DAIICHIKOSHO

CO.,

LTD.

FY2014, the year ended March 31, 2015

Flash Report on the Consolidated Results for the Year Ended March 31, 2015
[JGAAP]May 11, 2015

Company Name:
Stock Exchange Listing:Code Number:
URL:
Representative:
Contact:

DAIICHIKOSHO CO., LTD.
Tokyo Stock Exchange, JASDAQ
7458
http://www.dkkaraoke.co.jp
Saburo Hayashi, President
Shigeki Kobayashi,
Corporate Officer; and General Manager, Accounting Department
Phone:+81-3-3280-2151
Date of the Ordinary General Meeting of Shareholders: June 19, 2015
Start Date for Dividend Payment:
June 22, 2015
Scheduled Date to Submit the Securities Report:
June 30, 2015
Availability of Supplementary Briefing Material on Financial Results: Available
Schedule of Financial Results Briefing Session: None
(Amounts below one million yen are truncated.)

1. Consolidated Performance for the Year Ended March 31, 2015 (From April 1, 2014, to March 31,
2015)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales
Millions of yen

Year ended March 31, 2015
Year ended March 31, 2014

133,111130,587

Operating income
Ordinary income% Millions of yen% Millions of yen%
1.9
19,034(0.5)
21,082(0.7)
1.3
19,1394.0
21,227(4.7)

Net income

Net income per share

Millions of yen%
Year ended March 31, 2015
13,650
4.3
Year ended March 31, 201413,0842.1(Note) Comprehensive income:Year ended March 31, 2015: 13,097 million yen 20.6%
Year ended March 31, 2014: 10,862 million yen (31.4)%

Yen
235.13219.68

Ordinary income to total
assets%%Year ended March 31, 2015
13.0
12.3
Year ended March 31, 2014
13.1
13.2
(Reference) Equity in net income of unconsolidated subsidiaries and affiliates:
Year ended March 31, 2015: ― million yen
Year ended March 31, 2014: 0 million yen
Return on equity

1

Fully diluted net income
per share
Yen――

Operating income to net
sales
%
14.3
14.7

DAIICHIKOSHO

CO.,

LTD.

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

Year ended March 31, 2015
180,312110,264
Year ended March 31, 2014
161,587
102,268(Reference) Shareholders’ equity:Year ended March 31, 2015: 109,049 million yen
Year ended March 31, 2014: 101,114 million yen

Equity ratio
%
60.5
62.6

Net assets per share
Yen
1,879.44
1,736.70(3) Consolidated cash flows

Year ended March 31, 2015
Year ended March 31, 2014

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 theend of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

30,26427,298(18,459)(15,415)

3,672(9,458)60,00744,381First Quarter――

Second Quarter
Yen
30.00
50.00

―

50.00

2. DividendYear ended March 31, 2014
Year ended March 31, 2015
Year ending March 31,
2016 (forecast)Aggregate amount ofdividend (total)

Annual dividend
Third Quarter

―

50.00

Payout ratio (consolidated)

Millions of yen

Year ended March 31, 2014
Year ended March 31, 2015
Year ending March 31,
2016 (forecast)――Year-end
Yen
35.00
50.00

%
29.6
42.5

3,829
5,802

Total
Yen
65.00
100.00100.00

Ratio of dividends to net
assets (consolidated)
%
3.8
5.5

43.6

3. Forecast Consolidated Performance for FY2015, the Year Ending March 31, 2016 (From April 1,
2015, to March 31, 2016)
Net sales
Millions of yen

Six months ending
September 30, 2015
Year ending March 31,
2016 (full year)(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income% Millions of yen% Millions of yen%

70,100

7.8

9,800

1.2

10,8000.1

142,500

7.1

20,7008.7

22,500

6.7

Profit attributable toowners of parent
Six months ending
September 30, 2015
Year ending March 31,
2016 (full year)

Net income per share

Millions of yen

%

Yen

6,500

0.1

112.03

13,300(2.6)

229.22

2

DAIICHIKOSHO

CO.,

LTD.

