Summary(Translation)
Fields Corporation
Summary of Financial Statements and Business Results (Consolidated)Year Ended March 31, 2006
May 15, 2006
Company Name:

Fields Corporation(URL: http://www.fields.biz)
JASDAQ (Securities code: 2767)
Tokyo
Hidetoshi Yamamoto
President, Representative Director and CEO
Hiroyuki Yamanaka
General Manager, Administration Division
Tel: (03) 5784-2111

Listed on:
Head Office:Representative Director:
Inquiries:

Date of Board of Directors meeting
to approve these accounts:
U.S. GAAP applied (Yes/No):

May 15, 2006
No

1. Summary of business results for the year ended March 31, 2006 (April 1, 2005, to March 31, 2006)(1) Operating results
Net salesYear ended
March 31, 2006
Year ended
March 31, 2005

Operating income

Millions of yen(% change)

96,814(18.6)

81,658(23.3)Net income
per share

Net income

Year ended
March 31, 2006
Year ended
March 31, 2005

Millions of yen（Rounded down to nearest million）
Ordinary income(% change)

Millions of yen(% change)

12,348(2.1)

13,127(5.2)

12,097(1.9)

12,480(2.2)

Diluted net
income per
share

Return on
equityOrdinary
income tototal assets

Ordinary
income tonet sales

Millions of yen(% change)

Yen

Yen

%

%

%

7,085

(2.3)

20,118.14

−

19.5

16.4

13.6

6,926

(4.6)

19,888.61

−

28.9

22.8

15.3

Notes: 1. Equity in earnings of affiliates
Year ended March 31, 2006: ¥429 million
Year ended March 31, 2005: ¥421 million
2. Average number of shares outstanding
Year ended March 31, 2006:
347,000
Year ended March 31, 2005:
343,000
3. Changes in accounting methods (Yes/No): No
4. Percentages for net sales, operating income, ordinary income and net income denote changes compared withthe previous fiscal year.

1(2) Financial position
Total assets

Shareholders’ equity

Shareholders’ equity
ratio

Shareholders’ equity
per share

Millions of yen

Millions of yen%

Yen

At March 31, 2006

87,556

39,411

45.0

113,275.37

At March 31, 2005

72,58433,42646.0

96,026.73

Cash and cash
equivalents at end of
year

Note:

Total number of shares issued and outstanding at end of fiscal year
Year ended March 31, 2006:
347,000
Year ended March 31, 2005:
347,000(3) Cash flows

Year ended
March 31, 2006
Year ended
March 31, 2005

Cash flow fromoperating activities

Cash flow frominvesting activities

Cash flow fromfinancing activities

Millions of yen

Millions of yen

Millions of yen

Millions of yen

6,164(2,224)(1,540)15,777

2,965(5,257)

10,177

13,326(4) Scope of consolidation or application of the equity method
Number of consolidated subsidiaries: 9
Number of unconsolidated subsidiaries accounted for by the equity method: –Number of affiliates accounted for by the equity method: 2(5) Changes in the scope of consolidation or application of the equity method
Newly consolidated companies: 3
Excluded companies: 3
Newly added equity method companies: –Excluded equity method companies: 1

2. Forecast earnings for the year ending March 31, 2007 (April 1, 2006, to March 31, 2007)
Net sales

Ordinary income

Net income

Millions of yen

Millions of yen

Millions of yen

First half

40,640

3,160

1,270

Full year

106,960

14,0707,400

Reference: Projected net income per share (Full year): ¥21,325.64

2

1. Outline of the Fields GroupThe Fields Group (parent company and associated companies) comprises Fields Corporation ("the Company"), 12
subsidiaries, and 3 affiliated companies.
The Group's principal business activities are the sale of pachinko/pachislot machines and, based on rights
created by itself or acquired for secondary use, the planning and development of digital content that it applies to avariety of media. The Group's "digital content business strategy," its strategy for implementation over the medium
term, is described on page 5 hereof in section 3: "Management strategies for the medium to long term."
It has been decided to rename the "Sales of pachinko/pachislot machines" category, stated as a separate businesssegment up to the previous fiscal year, as the "Pachinko/pachislot field" (hereinafter "PS Field"), and in view of the
expansion of the scale of game business within the "Others" segment, to make game-related business an
independent category divided into segments according to business type, namely as the "Game Field" and "Other
Field" categories.
The business areas of each company in the Fields Group are summarized below.
Business segment
PS FieldGame Field

Other Field

Principal business
Planning, development and sale of pachinko/pachislot
machines
Pachinko/pachislot machine maintenance
Purchasing of pachinko/pachislot machines
Planning and development of pachinko/pachislot
machine software
Planning, development and sale of game software forhome use

Company nameFields Corporation
Fields Jr. Corporation
Rodeo Co., Ltd.
Digital Lord Corporation
D3 Publisher Inc.
Entertainment Software PublishingInc.
D3Publisher of America, Inc.*
D3Publisher of Europe Ltd.*
D3DB S.r.l.*Japan Sports Marketing, Inc.
Kadokawa Haruki Corporation
White Trash Charms Japan Co., Ltd.
Database Co., Ltd.
E-Active Co., Ltd.
G&E Corporation
APE Inc.
* Companies located overseas

Other content businessBusiness organization chart
The Company sells pachinko/pachislot machines through a distribution model and an agency model. Under the
distribution model it sells the machines directly to pachinko hall operators through the marketing efforts of its
branch offices, while under the agency model it mediates sales of the machines as an agent.
Distribution model

Agency model

Nationwide pachinko halls(Our users)

Nationwide pachinko halls(Our users)

Collection ofsales amountCollection ofsales amount

Agency(Brokerage of sales)
Payment ofcommissions

SecondaryagencySalesamountRemittanceof salesamountPayment ofcommissions
Transport ofmachines

Remittanceof salesamountCollectionof salesamountTransport ofmachines

Fields(Primary agency)

Fields

Receipt ofcommissions

Purchase ofmachines

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

Remittanceof salesamountPachinko/pachislot machine makers

3

The chart below provides an overview of Group businesses.

Product sales
Sales representation
Agencies (Mediators)(Consolidated subsidiary)Fields Jr. Corporation

Installation,
maintenance ofpachinko/pachislot machines

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

Pachinko/pachis
machine manufactu

Product purchasing(Users)Nationwide pachinko halls

PS Field

Fields Corporation

Consignmentof installation(Consolidated subsidiary)
Digital Lord CorporationGame Field

Businesscollaboration(Consolidated subsidiaries)
D3 Publisher Inc.
Entertainment Software Publishing Inc.
D3Publisher of America, Inc.
D3Publisher of Europe Ltd.
D3DB S.r.l.
Through a corporate split on April 1, 2006,
D3 Publisher Inc. changed its trade name to
D3 Inc., and newly established D3 Publisher
Inc.

Users

Copyright licensing (Merchandising rights)
Content

Other Field

Businesscollaboration(Consolidated subsidiary)
Japan Sports Marketing, Inc.
Professional Management Co., Ltd., Total
Workout Corporation, and J. Sakazaki
Marketing Ltd. merged on October 1, 2005,
to form Japan Sports Marketing, Inc.

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

(Non-equity method affiliate)

G&E Corporation(Equity method affiliate)
Kadokawa Haruki Corporation(Non-consolidated subsidiary) (Non-consolidated subsidiary)

Database Co., Ltd.

E-Active Co., Ltd.

4

(Non-consolidated subsidiary)

APE Inc.

2. Operating Policies
1. Fundamental corporate management policy
Taking the pachinko/pachislot field as its starting point the Company has been expanding its business domain in avariety of entertainment fields, with the aim of translating into reality its management philosophy of providing "thegreatest leisure for all people." Content business constitutes the basic engine for shaping the core strength of this.
By harnessing the collective strength of its Group companies, Fields Corporation acquires merchandising rights
with the objective of creating content and for multidimensional secondary use. By means of detailed project design
based on strategic marketing, the Company will pursue its business of providing content to a diversity of media,
primarily pachinko/pachislot and games.
The Company’s fundamental corporate management policy is to place "shareholders first." The twin pillars of
this are to enhance corporate value and to return profits to shareholders, for which we will seek to make optimal use
of our management resources.
2. Fundamental corporate policy for profit distribution
The Company, which views raising shareholder value as its primary task, carries out a fundamental policy of paying
dividends at an appropriate level in line with profit.
For the fiscal year ended March 2006, the Company paid an interim dividend of ¥2,000 per share, and plans topay ¥2,000 for the year-end dividend. As a result, the dividend payout ratio is scheduled to be 20.3%.
The Company makes every effort to make effective use of retained earnings to enhance its financial conditionand strengthen the foundations of its operations, at the same time giving due consideration to business development
requirements.
3. Management strategies for the medium to long term
In May 2004 the Ministry of Economy, Trade and Industry released its New Industry Promotion Strategy, the aimof which is to nurture industries to underpin the future of the Japanese economy. The future potential of the content
industry is one of the focuses of the strategy, which holds high expectations for the growth potential of the digitalcontent field, including animations and games.
Under its management philosophy of providing "the greatest leisure for all people," the Company has long been
focusing efforts on furthering its content-provider strategy—based on the multiple use of digital content—as thefoundation for enhancing its competitive advantage.
Fields believes that the essence of content business lies in creating content with high commercial value, andputting it to a diversity of uses. To that end, with the overwhelming earnings capacity of the PS Field serving as a
powerful base, the Company is strengthening collaboration with its affiliates and partners for the creation of primarycontent and the development of content for diverse secondary use. In addition, particular emphasis is being placedon the importance of "killer content," which is now a special feature of content business, and through Neon Genesis
Evangelion, Fields has been developing content in a wide range of media, for example pachinko/pachislot, games
and merchandising goods. Fields and its Group companies will continue to work in concert on the strategic
development of an array of killer content comparable with Neon Genesis Evangelion, including primary content
created in-house, and also to develop the content in a variety of media.

5Digital content business

Fields Group Digital Content Business
Marketing

Production

Integration

Provision

Distribution

Pachinko/pachislot

TV,
Internet,
DVDs,
etc.

Alliances

Consumers (Domestic/overseas)

Digital content development

Content creation/purchaseMarketingContent elements (characters, etc.)

Games

Feedback
Priority
capabilities･･- Soundjudgment and investment･
ability for rights acquisitions- Production capabilities for taking
initiatives

･

･

･

- Concept management ･- Branding capability ･capability
for enhancing value- Image development
capability･- Promotion capability forenhancing value- Sales capability for
maximizing sales volume

4. Challenges for the future(1) PS Field[1] PS planning and development system
The Company's planning and development division for PS (pachinko/pachislot) merchandise has the status of afabless manufacturer that provides merchandising rights and product planning to collaborating manufacturers,
and also image development and the comprehensive supply of image units. In the fiscal year under review, in
addition to merchandising rights and product planning, the Company undertook image development for threemodels. In addition, through the completion of the prototypes of image units the Company has been able tosolidify its status as a fabless manufacturer conducting comprehensive planning and development. With respect
to the provision of merchandising rights, these are already being provided continuously to a number ofcompanies other than manufacturers with which we collaborate, and we intend to continue developing thisbusiness of providing merchandising rights.
Given these trends, we are taking steps to secure high-quality human resources for our planning anddevelopment operations, and at the same time are strengthening collaboration with outsourcing partners in avariety of spheres.
[2] PS sales structure
For PS sales the Company has established a sales structure with the finest array of human resources in theindustry, including some 400 marketing personnel. This is backed by a nationwide network of 30 branches,
boosted by the recent opening of a branch in the city of Kumamoto. In consequence, for sales ofpachinko/pachislot machines that involve the launch of the largest number of machines in the industry, Fields is
confident that it has the structure in place to enable it to conduct the continuous, stable input and sale of its
products.
Fields is committed to continuing to increase sales in the PS Field and expand market share, and to that end it
will continue its efforts to further boost sales of collaborative brands and also to develop new brands. To position
ourselves for these sales of multiple brands and machine models, we will constantly investigate the desirable
configuration of our sales channels, so as to ensure efficient sales activities; we will place emphasis on the
education and training of our marketing personnel, so as to mold them into a professional group with a high levelof advanced, specialist knowledge of pachinko and pachislot gaming, and with in-depth understanding of theknow-how required for hall management; and we will increase our presence in the industry as a sales
6organization that gains the profound trust of client halls.
Rodeo Co., Ltd., an affiliate accounted for by the equity method, is continuing to make strong progress,
having made mega-hits of Onimusha 3, which has been on sale continuously since the previous fiscal year, andof Ore no Sora, launched at the end of the fiscal year under review (cumulative sales of more than 100,000 ineach case). We are also continuing to develop a structure to enable a continuous stream of products to be brought
to the market from next term onwards, when machines that conform with the new regulations get on track as they
achieve compliance with the requirements of the Security Electronics and Communications Technology
Association.
(2) Game Field
D3 Inc. ("D3") engages in the unitary planning, development, and distribution of highly diverse game software
for a variety of platforms in a global market that encompasses Japan, North America and Europe. As
demonstrated by the way in which Neon Genesis Evangelion simulator game software became a big hit during
the year under review, the sharing of content with D3 is generating synergistic effects. By proceeding still further
with the bidirectional creation and sharing of content in this way, we will continue to develop operations
vigorously in the digital content field.
During the fiscal year under review, particular efforts were thrown into the development of game software,
targeting the North American market in particular. The vigorous development investment that was conducted
will be reflected in business results from the next fiscal year onwards.
(3) Other Field
Japan Sports Marketing, Inc. ("JSM") was established on October 1, 2005, through the amalgamation of three
Fields subsidiaries. JSM has realized the power of sport to inspire people everywhere—irrespective of
nationality—with dreams and infuse them with emotion, and pursues a business model unparalleled anywhere in
the world by the manner in which it combines three business domains: athlete business, in which it engages in
the management of athletes in a way that enables them to make maximum use of their capabilities; rights
business, in which it conducts an array of activities in major sports such as baseball, soccer, and golf, ranging
from event management to the handling of broadcasting rights, together with the acquisition of merchandisingrights for peripheral content; and solutions business, based on the former Total Workout Corporation, in which
the personal values of a wide array of consumers are enhanced through the services of sports gymnasiums. In thefiscal year under review, progress was made with the securing and management of overseas sports content,
including the handling of the management of the U.S. women's professional golf LPGA Tour.
Kadokawa Haruki Corporation, an equity-method affiliate, is renowned for having a pioneering media mix ofpublishing, movies, and music. Its movie Otokotachi no Yamato, for which it provided funding and the original
script, has been a major success, and the book of the film, the title of which is Otokotachi no Yamato, has been abrisk seller. Based on the publishing business, the company will continue to be a driving force for the creation ofprimary content within the Fields Group.
5. Matters relating to relationships with parent company, etc.
Not applicable, since the Company does not have a parent company, etc.
6. Development of internal control system and its operational statusa. Organization of internal control, allocation of business and management divisions, status of internal regulations,and status of provision of other internal administrative structures
In accordance with its management philosophy of providing "the greatest leisure for all people," the Fields
Group seeks to enhance corporate value constantly by strengthening its internal administrative structures,
including by building management mechanisms and organizational structures, by laying down various
regulations to cover the entire range of the company's business, by the efficient management of business, and by
the clear definition of powers and responsibilities. The observance of regulations relating to the execution ofbusiness is verified by means of internal audits conducted by the Internal Audit Office.
The Internal Audit Office reports directly to the President and has three personnel: a manager and two
members of staff. It conducts regular internal audits of all the business activities of the Company and its
subsidiaries, based on internal audit plans for each fiscal year that are laid down and approved by the President at
the beginning of each year. Based on the results of the audits, it provides advice and recommendations for
improvements.
b. Status of implementation of measures to improve the internal control system over the most recent one-year period- A business reform project was inaugurated, its objectives being to provide constant support for the futurebusiness model, and to build an IT system for improving the internal control system.
7

- In order to improve the sharing of in-house information, committees and similar bodies were reviewed andenhanced.
- Internal audits of 17 head-office divisions, 29 branches nationwide, and four subsidiaries were conducted by
the Internal Audit Office. In addition, the Internal Audit Office, the Board of Statutory Auditors, and the
independent auditors have held a meeting every quarter to exchange opinions, and through mutual liaison they
have sought to enhance the internal control system.
7. Other important matters for company management
Not applicable.

