May 12, 2009
Consolidated Earnings Report for Fiscal 2008, Ended March 31, 2009
Company name: Ryosan Company, Limited
Securities code: 8140
Representative: Naoto Mimatsu, President

Stock listing: First Section, Tokyo Stock Exchange(URL http://www.ryosan.co.jp)
Inquiries: Harumitsu Seki
Managing Director and General Manager
Financing and Accounting Headquarters
TEL: +81-3-3862-2591
Scheduled date of the Annual General Meeting of Shareholders: June 26, 2009
Scheduled payment date of for fiscal year-end dividend: June 11, 2009
Scheduled filing date of the Annual Securities Report: June 29, 2009
Millions of yen rounded down

1． Consolidated results for the fiscal year ended March 31, 2009
(April 1, 2008 to March 31, 2009)(1) Consolidated operating results(% figures represent year-on-year increase or decrease)
Net sales
Operating income
Ordinary income
Net income%

Millions of yen

Fiscal 2008
Fiscal 2007

220,871
286,098(22.8)(7.9)%

Millions of yen

6,145
10,737

Net income pershare after
dilution

Net income
per share%

Millions of yen(42.8)
6.7

7,263
11,277Return on
equityYen
Yen%
Fiscal 2008
111.83—
3.3
Fiscal 2007
187.15—
5.6(Reference)
Equity in earnings (losses) of non-consolidated subsidiaries and affiliates:%

Millions of yen(35.6)
8.9

3,919
6,738

Ordinary
income to net
assets
%4.5
6.3(41.8)
5.8

Operatingincometo net sales
%
2.8
3.8

FY2008 — million yen
FY2007 — million yen(2) Consolidated financial position
Total assets
March 31, 2009
March 31, 2008
(Reference)
Shareholders equity:

Net assets

Millions of yen

Millions of yen

148,987
174,022

116,499
118,911

March 31, 2009
March 31, 2008

Net assets to total
assets
%78.1
68.3

Net assets per share
Yen

3,376.78
3,348.70

116,386 million yen
118,782 million yen(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal 2008
Fiscal 2007

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at theend of the period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

15,033
9,057(3,540)(665)(4,240)(5,899)50,00343,077−1−

2. Dividends(Millions of yen rounded down unless otherwise stated)
Dividends per share (Yen)(Record date)

End of 1Q

End of 2Q

End of 3Q

Dividends to

End of 4Q

AnnualDividends

Payout ratio(Full fiscal(consolidated)

ratio

year)

%

(consolidated)

net assets%
Fiscal 2007

―

40.00

―

40.00

80.00

2,857

42.7

2.4

Fiscal 2008

―

40.00

―

40.00

80.00

2,775

71.5

2.4

―

20.00

―

40.00

60.00

Fiscal 2009
(Forecast)

94.0

3. Forecast of results for the fiscal year ending March 31, 2010 (April 1, 2009 to March 31, 2010)(% figures for the full fiscal year represent year-on-year increase or decrease,% figures for the interim period are the increase / (decrease) for the corresponding period of the previous fiscal year)

Net salesInterim period
Fiscal year ending
March 31, 2010

Operating income

Ordinary income

Net
incomepershare

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

80,000(39.0)

1,100(76.8)

1,300(76.2)

800(76.0)

23.21

170,000(23.0)

3,400(44.7)

3,800(47.7)

2,200(43.9)

63.83

4. Other(1) Changes in important subsidiaries during the period (Changes in special subsidiaries involving changes inthe scope of consolidation: None
(2) Changes in accounting principles, procedures and presentation methods in connection with the preparationof consolidated financial statements(Recorded under “Changes in important items considered fundamental to the preparation of consolidated
financial statements”).
i.
Changes in accordance with revisions to accounting and other standards: Yesii.
Changes in items other than (i) above: No
Note: For details, please refer to “Changes in important items considered fundamental to the
preparation of consolidated financial statements” on page 23.
(3) Number of shares issued and outstanding (common shares)i.
Number of shares issued and outstanding as of the fiscal year-end (including treasury stock)
March 31, 2009:
34,500,000 shares
March 31, 2008:
36,500,000 sharesii.
Number of treasury stock as of the fiscal year-end
March 31, 2009:
33,358 shares
March 31, 2008:
1,028,717 shares
Note: For details regarding the number of shares used to calculate net income per share on a consolidated
basis, please refer to “Per share information” on page 38.

−2−

(Reference) Overview of non-consolidated operating results
1. Non-consolidated results for the fiscal year ended March 31, 2009
(April 1, 2008 to March 31, 2009)(1) Non-consolidated operating results(% figures represent year-on-year increase or decrease)
Net sales
Operating income
Ordinary income
Net income%

Millions of yen

Fiscal 2008
Fiscal 2007

165,580
212,419(22.1)
(8.5)

4,074
7,574

Net income
per share
Fiscal 2008
Fiscal 2007%

Millions of yen%

Millions of yen(46.2)
7.4

6,085
9,455

%

Millions of yen(35.6)
7.3

2,974
5,499

(45.9)
3.3

Net income pershare after dilution
Yen

Yen

84.87
152.75——(2) Non-consolidated financial position
Total assets
March 31, 2009
March 31, 2008
(Reference)
Shareholders equity:

Net assets

Millions of yen

Millions of yen

133,428
152,780

106,948
109,552

March 31, 2009
March 31, 2008

Net assets to total
assets%80.3
71.7

Net assets per shareYen

3,102.97
3,088.49

106,948 million yen
109,552 million yen

2. Forecast of non-consolidated results for the fiscal year ending March 31, 2010
(April 1, 2009 to March 31, 2010)(% figures for the full fiscal year represent year-on-year increase or decrease,% figures for the interim period are the increase / (decrease) for the corresponding period of the previous fiscal year)

Net salesInterim period
Fiscal year ending
March 31, 2010

Operating income

Ordinary income

Net
incomepershare

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

63,500(34.2)

650(79.9)

1,750(61.7)

1,250(52.6)

36.27

133,000(19.7)

2,250(44.8)

3,700(39.2)

2,300(22.7)

66.73

Caution with respect to forward-looking statements:
The above estimates were made based on the information available as of the date of this release. Actual results could
significantly differ from the above estimates due to a variety of factors. In addition, net income per share has been
calculated taking into consideration the acquisition of treasury stock. Moreover, please refer to “1. Results of Operations”
on pages 4 through 8 of this document for the assumptions and conditions that form the basis of forward-looking
statements.

−3−

1. Results of Operations(1) Analysis of Operating Results
Results of Operations for Fiscal 2008 (the Fiscal Year Ended March 31, 2009)
1. Overview
Looking at macroeconomic conditions throughout fiscal 2008, the fiscal year ended March 31, 2009, the global
economy entered a recessionary phase. This was attributable to a variety of factors including the sub-prime loan shock,which prompted what many pundits have termed a “once in a century financial crisis,” and a subsequent slump in thereal economy. On the domestic front, corporate sector business results have been further impacted by the sharp anddramatic appreciation in the value of the yen particularly from the middle through to the end of the year.
In the electronics industry, the Ryosan Group’s principal field of activity, most manufacturers undertook
unprecedented adjustments in production as well as cutbacks in capital investment due to the rapid drop in overall
demand.
Under this prevailing harsh business environment, the Ryosan Group reported a decline in overall revenues owing
mainly to the rapid drop in semiconductor and electronic component demand. In the fiscal year under review, net sales
contracted 22.8% compared with the previous fiscal year to ¥220,871 million. From a profit perspective, operating
income and ordinary income declined 42.8% and 35.6%, respectively, to ¥6,145 million and ¥7,263 million. Net
income for the period decreased 41.8% year on year to ¥3,919 million.
2. Business Segment Informationa. Semiconductors
The Ryosan Group is engaged in the sale of memories, system LSIs and discrete semiconductors. The Group is also
active in the development and marketing of system LSIs. In the fiscal year ended March 31, 2009, segment sales
dropped 21.5% compared with the previous fiscal year to ¥116,909 million impacted by declines in sales of system
LSIs for digital AV devices and for car audio equipment. Operating income also fell 32.7% year on year to ¥4,887
million.
b. Electronic Components
In the Electronic Components segment, the Ryosan Group is engaged in the sale of display devices, power supplies
and mechanical components. In the fiscal year under review, sales of liquid crystal displays (LCDs) for personalnavigation devices (PNDs) and for digital still cameras (DSCs) as well as other products decreased. As a result, sales
in this segment contracted 26.4% compared with the previous fiscal year to ¥75,918 million. From a profit perspective,
operating income declined 35.9% year on year to ¥2,823 million.
c. Electronic Equipment
The Ryosan Group sells systems equipment and facilities equipment in the Electronic Equipment segment. The
12-month period ended March 31, 2009 saw lower sales of systems equipment for arcade games, manufacturing
equipment for magnetic heads and other products. Accounting for these factors, segment sales declined 16.9%
compared with the previous fiscal year to ¥21,327 million. Operating income decreased 56.1% year on year to ¥443
million.
d. Ryosan Products
The Ryosan Group manufactures and markets heat sinks (devices that dissipate the heat generated by semiconductors).
In fiscal 2008, sales of heat sinks used in factory automation and other products decreased. As a result, sales in thissegment fell 19.9% compared with the previous fiscal year to ¥6,716 million while operating income declined 30.3%
year on year to ¥514 million.
3. Geographical Segment Informationa. JapanIn the 12-month period ended March 31, 2009, sales in Japan of LCDs for PNDs, system LSIs for camera modules
and other products decreased. Accounting for these factors, domestic sales dropped 22.1% compared with theprevious fiscal year to ¥165,580 million. Operating income contracted 46.0% year on year to ¥4,093 million.
b. Asia
In the fiscal year under review, sales in Asia declined 26.0% compared with the previous fiscal year to ¥66,339
million owing to the drop in sales of system LSIs for digital AV devices and for car audio equipment, and other−4−

products. Operating income decreased 36.1% year on year to ¥1,600 million.
The aforementioned amounts do not include consumption and other taxes.
(Outlook for the Next Fiscal Period)(1) Projected Operating Results
Looking ahead, economic conditions are anticipated to remain extremely harsh due to the downturn in the global
economy.
Against the backdrop of this forecast operating environment and the growing trend toward business scale contraction,
the Ryosan Group will endeavor to establish a structure and system that is capable of generating stable profits. To thisend, and in the final year of its 7th medium-term management plan, Ryosan will promote and pursue three key
initiatives: “the reduction of business costs,” “the review and renewal of its business model” and “the reconstructionof a growth trajectory.” Despite these endeavors, however, the Ryosan Group is not anticipating an immediate
recovery in the demand for semiconductors and electronics components. As a result, the Group is forecasting a drop in
both revenues and earnings.
On this basis, operating forecasts for the fiscal year ending March 31, 2010 are as follows:
Millions of yen

YoY change (%)
170,000
3,400
3,800
2,200

Net sales
Operating income
Ordinary income
Net income(23.0)(44.7)(47.7)(43.9)

2. Projected Operating Results by Business Segment
a. Semiconductors
In the Semiconductor segment, Ryosan is projecting lower sales of system LSIs for digital AV devices and car audio
equipment as well as other products. As a result, sales in this segment are forecast to decrease 30.9% compared withthe fiscal year under review to ¥80,800 million, while operating income is expected to contract 42.7% year on year to¥2,800 million.
b. Electronic Components
Sales of LCDs for DSCs, mechanical components for game consoles and related products are anticipated to decline in
the Electronic Components segment. On this basis, segment sales are forecast to fall 23.1% compared with the fiscal
year ended March 31, 2009 to ¥58,400 million. In line with the drop in sales, operating income is expected to contract
22.1% year on year to ¥2,200 million.
c. Electronic Equipment
In the Electronic Equipment segment, sales of office automation systems equipment and other products are expected
to rise. Accounting for these factors, segment sales are forecast to increase 20.5% compared with the fiscal year underreview to ¥25,700 million. Operating income is anticipated to climb 35.4% year on year to ¥600 million.
d. Ryosan Products
Lower sales of heat sinks for use in flat-screen televisions and other products are projected in the Ryosan Products
segment. As a result, segment sales are forecast to decrease 24.1% compared with the fiscal year ended March 31,
2009 to ¥5,100 million. Operating income is also anticipated to drop 2.7% year on year to ¥500 million.
Note: The aforementioned forecasts are subject to certain risks and uncertainties. Accordingly, actual results may
differ materially from forecasts for a variety of factors. Principal among these factors are the following:-

Economic trends in the Ryosan Group’s major markets (Japan, Asia and other markets); rapid changes in
consumer trends and sudden shifts in supply and demand dynamics
Significant fluctuations in the dollar/yen exchange rate
Major shifts in capital markets.

