis Evangelion—‘Magokoro wo Kimini’
Kaiketsu Harimau
Cream Stew
The Mask of Zorro
Beach Club
Virtua Fighter
Tenka Muteki! Salaryman Kintaro
Shin Sangokumusou

Month released
June 2007
June 2007
July 2007
July 2007
September 2007
September 2007
November 2007
December 2007
February 2008
March 2008

Total number of pachislot machines sold

Manufacturer
Bisty Co., Ltd.
Rodeo Co., Ltd.
Bisty Co., Ltd.
Olympia Co., Ltd.
Rodeo Co., Ltd.
Rodeo Co., Ltd.
Bisty Co., Ltd.
Rodeo Co., Ltd.
Rodeo Co., Ltd.
Olympia Co., Ltd.

210,553

Note: The total number of pachislot machines sold includes the number of machines with titles other than those above sold via
agency sales.

Anticipating unprecedented levels of replacement demand for the first half ended September 30, 2007, weaggressively introduced six pachislot machine models compliant with the new regulations and explored the newly
altered pachislot market. During the second half, we introduced four models and strove to steadily supply productswith enhanced entertainment and gaming features to acquire new fan tiers. As a result, the total number of machines
sold for the year under review surpassed 210,000.

-6-

As a result, net sales in the PS Field were ¥82,763 million, up 16.1%, and operating income was ¥12,747 million,
up 40.5%.
(unit: million yen)

Net sales
Operating income

Fiscal year ended
March 31, 2007
(April 2006 to March
2007)
71,306
9,073

Fiscal year ended
March 31, 2008
(April 2007 to March
2008)
82,763
12,747Year-over-year
Change (%)
16.1
40.5

Note: Net sales include inter-group sales and transfers.

2) Game Field
In the Game Field, which has a highly synergetic relationship with the PS Field, we aggressively expanded ourbusiness by introducing high-end game software and promoting our mainstay SIMPLE Series mainly for the Nintendo
DS in the Japanese market.
Overseas, we aggressively introduced global content titles in North America and continued to sell titles in Europe
supplied from North America and Japan. In particular, favorable sales of the original global content title darkSector,
which was introduced worldwide, as well as Ben10 and the NARUTO Series, supported net sales and operating
income.
As a result, net sales in the Game Field were ¥14,528 million, up 46.1%, and operating income was ¥952 million,
up 332.5%.
(unit: million yen)

Net sales
Operating income

Fiscal year ended
March 31, 2007
(April 2006 to March
2007)
9,946
220

Fiscal year ended
March 31, 2008
(April 2007 to March
2008)
14,528952

Year-over-year
Change (%)
46.1
332.5

Note: Net sales include inter-group sales and transfers.

3) Other Field
In the sports marketing field, which offers a wealth of content on a global scale, the athlete management businessprogressed steadily, and Total Workout, which engages in the solution business, revised service fees in December
2007 and promoted sports marketing and other measures aimed at expanding to cities outside of the major urban areasin Japan. In April 2008, its fourth branch was opened in Fukuoka.
Enjoying an increasingly high profile as a new medium, the mobile field is growing steadily, reflected by anincrease in the number of paying members of the mobile phone Web site “Fields Mobile,” which provides
comprehensive entertainment information. Although the service began only one year ago, the number of Web sitemembers exceeded 300,000 as of March 31, 2008, showing steady growth. We also began to plan and develop mobile
content, which will continue steadily.
In the movie and animation field, which is highly interactive with other fields in the cross-media business, we
continued aggressive investments in movie, animation and content funds to help produce primary content for theentire Group.
In the movie field, in which we have prioritized investments with the aim of commercializing pachinko andpachislot machines, we have seen the release of movies produced through the Group companies and movie funds aswell as the launch of DVD sales. Animations in which we have invested through the production committees haveaired on TV, and each affiliate has been developing and selling game software using such content. Such synergies are-7-

being created among the Group companies.
Lucent Pictures Entertainment, Inc. launched the planning and production of animation videos toward thecross-media development of content assets such as movies, videos and TV, aiming to turn these efforts into profits by
the year ending March 2010.
As part of our efforts to create primary content and an exit strategy for created content, we invested in SPO Inc.,
which engages mainly in the production, distribution and screening of movies. We also invested in a Web magazine
management company that delivers mobile electronic books, thereby further exploring content.

As a result, net sales of the Other Field were ¥5,919 million, up 7.2%, and operating loss was ¥516 million.
(unit: million yen)

Net sales
Operating loss

Fiscal year ended
March 31, 2007
(April 2006 to March
2007)
5,521
(513)

Fiscal year ended
March 31, 2008
(April 2007 to March
2008)
5,919
(516)

Note: Net sales include inter-group sales and transfers.

-8-Year-over-year
Change (%)
7.2%—

(3) Forecast earnings for the year ending March 31, 2009 (April 1, 2008 to March 31, 2009)
The full-year forecast for the year ending March 31, 2009, is as follows:
Forecast for the year
Results for the year
ending March 2009
ended March 2008
101,818
Net sales
75,000Operating income
10,00013,158
Ordinary income
10,00011,705
Net income
5,300
5,296

(unit: million yen)

Year-over-yearchange–26.3%–24.0%–14.6%
0.1%

1) PS Field
Despite some uncertainty regarding the market environment for the year ending March 31, 2009, we recognize thatthe quality of our content is a key to our competitive edge. To ensure future growth, the Company thoroughly reviews
planned products and reinforces planning and development capabilities.
We will offer high-quality pachinko machines that meet the needs of pachinko halls and fans in a timely manner
during the year ending March 31, 2009, with strategies emphasizing the pachinko machine sales business. Indeed, the“CRA Neon Genesis Evangelion Premium Model,” which was scheduled for release during the first quarter, ending
June 30, 2009, has already been introduced and has been highly appraised. In the future, we plan to introduce
additional innovative titles and major titles.
In the pachislot machine sales business, we enjoyed tremendous performance as a result of our correct market
anticipation of and strategic efforts for the unprecedented huge replacement demand for pachislot machines compliant
with the new regulations that took place during the first half (ended September 30, 2007) of the year under review,
subsequent to the expiration of the use of the old regulation machines. However, in the year ending March 31, 2009,
we expect a large portion of funds from pachinko halls to be used to purchase pachinko machines. Therefore, we willoffer the stable and continual provision of major products, including those of popular titles, featuring superior
entertainment and game content to attract new tiers of fans.
2) Game Field
In the domestic market, we intend to reinforce the mobile business and continue focusing on sales of products
attractive to users, together with the SIMPLE Series, which boasts stable sales.
Overseas, we will reinforce global business development through the enhanced use of high-performance content.
In addition, we have designated the year ending March 31, 2009, as a year to form a sturdy foundation for future
growth, and we intend to develop various measures accordingly.
3) Other Field
Our plans for the year ending March 31, 2009, in the Other Field are to enhance profitability in each company inwhich the Company has invested and to strengthen synergies among the Group companies. In the fields of sports,
mobile, movie and animation, we intend to create primary content and promote aggressive business development,
thereby improving earnings quickly.
The Company will celebrate its 20th anniversary on June 10, 2008.
Taking advantage of this anniversary, the Group has formulated the medium-term management plan to further pursue
its corporate philosophy: “The Greatest Leisure for All People.” This five-year plan, which began in the fiscal year
starting in April 2008, is designed to help us realize our vision for the Group 10 years from now. Particularly, in the year
ending March 31, 2009, the first year of the medium-term management plan, we will establish the foundation of theGroup’s growth strategies. We intend to aggressively strive not only to improve our businesses but also to reinforce ourmanagement foundation. (For an Outline of the Medium-Term Management Plan, please see the relevant section in“Operating Policies.”)-9-2. Analysis of Financial Position(1) Assets, Liabilities and Net Assets

Total assets
Total liabilities
Total net assets

At March 31, 2008
69,16822,836
46,331At March 31, 2007
66,081
23,244
42,836(Unit: Million yen)
Year-over-year change
3,087
(407)
3,494

AssetsCurrent assets decreased ¥6,585 million year over year to ¥39,559 million. This was principally attributable todecreases in notes and accounts receivable (trade) and cash and cash equivalents.
Tangible fixed assets increased ¥2,336 million to ¥8,093 million. This occurred primarily as a result of land purchases
for new branches scheduled to be constructed to bolster sales capacity in the PS Field.
Intangible fixed assets decreased ¥98 million to ¥3,937 million. This was mainly attributable to a decrease in goodwill
and the purchase of software to reorganize our key system.
Investments and other assets increased ¥7,434 million to ¥17,578 million. This was attributable to an increase ininvestment securities.
As a result, total assets increased ¥3,087 million year over year to ¥69,168 million.
Liabilities
Current liabilities increased ¥457 million to ¥19,322 million. This was attributable to decreases in notes payable andaccounts payable (trade), an increase in short-term borrowings and an increase in accrued income taxes as profit
increased.
Fixed liabilities decreased ¥865 million to ¥3,514 million. This was principally attributable to a decrease in long-termborrowings and the redemption of corporate bonds.
As a result, total liabilities decreased ¥407 million year over year to ¥22,836 million.
Net assets
Net assets increased ¥3,494 million year over year to ¥46,331 million. This was mainly attributable to an increase inretained earnings.
(2) Cash flows
Cash and cash equivalents at March 31, 2008, amounted to ¥12,693 million.
Cash flows for the year ended March 31, 2008, were as follows:

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities

Year ended March 31,
2008
11,127(14,604)(1,384)

Year ended March 31,
2007
5,293
(4,772)
1,488(Unit: Million yen)
Year-over-yearchange5,834(9,831)(2,872)

Cash flows from operating activities
Net cash provided by operating activities increased ¥5,834 million to ¥11,127 million. The principal factors in thiswere a decrease of ¥6,052 million in notes and accounts receivable (trade), an increase of ¥504 million in inventories, anincrease of ¥1,918 million in merchandising rights advances, a decrease of ¥3,250 million in notes and accounts payable(trade) and ¥4,299 million in income taxes paid.

- 10 -Cash flows from investing activities
Net cash used in investing activities increased ¥9,831 million to ¥14,604 million. The principal factors in this increase
included purchases of tangible fixed assets totaling ¥3,450 million, purchases of investment securities totaling ¥7,585
million, purchases of investment securities in subsidiaries and affiliates and the acquisition of newly consolidated
subsidiaries totaling ¥2,072 million and ¥1,036 million of expenditures for loans.
Cash flows from financing activities
Net cash used in financing activities increased ¥2,872 million to ¥1,384 million. The principal factors in this were an
increase of ¥1,167 million in short-term borrowings, the repayment of ¥987 million in long-term borrowings and cash
dividends paid totaling ¥1,397 million.
Reference: Trends of Cash Flow Indicators

Shareholders’ equity ratio (%)
Equity ratio at market value (%)
Interest-bearing debt/cash flow
ratio (years)
Interest coverage ratio (times)

Year ended
March 2004
39.1
491.7

Year ended
March 2005
46.0
250.5

Year ended
March 2006
45.0
145.8

Year ended
March 2007
62.2
99.8

Year ended
March 2008
64.3
68.7

3.5

0.7

0.3

0.9

0.4

271.0

210.3

256.6

83.7

145.7

y

Shareholders’ equity ratio: Shareholders’ equity/Total assetsyEquity ratio at market value: Aggregate market value (based on the closing stock price at the end of theyear)/Total assetsyInterest-bearing debt/cash flow ratio: Interest-bearing debt/Operating cash flowyInterest coverage ratio: Operating cash flow/Interest expense
Notes: 1. All of the above indicators are calculated for their respective values on a consolidated basis.
2. Interest-bearing debt indicates all the liabilities for which interest is paid posted in the
consolidated balance sheets.

3. Fundamental Corporate Policy for Distributing Profits and Dividends for the Current and Next Fiscal Years

The Company regards the enhancement of corporate value as a principal management task, and its fundamental policy
is to pay dividends at an appropriate level that corresponds with profits. Specifically, dividends are determined on thebasis of such factors as operating revenue and cash flow conditions, and we aim to achieve a consolidated payout ratio of
20% or more.
The Company makes every effort to effectively use retained earnings for investments to enhance its financial
condition, strengthen the management foundation, expand businesses continually and secure a competitive edge.
Given these factors for the year ended March 31, 2008, the Company paid an interim cash dividend of ¥2,000 per
share to shareholders and intends to distribute a year-end dividend of ¥2,500 per share, which consists of an ordinary
dividend of ¥2,000 and a commemorative dividend for the Company’s 20th anniversary of ¥500. The resulting
consolidated payout ratio would be 29.5%.
With regard to the year ending March 2009, to realize the Company’s basic management policy of “Shareholders
First,” we intend to distribute an annual dividend per share of ¥4,500, including the same amount as the aforementioned
commemorative dividend to be paid for the fiscal year under review (¥500) and an ordinary dividend. The interim
dividend will be ¥2,000, and the year-end dividend will be ¥2,500.

- 11 -

Outline of the Fields GroupThe Fields Group (parent company and associated companies) comprises Fields Corporation (“the Company”), 20
subsidiaries and 6 affiliated companies.
The Group’s principal business activities are the sale of pachinko and pachislot machines and the planning anddevelopment of digital content based on the copyrights created by the Group itself or acquired for secondary use in othermedia.
The business areas of each company in the Fields Group are summarized below.
Business segment

Description of principal business
Planning, development, sales andmaintenance of pachinko/pachislot
machines, as well as purchasing ofpachinko/pachislot machines
Planning and development ofpachinko/pachislot machine software

PS FieldGame Field

Planning, development and sales ofhome-use game software, etc.

Other Field

Sports marketing and content
business, etc.

Company nameFields Corporation
Fields Jr. Corporation
Shin-Nichi Technology Co., Ltd.
Rodeo Co., Ltd.
Ildel Corporation
thinkArts Co., Ltd.
D3 Inc.
D3 Publisher Inc.
Entertainment Software Publishing Inc.
D3Publisher of America, Inc.1
D3Publisher of Europe Ltd.1
Vicious Cycle Software, Inc.1
D3DB S.r.l.1
White Trash Charms Japan Co., Ltd.
Lucent Pictures Entertainment, Inc.2
Fields Pictures Corporation
Haruki Fields Cinema Fund
FutureScope Corporation
EXPRESS Inc.
Japan Sports Marketing Inc.
JSM HAWAII, LLC1SPO Inc.
Bbmf Magazine, Inc.
Kadokawa Haruki Corporation
APE Inc.
G&E Corporation
YMO Inc.

Notes: 1. Located overseas.
2. The company name was changed from Digital Lord Corporation on October 1, 2007.

Business Organization Chart
We have two sales channels for pachinko and pachislot machines: direct sales to pachinko halls through sales
activities by our branches (distribution model) and sales by an intermediary of an agency service (agency model).
Distribution model

Agency model
Nationwide pachinko halls (our users)

Nationwide pachinko halls (our users)

Collection ofsales amountCollection ofsales amount

Agency(brokerage of sales)
Payment ofcommissions

Secondary agency

SalesamountRemittance ofsales amountCollectionof salesamountTransport ofmachines

Payment ofcommissions

Remittance ofsales amountTransport ofmachines

Fields Corporation (primary agency)

Fields Corporation

Receipt ofcommissions

Purchase of machines

Pachislot machine manufacturers(Rodeo Co., Ltd., and others)

Remittance ofsales amountPachinko/pachislot machine manufacturers- 12 -

Overview of Group Business
Product sales
Sales representation

Consignment of
installation

Installation andmaintenance ofpachinko/pachislot machines(Consolidated subsidiary)Fields Jr. Corporation

Consigned
Sales(Equity method affiliate)
Rodeo Co., Ltd.

Machinemanufacturer

Product
purchasing(Consolidated subsidiary)(Consolidated subsidiary)

Ildel Corporation

Shin-Nichi Technology Co.,
Ltd.

(Users)Nationwide pachinko halls

Fields Corporation

PS FieldAgency (Intermediary agent)(Consolidated subsidiary)(Consolidated subsidiaries)
D3 Inc.
D3 Publisher Inc.
Entertainment Software Publishing Inc.
D3Publisher of America, Inc.
D3Publisher of Europe Ltd.
Vicious Cycle Software, Inc.
D3DB S.r.l.

Businesscollaboration

Users

Game Field

thinkArts Co., Ltd.

(Consolidated subsidiary)
Lucent Pictures Entertainment, Inc.
The company name changed from Digital Lord Corporation
on October 1, 2007

Businesscollaboration(Consolidated subsidiary)

Other Field

FutureScope Corporation

Copyright licensing of content (Merchandising rights)
Businesscollaboration(Consolidated subsidiary)
Japan Sports Marketing Inc.

(Consolidated subsidiary)(Consolidated subsidiary)
White Trash Charms
Japan Co., Ltd.

G&E Corporation

JSM HAWAII, LLC

Kadokawa Haruki
Corporation(Consolidated subsidiary)
EXPRESS Inc.

(Equity method affiliate)(Consolidated subsidiary)(Consolidated subsidiary)Fields Pictures Corporation

Haruki Fields Cinema Fund

(Non-equity method affiliate)(Equity method affiliate)

SPO Inc.

(Equity method affiliate)
Bbmf Magazine, Inc.

(Non-equity method affiliate)(Non-consolidated subsidiary)

YMO Inc.

APE Inc.