3. Operating Results and Financial Position
1. Operating results(1) Consolidated results for the fiscal year ended March 31, 2006
During the fiscal year under review, uncertainty about the outlook for the Japanese economy lingered, which wascaused by factors such as sharp increases in crude-oil prices. Nevertheless, positive developments included growthin capital investment accompanying improvements in corporate earnings, an improved employment situation, and achange in monetary policy by the Bank of Japan. These served to entrench a mood of optimism about the economy
throughout the nation, and it became steadily clearer that the recovery trend was on track.
In Fields' mainstay business of selling pachinko/pachislot machines, the trend towards larger-scale pachinkohalls continued, and the aggregate number of pachinko/pachislot machines installed in halls nationwide remained
stable at just under five million. Amid these conditions, in the market for the sale of pachinko/pachislot machines
the pattern that established itself was one in which fierce competition to attract customers, particular among largescale halls, generated even greater demand for large numbers of new models to replace existing ones. As a result,the cumulative total of sales of new models of pachinko machines over the year was in excess of 4 million. With
regard to pachislot machines, there was a temporary decline in the number of new models launched following therevision of the regulations two years ago, but unit sales of each of the new models increased, with the result that the
number of units sold greatly exceeded the overall number of machines installed.
With regard to sales of pachinko machines, we scored an even bigger hit with CR Neon Genesis Evangelion:
Second Impact than with its predecessor, registering the largest number of unit sales ever in the Company's history.
In addition, products such as the CR Marilyn Monroe, CR Ashita Ga Arusa, and CR Sakigake!! Otoko Juku soldwell, as the business frame with collaborating manufacturers, involving merchandising rights, planning, and the
supply of images, got on track.
In respect of pachislot machine sales, there were adverse factors such as delays in completing compliancerequirements for new models as a result of changes in the regulations. Nevertheless, based on marketing analysis
backed by thorough knowledge of the market nationwide, Ore no Sora was placed on the market at the optimum
time to maximize sales volume, and with added impetus from television commercials using baseball star Kazuhiro
Kiyohara to represent Fields, it became a big hit, selling more than 100,000 units. Meanwhile Neon Genesis
Evangelion, the first machine in the industry to conform with the new regulations, recorded the highest unit sales in
the industry during the year.
Given this performance, sales of pachinko/pachislot machines achieved stronger growth than in the previous
fiscal year, because strong underlying demand was tapped by the introduction of highly competitive products, andcommission income on machine sales was also up year-on-year, owing to the increase in unit sales. SG&A expenses
were also up from the previous year. Among these, the selling of pachislot machines accounts for a large proportionof sales-promotion expenses, but these were reduced during the year, primarily by limiting the number of models
being marketed, while monitoring the market environment closely. The primary factors behind the overall rise werean increase in advertising spending, mainly to support launches of overseas operations by D3 and JSM, andincreases in personnel and outsourcing expenses for the purposes of improving the PS planning and development
structure and of enhancing business efficiency accompanying the increase in the number of collaborating
manufacturers.
As a result, net sales were 5.5% higher than in the revised projections released on August 26, 2005, and ordinary
income was up by 18.0%. Net sales totaled ¥96,814,364,000, up by 18.6% year-on-year, ordinary income was¥13,127,685,000, up by 5.2%, and net income was ¥7,085,994,000, up by 2.3%.

8

(2) Segment overview
In the PS Field segment, factors such as the good reception in the market for products such as CR Neon Genesis
Evangelion: Second Impact and Ore no Sora enabled us to achieve net sales of ¥88,168,782,000 and operating
income of ¥12,711,000,000.
The Game Field segment saw the launch of products such as the SIMPLE series of low-priced software and thefull-price software K1-WORLD 2005. It generated net sales of ¥5,042,102,000, and operating income of¥277,681,000.
In the Other Field segment the year under review was positioned as a period of forward-looking investment,
highlighted by the merger of three subsidiaries on October 1, 2005, and by vigorous investment to lay further
foundations for future earnings expansion. In consequence, in this segment we posted net sales of ¥3,603,479,000,
and an operating loss of ¥655,529,000.
(3) Forecast for the fiscal year ending March 31, 2007
The Fields Group's principal business activities are the sale of pachinko/pachislot machines and, based on rights
created by itself or acquired for secondary use, the planning and development of digital content that it applies to avariety of media.
In its PS Field segment, over the next period of approximately one year its pachislot machines, more than 1.93
million of which have now been installed, will be shifting from machines compliant with the old regulations tothose that comply with the new ones. The Company's aim is to maximize sales volume by identifying market needs
with great accuracy, and continuing to introduce the optimum products at the optimum times. With regard topachinko machines we are placing emphasis on the strategic planning and development of killer content to comparewith Neon Genesis Evangelion, and will develop our sales on the basis of such major products.
In the Game Field segment we plan to launch Flashed Away, the major full-price product that has already been
under development by D3 for some time, starting in the North American market during the second half. We are also
committed to the vigorous development of simulator games such as CR Neon Genesis Evangelion: Second Impact,
and to strengthening the foundations of our management in this segment.
In the Other Field segment JSM, which will enter the second year of its existence during the year, will be
devoting its efforts to nurturing the three principal pillars of its operations, namely rights business, athlete business,and solutions business, focusing on the further refinement of its unparalleled business model.
The major movie Aoki Okami (The Blue Wolf), for which Kadokawa Haruki Corporation provided the original
script and also funding, was filmed entirely on location in Mongolia, with the full cooperation of the Mongolian
government, and is due to be released in March 2007. Aoki Okami is planned to be used in multiple applications in
the future, such as in games and pachinko/pachislot machines.
As a result of this vigorous development of our business activities we are projecting the following consolidated
results for the fiscal year ending March 31, 2007: net sales of ¥106,960 million, up by 10.5% year-on-year, ordinary
income of ¥14,070 million, up by 7.2%, and net income of ¥7,400 million, up by 4.4%.
2. Financial position
Cash flows
Cash and cash equivalents at the end of the fiscal year under review totaled ¥15,777,313,000, representing an
increase of ¥2,451,057,000 from the previous year. Factors contributing to this included a 3.8% increase in income
before income taxes and minority interest to ¥13,034,882,000, an increase in notes and accounts receivable-trade, anincrease in notes and accounts payable-trade, expenditure for the relocation of branch offices, and an increase in
expenses related to merchandising rights (copyrights).
Cash flows from operating activities
Net cash provided by operating activities totaled ¥6,164,786,000. The principal contributing factors included theincrease in income before income taxes and minority interest to ¥13,034,882,000, an increase of ¥9,135,880,000 innotes and accounts receivable-trade, an increase of ¥7,492,695,000 in notes and accounts payable–trade, an increaseof ¥1,085,496,000 in inventories, and income taxes paid of ¥6,162,055,000.
Cash flows from investing activities
Net cash used in investing activities totaled ¥2,224,610,000. This resulted principally from purchases of property
and equipment totaling ¥784,621,000 (particularly expenditure for moving branches), and purchases of investment
securities totaling ¥920,000,000.

9Cash flows from financing activities
Net cash used in financing activities amounted to ¥1,540,544,000. This was attributable primarily to the repaymentof long-term borrowings totaling ¥343,268,000, and dividend payments totaling ¥1,384,996,000.

Equity ratio
Equity ratio at market
value
Debt redemption years
Interest coverage ratio

Year ended
March 31, 2002
(Fiscal 2001)
20.8%−

Year ended
March 31, 2003
(Fiscal 2002)
51.2%
88.8%

Year ended
March 31, 2004
(Fiscal 2003)
39.1%
491.7%

Year ended
March 31, 2005
(Fiscal 2004)
46.0%
250.5%

Year ended
March 31, 2006
(Fiscal 2005)
45.0%
145.8%

0.9 years
53.6 times−
68.8 times

3.5 years
271.0 times

0.7 years
210.3 times

0.3 years
256.6 times

1. Equity ratio: Shareholders’ equity/Total assets
2. Equity ratio at market value: Market capitalization (based on closing share price at end of fiscal year)/Total
assets3. Debt redemption years: Interest bearing debt/Net cash provided by operating activities
4. Interest coverage ratio: Net cash provided by operating activities/Interest expense
Notes: 1. Consolidated financial statements have been prepared since fiscal 2002 (ended March 31, 2003). For
fiscal 2001 (ended March 31, 2002), calculations are based on the figures from the non-consolidated
financial statements.
2. The Company listed its shares on the JASDAQ market on March 19, 2003; the shares had no market
value prior to that date.

4. Planned and Actual Application of Funds Raised through Public Share Offering at Market Price
The funds totaling ¥13,100 million raised through a public share offering at market price conducted on June 15,
2004, were, with the exception of a portion for the capital spending plan, applied generally according to plan,
including for the purchase of merchandising rights (copyrights) and for investments in subsidiaries.

10

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 10:59 AM

5. Consolidated Financial Statements
1. Consolidated Balance Sheets
PeriodItem

Fiscal year ended
March 31, 2005
(As of March 31, 2005)
Amount% totalAssetsI. Current assets
Cash and cash equivalents
Notes and accounts receivable tradeMarketable securities
Inventories
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
II. Fixed assets
1. Tangible fixed assets
Buildings and structures
Accumulated depreciation
VehiclesAccumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land
Construction in progress
Total tangible fixed assets
2. Intangible fixed assets
SoftwareExcess of net assets acquired
over cost
Other intangible fixed assets
Total intangible fixed assets
3. Investments and other assets
Investment securities*1Long-term loan receivables
Deposits
OthersDeferred tax assets
Allowance for doubtful
accounts
Total investments and other assets
Total fixed assets
Total assets

13,326,256

15,777,313

2,451,057

37,667,536

46,385,995

8,718,459

5,000

−

(5,000)480,171

1,568,986

1,088,815
258,969

267,886

526,855

5,340,996

5,769,846

428,849(87,140)(149,225)(62,084)

57,000,705

78.5

2,803,718(416,997)(692,884)

79.8

12,879,066

2,455,245

68,524

20,713(8,793)

813,349(29,654)1,547,993

1,372,477(175,516)

50,35327,36947,356
29,506(26,643)

1,473,323(630,319)

69,879,772

3,148,129
2,386,720

73,791(44,284)(Thousands of yen, %)Fiscal year ended
Year-on-year
March 31, 2006
change(As of March 31, 2006)
Amount% totalAmount

1,671,437
843,004

4,857,578(858,088)

6.7

4,689,155(22,983)
5.4(168,423)

353,136

266,603(86,532)

666,791

1,600,689

933,898

686,438
1,706,367

885,090
2.4

2,752,383

198,651
3.1

1,046,016

5,545,899

6,991,655

1,445,756

382,300

296,238(86,061)2,201,142

2,298,879

97,737568,889

442,485(126,403)

500,672

360,424(140,248)(179,008)(154,461)

24,547

9,019,895

12.4

10,235,222

15,583,841

21.5

17,676,761

20.2

2,092,920

72,584,547

100.0

87,556,534

100.0

14,971,987

11

11.7

1,215,326

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 10:59 AM

PeriodItem
Liabilities
I. Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-term
debt
Corporate bonds redeemablewithin 1 year
Accrued income taxes
Accrued bonuses
Other current liabilities
Total current liabilities
II. Long-term liabilities
Corporate bonds
Long-term borrowings
Retirement benefit provisions
Reserve for retirement benefits for
directors and statutory auditors
Deposits received
Other long-term liabilities
Total long-term liabilities
Total liabilities
Minority interest
Minority interest in consolidated
subsidiaries
Shareholders’ equity
I. Common stock*2
II. Capital surplus
III. Retained earnings
IV. Unrealized holding gain on
available-for-sale securities
V. Foreign currency translation
adjustment
Total shareholders’ equity
Total liabilities, minority interest,and shareholders’ equity

Fiscal year ended
March 31, 2005
(As of March 31, 2005)
Amount% total(Thousands of yen, %)Fiscal year ended
Year-on-year
March 31, 2006
change(As of March 31, 2006)
AmountAmount% total27,479,525

34,869,095

7,389,570

656,600

730,000

73,400341,768

214,668(127,100)−

110,000

110,000

2,685,881

3,733,977

1,048,095

20,00025,0005,000

2,126,332

2,843,769

717,437

33,310,107

45.9

42,526,511

48.6

9,216,403

500,000

490,000(10,000)

593,165

366,997(226,168)

139,140

162,648

23,507568,700

607,100

38,4002,378,609

2,380,985

2,375

5,893

−

(5,893)

4,185,508

5.8

4,007,730

4.6(177,777)

37,495,616

51.7

46,534,242

53.2

9,038,625

1,662,657

2.3

1,610,739

1.8(51,917)

7,948,036

10.9

7,948,036

9.1

7,994,953

11.0

7,994,953

9.1

−
−

17,133,487

23.6

22,726,469

26.0

5,592,982

349,7960.5

735,6220.8

385,826

6,470

0.0

6,470

−
33,426,273

46.0

39,411,552

45.0

5,985,279

72,584,547

100.0

87,556,534

100.0

14,971,987

12

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 10:59 AM

2. Consolidated Statements of Income

PeriodItem
I. Net sales
II. Cost of sales
Gross profit
III. Selling, general and administrative
expenses
Advertising expenses
Salaries
Provision for accrued bonuses
Outsourcing expenses
Travel expenses
Depreciation and amortization
Rents
Retirement benefit expenses
Provision to reserve for retirement
benefits for directors and statutory
auditors
Provision to allowance for
doubtful accounts
Amortization of excess of net
assets acquired over cost
OthersOperating income
IV. Non-operating income
Interest income
Dividend income
Discounts on purchases
Amortization of excess of net
assets acquired over cost
Equity in earnings of affiliates
Lease income
OthersV. Non-operating expenses
Interest expense
Corporate bond issuance expense
Stock issuance expense
Capital increase-related expense
Lease expenses
OthersOrdinary income
VI. Extraordinary income
Gain on sale of fixed assets*1
Gain from liquidation of guarantees
Gain on sale of investment securities
Gain from investment inanonymous association
Reversal of reserve for retirement
benefits for directors and statutory
auditors
Gain from changes in equity ofaffiliates
VII. Extraordinary loss
Loss on sale of fixed-assets*2
Loss on disposal of fixed-assets *3
Impairment loss
*4
Loss on sale of investment securities
Valuation loss on investment
securities
Transfer to allowance for doubtful
accounts
Loss on sale of shares in affiliates
Valuation loss on shares inaffiliates
Valuation loss on equity
investment
Valuation loss on membershiprightsLoss on changes in equity ofaffiliates
Income before income taxes andminority interest
Current income taxes
Deferred income taxes
Minority interest
Net income

Fiscal year ended
March 31, 2005
(April 1, 2004–March 31, 2005)
Amount% sales
81,658,011
56,905,614
24,752,397(Thousands of yen, %)Fiscal year ended
Year-on-year
March 31, 2006
change(April 1, 2005–March 31, 2006)
Amount% salesAmount

100.0
69.7
30.3

2,873,523
3,535,458
20,000745,562503,664
468,471
835,296
26,6683,905,772
4,588,573
25,0001,277,679
622,025
576,645
1,087,487
47,982−

57,40020,268114,257−
3,626,259

15.5
14.8

4,824,379

1,481−
429,1790.8

155,191

17.9
12.8

4,733,837
250,932

828,495

0.9

172,544

48,966
13,127,685

0.1
13.6

(223,636)
647,113

218,451

0.2(128,442)