−5−(2) Analysis of Financial Condition(Analysis of Assets, Liabilities, Net Assets and Cash Flows)
1. Status of Assets, Liabilities and Net Assets as of March 31, 2009a. Assets
Total assets as of March 31, 2009 stood at ¥148,987 million, a decrease of ¥25,034 million compared with the end of
the previous fiscal year. Major components comprised trade notes and accounts receivable as well as marketable andinvestment securities, which declined ¥31,094 million, ¥17,992 million and ¥1,152 million, respectively. Other
components included cash and deposits,which increased ¥24,916 million and long-term deposits, which climbed¥3,000 million.
b. Liabilities
Total liabilities declined ¥22,622 million compared with March 31, 2008 to ¥32,488 million. This is mainly
attributable to the drop in trade notes and accounts payable, which decreased ¥21,630 million compared with the endof the previous fiscal year.
c. Net assets
Net assets including minority interests as of the end of fiscal 2008 stood at ¥116,499 million, a decline of ¥2,412
million compared with the end of the previous fiscal year. Principal movements included retained earnings andvaluation and conversions, which decreased ¥4,013 million and ¥1,232 million, respectively, and treasury stock,which increased ¥2,858 million year on year. Furthermore, in March 2009, Ryosan retired 2,000,000 shares oftreasury stock totaling ¥5,125 million. Taking all of the aforementioned factors into account, the ratio of net assets tototal assets climbed from 68.3% at the end of the previous fiscal year to 78.1% as of March 31, 2009.
2. Status of Cash Flows
Cash and cash equivalents as of March 31, 2009 stood at ¥50,003 million an increase of ¥6,925 million comparedwith the end of the previous fiscal year.
i. Cash flows from operating activities
Net cash provided by operating activities amounted to ¥15,033 million. In addition to income before income taxes
totaling ¥6,647 million, major cash inflows included decrease in accounts receivable of ¥30,226 million. Major cash
outflows, on the other hand, comprised the decrease in accounts payable amounting to ¥21,040 million and income
taxes paid totaling ¥4,280 million.
ii. Cash flows from investing activities
Net cash used in investing activities for the fiscal year under review was ¥3,540 million. The principal cash outflow
during the fiscal year under review was payments for time deposits amounting to ¥3,000 million.
iii. Cash flows from financing activities
Net cash used in financing activities totaled ¥4,240 million. For the fiscal year ended March 31, 2009, major cash
outflows were cash dividends paid of ¥2,815 million and repurchase of treasury stock totaling ¥2,271 million.
3. Forecasts for Assets, Liabilities, Net Assets and Cash Flows for Fiscal 2009
In fiscal 2009, net cash provided by operating activities is forecast to decline on a year-on-year basis. While accounts
receivable are anticipated to fall in line with forecast lower sales, this is mainly attributable to the projected drop inincome before income taxes.
Turning to cash flows from investing activities for the fiscal year ending March 31, 2010, the Company is budgeting
capital expenditures of around ¥1,000 million.
From a finance activity cash flow perspective, Ryosan does not plan to acquire treasury stock in fiscal 2009.
Accounting for these factors, cash and cash equivalents as of March 31, 2010 are expected to remain essentiallyunchanged from the end of the fiscal year under review.

−6−

(Trends in cash flow-related indicators)
Trends in key cash flow-related indicators for the Ryosan Group are provided as follows:
Fiscal 2004
Net assets to total assets (%)
Net assets to total assets (%)(Market capitalization basis)
Cash flow to Interest-bearing
Liabilities (Years)
Interest coverage ratio (Times)

Fiscal 2005

Fiscal 2006

Fiscal 2007

Fiscal 2008

63.1

64.1

65.6

68.3

78.1

57.9

62.9

60.3

48.0

47.4

―

0.5

0.6

0.5

0.3

―

49.8

24.0

37.4

107.3

Net assets to total assets: Net assets / Total assets
Net assets to total assets (Market capitalization basis): Market capitalization / Total assets
Cash flow to Interest-bearing liabilities: Interest-bearing liabilities / Cash flow
Interest coverage ratio: Cash flow / Interest expensez All indicators have been calculated from consolidated financial figures.
z Market capitalization was calculated based on the number of shares issued and outstanding less treasury stock.
z Cash flow refers to cash flows from operating activities as shown on the consolidated statements of cash flows.
Interest-bearing liabilities comprise all debt on which interest was paid in the liabilities section of theconsolidated balance sheets. Interest expense represents interest paid as shown on the consolidated statements ofcash flows.
z The interest coverage ratio is presented with a minus sign when operating cash flows are negative.
(3) Basic Policy Regarding the Allocation of Profits / Dividends for Fiscal 2008 and Fiscal 2009
Basic Policy Regarding the Allocation of Profits
Ryosan recognizes that the return of profits to shareholders is an important business priority. At the same time, theCompany works to increase consolidated basic net income per share. Accordingly, Ryosan’s fundamental policy is toachieve incremental yet steady and sustained increases in profits returned to shareholders. The details of theCompany's profit allocation policy are set out in each successive mid-term management plan. The 7th Medium-Term
Management Plan, from fiscal 2007 through to fiscal 2009, calls for continued efforts to “Advance Financial
Strategies for Improved Corporate Value.” In this context, Ryosan is targeting a consolidated dividend payout ratio of
40% or more as a part of its proactive efforts to allocate profits to shareholders.
Over the three-year period of the 7th Medium-Term Management Plan, Ryosan identified plans to acquire up to a
maximum 3,000,000 of its own shares. Of the 2,000,000 shares acquired to date held as treasury stock, the Company
retired the full amount during the fiscal year ended March 31, 2009. Taking into consideration recent trends andconditions, Ryosan plans to suspend any attempt to purchase the remaining 1,000,000 shares.
Dividends for Fiscal 2008 and Fiscal 2009
For the fiscal year ended March 31, 2009, Ryosan has declared a fiscal year-end ordinary dividend of ¥40 per share.
Together with the interim ordinary dividend of ¥40 per share, the Company will pay an ordinary dividend payment for
the full fiscal year of ¥80 per share.
It is with deep regret that Ryosan is forecasting a drop in its full fiscal year ordinary dividend payment to ¥60 per
share for the fiscal year ending March 31, 2010. This is mainly attributable to the forecast significant downturn in its
consolidated business results. As of the date of this report, Ryosan is anticipating the payment of an interim ordinary
dividend for fiscal 2009 of ¥20 per share, with a fiscal year-end ordinary dividend payment of ¥40 per share based on
forecasts of its business results for the six-month period ending September 30, 2009 and the full fiscal year ended
March 31, 2010.

−7−

(4) Business Risk
The Ryosan Group, its performance, share price, and financial position, are subject to a variety of potential risks,some of which are detailed briefly as follows.
Forward-looking statements contained in this section represent judgments of Ryosan Group’s management based on
information available as of the end of fiscal 2008 (March 31, 2009).
a.

Sudden Changes in the Economic Environment

The Ryosan Group’s consolidated revenues are derived from the level of demand generated by customers of device
manufacturers. Against this backdrop, the Group’s performance is necessarily impacted by changes in economic
conditions in those countries and regions in which Ryosan’s principal clients operate. As a result, Ryosan’s
performance and its financial position can be expected to deteriorate in the event of economic downturn and a
resulting slowdown in demand in its principal markets, such as Japan, Asia and other regions.
b. Exchange Rate Fluctuation
The Ryosan Group engages in the manufacture and sale of products across a number of regions including Japan, Asiaand other countries. In preparing consolidated financial statements, sales, expenses, assets and liabilities, denominatedin foreign currencies are translated into yen as of the Company’s balance sheet date. In principle, appreciation of the
yen against major currencies impacts negatively on Ryosan’s performance, while a weak yen impacts favorably. As aresult, Ryosan’s consolidated operating results and financial position are subject to fluctuations in foreign exchange
rates.
c.

Overseas Business Risk

The Ryosan Group does not operate in Japan alone. It also operates overseas, mainly in Asia. As a result it is exposedto the following risks. The materialization of any of the following risks could adversely affect the Ryosan Group’s
operating results and its financial position.
(i)
(ii)
(iii)
(iv)

Unforeseen changes in statutory and regulatory requirements and adverse changes in tax
requirements
Inadequate and insufficient local infrastructure in the countries in which the Ryosan Group operates
Development of adverse political factors
Social unrest arising out of war, acts of terrorism and other developments

d. Capital Market Volatility
As a part of its business activities the Ryosan Group holds shares in certain financial institutions, customers andsuppliers, and is therefore susceptible to stock price fluctuations. Ryosan does not, however, adopt specific methods
as a hedge against movements in stock prices. Accordingly, Ryosan’s performance and financial position are subject
to substantial changes in stock markets.
e.

Liability for Retirement Benefits

Ryosan accounts for retirement benefit expenses and the liability for retirement benefits using certain assumptions
and an expected rate of return applicable to the Group’s pension plan assets for actuarial projections. In the event thatthe actual obligation differs from the projected obligation or there is a change in the assumptions leading to thecalculation of the projected obligation, the difference in retirement benefit expenses and the liability for retirement
benefits are accrued and amortized over a generally accepted period. As a result, any significant decline in the
discount rate and expected rate of return applicable to the Group’s pension plan assets can impact its performance andfinancial position.

−8−

2. The Ryosan GroupThe Ryosan Group comprises Ryosan Company, Limited (“Ryosan” or “the Company”), eight consolidated
subsidiaries and 11 non-consolidated subsidiaries.
Ryosan operates as a trading house that specializes in semiconductors, electronic components and electronicequipment, which it sells to manufacturers of electronic equipment and other customers both domestically andoverseas. Ryosan also develops, manufactures and sells its own-brand products.
The following table provides an overview of industry segments and the activities of Ryosan and its consolid
ated subsidiaries.

Segment

Semiconductors

Electronic
Components
Electronic
Equipment

Ryosan Products

Main Products
Memories
System LSIs
Discretesemiconductors
Display devices
Power supplies
Mechanicalcomponents

Ryosan Company, Limited

Systems equipment
Facilities equipment

RYOTAI CORPORATIONHeat sinks(for semiconductor
circuit elements)

Development andManufacturing Companies

Sales Companies

HONG KONG RYOSAN
LIMITEDSINGAPORE RYOSANPRIVATE LIMITEDRYOSAN IPC (MALAYSIA)
SDN. BHD.