- 13 -

Operating Policies(1) Fundamental Corporate Management Policy
The Company’s management philosophy is to provide “The Greatest Leisure for All People,” based on which it has
been expanding its business domain in a variety of entertainment fields, taking the pachinko and pachislot field as its
starting point. The backbone engine to drive the creation of its core strengths is the “content business.” Accordingly,
through the comprehensive strengths of its group companies, the Group strives to create primary content and acquire
copyrights (by sublicensing copyrights) for multiple secondary uses, providing such content for diverse media including
pachinko and pachislot machines and game software through detailed project design based on strategic marketing.
The twin pillars of the Company’s “Shareholders First” operating policy are the enhancement of corporate value andthe return of profits to shareholders. To do this, we seek to make optimal use of our management resources.
(2) Issues to Address and Management Strategies for the Medium to Long Term
In May 2004, the Ministry of Economy, Trade and Industry released its New Industry Promotion Strategy, the aim ofwhich is to nurture industries to underpin the future of the Japanese economy. The future potential of the content
industry is one of the focuses of the strategy, which holds high expectations for the growth potential of the digitalcontent field, including animation and game software.
Fields believes that the essence of the content business lies in creating content with high commercial value that can be
put to a diversity of uses. To that end, we recognize the stable and continual supply of content with high commercial
value to various media, including pachinko and pachislot machines, as a primary management issue in our businessactivities.
Anticipating environmental changes for this and future generations, we are promoting strategies based on the multiple
uses of digital content to establish our competitive edge, beginning with the PS Field. The Group’s business now covers
a wide range of entertainment fields encompassing not only the PS Field but also game software, sports and mobile, as
well as visual fields such as movies and animation.
In June 2008, the Company celebrated its 20th anniversary. In pursuing our corporate philosophy of “The Greatest
Leisure for All People,” during the Company’s first 10 years, we disseminated pachinko and pachislot machines more
widely by providing pachinko halls nationwide with proposals on services and interiors, as well as suggesting the kindsof machines that could attract more fans, and in the last 10 years, we strove to offer machines with sound and attractive
content that do not depend on gambling, through alliances with major machine manufacturers. We have grown bycontributing to the development and soundness of the pachinko market. Recognizing the importance of content for
pachinko and pachislot machines, we have promoted the content business aggressively, taking the lead in making moreentertaining machines.
Over the next 10 years, the Group will not only review and reinforce existing businesses but also strive to create newleisure businesses, which will be essential to our sustainable growth.
To realize our vision for the Group 10 years from now, we launched a five-year Medium-Term Management Plan
beginning with the year that started in April 2008. We will strategically promote this Medium-Term Management Plan
with its basic policies to “Provide products that contribute to market expansion and soundness” and “Explore, nurtureand energize high-quality content,” as shown specifically in the following:
1) PS business strategies
The PS Field currently faces radical change. Ongoing technological innovations such as LCDs and the enhanced
performance of graphic IC chips have created a need to focus on the quality of content presented. The companies thatsurvive will be those that can continue to supply high-quality products to the market.
In such circumstances, in the Group’s key PS business, we will contribute to market expansion and vitalization andexpand our earnings foundation by 1) promoting alliance strategies, 2) reinforcing planning and development
capabilities and 3) reinforcing the sales foundation. To promote alliance strategies, we will reinforce tie-ups with- 14 -

existing manufacturers. We intend to release our first products during the year ending March 2010 through an alliancewith KYORAKU SANGYO, with which the Company entered into a business alliance in February 2008.
In our efforts to reinforce planning and development capabilities, we will strive to effectively sublicense
high-quality copyrights, reinforce planning capabilities to maximize copyright content and buttress development
capabilities to improve quality and contribute to profitability. To this end, a drastic review of our planning anddevelopment structure and the consolidation of a graphic content software company are under way.
In reinforcing the sales foundation, we will harness our strength as the largest individual distributor. Furthermore,
we have launched a review of our sales strategies and promotion activities at our sales bases nationwide.
2) Group business strategies
As cross-media business strategies in the Group businesses are a key to the growth of the Game Field and the Other
Field, we will 1) promote the acquisition of high-quality copyrights to make pachinko and pachislot machines more
attractive, 2) increase earnings through multiple uses of content and 3) promote the creation of primary content by
aggressively investing in each media.
With regard to the content that we have acquired in the fields of games, movie and animation, publications andsports marketing, we will continue to use them for pachinko and pachislot machines as an important exit strategy,
promote their multiple uses and establish a business scheme to expand earnings through synergies created in theGroup. We will not only make multiple uses of content within the Group but also reinforce rights trading with entities
outside the Group.
The Group currently forms a large corporate group encompassing a wide range of entertainment fields. We will
strive to raise profitability among the existing Group companies quickly and continue investments as necessary. With
each Group company expanding business on its own, Fields Corporation and each Group company will effectively
use the high-value-added content held by each company for pachinko and pachislot machines and game software,
thereby acquiring a competitive edge in each business field.
3) Enhancement of the management foundation
In addition to reinforcing our businesses, we will enhance our management foundation to fulfill our corporate social
responsibility. Specifically, we will strive to reinforce the Group governance, nurture our good corporate culture andraise awareness.

(3) Targeted Management Indicators
The Fields Group’s primary management target is to enhance corporate value through more efficient management andconsistent expansion of businesses. Specifically, return on equity, operating income and operating cash flow shall be thethree focus indicators.

(4) Streamlining of the Internal Control System and Its Operational Status
The relevant description is omitted because it overlaps with the description in the “Basic Concept and the Streamlined
Conditions Regarding the Internal Control System” in the Report on Corporate Governance, which is set forth in Article
8-3 of the Securities Listing Rules and Article 10, Paragraph 3, of the Timely Disclosure Regulations.

- 15 -

Consolidated Financial Statements(1) Consolidated Balance Sheets
PeriodItem(Assets)
I Current assets
1. Cash and cash equivalents
2. Notes and accounts
receivable—trade
3. Inventories
4. Merchandising rights
advances
5. Deferred tax assets
6. Other current assets
7. Allowance for doubtful
accounts
Total current assets
II

Fixed assets
1. Tangible fixed assets(1) Buildings and structures
Accumulated depreciation(2) Vehicles
Accumulated depreciation(3) Tools, furniture andfixturesAccumulated depreciation(4) Land(5) Construction in progress
Total tangible fixed assets
2. Intangible fixed assets(1) Goodwill(2) Software(3) Other intangible fixed
assetsTotal intangible fixed assets
3. Investments and other assets(1) Investment securities(2) Long-term loans(3) Deposits and guarantees(4) Other assets(5) Deferred tax assets(6) Allowance for doubtful
accounts
Total investments and otherassetsTotal fixed assets
Total Assets

Fiscal year ended March 31, 2007
(As of March 31, 2007)
Amount% total*1*417,902

12,841(5,061)

18,523

12,354(6,168)

2,972

4,013

1,040

—

4,397

4,397

1,517
5,286

2,271
3,774

754
(1,512)

(57)

(92)

(35)

46,144

3,905
(851)
45
(20)

69.8

25

57.2

(6,585)

2,904

(149)

11

(13)

1,206
3,701
269
8,093

340
1,939
220
2,336

2,599
865
1,762
48
5,756

(1,393)

8.7

11.7

1,405
433

1,057
2,473

(348)
2,040

2,196

406

(1,790)4,036*239,5593,957(1,052)
26
(14)

3,053

1,931
(1,066)(Unit: Million yen)
Year-on-year
Fiscal year ended March 31, 2008change(As of March 31, 2008)(decrease)
Amount% totalAmount

6.1

3,937

5.7

(98)

6,216
104
2,464
1,266
363

13,212
102
2,893
934
790

6,995
(1)
428
(331)
427

(272)

(355)

(82)

10,14415.4

17,578

25.4

7,434

19,936
66,08130.2
100.0

29,60969,168

42.8
100.0

9,672
3,087

- 16 -

Period
Item(Liabilities)
I Current liabilities
1. Notes and accounts
payable—trade
2. Short-term borrowings
3. Current portion of long-termborrowings
4. Corporate bonds redeemablewithin 1 year
5. Accrued income taxes
6. Accrued bonuses
7. Accrued bonuses to directors
and auditors
8. Allowance for losses onorder receiving
9. Allowance for losses on
relocation of offices
10. Other current liabilities
Total current liabilities
II

Fixed liabilities
1. Corporate bonds
2. Long-term borrowings
3. Retirement benefit
provisions
4. Guaranty deposits received
5. Other fixed liabilities
Total fixed liabilities
Total liabilities(Net assets)
I Shareholders’ equity
1. Common stock
2. Capital surplus
3. Retained earnings
Total shareholders’ equity
II Valuation and translationdifferences
1. Unrealized holding gain on
available-for-sale securities
2. Foreign currency translation
adjustment
Total valuation andtranslation differences
III Stock acquisition rights
IV Minority interest
Total net assets
Total Liabilities and Net
AssetsFiscal year ended March 31, 2007
(As of March 31, 2007)
Amount% total*5(Unit: Million yen)
Year-on-yearchange(As of March 31, 2008)(decrease)
Amount% totalAmountFiscal year ended March 31, 2008

9,094

5,954

(3,139)

2,230

3,398

1,168

917

804

(113)

120

120

—

2,032
25

3,743
174

1,711
149

98

128

30

—

49

49

—

32

32

4,347
18,86528.6

4,915
19,322

27.9

568
457

370
1,238

250
434

(120)
(804)

195

211

16

2,575
—
4,379
23,244

6.6
35.2

2,459
158
3,514
22,836

5.1
33.0

(116)
158
(865)
(407)

61.9

7,948
7,994
28,852
44,795

64.8

—
—
3,908
3,908

7,948
7,994
24,94340,886

214

(249)

(464)

13

(59)

(73)

228

0.3

(309)

(0.5)

(537)

15
1,705
42,836

0.0
2.6
64.8

43
1,802
46,331

0.1
2.6
67.0

27
96
3,494

66,081

100.0

69,168

100.0

3,087

- 17 -

(2) Consolidated Statements of Income
Period

I
II

*1

5,561
5,246

4,307
5,175

25

145

98

128

1,180

1,878

660

662

622

977

1,244
51

1,460
71

71

150

429
5,111

59
27
215
78
58

20,303
8,944

439

23.8
10.5

0.5

335
6,092

62
28
103
―
118

58

86

92

557

―

217

―

243

―
29

*2

(Unit: Million yen)
Year-on-yearchange(April 1, 2007–March 31, 2008)(decrease)
Amount% salesAmount101,818
100.0
16,497
67,274
66.1
11,202
34,54433.9
5,295

Fiscal year ended March 31, 2008

(April 1, 2006–March 31, 2007)
Amount% sales
85,321
100.0
56,072
65.7
29,24834.3

Item
Net sales
Cost of sales
Gross profit
III Selling, general andadministrative expenses
1. Advertising expenditures
2. Salaries and allowances
3. Provision for accrued
bonuses
4. Provision for accrued
bonuses to directors andauditors
5. Outsourcing expenses
6. Travel and transport
expenses
7. Depreciation andamortization
8. Rents
9. Retirement benefit expenses
10. Provision to allowance for
doubtful accounts
11. Amortization of goodwill
12. Others
Operating income
IV Non-operating income
1. Interest income
2. Dividend income
3. Discounts on purchases
4. Foreign exchange gain
5. Others
V Non-operating expenses
1. Interest expense
2. Equity method investment
loss
3. Loss on management ofinvestment securities
4. Amortization of equity
investment
5. Foreign exchange loss
6. Others
Ordinary income
VI Extraordinary income
1. Gain on sale of fixed assets
2. Gain on sale of share in
affiliates
3. Reversal of allowance for
doubtful accounts
4. Gain on investment inanonymous association
5. Gain on liquidation ofaffiliates
6. Others

Fiscal year ended March 31, 2007

181
9,202

0.2
10.8

597
63

0

2

10

―

3

―

79

90

17

―

―

110

- 18 -

0.1

3

21,385
13,158

21.0
12.9

1,082
4,213

313

0.3

(125)

1,766
11,705

1.7
11.5

1,585
2,502

97

0.1

(13)

Period
Item
VII Extraordinary losses
1. Loss on sale of fixed assets
2. Loss on disposal of fixed
assets3. Impairment loss
4. Valuation loss on investment
securities
5. Loss from change in equityof affiliates
6. Provision to allowance forloss on relocation of offices
7. Others
Income before income taxes
and minority interest
Current income taxes
Deferred income taxes
Minority interest
Net income

*3
*4
*5

Fiscal year ended March 31, 2007

Fiscal year ended March 31, 2008

(April 1, 2006–March 31, 2007)
Amount% sales(April 1, 2007–March 31, 2008)
Amount% sales

7

―

743

266

214

876

―

112

0

―

―

32

119

5,058
(625)

1,086

1.3

8,226

9.6

4,433
83
3,710

- 19 -

5.2
0.1
4.3

3

6,022
(921)

Year-on-yearchange(decrease)
Amount

1,292

1.3

206

10,509

10.3

2,282

5,101
111
5,296

5.0
0.1
5.2

667
28
1,586

(3) Consolidated Statement of Change in Net Assets
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)(Unit: Million yen)

Shareholders’ equity
Total
shareholders’equityRetainedearnings

Common stock

Capital surplus

7,948

7,994

22,726

38,669――(1,388)(1,388)

―

―

(105)

(105)

―

―

3,710

3,710

―

―

―

―

Balance at March 31, 2006
Amount of changes during the year
Dividends from surplus
Bonuses to directors and auditors
Net income
Net amount of changes in items not included inshareholders’ equity during the year
Total amount of changes during the year
Balance at March 31, 2007

―

―

2,217

2,217

7,948

7,994

24,94340,886

Valuation and translation differences

Balance at March 31, 2006
Amount of changes during the year
Dividends from surplus
Bonuses to directors and auditors
Net income
Net amount of changes in items not included inshareholders’ equity during the year
Total amount of changes during the year
Balance at March 31, 2007

Unrealized
holding
gain onavailablefor-salesecurities
735

Foreigncurrencytranslation
adjustment

Total
Stock
valuation acquisition
andrightstranslationdifferences

Minority
interest

Total net
assets

6

742

―

1,610

41,022

―

―

―

―

―

(1,388)

―

―

―

―

―

(105)

―

―

―

―

―

3,710

(520)

7

(513)

15

94

(402)

(520)

7

(513)

15

94

1,814

214

13

228

15

1,705

42,836

Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)(Unit: Million yen)

Shareholders’ equity
Total
shareholders’equityRetainedearnings

Common stock

Capital surplus

7,948

7,994

24,94340,886――(1,388)(1,388)

―

―

5,296

5,296

―

―

(0)

(0)

―

―

―

―

―

―

3,908

3,908

7,948

7,994

28,852

44,795

Balance at March 31, 2007
Amount of changes during the year
Dividends from surplus
Bonuses to directors and auditors
Net income
Net amount of changes in items not included inshareholders’ equity during the year
Total amount of changes during the year
Balance at March 31, 2008

- 20 -

Valuation and translation differences

Balance at March 31, 2007
Amount of changes during the year
Dividends from surplus
Bonuses to directors and auditors
Net income
Net amount of changes in items not included inshareholders’ equity during the year
Total amount of changes during the year
Balance at March 31, 2008

Unrealize
d
Total
Stock
Foreignvaluation acquisition
holding
currency
gain onandrightstranslationtranslation
availableadjustment
for-saledifferences
securities
214
13
228
15

Minority
interest

Total net
assets

1,705

42,836

―

―

―

―

―

(1,388)

―

―

―

―

―

5,296

―

―

―

―

―

(0)

(464)

(73)

(537)

27

96

(413)

(464)

(73)

(537)

27

96

3,494

(249)

(59)

(309)

43

1,802

46,331- 21 -

(4) Consolidated Statements of Cash Flows

PeriodItem

Fiscal year ended March 31,
2007(April 1, 2006–March 31,
2007)
AmountCash flows from operating activities
1. Income before income taxes and minority
interest
2. Depreciation and amortization
3. Impairment loss
4. Amortization of goodwill
5. Increase (decrease) in allowance for doubtful
accounts
6. Increase (decrease) in accrued bonuses
7. Increase (decrease) in accrued bonuses todirectors and auditors
8. Increase (decrease) in retirement benefit
provisions
9. Increase (decrease) in reserve for retirement
benefits for directors and auditors
10. Increase (decrease) in allowance for losses onorder receiving
11. Increase (decrease) in allowance for losses on
relocation of offices
12. Interest and dividend income
13. Discounts on purchases
14. Equity method investment loss (gain)
15. Interest expense
16. Gain on sale of fixed assets
17. Gain on sale of shares in affiliates
18. Gain on investment in anonymous association
19. Gain (loss) from change in equity of affiliates
20. Loss on sale of fixed assets
21. Loss on disposal of fixed assets
22. Loss on management of investment securities
23. Valuation loss on investment securities
24. Amortization of equity investment
25. Foreign exchange gain
26. Decrease (increase) in notes and accounts
receivable—trade
27. Decrease (increase) in inventories
28. Decrease (increase) in merchandising rightadvances
29. Decrease (increase) in prepaid expenses
30. Decrease (increase) in advance payments
31. Decrease (increase) in notes held
32. Decrease (increase) in non-operating notes
receivable
33. Decrease (increase) in deposits as security for
dealing
34. Increase (decrease) in notes and accounts
payable—trade
35. Increase (decrease) in other accounts payable
36. Increase (decrease) in accrued consumption taxes
37. Increase (decrease) in deposits received
38. Increase (decrease) in guarantee deposits held
39. Payments of bonuses to directors and auditors
40. Others
Subtotal
41. Interest and dividends received
42. Interest paid
43. Income taxes paid
Net cash provided by (used in) operating activities(Unit: Million yen)
Fiscal year ended March 31,
Year-on-year change
2008(April 1, 2007–March 31,(decrease)
2008)
AmountAmountI- 22 -

8,226

10,509

2,282

817
214
429

1,097
876
335

280
661
(93)

26

112

86

―

120

120

98

30

(68)

32

12

(19)

(607)

―

607

―

17

17

―

32

32

(86)
(215)
92
58
(0)
(10)
(79)
0
7
743
―
―
―
―

(90)
(103)
557
86
―
―
(90)
―
―
266
217
112
243
620

(4)
111
464
28
0
10
(11)
(0)
(7)
(477)
217
112
243
620

28,7196,052(22,667)(1,341)

(504)

837

944

(1,918)(2,862)

331
52
(37)

(422)
(245)
―

(754)
(298)
37

(175)

―

175

20

―

(20)

(26,297)(3,250)23,046

―
(152)
530
190
(105)
(318)
12,111132(63)(6,887)
5,293

850
162
(363)
―
―
46
15,372131(76)(4,299)11,127

850
314
(893)
(190)
105
365
3,260
(1)
(13)
2,588
5,834

Period
Item

Cash flows from investing activities
Transfer to time deposits
Proceeds from cancellation of time deposits
Purchases of tangible fixed assets
Proceeds from sale of tangible fixed assets
Purchases of intangible fixed assets
Purchases of investment securities
Proceeds from sale of investment securities
Expenditure for acquiring shares in affiliates
Proceeds from sale of shares in affiliates
Proceeds from (expenditure for) acquiring newly
consolidated subsidiaries
11. Expenditure for equity investment
12. Expenditure for loans
13. Collection on loans
14. Payments for deposits and guarantees
15. Proceeds from cancellation of deposits andguarantees
16. Payments for long-term prepaid expenses
17. Payments for insurance reserve
18. Others
Net cash provided by (used in) investing activities

Fiscal year ended March 31,
2007(April 1, 2006–March 31,
2007)
Amount(Unit: Million yen)
Fiscal year ended March 31,
Year-on-year change
2008(April 1, 2007–March 31,(decrease)
2008)
AmountAmount

II

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

*2

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. Redemption of corporate bonds
5. Provision of collateral goods
6. Proceeds from issuance of shares
7. Proceeds from payments by minority shareholders
8. Cash dividends paid
Net cash provided by (used in) financing activities(2)
98(1,113)16(2,425)(1,050)
758
(16)
100

―
―
(3,450)―(761)(7,585)495(1,169)―2(98)(2,336)(16)
1,664(6,534)(263)(1,153)
(100)

(9)

(902)

(893)

(596)
(23)
40
(363)

(220)
(1,036)
234
(296)

376
(1,012)
193
66

136

124

(12)

(8)
(1)
(311)
(4,772)(57)―
21(14,604)

(48)
1
332
(9,831)

1,477
2,000
(418)
(110)
(81)
0
10
(1,389)
1,488

1,167
―
(987)
(120)
(89)
―
42
(1,397)(1,384)(309)(2,000)
(569)
(10)
(8)
(0)
32
(7)
(2,872)

32

(275)

(308)

2,042
15,777(5,136)
17,819(7,178)
2,042

0

10

10

17,81912,693(5,126)

III

IV Effect of exchange rate changes on cash and cash
equivalents
V Increase (decrease) in cash and cash equivalents
VI Cash and cash equivalents at beginning of year
VII Increase in cash and cash equivalents due to change inscope of consolidation
VIII Cash and cash equivalents at end of year(5) Material items affecting the operation of the Company as a going concern
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)

No relevant items
Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)

No relevant items- 23 -

(6) Basis of Presentation of the Consolidated Financial Statements
Item
1. Scope of consolidation

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(1) Number of consolidated subsidiaries: 14
Names of consolidated subsidiaries:
Fields Jr. Corporation
White Trash Charms Japan Co., Ltd.
Digital Lord Corporation
thinkArts Co., Ltd.
Fields Pictures Corporation
FutureScope Corporation
Japan Sports Marketing Inc.
JSM HAWAII, LLC
D3 Inc.
D3 Publisher Inc.
Entertainment Software Publishing Inc.
D3Publisher of America, Inc.
D3Publisher of Europe Ltd.
D3DB S.r.l.