311,254

0.3

44,636

13,034,882

13.5

474,034

6,204,823(255,935)
7,085,994

6.4
(0.2)
7.3

583,270(268,438)
159,202

23,875
2,400
872

−
−

272,60212,480,571

0.3
15.3

21,818147,31445,17164,081

131,100

−

−

7,054

346,893

0.4

−

1,666
89,416−−

62
115,194
56,8191,251

175,534

4,320

−
−
−

6,900
13,498−22,609−2,100

5,403,841
217,712

17,389,011
12,348,156−

655,950

4,726
2,600
162,685−

15,156,352
10,171,582
4,984,770

16,79725,422201,904

421,667
38,07917,804

610

100.0
69.3
30.7

261,807
12,655,173
12,097,224

7,135
10,021
159,760

14,783
10,75091,906112,494
16,84825,81996,814,364
67,077,197
29,737,167

4,604

266,618

0.3

12,560,847

15.4

5,621,553
12,502
6,926,791

13

6.9
0.0
8.5

83,894

6,588,353(383,530)最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 10:59 AM

3. Consolidated Statements of Shareholders’ Equity(Thousands of yen)
PeriodItem
Capital surplus
I. Capital surplus at beginning of period
II. Increase in capital surplus
Capital increase from issue of new stock
III. Balance of capital surplus at end of period
Retained earnings
I. Retained earnings at beginning of period
II. Increase in retained earnings
Net income
III. Decrease in retained earnings
Cash dividends paid
Bonuses to directors and statutory auditors
Decrease due to newly consolidated
subsidiaries
IV. Retained earnings at end of period

Fiscal year ended
March 31, 2005
(April 1, 2004–March 31, 2005)
AmountFiscal year ended
March 31, 2006
(April 1, 2005–March 31, 2006)
Amount

1,342,429

7,994,953

6,652,524

6,652,524
7,994,953−

11,631,695
6,926,791

6,926,791

1,340,000
85,000−17,133,487
7,085,994

7,085,994

1,388,000
105,000
1,425,000
17,133,487

14−
7,994,953

12

1,493,012
22,726,469

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 10:59 AM

4. Consolidated Statements of Cash Flows(Thousands of yen)
PeriodItem

I. Cash flows from operating activities
1. Income before income taxes and minority
interest
2. Depreciation and amortization
3. Impairment loss
4. Amortization of excess of net assets
acquired over cost
5. Increase (decrease) in allowance for
doubtful accounts
6. Increase (decrease) in accrued bonuses
7. Increase (decrease) in retirement benefit
provisions
8. Increase (decrease) in reserve for retirement
benefits for directors and statutory auditors
9. Interest and dividend income
10. Discounts on purchases
11. Equity in earnings of affiliates
12. Interest expense
13. Corporate bond issuance expense
14. Stock issuance expense
15. Capital increase-related expense
16. Gain on sale of fixed assets
17. Gain on sale of investment securities
18. Gain from investment in anonymous
association
19. Loss on changes in equity of affiliates
20. Loss on sale of fixed assets
21. Loss on disposal of fixed assets
22. Valuation loss on investment securities
23. Decrease (increase) in notes and accounts
receivable – trade
24. Decrease (increase) in inventories
25. Decrease (increase) in merchandising rights
advances
26. Decrease (increase) in prepaid expenses
27. Decrease (increase) in advance payments
28. Decrease (increase) in notes held
29. Decrease (increase) in non-operating notes
receivable
30. Decrease (increase) in deposits as security
for dealing
31. Increase (decrease) in notes and accounts
payable – trade
32. Increase (decrease) in accrued consumptiontax
33. Increase (decrease) in deposits received
34. Increase (decrease) in deposits held
35. Payments of bonuses to directors andstatutory auditors
36. Others
Subtotal
37. Interest and dividends received
38. Interest paid
39. Income taxes paid
Net cash provided by (used in) operating activities

Fiscal year ended
March 31, 2005
(April 1, 2004–
March 31, 2005)
AmountFiscal year ended
March 31, 2006
(April 1, 2005–
March 31, 2006)
Amount12,560,847

13,034,882

474,034

568,604−

1,237,274
56,819668,669
56,819

(1,481)

261,807263,289

2,729(55,454)(58,184)

1,400

2,688

1,288

9,110

(3,100)(12,210)Year-on-yearchangeAmount(131,100)

38,400169,500(17,157)(159,760)(421,667)
14,783
10,75091,906112,494(4,726)(162,685)(42,219)(201,904)(429,179)
23,8752,400
872(147,314)(7,054)(25,061)(42,143)(7,512)
9,091(8,350)(91,034)(112,494)(142,588)
155,630(45,171)(64,081)(18,909)

(610)
1,666
89,416
175,534

83,894
62
115,194
4,320

84,504(1,604)25,777(171,213)(18,363,214)(9,135,880)

9,227,333(54,621)(1,085,496)(1,030,874)(1,592,677)(203,728)

1,388,949

34,850(74,885)
122,482

147,235
5,838(19,670)

112,384
80,724(142,153)(415,283)

377,620792,904(10,000)(30,832)(20,832)

15,920,750

7,492,695(8,428,054)(269,189)

177,473446,6623,529
1,216,687(55,878)
2,375(59,408)(1,214,311)(85,000)(105,000)(20,000)

641,685
9,769,999
39,248(14,103)( 6,829,288)
2,965,857

797,611
12,276,545
74,320(24,024)(6,162,055)
6,164,786

155,925
2,506,545
35,072(9,921)
667,232
3,198,929

15−

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 10:59 AM

PeriodItem

II. Cash flows from investing activities
1. Sale of marketable securities
2. Purchases of property and equipment
3. Sale of property and equipment
4. Purchases of intangible fixed assets
5. Purchases of investment securities
6. Sale of investment securities
7. Purchases of shares in affiliates
8. Proceeds (expenditure) from acquiring *2
newly consolidated subsidiaries
9. Sale of shares of subsidiaries on change to *3
scope of consolidation
10. Expenditure for loans
11. Proceeds from repayment of loans
12. Refund of deposits and guarantees
13. Payment of deposits and guarantees
14. Payment for long-term prepaid expenses
15. Cancellation of insurance policies
16. Payments to insurance reserve
17. Other
Net cash provided by (used in) investing activities
III. Cash flows from financing activities
1. Increase (decrease) in short-term borrowings
2. Proceeds from long-term borrowings
3. Repayment of long-term borrowings
4. Proceeds from issuance of corporate bonds
5. Proceeds from issuance of new stock
6. Payments by minority shareholders
7. Cash dividends paid
Net cash provided by (used in) financing activities(Thousands of yen)
Year-on-yearchangeFiscal year ended
March 31, 2005
(April 1, 2004–
March 31, 2005)
AmountFiscal year ended
March 31, 2006
(April 1, 2005–
March 31, 2006)
Amount−(2,245,700)
38,761(629,298)(3,182,935)
238,024(10,000)

5,000(784,621)
395,924(702,484)(920,000)
551,585(300,000)

5,000
1,461,079
357,162(73,185)
2,262,935
313,561(290,000)

896,150(662,560)(1,558,710)

−

8,914

8,914

(24,000)
83,158103,463(466,414)(33,727)(215,650)
303,461
259,448(304,686)(48,271)
178,638(1,092)
11,780(2,224,610)(191,650)
220,303
155,985
161,727(14,543)
178,638−(1,092)(23,543)(5,257,154)(2,570,000)
520,000(27,000)
489,250
13,100,659−
35,324
3,032,543(1,335,027)
10,177,881

10,319(1,384,996)(1,540,544)

2,649,800(520,000)(316,268)(391,650)(13,100,659)
10,319(49,968)(11,718,425)

1,913

50,037

48,124

7,888,497

2,449,668(5,438,828)

5,437,758

13,326,256

7,888,497

−

1,388

1,388

13,326,256

15,777,313

2,451,057−

IV. Effect of exchange rate changes on cash andcash equivalents
V. Increase (decrease) in cash and cash
equivalents
VI. Cash and cash equivalents at beginning of
periodVII. Increase (decrease) in cash and cash
equivalents due to change in scope of
consolidation
VIII. Cash and cash equivalents at end of period

16

79,800

Amount−(343,268)
97,600−最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

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

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)(1) Number of consolidated subsidiaries: 9
Names of consolidated subsidiaries:
Professional Management Co., Ltd.
Fields Jr. Corporation
Total Workout Corporation
White Trash Charms Japan Co., Ltd.
Digital Lord Corporation
D3 Publisher Inc.
Heart-line Inc.
Entertainment Software Publishing Inc.
D3Publisher of America, Inc.

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)(1) Number of consolidated subsidiaries: 9
Names of consolidated subsidiaries:
Fields Jr. Corporation
White Trash Charms Japan Co., Ltd.
Digital Lord Corporation
Japan Sports Marketing, Inc.
D3 Publisher Inc.
Entertainment Software Publishing Inc.
D3Publisher of America, Inc.
D3Publisher of Europe Ltd.
D3DB S.r.l.

D3 Publisher Inc., which was an affiliate notaccounted for by the equity method, has been
consolidated as a result of the Company’s
acquiring additional shares in that company.
Concurrently, Heart-line Inc., Entertainment
Software Publishing Inc., and D3Publisher ofAmerica, Inc., all consolidated subsidiaries ofD3 Publisher Inc., have been included within
the scope of consolidation.

Given its significance, D3DB S.r.l., which
was a non-consolidated subsidiary until theprevious fiscal year, was included within thescope of consolidation in the current fiscal
year.

Since D3 Publisher Inc., Heart-line Inc.,Entertainment Software Publishing Inc., andD3Publisher of America, Inc. are deemed tohave come under the control of the Company
at the end of the current fiscal year, they are
consolidated only in the balance sheet.
However, given its significance, D3 Publisher
Inc., which was an affiliate not accounted forby the equity method in the previous fiscal
year, became an equity method affiliate thisfiscal year, and the Company’s equity in theearnings of D3 Publisher Inc. is reflected in
the consolidated financial statements.

During the year, Total Workout Corporationand newly consolidated J. Sakazaki
Marketing Ltd. were excluded from the scopeof consolidation, since they merged on
October 1, 2005, and Professional
Management Co., Ltd. became the surviving
company. After the merger, Professional
Management Co., Ltd. changed its name to
Japan Sports Marketing, Inc.

J. Sakazaki Marketing Ltd. has also been
included within the scope of consolidation asa result of the acquisition of its shares in thecurrent fiscal year.

D3Publisher of Europe Ltd. was establishedduring the fiscal year under review, and wastherefore included in the scope of
consolidation.
The Company sold all its shares in Heart-line
Inc., which was a consolidated subsidiary in
the previous fiscal year, and therefore thatcompany ceased to be a consolidated
subsidiary as of this fiscal year.

2. Application of equity method(2) Names of non-consolidated subsidiaries:
Database Co., Ltd.
APE Inc.
D3DB S.r.l.

(2) Names of non-consolidated subsidiaries:
Database Co., Ltd.
E-Active Co., Ltd.
APE Inc.

Reason for exclusion from the scope of
consolidation:
Non-consolidated subsidiaries have been left
out of consolidation due to their small size,with none of their total assets, net sales, net
income (proportionate to the equity stakes
held) and retained earnings (proportionate toequity stakes held) having a material effect on
the consolidated financial statements.
(1) Number of equity-method affiliates: 3
Rodeo Co., Ltd.
Kadokawa Haruki Corporation
3D-AGES Inc.

Reason for exclusion from the scope of
consolidation:
Same as at left

As a result of acquiring additional shares in
D3 Publisher Inc. and converting it into a
subsidiary in the current fiscal year,
3D-AGES Inc., an affiliate of D3 Publisher
Inc., has become an equity-method affiliate.
Since shares of Kadokawa Haruki
Corporation have been newly acquired, thatcompany has become an equity-method
affiliate as of the current fiscal year.

17(1) Number of equity-method affiliates: 2
Rodeo Co., Ltd.
Kadokawa Haruki Corporation
In accordance with a resolution adopted at theordinary general meeting of shareholders held
on September 30, 2005, 3D-AGES Inc. wasdissolved, and upon the completion of its
liquidation on December 30, 2005, it ceased
to be an equity method affiliate.

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

Item
2. Application of equity method

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)(2) Names of non-consolidated subsidiaries andaffiliated companies not accounted for by theequity method:
Database Co., Ltd.
APE Inc.
D3DB S.r.l.

(2) Names of non-consolidated subsidiaries andaffiliated companies not accounted for by theequity method:
Database Co., Ltd.
G&E Corporation
APE Inc.
E-Active Co., Ltd.
Reason for non-application of the equity method:Same as at left

Reason for non-application of the equity method:
These companies have a negligible impact on
net income (proportionate to equity stakes
held) and retained earnings (proportionate toequity stakes held) and have no significanceas a whole, so have been excluded from theapplication of the equity method.
(3) Matters requiring clarification concerning
procedures for application of the equity
method:With regard to companies accounted for by
the equity method whose accounting
year-ends differ from the consolidation date,
the financial statements relating to thosecompanies' fiscal years are utilized.

3. Balance sheet dates of
consolidated subsidiaries

4. Accounting standards(1) Valuation standards andmethods for important assets

With regard to 3D-AGES Inc., financial
statements based on a provisional accounts
settlement effected on the consolidation datehave been utilized.
Among the consolidated subsidiaries, D3
Publisher Inc., Heart-line Inc., Entertainment
Software Publishing Inc., and D3Publisher ofAmerica, Inc., have October 31 as theiryear-end balance sheet date.
The financial statements based on provisional
accounts settlements on March 31 are used in
the preparation of the consolidated financial
statements.
(1) Marketable securities
Other marketable securities
Securities with market prices:Stated at market value based on market
price as of the consolidated balance sheet
date (unrealized gains or losses arecharged or credited directly toshareholders’ equity, with the cost of
securities sold determined by themoving-average method).
Securities without market prices:Stated at cost determined by themoving-average method.
(2) Inventories- Merchandise
Fields Corporation:
Used pachinko/pachislot machines
Stated at cost determined by the specificidentification method.
OthersStated at cost determined by themoving-average method.
Consolidated subsidiaries:
Stated at cost determined by theaverage-cost method.
- Products
Consolidated subsidiaries:
Stated at cost determined by the first-in
first-out method.

18(3) Matters requiring clarification concerning
procedures for application of the equity
method:With regard to companies accounted for by
the equity method whose accounting
year-ends differ from the consolidation date,
the financial statements relating to thosecompanies' fiscal years are utilized.

The year-end balance sheet date of
consolidated subsidiaries coincides with theconsolidation date.
As of the fiscal year under review, theyear-end balance sheet date of D3 Publisher
Inc. and of Entertainment Software
Publishing Inc. was changed from October 31
to March 31.
(1) Marketable securities
Other marketable securities
Securities with market prices:
Same as at left

Securities without market prices:
Same as at left(2) Inventories- Merchandise
Fields Corporation:
Used pachinko/pachislot machines
Same as at left
OthersSame as at left
Consolidated subsidiaries:
Same as at left
- Products
Consolidated subsidiaries:
Same as at left

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

Item(1) Valuation standards andmethods for important assets

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)- Work in process
Consolidated subsidiaries:
Stated at cost determined by the specificidentification method.

- Work in process, content
Consolidated subsidiaries:
Stated at cost determined by the specificidentification method.
Game software
With regard to the production costs ofoutsourced game software, the software andits content are closely integrated andtherefore inseparable, and it is impossible todemarcate them. In view of this, hitherto
they have been recognized as software andtreated accordingly, but owing todevelopments such as the upgrading of theperformance of home game machines, thedecision-making process for themerchandising of game software and thenature of outsourcing have been revised, andin recent years the importance of content
categorized as images, music, voice, etc.,
has been growing, and this trend will
strengthen in the future. In view of this, withthe exclusion of items whose principal
characteristics are clearly those of software,
as of the fiscal year under review the
Company's accounting recognizes them ascontent (stating production expenditure asadvances or inventories, and transferring it
to cost of sales in accordance with projectedsales volume).
In consequence, inventories increased by¥1,160,073,000 and there were declines of¥147,250,000 in advances and of¥718,410,000 in other intangible fixed
assets. Cost of sales rose by ¥124,267,000,
and there were declines of ¥418,793,000 in
selling, general and administrative expenses
and of ¥112,000 in non-operating income,while the operating loss fell by¥294,525,000, and also the ordinary loss andthe net loss before income taxes andminority interest each fell by ¥294,413,000.

