The Investors Meeting for a Results
Briefing of the FY 2007

May 24, 2007
KAGA ELECTRONICS CO., LTD. (TSE 1st section, 8154)
2-2-9 Hongo, Bunkyo-ku, Tokyo 113-8503 Tel: (03) 4455-3131 Fax: (03) 3815-6807

http://www.taxan.co.jp

1 Financial Highlights of Fiscal Year Ended March 2007２2
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■ Financial Highlights of Fiscal Year Ended March 2007
Consolidated Statements of income (Fiscal 2006 and 2007)（million yen）

Net sales
Cost of sales

Fiscal 2006

Fiscal 2007

257,764

269,014100.0%

11,25088.5%
平成18年3月期 228,218
平成19年3月期（予）29,54611.5%

236,214

87.8%

7,996

32,799

12.2%

3,253

21,336

8.3%

25,884

9.6%

4,548

8,209

3.2%

6,915

2.6%

-1,294

806

0.3%

853

0.3%

47

377

0.2%

363

0.1%

-14

8,638

3.4%

7,404

2.8%

-1,234Gross Profit
Selling,general andadministrative expenses
Operating income
Non-operating income
Non-operating expenses

100.0%

ChangeOrdinary income
Extraordinary income
Income before income taxes
and minority interests
Income,Inhabitants andenterprise taxes
Income tax adjustment

2,792

1.2%

5

0.0%

-2,787

11,429

4.4%

7,410

2.8%

-4,019

4,071

1.6%

3,270

1.2%

-801

29

0.01%

-143

-0.1%

-172

Minority interest
income/loss of
consolidated subsidiaries

57

0.02%

-60

0.0%

-117

7,272

2.8%

4,343

1.6%

-2,929Net income

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Consolidated Sales by Business Category (Fiscal 2006 and 2007)(million yen)

Information equipment

EMS
Semiconductors
General electronic
components

Others
Total

Fiscal 2006

Fiscal 2007

55,336
86,64669,86658,737
84,29060,84924,393

21.5%
33.6%
27.1%
9.5%

28,754

Change21.8% 3,401
31.3% -2,356
22.6% -9,017
10.7% 4,361(million yen)

250,000

8.3%

36,382

13.5% 14,861

257,764100.0% 269,014

100.0% 11,250

257,764
21,521
24,393

269,014
36,38228,754General electronic
components
Semiconductors

69,866

60,849EMS

200,000
150,000
Information equipment

100,000

21,521Others300,000

86,646

84,29055,33658,737

Fiscal 2006

Fiscal 2007

50,0000

Major changes■Others: Sales up ¥14,861 million (+69.1%)
KAGA HITECH made its first full-year contribution in FY07, posting an increase in camera film. The result
was an increase of ¥14,861 million in sales.
■Semiconductors: Sales down ¥9,017 million (-12.9%)
KAGA succeeded in signing new sales agency agreements with overseas semiconductor manufacturers, butthere was a big drop in sales of sound ICs to large cell phone manufacturers and of semiconductors used inamusement equipment. The result was a decline of ¥9,017 million in sales.

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2006 KAGA ELECTRONICS CO.,LTD
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・Selling, General and Administrative Expenses (Fiscal 2006 and 2007)
Changes in SG&A expenses(million yen)

Fiscal 2006
AmountPacking andfreight
R&D
OthersFiscal 2007

Pct.

AmountChangePct.