Ryosan Company, Limited
RYOSAN ENGINEERING(M) SDN.BHD.

KOREA RYOSANCORPORATIONZHONG LING
INTERNATIONAL TRADING(SHANGHAI) CO., LTD.

RYOSAN ENGINEERING(THAILAND) CO., LTD.

Information about Ryosan’s principal non-consolidated subsidiaries is as follows:(Non-consolidated subsidiaries)
Company NameBusiness Activities

Will Business Service Company, Limited

Insurance agent and building maintenanceCentrAct Corporation

Commission sales of semiconductors

EC Ryosan Company, Limited

Commission sales of electronic components

RYOSAN TECHNOLOGIES USA INC.

Sales of semiconductors and electronic components

RYOSAN (THAILAND) CO., LTD.

Sales of semiconductors and electronic components

DALIAN F.T.Z. RYOSAN INTERNATIONAL TRADING Sales of semiconductors and electronic components
CO., LTD.
Commission sales of semiconductors and electronic
SHEN LING ELECTRONICS (SHENZHEN) CO., LTD.
components
Manufacture and sales of heat sinks
RYOSAN ELECTRONICS (FOSHAN) CO., LTD.
Note: Effective March 31, 2009, Will Business Service Company, Limited transferred its insurance agency operations toGinsen Co., Ltd. Control of the company’s building maintenance operations was also transferred to Ryosan on thesame date.

−9−

The Group’s organization chart is provided as follows
Sale

Sale

※ RYOSAN ELECTRONICS(FOSHAN) CO., LTD.
Provision of Finished Products

Provision of
Merchandise

HONG KONG RYOSAN
LIMITED

Sale

Provision of
Merchandise
Provision of
Merchandise
Provision ofservices※CentrAct Corporation

Intermediary sales
Provision of
Merchandise

Provision of
Merchandise

Provision of
Merchandise
Provision of
MerchandiseSale※ DALIAN F.T.Z RYOSANSale

INTERNATIONAL TRADING
CO., LTD.

※SHEN LING
ELECTRONICS (SHENZHEN)
CO., LTD.

KOREA RYOSANCORPORATIONRYOTAI CORPORATION

Provisionof services

Provisionof services

Sale※RYOSAN (THAILAND）
CO., LTD.

Sale

SINGAPORE RYOSANPRIVATE LIMITED

Sale

Overseas Customers

COMPANY, LIMITEDIntermediary sales

IntermediarysalesIntermediary sales※ EC RYOSANRYOSAN COMPANY, LIMITED

Customers in Japan

Provision ofservices

Intermediarysales

ZHONG LING
INTERNATIONAL TRADING(SHANGHAI) CO., LTD.

Provision of
Finished Products※ WILL BUSINESS

Provision of
Merchandise

Outsourcing/
Insurance
Contracts

SERVICE COMPANY,
LIMITED

Provision of
MerchandiseRYOSAN ENGINEERING(THAILAND)CO.,LTD.

SaleRYOSAN IPC(MALAYSIA)
SDN. BHD.

Sale

Provision of
Finished Products
RYOSAN ENGINEERING(M) SDN. BHD.

※RYOSAN TECHNOLOGIESUSA INC.

Sale

Note: Companies identified with a asterisk are non-consolidated subsidiaries not accounted for by the equity method.
All other companies are consolidated subsidiaries.

−10−3. Management Policies(1) Fundamental Management Policies
Since our establishment, we have always been highly conscious of the fact that the corporation is a public institution.
In addition, we now no longer see ourselves simply as a trading company, but as an electronic systems coordinator,
providing a vital link between our customers’ needs and electronics technology. We aim to achieve consistentlong-term growth by stressing this social consciousness and our new role as a systems coordinator.
Three functions are vital to fulfilling our ambition of becoming an electronics system coordinator—the Information
Function (supplying data), the Solutions Function (supplying technology), and the Distribution Function (supplying
logistics). By constantly enhancing these three functions, Ryosan will raise customer satisfaction and increase its
existence value.
(2) Targeted Management Indicators
The Ryosan Group has adopted net income per share and consolidated dividend payout ratio as key management
indicators. Guided by these benchmarks, the Company aims to secure financial soundness while at the same time
pursuing further improvements in its corporate value.
In line with our 7th Medium-Term Management Plan, which covers the period from fiscal 2007 through to fiscal 2009,
we aim to secure net income per share exceeding ¥200 in the final year of the plan and a consolidated dividend payout
ration of more than 40% each fiscal year. Notwithstanding the aforementioned, we do not envisage any immediate
recovery in the Group’s consolidated performance, which has been negatively impacted by the sudden and unforeseen
deterioration in overall economic conditions.
(3) Medium- and Long-Term Management Strategies
Looking ahead, the Ryosan Group is expected to confront an operating environment characterized by intense
globalization and rapid change. Against this backdrop, demands for the corporate sector to more adequately fulfill
their corporate social responsibility (CSR) are also anticipated to rise.
Under these circumstances, the Ryosan Group has formulated its 7th Medium-Term Management Plan, which covers
the period from fiscal 2007 through to fiscal 2009. In line with its ongoing “Basic Stance,” Ryosan continues to focus
on “Pursuing Management Essence, Advancing Management Innovation, and Yielding Management Results.” These
three activities are the key to conducting “Open and Transparent Corporate Management” and “Business Activities
with Abundant Creativity.”
To realize its Basic Stance, Ryosan is taking significant strides in the implementation of its “Three Basic Strategies”:
the Growth Strategy, Segment Strategy, and the Strategy to Establish a Strong Business Infrastructure. The following
is an outline of these “Three Basic Strategies.”
1. Growth Strategy as a systems coordinator:
We will establish four growth strategies:- A comprehensive product lineup to broaden the Group’s operating spheres- Efforts to ensure complete sales of all inventories and maximum utilization of technological capabilities- Overseas semiconductor product business expansion- China bloc conception including Hong Kong, China, Taiwan and Korea business expansion
2. Segment Strategy as a system coordinator:
We will qualitatively strengthen individual strategies for four product segments:- Semiconductor Business Strategy: Strategic mainstay business- Electronic Components Business Strategy: Stable cornerstone business- Electronic Equipment Business Strategy: Synergy-driving business- Products Business Strategy: Signature trading business−11−

3. Strategy to Establish a Strong Business Infrastructure that supports growth and reinforces operations:
We will implement four management reforms:- Establish highly social corporate governance- Qualitatively strengthen management structure- Further reform of the personnel system- Strengthen RS (Ryosan) Culture(4) Issues to be Addressed
Within the domestic and overseas electronics industries, the Ryosan Group’s primary fields of business, major electric
equipment manufacturers are increasingly implementing a variety of countermeasures in response to the sudden anddramatic downturn in their operating results. These countermeasures include a succession of capital and businesstie-ups, moves to withdraw from unprofitable businesses and the decision undertake business reorganization. In
addition, semiconductor manufacturers are pursuing the realignment of their activities, promoting alliances andengaging in the review of sales route strategies and procedures. In this context, NEC Electronics Corporation, one of
the Ryosan Group’s principal business partners, is working toward business integration with Renesas Technology
Corp. Through these and other means, companies within the industry are working to ensure their operating survival.
Reflecting the aforementioned fluctuations in industry conditions, reorganization among electronics trading houses has
also gathered pace. Against this backdrop, the Ryosan Group has positioned efforts to accurately grasp industry trends
as well as rapid changes in its operating environment, and steps to formulate appropriate countermeasures as its mostimportant and immediate management issues.
At the same time, as the Ryosan Group enters a period of unprecedented economic decline, it recognizes the abrupt
downturn in its net sales performance is a matter of the utmost concern. In acknowledging the gravity of this slump in
operating results, which have fallen well below the Group’s initial expectations, Ryosan is particularly cognizant of its
inability to realize overseas semiconductor resource business expansion as well as business growth throughout the
China bloc, two strategic initiatives that were anticipated to boost future performance.
Looking at the Group’s future prospects, Ryosan unfortunately predicts weak results to continue for the next two to
three years. Even as it breaks through this unparalleled economic downturn, and enters a period of sustained recovery,
the Company does not anticipate surpassing net sales of ¥300 billion will be an easy task, particularly if it is tocontinue relying on its existing business model. In no uncertain terms, the Ryosan Group therefore realizes that it isconfronting a significant turning point as a going concern. Under this realization, and in an effort to secure futurebusiness growth, Ryosan is promoting the medium-term strategy to build a new and robust business model. From ashort-term perspective, the Company is working to establish a management structure and framework commensuratewith the cutback in business scale. To this end, Ryosan is undertaking a comprehensive review of its business andorganizational systems while working diligently to curtail business costs.
In any case, the Ryosan Group is committed to firmly raising its presence and value within the electronics market andto ensure that the Group generates performance improvements that accurately reflect this value. In this manner,
Ryosan places the utmost importance on addressing the expectations and needs of all stakeholders including
shareholders.

−12−4 - (1) Consolidated Balance Sheets(Millions of yen)
As of March 31, 2008

As of March 31, 2009ASSETS
Current assets:
Cash and deposits

25,08750,003

Trade notes and accounts receivable

87,21956,124Marketable securities

17,992―Inventories

17,139―Merchandise and finished products―

14,688Work in process―59

Raw materials and stored goods

―

191

2,287

1,737

Income tax refund receivable―

239

Deferred tax assets

525

380

Other current assets

407

630

Allowance for doubtful accounts

(225)

(104)

150,432

123,950

10,858

10,795

Accumulated depreciation(5,455)(5,664)

Buildings and structures (net)

5,402

5,131

8,210

8,184

―

660

Accumulated depreciation

―

(196)

Lease assets (net)

―

463

3,976

3,833

(2,980)(3,058)

Accrued income

Total current assets
Fixed assets:
Property, plant and equipment:
Buildings and structures

Land
Lease assets

Other fixed assets
Accumulated depreciation
Other fixed assets (net)

996

774

14,61014,554

687

628

4,042

2,890

Long-term deposits

―

3,500

Deferred tax assets

2,265

2,153

Other investments and other assets

3,209

2,529

Allowance for doubtful accounts(1,140)(1,101)

Total property, plant and equipment
Intangible fixed assets
Investments and other assets:
Investment securities

Allowance for loss on investments

(85)

(118)

Total investments and other assets

8,292

9,853

23,59025,036

174,022

148,987

Total fixed assets
Total assets−13−

(Millions of yen)
As of March 31, 2008

As of March 31, 2009

LIABILITIESCurrent liabilities:
Trade notes and accounts payable

43,51921,888

Short-term bank loans

4,090

4,773

Lease obligations―

157

Accrued expenses

1,177

1,024

Accrued income taxes

2,120

109

Other current liabilities

1,739

1,738

Total current liabilities

52,646

29,691

―

394

2,149

2,086

314

315

Long-term liabilities:
Lease obligations
Employees’ retirement benefits
Other long-term liabilities
Total long-term liabilities

2,463

2,796

55,11032,488

Common stock

17,69017,690Additional paid-in capital

19,122

19,114Retained earnings

85,45781,443

Treasury stock(2,940)(82)