(2) Depreciation methods forimportant depreciable assets- Supplies
Stated at cost determined by the lastpurchase price method.
(1) Tangible fixed assets
Declining-balance method
However, the straight-line method isapplied to buildings (excluding building
fixtures) acquired after April 1, 1998.
The estimated useful lives of depreciable
assets are as follows.
Buildings: 6-50 years
Structures: 10-50 years
Vehicles: 4-6 years
Tools, furniture and fixtures: 3-20 years(2) Intangible fixed assets
Straight-line method
The straight-line method is applied tosoftware for company use, based on its
useful life within the company (five years).
Software for sale by consolidated
subsidiaries is depreciated at the
depreciation rate determined by theCompany over the estimated payback
period (12 months for game software; 36months for other software).
(3) Long-term prepaid expenses
Straight-line method

19- Supplies
Same as at left
(1) Tangible fixed assets
Declining-balance method
However, the straight-line method isapplied to buildings (excluding building
fixtures) acquired after April 1, 1998.
The estimated useful lives of depreciable
assets are as follows.
Buildings: 4-50 years
Structures: 10-50 years
Vehicles: 4-6 years
Tools, furniture and fixtures: 3-20 years(2) Intangible fixed assets
Same as at left

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

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

Item(3) Treatment of important deferredcharges

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)(1) Stock issuance expenses
These expenses are charged in full at thetime they are incurred.

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)(1) Stock issuance expenses
These expenses are charged in full at thetime they are incurred.

The issuance of 12,000 new shares ofcommon stock on June 15, 2004, through apublic offering was carried out by theunderwriting companies purchasing andunderwriting the shares at ¥1,108,755 pershare, which differed from the share issue
price of ¥1,161,000, the offering price paidby ordinary investors.
The gross spread or differential between
the two prices was in this case¥626,940,000, the de facto underwriting
commission. If, as was previously the case,the underwriting and share issue prices
were the same, the underwriting
commission would have been charged as
stock issuance expenses.

(4) Accounting standards forimportant reserves

Consequently, compared to the previous
method of accounting for underwriting
commission, stock issuance expenses andthe total of common stock and capitalsurplus are each reduced by ¥626,940,000,
and ordinary income and income before
income taxes and minority interest areeach increased by the same amount.
(2) Corporate bond issuance expenses
These expenses are charged in full at thetime they are incurred.
(1) Allowance for doubtful accounts
To provide against losses from doubtful
accounts, allowances for ordinary
receivables are provided using a rate
determined by past collection experience,
and allowances for specific debts
considered doubtful are accounted for by
calculating the estimated amounts deemed
uncollectible after individually reviewing
collectibility of the debts.
(2) Accrued bonuses
To provide for employee bonuses, theCompany recognizes the amounts out of the
projected bonus payments to be allocated to
the fiscal year.
(3) Retirement benefit provisions
To provide for employees’ retirement
benefits, the Company and someconsolidated subsidiaries recognize, on thebasis of projected benefit obligations as ofthe end of the fiscal year, benefit
obligations accrued as of the end of the
fiscal year.
Actuarial differences are amortizedproportionately by the straight-line method
over a fixed number of years (five years)
within the average remaining period ofservice of employees as of the time suchdifferences arise.
Amortization amounts are expensed
beginning with the fiscal year followingthat in which the difference arise.

20(2) Corporate bond issuance expenses
Same as at left
(1) Allowance for doubtful accounts
Same as at left

(2) Accrued bonuses
Same as at left

(3) Retirement benefit provisions
Same as at left

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

Item(5) Translation of importantforeign-currency-denominatedassets and liabilities into yen

Fiscal year ended March 31, 2005

Fiscal year ended March 31, 2006

(April 1, 2004–March 31, 2005)(April 1, 2005–March 31, 2006)(4) Reserve for retirement benefits for
directors and statutory auditors
To provide for directors' and statutory
auditors' retirement benefits the Company,in accordance with the internal
regulations, states the amounts to be paid
at the end of the fiscal year.

(4) Reserve for retirement benefits for
directors and statutory auditors
Same as at left

Foreign currency receivables and payables aretranslated into yen using the spot currency
exchange rate on the consolidated balance
sheet date, and translation differences arerecorded as gains or losses.

Foreign currency receivables and payables aretranslated into yen using the spot currency
exchange rate on the consolidated balance
sheet date, and translation differences arerecorded as gains or losses.
The assets and liabilities of overseas
subsidiaries are translated into yen using the
spot currency exchange rate on the
consolidated balance sheet date, and income
and expenses are translated into yen using the
average exchange rate during the period,translation differences being stated as part of
the foreign currency translation adjustment in
the minority interest or shareholders' equity
sections of the balance sheet.

(6) Treatment of important leasetransactions

Finance lease transactions, other than thosewhere the ownership of the leased assets isdeemed to be transferred to the lessee, areaccounted for as ordinary operating leasetransactions.

Same as at left

(7) Important hedge accounting
methods(1) Hedge accounting method
At certain consolidated subsidiaries,
special treatment is used in the case ofinterest rate swaps that satisfy the criteria
for hedge accounting.

(1) Hedge accounting method
Same as at left

(2) Methods and scope of hedging
Hedging methods
Interest rate swap transactions
Scope of hedging
Interest on borrowings(2) Methods and scope of hedging
Same as at left

(3) Hedging policy
At certain consolidated subsidiaries, ahedging policy is implemented to avoid
any impact of fluctuations in market
interest rates on fund-raising costs (interest
expense).

(3) Hedging policy
Same as at left

(4) Method for assessing hedging
effectivenessInterest rate swap transactions are deemed
to qualify for special accounting treatment,
and therefore it is on this basis that
judgments as to effectiveness are made.

(4) Method for assessing hedging
effectivenessSame as at left

(5) Other risk management
The management division has
responsibility for the conclusion ofcontracts relating to hedge accounting at
certain consolidated subsidiaries. No
particular stipulations relating to suchtransactions have been laid down, but they
are administered in accordance withregulations governing the scope of
authority.

(5) Other risk management
Same as at left

(8) Other significant standards forthe preparation of financial
statements

Accounting for consumption tax
Consumption tax is accounted for by the
tax-excluded method.

Accounting for consumption tax
Same as at left

5. Valuation of assets and liabilities
of consolidated subsidiaries

The full fair value method is adopted tovalue assets and liabilities of consolidated
subsidiaries.

Same as at left

21

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

Item

Fiscal year ended March 31, 2005

Fiscal year ended March 31, 2006

(April 1, 2004–March 31, 2005)(April 1, 2005–March 31, 2006)

6. Amortization of excess of net
assets acquired over cost

The excess of net assets acquired over cost isamortized evenly over five years.

Same as at left

7. Treatment of items forappropriation of retained earnings

The methods of appropriation of retained
earnings and loss disposition are determinedin accordance with the appropriation ofretained earnings determined during the fiscal
year.

Same as at left

8. Scope of funds in consolidated
statements of cash flows

Funds include cash on hand, demand deposits,
and investments maturing or redeemablewithin three months from acquisition that arehighly liquid, easy to convert into cash, andexposed to low price fluctuation risk.

Same as at left

22

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

Changes in accounting treatment
Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Accounting standard for impairment of fixed assets––––––––––

As of this fiscal year the Company has adopted the AccountingStandard for Impairment of Fixed Assets ("Opinion Concerning
Establishment of Accounting Standard for Impairment of Fixed
Assets" issued by the Business Accounting Deliberation Council
on August 9, 2002) and the Implementation Guidance for the
Accounting Standard for Impairment of Fixed Assets (Financial
Accounting Standard Implementation Guidance No. 6 issued by
the Accounting Standards Board of Japan on October 31, 2003).
In consequence, income before income taxes and minority interest
declined by ¥56,819,000.
Cumulative impairment losses are deducted directly from theamount of the relevant assets in accordance with the revised
Regulations on Consolidated Financial Statements.

Changes in method of presentation
Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Consolidated statements of income
Until the previous fiscal year, "Lease income" was presented as aseparate item under "Non-operating income." As this item has
become insignificant it has been included in "Others" under"Non-operating income." During the year ended March 31, 2006,lease income amounted to ¥5,393,000.

Additional information
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

As a result of the promulgation of the Law for Partial Amendment
to the Local Tax Law, etc. (Law No. 9 of 2003) on March 31,
2003, and the consequent introduction of the pro forma standard
taxation system, which applies to fiscal years commencing on orafter April 1, 2004, as of the current fiscal year the Company
includes charges for the value-added and capital portions ofcorporate enterprise tax in selling, general and administrative
expenses in accordance with the Practical Procedures for
Indication of Pro Forma Taxation in Income Statement concerning
Corporate Enterprise Tax (Practical Solutions Report No. 12 issued
by the Accounting Standards Board of Japan on February 13,2004).
As a result, SG&A expenses increased by ¥108,422,000, andoperating income, ordinary income, and income before income
taxes and minority interest decreased by ¥108,422,000.

23

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

Notes
Consolidated balance sheets
Fiscal year ended March 31, 2005
(As of March 31, 2005)

Fiscal year ended March 31, 2006
(As of March 31, 2006)*1. The following are assets held in non-consolidated subsidiaries
and affiliates
Investment securities (equities)¥3,554,981,000*1. The following are assets held in non-consolidated subsidiaries
and affiliates
Investment securities (equities)¥4,128,042,000*2. Number of shares issued*2. Number of shares issued

347,000 shares

3. Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on an agency
basis for pachinko/pachislot machine manufacturers.
Asahi Shoji K.K.
Daiei Kanko K.K.
Meiplanet K.K.
Kouki Co., Ltd.
Iwamoto Development Co., Ltd.
BOSS Co., Ltd.
Niimi Co., Ltd.
Y.K. Daiko
The City Co., Ltd.
K.K. Toei Kanko
Others (176)
Total

Sankei Shoji Co., Ltd.
Asahi Shoji K.K.
Niimi Co., Ltd.
Y.K. Daiko
Meiplanet K.K.
K.K. Toei Kanko
LiNE Company
Y.K. Big Shot
Y.K. R&K
K.K. Bishop
Others (294)
Total¥59,985,000¥58,480,000¥33,698,000¥30,571,000¥28,551,000¥24,910,000¥23,739,000¥23,293,000¥19,622,000¥18,677,000¥475,519,000¥797,050,000

4. Overdraft agreements and loan commitments
To raise working capital efficiently, the Fields Group has
concluded overdraft and loan commitment agreements withthree banks. As of the end of the fiscal year, unutilized amounts
under these agreements were as follows:
Overdraft limit plus total
amount of loan commitments
Borrowings outstanding
Difference

347,000 shares

3. Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on an agency
basis for pachinko/pachislot machine manufacturers.
¥41,728,000¥39,823,000¥33,106,000¥31,777,000¥23,861,000¥19,895,000¥15,536,000¥14,025,000¥14,017,000¥13,198,000¥430,297,000¥677,268,000

4. Overdraft agreements and loan commitments
To raise working capital efficiently, the Fields Group has
concluded overdraft and loan commitment agreements with six
banks. As of the end of the fiscal year, unutilized amounts
under these agreements were as follows:
Overdraft limit plus total
amount of loan commitments
Borrowings outstanding
Difference¥4,310,000,000¥630,000,000¥3,680,000,000

24¥5,610,000,000¥730,000,000¥4,880,000,000最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

Consolidated statements of income
Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)*1. The gain on sale of fixed assets arose from the sale of vehicles.

*1. Breakdown of gain on sale of fixed assets
Buildings and structures
Tools, furniture and fixtures
Land
Gain from sale of insurance reserves
Total¥9,323,000¥521,000¥115,617,000¥21,852,000¥147,314,000*2. The loss on sale of fixed assets arose from the sale of tools,
furniture and fixtures.

*2. The loss on sale of fixed assets arose from the sale of telephone
subscription rights.

*3. Details of loss on disposal of fixed assets
Buildings and structures
VehiclesTools, furniture and fixtures
Long-term prepaid expenses
Software
Other intangible fixed assets
Total*3. Details of loss on disposal of fixed assets
Buildings and structures
Tools, furniture and fixtures
Construction in process
Long-term prepaid expenses
Software
Other intangible fixed assets
Total¥54,837,000¥29,000¥20,961,000¥361,000¥13,151,000¥74,000¥89,416,000*4.

¥34,242,000¥16,274,000¥19,337,000¥1,714,000¥5,845,000¥37,780,000¥115,194,000*4. Impairment loss
The Fields Group has stated an impairment loss for the asset set
out below.
Usage
Miscellaneous businessType
Buildings and land
Location Shibuya, Tokyo
Amount ¥56,819,000
When grouping its assets the Fields Group adopts the methodof grouping primarily by business category in accordancewith management accounting practice. With regard to aproperty in Shibuya used for miscellaneous business, since
there is no prospect of a recovery in operating income fromthe property, a loss has been recognized, composed of¥51,136,000 on the building and ¥5,682,000 on the land.
The recoverable value of this property has been calculated on
the basis of the net sale price, the market price being the realestate appraisal value.

25

最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

Consolidated statements of cash flows
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

1. Relationship between cash and cash equivalents as of the end of
the fiscal year and cash amounts stated in the consolidatedbalance sheets

1. Relationship between cash and cash equivalents as of the end of
the fiscal year and cash amounts stated in the consolidatedbalance sheets(As of March 31, 2005)

Cash and deposit accounts
Cash and cash equivalents(As of March 31, 2006)¥13,326,256,000¥13,326,256,000

Cash and deposit accounts
Cash and cash equivalents¥15,777,313,000¥15,777,313,000*2. Details of assets and liabilities of companies that have been
newly consolidated through the acquisition of shares*2. Details of assets and liabilities of companies that have been
newly consolidated through the acquisition of shares
Details of assets and liabilities at the start of consolidation when
the companies were newly consolidated through the additional
acquisition of shares, and the relationship between theacquisition cost of the shares and the income from acquisition(net amount) are as follows.

Details of assets and liabilities at the start of consolidation when
the companies were newly consolidated through the additional
acquisition of shares, and the relationship between theacquisition cost of the shares and the income from acquisition(net amount) are as follows.

D3 Publisher Inc. and its three subsidiaries

J. Sakazaki Marketing Ltd.

(As of March 31, 2005)(As of September 30, 2005)

Current assets
Fixed assets
Excess of net assets acquired over cost

¥3,715,900,000¥1,113,546,000¥446,834,000

Current assets
Fixed assets
Excess of net assets acquired over cost

¥1,293,740,000¥249,426,000¥980,395,000

Current liabilities
Long-term liabilities
Minority interest in consolidated
subsidiaries(¥784,740,000)(¥217,380,000)

Current liabilities
Long-term liabilities
Minority interest in consolidated
subsidiaries(¥1,024,859,000)(¥26,607,000)

Acquisition cost
Cash and cash equivalents¥1,300,000,000(¥637,439,000)

Acquisition cost
Book value after application ofequity method at end of fiscal year(¥1,632,177,000)¥2,641,982,000(¥172,094,000)¥854,882,000
Less: income from acquisition (net amount)Less: acquisition cost for current
fiscal year
Cash and cash equivalents¥1,787,100,000(¥2,683,250,000)

Less: income from acquisition (net amount)(¥896,150,000)¥662,560,000*3. Details of assets and liabilities of a company that has ceased to
be a consolidated subsidiary through the sale of shares
As a result of the sale of shares, Heart-line Inc. ("HL") ceased to
be a consolidated subsidiary. Details of the assets and liabilities
at the time of the sale, and the selling price of HL shares and thesales proceeds, are as follows.