25,884

2,057

9.6%

2,786

10.8%

729

Depreciation
Rent
Personnel
Others

339
1,181
3,577
358
1,668
10,089
5,644

1.6%
5.5%
16.8%
1.7%
7.8%
47.3%
26.5%

364
1,711
4,861
367
1,999
11,731
6,926

1.4%
6.6%
18.8%
1.4%
7.7%
45.3%
26.8%

25
530
1,284
9
331
1,642
1,282

Total administrative
expenses

17,75983.2%

21,023

81.2%

3,264

Total SG&A
expenses

21,336100.0%

25,884100.0%

4,548

Total selling expenses

30,00025,00021,336

6,926

20,0005,644（million yen）
Other administrative
Personnel
Rent
Depreciation
Other selling
R&D
Packing and freight

15,00011,731
10,0005,000

10,089

1,668
358
1,181
339
2,057

1,999
367
1,711
364
2,786

0
Fiscal 2006

Fiscal 2007

Major changes■Selling expenses: Packing and freight expenses, sales promotion expenses and other items increased
because of the consolidation of KAGA HITECH for the entire fiscal year. The result was an increase of¥1,284 million in selling expenses.
■Administrative expenses:
Growth in office supply expenses due to KAGA HITECH and in rent due to KAGA SPORTS (formerly FYT)
Growth in personnel expenses due to YoY increase of 332 in number of employees (from 4,469 to 4,801)
The result was an increase of ¥3,264 million in administrative expenses.

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■ Financial Highlights of Fiscal Year Ended March 2007
Consolidated Balance sheets (Fiscal 2006 and 2007)
Fiscal06（ASSETS）
Current assets
Cash and cash equivalents

Notes and accounts
Inventories
OthersFixed assets
Property,plant and equipment

Intagible assets
Investment and other assets

Total assets

Fiscal07

119,441
125,812102,008
107,853
平成18年3月期
20,143
14,56861,33567,464
14,926
19,7275,603
6,094
17,432
17,959
5,176
5,495
1,307
1,567
10,948
10,896

119,441

125,812

Fiscal06

Change6,371(LIABILITIES)
5,845
Current liabilities
平成19年3月期（予）-5,575
Notes and accounts payable
6,129
Short-term bank loans
4,801
Others491
Long-term liabilities
527
Long-term bank loans
319
Oters
260
（NET ASSETS）-52

Owners' equity
Paid-in capital
Capital surplus
Earned surplus
Treasury stock
Valuation and translation
Minority interests

6,371

Total liabilities and net assets（million yen）

Fiscal07

Change69,271
61,34347,863
5,612
7,865
7,928
4,687
3,241
49,841

72,76367,05954,217
7,045
5,797
5,704
2,378
3,326
53,049

3,492
5,716
6,354
1,433
-2,068-2,224-2,30985
3,208

12,133
13,912
22,430
-74
1,439
328
119,441

12,133
13,912
25,161
-80
1,787
134
125,812

0
0
2,731
-6
348
-194
6,371
６6

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Cash Flows (Fiscal 2006 and 2007)(million yen)

Fiscal 2006
Operating activities
Investing activities

平成18年3月期

Financing activities
Effect of foreign exchange
Net change in cash and cash equivalents

Cash and cash equivalents at
beginning of year
Cash and cash equivalents at end ofyear

Fiscal 2007

Change17,332-1,120-18,452-5,976-2,141

3,835-2,152-2,586

-434

507

274

-233

9,711

-5,563-15,274

10,42020,131

9,711

20,131

14,558-5,573

平成19年3月期（予）Major changes■Operating activities: Net cash used was ¥1,120 million because cash provided by earnings was exceeded by cashused for increases in accounts receivable and inventories.
■Investing activities: Net cash used was ¥2,141 million because of payments for the purchase of property, plantand equipment and investment securities.
■Financing activities: Net cash used was ¥2,586 million because of loan repayments and the payment of cash
dividends.