Total shareholders’ equity

119,329

118,165

Net unrealized gain on other marketable securities

520

14

Gain (loss) on deferred hedges(6)

3(1,061)(1,797)(547)(1,779)Total liabilities

NET ASSETS
Shareholders’ equity:

Valuation and conversions:

Foreign currency translation adjustments
Total valuation and conversions
Minority interests
Total net assets
Total liabilities and net assets

−14−

129

113

118,911

116,499

174,022

148,987

4 - (2) Consolidated Statements of Income(Millions of yen)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to(April 1, 2008 to

March 31, 2008)

March 31, 2009)

Net sales

286,098

220,871

Cost of sales

260,906

201,251

Gross profit

25,191

19,620

Selling, general and administrative expenses
Packaging and freight expenses

754

633

Directors’ remuneration

579

449

Employees’ salaries

3,721

3,657

Bonuses

1,398

1,241

Retirement benefit expenses

450

467

Employee benefits

794

760

Depreciation and amortization

683

815

6,072

5,449

Other selling, general and administrative expenses
Total selling, general and administrative expenses

14,454

13,474

10,737

6,145Interest income

226

164

Dividend income

72

340

Gain on foreign exchange―

206

Management consultation fee

155

149

Operating income
Non-operating income

Refund on cancellation of insurance contracts

118―

Other non-operating income

436

429

Total non-operating income

1,008

1,289

Interest expense

242

140

Foreign exchange loss

144―

Other non-operating expenses

8131

Non-operating expenses

Total non-operating expenses
Ordinary income

468

171

11,277

7,263

Extraordinary gains
Gain on sales of property, plant and equipment

23Gain on reversal of allowance for doubtful accounts

138

155

Total extraordinary gains

140

159

Extraordinary losses
Loss on sales and disposal of property, plant and equipment

36

41

Loss on devaluation of inventories―

112

Loss on devaluation of investment securities

88

325

Loss on liquidation of affiliated companies

17―

Provision for allowance for loss on investments

732

Loss on devaluation of golf membership rights―

8

Extraordinary loss attributable to the application of lease―66

accounting standards
Impairment loss―

9

Special severance payments

―

177

150

775

Income before income taxes and minority interests

Total extraordinary losses

11,267

6,647

Income taxes ― current

4,456

2,122

Income taxes ― deferred

71

600

Total income taxes

4,528

2,723

Minority interests

0

4

6,738

3,919

Net income−15−

4 - (3) Consolidated Statements of Changes in Shareholders’ Equity, Valuation and Conversions(Millions of yen)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

Shareholders’ equity
Common stock
Balance as of the end of the previous period

17,69017,690

Increase (decrease) during the period
Total increase (decrease) during the period
Balance as of the end of the period――

17,69017,69019,122

19,122

Additional paid-in capital
Balance as of the end of the previous period
Increase (decrease) during the period
Disposal of treasury stock00Retirement of treasury stock―(7)

Total increase (decrease) during the period0(8)

19,122

19,114

81,61685,457

Appropriation of earnings as cash dividends(2,897)(2,815)

Net income for the period

6,738

3,919

Balance as of the end of the period
Retained earnings
Balance as of the end of the previous period
Increase (decrease) during the period

Retirement of treasury stock
Total increase (decrease) during the period
Balance as of the end of the period―(5,117)

3,840(4,013)85,45781,443(57)(2,940)(2,884)(2,271)

Treasury stock
Balance as of the end of the previous period
Increase (decrease) during the period
Acquisition of treasury stock
Disposal of treasury stock

1

4

Retirement of treasury stock

―

5,125

(2,883)

2,858(2,940)(82)

118,372

119,329

Appropriation of earnings as cash dividends(2,897)(2,815)

Net income for the period

6,738

3,919

Acquisition of treasury stock(2,884)(2,271)

Total increase (decrease) during the period
Balance as of the end of the period
Total shareholders’ equity
Balance as of the end of the previous period
Increase (decrease) during the period

Disposal of treasury stock

1

3

Retirement of treasury stock――

Total increase (decrease) during the period

957(1,163)

119,329

118,165

Balance as of the end of the period−16−

(Millions of yen)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

Valuation and conversions:
Net unrealized gain on other marketable securities
Balance as of the end of the previous period

1,711

520

(1,191)(506)(1,191)

(506)

520

14

0

(6)

(6)

10

Increase (decrease) during the period
Net changes in items excluding shareholders’equity during the period
Total increase (decrease) during the period
Balance as of the end of the period
Gain (loss) on deferred hedges
Balance as of the end of the previous period
Increase (decrease) during the period
Net changes in items excluding shareholders’equity during the period
Total increase (decrease) during the period
Balance as of the end of the period

(6)

10

(6)

3

144

(1,061)(1,205)(736)

Foreign currency translation adjustments
Balance as of the end of the previous period
Increase (decrease) during the period
Net changes in items excluding shareholders’equity during the period
Total increase (decrease) during the period
Balance as of the end of the period(1,205)(736)(1,061)(1,797)

1,856

(547)

(2,403)(1,232)

Total valuation and conversions
Balance as of the end of the previous period
Increase (decrease) during the period
Net changes in items excluding shareholders’equity during the period
Total increase (decrease) during the period
Balance as of the end of the period(2,403)(1,232)(547)(1,779)

139

129

(10)

(15)

(10)

(15)

129

113

120,367

118,911(2,897)(2,815)

Minority interests
Balance as of the end of the previous period
Increase (decrease) during the period
Net changes in items excluding shareholders’ equity
during the period
Total increase (decrease) during the period
Balance as of the end of the period
Total net assets
Balance as of the end of the previous period
Increase (decrease) during the period
Appropriation of earnings as cash dividends
Net income for the period

6,738

3,919

Acquisition of treasury stock(2,884)(2,271)

Disposal of treasury stock

1

3

Retirement of treasury stock――(2,413)(1,248)

Increase (decrease) during the period(1,455)(2,412)

Balance as of the end of the previous period

118,911

116,499

Net changes in items excluding shareholders’ equity
during the period−17−4 - (4) Consolidated Statements of Cash Flows(Millions of yen)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

Operating activities:
Income before income taxes

11,267

6,647

Depreciation and amortization

843

1,002

(Decrease) increase in allowance for doubtful accounts

(138)

(155)

Increase (decrease) in employees’ retirement benefits

134

(55)

―

32

Interest and dividend income

Increase (decrease) in allowance for loss on investments

(298)

(504)

Interest expense

242

140

Loss on sales and disposal of property, plant and equipment

34

38

Loss on devaluation of investment securities

88

325

Loss on liquidation of affiliated companies

17―

Loss on devaluation of inventories

―

112

―

66

Extraordinary loss attributable to the application of leaseaccounting standards
Special severance payments―

177

Other income

(499)

(363)

Decrease in accounts receivable

9,464

30,226(Increase) decrease in inventories

(652)

1,913

Decrease in accounts payable(5,517)(21,040)(Decrease) increase in other assets and liabilities(1,037)384

Subtotal

13,94818,948Interest and dividends received

299

504

Interest paid

(243)

(140)

Income taxes paid

(4,946)(4,280)Net cash provided by operating activities

9,057

15,033Net decrease (increase) in time deposits

103(3,000)Purchases of property, plant and equipment

(548)

(342)

Investing activities:

Proceeds from sale of property, plant and equipment

8

14

Purchases of intangible fixed assets

(11)

(3)

Purchases of investment securities

(311)

―

Purchases of affiliate company shares

―

(27)

Investments in affiliated companies

(21)

―

Increase in loans

―

(181)

Proceeds from collection of loans

117―

Net cash used in investing activities(665)(3,540)

(119)

1,068

Financing activities:(Decrease) increase in short-term borrowings, net
Payment of refund of lease obligations
Repurchase of treasury stock
Proceeds from retirement of treasury stock

―

(226)

(2,884)(2,271)

1

3

Cash dividends paid

(2,897)(2,815)

Net cash used in financing activities(5,899)(4,240)

(295)

(327)

Effect of foreign currency translation adjustments on cash andcash equivalents
Net increase in cash and cash equivalents

2,197

6,925

Cash and cash equivalents at the beginning of the period

40,88043,077

Cash and cash equivalents at the end of the period

43,07750,003−18−

4 – (5) Events or Circumstances that Raise Doubts as to the Validity of the Going-Concern Assumption
Changes in important items considered fundamental to the preparation of consolidated financial statements: None
4 – (6) Important Items Considered Fundamental to the Preparation of Consolidated Financial Statements
Changes in important items considered fundamental to the preparation of consolidated financial statements
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

1

Scope of Consolidation

1

Scope of Consolidation(1)

Number of consolidated subsidiaries: Eight(1)

Number of consolidated subsidiaries: Eight

Names of principal consolidated subsidiaries:

Names of principal consolidated subsidiaries:

The names of principal consolidated subsidiaries are outlined in

As left.

section 2. The Ryosan Group of this report. Accordingly, thisinformation has been omitted.
(2)

Names of principal non-consolidated subsidiaries:(2)

EC Ryosan Company, Limited

Will Business Service Company, Limited

Will Business Service Company, Limited

The reason for exclusion from the scope of consolidation:

The reason for exclusion from the scope of consolidation:

The assets, net sales, net income (loss) and retained earnings (theThe assets, net sales, net income (loss) and retained earnings (theamountsnine

amounts equivalent to equity shareholdings) of 11 non-consolidated

non-consolidated subsidiaries are considered insignificant andsubsidiaries are considered insignificant and deemed to have

deemed to have immaterial impact on consolidated financial

immaterial impact on consolidated financial statements. As a result,statements. As a result, these non-consolidated subsidiaries have beenthese non-consolidated subsidiaries have been excluded from theequivalent

toequityshareholdings)

ofexcluded from the scope of consolidation.
2

Names of principal non-consolidated subsidiaries:

EC Ryosan Company, Limited

scope of consolidation.

Application of the Equity Method

2

Application of the Equity Method

Names of principal non-consolidated subsidiaries and affiliatedAs left.

companies not accounted for by the equity method:
EC Ryosan Company, Limited
Will Business Service Company, Limited
The reason non-consolidated subsidiaries and affiliated companies
are not accounted for by the equity method:
Non-consolidated subsidiaries and affiliated companies are notaccounted for by the equity method because their net income (loss)
and retained earnings have an immaterial impact on the Group, andtheir overall importance to the Group’s performance is limited.
3

Fiscal Year-End of Consolidated Subsidiaries

3

Fiscal Year-End of Consolidated Subsidiaries

The fiscal year-end of consolidated subsidiaries: ZHONG LING

As left.

INTERNATIONAL TRADING (SHANGHAI) CO., LTD. and
RYOSAN ENGINEERING (THAILAND) CO., LTD. is December
31. This date is used in the preparation of consolidated financial
statements. Where significant transactions have occurred during theperiod between these fiscal year-ends and the consolidated fiscal
year-end, the consolidated financial statements are adjusted
accordingly.
4

Accounting Policies

4

Accounting Policies(1)

Valuation standard and valuation method of important assets(1)

Valuation standard and valuation method of important assets

1.

Marketable securitiesa.

1.

Securities held to maturity

Marketable securitiesa.

Securities held to maturityb.

Shares of subsidiary and affiliated companiesc.

Other marketable securities

Amortized cost basis (straight line method)b.

As left.

Shares of subsidiary and affiliated companies
Cost basis using the moving-average cost methodc.

As left.