Given its significance, Fields Pictures
Corporation, which was a
non-consolidated subsidiary until theprevious fiscal year, was included within
the scope of consolidation in the current
fiscal year.
E-Active Co., Ltd. changed its trade nameto Fields Pictures Corporation as of June
19, 2006.
thinkArts Co., Ltd. has been included
within the scope of consolidation as aresult of the acquisition of its shares by theCompany in the current fiscal year.
FutureScope Corporation was establishedduring the fiscal year under review andwas therefore included in the scope of
consolidation.
JSM HAWAII, LLC was establishedduring the fiscal year under review, andwas therefore included in the scope of
consolidation.
D3 Publisher Inc. was included in thescope of consolidation because it changed
its trade name to D3 Inc. and newly
established D3 Publisher Inc. as a result of
the corporate divesture as of April 1, 2006.
(2) Names of significant non-consolidated
subsidiaries:
Ildel Corporation
APE Inc.
Reason for exclusion from the scope of
consolidation:
Non-consolidated subsidiaries have been
excluded from consolidation owing totheir small size and the fact that in no casedo their aggregate total assets, net sales,
net income (proportionate to equity stakes
held) and retained earnings (proportionate
to equity stakes held), etc., have a material
impact on the consolidated financial
statements.

- 24 -

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(1) Number of consolidated subsidiaries: 19
Names of consolidated subsidiaries:
Fields Jr. Corporation
White Trash Charms Japan Co., Ltd.
Lucent Pictures Entertainment, Inc.
thinkArts Co., Ltd.
Fields Pictures Corporation
Shin-Nichi Technology Co., Ltd.
Haruki Fields Cinema Fund
FutureScope Corporation
EXPRESS Inc.
Japan Sports Marketing Inc.
JSM HAWAII, LLC
Ildel Corporation
D3 Inc.
D3 Publisher Inc.
Entertainment Software Publishing Inc.
D3Publisher of America, Inc.
D3Publisher of Europe Ltd.
Vicious Cycle Software, Inc.
D3DB S.r.l.
Digital Lord Corporation changed its tradename to Lucent Pictures Entertainment,
Inc. as of October 1, 2007.
Shin-Nichi Technology Co., Ltd. and
EXPRESS Inc. were included within thescope of consolidation as a result of theacquisition of its shares by the Company
in the current fiscal year.
Given its significance, Ildel Corporation,
which was a non-consolidated subsidiary
until the previous fiscal year, was included
within the scope of consolidation in thecurrent fiscal year.
Vicious Cycle Software, Inc. was included
within the scope of consolidation as aresult of the acquisition of its shares by
D3Publisher of America, Inc. in thecurrent fiscal year.
Haruki Fields Cinema Fund wasestablished during the fiscal year underreview and was therefore included in thescope of consolidation.

(2) Names of significant non-consolidated
subsidiaries:
APE Inc.
Reason for exclusion from the scope of
consolidation:
Same as at left

Item
2. Application of equity method

3. Accounts settlement dates of
consolidated subsidiaries

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(1) Number of equity-method affiliates: 2
Rodeo Co., Ltd.
Kadokawa Haruki Corporation(2) Names of significant non-consolidated
subsidiaries and affiliated companies notaccounted for by the equity method:
Ildel Corporation
APE Inc.
G&E Corporation
YMO Inc.
Reason for non-application of the equity
method:These companies have a negligible impact
on net income (proportionate to equity
stakes held) and retained earnings(proportionate to equity stakes held) andhave no significance as a whole, so havebeen excluded from the application of theequity method.
(3) Matters requiring clarification concerning
procedures for application of the equity
method:With regard to companies accounted forby the equity method whose year-end
settlement dates differ from that for
consolidated accounts, the financial
statements relating to those companies’
fiscal years are utilized.
Of the consolidated subsidiaries, theyear-end balance sheet date of JSM
HAWAII, LLC is December 31. In
preparing the consolidated financial
statements, its financial statements as ofMarch 31 through the temporary
settlement of accounts are used. Effectivefrom the current fiscal year, thinkArts Co.,
Ltd. has changed its year-end balance
sheet date from the previous November 30
to March 31.

- 25 -

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(1) Number of equity-method affiliates: 4
Rodeo Co., Ltd.
SPO Inc.
Bbmf Magazine, Inc.
Kadokawa Haruki Corporation
SPO Inc. has been newly accounted for by
the equity method as a result of theacquisition of its shares by the Company
in the current fiscal year.
Bbmf Magazine, Inc. has been newly
accounted for by the equity method as aresult of the acquisition of its shares byFields Pictures Corporation in the current
fiscal year.
(2) Names of significant non-consolidated
subsidiaries and affiliated companies notaccounted for by the equity method:
APE Inc.
G&E Corporation
YMO Inc.
Reason for non-application of the equity
method:Same as at left

(3) Matters requiring clarification concerning
procedures for application of the equity
method:Same as at left

Of the consolidated subsidiaries, theyear-end balance sheet date of JSM
HAWAII, LLC is December 31. In
preparing the consolidated financial
statements, its financial statements as ofMarch 31 through the temporary
settlement of accounts are used.

Item
4. Accounting standards(1) Valuation standards andmethods for important
assetsFiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(1) Marketable securities
Held-to-maturity bonds: Carried atamortized cost (straight-line method)
Other marketable securities
Securities with market prices:Stated at market value based on market
price as of the consolidated balance
sheet date (unrealized gains or losses arecharged or credited directly to net assets,with the cost of securities solddetermined by the moving averagemethod).
Securities without market prices:Stated at cost determined by the moving
average method.
(2)(3) Inventories
1) Merchandise
Fields Corporation:
Used pachinko/pachislot machines
At cost determined by the specificidentification method
OthersAt cost determined by the moving
average method
Consolidated subsidiaries:
At cost determined by the periodic
average method
2) Products
Consolidated subsidiaries:
At cost determined by the first-in
first-out method
3) Work in process, content
Consolidated subsidiaries:
At cost determined by the specificidentification method(4)(2) Depreciation methods forimportant depreciable
assets(5) Supplies
At cost determined by the lastpurchase price method(1) Tangible fixed assets
Declining-balance method for theCompany and domestic consolidated
subsidiaries
However, the straight-line method isapplied to buildings (excluding building
fixtures) acquired on and after April 1,
1998.
Straight-line method for overseas
consolidated subsidiaries
The estimated useful lives of depreciable
assets are as follows.
Buildings: 4–50 years
Structures: 10–50 years
Vehicles: 2–6 years
Tools, furniture and fixtures: 3–20 years- 26 -

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(1) Marketable securities
Held-to-maturity bonds:
Same as at left
Other marketable securities
Securities with market prices:
Same as at left

Securities without market prices:
Same as at left
(2) Derivatives:
Stated at market value(3) Inventories
1) Merchandise
Fields Corporation:
Used pachinko/pachislot machines
Same as at left
OthersSame as at left
Consolidated subsidiaries:
Same as at left
2) Products
Consolidated subsidiaries:
Same as at left
3) Work in process, content
Consolidated subsidiaries:
Same as at left
(4) Raw materials
Consolidated subsidiaries
Stated at cost determined by the moving
average method.
(5) Supplies
Same as at left
(1) Tangible fixed assets
Declining-balance method for theCompany and domestic consolidated
subsidiaries
However, the straight-line method isapplied to buildings (excluding building
fixtures) acquired on and after April 1,
1998.
Straight-line method for overseas
consolidated subsidiaries
The estimated useful lives of depreciable
assets are as follows.
Buildings: 8–50 years
Structures: 10–50 years
Vehicles: 2–6 years
Tools, furniture and fixtures: 2–20 years

Item(2) Depreciation methods forimportant depreciable
assets(3) Treatment of importantdeferred charges(4) Accounting standards forimportant reserves

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(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 (fiveyears).
Software for sale by consolidated
subsidiaries is depreciated at the
depreciation rate determined by theCompany over the estimated payback
period (12 months for game software; 36months for other software).
(3) Long-term prepaid expenses
Straight-line method(1) Stock issuance expense
The expense is charged in full at the time
it is incurred.
(1) Allowance for doubtful accounts
To provide against 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 individually reviewing
collectability of the debts.
(2) Accrued bonuses
To provide for employee bonuses, theCompany recognizes the amounts out ofthe projected bonus payments to beallocated to the fiscal year.
(3) Accrued bonuses to directors and auditors
To provide for bonuses to directors andauditors, the Company recognizes theamounts corresponding to the current
fiscal year based on the projected bonus
payments.
(Change in Accounting Treatment)
Effective from current fiscal year, theCompany has adopted the AccountingStandards Board of Japan Statement No. 4,“Accounting Standard for Directors’
Bonuses,” issued on November 29, 2005.
As a result, operating income, ordinary
income, and income before income taxes
and minority interest decreased ¥98
million, respectively.
The impacts on segment information arestated at the relevant points in the Segment
Information.
(4)- 27 -

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(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 (fiveyears).

(3) Long-term prepaid expenses
Same as at left
(1)(1) Allowance for doubtful accounts
Same as at left

(2) Accrued bonuses
To provide for employee bonuses, theCompany and some of its consolidated
subsidiaries recognize the amounts out ofthe projected bonus payments to beallocated to the current fiscal year.
(3) Accrued bonuses to directors and auditors
To provide for bonuses to directors andauditors, the Company recognizes theamounts corresponding to the current
fiscal year based on the projected bonus
payments.

(4) Allowance for losses on order receiving
To provide against losses from receiving
orders, allowances for losses on order
receiving are provided at someconsolidated subsidiaries with regard toorder receiving operations bearing a highpossibility of incurring losses that at thesame time can be estimated rationally.

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)

Item(4) Accounting standards forimportant reserves(5) Translation of importantforeign-currency-denomi
nated assets and liabilities
into yen(6) Treatment of important
lease transactions(7) Important hedge
accounting methods(5)(6) Retirement benefit provisions
To provide for employees’ retirement
benefits, the Company and someconsolidated subsidiaries recognize, on thebasis of projected benefit obligations as ofthe end of the fiscal year, benefit
obligations accrued as of the end of the
fiscal year.
Actuarial differences are amortizedproportionately by the straight-line
method over a fixed number of years (fiveyears) within the average remaining periodof service of employees as of the timesuch differences arise.
Amortization amounts are expensed
beginning with the fiscal year followingthat in which the differences arise.
Foreign currency receivables and payables
are translated into yen using the spot
currency exchange rate on the
consolidated balance sheet date, andtranslation differences are recorded asgains or losses.
The assets and liabilities of overseas
subsidiaries are translated into yen using
the spot currency exchange rate on the
consolidated balance sheet date, andincome and expenses are translated into
yen using the average exchange rateduring the period, translation differences
being stated as part of the foreign currencytranslation adjustment and minority
interest in the net assets section of thebalance sheet.
Finance lease transactions, other thanthose where the ownership of the leased
assets is deemed to be transferred to thelessee, are accounted for as ordinary
operating lease transactions.
(1) Important hedge accounting methods
At certain consolidated subsidiaries,
special treatment is used in the case ofinterest rate swaps that satisfy the criteria
for hedge accounting.
(2) Method and scope of hedging
Hedging method
Interest rate swap transactions
Scope of hedging
Interest on borrowings(3) Hedging policy
At certain consolidated subsidiaries a
hedging policy is implemented to avoid
any impact of fluctuations in market
interest rates on fund-raising costs(interest expense).

- 28 -

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(5) Allowance for losses on relocation of
offices
The Company provides estimated costs
that might result from office relocations
including a loss on disposal of fixed assets
and expenses for recovering the present
status, etc.
(6) Retirement benefit provisions
Same as at left

Foreign currency receivables and payables
are translated into yen using the spot
currency exchange rate on the
consolidated balance sheet date, andtranslation differences are recorded asgains or losses.
The assets and liabilities of overseas
subsidiaries are translated into yen using
the spot currency exchange rate on the
consolidated balance sheet date, andincome and expenses are translated into
yen using the average exchange rateduring the period, translation differences
being stated as part of the foreign currencytranslation adjustment in the net assets
section of the balance sheet.
Same as at left

(1) Important hedge accounting methods
Same as at left

(2) Method and scope of hedging
Same as at left

(3) Hedging policy
Same as at left

Item(7) Important hedge accounting
methods(8) Other significant
standards for the
preparation of
consolidated financial
statements
5. Valuation of assets andliabilities of consolidated
subsidiaries
6. Amortization of goodwill
and negative goodwill

7. Scope of funds inconsolidated statements ofcash flows

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(4) Method for assessing hedging
effectivenessInterest rate swap transactions are deemed
to qualify for special accounting
treatment, and therefore it is on this basisthat judgments as to effectiveness aremade.
(5) Other risk management
The management division has
responsibility for the conclusion ofcontracts relating to hedge accounting at
certain consolidated subsidiaries.
No particular stipulations relating to suchtransactions have been laid down, but they
are administered in accordance withregulations governing the scope of
authority.
Accounting for consumption taxes
Consumption tax is accounted for by the
tax-excluded method.

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(4) Method for assessing hedging
effectivenessSame as at left

(5) Other risk management
Same as at left

Accounting for consumption taxes
Same as at left

Assets and liabilities of consolidated
subsidiaries are stated at fair value.

Same as at left

Goodwill is equally amortized for five
years.

Goodwill is amortized equally for areasonable number of years within 10
years, estimating the period when its effectis generated.
Same as at left

Funds include cash on hand, demand
deposits and short-term investments
maturing or redeemable within threemonths after acquisition that are highly
liquid, easily convertible into cash andexposed to low price fluctuation risk.

(7) Change in the Basis of Presentation of the Consolidated Financial Statements
Changes in accounting treatment
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(Accounting standard for the presentation of net assets inbalance sheets)
Effective from the current fiscal year, the Company has
adopted the Accounting Standard for Presentation of Net
Assets in the Balance Sheet (ASBJ Statement No. 5 issued on
December 9, 2005) and the Implementation Guidance on
Accounting Standard for Presentation of Net Assets in the
Balance Sheet (ASBJ Guidance No. 8 issued on December 9,2005).
The amount conventionally recorded in “Shareholders’ equity”
was ¥41,115 million.
Due to the revision to the regulations regarding consolidated
financial statements, the “Net assets” section of theconsolidated balance sheets for the current fiscal year ended
March 31, 2007, has been prepared according to the revised
regulations for the consolidated financial statements.

- 29 -

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(Accounting standard for business combinations)
Effective from the current fiscal year, the Company has
adopted the Accounting Standard for Business Combinations(issued on October 31, 2003 by Business Accounting
Deliberation Council), Accounting Standard for Business
Divestures (ASBJ Statement No. 7 issued on December 27,2005) and the related Accounting Standard for Business
Combinations and Accounting Standard for Business
Divestitures (ASBJ Implementation Guidance No. 10, last
revised on December 22, 2006).
(Accounting standard for share-based payment including Stock
Options)
Effective from the current fiscal year, the Company has
adopted the Accounting Standard for Share-Based Payment(ASBJ Statement No. 8 issued by the ASBJ on December 27,2005) and the Implementation Guidance on AccountingStandard for Share-Based Payment (ASBJ Implementation
Guidance No. 11 issued by the ASBJ on May 31, 2006).
As a result, operating income, ordinary income and income
before income taxes and minority interest each decreased ¥15
million, compared with the previous accounting method.
The impacts on segment information are stated at the relevant
points in the Segment Information.
(Tentative treatment of the accounting for deferred charges)
Effective from the current fiscal year, the Company has
adopted the Tentative Solution on Accounting for Deferred
Assets (Practical solutions—PITF No. 19 issued by ASBJ on
August 11, 2006).
As a result, “Stock issuance expense,” which was included in“Non-operating expenses” in the previous fiscal year, has beentreated as “Stock delivery expense” effective from the current
fiscal year.
This change has no significant effect on the consolidated
statement of income.

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(Change in the method of depreciation of tangible fixed assets)
At the Company and its domestic consolidated subsidiaries,
pursuant to the revisions to the Corporate Tax Law (the Partial
Revision to the Corporate Tax Law, the 6th Law enacted on
March 30, 2007, and the Ordinance for Partial Revision to the
Cabinet Order Related to the Corporate Tax Law, the 83rd
Ordinance on March 30, 2007), the Company changed themethod of depreciation of tangible fixed assets and uses amethod based on the revised Corporate Tax Law with regard to
those assets acquired on and after April 1, 2007. Due to thischange, operating income, ordinary income and income before
income taxes and minority interest each decreased ¥41 million.
The impact on the Segment Information is indicated in the
Segment Information section.