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Major Performance Indicators (Fiscal 2006 and 2007)

Fiscal 2006
Earnings per share

Fiscal 2007

250.18yen

151.55yen

300

35

250

30
25

200

Dividend per share

平成18年3月期
40+10yen

Dividend payout ratio

20.0%

Return on equity
Net income

16.1%

平成19年3月期（予）
45yen

20

150

29.7%

15

100

10

8.5%

50

5

7,272million yen 4,343million yen

00
Fiscal 2006

EPS (yen)
Dividend (yen)Payout ratio (%)
ROE (%)

Fiscal 2007

Major changes■EPS: Down because of ¥2,929 million decline in net income resulting from higher SG&A expenses and declines in
non-operating income and extraordinary gains.
■Dividend: Paid ¥20 interim dividend and ¥25 year-end dividend(¥5 higher than for FY06 to attract long-term shareholders and mark the company’s 40th anniversary).
■Payout ratio: Up 9.7 pct. points because of decline in net income.
■ROE: Down 7.6 pct. points because of increase in net assets and decrease in EPS.

８8
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■ Forecast for the Fiscal Year Ending March 2008
Statements of income FY07 Performance and FY08 (Consolidated)（million yen）

Fiscal07
Net sales

平成18年3月期

Fiscal 2008 (est.)

平成19年3月期（予）Change269,014100.0%

290,000

100.0%

20,986236,21487.8%

254,350

87.7%

18,136Gross profit
Selling,general andadministrative expenses
Operating income

32,79912.2%

35,650

12.3%

2,851

25,8849.6%

27,800

9.6%

1,916

6,915

2.6%

7,850

2.7%

935

Non-operating income

853

0.3%

250

0.1%

-603

7,404

2.8%

8,100

2.8%

696

5

0.0%

-150

-0.1%

-155

Cost of sales

Ordinary income
Extraordinary income end losses

Income before income taxes
and minority interest
Income tax

7,410

2.8%

7,950

2.7%

540

3,067

1.1%

3,250

1.1%

183

Net income

4,343

1.6%

4,700

1.6%

357

９9
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■ Consolidated Sales Forecast by Business Category (Fiscal 2007 and 2008)
3,500(million yen)

290,000

3,000

Fiscal 2007

Fiscal 2008 (est.) Change

269,014％2,500

58,737
84,29060,84921.8% 63,000
31.3% 87,000
22.6% 69,000

21.7% 4,263
30.0% 2,710
23.8% 8,151

7.3%
3.2%
13.4%

General electronic
components

28,75410.7%

31,50010.9% 2,746

9.5%

OthersTotal

36,382
269,014

13.5% 39,500
100.0% 290,000

13.6% 3,118
100.0% 20,986

8.6%
7.8%

Information equipment

EMS
Semiconductors

395

363
315
287

2,000
608

690

1,500

1,000

(million yen)
OthersGeneral electronic
components
Semiconductors

EMS

Information equipment
842

870

587

630

Fiscal 2007

Fiscal 2008 (est.)

500

0Major changes■Information equipment: Forecasting ¥4,263 million (+7.2%) sales increase because of expanded distribution channels due to
KAGA HITECH and the addition of new products.
■EMS: Forecasting ¥2,710 million (+3.3%) sales increase mainly because of projected growth in overseas EMS applications.
■Semiconductors: Forecasting ¥8,151 million (+13.5%) sales increase mainly because of projected growth in sales of digital TV semiconductors.
■General electronic components: Forecasting ¥8,151 million (+13.5%) sales increase because of projected growth in sales to
OTSUKA ELECTRIC and higher sales of newly added products.
■Others: Forecasting ¥3,118 million (+8.6%) sales increase because of projected growth in sales of Kodak products and higher sales of
newly added products.
10
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・Selling, General and Administrative Expense Forecast (Fiscal 2007 and 2008)(million yen)

Changes in SG&A expenses
Fiscal 2007
AmountPacking andfreight
R&D
OthersTotal selling
expenses
Depreciation
Rent
Personnel
OthersFiscal 2008 (est.)

Pct.