26

Current assets
Fixed assets¥2,810,000¥13,330,000

Current liabilities
Long-term liabilities
Gain on sale of shares(¥15,012,000)(¥10,000,000)¥18,871,000

Selling price of HL shares
HL cash and cash equivalents¥10,000,000(¥1,085,000)

Less: sales proceeds¥8,914,000最終更新日時：6/16/2006 8:03 PM 最終印刷日時：6/30/2006 11:00 AM

LeasesFiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

1. Finance lease transactions other than those in which theownership of the leased assets is deemed to be transferred to thelessee1. Finance lease transactions other than those in which theownership of the leased assets is deemed to be transferred to thelessee(1) Acquisition cost, accumulated depreciation, and net book valueof leased assets at the end of the fiscal year

(1) Acquisition cost, accumulated depreciation, and net book valueof leased assets at the end of the fiscal year
(Thousands of yen)(Thousands of yen)Tools,
furniture andfixtures
SoftwareTotal

Acquisition
cost

Accumulated
depreciation

Net book
value

216,628

158,948

57,68039,710256,339

1,441
160,389

38,26995,949VehiclesTools,
furniture andfixtures
SoftwareTotal

Net book
value

11,592

241

11,35091,86367,27824,58438,757142,212

8,397
75,91730,35966,295(2) Future minimum lease payments
Due within one year
Due after one year
Total

¥41,005,000¥54,944,000¥95,949,000

Future minimum lease payments at the end of the fiscal year
have been calculated by the interest-inclusive method, since thebalance of future minimum lease payments accounts for aminimal portion of tangible fixed assets at the end of the fiscal
year.
(3) Lease payments and depreciation
Lease payments
Depreciation

Accumulated
depreciation

Acquisition cost has been calculated by the interest-inclusive
method, since the balance of future minimum lease payments
accounts for a minimal portion of tangible fixed assets at theend of the fiscal year.

Acquisition cost has been calculated by the interest-inclusive
method, since the balance of future minimum lease payments
accounts for a minimal portion of tangible fixed assets at theend of the fiscal year.
(2) Future minimum lease payments
Due within one year
Due after one year
Total

Acquisition
cost¥27,619,000¥38,676,000¥66,295,000

Future minimum lease payments at the end of the fiscal year
have been calculated by the interest-inclusive method, since thebalance of future minimum lease payments accounts for aminimal portion of tangible fixed assets at the end of the fiscal
year.
(3) Lease payments and depreciation
Lease payments
Depreciation¥50,540,000¥50,540,000(4) Calculation method for depreciation¥41,246,000¥41,246,000(4) Calculation method for depreciation

Depreciation is calculated by the straight-line method over thelease term of the leased assets, with no residual value.

Depreciation is calculated by the straight-line method over thelease term of the leased assets, with no residual value.

27

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:01 AM

Marketable securities
1. Other securities at fair value(Thousands of yen)

Category

Securities whose carrying
value exceeds theiracquisition cost(i)
Shares
(ii)
Bonds
(iii)
Others
Sub total
Securities whose carrying
value does not exceed theiracquisition cost(i)
Shares
(ii)
Bonds
(iii)
Others
Sub total
Total

Fiscal year ended March 31, 2005
Fiscal year ended March 31, 2006
(As of March 31, 2005)(As of March 31, 2006)
Carrying value on
Carrying value on
Acquisition
Acquisition
consolidated balance
consolidated balance Difference
Difference
cost
cost
sheetssheets773,307

1,363,984

590,676

−
−

−
−

−
−

832,724500,000

2,088,715
503,200

1,255,990
3,200

−

−

−

773,307

1,363,984

590,676

1,332,724

2,591,915

1,259,190

59,41759,417

−

−

−

−
−

−

−

200,000

181,320(18,680)

500,000
559,417
1,332,724

499,199558,616
1,922,600

(800)
(800)
589,875−−−

200,000
1,532,724

181,320
2,773,235(18,680)
1,240,510

2. Other securities sold during the fiscal year under review(Thousands of yen)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Category
Proceeds from sales
Gains on sales
Losses on sales

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

238,024
162,685

551,585
7,054(1,251)−3. Major securities with no available market value(Thousands of yen)

Category

Fiscal year ended March 31, 2005
(As of March 31, 2005)

Fiscal year ended March 31, 2006
(As of March 31, 2006)

Carrying value on consolidated balance sheets

Carrying value on consolidated balance sheets

1. Shares of subsidiaries and affiliates
Shares of subsidiaries
Shares of affiliates
2. Other securities
Unlisted shares (excluding shares
traded over the counter)
Unlisted corporate bonds
Others100,000
3,454,981

155,000
3,973,042

68,317

34,618

5,000

−

−

55,758

4. Redemption schedule of other securities with maturities and bonds classified as held-to-maturity
Fiscal year ended March 31, 2005 (April 1, 2004 – March 31, 2005)(Thousands of yen)

1 year or less
1. Bonds
Japanese government andlocal government bonds
Japanese corporate bonds
Others
2. Others
Total

1 to 5 years

5 to 10 years

Over 10 years

−

−

−

−

5,000

−
−
−
−

−
−
−
−

−
−
−
−

−
−
5,000

28

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:01 AM

Fiscal year ended March 31, 2006 (April 1, 2005 – March 31, 2006)(Thousands of yen)

1 year or less
1. Bonds
Japanese government andlocal government bonds
Japanese corporate bonds
Others
2. Others
Total

1 to 5 years

5 to 10 years

Over 10 years

−

−

−

−

−
−
−
−

−
−
−
−

−
−
−
−

−
−
−
−

Derivatives
1. Matters relating to transaction status
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)(1) Description of transactions
Derivative transactions entered into by some of theconsolidated subsidiaries are interest rate swaps.

(1) Description of transactions
Same as at left

(2) Policy for transactions
Derivative transactions entered into by some of theconsolidated subsidiaries are aimed at reducing the risks frominterest rate fluctuations, and it is our policy that they are notfor speculative purposes.

(2) Policy for transactions
Same as at left

(3) Purposes of transactions
Derivative transactions entered into by some of theconsolidated subsidiaries are aimed at reducing their exposure
to interest rate fluctuations on borrowings.

(3) Purposes of transactions
Same as at left

Hedge accounting is carried out using derivative transactions.
Method for hedge accounting
Special accounting methods are adopted for interest rate
swaps that satisfy the requirements for hedge accounting.

Method for hedge accounting
Same as at left

Means and scope of hedging
Means of hedging: Interest rate swap transactions
Scope of hedging: Interest on borrowings

Means and scope of hedging
Same as at left

Hedge policy
At some of the consolidated subsidiaries, a hedge policy
is implemented to mitigate the interest rate risks andimprove the financial account balance, and hedging iscarried out within the scope of the relevant debt.

Hedge policy
Same as at left

Method for assessing hedging effectivenessAs the interest rate swap transactions are deemed to comeunder the requirements for special accounting methods,that becomes the criterion for assessing the hedging aseffective.

Method for assessing hedging effectivenessSame as at left

(4) Details of risk relating to transactions
Interest rate swap transactions entered into by some of theconsolidated subsidiaries have risks from fluctuations in themarket interest rates.

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

(5) Risk management system relating to transactions
The management division bears the responsibility forconcluding contracts relating to hedge accounting at some of
the consolidated subsidiaries. There are no particular
stipulations relating to such transactions, but these arecontrolled in accordance with the office regulations
concerning authority.

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

(6) Supplementary explanation on matters relating to market valueof transactions
All derivative transactions entered into by some of theconsolidated subsidiaries are subject to hedge accounting,thus a supplementary explanation has been omitted.

(6) Supplementary explanation on matters relating to market valueof transactions
Same as at left

29

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:01 AM

2. Matters relating to market value of transactions
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)
Same as at left

All derivative transactions entered into by some of theconsolidated subsidiaries are subject to hedge accounting, thus a
supplementary explanation has been omitted.

Deferred tax accounting
Fiscal year ended March 31, 2006
(As of March 31, 2006)

Fiscal year ended March 31, 2005
(As of March 31, 2005)
1. Main components of deferred tax assets and deferred tax
liabilities
Deferred tax assets
Unrecognized reserve for retirement¥231,460,000
benefits for directors and statutory
auditors
Unrecognized accrued enterprise taxes¥161,041,000
Excess reserve for retirement benefits¥55,593,000
Excess allowance for doubtful¥55,763,000
accounts
Excess reserve for accrued bonuses¥8,140,000
Operating loss carryforwards for¥524,700,000
subsidiaries
Unrecognized excess depreciation of¥118,720,000
softwareExcess amortization of royalty¥268,125,000
Unrecognized valuation loss on¥45,195,000
investment securities
Unrecognized valuation loss on¥40,608,000
merchandise
Others
Sub total deferred tax assets
Valuation allowance
Total deferred tax assets

Deferred tax liabilities
Unrealized holding gains (losses) on
available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets¥64,218,000¥1,573,566,000(¥564,928,000)¥1,008,637,000(¥240,079,000)(¥240,079,000)¥768,558,000

1. Main components of deferred tax assets and deferred tax
liabilities
Deferred tax assets
Unrecognized reserve for retirement¥247,089,000
benefits for directors and statutory
auditors
Unrecognized accrued enterprise taxes¥262,282,000
Excess reserve for retirement benefits¥66,142,000
Excess allowance for doubtful¥93,755,000
accounts
Excess reserve for accrued bonuses¥10,175,000
Operating loss carryforwards for¥1,055,752,000
subsidiaries
Unrecognized excess depreciation of¥183,322,000
softwareExcess amortization of royalty¥246,788,000
Unrecognized valuation loss on¥90,416,000
merchandising rights advances
Unrecognized excess depreciation of¥41,653,000
content
Unrecognized valuation loss on¥29,388,000
merchandise
Others¥180,132,000
Sub total deferred tax assets¥2,506,901,000
Valuation allowance(¥1,114,733,000)
Total deferred tax assets¥1,392,167,000
Deferred tax liabilities
Unrealized holding gains (losses) on
available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets(¥504,887,000)(¥504,887,000)¥887,279,000

2. Breakdown of main items causing differences between thestatutory tax rate and the effective rate for income taxes after
applying deferred tax accounting

2. Breakdown of main items causing differences between thestatutory tax rate and the effective rate for income taxes after
applying deferred tax accounting

Statutory tax rate
(Adjustments)
Accumulated earnings tax
Per capita levy of local resident
income tax
Entertainment expenses notdeductible for tax purposes
Non-taxable dividend income
Tax deductions

40.7 %

Others
Effective income tax rate after
application of deferred tax accounting

0.8 %44.8 %

Statutory tax rate
(Adjustments)
Accumulated earnings tax
Per capita levy of local resident
income tax
Entertainment expenses not deductible
for tax purposes
Non-taxable dividend income
Tax-rate difference arising from losses
at consolidated subsidiaries
Others
Effective income tax rate after
application of deferred tax accounting

2.4 %
0.3 %
0.8 %
(0.1 %)(0.1 %)

30

40.7 %
2.9 %
0.3 %
1.1 %
(0.2 %)
3.5 %(0.7 %)
47.6 %

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:01 AM

Retirement benefit provisions
Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
1.

Outline of retirement benefit system adopted
The Company has adopted a defined benefit planconsisting of a lump-sum retirement payment.

1.

Outline of retirement benefit system adopted
The Company and certain domestic consolidated
subsidiaries have adopted a defined benefit plan consistingof a lump-sum retirement payment.
Certain overseas consolidated subsidiaries have adopted
defined contribution plans.

2.

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

2.
(¥145,040,000)¥5,899,000(¥139,140,000)

Details of retirement benefit obligations
Projected benefit obligations
Unrecognized net actuarial loss
Retirement benefit provisions(¥165,941,000)¥3,293,000(¥162,648,000)

Note : Certain domestic consolidated subsidiaries use thesimplified method for the computation of retirement benefit
obligations.
3.

Details of retirement benefit expenses
Retirement benefit expenses
Service cost
Interest cost
Amortization of net actuarial loss

3.

Details of retirement benefit expenses
Retirement benefit expenses
Service cost
Interest cost
Amortization of net actuarial loss
Other

¥23,904,000¥2,470,000¥293,000¥26,668,000¥40,626,000¥2,716,000¥993,000¥3,645,000¥47,982,000

Notes: 1. The retirement benefits expenses of consolidated
subsidiaries using the simplified method are stated in"Service cost."
2. "Other" indicates the amount of premium payments todefined contribution pensions.
4.

Basis for calculation of retirement
benefit obligation
Discount rate:
2.0 ％Periodic allocation method for projected benefits:
Straight-line standard
Years over which actuarial gains or losses are amortized:
Five years from the fiscal year after the year of occurrence

4.

31

Basis for calculation of retirement
benefit obligation
Discount rate:
2.0 ％Periodic allocation method for projected benefits:
Straight-line standard
Years over which actuarial gains or losses are amortized:
Five years from the fiscal year after the year of occurrence最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:01 AM

Segment information
1. Segment information by business category
Fiscal year ended March 31, 2005 (April 1, 2004–March 31, 2005)
Since pachinko/pachislot machine sales business accounts for more than 90% of total sales and operating income in all segments, theCompany does not disclose segment information for each category of business activity.

Fiscal year ended March 31, 2006 (April 1, 2005–March 31, 2006)(Thousands of yen)

Elimination

Consolidated
total

96,814,364−

96,814,364

671,455(671,455)−

97,485,820(671,455)

96,814,364

4,739,036

85,152,668(686,460)

84,466,208(655,529)

12,333,151

15,004

12,348,156

5,543,721

6,091,831

88,426,907(870,373)

87,556,534

403,421

252,956

1,153,912(4,942)

1,148,970

PS FieldGame Field

Other Field

Total(1) Sales to outside customers

88,168,782

5,042,102

3,603,479(2) Inter-segment sales and transfers

180,653

10,774

480,027

Total

88,349,435

5,052,877

4,083,507

Operating expenses

75,638,435

4,775,196

Operating profit (loss)

12,711,000

277,681

76,791,354
497,534

I. Sales and operating income
Sales

II. Assets, depreciation and capital
expenditure
AssetsDepreciation
Impairment losses−−

56,81956,819−56,819

Capital expenditureNotes: 1. The business has been segmented into the PS Field, Game Field, and Other Field segments after taking into consideration
the similarities between products and services.
2. Principal products in each segment(1) PS Field: Purchasing and sale, planning and development of pachinko/pachislot machines, and ancillary businessactivities(2) Game Field: Planning, development and sale of game software and other software packages, etc.
(3) Other Field: Sports management, etc.
3. All operating expenses are allocated to individual segments, and thus none remain unallocated.
4. All assets are allocated to individual segments, and thus there are no assets that are regarded as being Company-wide
assets.
734,555674,656

987,660

2,396,872(3,555)2,393,317

2. Segment information by region
Fiscal year ended March 31, 2005 (April 1, 2004–March 31, 2005)
Since Japan accounts for more than 90% of total sales in all segments and of the value of assets of all segments, the Company does
not disclose segment information by region.

Fiscal year ended March 31, 2006 (April 1, 2005–March 31, 2006)
Since Japan accounts for more than 90% of total sales in all segments and of the value of assets of all segments, the Company does
not disclose segment information by region.

3. Overseas sales
Fiscal year ended March 31, 2005 (April 1, 2004–March 31, 2005)
Since there are no overseas sales, there is no pertinent information to disclose.

Fiscal year ended March 31, 2006 (April 1, 2005–March 31, 2006)
Since overseas sales account for less than 10% of consolidated net sales, the Company does not disclose information on overseas
sales.

32

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:01 AM

Transactions with related parties
Fiscal year ended March 31, 2005 (April 1, 2004 – March 31, 2005)
1. Directors and major individual shareholders(Thousands of yen)
Attribute

NameBusiness or
occupation

Location Capital

Votingrightsholding(held)

Relationship
Concurrent
Business
posts ofrelationshipdirectors

Transaction
details

Transaction
amountAccount Balance at
item
year-end

Director,
General Manager,of Administration
Division
Fields Corporation
Director
Database Co., Ltd.

Hiroyuki
Yamanaka−−

ShigemiShimada−−Directors
and their
close
relatives

Notes:

Statutory Auditor
Professional
Management Co.,Ltd.
Total Workout
Corporation
White Trash
Charms Japan Co.,Ltd.
Fields Jr.
Corporation
Digital Lord
Corporation
Director,
General Manager of
Product
Development
Division
Fields Corporation(Held)
direct0.1％−−

Corporate
housing rent
(Notes 1,2)

2,953

−

−

(Held)
direct0.1％−−

Corporate
housing rent
(Notes 1,2)

1,430

−

−

1. The above transaction amounts are net of consumption tax.
2. Transaction conditions and the policies for determining those conditions(1) Corporate housing rent is the amount borne by individuals as rent for leased corporate housing. Until December 2004 they
bore 50% of the total rent, but from January 2005 the system was changed so that individuals bore the full amount. Corporate
housing rent was terminated on April 1, 2005.

