April 28, 2011

Summary of Consolidated Financial Results
For the Year Ended March 2011 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:
Representative
Contact Person

KAGA ELECTRONICS CO., LTD.
8154
URL: http://www.taxan.co.jp/
Tokyo Stock Exchange, First Section
Title: President & COO
Name: Tomohisa Tsukamoto
Title: Senior Managing Director, FinanceName: Waichiro Shimoyama& Administration Headquarters
Phone:+81-(0)3-4455-3111
Date of regular general meeting of shareholders:June 29, 2011 (tentative)
Date of commencement of dividend payment:
June 30, 2011 (tentative)
Date of filing of securities report:
June 29, 2011 (tentative)
Supplementary explanatory documents:
Yes
Earnings presentation:
Yes (For institutional investors)(Yen in millions, rounded down)
1. Financial results for the current fiscal year (April 1, 2010 – March 31, 2011)(1) Result of operations (Consolidated)(Percentage figures represent year on year changes)
Net sales
Fiscal year ended March 2011

Million yen
237,951

Fiscal year ended March 2010

239,391

Operating income

Ordinary income

Net income%
Million yen
(0.6)
3,563

%
Million yen
125.2
3,738

%
Million yen
192.0
1,854

(12.5)(29.6)(42.0)

1,582

1,280

%
-

(318)

-

Note: Comprehensive income: FY ended March 31, 2011: 908 million yen (-%), FY ended March 31, 2010: -139 million yen (-%)
Net income per share

Fiscal year ended March 2011

Yen
67.20

Fiscal year ended March 2010(11.55)

Note: Equity in losses of affiliates

Net income per share
fully diluted
Yen

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

Return on
equity
%
4.0

-

(0.7)

0.7

FY ended March 2011: -million yen

3.3

1.5

1.1
FY ended March 2010: 110 million yen(2) Financial Position (Consolidated)
Total assets
As of March 31, 2011
As of March 31, 2010
Note: Shareholders’ equity(3)

Net assets

Equity ratio

Net assets per share

Million yen
Million yen%
Yen114,686
48,59840.9
1,700.68
113,962
48,55341.1
1,697.27
FY ended March 2011: 46,934 million yen
FY ended March 2010: 46,841 million yen

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

Net cash providedby (used in)investing activities

Net cash providedby (used in)financing activities

Cash and cash
equivalents at endof period

Fiscal year ended March 2011

Million yen
6,321

Million yen(6,369)Million yen
478

Million yen
11,796

Fiscal year ended March 2010

5,728

(3,040)(2,307)

11,797

2. Dividends
AnnualDividends/
Payout ratio
aggregate
net assets(Consolidated)
End of 1Q End of 2Q End of 3Q End of FY Full year
amount(Consolidated)
Yen
Yen
Yen
Yen
Yen Million yen
%
%
15.00
15.00
30.00
827
1.8
15.00
15.00
30.00
827
44.6
1.8
Dividend per share

Fiscal year ended March 2010
Fiscal year ended March 2011
Fiscal year ending March 2012
(est.)
Note: The estimated amount of dividend for FY2012 is not yet determined.

3. Forecast for the fiscal year ending March 2012 (Consolidated, April 1, 2011 - March 31, 2012)
Note: It is not possible to determine a reasonable forecast for consolidated results of operations at this time due to the impact of
the Great East Japan Earthquake of March 11, 2011. An announcement will be made when it becomes possible to determine
a forecast.
4. Others(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of consolidation):
None(2) Changes in accounting principles and procedures, presentation methods and other items in the preparation of theconsolidated financial statements(a) Changes due to revision of accounting standards: Yes(b) Changes other than in (a): None
(3) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury stock)
As of March 31, 2011: 28,702,118 As of March 31, 2010: 28,702,118(b) Treasury stock(c) Average number of shares outstanding during the year

As of March 31, 2011: 1,104,656
As of March 31, 2011: 27,597,906

As of March 31, 2010: 1,103,943
As of March 31, 2010: 27,596,924

Non-consolidated Financial Results (For reference)
1. Financial results for the current fiscal year (April 1, 2010 – March 31, 2011)(1) Result of operations (Non-consolidated)(Percentage figures represent year on year changes)
Net sales

Fiscal year ended March 2011
Fiscal year ended March 2010

million yen
95,19491,291%
4.3(27.7)Net income
per shareyen
74.96(27.55)

Fiscal year ended March 2011
Fiscal year ended March 2010

Operating income

Ordinary income

million yen
1,125
110

million yen
2,852
1,741

%
917.5
(96.3)%
63.8(60.2)Net income
million yen
2,068
(760)

%
-

Net income per share
fully dilutedyen-(2) Financial Position (Non-consolidated)
Total assets
As of March 31, 2011
As of March 31, 2010
Note: Shareholders’ equity
Fiscal year ended March 2011:
Fiscal year ended March 2010:

Net assets

Equity ratio

Net assets per share

million yen
71,850

million yen
33,924%47.2

yen1,229.26

70,87032,74446.2

1,186.49

33,924 million yen
32,744 million yen*Status of implementation of audit procedures
The rule mandating audit procedures (under the Financial Instruments and Exchange Act) does not apply to this Summary of
Financial Results.
The financial statements for the fiscal year were under audit procedures at the time this Summary of Financial Results was released.
*Cautionary statement regarding forecasts of operating results and special notes
1. Forward-looking statements in these materials are based on information available to management at the time this report was
prepared and assumptions that management believes are reasonable. Actual results may differ significantly from thesestatements for a number of reasons.
2. It is not possible to determine a reasonable forecast for dividends for the fiscal year ending March 2012 at this time due tothe impact of the Great East Japan Earthquake of March 11, 2011. An announcement will be made when it becomes possible
to determine a forecast.

Index for Supplementary Information
1.

Results of Operations....................................................................................................................................................................1
Overview on consolidated business performance..................................................................................................................1
Overview of financial condition............................................................................................................................................2
Fundamental policy for earnings allocations and dividends in the fiscal years 2011 and 2012.............................................22.
Corporate Group ...........................................................................................................................................................................3
3.
Management Policies ....................................................................................................................................................................5(1)
Fundamental management policy..........................................................................................................................................5(2)
Targeted performance indicators...........................................................................................................................................5(3)
Medium- and long-term management strategies ...................................................................................................................5(4)
Key issues .............................................................................................................................................................................5(5)
Other important items concerning management....................................................................................................................54.
Consolidated Financial Statements ...............................................................................................................................................6(1)
Balance sheet ........................................................................................................................................................................6(2)
Statements of income ............................................................................................................................................................8(3)
Statement of changes in consolidated shareholders’ equity ................................................................................................10(4)
Statements of cash flows .....................................................................................................................................................12(5)
Notes to ongoing concern assumptions ...............................................................................................................................14(6)
Basis of presenting the consolidated financial statements...................................................................................................14(7)
Changes in method of presentation .....................................................................................................................................14(8)
Supplementary information.................................................................................................................................................15(9)
Notes to consolidated financial statements..........................................................................................................................15(For consolidated statement of comprehensive income) .............................................................................................................15(Segment information) ................................................................................................................................................................16(Per-share information) ...............................................................................................................................................................19(Subsequent events) ....................................................................................................................................................................195.
Non-consolidated Financial Statements ......................................................................................................................................20(1)
Balance sheets .....................................................................................................................................................................20(2)
Statements of income ..........................................................................................................................................................23(3)
Statement of changes in shareholders’ equity...................................................................................................................24
(1)
(2)
(3)

1.