Changes in method of presentation
Fiscal year ended March 31, 2007
Fiscal year ended March 31, 2008
(April 1, 2006–March 31, 2007)(April 1, 2007–March 31, 2008)(Consolidated Balance Sheets)(Consolidated Balance Sheets)
1. “Consolidation adjustment account” for the previous fiscal 1. As “Merchandising rights advances,” which had beenyear has been presented as “Goodwill” since the current
included in “Other current assets” under current assets until
fiscal year.
the end of the previous year, accounted for more than 5/100
of total assets, it has been separately presented.
The “Merchandising rights advances” as of March 31, 2007,
was ¥2,572 million.
(Consolidated Statements of Income)
1. “Amortization of excess of net assets acquired over cost” inthe previous year is presented as “Amortization of goodwill”
since the current fiscal year.

- 30 -

Fiscal year ended March 31, 2007
Fiscal year ended March 31, 2008
(April 1, 2006–March 31, 2007)(April 1, 2007–March 31, 2008)
2. As “Foreign exchange gain,” which was included in “Other
current assets” under non-operating income until the end of
the previous year, accounted for more than 10/100 of total
non-operating income, it has been separately presented.
The “Foreign exchange gain” as of March 31, 2006, was ¥67
million.
3. “Stock issuance expense,” which was included in“Non-operating expenses” until the previous fiscal year, andhas been treated as “Stock delivery expense” from thecurrent fiscal year, has been included in “Others” of“Non-operating expenses” because the amount became
insignificant. The “Stock delivery expense” as of March 31,
2007, was ¥0 million.
(Consolidated Statements of Cash Flows)(Consolidated Statements of Cash Flows )1. “Amortization of excess of net assets acquired over cost” in
1. “Loss on sale of fixed assets,” which was separately presented
the cash flows from operating activities until the previous
in the cash flows from operating activities until the previous
fiscal year is presented as “Amortization of goodwill” since
fiscal year, is included in “Others” of the cash flows fromthe current fiscal year.
operating activities because the amount became insignificant.
The “Loss on sale of fixed assets” as of March 31, 2008, was¥2 million.
2. “Loss from change in equity of affiliates,” which was
2. “Stock issuance expense,” which was presented in the cash
separately presented in the cash flows from operatingflows from operating activities until the previous fiscal year,
activities until the previous fiscal year, has been included in
is included in “Others” of the cash flows from operating“Others” of the cash flows from operating activities because
activities because the amount became insignificant.
the amount became insignificant. The “Loss from change in
The “Stock delivery expense” as of March 31, 2007, was ¥0equity of affiliates” as of March 31, 2008, was ¥0 million.
million.
3. “Amortization of equity investment,” which was included in“Others” of the cash flows from operating activities until theprevious fiscal year, has been separately presented because
the amount became significant. The “Amortization of equity
investment” as of March 31, 2007, was ¥7 million.
4. “Foreign exchange gain,” which was included in “Others” of
the cash flows from operating activities until the previous
fiscal year, has been separately presented because the amountbecame significant. The “Foreign exchange loss” as ofMarch 31, 2007, was ¥25 million.
5. “Decrease (increase) in notes held,” which was separately
presented under the cash flows from operating activities until
the previous fiscal year, has been included in “Others” of the
cash flows from operating activities because the amountbecame insignificant.
The “Increase in notes held” as of March 31, 2008, was ¥80
million.
6. “Decrease (increase) in non-operating notes receivable,”which was separately presented in the cash flows fromoperating activities until the previous fiscal year, has been
included in “Others” of the cash flows from operating
activities because the amount became insignificant. The“Decrease in non-operating notes receivable” as of March
31, 2008, was ¥156 million.
7. “Decrease (increase) in deposits as security for dealing,”
separately presented in the cash flows from operating
activities until the previous fiscal year, has been included in“Others” of the cash flows from operating activities because
the amount became insignificant. The “Increase in deposits
as security for dealing” as of March 31, 2008, was ¥100
million.
8. “Increase (decrease) in other accounts payable,” which was
included in “Other” of the cash flows from operating
activities until the previous fiscal year, has been separately
presented because the amount became significant. The“Decrease in other accounts payable” as of March 31, 2007,
was ¥563 million.

- 31 -

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)
9. “Increase (decrease) in guaranty deposits held,” which was
separately presented under the cash flows from operating
activities until the previous fiscal year, has been included in“Others” of the cash flows from operating activities because
the amount became insignificant. The “Decrease in guaranty
deposits held” as of March 31, 2008, was ¥119 million.
10. “Proceeds from sales of tangible fixed assets,” which was
separately presented under the cash flows from investing
activities until the previous fiscal year, has been included in“Others” of the cash flows from investing activities because
the amount became insignificant. The “Proceeds from salesof tangible fixed assets” as of March 31, 2008, was ¥10
million.
11. “Payments for insurance reserve,” which was separately
presented under the cash flows from investing activities until
the previous fiscal year, has been included in “Others” of the
cash flows from investing activities because the amountbecame insignificant. The “Payments for insurance reserve”
as of March 31, 2008, was ¥1 million.

Additional information
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(Reserve for retirement benefits of directors and auditors)
The Company reviewed the remuneration payment system fordirectors and auditors, which is not linked to actual
performance and may be considered deferred remuneration. As
a result, the retirement benefit system for directors andauditors was abolished as of the closing of the 18th Ordinary
General Meeting of Shareholders held on June 28, 2006.
Accordingly, pursuant to the resolution adopted by the
Meeting, accrued retirement benefits as of the closing of said
Meeting were paid to the directors and auditors then in officeat the Meeting for their services corresponding to the tenure ofrespective directors and auditors until the closing of the
Meeting.

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(Method of depreciation of tangible fixed assets)
Beginning with the consolidated fiscal year ended March 31,
2008, at Fields Corporation and its domestic subsidiaries,
tangible fixed assets acquired by March 31, 2007, are equallyamortized over five years from a year following the year when
depreciation was completed up to the limit of the depreciation.
The impact that this change has on the consolidated statementof income is immaterial.

- 32 -

(8) Notes to the Consolidated Financial Statements
Consolidated Balance Sheets
Fiscal year ended March 31, 2007
(As of March 31, 2007)*1 Assets held as collateralTime deposits¥81 million
They are held as collateral to guarantee the transactions
with banks.
*2 Related to non-consolidated subsidiaries and affiliates
Investment securities (shares)¥3,860 million

Fiscal year ended March 31, 2008
(As of March 31, 2008)*1 Assets held as collateralTime deposits¥147 million
They are held as collateral to guarantee the transactions
with banks.
*2 Related to non-consolidated subsidiaries and affiliates
Investment securities (shares)¥4,447 million

3

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

Y.K. Daiko¥72 million
Meiplanet K.K¥51 million
Asahi Shoji K.K.
¥44 million
Niimi Co., Ltd.
¥41 million
K.K. Taisei Kanko¥37 million
Sankei Shoji Co., Ltd.
¥31 million
K.K. Toei Kanko¥28 million
K.K. New Asahi¥26 million
K.K. Corona¥21 million
Narita Kogyo K.K.
¥20 million
Others (218)¥540 million
Total¥917 million*4 Notes due as of the balance-sheet date
The notes of the Company maturing at the end of the year
are settled on a bill clearing date. As the balance-sheet
date for the year under review was a bank holiday, thefollowing notes matured are included in the balance as ofMarch 31, 2007.
Notes receivable
Non-operating notes
receivable

Overdraft agreements
To raise working capital efficiently, the Fields Group has
concluded an overdraft agreement with five banks. As of
March 31, 2007, unutilized balances under these
agreements were as follows:
Overdraft limit
Borrowings
Outstanding
Difference

Y.K. DaikoNiimi Co., Ltd.
K.K. The City
K.K. Taisei Kanko
Iwamoto Development Co., Ltd.
Y.K. Fuji Leisure Service
K’s corporation
Meiplanet K.K
Asahi Shoji K.K.
R&K Co., Ltd.
Others (126)Total¥54 million¥51 million¥48 million¥46 million¥33 million¥31 million¥25 million¥23 million¥13 million¥13 million¥264 million¥605 million*4¥1,299 million¥431 million*5

6.

Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on anagency basis for pachinko/pachislot machine
manufacturers.

*5 Financial covenant
Of the short-term borrowings, the following financial
restrictions are included in the borrowing of ¥1,000
million borne by D3 Inc., our consolidated subsidiary.
(1) The amount of net assets in the Consolidated andNon-Consolidated Balance Sheets as of eachbalance sheet date after the conclusion of thecontract including first half-ends must be maintained
at 75% or more of the amount for the previous term.
(2) Operating income/loss in the Consolidated andNon-Consolidated Statements of Income after
conclusion of the contract including first half-ends
must not be losses for the second consecutive terms.
6. Overdraft agreements
To raise working capital efficiently, the Fields Group has
concluded an overdraft agreement with four banks. As of
March 31, 2008, unutilized balances under these
agreements were as follows:
Overdraft limit
Borrowings
Outstanding
Difference¥4,500 million¥1,400 million¥3,100 million- 33 -¥3,568 million¥568 million¥3,000 million

Consolidated Statements of Income
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)*1 R&D expenses included in SG&A expenses*1¥34 million*2 Gain on sale of fixed assets were due to sale of vehicles.

*2 Details of Gain on sale of fixed assets are as follows:
Vehicles¥2 million
Tools, furniture and fixtures¥0 million
Total¥2 million*3 Details of loss on sale of fixed assets
VehiclesTools, furniture and fixtures
Total

*3
¥2 million¥4 million¥7 million*4 Details of loss on disposal of fixed assets
Buildings and structures¥82 million
Tools, furniture and fixtures¥13 million
Long-term prepaid expenses¥0 million
Software¥24 million
Software under development¥623 million
Total¥743 million*5 Impairment loss
The Fields Group has stated an impairment loss for theasset set out below.
Miscellaneous
Usage―business-related
assetsBuildings, tools,Typefurniture and fixtures, Goodwill
and trademark rights
Minato-ku, Tokyo
Location Shibuya-ku, Tokyo―
Osaka-shi, Osaka
Amount¥208 million¥6 million
When grouping its assets, the Fields Group adopts themethod of grouping primarily by business category inaccordance with management accounting practice. With
regard to the properties in Minato-ku, Shibuya-ku andOsaka used for miscellaneous business, the Group hasrecognized losses, which consist of ¥120 million on thebuilding, ¥2 million on the tools, furniture and fixtures and¥85 million on the trademark rights because there is noprospect of a recovery in operating income from theseproperties.
On the other hand, with regard to the goodwill, the Grouphas recognized a loss because the initially anticipatedincome has become impossible in the business plan which
had been studied when the relevant shares were acquired.
It consists of ¥6 million in goodwill.
The recoverable value of these properties has been
calculated on the basis of use value in use, with suchrecoverable value appraised zero, because future cash
flows are negative.

*4 Details of loss on disposal of fixed assets
Buildings
VehiclesTools, furniture and fixtures
SoftwareTotal¥84 million¥0 million¥19 million¥162 million¥266 million*5 Impairment loss
The Fields Group has stated an impairment loss for theasset set out below.
Miscellaneous
Usage―
Idle assets
business-related
assetsBuildings,
Buildings andTypetools, furniture Goodwill
structuresand fixtures
Osaka-shi,
Nagoya-shi,
Location
―
Aichi
Osaka
Amount ¥42 million¥717 million ¥116 million
When grouping its assets, with regard to business-use
assets, the Fields Group adopts the method of grouping
primarily by business category in accordance withmanagement accounting practice. With regard to idle
assets, the method of individual grouping is adopted.
Of the Miscellaneous business-related assets, with regard
to the properties in Osaka, the Group has recognized
losses, which consist of ¥35 million on the building and ¥6
million on the tools, furniture and fixture because there is
no prospect of a recovery in operating income from theseproperties. On the other hand, with regard to the goodwill,
the Group has recognized a loss because the initiallyanticipated income has become impossible in the businessplan which had been studied when the relevant shares wereacquired. It consists of ¥717 million in goodwill.
The recoverable value of these properties has been
calculated on the basis of use value in use, with suchrecoverable value appraised zero, because future cash
flows are negative.
With regard to idle assets, the transfer of such assets wasdetermined at the Board of Directors’ meeting held on
March 7, 2008. The book value was amortized up to therecoverable value, and the decreased amount was recorded
as an impairment loss under an extraordinary loss. It
consists of ¥116 million in buildings and structures.
The recoverable value is based on the scheduled price forthe transfer of aforementioned idle assets.

- 34 -

Consolidated Statements of Changes in Net Assets
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)
1.

Shares issued

Type
Common stock(shares)2.

As of March 31, 2006

Increase

347,000

Decrease―

As of March 31, 2007―

347,000

Treasury shares
None applicable3.

Stock acquisition rights

Company Name

The
Company

Nature ofshares to beissuedThe first stock
Commonacquisition rights
stock
The second stock Common
acquisition rights
stock
Description

Consolidated
subsidiaries――

Number of shares to be issued
As of March
31, 2006

Increase

Decrease

Balance at
As of March March 31, 2007
(Million)
31, 2007

6,040

―

400

5,640

―

1,610

―

250

1,360

―

―

―

―

―

15

Total
7,650
―
650
7,000
15
Notes:
1. The number of shares to be issued is the number of shares to which acquisition rights can be exercised.
2. The reason for the changes in the number of shares to be issued is as follows.
The decrease during the fiscal year ended March 31, 2007, reflects invalidation of some of the rights.
3. Stock acquisition rights held by the Company’s consolidated subsidiaries have not yet become effective as of March 31, 2007.
4.

Dividends(1) Dividends paid
Resolution
Ordinary general meeting ofshareholders on June 28, 2006
Meeting of the Board of
Directors on November 6,
2006

Nature of shares

Amount of
Total dividends
dividends per share(¥ Million)(yen)

Cut-off date

Effective dateCommon stock

694

2,000

March 31, 2006

June 29, 2006

Common stock

694

2,000

September 30,
2006

December 8, 2006

(2) Dividends for which the cut-off date came during the fiscal year ended on March 31, 2007, but the effective date will comeduring the fiscal year ended on March 31, 2008 or thereafter
Source for
Total
Amount of
Nature ofdividends payment of dividends per
Resolution
Cut-off date
Effective dateshares(¥ Million)
share (yen)dividends
Ordinary general meeting ofCommonRetained694
2,000 March 31, 2007
June 28, 2007
shareholders on June 27, 2007stock
earnings- 35 -

Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)
1.

Shares issued

Type
Common stock(shares)2.

As of March 31, 2007

Increase

Decrease

347,000―

As of March 31, 2008―

347,000

Treasury shares
None applicable3.

Stock acquisition rights

Company Name

The
Company

Nature ofshares to beissuedThe first stock
Commonacquisition rights
stock
The second stock Common
acquisition rights
stock
Description

Consolidated
subsidiaries――

Number of shares to be issued
As of March
31, 2007

Increase

Decrease

Balance at
As of March March 31, 2008
(Million)
31, 2008

5,640

―

680

4,960

―

1,360

―

610

750

―

―

―

―

―

43

Total
7,000
―
1,290
5,710
43
Notes:
1. The number of shares to be issued is the number of shares to which acquisition rights can be exercised.
2. The reason for the changes in the number of shares to be issued is as follows.
The decrease during the fiscal year ended March 31, 2008, reflects invalidation of some of the rights.
3. Stock acquisition rights held by the Company’s consolidated subsidiaries have not yet become effective as of March 31, 2008.
4.

Dividends(1) Dividends paid
Resolution
Ordinary general meeting ofshareholders on June 27, 2007
Meeting of the Board of
Directors on November 6,
2007

Nature of shares to Total dividends
be issued(¥ Million)

Amount ofdividends per share(yen)

Cut-off date

Effective dateCommon stock

694

2,000

March 31, 2007

June 28, 2007

Common stock

694

2,000

September 30,
2007

December 7, 2007

(2) Dividends for which the cut-off date came during the fiscal year ended on March 31, 2008, but the effective date will comeduring the fiscal year ending on March 31, 2009 or thereafter
Source for
Nature of
Total
Amount ofshares to be dividends payment of dividends per share
Resolution
Cut-off date
Effective dateissued(¥ Million)(yen)
dividends
Ordinary general meeting ofCommonRetained867
2,500 March 31, 2008
June 27, 2008
shareholders on June 26, 2008stock
earnings- 36 -

Consolidated Statements of Cash Flows
Fiscal year ended March 31, 2007
Fiscal year ended March 31, 2008
(April 1, 2006–March 31, 2007)(April 1, 2007–March 31, 2008)
1 Relationship between cash and cash equivalents as of the
1 Relationship between cash and cash equivalents as of theend of the fiscal year and cash amounts stated on theend of the fiscal year and cash amounts stated on the
consolidated balance sheets
consolidated balance sheets(As of March 31, 2008)(As of March 31, 2007)
Cash and deposit accounts¥12,841 million
Cash and deposit accounts¥17,902 million
Time deposits of which
Deposits supplied as collateral¥(147) million¥(1) million
depositing period exceeds 3
Cash and cash equivalents¥12,693 million
months
Deposits supplied as collateral¥(81) million
Cash and cash equivalents¥17,819 million*2 Details of assets and liabilities of companies that have been *2 Details of assets and liabilities of companies that have been
newly consolidated through the acquisition of shares
newly consolidated through the acquisition of shares
Assets and liabilities and the relationship between the
Assets and liabilities and the relationship between theacquisition cost of shares and net expenses for theacquisition cost of shares and net expenses for theacquisition of shares at the beginning of consolidation wereacquisition of shares at the beginning of consolidation wereas follows:
as follows:
thinkArts Co., Ltd.
(As of April 1, 2006)
EXPRESS Inc.
(As of March 31, 2008)
Current assets¥88 million
Current assets¥326 million
Fixed assets¥24 million
Fixed assets¥353 million
Goodwill¥184 million
Goodwill¥353 million
Current liabilities
Fixed liabilities
Acquisition cost
Cash and cash equivalents¥(97) million¥(185) million¥15 million¥(5) million

Subtract: Net expenses for acquisition of shares¥9million

Current liabilities
Fixed liabilities¥(151) million¥(530) million

Acquisition cost
Cash and cash equivalents

351 million¥(304) million

Subtract: Net expenses for acquisition of shares¥47 million
Shin-Nichi Technology Co., Ltd.
(March 31, 2008)
Current assets¥1,293 million
Fixed assets¥51 million
Goodwill¥26 million
Current liabilities
Fixed liabilities¥(766) million¥(3) million

Acquisition cost
Cash and cash equivalents¥600 million¥(13) million

Subtract: Net expenses for acquisition of shares¥586 million
Vicious Cycle Software, Inc.
Current assets¥126 million
Fixed assets¥167 million
Goodwill¥367 million
Current liabilities¥(72) million

Acquisition cost
Cash and cash equivalents
Other accounts payable concerning
acquisition of shares¥589 million¥(96) million¥(223) million

Subtract: Net expenses for acquisition of shares¥268 million- 37 -

Stock Options
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)
1. Outline, scale and variation of Stock Options(1) Outline of Stock Options
IssuerDate of resolution
Scope and number of grantees
Number of Stock Options (Note)
Granting date

Right-ascertaining conditions

Service period required for
qualification
Exercise period of the options

IssuerDate of resolution
Scope and number of grantees
Number of Stock Options(Note)
Granting date
Right-ascertaining conditions
Service period required for
qualification
Exercise period of the options

2003 Stock Options
The Company
June 27, 2003
Directors and auditors of theCompany: 7
Employees of the Company: 100
Common stock: 6,810 shares
April 14, 2004
The grantee shall be a director,
employee or auditor of theCompany or its subsidiaries at thetime he/she exercises the option,
provided that the right can be
exercised within one year after thedate of such retirement or leaving
in case there is a reason such as
retirement due to expiration of theterm of office or transfer to anothercompany ordered by the Company
or its subsidiaries that can be
identified as reasonable by theCompany.
No provision that specifies theservice period required for
qualification
From July 1, 2005
to June 30, 20082005 Stock Options
The Company
June 29, 2005
Directors of the Company: 1
Employees of the Company: 44
Common stock: 1,610 shares
June 29, 2005

Same as at left

Same as at left
From August 1, 2005
to June 30, 2008

First 2000
Stock Options
D3 Inc.
September 5, 2000
Directors of the Company: 3
Employees of the Company: 8Second 2000
Stock Options
D3 Inc.
September 5, 2000

2001
Stock Options
D3 Inc.
January 30, 2001

Outside cooperators: 12

Employees of the Company: 3

Common stock: 102 shares

Common stock: 76 shares

Common stock: 28 shares

September 22, 2000

September 22, 2000

January 31, 2001
To continue to be in service until
the time when he/she exercises
the option.