Other marketable securities(a)

Securities with quoted market values(a)Securities with quoted market values are stated atfair value as of the closing date. (Net unrealized
gains and losses on other securities are recorded
directly to net assets. Costs of these securities arecalculated based on the moving-average cost
method.)−19−

Securities with quoted market values
As left.

Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(b)(April 1, 2008 to March 31, 2009)

Securities without quoted market values(b)Securities without quoted market values

Securities without quoted market values are stated

As left.

on a cost basis using the moving-average cost
method.
2.

Inventories: Merchandise, finished products, raw materials and2.

Inventories

work in process

Merchandise, finishes products, raw materials and work in

Inventories are valued on a lower of cost or market value basis

process valued on a cost basis using the moving-average costusing the moving-average method.

method (with book values written down due to decreased
profitability of balance sheet amounts)(Change in Accounting Principle)
Effective from the fiscal year under review, the Ryosan Group
has adopted Accounting Standards Board of Japan Statement
No. 9 “Accounting Standard for the Measurement of
Inventories” issued on July 5, 2006.
Taking into account this change, gross profit, operating income
and ordinary income for the fiscal year ended March 31, 2009
decreased by ¥37 million, ¥37 million and ¥37 million,
respectively, while income before income taxes and minority
interests for the fiscal year under review declined by ¥150
million.
Impacts on the segment information are described in therelevant section.

3.

Derivatives (foreign currency exchange contracts)3.

Derivatives (foreign currency exchange contracts)

Market value method(2)

As left.

Depreciation of important depreciable assets
1.

(2)

Property, plant and equipment

Depreciation of important depreciable assets
1.

Property, plant and equipment (excluding lease assets)

Depreciation of property, plant and equipment is calculated by

As left.

the declining-balance method except that depreciation onbuildings (excluding structures) acquired on or after April 1,
1998 is calculated by the straight-line method.
The useful lives of buildings and structures are between three
and 50 years, between two and 15 years for other tangible fixed
assets.
(Change in Accounting Principle)
Tangible fixed assets acquired after April 1, 2007 are primarily
depreciated based on the revised Corporation Tax Law inaccordance with revisions to the Corporation Tax Law (Partial
Revision of the Income Tax and Other Taxes Law No. 6
enacted on March 30, 2007) and implementation guidelines(Implementation Guidance for Partial Revision of the
Corporation Tax Law No. 83 issued on March 30, 2007). The
impact on the Company’s profit and loss as a result of thischange is considered immaterial.
(Additional Information)——

In accordance with revisions to the Corporation Tax Law, theCompany will depreciate tangible fixed assets acquired on or
prior to March 31, 2007 in equal amounts over a period of five
years commencing the next consolidated fiscal year from when
depreciation to the ceiling value was completed. The impact on
the Company’s profit and loss as a result of this change isconsiderd immaterial.
2.

Intangible fixed assets

2.

Intangible fixed assets (excluding lease assets)

3.

Lease assets

Intangible fixed assets are depreciated using the straight-line
method.

As left.
The depreciation of lease assets of finance leases that do nottransfer titles to lessees is computed using the straight-line
method, assuming the lease period to be the useful life and aresidual value of zero.

−20−

Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(3)(April 1, 2008 to March 31, 2009)

Accounting policies for important provisions
1.

(3)

Allowance for doubtful accounts

Accounting policies for important provisions
1.

The Company provides for doubtful accounts based on the

Allowance for doubtful accounts
As left.

historical bad-debt rate applicable to normal loans, and theamount deemed necessary to cover individual accounts
estimated to be uncollectible.
2.

Allowance for loss on investments

2.

The Company provides an amount deemed necessary for loss

Allowance for loss on investments
As left.

on investments in affiliated companies after taking into
consideration the financial standing of affiliated companies.
3.

Employees’ retirement benefits

3.

The Company provides an allowance for retirement and

Employees’ retirement benefits
As left.

severance benefits for employees based on projected benefit
obligations and accrued pension assets as of the end of the
fiscal year under review.
Actuarial gains and losses are amortized using the straight-line
method over a fixed period (10 years) within the averageremaining service period of employees as of the time the cost isincurred, with each amount recognized as an expense startingfrom the following fiscal year. In addition, prior service cost isamortized using the straight-line method over a fixed period (10years) within the average remaining service period of
employees as of the time the cost is incurred, with each amountrecognized as an expense starting from the fiscal year in which
it is incurred.
.
(4)

.

Standard for the translation of important foreign currency(4)

denominated assets and liabilities to Japanese currency

Standard for the translation of important foreign currency
denominated assets and liabilities to Japanese currency

Monetary debts and credits denominated in foreign currencies
are translated into yen using the spot foreign exchange rates in
effect as of the consolidated settlement date. Translationdifferences are treated as gains or losses in the term. Assets andliabilities of foreign subsidiaries and affiliated companies aretranslated into yen using the spot foreign exchange rate in effectas of the consolidated settlement date. Income and expenses offoreign subsidiaries and affiliated companies are translated into
yen using the average rate for the period. Translationdifferences applicable to the Company are included in foreign
currency translation adjustments account in the net assets
section of the balance sheet.

−21−

As left.

Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(5)(April 1, 2008 to March 31, 2009)

Accounting for important lease transactions(5)

Accounting for important lease transactions

Finance leases in which ownership is not transferred to a lessee——

are accounted for in the same manner as operating leases.
(6)

Significant method of hedge accounting
1.

(6)

Hedge accounting method

Significant method of hedge accounting
1.

Hedge accounting method2.

Hedge instruments and hedge items

Hedge accounting is based on allotment processing.
2.

As left.

Hedge instruments and hedge itemsaHedge instruments: foreign currency exchange forward.

contractsb

Hedge items: foreign currency denominated receivables and.

payables; items scheduled for transaction in a foreign

As left.

currency
3

Hedge accounting policy

3

Hedge accounting policy

In order to minimize risks from fluctuations in foreign currency

As left.

exchange rates the relevant transactions are managed inaccordance with the Group’s internal policie. In principle, Ryosanenters into a foreign exchange forward contract based thesettlement date of each individual transaction at the time an orderis received from a client or a purchase order is placed.
4.

Evaluation of hedging effectiveness4.

Evaluation of hedging effectivenessIn accordance with hedge accounting policy, the foreign currency

As left.

amounts and the terms for orders received and placed as well asmonetary debts and credits have corresponding foreign currency
forward exchange contracts for the identical amounts and terms,
their reciprocal interdependence is fully secured throughout any
subsequent fluctuations in foreign currency exchange rates andthis in effect ensures hedge effectiveness.
(7)

Other significant accounting policies for preparing full fiscal year

(7)

consolidated financial statements
Consumption

taxes

are

separately

recorded.

Accrued

Consumption taxes are separately recorded. Accrued

consumptions taxes are recorded in Other current liabilities.
5

Other significant accounting policies for preparing full fiscal
year consolidated financial statements

Valuation of Assets and Liabilities of Consolidated Subsidiaries

consumptions taxes are recorded in Accrued income.
5

Valuation of Assets and Liabilities of Consolidated Subsidiaries

The assets and liabilities of consolidated subsidiaries are evaluated on a

As left.

mark to market value basis.
6

Amortization of Goodwill

6

For the amortization of goodwill, the Company employs a straight-line

Amortization of Goodwill
As left..

method over a period of five years.
7

Scope of “Cash and Cash Equivalents” in the Full Fiscal Year
Consolidated Statement of Cash Flows7

Scope of “Cash and Cash Equivalents” in the Full Fiscal Year
Consolidated Statement of Cash Flows“Cash and cash equivalents” in the consolidated statement of cash flows
includes cash on hand, demand deposits, and short-term investmentswith original maturities not exceeding three months, which are highly
liquid and virtually risk-free with respect to changes of value.

−22−

As left.

4 – (7) Important Items Considered Fundamental to the Preparation of Consolidated Financial Statements
Changes in accounting standards
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)(Accounting Policies for Lease Transactions)
From the fiscal year ended March 31, 2009, the Ryosan Group―――――――

began applying the Accounting Standard for Lease Transactions(Business Accounting Council, the 1st Committee Standard No. 13,
first implemented on June 17, 1993, and last amended on March 30,2007) and the Guidance on the Accounting Standards for Lease
Transactions(The

Japanese

InstituteofCertifiedPublicAccountants, Accounting Practice Committee Guidance No. 16, first
implemented on January 18, 1994, and last amended on March 30,
2007. As a result of the application of this policy, the method of
accounting for financial leases that do not transfer ownership tolessees changed from treating such leases as operating leasetransactions to treating them as sales and purchase transactions.
Taking into account this change, operating income and ordinary
income for the fiscal year ended March 31, 2009 increased by ¥28
million and ¥16 million, respectively, while income before income
taxes and minority interests for the fiscal year under review declinedby ¥50 million.

(Foreseeable Handling of Accounting PoliciesApplied to Foreign Subsidiaries in the preparation of C
onsolidated Financial Statements)―――――――

From a consolidated account settlement perspective, the RyosanGroup has undertaken all essential adjustments following adoptionof the Practical Issues Task Force No. 18 “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries
for Consolidated Financial Statements” issued by the ASBJ on May
17, 2006 from the the fiscal year ended March 31, 2009.
There was no material impact on the Company’s income andexpenses for the fiscal year ended March 31, 2009 as a result of thisrevision..

−23−

Changes in disclosure method
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)(Consolidated Balance Sheets)―――――――

1

In accordance with the “Cabinet Office Ordinance Amendment ofRegulations Concerning Terminology, Forms and Method of
Financial Statements” (2008 Cabinet Ordinance No. 50 issued on
August 7, 2008), the accounting line item “Inventories” recorded in
the Company’s balance sheet as of March 31, 2008 was reclassified
into “Merchandise and finished goods,” “Work in process” and“Raw materials and stored goods” in the Company’s balance sheet
as of March 31, 2009. The amounts of “Merchandise and finishedgoods,” “Work in process” and “Raw materials and stored goods”
included in “Inventories” in the Company’s balance sheet as ofMarch 31, 2008 were ¥16,617 million, ¥191 million and ¥330
million, respectively.

―――――――

2

In the fiscal year ended March 31, 2008, long-term deposits totaling ¥500 million were included in the accounting line item
other investments and other assets in the Company’s consolidat
ed balance sheet. Due to its growing significance, long-term deposits were included as a separate accounting line item in the
Company’s consolidated balance sheet as of March 31, 2009.

−24−

4 – (8) Notes to Consolidated Financial Statements(Millions of yen, figures less than ¥1 million have been omitted, unless otherwise stated)(Notes to consolidated balance sheets)
As of March 31, 2008
1.
2.

Accumulated depreciation of tangible fixed assets

As of March 31, 2009

8,436

8,919

Non-consolidated subsidiary and affiliated company
shares and other3.

- Investment securities (shares)

68

95- Other (equity)

255

255

155

89

―

173

Number of shares issued and outstanding

36,500,000 common shares

34,500,000 common shares

Number of treasury stock held by the Company

1,028,717 common shares

33,358 common shares

Assets pledged as collateral- Investment securities

4.

Guarantee contingent liabilities
The unpaid balance of debt financing provided to
non-consolidated subsidiaries by financial institutions
guaranteed by the Company

5.

(Notes to consolidated statements of income)1.