Amount30,000Change27,80025,884Pct.
25,000

2,786

10.8%

3,174

11.4%

388

364
1,711

1.4%
6.6%

785
2,212

2.8%
8.0%

421
501

4,861

18.8%

6,171

22.2%

1,310

367
1,999
11,731
6,926

1.4%
7.7%
45.3%
26.8%

333
2,209
12,392
6,695

1.2%
7.9%
44.6%
24.1%

-34
210
661
-231

6,695
6,926

20,00015,000Total administrative
expenses

21,023

81.2%

21,62977.8%

606

Total SG&A
expenses

25,884100.0%

27,800100.0%

1,916（million yen）
Other administrative
Personnel
Rent
Depreciation
Other selling
R&D
Packing and freight

12,392
11,731

10,000

5,000

2,209
333
2,212

1,999
367
1,711
364

785

2,786

3,174

Fiscal 2007

Fiscal 2008 (est.)

0

Major changes■Selling expenses: Forecasting ¥1,310 million increase mainly because of projected growth in packing
and freight expenses and sales promotion expenses at KAGA HITECH.
■Administrative expenses: Forecasting ¥606 million increase because of the first contributions to
expenses in FY08 of newly established group companies.

11
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２

An Introduction to the KAGA ELECTRONICS Group12
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■ Profile of the KAGA ELECTRONICS Group■Established

September 12, 1968

■Paid-in capital¥12.1 billion (March 31, 2007)■CEO

Isao Tsukamoto, President■Shares listed

Tokyo Stock Exchange, First Section (8154)■Consolidated results

Year ended March 2007:
Net sales: ¥269.0 billion Ordinary income: ¥7.4 billion
Year ending March 2008 (forecast)
Net sales: ¥290.0 billion Ordinary income: ¥8.1 billion■Group companies(May 16, 2007)
52 (21 in Japan, 31 overseas)■Group workforce(April 1, 2007)
4,914 (parent company, 561/group, 4,353)■Group activities

KAGA ELECTRONICS Group Head
Office(Ochanomizu, Tokyo)

Sales of electronic components and semiconductors
EDMS (outsourced manufacture of electronic devices)
sales of information equipment; design and development ofsemiconductors and electronic substrates;
production of computer graphics; others

Left：CEO Isao Tsukamoto
Right：President&COO
Tomohisa Tsukamoto13
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■ Company Profile
An independent electronics general trading company that meets every needfrom the customers’ perspective
Demand forelectronic
components

Demand for
assembly
services

Demand for
product designs
and development

Demand for
selling
product

Using the KAGA ELECTRONICS Group’s comprehensive
strengths to assist customers worldwide

３Ｇ● GENERAL● GLOBAL● GROUP（General merchandise）（Global coverage ）（Group resources ）14１４© 20062007 KAGA ELECTRONICS CO.,LTD
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■ Company Profile
The one-stop source of services for electronics
A complete lineup of products and services

A complete lineup●General-purpose memories●System LSIs
●Original ICs
Semiconductor●ASICsbusiness

Electronic
components
business●General electronic components●LCD panels Others

EDMS
business

One-stop source of services
Manufacturing Sales
Parts
Planning
Designs
Ideas Developmentprocurement●PCs●Digital cameras●Digital imaging devices

Informationequipment
business

IT and new
businesses●Main boards for electric
devices●LCD units●Power supplies

Problemsolving●IP telephone systems●LAN systems●Voice recognition
systems
15
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■ Company Profile
2008年3月期
The KAGA ELECTRONICS Group has grown steadily along with progress FY08 sales
forecast is
売上高¥290
billion２，９００億円(計画）in the electronics industry.
(billion（単位：億円）yen)
KAGA (DALIAN)/ KAGA IMPEX established
加賀大連設立/加賀インペックス設立
KGF established / KASHIMURAKGF設立／樫村子会社化
becomes a subsidiary
加賀スポーツT設立
FYT established

インベーダゲーム 登場︵
１９７８年︶

自社プランドパソコン用モニター発売

ＣＢトランシーバブーム到来︵
１９７３年︶

Debut of space invader game in Japan(1978)

