■ Information for Shareholders
Business term

From April 1 of each year to March 31 of the following year

Annual generalshareholders’ meeting

June of each year

Record date for above

Annual general shareholders’ meeting: March 31
Other occasions: Other record date separately
determined as necessary upon a prior public notice

Record date of shareholders toreceive dividends from surplus

Year-end dividend: March 31
Interim dividend: September 30

Number of sharesconstituting one unit

100 shares

Newspaper in which
public notices are inserted

The Nikkei

Transfer Agent and accountmanagement institution forthe special account

Mitsubishi UFJ Trust and Banking Corporation

Contact of above(postal address andtelephone number)

7-10-11 Higashisuna, Koto-ku, Tokyo 137-8081
Mitsubishi UFJ Trust and Banking Corporation,
Corporate Agency Division
Telephone: 0120-232-711 (toll-free in Japan only)

Securities code

7458

Shareholder Special Beneﬁts
Shareholders recorded in the ﬁnal shareholder registry on September 30, 2012 as holding 100 or more shares will be granted special
beneﬁts coupons according to the number of shares held.

Number of shares held

Details of beneﬁts

Vol.34April 1, 2012 to September 30, 2012

Business Report for the 38th Term (Interim Period)

Issued semiannually
Special Beneﬁt Coupon(＊1)

Exchange with CD(s)(＊2)

100 to 999 shares

Ten sheets of 500-yen coupon

1 CD

1,000 shares or more

25 sheets of 500-yen coupon

2 CDs

（＊1）
The coupons can be used at businesses operated by the Company including Big
Echo karaoke shops, and Rakuzo , Umeko No Ie , Bisutoroya and otherrestaurants.
（＊2）
CD albums are granted in exchange with all coupons corresponding to the shares
held.

Timing of delivery: On or after December 4, 2012
Validity period: January 1, 2013 to June 30, 2013[NOTICE]
1. Account management institution where a shareholder has
its account with (securities company, etc.) is principally
responsible for handling shareholder’s address change,
repurchase requests and other processes. The relevant
inquiries should be made to the securities company, etc.
where the shareholder has its account with. Please notethat the transfer agent (Mitsubishi UFJ Trust and Banking
Corporation) does not handle such processes.
2. Mitsubishi UFJ Trust and Banking Corporation serves as
the account management institution to handle procedures
concerning shares registered in special accounts. The
relevant inquiries should be made to the accountmanagement institution for the special account specified
above (Mitsubishi UFJ Trust and Banking Corporation). All
domestic branches of Mitsubishi UFJ Trust and Banking
Corporation also accept inquiries.
3. Outstanding dividends can be received at headquarters andbranches of Mitsubishi UFJ Trust and Banking Corporation.
4. The Company posts its non-consolidated balance sheets,
non-consolidated statements of income, consolidatedbalance sheets and consolidated statements of income on
its website (http://www.dkkaraoke.co.jp/).

C O N T E N T S
To Our Shareholders
Overview by Segment
Consolidated Financial Summary
Close-up: Exploring Daiichikosho s BusinessCorporate Profile
Status of the Shares of the Company
securities code：7458

To Our Shareholders

President

Saburo Hayashi

It gives me great pleasure to present the Business
Report of Daiichikosho Co., Ltd. for the interim
period of the 38th Term (April 1, 2012 to September
30, 2012).
The Daiichikosho Group possesses comprehensive
assets throughout Japan. Having built a systemthat can cover earnings even if contingency occurs
in some areas, its robust corporate structure iscapable of increasing stable earnings on acontinuous basis.
In the interim period under review, there had
been concerns about consumers reining in theirspending prior to our new product launches, but
thanks to all our stakeholders we were able tosteadily increase product shipments.
Although such factors as the Olympic Gamesand typhoons did have a slight impact on ourability to attract customers, our karaoke cabin andrestaurant business performed steadily andsecured increase in revenues.
In October of this year, the Company launchedthree new products: LIVE DAM GOLD EDITION,
Cyber DAM HD, and SmartDAM.