Fiscal 2007

Fiscal 2008

(April 1, 2007 to(April 1, 2008 to

March 31, 2008)

March 31, 2009)

Research and development expenditure included in

538

581

2

3

- Loss on disposal of buildings and structures

60- Loss on sales of buildings and structures

10- Other

27

41

Total

36

41

selling, general and administrative expenses
2.

Breakdown of gain on sales of property, plant andequipment- Other

3.

Breakdown of loss on sales an disposal of property, plantand equipment−25−

(Calculation Statement Relating to Changes in Consolidated Shareholders’ Equity)
Fiscal 2007, the fiscal year ended March 31, 20078(April 1, 2007 to March 31, 2008)
1. Matters Relating to the Type and Number of Shares Issued and Outstanding and the Type and Number ofTreasury Stock(Thousands of shares)
Number of Shares
As ofMarch 31, 2007
36,50027

Common shares issued and outstanding
Common shares of treasury stock (Note)

Increase

Decrease
—
1,001

—
0

Number of Shares
As ofMarch 31, 2008
36,5001,028

Notes:
1. The increase in the number of common shares of treasury stock reflects the repurchase of 1,000,000 shares ofcommon stock and 1,000 shares of common stock less than one trading unit pursuant to resolutions of theCompany’s Board of Directors.
2. The decrease in treasury stock reflects the sale of common stock less than one trading unit of stock.
2. Matters Relating to Dividends(1) Dividend payment amount
Total Cash
Dividend Paid

Type of Shares
Annual General
Meeting of
Shareholders heldon May 11, 2007
Board of Directors’Meeting held on
November 8, 2007

(Millions of yen unless otherwise stated)
Cash Dividend per
Common Share(Yen)

Base Date

Effective Date

Common shares

1,458

40

Mar. 31, 2007

Jun. 7, 2007

Common shares

1,438

40

Sept. 30, 2007

Dec. 4, 2007

(2) Dividends for which the effective date falls after the fiscal year ended March 31, 2009 included in dividends forwhich the base date falls within the fiscal year ended March 31, 2008
(Millions of yen unless otherwise stated)
Type of Shares
Board ofDirectors’Meeting heldon May 12,
2008

Commonshares

Source ofDividend
Payments

Total Cash
Dividend Paid

Cash Dividend
per Common
Share (Yen)

1,418

40

Retainedearnings

Base Date

Mar. 31, 2008

Effective Date

Jun. 5, 2008

Fiscal 2008, the fiscal year ended March 31, 2009
(April 1, 2008 to March 31, 2009)
1. Matters Relating to the Type and Number of Shares Issued and Outstanding and the Type and Number ofTreasury Stock(Thousands of shares)

Common shares issued and outstanding
Common shares of treasury stock (Note)

Number of Shares
As ofMarch 31, 2008
36,500
1,028

Increase

Decrease
—
1,006

2,000
2,001

Number of Shares
As ofMarch 31, 2009
34,50033

Notes:
1. The decrease in common share treasury stock reflects the repurchase of 2,000,000 shares in accordance with aresolution of the Board of Directors and the repurchase of common stock less than one trading unit of stock.
2. The increase in the number of common shares of treasury stock reflects the repurchase of 1,000,000 shares ofcommon stock and 6,000 shares of common stock less than one trading unit pursuant to resolutions of theCompany’s Board of Directors.
3. The decrease in the number of common shares of treasury stock reflects the retirement of 2,000,000 shares oftreasury stock and the sale of 1,000 shares of common stock less than one trading unit pursuant to resolutions of
the Company’s Board of Directors.

−26−

2. Matters Relating to Dividends(1) Dividend payment amount
Total Cash
Dividend Paid

Type of Shares
Board of Directors’Meeting held on
May 12, 2008
Board of Directors’Meeting held on
October 30, 2008

(Millions of yen unless otherwise stated)
Cash Dividend per
Common Share(Yen)

Base Date

Effective Date

Common shares

1,418

40

Mar. 31, 2008

Jun. 5, 2008

Common shares

1,397

40

Sept. 30, 2008

Dec. 2, 2008

(2) Dividends for which the effective date falls after the fiscal year ending March 31, 2010 included in dividends forwhich the base date falls within the fiscal year ended March 31, 2009
(Millions of yen unless otherwise stated)
Type of Shares
Board ofDirectors’Meeting heldon May 12,
2009

Source ofDividend
Payments

CommonsharesRetainedearnings

Total Cash
Dividend Paid

Cash Dividend
per Common
Share (Yen)

1,378

40

Base Date

Effective Date

Mar. 31, 2009

Jun. 11, 2009

(Notes to consolidated statements of cash flows)
The relationship between the balance of cash and cash equivalents at the end of the fiscal period and items recordedon the consolidated balance sheets.
(Millions of yen unless otherwise stated)
As of March 31, 2008
Cash and cash deposits
Marketable securities
Time deposits with deposit terms
exceeding three months
Bonds and notes with a redemption dateexceeding three months from the date ofacquisition
Cash and cash equivalents

As of March 31, 2008
25,087
17,99250,003
—

(1)

—

(0)

—

43,07750,003−27−

SEGMENT INFORMATION

1. Segment information by business type
Fiscal year ended March 31, 2008
(Millions of yen, figures less than ¥1 million have been omitted)

I

Eliminations
or
corporate

Consolidated

286,098−

286,098

−

−

−

−

25,66524,655
1,009

8,380
7,642
738

286,098
272,686
13,412−
2,674(2,674)

286,098
275,360
10,737

11,604
60
31

5,537
145
223

129,619831
526

44,402
12−

174,022843
526

Semiconductors

Electronic
components

Electronicequipment

Ryosanproducts

148,909103,142

25,665

8,380

−

−

−

148,909
141,648
7,260

103,142
98,7384,403

67,040397
146

45,438
227
123

Total

Sales and operating
incomeSales:(1) Sales to external
Customers(2)Internal sales
between segments,
or exchange
Total sales
Operating expenses
Operating income

II Assets, depreciationand capital
expenditures:
Total assets
Depreciation
Capital expenditure−28−

Fiscal year ended March 31, 2009
(Millions of yen, figures less than ¥1 million have been omitted)

I

Eliminations
or
corporate

Consolidated

220,871−

220,871

−

−

−

−

21,327
20,883
443

6,716
6,201
514

220,871
212,203
8,668

−
2,523
(2,523)

220,871
214,726
6,145

9,356
92
52

4,131
168
51

96,887991
473

52,09911−

148,987
1,002
473

Semiconductors

Electronic
components

Electronicequipment

Ryosanproducts

116,90975,91821,327

6,716

−

−

−

116,909
112,021
4,887

75,91873,0952,823

50,929431
204

32,470
298
164

Total

Sales and operating
incomeSales:(1) Sales to external
Customers(2)Internal sales
between segments,
or exchange
Total sales
Operating expenses
Operating income

II Assets, depreciationand capital
expenditures:
Total assets
Depreciation
Capital expenditureNotes:
1. Methods of determining business segments and main products classified under each business segment(1) Business segments are classified on the basis of organization, product type and sales structure.
(2) Main products of each business segment:
Semiconductors: memories, system LSIs, discrete semiconductors
Electronic components: display devices, power supplies, mechanical components
Electronic equipment: systems equipment, production equipment
Ryosan products: heat sinks (for semiconductors)
2. Unallocated operating expenses included in “Eliminations or corporate” totaled ¥2,674 million in the fiscal year ended March 31,
2008 and ¥2,523 million in the fiscal year ended March 31, 2009. These expenses consisted principally of Ryosan’s information
system investments and expenses related to Ryosan’s planning, administration and accounting departments.
3. Total assets included in “Eliminations or corporate” were ¥44,402 million at March 31, 2008 and ¥52,099 million at March 31, 2009.
These assets mainly include an excess fund for investment at the parent company (marketable securities), long-term investment funds(investment and marketable securities) and assets related to the administration department.
4. Effective from the first quarter of the fiscal year ended March 31, 2009, the Ryosan Group adopted Accounting Standards Board ofJapan Statement No. 9 “Accounting Standard for the Measurement of Inventories” issued on July 5, 2006. Accordingly, the valuation
method applicable to inventories changed from a lower of cost or market value to a cost value basis (with book values written down
due to decreased profitability of balance sheet amounts). As a result of this change, operating income in the Semiconductors,
Electronic Components and Ryosan Products segments declined ¥27 million, ¥10 million and ¥2 million, respectively, while operating
income in the Electronic Equipment segment climbed ¥2 million in comparison with the previously used method.

−29−

2. Geographical segment information
Fiscal year ended March 31, 2008
(Millions of yen, figures less than ¥1 million have been omitted)

Japan
I Sales and operating income
Sales:(1) Sales to external
Customers(2)Internal sales between
segments, or exchange
Total sales
Operating expenses
Operating income
II Assets

Asia

Total

Eliminations
or corporate

Consolidated

196,871

89,226

286,098―

286,098

15,548440

15,989(15,989)―

212,419
204,845
7,574
149,017

89,667
87,1642,503
25,005302,087
292,009
10,078174,022(15,989)(16,648)659―

286,098
275,360
10,737174,022

Fiscal year ended March 31, 2009
(Millions of yen, figures less than ¥1 million have been omitted)

Japan
I Sales and operating income
Sales:(1) Sales to external
Customers(2)Internal sales between
segments, or exchange
Total
Operating expenses
Operating income
II Assets

Asia

Total

Eliminations
or corporate

Consolidated

154,817

66,053

220,871―

220,871

10,762285

11,047(11,047)―

165,580
161,487
4,093
130,896

66,33964,7391,600
18,091

231,919
226,226
5,693
148,987(11,047)(11,499)452―

220,871
214,726
6,145
148,987

Notes:
1. Country and regional segments are classified on the basis of geographic proximity.
2. Principal countries and regions:
Asia ― Hong Kong, Singapore, Taiwan, Malaysia and others
3. Operating expenses are allocated to each geographical segment.
4. Effective from the first quarter of the fiscal year ended March 31, 2009, the Ryosan Group adopted Accounting Standards Board ofJapan Statement No. 9 “Accounting Standard for the Measurement of Inventories” issued on July 5, 2006. Accordingly, the valuation
method applicable to inventories changed from a lower of cost or market value to a cost value basis (with book values written down due
to decreased profitability of balance sheet amounts). As a result of this change, operating income recorded in Japan and Asia declined ¥35
million and ¥2 million, respectively.

−30−

3. Overseas sales
Fiscal year ended March 31, 2008
(Millions of yen, figures less than ¥1 million have been omitted)
Asia
Total
112,604
112,604
286,098
39.4
39.4

I Overseas sales
II Consolidated net sales
III Ratio of overseas sales to consolidated net sales (%)

Fiscal year ended March 31, 2009
(Millions of yen, figures less than ¥1 million have been omitted)
Asia
Total
84,00384,003
220,87138.0
38.0

I Overseas sales
II Consolidated net sales
III Ratio of overseas sales to consolidated net sales (%)

Notes:
1. Country and regional segments are classified on the basis of geographic proximity.
2. Principal countries and regions:
Asia—Hong Kong, Korea, China, Taiwan and others
3. Overseas sales represent the total of export sales of the parent company and sales of its consolidated subsidiaries outside Japan(excluding intra-group sales).