Results of Operations(1) Overview on consolidated business performance
In the fiscal year that ended on March 31, 2011, the global economy recovered at a moderate pace as economies in China andother emerging countries expanded and economies in the United States and other industrialized countries were supported byeconomic stimulus measures. However, many sources of uncertainty emerged in the fiscal year’s second half. Developments
included an increasingly pronounced upturn in the cost of natural resources, instability in the Middle East, financial problems at
EU member countries, the slowing pace of the U.S. economic recovery and measures taken by emerging countries to containinflation. As a result, the economic outlook is unclear.
In Japan, the economy staged a recovery that was backed by the benefits of the government’s economic stimulus programs,
increasing exports to emerging countries and a rebound in consumer spending. However, there are concerns about theeconomic outlook because of the high price of natural resources, the yen’s strength and other issues. Amid these concerns, theeconomy quickly weakened at the end of the fiscal year because of the severe impact of the Great East Japan Earthquake ofMarch 11.
In the electronics industry, sales of flat-panel TVs, air conditioners, refrigerators and other home appliances increased in Japanbecause of the eco-point program. In addition, markets expanded for digital products like Blu-ray recorders and information
devices like tablet computers and smartphones. Although higher sales of these products increased demand for the associatedsemiconductors and electronic components, demand for home appliances and consumer electronics declined in the second halfof the fiscal year because of the end of the eco-point program and other factors.
In this environment, the KAGA ELECTRONICS Group responded to the rapid changes in the electronics industry by taking
actions based on its management philosophy of “Everything we do, we do for our customers.” There were many management
initiatives for the purpose of enabling the entire group to operate with greater speed, agility and efficiency. Actions included
organizational changes to strengthen solidarity among group companies and measures to add new products and enlarge theproduct lineup.
Consolidated net sales decreased 0.6% to 237,951 million yen but operating income increased 125.2% to 3,563 million yen andordinary income increased 190.0% to 3,738 million yen. In addition, net income improved to 1,854 million yen from a net lossof 318 million yen in the previous fiscal year.
Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components and otherproducts, electronic manufacturing service (EMS)*, and other activities)
In Japan, there was an increase in sales of semiconductors, electronic components and other parts used in digital consumer
electronics, cell phones, PCs and amusement devices. Overseas, sales were higher in the climate control equipment sector
and the EMS business in the office equipment sector. The addition of NUMATA (H.K.) CO., LTD. to the KAGAELECTRONICS Group on October 1, 2010 also contributed to sales in this segment. The result was an 8.7% increase insegment sales to 171,576 million yen and a 224.2% increase in operating income to 2,901 million yen.
* Electronics manufacturing service is a term used for the provision of product development and manufacturing services onan outsourcing basis.
(b) Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, and otherproducts)
Group companies worked on increasing sales of existing products as well as new products like tablet PCs and SD memory
cards for portable devices. However, sales were lower because of a shift in distribution channels for some products sold atlarge electronics retailers and specialty stores. Segment sales were down 25.5% to 50,885 million yen and operating income
decreased 21.6% to 72 million yen.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
Performance in this segment reflected the addition of new products like image processing ICs for amusement devices, thedevelopment of software for cell phone games, and the addition of CYBERFRONT Corporation to the KAGAELECTRONICS Group on April 1, 2010. The result was a 110.3% increase in segment sales to 5,687 million yen and a
4.5% increase in operating income to 487 million yen.
(d) Others (Electronic device repairs and support, sales of sporting goods, and other activities)
Sales in the golf product sales business were lower despite measures to improve efficiency by reviewing and reorganizing
stores because of an overall downturn in the market for these products. Sales of amusement-related products were also
weak. The result was a 7.4% decrease in segment sales to 9,801 million yen and a 26.2% decrease in operating income to
230 million yen.

1

In the fiscal year ending in March 2012, the outlook for the global economy is unclear because of the weakening U.S. economy
and rising cost of natural resources along with sources of concern like uncertainty about the instability of the supply of oil andthe overheating of economies in emerging countries.
In Japan, the Great East Japan Earthquake and nuclear power plant crisis are having a severe economic impact. Although theeconomy will probably recover slowly as reconstruction progresses, it is very difficult to determine an economic outlook forJapan.
In the electronics industry, the operating environment will probably be difficult because of the expected decline in the output ofvarious products due to shortages of parts and materials caused by the Great East Japan Earthquake.
In this environment, it is not possible at this time to determine a reasonable forecast for results of operations and the dividend
for the fiscal year ending in March 2012. This is due to uncertainty regarding the impact of the Great East Japan Earthquake
and associated electric power shortage and other problems on economic activity and consumer spending as well as on theperformance of the KAGA ELECTRONICS Group. A cautious examination of the outlook will be conducted and anannouncement will be made promptly when a forecast has been determined.
(2) Overview of financial condition(a) Assets, liabilities and net assets
Assets increased 724 million yen from one year earlier to 114,686 million yen at the end of the fiscal year. The purchase ofproperty, plant and equipment was mainly responsible for this increase.
Liabilities increased 678 million yen to 66,087 million yen mainly because of an increase in loans.
Net assets increased 45 million yen to 48,598 million yen mainly because of an increase in retained earnings.
(b) Cash flows
There was a net decrease of 1 million yen in cash and cash equivalents to 11,796 million yen at the end of the fiscal year.
(Operating activities)
Net cash provided by operating activities was 6,321 million yen compared with 5,728 million yen one year earlier. A
decrease in notes and accounts receivable-trade was a major source of cash.
(Investing activities)
Net cash used in investing activities was 6,369 million yen compared with 3,040 million yen one year earlier. The primary
use of cash was payments for the purchase of property, plant and equipment.
(Financing activities)
Net cash provided by financing activities was 478 million yen. Financing activities used net cash of 2,307 million yen in
the previous fiscal year. Proceeds from long-term bank loans were the primary source of cash.
Cash flow index trends (for reference)
Fiscal year
ended
March 2007