No provision that specifies theright-ascertaining conditions
No provision that specifies theservice period required for
qualification
From November 1, 2002
to September 28, 2007

Same as at left
Same as at left

Same as at left

From November 1, 2001
to September 28, 2007

From April 1, 2003
to September 28, 2007

- 38 -

Issuer
Date of resolution

Scope and number of grantees

Number of Stock Options (Note)
Granting date

Right-ascertaining conditions

Service period required for
qualification
Exercise period of the options

IssuerDate of resolution

2003
Stock Options
D3 Inc.
January 30, 2003
Directors and auditors of theCompany:
7
Directors of the Company’s
subsidiaries:
1
Employees of the Company: 18
Employees of the Company’s
subsidiaries:
4
Outside cooperators:
16
Common stock: 594 shares
March 3, 2003
The grantee shall continue to work
as a director, employee or auditorof the Company or its subsidiaries
until such time as he/she exercises
the option.
As for the outside cooperators, thegrantee shall lose option rights if
the corporation he/she serves atbecomes a subsidiary or anaffiliated company of anothercompany that is competitive
against the Company.
No provision that specifies theservice period required for
qualification
From February 1, 2005
to January 29, 2010

Directors of the Company: 5

Number of Stock Options (Note)
Granting dateCommon stock: 110 shares
October 17, 2006
To continue to be in service until
the time when he/she exercises theoption.
No provision that specifies theservice period required for
qualification
From October 18, 2008
to October 17, 2013

Service period required for
qualification
Exercise period of the options

Directors and auditors of theCompany:
Directors of the Company’s
subsidiaries:
Employees of the Company:
Employees of the Company’s
subsidiaries:

First 2006
Stock Options
D3 Inc.
January 27, 2006
81
6
4

Directors of the Company:
6
Directors of the Company’s
subsidiaries:
1
Employees of the Company: 11
Employees of the Company’s
subsidiaries:
9

Common stock: 350 shares
September 14, 2005

Common stock: 500 shares
March 15, 2006

To continue to be in service until
the time when he/she exercises theoption.

Same as at left

Same as at left

Same as at left

From February 1, 2007
to January 31, 2012

From February 1, 2008
to January 31, 2013

Third 2006
Stock Options
D3 Inc.
June 22, 2006

Common stock: 280 shares
October 17, 2006

2005
Stock Options
D3Publisher of America, Inc.
October 31, 2005
Directors of the Company:
3
Directors of the Company’s
subsidiaries:
1
Employees of the Company: 2
Employees of the Company’s
subsidiaries:
9
Common stock: 1,521,900 shares
November 1, 2005

Same as at left

Same as at left

Same as at left

Same as at left

From June 23, 2008
to May 31, 2013

From November 1, 2007
to October 31, 2013

Second 2006
Stock Options
D3 Inc.
June 22, 2006

Scope and number of grantees

Right-ascertaining conditions

2005
Stock Options
D3 Inc.
January 28, 2005

Directors of the Company’s
subsidiaries:
3
Employees of the Company: 3
Employees of the Company’s
subsidiaries:
17

Notes: 1. The number of Stock Options is stated in terms of the number of the subjected shares.
2. The Company conducted a two-for-one stock split as of September 3, 2004. The number of shares relating to the 2003
Stock Option is listed for the number of shares after adjusting the number of shares due to the stock split.
3. D3 Inc. conducted a two-for-one stock split as of October 18, 2002. The number of shares relating to the 2000 Stock
Options and the 2001 Stock Option is respectively listed for the number of shares after adjusting the number of shares dueto the stock split.

- 39 -

(2) Scale and variation of Stock Options
The number of Stock Options existing for the year ended March 31, 2007, is stated in terms of the number of subjected shares.
1) Number of Stock Options
Issuer
Before ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Granting
Invalidation
Rights ascertained
Rights unascertained
After ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Rights ascertained
Exercise of the options
Invalidation
Rights unexercised

Issuer
Before ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Granting
Invalidation
Rights ascertained
Rights unascertained
After ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Rights ascertained
Exercise of the options
Invalidation
Rights unexercised

Issuer
Before ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Granting
Invalidation
Rights ascertained
Rights unascertained
After ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Rights ascertained
Exercise of the options
Invalidation
Rights unexercised

2003 Stock Options
The Company

2005 Stock Options
The Company

—

—

—
—
—
—

—
—
—
—

6,040

1,610

—
—
400
5,640

—
—
250
1,360

First 2000 Stock
Options
D3 Inc.

Second 2000 Stock
Options
D3 Inc.

2001 Stock Options

2003 Stock Options

2005 Stock Options

D3 Inc.

D3 Inc.

D3 Inc.

—

—

—

—

350

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

—
15
335
—

22

68

18

467

—

—
—
—
22

—
—
—
68

—
—
—
18

—
6
—
461

335
—
—
335

First 2006 Stock
Options

Second 2006 Stock
Options

Third 2006 Stock
Options

2005 Stock Options

D3 Inc.

D3 Inc.

D3 Inc.

D3Publisher ofAmerica, Inc.

500

—

—

1,527,900

—
32
—
468

280
—
—
280

110
—
—
110

—
6,000
—
1,521,900

—

—

—

—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

- 40 -

2) Information on the Unit Price
IssuerOption exercise
(Yen)
price
Average stock priceat the time of the(Yen)exercise of theoptions
Fair unit priceevaluated(Yen)(on the granting
date)

IssuerOption exercise
(Yen)
price
Average stock priceat the time of the(Yen)exercise of theoptions
Fair unit priceevaluated(Yen)(on the granting
date)

IssuerOption exercise
(Yen)
price
Average stock priceat the time of the(Yen)exercise of theoptions
Fair unit priceevaluated(Yen)(on the granting
date)

IssuerOption exercise(U.S.$)
price
Average stock priceat the time of the(U.S.$)
exercise of theoptions
Fair unit priceevaluated(U.S.$)(on the granting
date)2003 Stock Options
The Company

2005 Stock Options
The Company

760,000

760,000

—

—

—

—

First 2000 Stock Options
D3 Inc.

Second 2000 Stock Options
D3 Inc.

250,000

250,000

250,000

168,210———258,000

—

—

—

—

First 2006 Stock Options
D3 Inc.

Second 2006 Stock Options
D3 Inc.

Third 2006 Stock Options
D3 Inc.

335,000

379,005

320,650

320,650

—

—

—

—

—

—

123,564

119,064

2005 Stock Options
D3 Inc.

2005 Stock Options
D3Publisher ofAmerica, Inc.
0.10
—

0.06

- 41 -

2001 Stock Options
D3 Inc.

2003 Stock Options
D3 Inc.

2. Method to Estimate the Fair Unit Price Evaluated for Stock Options
The estimation method of the fair unit price of the stock options granted during the fiscal year ended March 31, 2007, is asfollows.
(1) Second 2006 Stock Options
1) Evaluation method used: the Black-Scholes model2) Major basic values and method of estimate
Stock price volatility (Note) 1
57.4%
Estimated remaining period (Note) 2
4.5 years
Dividends estimated (Note) 3¥600/share
No-risk interest rate (Note) 4
1.20%
Notes: 1. The stock price volatility was computed based on actual stock prices from April 15, 2002, to October 9, 2006.
2. Given the difficulty in making a reasonable estimate without the sufficient accumulation of data, the estimate wasmade based on the assumption that the stock options are exercised around the halfway point of the exercise periodof the options.
3. The computation is based on actual dividends paid in October 2005.
4. The yield rate of government bonds during the estimated remaining period.
(2) Third 2006 Stock Options
1) Evaluation method used: the Black-Scholes model2) Major basic values and method of estimate
Stock price volatility (Note) 1
57.7%
Estimated remaining period (Note) 2
4.2 years
Dividends estimated (Note) 3¥600/share
No-risk interest rate (Note) 4
1.14%
Notes: 1. The stock price volatility was computed based on actual stock prices from August 19, 2002, to October 9, 2006.
2. Given the difficulty in making a reasonable estimate without the sufficient accumulation of data, the estimate wasmade based on the assumption that the stock options are exercised around the halfway point of the exercise periodof the options.
3. The computation is based on actual dividends paid in October 2005.
4. The yield rate of government bonds during the estimated remaining period.
3. Method to estimate the number of rights for stock options ascertained
Because it is difficult to rationally estimate the number of rights that will become invalid in the future, we adopt a method toreflect only the number of rights actually invalidated.
4. Effects on consolidated financial statements
Stock compensation expense included in selling, general and administrative expenses: ¥15 million- 42 -

Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)
1. Outline, scale and valuation of stock options(1) Outline of Stock Options
IssuerDate of resolution
Scope and number of grantees
Number of Stock Options (Note)
Granting date

Right-ascertaining conditions

Service period required for
qualification
Exercise period of the options

IssuerDate of resolution
Scope and number of grantees
Number of Stock Options (Note)
Granting date
Right-ascertaining conditions
Service period required for
qualification
Exercise period of the options

2003
Stock Options
The Company
June 27, 2003
Directors and auditors of theCompany: 7
Employees of the Company: 100
Common stock: 6,810 shares
April 14, 2004
The grantee shall continue to work
as an director, employee or auditorof the Company or its subsidiaries
until such time as he/she exercises
the option, provided that the rightcan be exercised within one year
after the date of such retirement orleaving in case there is a reason
such as retirement due to expirationof the term of office or transfer toanother company ordered by theCompany or its subsidiaries that canbe identified as reasonable by theCompany.
No provision that specifies theservice period required for
qualification
From July 1, 2005
to June 30, 20082005
Stock Options
The Company
June 29, 2005
Directors of the Company: 1
Employees of the Company: 44
Common stock: 1,610 shares
June 29, 2005

Same as at left

Same as at left
From August 1, 2005
to June 30, 2008

First 2000
Stock Options
D3 Inc.
September 5, 2000
Directors of the Company: 3
Employees of the Company: 8
Common stock: 102 shares
September 22, 2000
No provision that specifies theright-ascertaining conditions
No provision that specifies theservice period required for
qualification
From November 1, 2002, toSeptember 28, 2007

Second 2000
Stock Options
D3 Inc.
September 5, 2000

2001
Stock Options
D3 Inc.
January 30, 2001

Outside cooperators: 12

Employees of the Company: 3

Common stock: 76 shares
September 22, 2000

Common stock: 28 shares
January 31, 2001
To continue to be in service until
the time when he/she exercises theoptionSame as at left
Same as at left

Same as at left

From November 1, 2001, toSeptember 28, 2007

From April 1, 2003, to September
28, 2007- 43 -

Issuer
Date of resolution

Scope and number of grantees

Number of Stock Options (Note)
Granting date

Right-ascertaining conditions

Service period required for
qualification
Exercise period of the options

IssuerDate of resolution

2003 Stock Options
2005 Stock Options
D3 Inc.
D3 Inc.
January 30, 2003
January 28, 2005
Directors and auditors of the
Directors and auditors of theCompany:
7
Company:
8
Directors of the Company’s
Directors of the Company’s
subsidiaries:
1
subsidiaries:
1
Employees of the Company: 18
Employees of the Company: 6
Employees of the Company’s
Employees of the Company’s
subsidiaries:
4
subsidiaries:
4
Outside cooperators:
16
Common stock: 594 shares
Common stock: 350 shares
March 3, 2003
September 14, 2005
The grantee shall continue to work
as a director, employee or auditor of
the Company or its subsidiaries
until such time as he/she exercises
the option.
To continue to be in service until
As for the outside cooperators, thethe time when he/she exercises the
grantee shall lose option rights if
optionthe corporation he/she serves atbecomes a subsidiary or anaffiliated company of anothercompany that is competitive against
the Company.
No provision that specifies theSame as at left
service period required for
qualification
From February 1, 2005, to January From February 1, 2007, to January
29, 2010
31, 2012
Second 2006
Stock Options
D3 Inc.
June 22, 2006

Scope and number of grantees

Directors of the Company: 5

Number of Stock Options (Note)
Granting dateCommon stock: 110 shares
October 17, 2006
To continue to be in service until
the time when he/she exercises theoptionNo provision that specifies theservice period required for
qualification
From October 18, 2008, toOctober 17, 2013

Right-ascertaining conditions
Service period required for
qualification
Exercise period of the options

IssuerDate of resolution

Scope and number of grantees

Number of Stock Options (Note)
Granting date
Right-ascertaining conditions
Service period required for
qualification
Exercise period of the options

Second 2008
Stock Options
D3 Inc.
December 18, 2007
Directors of the Company’s
subsidiaries:
3
Employees of the Company: 5
Employees of the Company’s
subsidiaries:
12
Common stock: 225 shares
January 7, 2008
To continue to be in service until
the time when he/she exercises theoptionNo provision that specifies theservice period required for
qualification
From June 22, 2009, to May 31,
2014

Third 2006
Stock Options
D3 Inc.
June 22, 2006
Directors of the Company’s
subsidiaries:
3
Employees of the Company: 3
Employees of the Company’s
subsidiaries:
17
Common stock: 280 shares
October 17, 2006

First 2006 Stock Options
D3 Inc.
January 27, 2006
Directors of the Company:
6
Directors of the Company’s
subsidiaries:
1
Employees of the Company: 11
Employees of the Company’s
subsidiaries:
9
Common stock: 500 shares
March 15, 2006

Same as at left

Same as at left
From February 1, 2008, to January
31, 2013
First 2008
Stock Options
D3 Inc.
December18, 2007
Directors of the Company: 5
Common stock: 120 shares
January 7, 2008

Same as at left

Same as at left

Same as at left

Same as at left

From June 23, 2008, to May 31,
2013

From January 9, 2010, to January 8,
2015

2005
Stock Options
D3Publisher of America, Inc.
October 31, 2005
Directors of the Company: 3
Directors of the Company’s
subsidiaries:
1
Employees of the Company: 2
Employees of the Company’s
subsidiaries:
9
Common stock: 1,521,900 shares
November 1, 2005
Same as at left
Same as at left
From November 1, 2007, toOctober 31, 2013

Notes: 1. The number of stock options is stated in terms of the number of the subjected shares.
2. The Company conducted a two-for-one stock split as of September 3, 2004. The number of shares relating to the 2003
Stock Option is listed for the number of shares after adjusting the number of shares due to the stock split.

- 44 -

3. D3 Inc. conducted a two-for-one stock split as of October 18, 2002. The number of shares relating to the 2000 Stock
Options and the 2001 Stock Option is respectively listed for the number of shares after adjusting the number of shares
due to the stock split.
(2)

Scale and valuation of Stock Options
The number of stock options existing for the year ended March 31, 2008, is stated in terms of the number of subjected shares.

1) Number of Stock Options
Issuer
Before ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Granting
Invalidation
Rights ascertained
Rights unascertained
After ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Rights ascertained
Exercise of the options
Invalidation
Rights unexercised

Issuer
Before ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Granting
Invalidation
Rights ascertained
Rights unascertained
After ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Rights ascertained
Exercise of the options
Invalidation
Rights unexercised

Issuer
Before ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Granting
Invalidation
Rights ascertained
Rights unascertained
After ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Rights ascertained
Exercise of the options
Invalidation
Rights unexercised

2003 Stock Options
The Company

2005 Stock Options
The Company

—

—

—
—
—
—

—
—
—
—

5,640

1,360

—
—
680
4,960

—
—
610
750

First 2000 Stock
Options
D3 Inc.

Second 2000 Stock
Options
D3 Inc.

2001 Stock Options

2003 Stock Options

2005 Stock Options

D3 Inc.

D3 Inc.

D3 Inc.

—

—

—

—

—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

22

68

18

461

335

—
13
9
—

—
—
68
—

—
18
—
—

—
—
—
461

—
—
44
291

First 2006 Stock
Options
D3 Inc.

Second 2006 Stock
Options
D3 Inc.

Third 2006 Stock
Options
D3 Inc.

First 2008 Stock
Options
D3 Inc.

Second 2008 Stock
Options
D3 Inc.