*Notes(1) Significant changes in subsidiaries during the period under review (changes to specific subsidiaries resulting fromchanges in scope of consolidation): None
Newly consolidated:－(Company name: － )Eliminated from the scope of consolidation:－(Company name: － )(2) Changes in accounting standard, accounting estimation change and error correction
1) Changes due to changes in accounting standard: Yes
2) Changes due to changes in accounting standard except (2) 1): None
3) Changes due to accounting estimation change: None
4) Error correction: None
(3) Number of common shares issued
1) Number of shares issued
As of
58,025,000 As of
58,225,000(including treasury shares)
March 31, 2015
shares March 31, 2014
shares2) Number of treasury shares
As of
2,879 As of
2,714
3) Average number of shares
March 31, 2015
shares March 31, 2014
Sharesduring the period
Year ended
58,058,109 Year ended
59,560,920
March 31, 2015
shares March 31, 2014
shares(Reference) Outline of Nonconsolidated Financial Results
1. Nonconsolidated Performance for the Year Ended March 31, 2015 (From April 1, 2014, to March
31, 2015)(1) Nonconsolidated operating results
Net sales
Millions of yen

Year ended March 31, 2015
Year ended March 31, 2014

93,522
92,605(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income% Millions of yen% Millions of yen%
1.0
13,931
3.9
16,4504.8
1.8
13,4099.3
15,695(5.9)

Net income
Millions of yen

Year ended March 31, 2015
Year ended March 31, 2014

11,455
10,532

Net income per share
%
8.8
4.0

Yen
197.31
176.83

Fully diluted net income
per shareYen——(2) Nonconsolidated financial position
Total assets
Millions of yen

Net assets
Millions of yen

Year ended March 31, 2015
133,587
Year ended March 31, 2014
115,021(Reference) Shareholders’ equity:Year ended March 31, 2015: 70,144 million yen
Year ended March 31, 2014: 64,640 million yen

70,14464,640Equity ratio
%
52.5
56.2

Net assets per shareYen
1,208.93
1,110.23* Presentation regarding the implementation status of the audit procedure:This flash report on the consolidated results is not covered by the audit procedure stipulated in the Financial
Instruments and Exchange Act. At the time of the publication of this report, the audit procedure for consolidated
financial statements is being implemented.
* Explanation for the appropriate use of performance forecasts and other special notes:
The statements regarding forecast of financial results in this report are based on the information that is available, as
well as estimates, assumptions and projections that are believed to be reasonable at the time of publication.
Therefore, there might be cases in which actual results greatly differ from forecast values.

3

DAIICHIKOSHO

CO.,

LTD.

(Attachment)

Corporate GroupThe Daiichikosho Group (“DKG”) consists of Daiichikosho Co., Ltd. (“DK” or “the company”) and39 consolidated subsidiaries. The major group companies engage in sales and rental of commercial-use
karaoke equipment, supply of sound source and video content for communication karaoke, operationof karaoke cabins and restaurants, and production and sales of music and video software products.
Business segment

Business line

Commercial
karaoke

Sales and rental of commercial-use
karaoke equipment and supply ofsound source and video content forcommunication karaoke

Karaoke cabin
and restaurant

Operation of karaoke cabins andrestaurants

Music software

Production and sales of music andvideo software products

Other

Background music (BGM)broadcasting, supply of content
services via mobile phone and realestate lease and rental, etc.

4

Domestic

Overseas

DK
Hokkaido Daiichikosho Co., Ltd.,
Tohoku Daiichikosho Co., Ltd.,
Taito Daiichikosho Co., Ltd.,
Niigata Daiichikosho Co., Ltd.,
Tokai Daiichikosho Co., Ltd.,
Daiichikosho Kinki Co., Ltd.,
Kyushu Daiichikosho Co., Ltd.,and 19 other subsidiaries
DK
Nippon Crown Co., Ltd.,
Tokuma Japan Communications Co.,Ltd.,
CROWN TOKUMA music
distribution Co., Ltd.,
Union Eiga Co., Ltd.,and 4 other subsidiaries
DK
DK Finance Co., Ltd.,and Maruhagi Yoshu Kogyo Co., Ltd.

DK KOREA
Co., Ltd.,
Daiichikosho(Shanghai), Ltd.,and 1 othersubsidiary

DAIICHIKOSHO

CO.,

LTD.

The following diagram schematically shows the relationships of the respective group companies and businesses.