2. Subsidiaries, etc.
(Thousands of yen)
Attribute

Name ofcompany

Location

D3
Publisher
Inc.

Shibuyaward, 1,727,889
Tokyo

Toshima
ward,
Tokyo

CapitalAffiliate
Rodeo Co.,
Ltd.

Notes:

100,000

Votingrightsholding(held)

Relationship
Concurrent
Business
posts ofrelationshipdirectors

Transaction
details

Transaction
amountDesign and saleof games
software andpackaged
softwareSubscription
Holding, Concurrentof new shares
Acquisition
directpost,
privatelyof shares
57.4％
1 person
allocated(Notes 1,2,3)

1,787,100

Development
andmanufacture ofpachinko/pachislot
machines

Development
andPurchase of
manufacturemachinesof pachinko/(Notes 1,2)
pachislot
machines

44,579,677

Business or
occupation

Holding,
direct35.0％−

Account Balance at
item
year-end−−

Accounts
payable 22,637,049-trade1. The above transaction amounts are net of consumption tax, but the balance at year-end is inclusive of consumption tax.
2. Transaction conditions and the policies for determining those conditions(1) The number of shares issued was 7,000, and the issue price was set at ¥255,300, the average of closing prices in ordinary
trading for the most recent three months up to the day immediately preceding the resolution of the Board of Directors(November 15, 2004, to February 14, 2005), disclosed by Jasdaq Securities Exchange, Inc. (during the period to December 10,
2004, disclosed by the Japan Securities Dealers Association).
(2) For the purchase of machines, the transaction conditions are determined in the same manner as those generally applied.
3. D3 Publisher Inc. became a consolidated subsidiary as a result of the subscription of new shares privately allocated referred toabove.

33

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:01 AM

Fiscal year ended March 31, 2006 (April 1, 2005 – March 31, 2006)
1. Subsidiaries, etc.
(Thousands of yen)
Attribute

Name ofcompany

Affiliate

Toshima
Rodeo Co.,
ward,
Ltd.
Tokyo

Notes:

Location

CapitalBusiness or
occupation

Votingrightsholding(held)

100,000

Development
andmanufacture ofpachinko/pachislot
machines

Holding,
direct35.0％

Relationship
Concurrent
Business
posts ofrelationshipdirectors

Transaction
details

Transaction
amountAccount Balance at
item
year-end

Development
andmanufactureof pachinko/
pachislot
machines

Purchase ofmachines(Notes 1,2)

46,825,232

Accounts
payable 30,590,077-trade−1. The above transaction amounts are net of consumption tax, but the balance at year-end is inclusive of consumption tax.
2. Transaction conditions and the policies for determining those conditions(1) For the purchase of machines, the transaction conditions are determined in the same manner as those generally applied.

34

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:01 AM

Per-share data
Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
Book value per share
Net income per share

Book value per share
Net income per share¥96,026,73¥19,888.61

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

¥113,275.37¥20,118.14

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

The Company implemented a 2-for-1 stock split on
September 3, 2004. Had this stock split been implemented
at the beginning of the previous fiscal year, per-share data
for the previous fiscal year would have been as follows.
Book value per share¥44,652.69
Net income per share¥20,233.98
Since no dilutive latent shares exist, diluted net income pershare is not stated.

Note: The calculation basis for net income per share is as follows.
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
Net income
Amount not allocable to commonshareholders(Of which, bonuses to directors andstatutory auditors by appropriation ofretained earnings)
Net income allocable to common shares
Average number of shares of common stock
outstanding
Outline of latent shares not reflected in thecalculation of diluted net income per sharesince they have no dilutive effect

Stock acquisition rights(Number of rights: 636)

Going concern assumption
Fiscal year ended March 31, 2005 (April 1, 2004 – March 31, 2005)
Not applicable.

Fiscal year ended March 31, 2006 (April 1, 2005 – March 31, 2006)
Not applicable.

35

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)¥6,926,791,000¥7,085,994,000¥105,000,000¥105,000,000(¥105,000,000)(¥105,000,000)¥6,821,791,000¥6,980,994,000

343,000 shares

347,000 shares

Stock acquisition rights: 2 types(Stock acquisition rights (1st series): 604)
(Stock acquisition rights (2nd series): 1,610)

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:02 AM

Significant subsequent events
Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
Resolution on stock options
Pursuant to the provisions of Articles 280-20 and 280-21 of theCommercial Code, and based on resolutions of the 17th ordinary
general meeting of shareholders on June 29, 2005, and of themeeting of the Board of Directors held on the same day, theCompany resolved as follows with regard to the issuance of stockacquisition rights as stock options.
1.
2.

3.
4.

5.

6.
7.

Issue date of stockacquisition rights
Number of stock acquisitionrights to be issued
Issue price of stockacquisition rights
Class and number of sharesfor which stock acquisitionrights are to be issued
Amount to be paid upon
exercise of stock acquisitionrightsExercise period
Number of persons eligible
for stock acquisition rights
allotment

June 29, 2005
1,610
(five shares per stockacquisition right)
Gratis
1,610 shares of common
stock¥760,000 per share

From August 1, 2005, toJune 30, 2008
Directors and employeesof the Company totaling
46 people

Acquisition of shares of J. Sakazaki Marketing Ltd. (to make it asubsidiary)
The Company is seeking to expand its sports and entertainment
operations and establish a global standing in the field, andtherefore at the meeting of its Board of Directors held on June 27,
2005, it was resolved to conclude a basic agreement to acquire
shares in J. Sakazaki Marketing Ltd. (to make it a subsidiary).
(1) Overview of the company(i)Trade name: J. Sakazaki Marketing Ltd.
(ii) Representative: Kazunori Sakazaki, President & CEO(iii) Address: 2-19 Akasaka 2-chome, Minato-ku, Tokyo(iv) Main businesses: Planning, implementation, sale ofbroadcasting rights, etc., for sporting events; acquisition of
copyrights, trademarks, licenses and granting of licenses.
(v) Capital: ¥20 million(vi) Shares issued: 24,000(vii) Revenues: ¥3,266,450,000(viii) Total assets: ¥952,935,000(ix) Fiscal year-end: December 31(2) Method of acquiring shares
Acquisition of 15,600 shares from Kazunori Sakazaki (65.0%
of all issued shares)(3) No. of shares acquired and state of share ownership before andafter the acquisition
No. of shares owned before the transfer- sharesNo. of shares acquired
15,600 shares(No. of shares with voting rights 15,600; 65.0% ownership)
No. of shares owned after the transfer
15,600 shares(No. of shares with voting rights 15,600; 65.0% ownership)(4) Schedule
Mid-July 2005: Conclusion of final agreement, transfer of sharecertificates and payment (Planned)36

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:02 AM

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Merger of subsidiaries
At the meeting of the Board of Directors held on June 27, 2005, it
was resolved that J. Sakazaki Marketing Ltd. would become asubsidiary of the Company, whereupon it was further resolved toapprove a basic memorandum of agreement concerning the mergerof its subsidiaries Professional Management Co., Ltd., Total
Workout Corporation and J. Sakazaki Marketing Ltd.
(1) Outline of the merger of subsidiaries
Schedule
Mid-August 2005: Signing of merger agreement (Planned)
Late-August 2005: Approval of merger by extraordinary
general meeting of shareholders at eachcompany (Planned)
October 1, 2005: Merger (Planned)(2) Outline of merging companies
(i)
(ii)

Trade name: Professional Management Co., Ltd.
Representatives: Hidetoshi Yamamoto, Ken Kudo,
Representative directors(iii) Address: 10-8 Dogenzaka 1-chome, Shibuya-ku, Tokyo(iv) Main businesses: Advertising agency services, etc.,
acquisition of copyrights (merchandising rights) and content(v) Capital: ¥200 million(vi) Shares issued: 4,000(vii) Total assets: ¥643,272,000(viii) Fiscal year-end: March 31
(i)
(ii)

Trade name: Total Workout Corporation
Representatives: Hidetoshi Yamamoto, Kevin Yamazaki,
Representative directors(iii) Address: 10-8 Dogenzaka 1-chome, Shibuya-ku, Tokyo(iv) Main businesses: Management of gymnasiums(v) Capital: ¥10 million(vi) Shares issued: 200(vii) Total assets: ¥1,373,732,000(viii) Fiscal year-end: March 31(i) Trade name: J. Sakazaki Marketing Ltd.
Details are as set out above in "(1) Overview of the company" in"Acquisition of shares of J. Sakazaki Marketing Ltd. (to make it asubsidiary)."37

最終更新日時：6/16/2006 8:04 PM 最終印刷日時：6/30/2006 11:02 AM

6. Production, Orders Received and Sales
As of the fiscal year under review, the businesses that were presented in the "Pachinko/pachislot machines" and "Others"
segments until the previous fiscal year are presented as segments categorized by type, namely the "PS Field," "GameField," and "Other Field" segments.
The reason for this change is that game-related business, formerly included within the "Others" category, has grownin importance relative to sales of pachinko/pachislot machines, the Company's principal business, and it was desired toensure that segmentation matches the realities of the Fields Group.
(1) Production
Production by segment during the fiscal year under review was as follows.
Item
Pachinko/pachislot machines
Others
Total(Thousands of yen)(Thousands of yen)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Segment

PS Field−
2,262,141
Game Field
Other Field−
2,262,141
Total
Note: The above amounts are net of consumption tax.

−−−

(2) Procurement
Product purchasing by segment during the fiscal year under review was as follows.
Item(Thousands of yen)(Thousands of yen)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Segment

53,820,662
PS FieldGame Field−
137,402
Other Field
53,958,064
Total
Notes: 1. The above amounts are based on the procurement
prices.
2. The above amounts are net of consumption tax.

49,064,230
Pachinko/pachislot machines
1,127,785
Others50,192,015
Total
Notes: 1. The above amounts are based on the procurement
prices.
2. The above amounts are net of consumption tax.

(3) Orders received
Orders received by segment during the fiscal year under review were as follows.
Item
Pachinko/pachislot machines
Others
Total(Thousands of yen)(Thousands of yen)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Segment

PS Field−
159,410
Game Field
Other Field−
159,410Total
Note: The above amounts are net of consumption tax.

−−−(4) Sales
Sales by segment during the fiscal year under review were as follows.
Item(Thousands of yen)
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)(Thousands of yen)Segment

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

88,168,782
PS Field
5,042,102
Game Field
3,603,479
Other Field
96,814,364
Total
Note: The above amounts are net of consumption tax.

78,336,175
Pachinko/pachislot machines
3,321,835 (*1)
Others81,658,011
Total
Notes: 1. "Others" includes pachinko/pachislot machine partsand used pachinko/pachislot machines.
2. The above amounts are net of consumption tax.

38

Summary(Translation)
Fields Corporation
Summary of Financial Statements and Business Results (Non-Consolidated)Year Ended March 31, 2006
May 15, 2006
Company Name:

Fields Corporation(URL: http://www.fields.biz)
JASDAQ (Securities code: 2767)
Tokyo
Hidetoshi Yamamoto
President, Representative Director and CEO
Hiroyuki Yamanaka
General Manager, Administration Division
Tel: (03) 5784-2111

Listed on:
Head Office:Representative Director:
Inquiries:

Date of Board of Directors meeting
to approve these accounts:
May 15, 2006
Interim dividend system (Yes/No):
Yes
Planned date for start of dividend payment:
June 29, 2006
Date of ordinary general meeting of shareholders: June 28, 2006
Unit share system (Yes/No):No

1. Summary of business results for the year ended March 31, 2006 (April 1, 2005, to March 31, 2006)(1) Operating results
Net salesYear ended
March 31, 2006
Year ended
March 31, 2005

Operating income

Millions of yen(% change)

88,251(10.4)

79,970(22.8)Net income

Year ended
March 31, 2006
Year ended
March 31, 2005

Millions of yen（Rounded down to nearest million）
Ordinary income(% change)

Millions of yen(% change)

12,497(1.8)

12,836(4.3)

12,275(2.7)

12,312(2.1)

Net income
per share

Diluted net
income per
share

Return on
equityOrdinary
income tototal assets

Ordinary
income tonet sales

Millions of yen(% change)

Yen

Yen

%

%

%

6,934

(3.2)

19,681.88

−

19.1

17.0

14.5

6,721

(3.1)

19,289.46

−

27.9

23.3

15.4

Notes: 1. Average number of shares outstanding
Year ended March 31, 2006:
347,000
Year ended March 31, 2005:
343,000
2. Changes in accounting methods (Yes/No): No
3. Percentages for net sales, operating income, ordinary income and net income denote changes compared withthe previous fiscal year.

39

(2) Dividends
Annual dividend per share
InterimYear ended
March 31, 2006
Year ended
March 31, 2005

Final

Total dividend(Full year)

Payout ratio

Ratio ofdividend toshareholders’equity

Yen

Yen

Yen

Millions of yen%%

4,000.00

2,000.00

2,000.00

1,388

20.3

3.5

4,000.00

2,000.00

2,000.00

1,388

20.7

4.2

(3) Financial position
Total assets

Shareholders’ equity

Shareholders’ equity
ratio

Shareholders’ equity
per share

Millions of yen

Millions of yen%

Yen

At March 31, 2006

82,304

39,242

47.7

112,787.63

At March 31, 2005

68,35433,41448.9

95,993.86

Notes: 1. Total number of shares issued and outstanding at end of fiscal year
Year ended March 31, 2006:
347,000
Year ended March 31, 2005:
347,000
2. Treasury stock at end of fiscal year
Year ended March 31, 2006:–
Year ended March 31, 2005:–

2. Forecast earnings for the year ending March 31, 2007 (April 1, 2006, to March 31, 2007)
Annual dividend per share
Final

Net sales

Ordinary
incomeNet income

Millions of yen

Millions of yen

Millions of yen

Yen

Yen

Yen

First half

34,700

3,710

2,040

2,000.00−−

Full year

90,20013,7307,550−

2,000.00

4,000.00

Reference: Projected net income per share (Full year): ¥21,757.92

40

Interim最終更新日時：6/16/2006 8:08 PM 最終印刷日時：6/30/2006 9:13 AM

7. Non-Consolidated Financial Statements
1. Non-Consolidated Balance Sheets
PeriodItem
AssetsI. Current assets
Cash and cash equivalents
Notes receivable - trade
Accounts receivable - trade*1
Marketable securities
Merchandise
Supplies
Advances
Merchandising rights advances *1
Prepaid expenses
Deferred tax assets
Other accounts receivable*1
Advance payments*1
Notes held
Non-operating notes receivable
Other current assets*1
Allowance for doubtful accounts
Total current assets
II. Fixed assets
1. Tangible fixed assets
Buildings
Accumulated depreciation
Structures
Accumulated depreciation
VehiclesAccumulated depreciation
Tools, furniture and fixtures
Accumulated depreciationLand
Total tangible fixed assets
2. Intangible fixed assets
Software
Software under development
Telephone subscription rights
OthersTotal intangible fixed assets
3. Investments and other assets
Investment securities
Investments in subsidiaries andaffiliates
Equity investment
Long-term loans receivable
Long-term loans receivablefrom shareholders, directors or
employees
Long-term loans receivablefrom affiliates
Claims in bankruptcy
Long-term prepaid expenses
Deferred tax assets
Deposits*1
OthersAllowance for doubtful accounts
Allowance for investment losses
Total investments and other assets
Total fixed assets
Total assets

Fiscal year ended March 31, 2005
(As of March 31, 2005)
Amount% total

9,872,987
3,232,572
34,061,850
5,000
146,691
99,77932,371
3,384,063
214,699
200,372
11,220209,866
91,936878,333
205,095(84,300)
52,562,541

2,347,171(315,720)
65,794(17,792)
27,128(16,548)
1,106,171(419,139)

13,566,922
1,746,185
43,542,586−

2,320,666(392,021)
62,201(24,533)
29,623(20,147)
1,091,590(526,818)