468

280

110

—

—

—
70
398
—

—
49
—
231

—
—
—
110

120
—
—
120

225
—
—
225

—

—

—

—

—

398
—
—
398

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

- 45 -

Issuer

2005 Stock Options
D3Publisher ofAmerica, Inc.

Before ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Granting
Invalidation
Rights ascertained
Rights unascertained
After ascertaining rights(shares)
As of the balance sheet dateof the previous fiscal year
Rights ascertained
Exercise of the options
Invalidation
Rights unexercised

1,521,900—
309,900
1,212,000——
1,212,000——
1,212,000

2) Information on the Unit Price
IssuerOption exercise
(Yen)
price
Average stock priceat the time of the(Yen)exercise of theoptions
Fair unit priceevaluated(Yen)(on the granting
date)

IssuerOption exercise
(Yen)
price
Average stock priceat the time of the(Yen)exercise of theoptions
Fair unit priceevaluated(Yen)(on the granting
date)

IssuerOption exercise
(Yen)
price
Average stock priceat the time of the(Yen)exercise of theoptions
Fair unit priceevaluated(Yen)(on the granting
date)

IssuerOption exercise
(Yen)
price
Average stock priceat the time of the(Yen)exercise of theoptions
Fair unit priceevaluated(Yen)(on the granting
date)2003 Stock Options
The Company

2005 Stock Options
The Company

760,000

760,000

—

—

—

—

First 2000 Stock Options
D3 Inc.

Second 2000 Stock Options
D3 Inc.

250,000

250,000

250,000

168,210306,000—

291,000

―

—

—

—

—

First 2006 Stock Options
D3 Inc.

Second 2006 Stock Options
D3 Inc.

Third 2006 Stock Options
D3 Inc.

335,000

379,005

320,650

320,650

—

—

—

—

—

—

123,564

119,064

2005 Stock Options
D3 Inc.

First 2008 Stock Options

Second 2008 Stock Options

D3 Inc.

D3 Inc.

2001 Stock Options
D3 Inc.

2003 Stock Options
D3 Inc.

IssuerOption exercise
268,635(U.S.$)
price
Average stock
price at the time—
(U.S.$)of the exercise of
the options
Fair unit priceevaluated
97,704(U.S.$)(on the granting
date)

268,635—

111,073- 46 -

2005 Stock Options
D3Publisher ofAmerica, Inc.
0.10
—

0.06

2. Method to Estimate the Fair Unit Price Evaluated for Stock Options
The estimation method of the fair unit price of the stock options granted during the fiscal year ended March 31, 2008, is asfollows.
(1) First 2008 Stock Options
1) Evaluation method used: the Black-Scholes model2) Major basic values and method of estimate:
Stock price volatility (Note) 1
56.56%
Estimated remaining period (Note) 2
4.51 years
Dividends estimated (Note) 3¥600/share
No-risk interest rate (Note) 4
0.92%
Notes: 1. The stock price volatility was computed based on actual stock prices from July 6, 2003, to January 7, 2008.
2. Given the difficulty in making a reasonable estimate without the sufficient accumulation of data, the estimate wasmade based on the assumption that the stock options are exercised around the halfway point of the exercise periodof the options.
3. The computation is based on actual dividends paid from January 1, 2007, to December 31, 2007.
4. The yield rate of government bonds during the estimated remaining period.
(2) Second 2008 Stock Options
1) Evaluation method used: the Black-Scholes model2) Major basic values and method of estimate:
Stock price volatility (Note) 1
52.97%
Estimated remaining period (Note) 2
3.93 years
Dividends estimated (Note) 3¥600/share
No-risk interest rate (Note) 4
0.862%
Notes: 1. The stock price volatility was computed based on actual stock prices from February 3, 2004, to January 7, 2008.
2. Given the difficulty in making a reasonable estimate without the sufficient accumulation of data, the estimate wasmade based on the assumption that the stock options are exercised around the halfway point of the exercise periodof the options.
3. The computation is based on actual dividends paid from January 1, 2007, to December 31, 2007.
4. The yield rate of government bonds during the estimated remaining period.
3. Method to estimate the number of rights for stock options ascertained
Because it is difficult to rationally estimate the number of rights that will become invalid in the future, we adopt a method toreflect only the number of rights actually invalidated.
4. Effects on consolidated financial statements
Stock compensation expense included in selling, general and administrative expenses:
Gain on reversal of stock acquisition rights

Business Combinations
None applicable- 47 -¥30 million¥2 million

Leases
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)
1 Finance lease transactions other than those in which theownership of the leased assets is deemed to be transferred to
the lessee(1) Acquisition cost, accumulated depreciation, and net bookvalue of leased assets at the end of the fiscal year
(Unit: Million yen)
Acquisition Accumulated
cost
depreciation

Net book
value

Vehicles18
3
15
Tools, furniture
27
16
11
and fixtures
Software
38
16
22
Total
84
35
49
Acquisition cost has been calculated by theinterest-inclusive method, since the balance of future
minimum lease payments accounts for a minimal portion of
tangible and intangible fixed assets at the end of the fiscal
year.
(2) Future minimum lease payments
Due within 1 year
¥18 million
Due after 1 year
¥31 million
Total¥49 million

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)
1 Finance lease transactions other than those in which theownership of the leased assets is deemed to be transferred to
the lessee(1) Acquisition cost, accumulated depreciation, and net bookvalue of leased assets at the end of the fiscal year
(Unit: Million yen)
Net bookacquisition Accumulated
depreciation
value
cost
Vehicles15
5
10
Tools, furniture
15
8
6
and fixtures
Software
38
23
14
Total
70
38
31
Same as at left

(2) Future minimum lease payments
Due within 1 year
Due after 1 year
Total

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 and intangible fixed assets at
the end of the fiscal year.
(3) Lease payments and depreciation
Lease payments¥27 million
Depreciation¥27 million(4) Calculation method for depreciation
Depreciation is calculated by the straight-line method overthe lease term of the leased assets with no residual value.
2 Operating lease transactions
Due within 1 year
¥1 million
Due after 1 year
¥1 million
Total¥2 million¥15 million¥15 million¥31 million

Same as at left

(3) Lease payments and depreciation
Lease payments
Depreciation¥20 million¥20 million(4) Calculation method for depreciation
Depreciation is calculated by the straight-line method overthe lease term of the leased assets with no residual value.
2 Operating lease transactions
Due within 1 year
¥1 million
Due after 1 year
¥0 million
Total¥1 million- 48 -

Marketable Securities
1.

Held-to-maturity bonds with market prices

Category

Fiscal year ended March 31, 2007
(As of March 31, 2007)
Carrying value on
consolidated balance Fair value
Difference
sheetsBonds with a fair value thatexceeds the carrying valueon the consolidated balance
sheetsBonds with a fair value that
does not exceed the carrying
value on the consolidatedbalance sheets
Total
2.

200

200

0

―

―

―

600

557

(42)

400

305

(94)

800

758

(41)

400

305

(94)

Other securities with market prices

Category

Securities whose carrying
value exceeds theiracquisition cost1
Shares
2
Bonds
3
Other
Subtotal
Securities whose carrying
value does not exceed theiracquisition cost1
Shares
2
Bonds
3
Other
Subtotal
Total
3.

Fiscal year ended March 31, 2007
(As of March 31, 2007)
Carrying value on
Acquisition
consolidated balance Difference
costsheets(Unit: Million yen)
Fiscal year ended March 31, 2008
(As of March 31, 2008)
Carrying value on
Acquisition
consolidated balance
Difference
costsheets

773
157
―
930

1,150
158
―
1,309

377
1
―
378

11
―
―
11

91
―
―
91

79
―
―
79

59
―
―
59
990

43
―
―
43
1,352

(16)
―
―
(16)
362

6,693
457
―
7,151
7,163

6,269
246
―
6,515
6,607

(423)
(211)
―
(635)
(555)

Other securities sold during the fiscal year
Category

Fiscal year ended March 31, 2007

(Unit: Million yen)
Fiscal year ended March 31, 2008

(April 1, 2006–March 31, 2007)(April 1, 2007–March 31, 2008)

Proceeds from sales
Gains on sales
Losses on sales
4.

(Unit: Million yen)
Fiscal year ended March 31, 2008
(As of March 31, 2008)
Carrying value on
consolidated balance Fair value
Difference
sheets

―
―
―

0
―
0

Principal holdings of securities not valued at fair value

Category

Fiscal year ended March 31, 2007
(As of March 31, 2007)
Carrying value on consolidated balance
sheets

1. Shares of subsidiaries and affiliates
Shares of subsidiaries
Shares of affiliates
2. Other marketable securities
Unlisted securities (excluding shares
traded over the counter)
Unlisted bonds
Others- 49 -(Unit: Million yen)
Fiscal year ended March 31, 2008
(As of March 31, 2008)
Carrying value on consolidated balance
sheets

16
3,844

10
4,437

122

445

―
81

500
811

5.

Redemption schedule of other securities with maturities and bonds classified as held-to-maturity

Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)
1 year or less
1. Bonds
Japanese government andlocal government bonds
Japanese corporate bonds
Others
2. Others
Total

1 to 5 years(Unit: Million yen)Over 10 years

5 to 10 years

―

―

―

―

―
―
―
―

―
―
―
―

―
―
―
―

―
958
―
958

Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)
1 year or less
1. Bonds
Japanese government andlocal government bonds
Japanese corporate bonds
Others
2. Others
Total

1 to 5 years(Unit: Million yen)Over 10 years

5 to 10 years

―

―

―

―

―
―
―
―

―
86
―
86

―
―
―
―

―
560
―
560

Derivatives
1. Matters relating to transaction status
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(1) Description of transactions
Derivative transactions entered into by some of theconsolidated subsidiaries are interest rate swaps.
(2) Policy for transactions
Derivative transactions entered into by some of theconsolidated subsidiaries are aimed at reducing the risks
from interest rate fluctuations, and it is our policy that they
are not for speculative purposes.
(3) 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 derivativetransactions.
Method for hedge accounting
Special accounting methods are adopted for interest
rate swaps that satisfy the requirements for hedge
accounting.
Method and scope of hedging
Hedging method: 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
and improve the financial account balance, andhedging is carried 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, those requirements become the criteria forassessing the hedging as effective.
(4) 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.

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(1) Description of transactions
Same as at left
(2) Policy for transactions
Same as at left

(3) Purposes of transactions
Same as at left

(4) Details of risk relating to transactions
Same as at left

- 50 -

(5) Risk management system relating to transactions
The management division bears the responsibility forconcluding contracts relating to hedge accounting at someof the consolidated subsidiaries. There are no particular
stipulations relating to such transactions, but these arecontrolled in accordance with the office regulations
concerning authority.
(6) Supplementary explanation on matters relating to market
value of transactions
All derivative transactions entered into by some of theconsolidated subsidiaries are subject to hedge accounting,thus a supplementary explanation has been omitted.

(5) Risk management system relating to transactions
Same as at left

(6) Supplementary explanation on matters relating to market
value of transactions
All interest rate swap transactions entered into by some of
the consolidated subsidiaries are subject to hedge
accounting, thus a supplementary explanation has been
omitted.

2. Matters concerning fair value of transactions
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)
Details of derivative transactions are as follows:

Type(Unit: Million yen)
Valuation
Contract
Contract
more than Fair value gain andamount1 yearloss

Transactions
other thanmarkettransactions
Complex
457
457
246
(211)
financial
products
Total
457
457
246
(211)
Notes: 1. Fair values were presented by financial institutions
with which we do transactions.
2. Because fair values for embedded derivatives
cannot rationally be categorized and measured, thecomplex financial products themselves areevaluated at fair value, with the valuationdifference recorded as a gain or a loss.
3. Book values of the complex financial products atthe beginning of the year are indicated as contract
amounts.

- 51 -

Tax-Effect Accounting
Fiscal year ended March 31, 2007
(As of March 31, 2007)
1. Main components of deferred tax assets and liabilities are
summarized as follows:(Deferred tax assets)
Million yen

Fiscal year ended March 31, 2008
(As of March 31, 2008)
1. Main components of deferred tax assets are summarized asfollows:(Deferred tax assets)
Million yen
Unrecognized accrued enterprise
273
taxes

Unrecognized sales discounts

215

Unrecognized accrued enterprise
taxes

175

Excess reserve for retirement benefit

86

Excess reserve for retirement benefit

79

Excess allowance for doubtful
accounts

109

Excess allowance for doubtful
accounts

127

Excess reserve for accrued bonuses

71

Excess reserve for accrued bonuses

10

Operating loss carry forwards for
subsidiaries

1,696

1,665

Excess amortization of royalty

185

Operating loss carryforwards for
subsidiaries
Unrecognized excess depreciation ofsoftwareExcess amortization of royalty
Unrecognized valuation loss onmerchandising rights advances
Unrecognized excess depreciation ofcontent
Unrecognized valuation loss onmerchandise
OthersSubtotal deferred tax assets
Valuation allowance
Total deferred tax assets(Deferred tax liabilities)
Unrealized holding gains (losses)
on available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets

Unrecognized excess depreciationof content
Unrecognized valuation loss onmerchandise

98
128
229

Unrecognized impairment loss
Addition of net sales and accounts
receivable—trade
Unrecognized valuation loss onmerchandising rights
Net unrealized holding gain on
available-for-sale securities
OthersSubtotal deferred tax assets
Valuation allowance
Total deferred tax assets

532
266
325
3,854
(1,825)
2,028

Tax-rate difference arising fromlosses at consolidated subsidiaries
Others
Effective income tax rate after
application of deferred tax
accounting

183
148
167
261
126
512
5,154
(2,092)
3,062

(147)
(147)
1,880

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
40.7
(Adjustments)
Accumulated earnings tax
0.4
Per capita levy of local resident
income tax
Entertainment expenses notdeductible for tax purposes
Non-taxable dividend income

1,331

4.9

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
40.7
(Adjustments)
Per capita levy of local resident
0.4
income tax
Entertainment expenses not
1.4
deductible for tax purposes
Non-taxable dividend income
(0.2)

(0.3)

Equity method investment gain/loss

0.5

6.2
1.5

Amortization of goodwill

2.2
1.3

Impairment loss on goodwill

2.8

Others(0.1)

Effective income tax rate after
application of deferred tax
accounting

48.5

53.9

- 52 -

Retirement Benefits

1.

2.

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)
Outline of retirement benefit system adopted
The Company and certain domestic consolidated
subsidiaries have adopted a defined benefit planconsisting of a lump-sum retirement payment.
Certain overseas consolidated subsidiaries have adopted
defined contribution plans.
Details of retirement benefit
obligations
Projected benefit obligations
Unrecognized net actuarial loss
Retirement benefit provisions

Unit: Million yen

1.

2.

(218)
23
(195)

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)
Outline of retirement benefit system adopted
Same as at left

Details of retirement benefit
obligations
Projected benefit obligations
Unrecognized net actuarial loss
Retirement benefit provisions

Unit: Million yen
(247)
36
(211)

Note Certain domestic consolidated subsidiaries use theNote Certain domestic consolidated subsidiaries use thesimplified method for the computation of retirement
simplified method for the computation of retirement
benefit obligations.
benefit obligations.
Unit: Million yen
Unit: Million yen
3. Details of retirement benefit
3. Details of retirement benefit
expenses
expenses
Retirement benefit expenses
Retirement benefit expenses
Service cost
35
Service cost
59
Interest cost
2
Interest cost
4
Amortization of net actuarial loss
1
Amortization of net actuarial loss
6
Others117151
Note 1. The retirement benefits expenses of consolidated
subsidiaries using the simplified method are stated in“Service cost.”
2. “Others” indicates the amount of premium payments
to defined contribution pensions.

Note 1. The retirement benefits expenses of consolidated
subsidiaries using the simplified method are stated in“Service cost.”
2. “Others” indicates the amount of premium payments
to defined contribution pensions.

4.

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 areamortized:
Five years from the fiscal year after the yearof occurrence- 53 -

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 areamortized:
Five years from the fiscal year after the yearof occurrenceSegment Information
1. Segment information by business category
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)(Unit: Million yen)

I. Net Sales and Operating Income
or Loss
Net Sales:(1) Sales to third parties(2) Inter-group sales ortransfers
Total

Elimination orincorporation

Consolidated

PS FieldGame Field

Other Field

71,064

9,847

4,409

85,321―

85,321

242

99

1,112

1,453

(1,453)―71,306

9,946

5,521

86,774(1,453)85,321

Total

62,233
9,726
6,034
77,994(1,618)76,376
Operating expenses
9,073
220
(513)
8,780
164
8,944
Operating income (loss)
II. Assets, depreciation and capital
expenditure
53,218
9,264
4,922
67,405(1,323)66,081
Assets
512
47
192
752
(4)
747
Depreciation and amortization
6
―
208
214
―
214
Impairment losses
4,051
95
181
4,328
(7)
4,320
Capital expenditureNotes: 1. Based on the proximity of services or others provided, the Fields Corporation’s businesses are segmented into PS Field,
Game Field and Other Field.
2. The major products or services in each segment are as follows:(1) PS Field: Purchasing, sales, planning and development of pachinko/pachislot machines and related services(2) Game Field: Planning, development and sales of packaged software, such as game software(3) Other Field: Sports management and others
3. All operating expenses are allocated to individual segments, and thus none remain unallocated.
4. All assets are allocated to individual segments, and thus there are no assets that are regarded as being corporate assets.
5. As stated in the “Basis of Presentation of the Consolidated Financial Statements; 4. Accounting standards; (4)Accounting standards for important reserves (3) Accrued bonuses to directors and auditors (Change in Accounting
Principle),” effective from the current fiscal year, the Company has adopted the ASBJ Statement No. 4, “AccountingStandard for Directors’ Bonuses,” issued on November 29, 2005. As a result, operating expenses in the PS Field for theyear under review increased ¥98 million and operating income decreased by the same amount for the current fiscal year
ended March 31, 2007, compared with the previous accounting method.
6. As stated in the “Change in the Basis of Presentation of the Consolidated Financial Statements,” effective from thecurrent fiscal year, the Company has adopted the Accounting Standards for Share-Based Payment (ASBJ Statement No.
8 issued by the ASBJ on December 27, 2005) and the “Implementation Guidance on Accounting Standard for
Share-Based Payment” (ASBJ Implementation Guidance No. 11 issued by the ASBJ on May 31, 2006).
As a result, operating expenses in the Game Field increased ¥15 million and operating income decreased by the sameamount for the current fiscal year ended March 31, 2007, compared with the previous accounting method.