(Overseas subsidiaries)(Domestic sales subsidiaries)

DAIICHIKDAIICHIKOOSHO CO., LTD. (Reporting company)

Domestic users(Intermediary services related to
installment sales and loans for
DK and group companies)
DK Finance Co., Ltd.
(Operation of karaoke cabins)
ADVAN CO., LTD.
GOLD CO., LTD.
(Production and sales of music
software products)
Nippon Crown Co., Ltd.
Tokuma Japan Communications
Co., Ltd.
CROWN TOKUMA music
distribution Co., Ltd.
Tri-M, Inc.
DK Music Publishing Co., Ltd.
Union Eiga Co., Ltd.
Crown Music Enterprise Co.
Zoom RepublicOverseas users

DK KOREA Co., Ltd.
Daiichikosho (Shanghai), Ltd.
DAIICHI KOSHO (SHANGHAI)
TRADE CO., LTD.

Hokkaido Daiichikosho Co., Ltd.
Tohoku Daiichikosho Co., Ltd.
Niigata Daiichikosho Co., Ltd.
Kyushu Daiichikosho Co., Ltd.
Taito Daiichikosho Co., Ltd.
Tokai Daiichikosho Co., Ltd.
Daiichikosho Kinki Co., Ltd.
17 other companies(Production and sale of fruitwines)
Maruhagi Yoshu Kogyo Co., Ltd.

Sales and rentals of merchandise and products

Operation of karaoke cabins and restaurants

5

Provision of services

DAIICHIKOSHO

CO.,

LTD.

Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)

FY2013(As of March 31, 2014)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Inventories
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Karaoke equipment for rental
Accumulated depreciation
Karaoke equipment for rental, net
Karaoke cabin and restaurant facilities
Accumulated depreciation
Karaoke cabin and restaurant facilities, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Lease and guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

6

FY2014(As of March 31, 2015)

44,223
6,403
426
7,000
1,405
4,401
(131)
63,72959,747
7,016
443
6,933
1,222
4,697
(139)
79,92012,801(8,144)
4,656
34,895(26,605)
8,289
38,537(22,832)
15,70526,095
5,690(4,758)931
55,67913,086(8,544)
4,542
36,887(27,624)
9,262
41,705(24,469)
17,23626,3395,436(4,424)
1,011
58,393

1,675
6,016
7,691

1,235
6,350
7,585

14,621
741
4,052
13,752
1,439(121)
34,48697,857
161,587

13,263
468
4,468
14,392
1,907(87)
34,413
100,392
180,312DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

FY2013(As of March 31, 2014)
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Accounts payable - other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities
Provision for directors' retirement benefits
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets

7

FY2014(As of March 31, 2015)

4,492
4,501
7,340
5,375
1,103
3,834
26,647

4,723
3,949
8,998
5,007
1,063
3,703
27,446

10,00013,367
66
2,296
5,075
1,865
32,67059,31810,00023,161
83
2,426
4,780
2,149
42,60270,04812,3504,001
84,926(7)
101,270

12,3504,001
93,439(8)
109,782

1,172
(777)
51
(602)
(156)
1,153
102,268
161,587

318
(733)
210
(528)
(733)
1,215
110,264
180,312DAIICHIKOSHO

CO.,

LTD.

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)

FY2013(From April 1, 2013, to
March 31, 2014)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Advertising expenses
Promotion expenses
Packing and freight expenses
Directors' compensations
Provision for directors' retirement benefits
Salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Rent expenses
Depreciation
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Cooperative monetary aid received
Compensation income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Receipt cancellation fee
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment loss
Other
Total extraordinary losses
Income before income taxes and minority interests
Income taxes - current
Income taxes - deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income

8

FY2014(From April 1, 2014, to
March 31, 2015)

130,587
76,80053,787133,11179,94353,168

2,680
1,870
1,017
1,668
310
13,705
879
556
1,301
737
9,921
34,648
19,139

1,892
2,099
923
1,656
260
13,580
872
614
1,297
746
10,19034,134
19,034

1,005
512
283
996
2,798

993
527
981
2,502

290
420
710
21,227309
145
454
21,082

31
2,126
2,157

40
173
2,319
2,533

546
362
10
918
22,466
9,444
(162)
9,281
13,184100
13,084387
259
647
22,968
9,304
(54)
9,250
13,71867
13,650DAIICHIKOSHO

CO.,

LTD.