KAGA (TAIWAN) /KAGA
加賀台湾／加賀ソルネット設立
SOLNET established

KAGA DEVICES (H.K.) established/
加賀デバイス香港設立／
DIGITAL MEDIA LAB
デジタルメディアラボ子会社化
becomes a subsidiary
KAGA (THAILAND) established
加賀タイ設立加賀技術開発シンセン設立
KAGA (SHENZHEN) TECHNOLOGY DEVELOPMENT
established加賀シンガポール／加賀韓国設立
加賀上海設立KAGA (SHANGHAI) established
KAGA (SINGAPORE) /KAGA (KOREA) established

Introduced TAXAN-brand PC monitor(1978)

KAGA (H.K.) established,becameApple Computer sales agent
加賀香港設立・アップル販売代理店

KAGA DEVICES established/
加賀デバイス設立・加賀コンポ子会社化
KAGA COMPONENTS becomes a subsidiary

AD DEVICES
ＡＤデバイス子会社化・
becomesa subsidiary/
デジタルゲイン設立
DIGITAL GAIN
established
Listed on
東証第一部上場TSE
1st section

Listed on
東証第二部上場TSE 2nd section
TAXAN (EUROPE)
ＴＡＸＡＮ
established
ＵＫ設立
Start of CB transceiver boom in Japan(1973))
TAXAN USA
ＴＡＸＡＮ
established
ＵＳＡ設立
KAGA
加賀電子株式会社設立
ELECTRONICS established

08 (Plan)16
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■ Company Profile
Sales Composition by Product Category（FY2007）
Information equipment
business

IT and new businesses

Electronic components
business

22％

13％
11％
Consolidated sales
in FY07

269,014million yen

EDMS business

31％

23％

Semiconductor business17
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■ Company Profile
Group companies in Japan (21)Major KAGA ELECTRONICS Group companies in Japan

A highly skilled semiconductor trading company
加賀電子グループの技術力を最大限に三菱電機やルネサスの特約店で、Taking full advantage of the group’s technologicalDistribution of equipment and support
backed by a sales agent agreement with
発揮して、新規ビジネスの開拓を行う。
高度な技術力を持つ半導体商社。
expertise to launch new businesses
development of new equipments
Mitsubishi Electric and Renesas

東芝のシステムインテグレーターとして、
Performs EDMS operations for the KAGA ELECTRONICS Group.
Support extending from semiconductor sales to 加賀電子グループのEDMS部門を集約。
企画・開発・製造・販売を国内・海外で推進。
半導体の販売からEDMSまでをサポート。
Planning, development, manufacturing and sales activities
EDMS as a Toshiba system integrator
in Japan and overseas.

高精度な映像と高いデザイン力で、Uses expertise in high-resolution images and映画やTVゲームのCGを制作。
designs to produce computer graphics f

デジタル映像機器のトータルコーディネーター。
Total coordinator for digital imaging devices.
日本におけるコダック製品の総販売代理店。
General sales agent in Japan for Kodak products.

OFFICEPLANT

or movies and video games

加賀電子グループの国内製造拠点。
Manufacturing bases in Japan.
情報機器やアミューズメント機器などの製造。
Produces information equipment,

セキュリティーに優れた
Able to build systems ranging from sophisticated LANs
最先端社内LANから監視映像システム構築まで。
with powerful security to imaging systems for surveillance.

amusement products and other products.

CGやWebなどのデジタル技術を応用した
Sales promotion and content businesses that
販売促進とコンテンツビジネス。
use computer graphics,

ゴルフなどのスポーツ業界のデジタル化・New businesses that use digital technology
IT化にそった新しいビジネスを展開。
and IT for golf and other sports

Web and other digital technologies
Eコマースを活用した食品やコネクター、機構部品、チューブ、ケーブルなどのInternet shopping for food products,
健康補助食品などのオンラインショッピング。
nutritional supplements and other merchandise 電子機器用部品および熱対策製品の販売。
18
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■ Company Profile
Overseas group companies (21 in 12 countries)
KAGA (USA）KAGA (H.K.)