- 54 -

Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)(Unit: Million yen)
Elimination orincorporation

Consolidated

PS FieldGame Field

Other Field

82,44914,261

5,107

101,818―

101,818

313

267

812

1,393

(1,393)―82,763

14,528

5,919

103,212(1,393)

101,818

I. Net Sales and Operating Income
or Loss
Net Sales:(1) Sales to third parties(2) Inter-group sales or transfers
Total

Total

70,016
13,576
6,436
90,029(1,369)88,660Operating expenses
12,747952(516)
13,182(24)
13,158Operating income (loss)
II. Assets, depreciation and capital
expenditure
55,23914,1485,350
74,737(5,569)69,168Assets
854
93
149
1,097
(9)
1,087
Depreciation and amortization
116
―
760
876
―
876
Impairment losses
3,479
130
127
3,738
(18)
3,720
Capital expenditureNotes: 1. Based on the proximity of services or others provided, the Fields Corporation’s businesses are segmented into PS Field,
Game Field and Other Field.
2. The major products or services in each segment are as follows:(1) PS Field: Purchasing, sales, planning and development of pachinko/pachislot machines and related services(2) Game Field: Planning, development and sales of packaged software, such as game software(3) Other Field: Sports management and others
3. All operating expenses are allocated to individual segments, and thus none remain unallocated.
4. All assets are allocated to individual segments, and thus there are no assets that are regarded as being corporate assets.
5. As indicated in the “Basis of Presentation of the Consolidated Financial Statements (Change in the method ofdepreciation of tangible fixed assets),” at Field Corporation and its domestic consolidated subsidiaries, pursuant to therevisions to the Corporate Tax Law (the Partial Revision to the Corporate Tax Law, the 6th Law enacted on March 30,
2007, and the Ordinance for Partial Revision to the Cabinet Order Related to the Corporate Tax Law, the 83rd
Ordinance on March 30, 2007), changed the method of depreciation of tangible fixed assets and now uses a method
based on the revised Corporate Tax Law with regard to those assets acquired on and after April 1, 2007. Due to thischange, operating expenses in the PS Field, the Game Field and the Other Field increased ¥38 million, ¥1 million and¥1 million, respectively, and operating income decreased by the corresponding amounts, compared with the previous
accounting method.
6. Although Lucent Pictures Entertainment, Inc. had been included in the PS Field, since the year ended March 31, 2008,
the company has been included in the Other Field because its principle business purposes shifted from the planning anddevelopment of graphic content software in the PS Field to the planning and production of animation since the second
half of the year under review. The impact of this change on the segment information is immaterial.

2. Segment information by region
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)
Since Japan accounts for more than 90% of total sales and of total assets in all segments, the Company does not disclose
segment information by region.
Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)
Since Japan accounts for more than 90% of total sales and of total assets in all segments, the Company does not disclose
segment information by region.

3. Overseas sales
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)
Since overseas sales account for less than 10% of consolidated net sales, the Company does not disclose overseas sales.
Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)
Since overseas sales account for less than 10% of consolidated net sales, the Company does not disclose overseas sales.

- 55 -

Transactions with Related Parties
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)
1. Subsidiaries, etc.

Attribute

Affiliate

Attribute

Affiliate

Notes:

Capital stock orequity capitalBusiness or
occupation

Company nameLocation

Rodeo Co., Ltd.

Toshima-ku
Tokyo

100

Transaction
amountAccount item

Balance at
year-end

12,447

Accounts
payable—trade

3,403

197

―

―

Transaction
details
Purchase ofmachines(Note 1, 2)
Purchase
discounts

Holding ratio ofvoting rights

Development
and manufacture
Direct holding:of pachinko/
35.0%
pachislot
machines(Unit: Million yen)
Relationship
Officer’s post
Business
concurrently
relationship
held
Development
and manufacture―of pachinko/
pachislot
machines

1. The above transaction amounts are net of consumption tax, but the balance at year-end is inclusive of consumption tax.
2. Transaction conditions and the policies for determining those conditions(1) For the purchase of machines, transaction conditions are determined in the same manner as general terms andconditions.

- 56 -

Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)
1. Subsidiaries, etc.
Attribute

Company name

Capital stock orequity capital

Location

Subsidiary

EXPRESS Inc.

Fukuoka-shi,
FukuokaAffiliate

Rodeo Co.,Ltd.

Toshima-ku, Tokyo

Company in which its
major corporateshareholder holds morethan half the total voting
rights (including the casethat such company is a
subsidiary of theshareholder)

Bisty Co., Ltd.
(Note 6)

Attribute

Subsidiary

Affiliate

Company in which its
major corporateshareholder holds morethan half the total voting
rights (including the casethat such company is a
subsidiary of theshareholder)――(Unit: Million yen)
Holding ratio ofvoting rights
Direct holding
90.0%
Direct holding
35.0%

Development andmanufacture of500
pachinko/pachislot
machines

Shibuya-ku, Tokyo

Relationship
Officer’s post
Business
Concurrently held
relationship2Business or
occupation
Management of300
sports gyms
Development andmanufacture of100
pachinko/pachislot
machines

Transaction
details

Loaning fund
(Note 2)
Collection of
funds
Purchase ofDevelopment andpachinko/pachislo
manufacture oft machines
pachinko/(Note1, 3)
pachislot
Purchasemachines
discounts
Commission
revenue from
Development and agency sale ofmanufacture ofmachinespachinko/(Note1, 5)
pachislot
Sale ofmachines
sublicensing
copyrights(Note1, 5)

Transaction
amountAccount item

717

Fund aid

187

―

―

Balance at
year-end―(Note 4)

20,865 Accounts
receivable—
trade
103

3,000

Accounts
5,393 payable—
trade

2,172

Advances
received

470

521

Transaction conditions and the policies for determining those conditions
Notes: 1. The above transaction amounts are net of consumption tax, but the balance at year-end is inclusive of consumption tax.
2. The conditions for providing loans are determined rationally, taking into account market interest rates.
3. For the purchase of machines, transaction conditions are determined in the same manner as general terms andconditions.
4. Because EXPRESS Inc. determined that its acquisition date would be March 31, 2008, only its Balance Sheets are on aconsolidated basis. The transaction amounts in the above table are those until March 31, 2008. The balance at year-end
has no indication because this item is offset and cleared on a consolidated basis.
5. For commission revenue from the agency sale of machines and sales of sublicensing copyrights, transaction conditions
are determined in the same manner as general terms and conditions.
6. SANKYO CO., LTD., which is the Company’s major shareholder, directly holds all the voting rights of Bisty Co., Ltd.

- 57 -

Per-Share Data
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)
Net assets per share¥118,487.37
Net income per share¥10,692.29

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)
Net assets per share¥128,201.49
Net income per share¥15,263.76

Since no dilutive latent shares exist, diluted net income
per share is not stated.
Note: The calculation basis for net income per share is as follows.

Since no dilutive latent shares exist, diluted net income
per share is not stated.

Net income (Million yen)Amount not allocable to common shares
Net income allocable to common shares (Million yen)
Average number of shares of common stock outstanding(shares)
Outline of latent shares not reflected in the calculation ofdiluted net income per share since they have no dilutive effectFiscal year ended March 31,
2007(April 1, 2006–March 31,
2007)

Fiscal year ended March 31,
2008(April 1, 2007–March 31,
2008)

3,710
―
3,710
347,000

5,296
―
5,296
347,000

2 types of stock acquisitionrights:(Number of the first stockacquisition rights: 564
Number of the second stockacquisition rights: 1,360)

2 types of stock acquisitionrights:(Number of the first stockacquisition rights: 496
Number of the second stockacquisition rights: 750)

Significant Subsequent Events
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)- 58 -

Non-Consolidated Financial Statements(1) Non-Consolidated Balance Sheets
PeriodItem(Assets)
I Current assets
1. Cash and cash equivalents
2. Notes receivable—trade*3
3. Accounts receivable—trade *1
4. Merchandise
5. Supplies
6. Advances
7. Merchandising rights*1
advances
8. Prepaid expenses*1
9. Deferred tax assets
10. Short-term loans*1
11. Other accounts receivable *1
12. Advance payments*1
13. Notes held
14. Non-operating notes*3
receivable
15. Other current assets*1
16. Allowance for doubtful
accounts
Total current assets
II Fixed assets
1. Tangible fixed assets(1) Buildings
Accumulated depreciation(2) Structures
Accumulated depreciation(3) Vehicles
Accumulated depreciation(4) Tools, furniture andfixturesAccumulated depreciation(5) Land(6) Construction in progress
Total tangible fixed assets
2. Intangible fixed assets(1) Software(2) Software underdevelopment(3) Telephone subscription
rights(4) Other intangible fixed
assetsTotal intangible fixed assets
3. Investments and other assets(1) Investment securities(2) Investments in
subsidiaries and affiliates(3) Equity investment(4) Equity investments in
subsidiaries and affiliates

Fiscal year ended March 31, 2007
(As of March 31, 2007)
Amount% total14,083
3,346
13,152
344
13
6

8,568
1,881
5,366
65
6
251

(5,515)(1,465)(7,785)
(279)
(6)
244

2,626

4,475

1,848

275
889
―
18
117
149

652
1,077
3,409
47
109
229

377
187
3,049
29
(7)
80

676

520

(156)

601

139

(462)

(50)

(63)

(12)

36,253

3,317
(538)
63
(30)
27
(10)

63.0

26,737

3,180
(649)
61
(35)
26
(14)

2,778
32
17

1,305
(681)

(Unit: Million yen)
Year-on-year
Fiscal year ended March 31, 2008change(As of March 31, 2008)(decrease)
Amount% totalAmount45.6(9,515)

2,530

(248)

25

(7)

11

(5)

888
3,699
188
7,344

264
1,939
156
2,099

1,782
623
1,760
32
5,245

(894)

9.1

12.5

370

2,244

1,873

2,155

345

(1,810)

18

18

―

31

44

12

2,576

4.5

2,652

4.5

75

2,351

8,350

5,998

7,876

6,903

(972)

213

77

(135)

―

313

313

- 59 -

Period
Item
(5)
(6)

Long-term loans
Long-term loans
receivable fromshareholders, directors or
employees(7) Long-term loans
receivable fromsubsidiaries and affiliates(8) Claims in bankruptcy(9) Long-term prepaid
expenses(10) Deferred tax assets(11) Deposits and guarantees *1(12) Other assets(13) Allowance for doubtful
accounts
Total investments and otherassetsTotal fixed assets
Total Assets

Fiscal year ended March 31, 2007
( As of March 31, 2007)
Amount% total102

Fiscal year ended March 31, 2008
( As of March 31, 2008)
Amount% total102Year-on-yearchange(Decrease)
Amount
(0)

0

0

0

625

2,492

1,866

257

338

81

16

53

37

365
2,078
86

2,265
2,416
77

1,900
337
(8)

(539)

(1,503)(964)

13,43423.4

21,888

37.4

8,454

21,25657,50937.0
100.0

31,88558,62254.4
100.0

10,6291,113- 60 -

Period
Item

Fiscal year ended March 31, 2007
(As of March 31, 2007)
Amount% total(Liabilities)
Current liabilities
1. Accounts payable—trade *1
2. Other accounts payable
3. Accrued expenses
4. Accrued income taxes
5. Accrued consumption taxes
6. Advances received
7. Deposits held
8. Accrued bonuses
9. Accrued bonuses todirectors and auditors
10. Reserve for losses on*2
guarantee liability
11. Allowance for losses on
relocation of offices
12. Other current liabilities
Total current liabilities
II Fixed liabilities
1. Retirement benefit
provisions
2. Guaranty deposits received
Total fixed liabilities
Total liabilities(Unit: Million yen)
Year-on-year
Fiscal year ended March 31, 2008change(As of March 31, 2008)(decrease)
Amount% totalAmountI(Net assets)
Shareholders’ equity
1. Common stock
2. Capital surplus(1) Additional paid-in
capital
Total capital surplus
3. Retained earnings(1) Legal reserve(2) Other retained earnings
General reserve
Retained earnings
carried forward
Total retained earnings
Total shareholders’ equity
II Valuation and translationdifferences
1. Unrealized holding gain
on available-for-salesecurities
Total valuation andtranslation differences
Total net assets
Total Liabilities and Net
Assets

8,199
1,419
9
1,242
67
680
1,000
25

4,765
1,394
21
2,929
199
480
660
145

(3,433)
(24)
11
1,687
132
(199)
(340)
120

98

128

30

―

830

830

―

32

32

15
12,75826
11,614

22.2

173

19.8

180

10
(1,143)
6

2,575
2,749
15,507

4.8
27.0

2,459
2,640
14,255

4.5
24.3

(116)
(109)
(1,252)

7,948

13.8

7,948

13.6

―

7,994

13.6

―

28,60944,552

48.8
76.0

2,765
2,765

I

7,994

7,994
7,994

13.9

9

9

20,00020,000

5,834

8,600
25,843
41,786

44.9
72.6

214

(184)

214

0.4

(184)

(0.3)

(399)

42,00173.0

44,367

75.7

2,366

57,509100.0

58,622

100.0

1,113

- 61 -

(2) Non-Consolidated Statements of Income
PeriodItem
Net sales
Cost of sales*1
Gross profit
III Selling, general andadministrative expenses
1. Advertising expenditures
2. Remuneration of directors
and auditors
3. Salaries and allowances
4. Bonuses
5. Provision for accrued
bonuses
6. Provision for accrued
bonuses to directors andauditors
7. Legal welfare expenses
8. Other welfare expenses
9. Outsourcing expenses
10. Travel and transport
expenses
11. Depreciation andamortization
12. Rents

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)
Amount% salesI
II

13. Recruitment and training
expenses
14. Provision to allowance for
doubtful accounts
15. Retirement benefit expenses
16. Others
Operating income
IV Non-operating income
1. Interest income*1
2. Interest on securities
3. Dividend income*1
4. Discounts on purchases*1
5. Lease income
6. Others*1
V Non-operating expenses
1. Amortization of equity
investment
2. Depreciation andamortization
3. Loss on management ofinvestment securities
4. Others
Ordinary income
VI Extraordinary income
1. Gain on sale of fixed assets *2
2. Gain on investment inanonymous association
3. Gain on sale of share in
affiliates
4. Reversal of allowance forinvestment losses

71,314
46,16425,150(Unit: Million yen)
Year-on-year
Fiscal year ended March 31, 2008change(April 1, 2007–March 31, 2008)(decrease)
Amount% salesAmount

100.0
64.7
35.3

4,439

2,592

313

353

4,228
48

4,149
37

25

145

98

128

523
30
1,051

520
203
1,716

428

429

527

865

1,049

1,218

332

247

71

115

37
2,944

24
37
77
215
5
46

16,150
8,999

407

22.7
12.6

0.6

52
3,078

47
27
53
103
3
90

7

243

3

3

―

217

2

13
9,393

0.0
13.2

33

0

―

79

90

10

―

0

89

- 62 -

0.1―

82,75854,27028,488

100.0
65.6
34.4

11,4438,106
3,337

15,854
12,634

19.1
15.3

(296)
3,634

326

0.4

(80)

497
12,463

0.6
15.1

483
3,069

90

0.1

0

Period

Item
VII Extraordinary losses
1. Loss on sale of fixed assets *3
2. Loss on disposal of fixed *4
assets3. Impairment loss
*5
4. Valuation loss on
investment securities
5. Valuation loss on shares inaffiliates
6. Bad debt loss
7. Provision to allowance for
doubtful accounts
8. Provision to reserve forlosses on guarantee liability
9. Provision to allowance forloss on relocation of offices
10. Others
Income before income
taxes
Current income taxes
Deferred income taxes
Net income

Fiscal year ended March 31, 2007

Fiscal year ended March 31, 2008

(April 1, 2006–March 31, 2007)
Amount% sales(April 1, 2007–March 31, 2008)
Amount% sales

2

―

651

263

―

116

―

112

―

2,997

95

―

―

890

―

830

―

32

0

4,272
(311)

749

1.1

8,734

12.2

3,961
4,773

5.5
6.7

- 63 -

3

4,966(1,813)Year-on-yearchange(decrease)
Amount

5,247

6.4

4,498

7,306

8.8

(1,427)

3,152
4,153

3.8
5.0

(808)
(619)

(3) Non-Consolidated Statement of Change in Net Assets
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)(Unit: Million yen)
Shareholders’ equity
Retained earnings
Other retained earnings

Capital surplus
Commonstock
Balance at March 31, 2006
Amount of changes during
the year
Dividends from surplus
Bonuses to directors andauditors
Provision for generalreserve
Net income
Net amount of changes in
items not included inshareholders’ equity during
the year
Total amount of changes
during the year
Balance at March 31, 2007

Balance at March 31, 2006
Amount of changes during
the year
Dividends from surplus
Bonuses to directors andauditors
Provision for generalreserve
Net income
Net amount of changes in
items not included inshareholders’ equity during
the year
Total amount of changes
during the year
Balance at March 31, 2007

Additional Total capital
Legal reservepaid-in capitalsurplus

Total

Total retained shareholders’
Retained
Generalequityearnings
earnings
reservecarried forward
15,0007,554
22,56338,506

7,948

7,994

7,994

9

―

―

―

―

―

(1,388)(1,388)(1,388)

―

―

―

―

―

(105)

(105)

(105)

―

―

―

―

5,000

(5,000)

―

―

―

―

―

―

―

4,773

4,773

4,773

―

―

―

―

―

―

―

―

―

―

―

―

5,000

(1,719)

3,280

3,280

7,948

7,994

7,994

9

20,0005,834

25,843

41,786

Valuation and translationdifferences
Unrealized
Total
holdingvaluation
gain onandavailabletranslation
for-saledifferences
securities
735
735

Total net
assets39,242――(1,388)

―

―

(105)

―

―

―

―

―

4,773

(520)

(520)

(520)

(520)

(520)

2,759

214

214

42,001- 64 -

Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)(Unit: Million yen)
Shareholders’ equity
Retained earnings
Other retained earnings

Capital surplus
Commonstock
Balance at March 31, 2007
Amount of changes during
the year
Dividends from surplus
Net income
Net amount of changes
in items not included inshareholders’ equity
during the year
Total amount of changes
during the year
Balance at March 31, 2008

Balance at March 31, 2007
Amount of changes during
the year
Dividends from surplus
Net income
Net amount of changes
in items not included inshareholders’ equity
during the year
Total amount of changes
during the year
Balance at March 31, 2008

Additional Total capital
Legal reservepaid-in capitalsurplus

Total

Total retained shareholders’
Retained
Generalequityearnings
earnings
reservecarried forward
20,0005,834
25,843
41,786

7,948

7,994

7,994

9

―

―

―

―

―

(1,388)(1,388)(1,388)

―

―

―

―

―

4,153

4,153

4,153

―

―

―

―

―

―

―

―

―

―

―

―

―

2,765

2,765

2,765

7,948

7,994

7,994

9

20,0008,600

28,60944,552

Valuation and translationdifferences
Unrealized
Total
holdingvaluation
gain onandavailabletranslation
for-saledifferences
securities
214
214

Total net
assets

42,001――――(1,388)
4,153

(399)

(399)

(399)

(399)

(399)

2,366

(184)

(184)

44,367(4) Material items affecting the operation of the Company as a going concern
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)
No relevant items
Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)
No relevant items- 65 -

(5) Significant Accounting Policies
Item
1. Valuation standards andmethods for marketablesecurities

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(1) Held-to-maturity bonds
Amortized at cost by the straight-line
method(2) Shares of subsidiaries and affiliates
Stated at cost determined by themoving-average method(3) Other marketable securities
Securities with market prices:Stated at market value based on market
price as of the balance sheet date(unrealized gains or losses are charged
or credited directly to net assets, with thecost of securities sold determined by themoving-average method).
Securities without market prices:Stated at cost determined by themoving-average method.