−31−Leases
1. Finance Leases other than Those that Transfer Ownership to the Lessee(1) Acquisition cost, accumulated depreciation and period-end balance of lease assets(Millions of yen unless otherwise stated)
Fiscal 2007
(April 1, 2007 to March 31, 2008)

Vehicles andTransportation

Equipment,
Furniture &Fittings

Acquisition cost

3

1,829

Accumulated depreciation

2

1,260

Period-end balance

1569(2) Period-end balance of unpaid lease expenses
Due within one year196

Due after one year

393

Total

589

(3) Lease expense payment(4) Accumulated depreciation(5) Interest expenses

330
296
16

The straight-line method is used to calculate amortization over the useful life of the asset with no remaining value.
The difference between total lease expenses and the acquisition cost of leased assets is considered as the interest
portion and the allocation of this interest is calculated by the interest method.
2. Operating Leases
The amount of unpaid lease expenses
Due within one year67

Due after one year

50

Total

117

Fiscal 2008, the Fiscal Year Ended March 31, 2009 (April 1, 2008 to March 31, 2009)
1. Finance Lease Transactions(1) Details of lease assets- Property, plant and equipment
Primarily hardware for sales and logistics information systems (tools, equipment, fittings)- Intangible fixed assets
Primarily software for sales and logistics information systems(2) Depreciation and amortization method applicable to lease assets
Lease assets are amortized over their useful lives with no remaining value.
2. Operating Lease Transactions
The amount of unpaid lease expenses applicable to operating lease transaction where cancellation is not allowed
Due within one year70

Due after one year

41

Total

111

−32−

(Transactions with related parties)
Fiscal 2007, the fiscal year ended March 31, 2008
(April 1, 2007 to March 31, 2008)
Directors and Principal Individual Shareholders(Millions of yen)
Position

Director

Name

TsuneoSato

Address—

Capital or
Investment—

Activities
orProfession

RyosanAuditor,
City-Yuwa
Partners(Solicitor)

Ratio of
RyosanShares
with
VotingRightsHeld (%)—

Relationship

Interlocking
Directors

Business
Relationship——Transaction
Details

Amount ofTransaction

Account

Period-End
BalanceLegaladvisor3——

Notes:
1. Consumption taxes are not included in the amount of transaction identified in the table above.
1. Tsuneo Sato is a member of City-Yuwa Partners. The Company has executed an agreement for City-Yuwa Partners to act as legal counsel.
Legal counsel fees paid by Ryosan to City-Yuwa Partners are set in line with commonly accepted business practice and norms.

Fiscal 2008, the fiscal year ended March 31, 2009
(April 1, 2008 to March 31, 2009)
None(Additional Information)
Effective from fiscal 2008, the fiscal year ended March 31, 2009, the Company adopted Accounting Standards Boardof Japan Statement No. 11 “Accounting Standard for Related Party Disclosures” issued on October 17, 2006 andGuidance No. 13 “Guidance on Accounting Standard for Related Party Disclosures” issued on October 17, 2006. As
a result, details of transactions undertaken under which the Company’s directors serve as the representative ofanother company have been omitted from the scope of disclosure.

−33−

(Tax-effect accounting)
1. Breakdown of major causes of occurrence in deferred tax assets and deferred tax liabilities（Millions of yen unless otherwise stated)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008

(April 1, 2008 to March 31, 2009)

618

496

Investment securities

600

528

Golf membership rights

145

124

Accrued bonuses

308

258

Accrued enterprise taxes

129

―

864

845

208

225

(Deferred tax assets)
Amount exceeded amortization of softwareand other

Provision for employees’ retirement
benefits
Provision for allowance for doubtful
accounts
Other
Total deferred tax assets

275

294

3,150

2,774

(357)

(9)

(8)

(10)

(Deferred tax liabilities)
Net unrealized gain on other marketablesecurities
OthersTotal deferred tax liabilities

(365)

(19)

Total

2,785

2,531

Note: An amount of ¥ (8) million included in net deferred tax assets for the fiscal year ended March 31, 2008, ¥1 million is included in othercurrent liabilities and ¥7 million in other long-term liabilities in the long-term liabilities, respectively, of the Company’s consolidatedbalance sheet.
An amount of ¥ (2) million included in net deferred tax assets for the fiscal year ended March 31, 2009, ¥0 million is included in othercurrent liabilities and ¥1 million in other long-term liabilities in the long-term liabilities, respectively, of the Company’s consolidatedbalance sheet.

2. Breakdown of major differences between the statutory tax rate and the effective tax rate after adoption oftax-effect accounting
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

Information on the difference between the statutory tax rate

As left.

and the effective tax rate is not presented for the fiscal year
since the difference between the statutory tax rate and theeffective tax rate was less than 5/100 and therefore
considered immaterial.

−34−

(Marketable securities)
1. Bonds and notes held to maturity with quoted market value(Millions of yen, figures less than ¥1 million have been omitted)
As of March 31, 2008

Bonds and notes for whichmarket value exceeds theamount stated on consolidatedbalance sheets

Amountstated on
consolidatedbalance sheet

Market value

17,992

17,992As of March 31, 2009
Amountstated onMarket value
Difference
consolidatedbalance sheet

Difference

0

—

—

—

2. Other securities with quoted market values(Millions of yen, figures less than ¥1 million have been omitted)

Securities forwhich the amountstated on
consolidatedbalance sheets
exceeds theiracquisition costs
Securities forwhich acquisition
costs exceed theamount stated on
consolidatedbalance sheets
Total

As of March 31, 2008
AmountAcquisition
stated on
Difference
cost
consolidatedbalance sheet

As of March 31, 2009
AmountAcquisition
stated on
Difference
cost
consolidatedbalance sheet

Stocks

1,620

2,607

986

580

830

249

Stocks

333

233

(100)

1,112

886

(226)

1,954

2,840

886

1,693

1,716

23

Note: In the fiscal year ended March 31, 2009, the Company has recorded an amount totaling ¥261 million reflecting the impairment ofinvestments and other assets. With regard to the impairment of other securities with quoted values, the Company has applied impairment
accounting in cases where the drop in quoted values exceeds 40%.

3. Other securities sold in the fiscal year ended March 31, 2009
(Millions of yen, figures less than ¥1 million have been omitted)
Sales amount
Total profit from sales

As of March 31, 2008——

As of March 31, 2009——

4. Other securities without quoted market values(Millions of yen, figures less than ¥1 million have been omitted)

Other securities
Non-listed stocks
Bonds and notes

As of March 31, 2008
Amount stated on
consolidated balance sheet

As of March 31, 2009
Amount stated on
consolidated balance sheet
133
1,000

78
1,000

Note: For the fiscal year ended March 31, 2009, the Company incurred an impairment loss totaling ¥64 million. The book value after
accounting for impairment losses was charged to acquisition costs.

−35−

5. Other securities with maturities and bonds and notes held to maturity which the Company plans to redeem(Millions of yen, figures less than ¥1 million have been omitted)
As of March 31, 2008
Commercial paper
Bonds and notes
Other

As of March 31, 2009

Less than one year

17,992More than 10 years———

Less than one year——

More than 10 years

1,000

1,000

(Derivatives)
Information relating to derivative transactions is considered immaterial to the preparation of this business report.
Accordingly, derivative transaction information has been omitted.

−36−

(Retirement benefits)
1. Overview of retirement benefits plans adopted
Based on rules and regulations relating to retirement benefits, the Company maintains allowances for termination
allowance plans, approved retirement annuity plans and defined contribution pension plans. Certain consolidated
overseas subsidiaries maintain defined benefit plans.
2. Breakdown of benefit obligations(Millions of yen unless otherwise stated)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)(4,701)
2,391
115
46

(4,586)
2,426
35
38

(2,149)(2,086)

1. Projected benefit obligation
2. Fair value of plan assets
3. Unrecognized actuarial loss
4. Unrecognized prior service cost
5. Reserve for employee retirement
benefits

Note: For certain consolidated subsidiaries, the simplified method is used to calculate benefit obligation.

3. Breakdown of benefit costs(Millions of yen unless otherwise stated)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

270
88
(17)

277
93
(17)

27

36

7
376

7
397

1. Service cost
2. Interest cost
3. Expected return on plan assets
4. Expensed amount for differences in
actuarial calculation
5. Amortization of prior service cost
Subtotal
6. Contribution to defined contribution
pension plan
Total pension cost

103

99

479

497

Notes:
1. For consolidated subsidiaries that use the simplified method, pension cost is recorded as “service cost.”

4. Calculation basis for retirement benefits
1. Method of attributing benefit to periodsof service
2. Discount rate
3. Rate of expected return on plan assets
4. Amortization period for the difference in
actuarial calculation
5. Amortization period for prior service
costs

Straight-line method

Straight-line method

2.0%
0.75%

2.0%
0.75%

10 years

10 years

10 years

10 years(Stock options and other)
Not applicable.
(Corporate integration and other)
Not applicable.

−37−

(Per share information)(Yen unless otherwise stated)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

1. Net assets per share

3,348.70

3,376.78

2. Net income per share

187.15111.83

Notes:
1. Net income per share for the fiscal years ended March 31, 2008 and March 31, 2009 are calculated on thefollowing basis:(Millions of yen unless otherwise stated)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

Net income

6,738

3,919

Net income applicable to common stock

6,738

3,919

Average number of shares for the period

36,005 thousand shares

35,050 thousand shares(Important subsequent events)
Not applicable−38−

5 - (1) Non-Consolidated Balance Sheets(Millions of yen)
As of March 31, 2008ASSETS
Current assets:
Cash and cash deposits
Trade notes receivable
Trade accounts receivable
Marketable securities
Merchandise
Finished products
Merchandise and finished products
Raw materials
Work in process
Accrued income
Income tax refund receivable
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets:
Property, plant and equipment:
Buildings
Accumulated depreciation
Buildings (net)
Structures
Accumulated depreciation
Structures (net)
Machinery and equipment
Accumulated depreciation
Machinery and equipment (net)
Vehicles and transportation
Accumulated depreciation
Vehicles and transportation (net)
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures (net)Land
Lease assets
Accumulated depreciation
Lease assets (net)Total property, plant and equipment
Intangible fixed assets
Goodwill
Telephone subscription rights
Lease assets
Total intangible fixed assets
Investments and other assets:
Investment securities
Shares in affiliated companies
Equity investments
Equity in affiliated companies
Affiliated company long-term loans receivable
Long-term deposits
Reorganization and other claims
Deferred tax assets
Other investments and other assets
Allowance for doubtful accounts
Allowance for loss on investments
Total investments and other assets
Total fixed assets
Total assets−39−

As of March 31, 2009

21,765
3,033
71,077
17,992
11,656
274
―
269
158
2,289
―
524
219
(61)
129,201

45,0453,230
46,014―――
10,898
163
43
1,794
198
378
515
(46)
108,235

10,278(5,118)
5,159
221
(182)
38
967
(634)
333
7
(7)
0
2,293
(1,816)
476
8,147
―
―
―
14,156

10,274(5,344)
4,930
221
(188)
32
956
(726)
230
7
(7)
0
2,291
(1,884)
407
8,137
660
(196)
463
14,202

78
48
―
126

24
48
38
110

3,974
1,219
199
278
40
―
1,016
2,265
1,404
(1,016)(85)
9,296
23,579152,780

2,795
1,251
182
278
139
3,500
999
2,150
749
(1,049)(118)
10,87925,192
133,428

(Millions of yen)
As of March 31, 2008

As of March 31, 2009

LIABILITIESCurrent liabilities:
Trade accounts payable

33,976

17,763

Short-term bank loans

2,274

3,236

Lease obligations―

157

Other payables

1,348

1,604

995

855

Accrued expenses
Accrued income taxes

1,904

―

Advances received

122

25

Deposits received

161

58

Other current liabilities

13―

Total current liabilities

40,796

23,701Long-term liabilities:
Lease obligations
Employees’ retirement benefits

―

394

2,124

2,069

Other long-term liabilities

307

312

Total long-term liabilities

2,432

2,777

43,22826,47917,69017,69019,114

19,114

Total liabilities
NET ASSETS
Shareholders’ equity:
Common stock
Additional paid-in capital
Capital reserve
Other additional paid-in capital