1

We are raising product value by evolving content
and functions—for example by making those in theexisting LIVE DAM conform with those in the newflagship model, LIVE DAM GOLD EDITION—thereby
enabling us to attract customers to our shops.
For Cyber DAM HD, which was exclusively
designed equipment for the NIGHT MARKET (suchas small pubs and clubs that have installedkaraoke machines), we pursued high quality. The
high cost performance of its many incorporated
features, which include high-definition video andnew content, make Cyber DAM HD a highly
attractive product.
Exceeding the standards set by our DENMOKU(A device for selecting songs (DK’s brand name)), thefeature-packed SmartDAM tablet is indispensable asa terminal capable of supporting shop management.
Armed with these new products, we will
endeavor to further strengthen sales in the second
half of the current fiscal year.
By continuing to respond to all of the needs ofeveryone in its market, the Daiichikosho Groupwill remain a corporate group that is capable ofmaking a contribution to society.
The entire Company will work as one to meetthe expectations of all its shareholders. Please
accept my sincerest thanks in anticipation of yourongoing support and patronage.

Overview of First Six Months of FY2012
In the first six months of the fiscal year ending March
31, 2013, partial signs of a trend toward recovery
were seen in the Japanese economy due to suchfactors as post-disaster reconstruction demand. In
contrast, the future remained clouded byuncertainty, as there remained the risk of adownturn in the world economy against a backdropof the situations in Europe and China, as well as
concerns about a prolonged appreciation of the yen.
Amid circumstances of this kind, theDaiichikosho Group focused on expanding
Daiichikosho Amusement Multimedia (DAM) sales

in the strategically prioritized areas of its
commercial karaoke business and on expanding
the seniors market, which is now seen as an areaof rapid growth. In its karaoke cabin andrestaurant business, the Group endeavored to
attract customers and improve customer
satisfaction levels by such measures as working to
make its karaoke cabin and restaurants
differentiate from those of its competitors and by
a range of promotional campaigns. In the Group’s
music software business, a range of albums frommajor artists contributed to sales, streamlined
management was established through cost
controls, and revenues remained steady.
As a result of the above, and because both thecommercial karaoke and karaoke cabin andrestaurant businesses increased their net sales,
while sales in music software and other businesses
decreased, net sales for the interim period underreview amounted to 62,747 million yen (up 1.0%
compared with the corresponding period of theprevious fiscal year). From the income standpoint,
although the commercial karaoke businessexperienced a profit decrease due to a temporary
increase in operating expenses, the karaoke cabin
and restaurant business as well as the music
software and other businesses increased profit.
Operating income for the period under review
totaled 9,464 million yen (up 3.9% compared withthe corresponding period of the previous fiscal
year), and ordinary income amounted to 10,135
million yen (up 1.9%). Net income totaled 5,911 million
yen (up 12.5%) due to improvements in extraordinary
income and extraordinary loss.

Outlook for FY2012
The outlook for the fiscal year ending March 31,
2013, remains unchanged from the businessperformance forecast announced on August 6,
2012: net sales of 130 billion yen, operating
income of 18.8 billion yen, ordinary income of 19.7
billion yen, and net income of 11.4 billion yen.

Consolidated Financial Highlights
Net salesFirst six months

Full year(Millions of yen)

130,000

125,083

125,300

127,885

127,246(Forecast)

61,902

62,46460,83362,15062,74734th Term

35th Term

36th Term

37th Term

38th Term

Operating income

First six months

9,124

9,111

9,464

36th Term

37th Term

38th Term

16,510

7,863

8,502

34th Term

35th TermFirst six months

9,944

10,13536th Term

37th Term

38th Term

8,300

9,054

34th Term

35th TermFirst six months

5,683

34th Term

35th Term

19,7009,575

17,457

5,058(Millions of yen)

(Forecast)

18,408

10,725Full year

20,544

17,46010,88518,800(Forecast)

16,659Net income(Millions of yen)

18,774

17,439Ordinary income

Full year

Full year(Millions of yen)

11,40010,689(Forecast)

5,388

5,256

5,911

36th Term

37th Term

38th Term

9,590

2

Overview by Segment
Commercial Karaoke Business

T O P I C S（Commercial Karaoke Business）
50.8%

N e t

s a l e s :31,895 million yen(year-on-year increase of 1.6%)
Operating income:

6,586 million yen(year-on-year decrease of 1.0%)

While commercial karaoke business shipments
steadily increased driven by the high-end LIVE DAM
equipment that boasts high performance and high35.1%
quality content as the unquestioned bestseller,
theCompany saw a significant growth in the number of
DAM systems in operation attributable to an increasein the number of equipment rentals following thestrengthening of sales in strategically prioritized areas.
Main reasons which contributed to these favorable
results are the strengthening of sales in the seniors
market and the service improvements by adding newcontent to FREE DAM, one of the DK ELDER SYSTEM
which we recommend for seniors, since April.
As a result of the above, net sales7.8
of %the commercial
karaoke business segment for the interim period underreview increased 1.6% compared with the corresponding
period of the previous fiscal year, to 31,895 million yen;operating income fell 1.0%, to 6,586 million yen.
Net salesFirst six months

Full year （Millions of yen）

64,66062,402（Forecast）

31,402

31,895

Operating income
First six months

12,266
6,653

Full year （Millions of yen）

12,520（Forecast）

6,586

6.3%

◆Efforts in Preventive Care

◆Launch of New Flagship Model, Two Models for the NIGHT MARKET and of the Epoch-Making Evolution, DENMOKU (October 2012)

In a guidance entitled Overall Improvements in the life functioning ,Japan’s Ministry of Health, Labour, and Welfare cited improvements
in“motor, oral, and cognitive”functions as well as active“lifestyle,interaction, and participation”as the pillars of preventive care. The
Company devised the DK ELDER SYSTEM, which has content thatassists preventive care and the promotion of good health, with a viewto bringing about those overall improvements in life functioning. Asof the end of September 2012, the equipment had been installed inaround 9,000 nursing homes and other welfare facilities. Particularly inthe past few years, the DK ELDER SYSTEM has been attracting attention
for its use in helping to maintain and promote seniors’ health as well as
in their rehabilitation; there is therefore burgeoning demand. In the years
to come, the Company will steadily add content that assists in theprovision of preventive care as well as the promotion of good health.

LIVE DAM GOLD EDITION - Advanced Model of LIVE DAM -Profiles of New Premium Content
Sing to Stay Young
Oral Health Clinic

3

38th Term

37th Term

38th Term

NAZOTOKI KARAOKE (content that provides customers with fun quizzes)◦Expanded lineup of music with Vocaloid™ singing synthesizer as well asof anime and indie label◦Enhanced anime song videos◦E nriched dance videos, including FURIKARA (content that enables
people to sing and dance)◦Improvement both in quality and in quantity of videos in which artists
appearing in person◦C o n t i n u o u s l a u n c h e s o f L I V E H D , w h i c h a l l o w s t o e n j o y l i v eperformances by popular artists with full high-definition videos◦Enhanced varieties of MAMA OTO (literally meaning, natural sound)content, which allows to enjoy rare videos of legendary concerts withthe sound as it was thenContent to facilitatecommunication through thewatching of short films anddiscussion programs, for the
purpose of supporting brain
activation and psychologicalcare.

◦Unit with a large, 10.1-inch touch panel◦Shift to karaoke background video using full high-vision technology◦C omes with a simple remote control for easy operation from a
distance◦Enhanced lineup of videos in which artists appearing in person

Cyber DAM HD（DAM-G100X）

SmartDAM - Tablet Terminal Overtaking Standards
Set by DENMOKU -LIVE DAM GOLD EDITION（DAM-XG5000G）

Changes in the Number of DK ELDER SYSTEM
installed in Facilities（Machines）
4,000 ■ Net increase

3,000

Cyber DAM HD with Full High-Vision Support - NIGHT
MARKET -Short Film Theater

Anti-aging content that assists
to move the mouth throughsinging from the perspectiveof the importance of saliva,
supervised by a professor of
School of Dental Medicine atTsurumi University.