(Consolidated Statements of Comprehensive Income)(Millions of yen)

FY2013(From April 1, 2013, to
March 31, 2014)
Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to minority interests

9

FY2014(From April 1, 2014, to
March 31, 2015)

13,184

13,718(2,474)151(2,322)
10,862

(853)
158
73
(621)
13,097

10,762100

13,02967

DAIICHIKOSHO

CO.,

LTD.

(3) Consolidated Statements of Changes in Net Assets
FY2013 (from April 1, 2013 to March 31, 2014)(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCumulative effects ofchanges in accounting
policies

Capital surplus

12,350Retained earnings

6,026

Total shareholders'equityTreasury shares

78,119(5)

96,490－12,350

Restated balance

6,026

78,119(5)

96,490Changes of items during period
Dividends of surplus(3,881)(3,881)

Net income

13,08413,084Purchase of treasury shares
Retirement of treasury
shares
Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current
period(2,024)(2,394)(4,422)(4,422)

4,419

－
－

－

(2,024)

6,807

(2)

4,780

12,3504,001

84,926(7)

101,270

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities

Balance at beginning of current
periodCumulative effects ofchanges in accounting
policies
Restated balance

3,646

Revaluation
reserve for
land

(777)

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

(100)

－

Total
accumulated
othercomprehensive
income2,768

Minority
interests

1,056

Total net
assets100,315
－

3,646

(777)

(100)

－

2,768

1,056

100,315

Changes of items during period
Dividends of surplus(3,881)

Net income

13,084Purchase of treasury shares(4,422)Retirement of treasury
shares-

Reversal of revaluation
reserve for land－

Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current
period(2,474)

－

151

(602)

(2,924)97(2,827)(2,474)

－

151

(602)

(2,924)

97

1,953

1,172

(777)

51

(602)

(156)

1,153

102,268

10

DAIICHIKOSHO

CO.,

LTD.

FY2014 (from April 1, 2014 to March 31, 2015)(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCumulative effects ofchanges in accounting
policies

Capital surplus

12,350Retained earnings

4,001

Total shareholders'equityTreasury shares

84,926(7)

101,270447
12,350

Restated balance

4,001

447

85,373(7)

101,717

Changes of items during period
Dividends of surplus(4,938)(4,938)Net income

13,65013,650Purchase of treasury shares
Retirement of treasury
shares
Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current
period

(602)

(603)

(603)

602

－

(43)

(43)

－

－

8,065

(0)

8,064

12,3504,001

93,439(8)

109,782

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities

Balance at beginning of current
periodCumulative effects ofchanges in accounting
policies
Restated balance

1,172

Revaluation
reserve for
land

(777)

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

51

(602)

Total
accumulated
othercomprehensive
income(156)

Minority
interests

1,153

Total net
assets102,268
447

1,172

(777)

51

(602)

(156)

1,153

102,715

Changes of items during period
Dividends of surplus(4,938)Net income

13,650Purchase of treasury shares(603)

Retirement of treasury
shares－

Reversal of revaluation
reserve for land(43)

Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current
period

(853)

43

158

73

(577)

61

(516)

(853)

43

158

73

(577)

61

7,548

318

(733)

210

(528)

(733)

1,215

110,264

11

DAIICHIKOSHO

CO.,

LTD.

(4) Consolidated Statements of Cash Flows(Millions of yen)

FY2013(From April 1, 2013, to
March 31, 2014)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Impairment loss
Increase (decrease) in provision for directors' retirement
benefits
Interest and dividend income
Interest expenses
Loss (gain) on sales of investment securities
Foreign exchange losses (gains)
Loss (gain) on disposal of non-current assets
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Transfer of cost of sales on karaoke equipment for rental
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accounts payable - other
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Increase in term deposits
Proceeds from decrease in term deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments for acquisition of video licenses
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments of loans receivableCollection of loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Other, net
Net cash provided by (used in) investing activities

12

FY2014(From April 1, 2014, to
March 31, 2015)

22,466
13,378362

22,96813,901
259

207

130

(1,151)290(2,118)119514(1,131)
309
(173)
(7)
347

1,970

(602)

(808)
335
(88)
(1,206)651
34,923
1,149(287)(8,487)
27,298

116
144
191
2,030
615
39,0991,155(306)(9,683)30,264(89)
182(10,974)
246(3,498)(1,761)(9,358)
11,989(179)
264(12,479)
146(3,964)(1,746)(5,044)
5,224(1,629)