Gathers information on the latest advances inelectronics technology and products in Silicon Valley
and other regions and conducts marketing activities.

The nucleus of the KAGA ELECTRONICS Group’s overseas EMS
business. Offers a main board EMS business for Japanese digital device
manufacturers at its own factory (Kaga (Shenzhen) Electronics) and fivepartner factories.

KAGA DEVICES(H.K.)
Serves mainly Japanese and Chinese TV manufacturers
in China by selling semiconductors backed bytechnology development activities.

KAGA (SHANGHAI)
An EMS base that serves Japanese digital device manufacturers locatedmainly in the Shanghai area. The number of customers is growing. Major
customers include manufacturers of electronic musical instruments, homehealthcare devices, and equipment for homes.

KAGA (THAILAND)。

KAGA (KOREA)

Exports electronic components from Korea and sells
components to companies in Korea.

Offers a main board EMS business for Japanese manufacturers
located in Thailand that produce air conditioners and digital
devices at its own factory (Ayutthaya Factory) and partner factories.
This company has also started to serve automotive device manufacturers .

KAGA (EUROPE) Sales offices in the U.K. and Czech Republic.
KAGA (TAIWAN)
Export/import of electronic components and electronic
devices. Identification of new products and information
gathering in Taiwan.

KAGA (SINGAPORE)
The nucleus of electronic component trading
activities in Southeast Asia. Covers Indonesia,
Malaysia, India and other countries in the region.

KAGA (DALIAN)
Sells semiconductors and electronic
components to Japanese and Chinesecompanies in northern China. Established in 2006.

Sells electronic components and semiconductors to the European
factories of Japanese manufacturers of digital devices and air
conditioners. Recently started an EMS business by using partner factories.

KAGA (SHENZHEN) Electronics Technology Development
Provides extensive technological support to semiconductor companies
in China. Design and development support for semiconductor
companies in Japan. Local design and development support for the
EMS business.

KAGA IMPEXSales of electronic components and devices in Russia. Engaged
in the electronic components and semiconductor business andthe EMS business. Established in 2006.

HANZAWA（H.K.)
The electronics educational equipment maker.Contribute to EMS for toy
makers.

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19
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2.1 ページタイトル
マスタ
タイトルの書式設定

３ The Strengths of the KAGA ELECTRONICS Group (20
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■ The Strengths of the KAGA ELECTRONICS GroupStrength as a group with no corporate affiliations
Able to establish diverse business relationships with no restrictions
Suppliers: 2,000 companies
Sales channels: 4,000 companies (7,000 accounts)
Information, communication, AV, office,amusement and other products
Overseas operations

Powerful technological capabilities

A global networkwith bases in 13 countries

400 engineers
at the KAGA ELECTRONICS Group5,000 engineers at alliance partners

Japan, U.S., U.K., Germany, Czech
Republic, Netherlands, Russia, China,
Korea, Taiwan, Thailand, Singapore,
Malaysia21
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■ The Strengths of the KAGA ELECTRONICS Group2,000 suppliers in Japan and other countries
Products sold through 4,000 companies (7,000 accounts)
Suppliers (about 2,000 companies)

Sales channels (about 4,000 companies,
about 7,000 accounts)

Customers are active in many growing market sectors, including
information, communication, AV, office and amusement products
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■ Global strategy of the KAGA ELECTRONICS GroupThe KAGA ELECTRONICS Group operates on a global scale.
(42 companies in 12 countries)
KAGA IMPEX(RUSSIA)

KAGA (DALIAN),

KAGA (SHENZHEN) ELECTRONICS TECHNOLOGY DEVELOPMENTKAGA (SHANGHAI),ELATEC VERTRIEBS

KAGA (SHENZHEN),GUANGZHOU KEIDENKI,DONGGUAN POWERTEK,
KAGA(SHENZHEN)TRADING

KAGA(KOREA)

KAGA(EUROPE)
KAGA(EUROPE) Czech sales office

KAGA (DALIAN) established in 2006
KAGA ELECTRONICS (Japan)

KAGA (H.K.)
KAGA DEVICES (H.K.)
KAGA COMPONENTS (Hong Kong)
KAGA DEVICE( Hong Kong office)
HANZAWA(H.K.)