8―

Total additional paid-in capital

19,122

19,114

1,371

1,371

Other reserve

64,30064,300Retained earnings carried forward

9,496

4,537

75,16870,209Retained earnings
Profit reserve
Other retained earnings

Total retained earnings
Treasury stock(2,940)(82)

Total shareholders’ equity

109,040

106,931

Net unrealized gain on other marketable securities

520

14

Gain (loss) on deferred hedges(7)

3

Total valuation and conversions

512

17

Total net assets

109,552

106,948

Total liabilities and net assets

152,780

133,428

Valuation and conversions:−40−

5 - (2) Non-Consolidated Statements of Income(Millions of yen)
Fiscal 2007
(April 1, 2007 to
March 31, 2008)

Fiscal 2008
(April 1, 2008 to
March 31, 2009)

204,871
7,548
212,419

159,553
6,027
165,580

11,636
186,630
198,266
11,656
186,610

11,656144,231
155,888
10,687145,201

Net sales
Merchandise sales
Finished product sales
Total net sales
Cost of sales
Cost of merchandise sales
Merchandise stock at the beginning of the period
Purchases during the period
Subtotal
Merchandise stock at the end of the period
Cost of merchandise sales
Cost of finished product sales
Finished product stock at the beginning of the period
Cost of finished products manufactured during theperiodPurchases during the period
SubtotalFinished product stock at the end of the period
Cost of finished product sales
Total cost of sales
Gross profit
Selling, general and administrative expenses
Packaging and freight expenses
Transfer to allowance for doubtful accounts
Directors’ remuneration
Employees’ salaries
Bonuses
Retirement benefit expenses
Employee benefits
Travel expenses
Rental expenses
Insurance premiums
Commission payments
Depreciation and amortization
Research and development expenses
Other selling, general and administrative expenses
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Interest on marketable securities
Dividend income
Gain on foreign exchangeManagement consultation fee
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange loss
Miscellaneous expenses
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on reversal of allowance for doubtful accounts
Total extraordinary gains
Extraordinary losses
Loss on sales and disposal of property, plant and equipment
Loss on devaluation of inventories
Loss on devaluation of investment securities
Provision for allowance for loss on investments
Loss on devaluation of golf membership rights
Extraordinary loss attributable to the application of leaseaccounting standards
Impairment loss
Special severance payments
Loss on liquidation of affiliated companies
Total extraordinary losses
Income before income taxes
Income taxes ― current
Income taxes ― deferred
Total income taxes
Net income

−41−

251

274

6,223

4,947

72
6,547
274
6,272
192,882
19,537

41
5,263
210
5,053
150,254
15,326

534
―
488
2,881
1,186
408
699
522
675
66
954
603
538
2,403
11,962
7,574

461
18
363
2,918
1,101
431
680
471
351
67
836
754
581
2,214
11,251
4,074

17
108
792
―
778
533
2,230

44
74
881
57
698
373
2,130

154
123
70
349
9,455

97
―
21
119
6,085

180
180

―
―

27
―
88
7
―

39
112
325
32
8

―

66

―
―
20
144
9,492
3,920
72
3,992
5,499

9
177
―
772
5,312
1,736
601
2,337
2,974

5 - (3) Non-Consolidated Statements of Changes in Shareholders’ Equity, Valuation and Conversions(Millions of yen)
Fiscal 2007
(April 1, 2007 to March 31, 2008)
Shareholders’ equity
Common stock
Balance as of the end of the previous period
Increase (decrease) during the period
Total increase (decrease) during the period
Balance as of the end of the period
Additional paid-in capital
Capital reserve
Balance as of the end of the previous period
Increase (decrease) during the period
Total increase (decrease) during the period
Balance as of the end of the period
Other additional paid-in capital
Balance as of the end of the previous period
Increase (decrease) during the period
Disposal of treasury stock
Retirement of treasury stock
Total increase (decrease) during the period
Balance as of the end of the period
Total additional paid-in capital
Balance as of the end of the previous period
Increase (decrease) during the period
Disposal of treasury stock
Retirement of treasury stock
Total increase (decrease) during the period
Balance as of the end of the period
Retained earnings
Profit reserve
Balance as of the end of the previous period
Increase (decrease) during the period
Total increase (decrease) during the period
Balance as of the end of the previous period
Other retained earnings
Other reserve
Balance as of the end of the previous period
Increase (decrease) during the period
Total increase (decrease) during the period
Balance as of the end of the previous period
Retained earnings carried forward
Balance as of the end of the previous period
Increase (decrease) during the period
Appropriation of earnings as cash
dividends
Net income for the period
Retirement of treasury stock
Total increase (decrease) during the period
Balance as of the end of the period
Total retained earnings
Balance as of the end of the previous period
Increase (decrease) during the period
Appropriation of earnings as cash dividends
Net income for the period
Retirement of treasury stock
Total increase (decrease) during the period
Balance as of the end of the period
Treasury stock
Balance as of the end of the previous period
Increase (decrease) during the period
Acquisition of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Total increase (decrease) during the period
Balance as of the end of the period
Total shareholders’ equity
Balance as of the end of the previous period
Increase (decrease) during the period
Appropriation of earnings as cash dividends
Net income for the period
Acquisition of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Total increase (decrease) during the period
Balance as of the end of the period−42−

Fiscal 2008
(April 1, 2008 to March 31, 2009)

17,69017,690―17,690―17,69019,114

19,114―
19,114―
19,114

8

8

0
―
0
8

0
(7)
(8)
―

19,122

19,1220―019,1220(7)(8)
19,114

1,371

1,371

―
1,371

―
1,371

64,30064,300―64,300―64,300

6,893

9,496

(2,897)(2,815)

5,499
―
2,602
9,496

2,974
(5,117)(4,958)4,537

72,56575,168(2,897)
5,499
―
2,602
75,168(2,815)2,974(5,117)(4,958)70,209(57)(2,940)(2,884)
1―(2,883)(2,940)(2,271)
4
5,125
2,858
(82)

109,321

109,040(2,897)5,499(2,884)1―(280)
109,040(2,815)2,974(2,271)
3―(2,108)106,931(Millions of yen, figures)
Fiscal 2007
(April 1, 2007 to March 31, 2008)
Valuation and conversions:
Net unrealized gain on other marketable securities
Balance as of the end of the previous period
Increase (decrease) during the period
Net changes in items excluding shareholders’equity during the period
Total increase (decrease) during the period
Balance as of the end of the period
Gain (loss) on deferred hedges
Balance as of the end of the previous period
Increase (decrease) during the period
Net changes in items excluding shareholders’equity during the period
Total increase (decrease) during the period
Balance as of the end of the period
Total valuation and conversions
Balance as of the end of the previous period
Increase (decrease) during the period
Net changes in items excluding shareholders’equity during the period
Total increase (decrease) during the period
Balance as of the end of the period
Total net assets
Balance as of the end of the previous period
Increase (decrease) during the period
Appropriation of earnings as cash dividends
Net income for the period
Acquisition of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Net changes in items excluding shareholders’ equity
during the period
Increase (decrease) during the period
Balance as of the end of the previous period−43−

Fiscal 2008
(April 1, 2008 to March 31, 2009)

1,711

520

(1,191)(506)(1,191)
520

(506)
14

(0)

(7)

(7)

11

(7)
(7)

11
3

1,711

512

(1,198)(494)(1,198)
512

(494)
17

111,032

109,552(2,897)5,499(2,884)
1―(2,815)2,974(2,271)3―(1,198)(494)(1,479)109,552(2,603)106,948

6. Other
Manufacturing, New orders and Sales(1) Manufacturing(Millions of yen, figures less than ¥1 million have been omitted)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

Heat sinks

7,004

5,565

(2) New Orders(Millions of yen, figures less than ¥1 million have been omitted)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

Semiconductors

150,241

109,186

Electronic components

102,189

71,712

Electronic equipment

26,95021,640Ryosan products

8,423

6,173

287,805

208,712Total(3) Sales(Millions of yen, figures less than ¥1 million have been omitted)
Fiscal 2007

Fiscal 2008

(April 1, 2007 to March 31, 2008)(April 1, 2008 to March 31, 2009)

Semiconductors

148,909

116,909

Electronic components

103,142

75,918

Electronic equipment

25,66521,327

Ryosan products

8,380

6,716

286,098

220,871

Total

−44−

Changes in Directors (Effective June 26, 2009)(1) Directors Scheduled to Retire
Current Position

Name

Managing Director and General Manager

Comments

Yukio Sasaki

2nd Domestic Marketing and Sales Headquarters
Director and General Manager

Yukio Tanaka

International Marketing and Sales Headquarters

Appointment as a corporate auditor to the Company(Planned)(2) Candidates for Appointment as New Directors
New Appointment

Name

Director and General Manager

Takeshi Honda

Administrative Headquarters
Director and General Manager

Katsuyuki Suzuki

Semiconductor Business Headquarters

Current Position
General Manager, Administrative Headquarters
Deputy General Manager, 1st Semiconductor Business
Headquarters(3) Directors Scheduled for Promotion
New Appointment

Name

Senior Managing Director and General Manager

Harumitsu Seki

Finance and Accounting Headquarters

Current Position
Managing Director and General Manager
Finance and Accounting Headquarters(4) Other Changes
New Appointment

Name

Current Position

Managing Director and General Manager

Managing Director and General Manager

1st Domestic Marketing and Sales Headquarters

Sales Administration Headquarters(Concurrent positions held)(Concurrent positions held)

General Manager, 3rd Domestic Marketing and Sales

Isao Hayashi

Headquarters
GeneralManager,

General Manager, 1st Domestic Marketing and Sales
Headquarters

Electronic

Components

Business

General Manager, 3rd Domestic Marketing and Sales

Headquarters

Headquarters

Director and General Manager
Sales Administration Headquarters(Concurrent positions held)
General Manager, International Marketing and Sales

Hiroshi Shibuya

Director and General Manager
2nd Semiconductor Business Headquarters

Headquarters
In charge of New Products Marketing
Director and General Manager
Director and General Manager
Engineering Headquarters

1st Semiconductor Business Headquarters
Toshifumi Sakata(Concurrent position held)
GeneralManager,

Semiconductor

Engineering

Headquarters
Director and General Manager
2nd Domestic Marketing and Sales Headquarters

Tsuyoshi Koyama

Director and General Manager
Electronic Components Business Headquarters(5) Corporate Auditors Scheduled to Retire
Current Position

Name

Corporate Auditor (Full-time)

Makoto Nakanishi

Corporate Auditor

Hajime Shibatani

Comments(6) Candidates for Appointment as New Corporate Auditors
New Appointment

Name

Corporate Auditor (Full-time)

Yukio Tanaka

Corporate Auditor

Kotaro Nakano−45−

Current Position
Director and General Manager
International Marketing and Sales Headquarters
Corporate Auditor
Showa Yokkaichi Sekiyu Co., Ltd.