78.0

3,693,935(1,486,386)
9,480,735(5,000)2,475(97,755)(27,763)
268,728
85,611
262,631
11,859(5,255)
19,670(377,620)(106,983)(56,700)
11,662,182

1,928,645(102,805)

37,668(10,333)

9,475(1,104)

6.3

564,772
1,370,827
3,911,388(122,259)(177,166)(413,669)

1.2

195,421739,255
18,53944,100997,317

48,002
10,579260,219442,446
18,53956,700777,906

149,166
2,023
4,607
3,652,792
300,310463,00323,080204,611
111,606
500,712
98,112(141,000)
64,224,724

76.9

2,031,450

687,032
1,547,993
4,325,058(Thousands of yen, %)Fiscal year ended March 31, 2006
Year-on-yearchange(As of March 31, 2006)
Amount% totalAmount4.8(64,797)
296,808−
1.2(12,600)
219,410

1,946,480

2,858,403

911,9225,510,550

7,315,550

1,805,000

22,830103,804

10,508103,204(12,321)
(600)

539

−

(539)

1,222,856

1,267,142

44,285102,952
34,699174,587
1,774,97886,486(97,206)(195,000)
10,688,559
15,791,524
68,354,065

143,867
27,957
123,267
1,868,307
85,478(612,476)(20,000)
13,171,210
18,079,916
82,304,640

40,915(6,741)(51,320)
93,329(1,007)(515,270)
175,000
2,482,651
2,288,392
13,950,575

41

15.6
23.1
100.0

16.0
22.0
100.0

最終更新日時：6/16/2006 8:08 PM 最終印刷日時：6/30/2006 9:13 AM

PeriodItem
Liabilities
I. Current liabilities
Accounts payable - trade
Other accounts payable
Accrued expenses
Accrued income taxes
Accrued consumption tax
Advances received
Deposits
Accrued bonuses
Other current liabilities
Total current liabilities

Fiscal year ended March 31, 2005
(As of March 31, 2005)
Amount% total*1

27,479,545
981,2742,200
2,609,000
132,032
123,314477,574
20,00034,453,859
990,3822,700
3,590,000
311,854
50,343498,233
25,0003,359
39,925,732−
31,824,942

II. Long-term liabilities
Retirement benefit provisions
Reserve for retirement benefits for
directors and statutory auditors
Deposits received
Other long-term liabilities
Total long-term liabilities
Total liabilities
Shareholders’ equity
I. Common stock*2
II. Capital surplus
Additional paid-in capital
Capital surplus total
III. Retained earnings
Legal reserve
Voluntary reserve
General reserve
Unappropriated retained earnings
Total retained earnings
IV. Unrealized holding gain on
available-for-sale securities
Total shareholders’ equity
Total liabilities and shareholders’equity(Thousands of yen, %)Fiscal year ended March 31, 2006 Year-on-yearchange(As of March 31, 2006)
Amount% totalAmount46.6

48.5

6,974,313
9,108
500
981,000
179,821(72,971)
20,6585,000
3,359
8,100,789

129,925

144,705

14,780568,700

607,100

38,4002,409,736
5,893
3,114,255
34,939,197

2,384,794
4.5
51.1

3,136,600
43,062,332

3.8
52.3

(24,942)(5,893)
22,344
8,123,134

7,948,036

11.6

7,948,036

9.7−

7,994,953

11.7

7,994,953

9.7

−

−

7,994,953

7,994,953

9,580

9,580

10,000,000
7,112,502

15,000,000
7,554,115
17,122,082

25.1

22,563,695

27.4

5,441,613

349,7960.5

735,6220.9

385,826

33,414,868

48.9

39,242,308

47.7

5,827,440

68,354,065

100.0

82,304,640

100.0

13,950,575

42

最終更新日時：6/16/2006 8:08 PM 最終印刷日時：6/30/2006 9:13 AM

2. Non-Consolidated Statements of Income
PeriodItem
I. Net sales
II. Cost of sales*1
Gross profit
III. Selling, general and administrative
expenses
Advertising expenses
Remuneration of directors andstatutory auditors
Salaries
Bonuses
Provision for accrued bonuses
Legal welfare expenses
Other welfare expenses
Outsourcing expenses
Travel expenses
Depreciation and amortization
Rents
Recruitment and training
expenses
Provision to allowance for
doubtful accounts
Retirement benefit expenses
Provision to reserve for retirement
benefits for directors and statutory
auditors
OthersOperating income
IV. Non-operating income
Interest income*1Interest on securities
Dividend income*1
Discounts on purchases*1
Lease income*1
Others*1
V. Non-operating expenses
Interest expense
Stock issuance expense
Capital increase-related expense
Lease expenses
Depreciation and amortization
OthersOrdinary income

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
Amount% sales
79,970,015
55,787,766
24,182,248(Thousands of yen, %)Fiscal year ended March 31, 2006 Year-on-year(April 1, 2005–March 31, 2006)
changeAmount% salesAmount

100.0
69.8
30.2

2,722,140

3,070,003

269,450

286,200

3,365,690
38,84620,000390,424
44,272756,856
436,646448,930
790,199

3,874,502
51,21025,000467,220
33,2481,293,836
447,745
502,937
959,287332,716

394,558

18,343

143,813

26,66830,626−

57,4002,245,171

34,926
175
33,021
159,760
38,07923,686

11,906,358
12,275,890

289,650

14.9
15.3

0.4

25,4883,060
67,622201,904
5,393
47,168

100.0
69.9
30.1

8,281,746
5,895,100
2,386,646

14,071,454
12,497,439

15.9
14.2

2,165,096
221,549

350,637

0.3

60,987

11,906
12,836,170

0.0
14.5

(241,049)
523,586

−
−
−
−

7,351
91,906112,494
16,848−24,3542,433,864

88,251,762
61,682,867
26,568,894

252,956
12,312,584

43

0.3
15.4

2,806
9,100

最終更新日時：6/16/2006 8:08 PM 最終印刷日時：6/30/2006 9:13 AM

PeriodItem
VI. Extraordinary income
Gain from sale of fixed assets*2
Gain from investment inanonymous association
Gain from liquidation of guarantees
Gain on sale of investment
securities
Reversal of reserve for retirement
benefits for directors and statutory
auditors
Reversal of allowance forinvestment losses
VII. Extraordinary loss
Loss on sale of fixed assets*3
Loss on disposal of fixed assets*4
Impairment loss
Loss on sale of investment
securities
Valuation loss on investment
securities
Valuation loss on equity investment
Valuation loss on membershiprightsTransfer to allowance for doubtful
accounts
Transfer to allowance forinvestment losses
Income before income taxes
Current income taxes
Deferred income taxes
Net income
Earnings brought forward fromprevious year
Interim dividends paid
Unappropriated retained earnings

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
Amount% sales(Thousands of yen, %)Fiscal year ended March 31, 2006 Year-on-yearchange(April 1, 2005–March 31, 2006)
Amount4,726

124,941

45,17164,081

2,600−

162,685−

131,100−−

346,2830.4

175,000−

72,86656,819−1,251

175,534

4,320−

12,311

−

2,100

−

471,900

5,354,480
121,863

Amount364,023

0.5

17,739621,5690.7

160,328

12,578,624

14.3

380,997

5,644,010
6,934,613

6.4
7.9

167,667
213,330−

1,666
89,039195,000% sales461,240

0.6

12,197,626

15.2

5,476,343
6,721,283

6.8
8.4

−
6,120,130(476,119)

1,085,219

1,313,502

228,283

694,000
7,112,502

694,000
7,554,115

441,61344−

最終更新日時：6/16/2006 8:08 PM 最終印刷日時：6/30/2006 9:13 AM

Appropriation Statements (Tentative)
PeriodItem

Fiscal year ended March 31, 2005
(June 29, 2005)

I.

Unappropriated retained earnings at end ofcurrent fiscal year
II. Appropriation amount
1. Dividends
2. Bonuses to directors and statutory auditors(Of which, to statutory auditors)
3. Voluntary reserve(1) General reserve
III. Retained earnings carried forward to next
fiscal year

(Thousands of yen)
Fiscal year ended March 31, 2006
(June 28, 2006)

7,112,502

7,554,115

694,000

694,000

105,000

105,000(3,000)(3,000)5,000,000

5,799,000
1,313,502

5,000,000

5,799,000
1,755,115

Note: The dates in parentheses under the period are the scheduled dates for approval at general meetings of shareholders

Items that raise significant doubts about the going concern assumption
Fiscal year ended March 31, 2005 (April 1, 2004 – March 31, 2005)
Not applicable.
Fiscal year ended March 31, 2006 (April 1, 2005 – March 31, 2006)
Not applicable.

45

最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

Basis of Presentation of the Non-Consolidated Financial Statements
Significant Accounting Policies
Item
1. Valuation standards andmethods for marketablesecurities

2. Valuation standards andmethods for inventories

3. Depreciation methods for fixed
assetsFiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)(1) Shares of subsidiaries and affiliates
Stated at cost determined by themoving-average method.

(1) Shares of subsidiaries and affiliates
Same as at left

(2) Other marketable securities
Securities with market prices:Stated at market value based on market
price as of the balance sheet date(unrealized gains or losses are charged
or credited directly to shareholders’equity, with the cost of securities solddetermined by the moving-averagemethod).
Securities without market prices:Stated at cost determined by the moving
average method.
(1) Merchandise
Used pachinko/pachislot machines
Stated at cost determined by the specificidentification method.
OthersStated at cost determined by the moving
average method.

(2) Other marketable securities
Securities with market prices:
Same as at left

(2) Supplies
Stated at cost determined by the lastpurchase price method.
(1) Tangible fixed assets
Declining-balance method
However, the straight-line method isapplied to buildings (excluding building
fixtures) acquired after April 1, 1998.

(2) Supplies
Same as at left

The estimated useful lives ofdepreciable assets are as follows.
Buildings: 6-50 years
Structures: 10-50 years
Vehicles: 4-6 years
Tools, furniture and fixtures: 3-20 years

4. Treatment of deferred charges

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Securities without market prices:
Same as at left
(1) Merchandise
Used pachinko/pachislot machines
Same as at left
OthersSame as at left

(1) Tangible fixed assets
Declining-balance method
However, the straight-line method isapplied to buildings (excluding building
fixtures) acquired after April 1, 1998.
The estimated useful lives ofdepreciable assets are as follows.
Buildings: 4-50 years
Structures: 10-50 years
Vehicles: 4-6 years
Tools, furniture and fixtures: 3-20 years(2) Intangible fixed assets
Straight-line method
The straight-line method is applied tosoftware for company use, based on its
useful life within the Company (fiveyears).

(2) Intangible fixed assets
Same as at left

(3) Long-term prepaid expenses
Straight-line method
Stock issuance expenses(3) Long-term prepaid expenses
Same as at left

These expenses are charged in full at the timethey are incurred.
The issuance of 12,000 new shares ofcommon stock on June 15, 2004, through apublic offering was carried out by theunderwriting companies purchasing andunderwriting the shares at ¥1,108,755 pershare, which differed from the share issue
price of ¥1,161,000, the offering price paid byordinary investors.
The gross spread or differential between thetwo prices was in this case ¥626,940,000, thede facto underwriting commission. If, as waspreviously the case, the underwriting andshare issue prices were the same, theunderwriting commission would have been
charged as stock issuance expenses.

46

最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

Item

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Consequently, compared to the previous
method of accounting for underwriting
commission, stock issuance expenses and thetotal of common stock and capital surplus areeach reduced by ¥626,940,000, and ordinary
income and income before income taxes areeach increased by the same amount.
5. Accounting standards forreserves(1) Allowance for doubtful accounts
To provide against losses from doubtful
accounts, allowances for ordinary
receivables are provided using a rate
determined by past collection experience,
and allowances for specific debts
considered doubtful are accounted for by
calculating the estimated amounts deemed
uncollectible after individually reviewing
the collectibility of the debts.

(1) Allowance for doubtful accounts
Same as at left

(2) Reserve for investment losses
To provide for possible losses frominvestments in affiliates, this reserve isprovided in consideration of factors such as
the financial condition of the affiliates.

(2) Reserve for investment losses
Same as at left

(3) Accrued bonuses
To provide for employee bonuses, theCompany recognizes the amounts out of the
projected bonus payments to be allocated to
the fiscal year.

(3) Accrued bonuses
Same as at left

(4) Retirement benefit provisions
To provide for employees’ retirement
benefits the Company recognizes, on thebasis of projected benefit obligations as ofthe end of the fiscal year, benefit obligations
accrued as of the end of the fiscal year.

(4) Retirement benefit provisions
Same as at left

Actuarial differences are amortizedproportionately by the straight-line method
over a fixed number of years (five years)
within the average remaining period ofservice of employees as of the time suchdifferences arise.
Amortization amounts are expensed
beginning with the fiscal year following thatin which the differences arise.

6. Accounting standards forrevenues and expenses

7. Treatment of leasetransactions

8. Other significant standards forthe preparation of financial
statements(5) Reserve for retirement benefits for
directors and statutory auditors
To provide for directors' and statutory
auditors’ retirement benefits the Company,in accordance with the internal regulations,states the amounts to be paid at the end of
the fiscal year.
For agency sales, when the pachinko/
pachislot machines are delivered to users,
and the payments for the machines are madeto the machine makers, these are recognized
as commission income and commission cost.
Finance lease transactions, other than thosewhere the ownership of the leased assets isdeemed to be transferred to the lessee, areaccounted for as ordinary operating leasetransactions.
Accounting for consumption tax
Consumption tax is accounted for by the
tax-excluded method.

47(5) Reserve for retirement benefits for
directors and statutory auditors
Same as at left

Same as at left

Same as at left

Accounting for consumption tax
Same as at left

最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

Changes in accounting treatment
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)
Accounting standard for impairment of fixed assets
As of this fiscal year the Company has adopted the AccountingStandard for Impairment of Fixed Assets ("Opinion Concerning
Establishment of Accounting Standard for Impairment of Fixed
Assets" issued by the Business Accounting Deliberation Council
on August 9, 2002) and the Implementation Guidance for the
Accounting Standard for Impairment of Fixed Assets (Financial
Accounting Standard Implementation Guidance No. 6 issued by
the Accounting Standards Board of Japan on October 31, 2003).
In consequence, income before income taxes declined by¥56,819,000.
Cumulative impairment losses are deducted directly from theamount of the relevant assets in accordance with the revised
Regulations on Financial Statements.

Changes in method of presentation
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Non-consolidated statements of income
Until the previous fiscal year, administrative services fees received
were stated as a separate item under non-operating income. As thisitem has fallen below 10% of non-operating income, it is now
included in "Others" under non-operating income. Administrative
services fees received in the current fiscal year amounted to¥15,452,000.

Additional information
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

As a result of the promulgation of the Law for Partial Amendment
to the Local Tax Law, etc. (Law No. 9 of 2003) on March 31,
2003, and the consequent introduction of the pro forma standard
taxation system, which applies to fiscal years commencing on orafter April 1, 2004, as of the current fiscal year the Company
includes charges for the value-added and capital portions ofcorporate enterprise tax in selling, general and administrative
expenses in accordance with the Practical Procedures for
Indication of Pro Forma Taxation in Income Statement concerning
Corporate Enterprise Tax (Practical Solutions Report No. 12 issued
by the Accounting Standards Board of Japan on February 13,2004).
As a result, SG&A expenses increased by ¥107,461,000, andoperating income, ordinary income, and income before income
taxes decreased by ¥107,461,000.

48

最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

Notes
Non-consolidated balance sheets
Fiscal year ended March 31, 2005
(As of March 31, 2005)

Fiscal year ended March 31, 2006
(As of March 31, 2006)*1. Assets and liabilities relating to affiliates
Other than items stated separately, the following are included in
the relevant balance sheet items.
Other assets¥858,911,000
Accounts payable-trade¥22,794,079,000*1. Assets and liabilities relating to affiliates
Other than items stated separately, the following are included in
the relevant balance sheet items.
Accounts payable-trade¥30,760,621,000*2. Number of authorized and outstanding shares
Authorized share
Common stock
586,000 shares
Outstanding shares Common stock
347,000 shares
3. Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on an agency
basis for pachinko/pachislot machine manufacturers.