No. of machines installed at facilities

DAM-AD5000G - High-Power Digital Amp for HITORI KARAOKE （Machines）
10,0008,000◦Stylish design matches LIVE DAM GOLD EDITION and Cyber DAM HD◦F itted with headphone socket and independent volume control, so
to be applicable to popular“HITORI KARAOKE”(to sing alone using
headphones in dedicated cabin)

6,000

2,000

4,000

1,000
0

37th Term◦High-capacity 5TB (terabyte) HDD◦Better power savings than current LIVE DAM◦New content to rate performances, CASE CLOSED (DETECTIVE CONAN)◦Large, 10.1-inch LCD screen focused on eye- and user-friendly◦Enables operation by the flick of a finger, in the same way as a smart
phone or tablet terminal◦Screen flips vertically to match direction of terminal◦First model of DENMOKU Series being capable of video functions,such as playing DAM CHANNEL, etc.
◦Magnetic cable allows charging
wherever you like, terminal canbe used while recharging◦Music search functions greatly
improved (enables searches by
keyword, partial lyrics, album
cover photo, etc.)◦Selectable TOP screens according
to customers preference(Kids DENMOKU / Raku Raku
(easy to operate) DENMOKU)

2,000
2008

2009

2010

2011

2012

（Forecast）

0
DAM-AD5000G

SmartDAM
（TM10）

4

Overview by Segment
Karaoke Cabin and Restaurant Business

T O P I C S（Karaoke Cabin and Restaurant Business）
35.1%

N e t

s a l e s :22,016 million yen(year-on-year increase of 3.0%)

3,288 million yen(year-on-year increase of 5.3%)

First six months

45,117

5

Full year （Millions of yen）

47,050（Forecast）

Operating income
First six months

7,140

Full year （Millions of yen）

7,650

（Forecast）

21,36922,016

3,123

3,288

37th Term

38th Term

37th Term

38th Term

For Casual Dining

Net sales

In the restaurant business, progress was made with new
initiatives to refine each brand’s food, space, and service.
Giving customer satisfaction the highest priority, we will honeeach brand.

For Men and Drinking Parties%
Karaoke cabin business is actively7.8
developing
three
shop brands with its“BIG ECHO with multi-choice”
concept. We made efforts to attract customers andimprove customer satisfaction by devising ways todifferentiate its shops from those of its competitors,
such as by having a women-only floor supervised
by a popular interior design store and rooms incollaboration with popular artists for the limited
period that become hot topics. In the restaurant
business, we worked to change or combine businesscategories in line with shifts in the market, regional
characteristics or the customer base.
6.3%
As a result of the above, net sales increased
3.0%
compared with the corresponding period in theprevious fiscal year, to 22,016 million yen. Operating
income rose 5.3%, to 3,288 million yen.

◆Refinement and New Initiatives

For Women and Dinner Parties

Operating income:“Dining Bars”

Authentic French Cuisine
Diners can enjoy anauthentic French menu at
reasonable prices; all you
can eat desserts for dating
p ar t ie s and g r oup s o f
women are also available.

“BIG ECHO”◆Selectable Concept Rooms Launched

To achieve the targets to differentiate itself from other shops as well as
further improve customer service, the Daiichikosho Group has promoted“BIGECHO with multi-choice”concept, currently we have 3 options, since lastyear. Following that, we are developing“selectable concept rooms”.
We will advance the introduction of various types of concept room to, notonly the new but the existing shops.

◦Women-Only Rooms

Furniture in good design and cute interiors◆New Grand Menus Launched

We have updated the menus at BIG ECHO andKARAOKE CLUB DAM franchises. Shops at which BIG
ECHO appears in the letters of the alphabet offer
high-grade authentic cooking, while those shopsthat have all or part of their name in katakana—BIG
ECHO, BIG ECHO 25, and KARAOKE CLUB DAM—offer
reasonably priced family menus as well as the multichoice concepts. We have also improved the drink
menu with a dessert drink that contains Placenta,
which has health and beauty benefits, as well as nonalcoholic items, such as smoothies and shakes.

Specialty Kyoto Cuisine
Renewal was implemented on
its logo and brand to enhance
the relaxed atmosphere. Cuisineusing specialty food from Kyoto
and a luxury shabu shabu set
menu are prepared as new menu.
Seafood Dining That Makes
Best Use of Ingredients
Placing a greater focus on
the origin and ingredientsof seafood, tuna based
dishes and grilled whiteclams are available.
Eye-Catching Broiled Dishes
Enhanced menu of broiled
dishes of treasures from the sea
and from the earth, dynamic
and eye-catching dishes. Hascommenced serving its winterrecommendation of pot cuisine.
Bar Menus and Authentic Italian
Launched small dish menus,
menu that customers canenjoy small portions ofdishes, and an authentic
menu with pasta, forexample.
Lunch/Café Menu
Launched a menu thatdiners feel free to use not
only during bar opening
hours but also at lunch
and coffee time.