－

(757)
782
(1,279)655
76(15,415)(422)
785(1,370)398(73)(18,459)DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

FY2013(From April 1, 2013, to
March 31, 2014)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Cash dividends paid
Purchase of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

13

(30)
2,390
(3,478)(3,883)(4,422)(34)(9,458)(5)
2,418
41,96344,381FY2014(From April 1, 2014, to
March 31, 2015)
81
12,360(3,198)(4,936)
(603)
(30)
3,672
148
15,62644,38160,007DAIICHIKOSHO

CO.,

LTD.

Notes to the Consolidated Financial Statements(Segment Information)
FY2013 (From April 1, 2013, to March 31, 2014)(Millions of yen)
Commercial
karaoke
Sales
Sales to third parties
Intersegment sales
and transfers
Total
Segment income(Operating income)
Other items
Depreciation andamortization
Amortization of
goodwill

Reportable segments
KaraokeMusiccabin andsoftwarerestaurant

Subtotal

Other

Total

Adjusted
amount(Note)

Amount on
consolidated
statements ofincome66,04747,086

10,463

123,5986,989

130,587－

130,587

－

－

－

－

－

－

－

－

66,04747,086

10,463

123,5986,989

130,587－

130,587

13,155

6,591

966

20,712

1,303

22,015(2,875)

19,139

8,336

2,931

51

11,320320

11,641

17

11,658

2

152

－

155

－

155

－

155

Note: The (2,875) million yen adjustment posted to segment income is primarily composed of general and administrative
expenses incurred by the administrative department at the head office that are not attributable to any particular
reportable segment.

FY2014 (From April 1, 2014 to March 31, 2015)(Millions of yen)
Commercial
karaoke
Sales
Sales to third parties
Intersegment sales
and transfers
Total
Segment income(Operating income)
Other items
Depreciation andamortization
Amortization of
goodwill

Reportable segments
KaraokeMusiccabin andsoftwarerestaurant

Subtotal

Other

Total

Adjusted
amount(Note)

Amount on
consolidated
statements ofincome63,902

52,723

9,863

126,489

6,622

133,111－

133,111

－

－

－

－

－

－

－

－

63,902

52,723

9,863

126,489

6,622

133,111－

133,111

12,9787,219

400

20,598

1,243

21,842(2,808)19,034

8,656

3,044

51

11,752

331

12,08419

12,104

2

437

－

440

－

440

－

440

Note: The (2,808) million yen adjustment posted to segment income is primarily composed of general and administrative
expenses incurred by the administrative department at the head office that are not attributable to any particular
reportable segment.

14

DAIICHIKOSHO

CO.,

LTD.

(Changes in Accounting Policies)(Application of Accounting Standard for Retirement Benefits)
The Company has applied Accounting Standard for Retirement Benefits (Accounting Standards Boardof Japan (ASBJ) Statement No. 26, May 17, 2012, “the Retirement Benefits Accounting Standard”)
and Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25, March 26,
2015, “the Retirement Benefits Guidance”) from the current fiscal year, in respect of the provisions in
the main text of paragraph 35 of the Retirement Benefits Accounting Standard and the main text ofparagraph 67 of the Retirement Benefits Guidance, whereby the method of calculating retirement
benefit obligation and service cost has been reviewed. Based on this review, the method of attributing
expected retirement benefits to periods has been changed from straight-line basis to benefit formulabasis, while the method of determining discount rates has been changed from the method using thediscount rate based on the approximate number of years of the average remaining service period of
employees, to the method using a single weighted average discount rate reflecting the period up to the
expected timing of retirement benefits payment, as well as the amount of retirement benefits payment
for each such period.
With regard to the application of Retirement Benefit Accounting Standard, etc., the effect of thechange in the method of calculating retirement benefit obligation and service cost is stated as an
adjustment to retained earnings at the beginning of the current fiscal year in accordance with theinterim treatment provided for in paragraph 37 of the Retirement Benefits Accounting Standard.
As a result, net defined benefit liability at the beginning of the current fiscal year decreased by 693
million yen while retained earnings increased by 447 million yen. The impact on income or loss for thecurrent fiscal year as well as net assets per share and net income per share was minimal.

15