*2. Number of authorized and outstanding shares
Authorized shares Common stock
1,388,000 shares
Outstanding share Common stock
347,000 shares
3. Contingent liabilities
The Company provides payment guarantees for sales ofpachinko/pachislot machines to pachinko halls on an agency
basis for pachinko/pachislot machine manufacturers.

Asahi Shoji K.K.
Daiei Kanko K.K.
Meiplanet K.K.
Kouki Co., Ltd.
Iwamoto Development Co., Ltd.
BOSS Co., Ltd.
Niimi Co., Ltd.
Y.K. Daiko
The City Co., Ltd.
K.K. Toei Kanko
Others (176)
Total

Sankei Shoji Co., Ltd.
Asahi Shoji K.K.
Niimi Co., Ltd.
Y.K. Daiko
Meiplanet K.K.
K.K. Toei Kanko
LiNE Company
Y.K. Big Shot
Y.K. R&K
K.K.Bishop
Others (294)
Total¥59,985,000¥58,480,000¥33,698,000¥30,571,000¥28,551,000¥24,910,000¥23,739,000¥23,293,000¥19,622,000¥18,677,000¥475,519,000¥797,050,000¥41,728,000¥39,823,000¥33,106,000¥31,777,000¥23,861,000¥19,895,000¥15,536,000¥14,025,000¥14,017,000¥13,198,000¥430,297,000¥677,268,000

4. Dividend restriction
As a result of mark-to-market valuation of securities, net assets
increased by ¥349,796,000. However, the Company is prohibitedfrom utilizing the said amount for dividend payment inaccordance with Article 124-3 of the Commercial Code
Enforcement Regulations.

4. Dividend restriction
As a result of mark-to-market valuation of securities, net assets
increased by ¥735,622,000. However, the Company is prohibitedfrom utilizing the said amount for dividend payment inaccordance with Article 124-3 of the Commercial Code
Enforcement Regulations.

5. Overdraft agreements
To raise working capital efficiently, the Company has concluded
overdraft agreements with three banks. As of the end of the fiscal
year, unutilized amounts under these agreements were as
follows.

5. Overdraft agreements
To raise working capital efficiently, the Company has concluded
overdraft agreements with three banks. As of the end of the fiscal
year, unutilized amounts under these agreements were as
follows.

Overdraft limit
Borrowings outstanding
Difference¥3,000,000,000–¥3,000,000,000

Overdraft limit
Borrowings outstanding
Difference49¥3,500,000,000–¥3,500,000,000最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

Non-consolidated statements of income
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)*1. Items relating to affiliates included in the statements of income
are as follows.
Purchases¥45,095,320,000
Interest income¥30,986,000
Discounts on purchases¥159,668,000
Other non-operating income¥39,052,000*1. Items relating to affiliates included in the statements of income
are as follows.
Purchases¥47,408,061,000Interest income¥42,200,000
Discounts on purchases¥201,904,000
Other non-operating income¥47,631,000*2. The gain on sale of fixed assets arose from the sale of vehicles.

*2. Details of gain on sale of fixed assets
Buildings and structures
Land
Total

*3. The loss on sale of fixed assets arose from the sale of tools,
furniture and fixtures.

*3.

*4. Details of loss on disposal of fixed assets
Buildings
VehiclesTools, furniture and fixtures
Long-term prepaid expenses
SoftwareTotal*4. Details of loss on disposal of fixed assets
Buildings
Structures
Tools, furniture and fixtures
Long-term prepaid expenses
SoftwareTotal¥54,837,000¥29,000¥20,659,000¥361,000¥13,151,000¥89,039,000*5.

¥9,323,000¥115,617,000¥124,941,000¥22,501,000¥105,000¥10,563,000¥1,714,000¥37,981,000¥72,866,000*5. Impairment loss
The Company has stated an impairment loss for the asset set out
below.
Usage
Miscellaneous businessType
Buildings and land
Location Shibuya, Tokyo
Amount ¥56,819,000
When grouping its assets, the Company adopts the method ofgrouping primarily by business category in accordance withmanagement accounting practice. With regard to a property inShibuya used for miscellaneous business, since there is noprospect of a recovery in operating income from the property, aloss has been recognized, composed of ¥51,136,000 on thebuilding and ¥5,682,000 on the land.
The recoverable value of this property has been calculated on
the basis of the net sale price, the market price being the realestate appraisal value.

50

最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

LeasesFiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

1. Finance lease transactions other than those in which theownership of the leased assets is deemed to be transferred to thelessee1. Finance lease transactions other than those in which theownership of the leased assets is deemed to be transferred to thelessee(1) Acquisition cost, accumulated depreciation, and net book valueof leased assets at the end of the fiscal year

(1) Acquisition cost, accumulated depreciation, and net book valueof leased assets at the end of the fiscal year

(Thousands of yen)

Acquisition
cost

Accumulated
depreciation

104,314

81,26423,04939,710144,025

1,441
82,70538,26961,319Tools,
furniture andfixtures
Software
Total

Accumulated
depreciation

Net bookvalue

26,833

14,441

12,39138,75765,5908,397
22,83830,35942,751

Acquisition cost has been calculated by the interest-inclusive
method, since the balance of future minimum lease payments
accounts for a minimal portion of tangible fixed assets at the endof the fiscal year.
(2) Future minimum lease payments
Due within one year
Due after one year
Total

¥18,568,000¥42,751,000¥61,319,000

Future minimum lease payments at the end of the fiscal year
have been calculated by the interest-inclusive method, since thebalance of future minimum lease payments accounts for aminimal portion of tangible fixed assets at the end of the fiscal
year.
(3) Lease payments and depreciation
Lease payments
Depreciation

Acquisition
cost
Tools,
furniture andfixtures
SoftwareTotal

Acquisition cost has been calculated by the interest-inclusive
method, since the balance of future minimum lease payments
accounts for a minimal portion of tangible fixed assets at the endof the fiscal year.
(2) Future minimum lease payments
Due within one year
Due after one year
Total

(Thousands of yen)

Net book
value¥12,527,000¥30,223,000¥42,751,000

Future minimum lease payments at the end of the fiscal year
have been calculated by the interest-inclusive method, since thebalance of future minimum lease payments accounts for aminimal portion of tangible fixed assets at the end of the fiscal
year.
(3) Lease payments and depreciation
Lease payments
Depreciation¥22,462,000¥22,462,000(4) Calculation method for depreciation¥18,568,000¥18,568,000(4) Calculation method for depreciation

Depreciation is calculated by the straight-line method over thelease term of the leased assets, with no residual value.

Depreciation is calculated by the straight-line method over thelease term of the leased assets, with no residual value.

Marketable securities
Fiscal year ended March 31, 2005 (March 31, 2005)
Shares of subsidiaries and affiliates at fair value(Thousands of yen)

Category

Carrying value on
non-consolidated balance sheets

Shares of subsidiaries

Market value

2,670,100

3,276,000

Difference
605,900

Fiscal year ended March 31, 2006 (March 31, 2006)
Shares of subsidiaries and affiliates at fair value(Thousands of yen)

Category
Shares of subsidiaries

Carrying value on
non-consolidated balance sheets

Market value

2,670,100

4,116,000

51

Difference
1,445,900最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

Deferred tax accounting
Fiscal year ended March 31, 2005
(As of March 31, 2005)

Fiscal year ended March 31, 2006
(As of March 31, 2006)

1. Main components of deferred tax assets and deferred tax liabilities

1. Main components of deferred tax assets and deferred tax liabilities

Deferred tax assets
Unrecognized reserve for retirement
benefits for directors and statutory
auditors
Unrecognized accrued enterprise taxes
Excess reserve for retirement benefits
Excess allowance for doubtful accounts
Excess reserve for accrued bonuses
Unrecognized allowance for investment
lossesOthersDeferred tax assets
Unrecognized reserve for retirement
benefits for directors and statutory
auditors
Unrecognized accrued enterprise taxes
Excess reserve for retirement benefits
Excess allowance for doubtful accounts
Excess reserve for accrued bonuses
Unrecognized allowance for investment
lossesUnrecognized valuation loss onmerchandising rights advances
Valuation loss on equity investment
Impairment loss
OthersTotal deferred tax assets
Deferred tax liabilities
Unrealized holding gains (losses) on
available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets¥231,460,000¥155,664,000¥51,989,000¥40,502,000¥8,140,000¥79,365,000¥47,916,000¥615,039,000(¥240,079,000)

Total deferred tax assets
Deferred tax liabilities
Unrealized holding gains (losses) on
available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets(¥240,079,000)¥374,960,000¥247,089,000¥250,278,000¥58,895,000¥280,551,000¥10,175,000¥8,140,000¥90,416,000¥21,367,000¥22,386,000¥101,858,000¥1,091,159,000(¥504,887,000)(¥504,887,000)¥586,271,000

2. Breakdown of main items causing differences between thestatutory tax rate and the effective rate for income taxes after
applying deferred tax accounting

2. Breakdown of main items causing differences between thestatutory tax rate and the effective rate for income taxes after
applying deferred tax accounting

Statutory tax rate
(Adjustments)
Accumulated earnings tax
Per capita levy of local resident income
taxEntertainment expenses not deductible
for tax purposes
Non-taxable dividend income
Tax deductions
Others
Effective income tax rate after
application of deferred tax accounting

Statutory tax rate
(Adjustments)
Accumulated earnings tax
Per capita levy of local resident income
taxEntertainment expenses not deductible
for tax purposes
Non-taxable dividend income
Tax deductions
Others
Effective income tax rate after
application of deferred tax accounting

40.7 %
2.5 %
0.3 %
0.8 %
(0.1
(0.1
0.8
44.9

%)
%)
%
%

Increases in numbers of shares of common stock outstanding
Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
Issuance of new shares through book-building processIssuance of new shares through book-building process on June 15,
2004
Number of shares issued
Issue price
Issue value
Amount transferred to paid-in-capital

12,000 shares¥1,161,000¥1,108,755¥554,378

Stock split
Issuance of new shares through a stock split on September 3, 2004
Stock split ratio
Number of shares issued

2-for-1
173,500 shares

52

40.7 %
3.0 %
0.3 %
1.1 %
(0.2
(0.0
0.0
44.9

%)
%)
%
%

最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

Per-share data
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
Book value per share
Net income per share

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)
Book value per share
Net income per share¥95,993.86¥19,289.46

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

¥112,787.63¥19,681.88

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

The Company implemented a 2-for-1 stock split on September
3, 2004. Had this stock split been implemented at the beginningof the previous fiscal year, per-share data for the previous fiscal
year would have been as follows.
Book value per share¥45,253.63
Net income per share¥19,923.14
Since no dilutive latent shares exist, diluted net income pershare is not stated.

Note: The calculation basis for net income per share is as follows.
Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
Net income
Amount not allocable to commonshareholders(Of which, bonuses to directors and statutory
auditors by appropriation of retained
earnings)
Net income allocable to common shares
Average number of shares of common stock
outstanding
Outline of latent shares not reflected in thecalculation of diluted net income per sharesince they have no dilutive effect

Stock acquisition rights(Number of rights: 636)

53

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)¥6,721,283,000¥6,934,613,000¥105,000,000¥105,000,000(¥105,000,000)(¥105,000,000)¥6,616,283,000¥6,829,613,000

343,000 shares

347,000 shares
Stock acquisition rights: 2 types(Stock acquisition rights (1st series): 604)
(Stock acquisition rights (2nd series): 1,610)

最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

Significant subsequent events
Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)
Resolution on stock options
Pursuant to the provisions of Articles 280-20 and 280-21 of theCommercial Code, and based on resolutions of the 17th ordinary
general meeting of shareholders on June 29, 2005, and of themeeting of the Board of Directors held on the same day, theCompany resolved as follows with regard to the issuance of stockacquisition rights as stock options.
1.
2.

3.
4.

5.

6.
7.

Issue date of stockacquisition rights
Number of stock acquisitionrights to be issued
Issue price of stockacquisition rights
Class and number of sharesfor which stock acquisitionrights are to be issued
Amount to be paid upon
exercise of stock acquisitionrightsExercise period
Number of persons eligible
for stock acquisition rights
allotment

June 29, 2005
1,610
(one share per stockacquisition right)
Gratis
1,610 shares of common
stock¥760,000 per share

From August 1, 2005, toJune 30, 2008
Directors and employeesof the Company totaling
46 people

Acquisition of shares of J. Sakazaki Marketing Ltd. (to make it asubsidiary)
The Company is seeking to expand its sports and entertainment
operations and establish a global standing in the field, andtherefore at the meeting of its Board of Directors held on June 27,
2005, it was resolved to conclude a basic agreement to acquire
shares in J. Sakazaki Marketing Ltd. (to make it a subsidiary).
(1) Overview of the company(i)Trade name: J. Sakazaki Marketing Ltd.
(ii) Representative: Kazunori Sakazaki, President & CEO(iii) Address: 2-19 Akasaka 2-chome, Minato-ku, Tokyo(iv) Main businesses: Planning, implementation, sale ofbroadcasting rights, etc., for sporting events; acquisition of
copyrights, trademarks, licenses and granting of licenses.
(v) Capital: ¥20 million(vi) Shares issued: 24,000(vii) Revenues: ¥3,266,450,000(viii) Total assets: ¥952,935,000(ix) Fiscal year-end: December 31(2) Method of acquiring shares
Acquisition of 15,600 shares from Kazunori Sakazaki (65.0%
of all issued shares)(3) No. of shares acquired and state of share ownership before andafter the acquisition
No. of shares owned before the transfer- sharesNo. of shares acquired
15,600 shares(No. of shares with voting rights 15,600; 65.0% ownership)
No. of shares owned after the transfer
15,600 shares(No. of shares with voting rights 15,600; 65.0% ownership)(4) Schedule
Mid-July 2005: Conclusion of final agreement, transfer of sharecertificates and payment (Planned)54

最終更新日時：6/16/2006 8:09 PM 最終印刷日時：6/30/2006 9:14 AM

Fiscal year ended March 31, 2005
(April 1, 2004–March 31, 2005)

Fiscal year ended March 31, 2006
(April 1, 2005–March 31, 2006)

Merger of subsidiaries
At the meeting of the Board of Directors held on June 27, 2005, it
was resolved that J. Sakazaki Marketing Ltd. would become asubsidiary of the Company, whereupon it was further resolved toapprove a basic memorandum of agreement concerning the mergerof its subsidiaries Professional Management Co., Ltd., Total
Workout Corporation and J. Sakazaki Marketing Ltd.
(1) Outline of the merger of subsidiaries
Schedule
Mid-August 2005: Signing of merger agreement (Planned)
Late-August 2005: Approval of merger by extraordinary
general meeting of shareholders at eachcompany (Planned)
October 1, 2005: Merger (Planned)(2) Outline of merging companies
(i)
(ii)

Trade name: Professional Management Co., Ltd.
Representatives: Hidetoshi Yamamoto, Ken Kudo,
Representative directors(iii) Address: 10-8 Dogenzaka 1-chome, Shibuya-ku, Tokyo(iv) Main businesses: Advertising agency services, etc.,
acquisition of copyrights (merchandizing rights) and content(v) Capital: ¥200 million(vi) Shares issued: 4,000(vii) Total assets: ¥643,272,000(viii) Fiscal year-end: March 31

(i)
(ii)

Trade name: Total Workout Corporation
Representatives: Hidetoshi Yamamoto, Kevin Yamazaki,
Representative directors(iii) Address: 10-8 Dogenzaka 1-chome, Shibuya-ku, Tokyo(iv) Main businesses: Management of gymnasiums(v) Capital: ¥10 million(vi) Shares issued: 200(vii) Total assets: ¥1,373,732,000(viii) Fiscal year-end: March 31(i) Trade name: J. Sakazaki Marketing Ltd.
Details are as set out above in "(1) Overview of the company" in"Acquisition of shares of J. Sakazaki Marketing Ltd. (to make it asubsidiary)."

8. Changes in Directors and Statutory Auditors
Changes are as yet undecided.

55