◦Restaurant Rooms

Rooms for parties that enable you to singwhile you eat and drink◦Lighting Rooms

Rooms with lighting that matches thesongs◦Furikara Rooms

Rooms for customers who want topractice dancing and singing◦Live Rooms

Rooms equipped with a stage and lighting
like those found in a live music venue◦Recording Rooms

Rooms for customers who want to record a CD using
headphones and a stand microphone like professional
artists.

◦Kids Rooms

Have cushion floors for child safety◦No-Smoking Room
[Shop Information]
All eight types of concept rooms available.

BIG ECHO (Takadanobaba Station-Waseda Exit Shop)
2nd Floor, Kikuzuki Building, 2-17-4 Takadanobaba,
Shinjuku-ku, Tokyo
Tel: 03-5287-25256

Overview by Segment
Music Software Business

N e t

s a l e s :4,895 million yen(year-on-year decrease of 2.0%)
Operating income:

6.3%

7.8%

399

(year-on-year increase of 6.1%)

million yen

to cost controls that focused on management
efficiency.
Consequently, net sales decreased 2.0% comparedwith the corresponding period in the previous fiscal
year, to 4,895 million yen. Operating income rose
6.1%, to 399 million yen.
Net salesFirst six months

6.3%

Amid weak music distribution sales due to changes in
the music listening and viewing environments, sales ofalbums by young artists, such as Sonar Pocket and
MAN WITH A MISSION, as well as Studio Ghibliproduced DVDs contributed to the music software
business sales. In addition, revenues were steady due

10,9744,996
37th Term

Full year （Millions of yen）

10,140Operating income
First six months

38th Term

580

376
37th Term（Forecast）

399
38th TermT O P I C S（ Music Software Business）

Profiles of Much-Talked-About Artists◆ＰＯＰS◆Enka (Popular Ballads) / Popular Songs
Sonar Pocket

Sonar Pocket’s 12th single, Kimi Kinenbi—
Umarete Kitekurete Arigatou , and the DVD oftheir first Nippon Budokan concert, for whichtickets were sold out in three minutes, went
on sale at the same time in November. In
December, they decided on live tour dates at
the Zepp music venues in Fukuoka, Osaka, andTokyo as well as at the Nagoya Gaishi Hall, so
look out for more Sonar Pocket success!

MAN WITH AMISSION

MAN WITH A MISSION’s first video, Ookami
Daizenshu 1 , went on sale in October and hit the bigtime by debuting at the top of the music category in
the Oricon DVD Weekly Ranking. In addition to the“one-man live”video recorded at Tokyo’s SHIBUYAAX in May 2012, the video contains all the tracks
recorded for the music videos announced up to
now. The video is packed with highlights, and there
is also a wealth of valuable footage, including sometaken behind the scenes at live venues.

7

Kaori Mizumori

Now on sale, the concept of the 11 songs on

Kaori Mizumori’s new album, Kayou Kikou 11—
Hitori Nagaragawa , is to take you on a journey
in song. Chosen for Seiryuu Nagaragawa
Shinzentaishi , just as the title of one of her songs,
she has been appointed tourism ambassador for10th locations.

Jang Yoon Jeong

N e t

s a l e s :3,940 million yen(year-on-year decrease of 10.1%)
Operating income:

652 million yen

As a result, net sales for the interim period underr e v i e w d e c r e a s e d 10.1% c o m p a r e d w i t h t h ecorresponding period in the previous fiscal year, to
3,940 million yen, while operating income jumped
65.6%, to 652 million yen.