Fiscal year
ended
March 2008

Fiscal year
ended
March 2009

Fiscal year
ended
March 2010

Fiscal year
ended
March 2011

Shareholders’ equity ratio
42.1%
40.0%
40.7%
41.1%
40.9%
Shareholders’ equity ratio at market value
48.2%
28.4%
18.8%
24.4%
23.6%
Debt repayment multiple
19.24 years
2.38 years
2.01 years
2.12 years
Interest coverage ratio
4.8
28.1
43.6
52.0
Shareholders’ equity ratio is shareholders’ equity divided by total assets.
Shareholders’ equity ratio at market value is market capitalization divided by total assets.
Debt repayment multiple is interest-bearing debt divided by operating cash flows.
Interest coverage ratio is operating cash flows divided by interest expenses.
Notes:
1. All figures are calculated based on consolidated financial data.
2. Market capitalization uses the number of shares issued less treasury stock.
3. Cash flows are operating cash flows.
4. Interest-bearing debt is the sum of all liabilities on the balance sheet on which the Group is obligated to pay interest.
5. No debt repayment multiple and interest coverage ratio are shown for the fiscal years ended March 2007 because
operating cash flows were negative in these fiscal years.
(3) Fundamental policy for earnings allocations and dividends in the fiscal years 2011 and 2012
The Company’s fundamental policy is to pay a steady and consistent dividend to shareholders that reflect consolidated
performance as well as the need to establish a more powerful financial position and base of operations from a long-term stable
perspective.
Based on performance in the fiscal year 2011, the Company plans to pay a year-end dividend of 15 yen per share. With theinterim dividend of 15 yen per share, this will result in an annual dividend of 30 yen per share.
There is no dividend forecast for the fiscal year ending on March 31, 2012 because of the uncertain outlook for the operating
environment. An announcement will be made promptly once a dividend forecast becomes possible due to future changes inoperating results and other factors.

2

2.

Corporate GroupThe KAGA ELECTRONICS group of companies (the Group) is made up of KAGA ELECTRONICS CO., LTD. (the Company), 50
consolidated subsidiaries (24 in Japan, 26 overseas) and 8 affiliates that are not accounted for using the equity method (1 in Japan, 7
overseas). These companies are engaged primarily in the following activities: the electronic components business, including thedevelopment, manufacture and sale of semiconductors and general electronic components and EMS (electronic manufacturingservices); and the information equipment business, including the sale of personal computers and peripherals, photography andimaging products, and original-brand products; and the software business, including the production of images using computer
graphics and the planning and development of amusement-related products.
In prior years, group companies were categorized based on whether their business activities belonged to the electronic components
business or the information equipment business because the group did not report business segment information. Beginning with thefiscal year that ended in March 2011, the following diagram presents the business activities of group companies based on businesssegments. A diagram showing business activities and Group companies is shown below.
<Japan>[Electronic components business]
Sales
KAGA DEVICES CO., LTD.
AD DEVICE CORPORATIONOTSUKA ELECTRIC CO., LTD.
ADM INC.
Manufacturing and sales
KAGA TECH CO., LTD.
KAGA COMPONENTS CO., LTD.

[Software business]
DIGITAL MEDIA LAB., INC.
ACCESS GAMES INC.
WORKBIT CORPORATIONSI ELECTRONICS LTD.
CyberFront Corporation
DS Press Corporation
Dreams.Co.,LTD.
Two other companies[Other business]
KAGA CREATE CO., LTD.
MICRO SOLUTION CO., LTD.
KAGA SPORTS CO., LTD.
KAGA AMUSEMENT CO., LTD

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

<Overseas>[Electronic components business]
Sales
KAGA (H.K.) ELECTRONICS LTD.
KAGA (SINGAPORE) ELECTRONICS PTE.LTD.
KAGA (KOREA) ELECTRONICS CO., LTD.
KAGA (TAIWAN) ELECTRONICS CO., LTD.
KAGA DEVICES (H.K.) LTD.
KAGA ELECTRONICS (USA) INC.
HANZAWA (HK) LTD.
KAGA (SHENZHEN) TRADING CO., LTD.
AD DEVICE (H.K.) LIMITEDKAGA (EUROPE) ELECTRONICS LTD.
NUMATA (H.K.) CO.,LTD.
NUMATA (SHENZHEN) TRADING CO., LTD.
Manufacturing and sales
KAGA ELECTRONICS (THAILAND) CO., LTD.
KAGA (SHANGHAI) ELECTRONICS CO., LTD.
KAGA (DALIAN) ELECTRONICS CO., LTD.
KAGA COMPONENTS (HONG KONG) LTD.
GUANGZHOU KEIDENKI LTD.
KAGA (SHENZHEN) ELECTRONICS CO.,LTD.
KAGA COMPONENTS (MALAYSIA) SDN. BHD.
DONGGUAN POWERTEK ELECTRONICS CO., LTD.
KAGA INSTRUMENTS SHANTOU CO., LTD.
KD TEC s.r.o.
KAGA TAXAN ELECTRONICS (SUZHOU) CO., LTD.
Design and development
HANZAWA (SZ) LTD.
[Software business]
CyberFront Korea Corporation# Explay Japan Co., Ltd.

# Elatec Vertriebs GmbH
# Six other companies

KAGA AGENCY CO., LTD.
(insurance agency)

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

3(1) The following consolidated subsidiaries became our group company during the fiscal year that ended in March 2011.

Name

Address

CapitalActivities

Voting rights
held

Businessrelationship

Leasing offacilities
andequipment--

Relationship with the Company
Joint Financial
directors support%

Persons

Millionyen

2-[Electronic components business]
NUMATA (H.K.) CO.,LTD.
(Note 2)

Hong Kong

4.68 mn
HKD

Sales of electronic
components andelectronic devices

100.0(Note 1)(100.0)

NUMATA(SHENZHEN)TRADING CO., LTD.
(Note 2)

Guangdong,
China527,000
RMB

Sales of electronic
components andelectronic device

100.0(Note 1)(100.0)

-

-

-

745

Supply ofcertainproducts
sold by theCompany-[Software business]
CyberFront Corporation Shinagawa-ku, 148.004(Note 3)Tokyo
mn YenDS Press Corporation(Note 3)

Shinagawa-ku,
20 mn Yen
Tokyo

Dreams.Co.,LTD.
(Note 3)

Ota-ku, Tokyo 50 mn Yen

CyberFront Korea
Corporation(Note 3)Seoul,South Korea

300 mnWon

Planning,
development,
production and sale ofsoftware

100.0

2

Design, production,
editing and publishingfor websites
Planning anddevelopment ofconsumer softwareand game arcade
software100.0(Note 1)(66.7)