4. Depreciation methods for
fixed assets(2) Shares of subsidiaries and affiliates
Same as at left
(3) Other marketable securities
Securities with market prices:
Same as at left

Securities without market prices:
Same as at left

Stated at fair value

2. Valuation standards andmethods for derivatives
3. Valuation standards andmethods for inventories

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(1) Held-to-maturity bonds
Same as at left

(1) Merchandise
Used pachinko/pachislot machines:
Stated at cost determined by the
specific identification method.
Others:Stated at cost determined by themoving-average method.
(2) Supplies
Stated at cost determined by the lastpurchase price method.
(1) Tangible fixed assets
Declining-balance method
However, the straight-line method isapplied to buildings (excluding
building fixtures) acquired on andafter April 1, 1998.
The estimated useful lives ofdepreciable assets are as follows.
Buildings: 4–50 years
Structures: 10–50 years
Vehicles: 2–6 years
Tools, furniture and fixtures: 3–20
years(2) Intangible fixed assets
Straight-line method
The straight-line method is applied tosoftware for company use, based onits useful life within the Company(five years).
(3) Long-term prepaid expenses
Straight-line method- 66 -(1) Merchandise
Used pachinko/pachislot machines:
Same as at left
Others:Same as at left

(2) Supplies
Same as at left
(1) Tangible fixed assets
Declining-balance method
However, the straight-line method isapplied to buildings (excluding
building fixtures) acquired on andafter April 1, 1998.
The estimated useful lives ofdepreciable assets are as follows.
Buildings: 8–50 years
Structures: 10–50 years
Vehicles: 2–6 years
Tools, furniture and fixtures: 2–20
years(2) Intangible fixed assets
Same as at left

(3) Long-term prepaid expenses
Same as at left

Item
5. Accounting standards forreserves

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(1) Allowance for doubtful accounts
To provide against losses from doubtful
accounts, allowances for ordinary
receivables are provided using a rate
determined by past collection
experience, and allowances for specificdebts considered doubtful are accounted
for by calculating the estimated amounts
deemed uncollectible after individuallyreviewing the collectibility of the debts.
(2) Accrued bonuses
To provide for employee bonuses, theCompany recognizes the amounts out ofthe projected bonus payments to beallocated to the fiscal year.
(3) Accrued bonuses to directors andauditors
To provide for bonuses to directors andauditors, the Company recognizes theamounts corresponding to the current
fiscal year based on the projected bonus
payments.
(Change in Accounting Principle)
Effective from the current fiscal year,
the Company has adopted the
Accounting Standards Board of Japan(ASBJ) Statement No. 4, AccountingStandard for Bonuses to Directors andAuditors (issued on November 29,2005). As a result, operating income,ordinary income, and income before
income taxes each decreased ¥98 million
compared with the previous accounting
method.
(4)(5) Retirement benefit provisions
To provide for employees’ retirement
benefits, the Company recognizes, on
the basis of projected benefit obligations
as of the end of the fiscal year, benefit
obligations accrued as of the end of the
fiscal year.
Actuarial differences are amortizedproportionately by the straight-line
method over a fixed number of years(five years) within the averageremaining period of service of
employees as of the time suchdifferences arise. Amortization amounts
are expensed beginning with the fiscal
year following that in which thedifferences arise.

- 67 -

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(1) Allowance for doubtful accounts
Same as at left

(2) Accrued bonuses
Same as at left

(3) Accrued bonuses to directors andauditors
To provide for bonuses to directors andauditors, the Company recognizes theamounts corresponding to the current
fiscal year based on the projected bonus
payments.

(4) Reserve for losses on guarantee liability
To prepare for losses on guarantees foraffiliates, the Company provides areserve for losses on guarantee liability
taking into account the financial
situation of the affiliates that it
guarantees.
(5) Retirement benefit provisions
Same as at left

Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)

Item
(6)

6. Accounting standards forrevenues and expenses

7. Treatment of important leasetransactions

8. Other significant standards
for the preparation offinancial statements

For agency sales, when thepachinko/pachislot machines aredelivered to users, and the payments forthe machines are made to the machine
makers, these are recognized ascommission income and commission
cost.
Finance lease transactions, other thanthose where the ownership of the leased
assets is deemed to be transferred to thelessee, are accounted for as ordinary
operating lease transactions.
Accounting for consumption tax
Consumption tax is accounted for by the
tax-excluded method.

- 68 -

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(6) Allowance for losses on relocation of
offices
The Company provides estimated costs
that might result from office relocations
including a loss on disposal of fixed
assets and expenses for recovering thepresent status, etc.
Same as at left

Same as at left

Accounting for consumption tax
Same as at left

(6) Changes to the Significant Accounting Policies
Changes in accounting treatment
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)
Accounting standard for the presentation of net assets inbalance sheets
Effective from the current fiscal year, the Company has
adopted the Accounting Standard for Presentation of Net
Assets in the Balance Sheet (ASBJ Statement No. 5 issued on
December 9, 2005) and the Implementation Guidance on
Accounting Standard for Presentation of Net Assets in the
Balance Sheet (ASBJ Guidance No. 8 issued on December 9,2005).
The amount conventionally recorded in “Shareholders’ equity”
was ¥42,001 million.
Due to the revision to the regulations regarding financial
statements, the “Net assets” section of the balance sheet forthe current fiscal year ended March 31, 2007, has been
prepared according to the revised regulations for the financial
statements.

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)

Change in the method of depreciation of tangible fixed assets
Pursuant to the revisions to the Corporate Tax Law (the Partial
Revision to the Corporate Tax Law, the 6th Law enacted on
March 30, 2007, and the Ordinance for Partial Revision to the
Cabinet Order Related to the Corporate Tax Law, the 83rd
Ordinance on March 30, 2007), the Company changed themethod of depreciation of tangible fixed assets and now uses amethod based on the revised Corporate Tax Law with regard to
those assets acquired on and after April 1, 2007.
Due to this change, operating income, ordinary income andincome before income taxes each decreased ¥38 million.

Changes in method of presentation
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(Balance Sheets)
As “Short-term loans,” which had been included in “Other
current assets” until the end of the previous year, accounted formore than 1/100 of total assets, it has been presented separately.
“Short-term loans” as of March 31, 2007, were ¥535 million.

- 69 -

Additional information
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)(Retirement benefits of directors and auditors)
The Company reviewed the remuneration payment system fordirectors and auditors, which is not linked to actual performanceand may be considered deferred remuneration. As a result, theretirement benefit system for directors and auditors wasabolished as of the closing of the 18th Ordinary General
Meeting of Shareholders held on June 28, 2006.
Accordingly, pursuant to the resolution adopted by the Meeting,accrued retirement benefits as of the closing of said Meetingwere paid to the directors and auditors then in office at the
Meeting for their services corresponding to the tenure ofrespective directors and auditors until the closing of the
Meeting.

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)(Method of depreciation of tangible fixed assets)
Beginning with the fiscal year ended March 31, 2008, tangible
fixed assets acquired by March 31, 2007, are equally amortizedover five years from a year following the year when
depreciation was completed up to the limit of the depreciation.
The impact that this change has on the consolidated statement ofincome is immaterial.

- 70 -

(7) Notes to the Non-Consolidated Financial Statements
Non-Consolidated Balance Sheets
Fiscal year ended March 31, 2007
(As of March 31, 2007)*1. Assets and liabilities relating to affiliates
Other than items stated separately, the following are
included in the relevant balance sheet items.
Other assets¥1,217 million
Accounts payable—trade¥3,456 million
2.

Fiscal year ended March 31, 2008
(As of March 31, 2008)*1. Assets and liabilities relating to affiliates
Other than items stated separately, the following are
included in the relevant balance sheet items.
Short-term loans¥3,407 million
Other assets¥950 million
Accounts payable—trade¥3,098 million*2. Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on anagency basis for pachinko/pachislot machine
manufacturers.
Y.K. Daiko¥54 million
Niimi Co., Ltd.
¥51 million
K.K. The Citi
¥48 million
K.K. Taisei Kanko¥46 million
Iwamoto Development Co., Ltd.
¥33 million
Y.K. Fuji Leisure Service¥31 million
K’s corporation¥25 million
Meiplanet K.K¥23 million
Asahi Shoji K.K.
¥13 million
R&K Co., Ltd.
¥13 million
Others (126)¥264 million

Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on anagency basis for pachinko/pachislot machine
manufacturers.
Y.K. Daiko¥72 million
Meiplanet K.K¥51 million
Asahi Shoji K.K.
¥44 million
Niimi Co., Ltd.
¥41 million
K.K. Taisei Kanko¥37 million
Sankei Shoji Co., Ltd.
¥31 million
K.K. Toei Kanko¥28 million
K.K. New Asahi¥26 million
K.K. Corona¥21 million
Narita Kogyo K.K.
¥20 million
Others (218)¥540 million
Total¥917 million

Total¥605 million
The Company provides a guarantee for liabilities of thefollowing corporation for its borrowings from financial
institutions.
¥830 million
Japan Sports Marketing Inc.
Reserve for losses on guarantee¥(830) million
liability
Difference― million

The Company provides a guarantee for liabilities of thefollowing corporation for it borrowings from financial
institutions.
¥830 million
Japan Sports Marketing Inc.

*3. Notes due as of the closing date
The notes of the Company maturing at the end of the year
are settled on a bill clearing date. As the balance-sheet date
for the year under review was a bank holiday, thefollowing notes matured are included in the balance as ofMarch 31, 2007.
Notes receivable¥1,299 million
Non-operating notes¥431 million
receivable
4. Overdraft agreements
To raise working capital efficiently, the Company has
concluded an overdraft agreement with two banks. As ofthe balance sheet date, unutilized balances under these
agreements were as follows:
Overdraft limit¥3,000 million
Borrowings outstanding― million
Difference¥3,000 million

*3.

4.

- 71 -

Overdraft agreements
Same as at left

Non-Consolidated Statements of Income
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)*1 Items relating to affiliates included in the statements ofincome are as follows.
Purchases¥13,122 million
Dividend income¥50 million
Discounts on purchases¥197 million
Other non-operating income¥43 million*2 “Gain on sale of fixed assets” was derived from the sale ofvehicles.
*3 “Loss on sale of fixed assets” was derived from the sale ofvehicles.

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)*1 Items relating to affiliates included in the statements ofincome are as follows.
Purchases¥21,562 million
Interest income¥42 million
Discounts on purchases¥103 million
Other non-operating income¥65 million*2*4 Details of loss on disposal of fixed assets
Tools, furniture and fixtures
Long-term prepaid expenses
Software
Software in progress
Total
*5

*4 Details of loss on disposal of fixed assets
Buildings¥83 million
Vehicles¥0 million
Tools, furniture and fixtures¥17 million
Software¥162 million
Total¥263 million*5 Impairment loss
The Company has stated an impairment loss for the assets set
out below.
Usage
Idle assets
Type
Buildings and structures
Location Nagoya-shi, Aichi
Amount¥116 million
When grouping its assets, with regard to business-use assets,
the Company adopts the method of grouping primarily bybusiness category in accordance with management
accounting practice. With regard to idle assets, the method ofindividual grouping is adopted.
With regard to idle assets, the transfer of such assets wasdetermined at the Board of Directors’ meeting held on March
7, 2008. The book value was amortized up to the recoverable
value, and the decreased amount was recorded as an
impairment loss under an extraordinary loss. It consists of¥114 million in buildings and ¥1 million in structures.
The recoverable value is based on the scheduled price for thetransfer of aforementioned idle assets.

*3¥3 million¥0 million¥24 million¥623 million¥651 million

Non-Consolidated Statement of Change in Net Assets
Fiscal year ended March 31, 2007 (April 1, 2006–March 31, 2007)
Matters related to treasury stock
None applicable
Fiscal year ended March 31, 2008 (April 1, 2007–March 31, 2008)
Matters related to treasury stock
None applicable- 72 -

Leases
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)
1. Finance lease transactions other than those in which theownership of the leased assets is deemed to be transferred to
the lessee(1) Acquisition cost, accumulated depreciation, and net bookvalue of leased assets at the end of the fiscal year
(Unit: Million yen)
Acquisition Accumulated Net bookcost
depreciation
value
Vehicles6―6Tools,
23
15
7
furniture andfixtures
Software
38
16
22
Total
68
31
36
Acquisition cost has been calculated by the interest-inclusive
method, since the balance of future minimum lease payments
accounts for a minimal portion of tangible and intangible
fixed assets at the end of the fiscal year.
(2) Future minimum lease payments
Due within 1 year
¥14 million
Due after 1 year
¥22 million
Total¥36 million
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 aminimal portion of tangible and intangible fixed assets at theend of the fiscal year.
(3) Lease payments and depreciation
Lease payments¥12 million
Depreciation¥12 million(4) Calculation method for depreciation
Depreciation is calculated by the straight-line method overthe lease term of the leased assets, with no residual value.
2. Operating lease transactions
Due within 1 year
¥1 million
Due after 1 year
¥1 million
Total¥2 million

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)
1. Finance lease transactions other than those in which theownership of the leased assets is deemed to be transferred to
the lessee(1) Acquisition cost, accumulated depreciation, and net bookvalue of leased assets at the end of the fiscal year
(Unit: Million yen)
Acquisition Accumulated Net bookcost
depreciation
value
Vehicles15
5
10
Tools,
10
7
3
furniture andfixtures
Software
38
23
14
Total
65
37
28
Same as at left

(2) Future minimum lease payments
Due within 1 year
Due after 1 year
Total

¥14 million¥13 million¥28 million

Same as at left

(3) Lease payments and depreciation
Lease payments
Depreciation(4) Calculation method for depreciation
Same as at left

¥17 million¥17 million

2. Operating lease transactions
Due within 1 year
Due after 1 year
Total

¥1 million¥0 million¥1 million

Marketable Securities
Fiscal year ended March 31, 2007 (As of March 31, 2007)
Shares of subsidiaries and affiliates at fair value(Unit: Million yen)
Category

Carrying value on
non-consolidated balance
sheetsMarket value

Difference

Shares of
subsidiaries

2,670

3,420

749

Fiscal year ended March 31, 2008 (As of March 31, 2008)
Shares of subsidiaries and affiliates at fair value(Unit: Million yen)
Category

Carrying value on
non-consolidated balance
sheetsMarket value

Difference

Shares of
subsidiaries

2,670

3,024

353

- 73 -

Tax-Effect Accounting
Fiscal year ended March 31, 2007
(As of March 31, 2007)
1. Main components of deferred tax assets and deferred tax
liabilities(Deferred tax assets)
Million Yen
Unrecognized accrued enterprise
111
taxes
Excess reserve for retirement70
benefits
Excess allowance for doubtful
328
accounts
Excess reserve for accrued bonuses
10
Unrecognized valuation loss on229
merchandising rights advances
Unrecognized valuation loss on
29equity investments
Impairment loss
21
Unrecognized valuation loss onmerchandise
Unrecognized sales discounts
OthersSubtotal deferred tax assets(Deferred tax liabilities)
Unrealized holding gains (losses)
on available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets

Fiscal year ended March 31, 2008
(As of March 31, 2008)
1. Main components of deferred tax assets and deferred tax
liabilities(Deferred tax assets)
Million Yen
Unrecognized accrued enterprise
221
taxes
Excess reserve for retirement73
benefits
Excess allowance for doubtful
573
accounts
Excess reserve for accrued bonuses
59
Unrecognized reserve for losses on
337
guarantee liability
Unrecognized valuation loss on120
investment securities
Unrecognized valuation loss on
261
merchandising rights advances
Unrecognized valuation loss on
1,254
equity investments in subsidiaries
and affiliates
Impairment loss
68
Unrecognized valuation loss on
119merchandise
Others253
Total deferred tax assets
3,342

216
215
170
1,402
(147)
(147)
1,254

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)
Per capita levy of local resident
income tax
Entertainment expenses notdeductible for tax purposes
Non-taxable dividend income
Others
Effective income tax rate after
application of deferred tax
accounting

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

40.7 %
0.4 %4.5 %(0.3) %
0.1 %
45.4 %- 74 -

40.7 %
0.5 %1.8 %(0.2) %
0.4 %
43.2 %

Per-Share Data
Fiscal year ended March 31, 2007

Fiscal year ended March 31, 2008

(April 1, 2006–March 31, 2007)(April 1, 2007–March 31, 2008)

Net assets per share
Net income per share¥121,042.25¥13,755.49

Net assets per share
Net income per share

Since no dilutive latent shares exist, diluted net income pershare is not stated.

¥127,861.20¥11,970.60

Since no dilutive latent shares exist, diluted net income pershare is not stated.

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

Net income (Million yen)Amount not allocable to common shares
Net income allocable to common shares (Million yen)
Average number of shares of common stock outstanding(shares)
Outline of latent shares not reflected in the calculation ofdiluted net income per share since they have no dilutive effectFiscal year ended March 31,
2007(April 1, 2006–March 31,
2007)
4,773
―
4,773

Fiscal year ended March 31,
2008(April 1, 2007–March 31,
2008)
4,153
―
4,153

347,000

347,000

2 types of stock acquisitionrights:(Number of the first stockacquisition rights: 564
Number of the second stockacquisition rights: 1,360)

2 types of stock acquisitionrights:(Number of the first stockacquisition rights: 496
Number of the second stockacquisition rights: 750)

Significant Subsequent Events
Fiscal year ended March 31, 2007
(April 1, 2006–March 31, 2007)

Fiscal year ended March 31, 2008
(April 1, 2007–March 31, 2008)

Others(1) Personnel change in officers
1. Change in Representatives of the Company
None applicable
2. Change in other officers (effective June 29, 2008)
Candidates for newly appointed directors
Director: Yoshiteru Yamaguchi (Currently Executive Officer, Division Manager, Group Strategy Division)
Director: Masakazu Kurihara (Currently Executive Officer, Division Manager, Product Division)
Director: Akira Fujii (Currently Executive Officer, Division Manager, Sales Division)
Director: Hideo Ito (Currently Executive Officer, Division Manager, Corporate Division)- 75 -