KAGA USA

KAGA(TAIWAN)

KAGA(THAILAND)KAGA COMPONENTS MALAYSIA

KAGA(SINGAPORE)

A global operation that matches the needs of each customer.
Covers China, Russia, Czech Republic, U.S. and other countries. Makes possible procurement,
manufacturing and sales on a global scale

23© 20062007 KAGA ELECTRONICS CO.,LTD
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４ Topics for First for the Year Ended March 200724
２４
© 20062007 KAGA ELECTRONICS CO.,LTD
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■ Information Equipment (Fiscal 2007)
Report on integration with distribution department and status of solutions department
Established KAGA HITECH in October 2006
Goals
・Make the photo business of the former KASHIMURA profitable
・Reduce product distribution expenses
・Eliminate overlapping sales channels
・Liquidated subsidiaries of the former KASHIMURA

Actions・Streamlined operations by liquidating three subsidiaries ofthe former KASHIMURA
・Considered adopting a distribution system to cut distribution expenses.
・Moved KAGA HITECH head office to KAGA ELECTRONICS head office= made employees more aware of the importance of cutting costs
・Used the large product lineups of KAGA ELECTRONICS, the former KASHIMURA
and Kodak along with the use of many sales channels to increase sales

Achieved low-cost operations＋

and leveraged a diverse productlineup and many sales channels to

Increase sales

Increased Emphasis on Value-added
Products■System Solutions Department
・Expanded the lineup of products involving communications equipment
・Increased sales of digital video editing equipment to broadcasters
・Operation of e-commerce sites and provision of products for these sites→ Taking on the challenge of entering new business fields■KAGA SOLUTION NETWORK CO., LTD.
・Builds networks for corporate clients・Started rental server business

Aims to be a solution provider for customers
by offering value-added, high-tech products

Diverse products/sales channels + Efficient operations= Sales growth and highly profitable businesses!
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■ Electronic Components (Fiscal 2007)
Strategy to strengthen the electronic components business in Japan and overseas
Acquired OTSUKA ELECTRIC CO., LTD.

Equity Investment in ELATEC (Germany)→Reinforced electronic component trading
company capabilities→Reinforced trading company capabilities
in Europe
ELATEC VERTRIEBS GMBHOTSUKA ELECTRIC
Purchased all shares of OTSUKA ELECTRIC in Dec. 2006
・OTSUKA ELECTRIC is an electronic components
trading company that was established in 1981.
・The company sells wire harnesses, connectors andother components used in electronic devices.
・The company is conducting sales activities devoted
exclusively to a thermal radiation material that uses
a new technology.

Aiming to raise sales to ¥5 billion by
pursuing synergies with the KAGAELECTRONICS sales network.

Acquired 22% equity stake in Elatec in October 2006,
making this company an equity-method affiliate.
・Elatec is an electronic components trading company
based in Munich.
・Operations include sales of components for electronic
devices, an RFID business and other activities.
With sales channels covering 8 European countries andEastern Europe, Elatec gives the KAGA ELECTRONICS
Group a powerful base of operations in Europe.
■Major Elatec affiliates
ELATEC BULGARIA OOD（Bulgaria ）ELATEC S.R.O.（Czech Republic ）ELATEC KFT（Hungary ）ELATEC SPOLKA ZO.O（Poland ）ELATEC D.O.O.（Slovenia ）ELATEC VERTRIEBS GMBH(Switzerland ）26
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■ Electronics Manufacturing Services (EMS)EMS Operations in Japan and Overseas■ Operations in JapanEMS for amusement equipment manufacturers
・Production of LCD units for amusement equipment
・Products for amusement halls (deodorizing units placed
between game machines, LCD POP materials, etc.)
・Game unit enclosures→Developing associated businesses,
mainly operations related toamusement equipment.