-

-

-

100.0
(Note 1)(100.0)---Development and saleof game software andother activities

100.0(Note 1)(100.0)-

Leases apart ofbuilding(Note 4)-

Notes:
1. Figures in parentheses in the column showing voting rights of the subsidiary are the indirect percentages.
2. NUMATA (H.K.) CO., LTD. became an indirectly owned subsidiary following the purchase of its stock on October 1, 2010 byconsolidated subsidiary KAGA DEVICES CO., LTD. In addition, Numata Trading Electronics (Shenzhen) Co., Ltd. became an
indirectly owned subsidiary due to this purchase.
3. CYBERFRONT Corporation became an equity-method affiliate of KAGA ELECTRONICS in the fiscal year that ended in
March 2010. This company became a subsidiary of KAGA ELECTRONICS on April 1, 1010 for the purposes of strengthening
the group’s operations involving the development of games and expanding the consumer game software business. As a result,
HIC Co., Ltd., DS Press Corporation, Dreams Co., Ltd. and CyberFront Korea Corporation became indirectly owned subsidiaries.
However, HIC Co., Ltd. is no longer an affiliated company because of the June 7, 2010 sale of HIC stock that was owned by
CYBERFRONT Corporation.
4. CyberFront Korea Corporation leases real estate from KAGA (KOREA) ELECTRONICS CO., LTD.
5. The following companies that were consolidated subsidiaries in the fiscal year that ended in March 2010 have been liquidated:
Kaga Impex, LLC on April 1, 2010; KAGA (SHENZHEN) ELECTRONICS TECHNOLOGY DEVELOPMENT CO., LTD. on
April 9, 2010; KAGA IMPEX CO., LTD. on September 13, 2010; and KAGA (EUROPE) ELECTRONICS B.V. on September
17, 2010.

4

3.

Management Policies(1) Fundamental management policy
Based on the management philosophy of “Everything we do, we do for our customers,” the KAGA ELECTRONICS Group
is guided by the fundamental policy of “remaining a company that contributes to the happiness of all stakeholders, including
shareholders, customers and employees, and fulfills its responsibilities to society.” The Group is dedicated to growing
consistently by responding with speed and agility to globalization of the economy and the rapidly changing electronics
industry. To accomplish this, the Group will expand its network in Japan and overseas and deepen ties among Group
companies to enhance collective strengths. The Group also has a strong commitment to corporate social responsibility,
positioning compliance and protecting the global environment as important elements of its operations.
Based on the above management philosophy and fundamental management policy, the companies of the KAGAELECTRONICS Group, which are active primarily in the electronics industry, seek to improve their results of operations
while cooperating with each other by doing business in a speedy manner that places the highest priority on rapid decisionmaking.
The key word is “F.Y.T.”
F = Flexibility (adapting adeptly to external changes)
Y = Young (staying young in thought and action)
T = Try (the spirit of always taking on challenges)(2) Targeted performance indicators
As the electronics industry, where the Group is active, is expected to continue to grow, priority will continue to be placed on
raising the rate of sales growth and improving the return on equity.
(3) Medium- and long-term management strategies
The rapid pace of change in the electronics industry is expected to continue. New products are appearing and existingproducts going out of date faster. Companies are moving production bases out of Japan faster, too. Amid these changes, more
growth is foreseen for the electronics industry.
The Group has grown with KAGA ELECTRONICS, an independent electronics trading company, as its nucleus by working
with a large number of suppliers and customers and handling a broad spectrum of products. The Group is distinguished by its
ability to handle all aspects of the electronics business, from upstream to downstream, including product planning,development and processing (EMS). Backed by these distinctive strengths, the Group will work even more closely together
to capture synergies with the goal of increasing sales and earnings while growing on a global scale.
The key word is “3G.”
General (covering everything)
Global (worldwide coverage)
Group (leveraging the collective power of the Group)(4) Key issues
As stated in its fundamental management policy, the Group is dedicated to upgrading group management in accordance with
the FYT and 3G concepts with the goal of continuing to grow. The Group is also committed to raising its enterprise value
while preserving strong relationships with all stakeholders. Additionally, the Group is constantly working on building anorganization that can quickly adapt to changes in market conditions and customer needs. Another goal is enhancing theability to gather information quickly. At the same time, the Group aims to capture more synergies by building stronger ties
among group companies and fostering more collaboration and mutual assistance within the Group, thereby expanding
operations and raising efficiency.
Based on the following environmental policy, all members of the Group are working together to build a framework that cantackle environmental issues from many perspectives. (ISO 14001 certification was received on November 15, 2002.)(Environmental policy)
Always looking ahead to the future of electronics, the KAGA ELECTRONICS Group is dedicated to meeting the needs ofcustomers while protecting the Earth in order to preserve and improve the natural environment.
At present, the Group is concentrating on the following issues:(a) Updating and establishing group oversight systems to improve operating efficiency(b) Strengthening relationships, collaboration and mutual assistance among Group companies to realize greater synergies(c) Reinforcing operations overseas and expanding the global network(d) Upgrading technological skills and improving the ability to gather information with speed(e) Revitalizing underperforming subsidiaries(f) Tackling environmental problems(g) Thorough operation of internal control systems(5) Other important items concerning management
Not applicable54.

Consolidated Financial Statements(1) Balance sheet(million yen)
FY 2010(As of March 31, 2010)ASSETS
Current assets
Cash and cash equivalents
Notes and accounts receivable-tradeMarketable securities
Merchandize and furnished goods
Goods in progress
Raw materials and other supplies
Deferred tax assets
OthersAllowance for doubtful receivables

FY 2011(As of March 31, 2011)

11,91759,21469
14,483
647
3,011
866
6,813
(184)

11,92654,17371
15,775
555
3,189
975
6,392
(182)

96,83892,876

3,720(1,135)

4,132(1,637)

Buildings and structures, net

2,584

2,494

Machinery, equipment and vehicles
Accumulated depreciation

3,491(2,002)

3,787(2,186)

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

Machinery, equipment and vehicles, net

1,489

1,601

3,272
(2,328)3,889(2,872)

944

1,016

Land
Construction in progress

1,297
119

4,099
511

Total property, plant and equipment

6,434

9,724

484
686
731

464
790
1,344

1,901

2,599

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

4,607
249
2,149
1,056
2,284
(1,559)

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

Total investments and other assets

8,786

9,485

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

Intangible assets
Goodwill
Software
OthersTotal intangible assets

Total fixed assets
Total assets

6

17,123

21,810113,962

114,686

(million yen)
FY 2010(As of March 31, 2010)
LIABILITIESCurrent liabilities
Notes and accounts payable-trade
Short-term bank loans
Accrued expenses
Income taxes payable
Provision for directors' bonuses
OthersTotal current liabilities
Long-term liabilities
Long-term bank loans
Deferred tax liabilities
Provision for retirement benefits
Provision for directors' retirement benefits
Asset retirement obligations
OthersTotal long-term liabilities

FY 2011(As of March 31, 2011)

43,535
8,935
2,134
1,049
20
3,103

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

58,77956,987

2,500
593
1,432
1,222
881

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

6,629

9,099

Total liabilities

65,40866,087NET ASSETS
Shareholder’s equity
Paid-in capital
Capital surplus
Retained earnings
Treasury stock

12,133
13,91224,012(1,332)

12,133
13,91225,038(1,332)

48,72649,752(195)
8(1,697)(246)
0(2,571)(1,884)(2,817)

1,711

0
1,664

Total shareholder’s equity
Valuation and translation adjustments
Valuation differences on available-for-sales securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Total valuation and translation adjustments
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

7

48,553

48,598113,962

114,686

(2) Statements of income(million yen)
FY 2010
FY 2011(Fiscal year ended March 31, 2010) (Fiscal year ended March 31, 2011)
Net sales
Cost of sales

239,391
211,153

237,951
207,298

Gross profit

28,23730,653

Selling, general and administrative expenses

26,65527,089Operating income

1,582

3,563

66
86
137
82
342

70
67
208
77
114
337

Non-operating income
Interest income
Dividend income
Commission income
Amortization of negative goodwill
House rent income
Others714

876

Non-operating expenses
Interest expense
Loss on investments in partnership
Foreign exchange losses
Equity in losses of affiliates
OthersTotal non-operating income

131
67
574
110
132

113
488
99

Total non-operating expenses

1,016

701

1,280

3,738

18
481
-

21
12
140

-

101

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

45

-

545

275

10
219
146

14
383
0

-

38

53

149
64

429

651

Income before income taxes and minority interests

1,396

3,363

Income, inhabitants and enterprise taxes
Income tax adjustment

1,411
347

2,026
(509)

Total taxes

1,759

1,516

Income before minority interests

-

1,846

Minority interests in income (loss)

(43)

(7)

Net income (loss)

(318)

1,854

8

(million yen)
FY 2010
FY 2011(Fiscal year ended March 31, 2010) (Fiscal year ended March 31, 2011)
Minority interests in loss-

(7)

Income (loss) before minority interests

-

1,846

-

(55)
(9)
(874)

-

-

-

(938)

-

908

-

921

-

(13)

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of theparentComprehensive income attributable to minority interests9(3) Statement of changes in consolidated shareholders’ equity(million yen))
FY 2010
FY 2011(Fiscal year ended March 31, 2010) (Fiscal year ended March 31, 2011)
Shareholders’ equity
Paid-in capital
Balance at the end of previous period

12,133

Balance at the end of current period

12,133

12,133
12,133

13,912

13,9120(0)

Total changes during the period

0(0)Balance at the end of current period

13,912

13,91225,15824,012

(827)
(318)

(827)
1,854

Capital surplus
Balance at the end of previous period
Changes during the period
Disposal of treasury stock

Retained earnings
Balance at the end of previous period
Changes during the period
Dividends paid
Net income (loss)
Total changes during the period
Balance at the end of current period
Treasury stock
Balance at the end of previous period
Changes during the period
Acquisition of treasury stock
Disposal of treasury stock(1,146)

1,026

24,01225,038(1,331)(1,332)

(1)
1

(0)
0

Total changes during the period

(0)

(0)

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

49,873

48,726

Total Shareholders’ equity
Balance at the end of previous period
Increase (decrease) due to changes in accounting
treatment at overseas subsidiaries-

Changes during the period
Dividends paid
Net income (loss)
Acquisition of treasury stock
Disposal of treasury stock

(827)
(318)
(1)
1

(827)
1,854
(0)
0

Total changes during the period(1,146)

1,025

Balance at the end of current period

48,72649,75210

(million yen))
FY 2010
FY 2011(Fiscal year ended March 31, 2010) (Fiscal year ended March 31, 2011)
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Balance at the end of previous period
Changes during the period
Net changes of items other than shareholders' equity

(364)

(195)

168

(51)

Total changes during the period

168

(51)

Balance at the end of current period

(195)

(246)

(0)

8

Deferred gains or losses on hedged
Balance at the end of previous period
Changes during the period
Net changes of items other than shareholders' equity

9(8)

Total changes during the period

9(8)Balance at the end of current period

80(1,737)(1,697)40(873)

Total changes during the period

40

(873)

Balance at the end of current period(1,697)(2,571)(2,103)(1,884)

218

(933)

Foreign currency translation adjustments
Balance at the end of previous period
Changes during the period
Net changes of items other than shareholders' equity

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

218

(933)

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

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

0

Total changes during the period-

0Balance at the end of current period

-

0

1,790

1,711

(79)

(47)

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

(79)

(47)

Balance at the end of current period

1,711

1,664

49,56048,553

(827)
(318)
(1)
1
139

(827)
1,854
(0)
0
(980)

Total changes during the period(1,007)

45

Balance at the end of current period

48,553

48,598

Total net assets
Balance at the end of previous period
Changes during the period
Dividends paid
Net income (loss)
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders' equity11(4) Statements of cash flows(million yen)
FY 2010
FY 2011(Fiscal year ended Mar. 31, 2010) (Fiscal year ended Mar. 31, 2011)
Operating activities
Income before income taxes and minority interest
Depreciation and amortization
Loss on impairment of fixed assets
Amortization of goodwill
Increase (decrease) in provision for retirement benefits
Increase (decrease) in provision for directors' retirement
benefits
Increase (decrease) in provision for directors' bonuses

1,396
2,050
146
223

3,363
2,242
0
192

67

99

92

72

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

10
268
(152)
131
(16)
10
(464)
219
2,303
102
(1,270)
1,203
(212)
187
6
748
213

121
259
(101)
115
(14)
14
2
383
4,762
(1,378)(2,683)
262
454
(15)
111
69
(257)

Sub-total

7,265

8,076

Decrease (increase) in advance payments
Interests and dividend received
Interests paid
Income taxes–paid
Others

(344)
146
(131)
(1,343)
135

88
151
(121)
(1,591)(281)

Net cash provided by (used in) operating activities

5,728

6,321

12

(million yen)
FY 2010
FY 2011(Fiscal year ended Mar. 31, 2010) (Fiscal year ended Mar. 31, 2011)
Investing activities
Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payment from sales of securities of subsidiaries, whichchanged the scope of consolidation
Payment for acquisition of securities of subsidiaries, whichchanged the scope of consolidation
Proceeds from acquisition of securities of subsidiaries,
which changed the scope of consolidation
Payments of short-term loans receivableCollection of short-term loans receivable
Payments of long-term loans receivable
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other payments
Other proceeds
Net cash provided by (used in) investing activities
Financing activities
Increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
OthersNet cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents(120)(2,498)
104
(723)
(888)
1,550