■ Overseas Operations
Target more applications and regions
・In addition to the assembly of HVAC and office equipment,
have extended EMS to new applications like ATMs.
・Expanding into more regions→China, Thailand, Czech Republic, Malaysia→ Vietnam (now under consideration)

Equity Investment in Hanzawa (H.K.)〜The Hanzawa Group 〜Core member is Hanzawa (H.K.)・A manufacturer that plans, develops and manufactures
educational electronic toys and games for children andother products.
・Hanzawa has used the specialized toy manufacturing skillsof partner factories in China (Shenzhen) to serve as an
OEM supplier of major Japanese toy manufacturers formany years.
☆A diverse range of customers
Hanzawa has sales channels in Brazil and othercountries with emerging economies.

Reinforce the amusement equipment
component business and EMS business→ Aim to raise sales to ¥5 billion.
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■ Semiconductors (Fiscal 2007)
Used alliances with overseas vendors to cover new market sectors and gain
access to new technologies
New sales agency agreements
・Signed sales agent agreement with AMD
・Signed sales agent agreement with
Fairchild Semiconductor

Expanded market coverage for primary ICs
・Alliances with many major overseas IC manufacturers→Use the diverse sales network of
the KAGA ELECTRONICS Group→Target business opportunities with customers
worldwide

Access to products using
new technologies
・Signed sales agent agreement with Integrated
・Increased sales of XM products

Started work on next-generation products
・One-seg tuners
・Satellite radio ICs (sold in U.S.)
・Added products for new applications, suchas development projects for Chinese TV28
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■ New Businesses of the KAGA ELECTRONICS Group (Fiscal 2007)
Starting new businesses allows integrating new customers, sales channels andtechnologies with the KAGA ELECTRONICS Group
Taking on the challenge of starting new businesses that target the convergence of broadcasting
and communications, the content business, e-commerce shopping and other opportunities
Animated program forNHK educational channel

エンジン」
Participate 「CSCin productionof programs
and sale of merchandise as the core
通信モジュールの企画・開発。
memberof the production committee

e-commerce shopping site
“tvk shop”

Creating new businesses
Content business, e-commerce shopping,cell phone site operations …

「CSC エンジン」
Jointly developed with TV Kanagawa
Merchandise development and site
通信モジュールの企画・開発。
operations

KAGA ELECTRONICS Group
Launched “Ashi-Kirei-Kirei”
compact dog paw washer“Shopping KODAK” online store
New customers and sales channels
組み込み用OS

組み込み用OS「axLinux」
An innovative product that represents
the first step toward starting a pet
キャプチャーボード等の開発。
products business

Use the strengths of the entire KAGAELECTRONICS Group to generate moresynergies through the development,
manufacture and sale of new products.

Operationof a shopping「axLinux」
site for Kodak products
キャプチャーボード等の開発。

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５ Greeting from President,Tomohisa Tsukamoto30
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■Greetings from the new President
New President Tomohisa Tsukamoto〔Biography〕
October,1949 Born in Kanazawa City,Ishikawa Prefecture
March, 1974 Graduated Kanazawa University,faculty of Engineering,
Department Industrial chemistry
April,1974

Entered MITANI SANGYO CO., LTD.

January,1981 Entered KAGA ELECTRONICS CO., LTD.
April,1990

General Manager for Sales Promotion Department

June,1991

Director

May,2005

Managing Director

April,2002

Senior Managing Director＜Company's basic principles＞

June,2004

Director Vice President■

April,2005

Representative Director Vice President

May,2005

Representative Director Vice President■

Improve more customer
satisfaction
Strengthen relations amonggroup companies

Supervisor for Electronics Sales Headquarters,Specific Industry
Sales Headquarters,Sales Promotion Division,Engineering Division
April,2007

President & COO
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