(112)
(4,875)71(1,013)
(646)
281

(11)

-

-

(227)

164

64

(757)
468
(18)
(123)
1
(858)
698
(102)
74

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

(3,040)(6,369)483(1,905)
(0)
(827)
(42)
(16)

(1,154)4,011(1,463)
(0)
(831)
(34)
(49)

(2,307)

478

49

(431)

Increase (decrease) in cash and cash equivalents

428

(1)

Cash and cash equivalents, beginning of period

11,368

11,797

Cash and cash equivalents, end of period

11,797

11,79613

(5) Notes to ongoing concern assumptions
None(6) Basis of presenting the consolidated financial statements
Changes in accounting standard
Application of “Guidance on Accounting Standard for Asset Retirement Obligations”
From the fiscal year ended March 31, 2011, KAGA ELECTRONICS Group applies the” Accounting Standard for Asset
Removal Obligations”(ASBJ Statement No.18 of March 31, 2008) and the “Guidance on Accounting Standard for Asset
Retirement Obligations”(ASBJ Guidance No.21 of March 31, 2008).
As a result, the operating income and the ordinary income have decreased for 42 million yen, and the income before
income tax and minority interests has decreased for 80 million yen.
(7) Changes in method of presentation
FY 2010(Fiscal year ended Mar. 31, 2010)(Consolidated statement of income and statement ofcomprehensive income)
1. In the previous fiscal year, “Amortization of negative
goodwill” was included in the “Others” item of nonoperating income. Beginning with the fiscal year that
ended in March 2010, this item is presented as aseparate item in non-operating income because it
became more than one-tenth of total non-operating
income. “Amortization of negative goodwill” was 53
million yen in the fiscal year that ended in March 2009.
2. In the previous fiscal year, “Equity in losses ofaffiliates” was included in the “Others” item of nonoperating expenses. Beginning with the fiscal year that
ended in March 2010, this item is presented as aseparate item in non-operating expenses because it
became more than one-tenth of total non-operating
expenses. “Equity in losses of affiliates” was 3 million
yen in the fiscal year that ended in March 2009.
(Consolidated statement of cash flows)
The “Other payments” and “Other proceeds” items in cash
flows from investing activities were included in the “Others”
item in the fiscal year that ended in March 2009. Beginningwith the fiscal year that ended in March 2010, these items
are presented separately due to their greater importance. In
the fiscal year that ended in March 2009, the “Others” item
included “Other payments” of 161 million yen and “Other
proceeds” of 67 million yen.

14

FY 2011(Fiscal year ended Mar. 31, 2011)(Consolidated statement of income and statement ofcomprehensive income)
1. In the previous fiscal year, “House rent income” wasincluded in the “Others” item of non-operating income.
Beginning with the fiscal year that ended in March 2011,
this item is presented as a separate item in non-operating
income because it became more than one-tenth of total
non-operating income. “House rent income” was 60
million yen in the fiscal year that ended in March 2010.
2. “Income before minority interests” is included in thefinancial statements for the fiscal year that ended in
March 2011 due to the application of the “Cabinet Office
Ordinance Partially Revising Regulations on the
Terminology, Format and Preparation of Financial
Statements” (Cabinet Office Ordinance No. 5, March 24,2009) in accordance with “Accounting Standard forConsolidated Financial Statements” (ASBJ Statement
No. 22, December 26, 2008).

(8) Supplementary information(Change in estimates for accounting purposes)
The Company signed a real estate transaction contract on June 30, 2010 for the purpose of acquiring land for the constructionof a building. As a result, in the first quarter of the fiscal year, the Company reexamined the useful lives of property, plantand equipment that were expected to be disposed of because of a transfer of ownership. This reexamination resulted in achange from 15 years to 4 years starting in the first quarter of the fiscal year in the useful life of the building, structures, tools,
furniture and fixtures used at the head office. Compared with the previous accounting method, this change had the effect of
reducing operating income, ordinary income and income before income taxes and minority interests by 130 million yen eachin the fiscal year that ended in March 2011.
(Additional information)
Beginning with the fiscal year that ended in March 2011, the Company has adopted “Accounting Standard for Presentationof Comprehensive Income (ASBJ Statement No. 25, June 30, 2010). However, the amounts shown for the “Accumulated
other comprehensive income” and “Total accumulated other comprehensive income” items for the fiscal year that ended in
March 2010 show the amounts for “Valuation and translation adjustments” and “Total valuation and translation
adjustments,” respectively.
(9) Notes to consolidated financial statements(For consolidated statement of comprehensive income)For the year ended March 31, 2011
*1. Comprehensive income in preceding fiscal year
Comprehensive income for parent company shareholders
Comprehensive income for minority shareholders
Total(million yen)
(100)
(38)
(139)

*2. Other comprehensive income in preceding fiscal year
Valuation differences on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Amount of ownership based on application of equity method
Total(million yen)
171
11
33
6
223

15

(Segment information)
Operating segment information
Operating segment information is not presented for the previous fiscal year since the Kaga Electronics Group has been
engaged in a single sector generally described as the manufacturing and sale of electronics merchandise and products.
Geographical segment information
For the previous fiscal year (April 1, 2009 – March 31, 2010)(million yen)North
AmericaJapan
I. Sales and operating income (loss)
Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating expenses
Operating income (loss)

Europe

East
Asia

Total

Eliminations
orConsolidated
Corporate

194,586
16,239210,826
210,174

262
113
375
497

3,042
37
3,079
3,157

41,4997,689
49,18948,663

239,391
24,079263,470
262,493(24,079)(24,079)(24,684)

239,391
239,391
237,808

651

(121)

(77)

525

977

605

1,582

II. Assets
94,428225
1,422
23,994
120,071(6,109)113,962
Notes:
1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand
3. Assets included in Eliminations and Corporate amounted to 2,654 million yen in the current fiscal year, which primarily
consist of surplus working capital (cash and cash equivalents, marketable securities) and long-term investment securities(investment securities, contribution to investment partnerships), among others.
Overseas sales
For the previous fiscal year (April 1, 2009 – March 31, 2010)(million yen)
North America

EuropeEast Asia

Total

I. Overseas sales
2,456
3,486
52,28258,225
II. Consolidated sales
239,391
III. Share of overseas sales in total sales (%)
1.0
1.5
21.8
24.3
Notes:
1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand
3. Overseas sales refer to sales posted by the Company and its consolidated subsidiaries in countries and regions outside
Japan.

16

Segment information
1. Summary of reporting segments
Segments used for financial reporting are the constituent units of KAGA ELECTRONICS for which separate financial
information is available and for which the board of directors performs regular reviews for the purposes of determining the
distribution of resources and evaluating results of operations.
KAGA ELECTRONICS conducts business activities by grouping affiliated companies based on products and services andbased on comprehensive strategies for operations in Japan and overseas for products and services handled.
Consequently, KAGA ELECTRONICS and its affiliated companies have three reporting segments that are made up ofdifferent categories of products and services: electronic components, information equipment and software.
The electronic components segment includes the development, manufacture and sale of semiconductors, general electronic
components and other products, the electronics manufacturing service (EMS), and other activities. The informationequipment segment includes sales of PCs, PC peripherals, photograph and imaging products, original brand products, andother products. The software segment includes the production of computer graphics, planning and development of
amusement products, and other activities.
2. Calculation method for sales, earnings or losses, assets, liabilities and other items for individual reporting segments
Transactions between reporting segments use the same terms as for ordinary business transactions.
3. Information concerning sales, earnings or losses, assets, liabilities and other items for individual reporting segments
For the previous fiscal year ended March 2010 (April 1, 2009 – March 31, 2010)(million yen)Amount in theReporting segments
OthersAdjustments
consolidated
Total
Electronic
Information*1*2
statement of income
SoftwareTotal
components
equipment*3
Net salesof which to outside
customersof which intersegment
Total
Segment income
Segment assets
OthersDepreciation andamortization
Increase inproperty, plantand equipment
and intangible
assets157,795

68,311

2,704

228,811

10,579239,391-

239,391

1,126
158,921895
93,781

1,458
69,76993
21,067

1,617
4,321
466
3,988

4,201
233,0131,454
118,837

3,047
13,627
311
5,785

7,249
246,640
1,766
124,622(7,249)(7,249)(183)(10,660)

239,391
1,582
113,962

920

181

163

1,264

43

1,308

(10)

1,297

1,553

324

537

2,415

806

3,221

-

3,221

17

For the current fiscal year ended March 2011 (April 1, 2010 – March 31, 2011)
Reporting segments
Electronic
components

Informationequipment

Software

Total

Others*1

Total

Adjustments*2(million yen)Amount in the
consolidated
statement of income*3

Net salesof which to outside
171,576
50,8855,687 228,149
9,801
237,951
237,951
customersof which inter1,342
778
2,418
4,539
3,159
7,698
(7,698)segment
Total
172,919
51,6648,105 232,688
12,961
245,650(7,698)
237,951
Segment income
2,901
72
487
3,462
230
3,692
(128)
3,563
Segment assets
97,21015,754
6,043 119,008
5,390
124,399(9,713)
114,686
OthersDepreciation and
970
142
407
1,520
43
1,563
(8)
1,554
amortization
Increase inproperty, plant
4,336
192
636
5,165
724
5,889
5,889
and equipment
and intangible
assets
Notes:
1. Others is a business segment for activities that are not included in the reporting segments, but included sporting
goods business etc.
2. For assets, eliminations or corporate in the fiscal year that ended in March 2010 include corporate assets of 2,654
million yen that consist primarily of short-term investments (cash and securities, etc.) at the Company. In addition,
eliminations or corporate in the fiscal year that ended in March 2011 include corporate assets of 2,407 million yenthat consist primarily of short-term investments (cash and securities, etc.) at the Company.
3. The adjustment for segment operating income is as follows(1) Segment income(million yen)
Fiscal year ended March 2010
Fiscal year ended March 2011
Elimination of inter-segment trade
(183)
(128)
Total
(183)
(128)
(2)

Segment assets

Elimination of inter-segment trade
Total
(3)

(million yen)
Fiscal year ended March 2011
(9,713)(9,713)Fiscal year ended March 2010
(10)
(10)

(million yen)
Fiscal year ended March 2011(8)(8)

Depreciation and amortization

Elimination of inter-segment trade
Total
4.

Fiscal year ended March 2010
(10,660)(10,660)

Segment operating income includes adjustments to match operating income as presented in the consolidated
statement of income and statement of comprehensive income.

(Supplementary Information)
Beginning with the fiscal year ended March 31, 2011, “Accounting Standard for Disclosures about Segments of anEnterprise and Related Information” (ASBJ Statement No. 17, March 27, 2009) and “Guidance on Accounting Standard forDisclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20, March 21, 2008) have been
applied.

18

Associated information
For the current fiscal year ended March 2011 (April 1, 2010 – March 31, 2011)
1. Information about individual products and services
This information is not presented because the KAGA ELECTRONICS Group prepares reports in accordance with amanagement approach based on individual products and services.
2. Geographic information(1) Net sales(million yen)Japan
North America
EuropeEast Asia
Total
171,138
2,182
5,293
59,336
237,951(2)

Property, plant and equipment
Japan
North America
7,534
36

Europe(million yen)
Total
9,724

East Asia
2,068

83

Notes:
1.
2.

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

FY 2010(For the year ended March 31, 2010)

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

Net assets per share

1,697.27

1,700.68

Net income (loss) per share(11.55)67.20

Net income per share (diluted) is not

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

presented, since there is no potential
stock which has dilution effect.

Note: The basis for calculating net income (loss) per share is as follows.
FY 2010(For the year ended
March 31, 2010)

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

Net income per share
Net income (loss) (million yen)
Net income (loss) not available to commonshareholders (million yen)
Net income (loss) available to common shareholders(million yen)
Weighted average number of shares outstanding
Outline of potential stock which does not have dilution
effect and has not been included in net income per share(Subsequent events)
None

19

(318)

1,854

-

-

(318)

1,854

27,596,924

27,597,906
Number of classes ofsubscription rights to shares forconsolidated companies : 4(Number of rights: 4060)

5.

Non-consolidated Financial Statements(1) Balance sheets(million yen)
FY 2010(As of March 31, 2010)ASSETS
Current assets
Cash and cash equivalents
Notes receivable-trade
Accounts receivable-tradeMarketable securities
Merchandise
Goods in progress
Supplies
Advance payments-trade
Prepaid expenses
Deferred tax assets
Short-term loans
Short-term loans to affiliates
Accounts receivable-otherConsumption taxes receivable
OthersAllowance for doubtful receivables
Total current assets
Fixed assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Trade mark rights
SoftwareTelephone rights
OthersTotal intangible assets

20

FY 2011(As of March 31, 2011)

5,085
3,394
24,567
69
4,178
220
1,195
191
579
454
13,5544,150
161
16(2,729)

6,442
3,191
22,927
71
4,039
132
25
1,131
202
667
131
14,1032,828
199
16(3,480)55,09052,631

678
(213)

830
(424)

465

406

36
(16)

71
(30)

19

40

169
(124)

150
(126)

44

23

784
(398)

794
(517)

386

277

161
-

2,964
4

1,077

3,716

12
227
26
76

13
229
26
259

343

529

(million yen)
FY 2010(As of March 31, 2010)
Investments and other assets
Investment securities
Affiliate stock
Contribution to capital
Contribution to affiliate capital
Long-term loans
Long-term loans to affiliates
Long-term prepaid expenses
Claims provable in bankruptcy, claims provable inrehabilitation and other
Deferred tax assets
Guarantee deposits
Insurance reserve
Golf memberships
OthersAllowance for doubtful receivables
Allowance for loss on investment
Total investments and other assets
Total fixed assets
Total assets
LIABILITIESCurrent liabilities
Notes payable-trade
Accounts payable-trade
Short-term bank loans
Short-term loans from affiliates
Current portion of long-term debt
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Provision for directors' bonuses
OthersTotal current liabilities
Long-term liabilities
Long-term bank loans
Allowance for retirement benefits for employees
Allowance for retirement benefits for directors andcorporate auditors
Asset retirement obligations
OthersTotal long-term liabilities
Total liabilities

21

FY 2011(As of March 31, 2011)

3,856
8,637
34
6
238
3,498
42

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

266

267

707
1,062
988
396
0
(4,137)(1,239)

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

14,358

14,973

15,77919,21970,87071,8502,727
17,917
6,877
2,118
1,000
1,528
748
77
1,076
58
8

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

34,13831,433

2,500
437

4,548
457

1,046

1,094

1

188
203

3,986

6,493

38,12537,926

(million yen)
FY 2010(As of March 31, 2010)
NET ASSETS
Shareholder’s equity
Paid-in capital
Capital surplus
Capital legal reserve
Other capital surplus
Total capital surplus
Retained earnings
Earned legal reserve
Other retained earnings
General reserve
Retained earnings brought forward
Total retained earnings

FY 2011(As of March 31, 2011)12,133

12,133

13,912
0

13,912-

13,912

13,912618

618

12,860(5,298)

7,000
1,802

8,179

9,420

Treasury stock(1,332)(1,332)

Total shareholder’s equity

32,89334,134

(148)
(0)

(208)
(1)

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

22

(148)

(209)

32,74433,92470,87071,850(2) Statements of income

Net sales
Cost of sales
Beginning goods
Cost of purchased goods(million yen)
FY 2010
FY 2011(Fiscal year ended Mar. 31, 2010) (Fiscal year ended Mar. 31, 2011)
91,291
95,194
3,778
83,541

4,399
85,128

Total

87,31989,527

Transfer to other accountEnding goods

104
4,399

119
4,172

Cost of goods sold82,81585,236Gross profit

8,476

9,957

Selling, general and administrative expenses

8,365

8,832

110

1,125

121
1,582
260

102
1,508
284

1,964

1,896

133
68
23
82
25

105
36
26

Operating income
Non-operating income
Interest income
Dividend income
OthersTotal non-operating income
Non-operating expenses
Interest expense
Loss on investments in partnership
Amortization of investments in unconsolidated subsidiaries
Foreign exchange losses
Others

333

168

1,741

2,852

372
-

0
183
3

372

187

3
217
73
999
865
56

1
235
216
41

2,216

494

Income (loss) before income taxes and minority interests

(102)

2,545

Income, inhabitants and enterprise taxes
Income tax adjustment

96
561

817
(340)

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

Total taxes

658

476

Net income (loss)

(760)

2,068

23

(3) Statement of changes in shareholders’ equity(million yen)
FY 2010
FY 2011(Fiscal year ended March 31, 2010) (Fiscal year ended March 31, 2011)
Shareholders’ equity
Paid-in capital
Balance at the end of previous period

12,133

12,133

Balance at the end of current period

12,133

12,133

Capital surplus
Capital legal reserve
Balance at the end of previous period

13,912

13,912

Balance at the end of current period

13,912

13,912Other capital surplus
Balance at the end of previous period
Changes during the period
Disposal of treasury stock

0

0

(0)

(0)

Total changes during the period

(0)

(0)

Balance at the end of current period

0-13,912

13,912(0)(0)

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

(0)

(0)

Balance at the end of current period

13,912

13,912Retained earnings
Earned legal reserve
Balance at the end of previous period

618

618

Balance at the end of current period

618

618

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

12,86012,860-(5,860)Total changes during the period-(5,860)

Balance at the end of current period

12,8607,000(3,710)(5,298)

(827)
(760)
-

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

Total changes during the period(1,588)

7,100

Balance at the end of current period(5,298)1,802

Retained earnings brought forward
Balance at the end of previous period
Changes during the period
Reversal of general reserve
Dividends paid
Net income (loss)
Disposal of treasury stock24

(million yen)
FY 2010
FY 2011(Fiscal year ended March 31, 2010) (Fiscal year ended March 31, 2011)
Total retained earnings
Balance at the end of previous period
Changes during the period
Provision of general reserve
Dividends paid
Net income (loss)
Disposal of treasury stock

9,767

8,179

(827)
(760)
-

(827)
2,068
(0)

Total changes during the period(1,588)

1,240

Balance at the end of current period

8,179

9,420

(1,331)(1,332)

(0)
0

(0)
0

Total changes during the period

(0)

(0)

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

34,48232,893

(827)
(760)
(0)
0
(1,588)32,893

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

(228)

(148)

Total changes during the period

79
79

(59)
(59)

Balance at the end of current period

(148)

(208)

(0)

(0)

Total changes during the period

(0)
(0)

(1)
(1)

Balance at the end of current period

(0)

(1)

(228)

(148)

Total changes during the period

79
79

(60)
(60)

Balance at the end of current period

(148)

(209)

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

Total Shareholders’ equity
Balance at the end of previous period
Changes during the period
Dividends paid
Net income (loss)
Acquisition of treasury stock
Disposal of treasury stock
Total changes during the period
Balance at the end of current period
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Balance at the end of previous period
Changes during the period
Net changes of items other than shareholders'equityDeferred gains or losses on hedged
Balance at the end of previous period
Changes during the period
Net changes of items other than shareholders'equityTotal valuation and translation adjustments
Balance at the end of previous period
Changes during the period
Net changes of items other than shareholders'equity25

(million yen)
FY 2010
FY 2011(Fiscal year ended March 31, 2010) (Fiscal year ended March 31, 2011)
Total net asset
Balance at the end of previous period
Changes during the period
Dividends paid
Net income (loss)
Acquisition of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders' equity

34,25332,744

(827)
(760)
(0)
0
79

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

Total changes during the period(1,508)

1,179

Balance at the end of current period

32,74433,92426