Net salesFirst six months

Full year （Millions of yen）

(year-on-year increase of 65.6%)

1,433（Forecast）

4,895

Full year （Millions of yen）

Other Business

The “goddess of the South Korean musicindustry,”Jang Yoon Jeong finally made her
debut in Japan in October with Usotsuki Taiyo .
Having been in the top five of the South Korean
popular singer rankings for five consecutive
years from 2007, great things can be expectedof her in the years to come in Japan, where
her popularity and ability have earned her
staunch praise.

In its content services to mobile phones the otherbusiness endeavored to reduce costs by content
elimination and consolidation. Profitability was
improved by reviewing the business, such as from theeffect of withdrawing from TV channels in its satellite
broadcast business.

8,751

Operating income
First six months

8,150（Forecast）

Full year （Millions of yen）

700

683

（Forecast）

4,382

3,940

393

652

37th Term

38th Term

37th Term

38th TermT O P I C S（Other Business）◆GAAD Series Food Hygiene Monitors
Rentals of“Fst GAAD”Commenced

In recent years, cases of food poisoning at restaurant chains where
people eat out have come under close scrutiny, awareness offood safety has increased, and the necessity of food inspections
has become acutely recognized. In response, the Company jointly
developed the“Fst GAAD”“First(
Guard”) food hygiene monitor
with Micro Blood Science Co., Ltd. and started renting it from
October.
Simply, rapidly, and at low cost,“Fst GAAD”is capable of testingfor the bacteria that cause food poisoning. Although there are
currently a variety of methods used to test for bacteria, manyof these take more than a day to produce results. If there are
100,000 viable bacteria,“Fst GAAD”can determine their presence
in around three hours.
The unit’s market introduction leverages the know-how the
Company has gained from its business of renting commercial
karaoke equipment. By renting “Fst GAAD” units primarily
to factories that handle food as well as supplying them withexpendable supplies, the Company will generate stable earnings
and provide a rapid after-sales service.

▲Expendable supplies (testing agents, etc.)

A Fst GAAD unit▶

8Consolidated Financial Summary■Summarized Consolidated Balance Sheets (Interim Period)(Millions of yen)

37th Term

Item

38th Term(Interim Period)
As of March 31, 2012 As of September 30, 2012

A s s e t s
Current assets

52,50862,193

Noncurrent assets

89,73091,69851,074

51,956

6,553

6,145

32,102

33,597142,238

153,892

Property, plant and equipment
Intangible assets
Investments and other assets
Total assets▶ For detailed financial information,

P O I N T
●Current assets

The 9,685 million yen increase in current
assets was mainly due to an increase of
9,229 million yen in cash and deposits anda decrease of 441 million yen in notes andaccounts receivable—trade.

●Noncurrent assets

The 1,968 million yen increase in noncurrent
assets was mainly due to an increase of
1,249 million yen in investment securities, an

L i a b i l i t i e s
Current liabilities

26,15925,005increase of 1,012 million yen in karaoke rental

Noncurrent liabilities

22,27432,276equipment, and a decrease of 340 million yen

Total liabilities

48,43357,281

in sound delivery/video software included
under other intangible assets.

N e t

a s s e t s

92,996

95,357

Capital stock

12,35012,350Capital surplus

12,905

10,254

liabilities was mainly due to an increase of

Retained earnings

68,73072,7571,850 million yen in notes and accounts

Treasury stock

△ 989

△ 5

payable—trade, a decrease of 1,335 million

Accumulated other comprehensive income

△ 170

237

yen in income taxes payable, and a decrease

Valuation difference on available－for－sale securities

793

1,237

of 1,061 million yen in accounts payable—

Revaluation reserve for land

△ 777

△ 777

other included under other current liabilities.

Foreign currency translation adjustment

△ 186

△ 222

978

1,016

Shareholders’ equity

Minority interests
Total net assets
Total liabilities and net assets

93,804

96,610142,238

153,892

The 1,154 million yen decrease in current●Noncurrent liabilities

T h e 10,002 m i l l i o n y e n i n c r e a s e i nnoncurrent liabilities was mainly due to anincrease of 10,000 million yen in corporate*Amounts of less than one million yen are truncated.

9●Current liabilities［Notes］

37th Term

38th Term(Interim Period)

1. Guarantee obligation
2. Net assets per share

163 million yen
1,477.71 yen

96 million yen
1,546.39 yen

bonds.

please see the Investor Relations section on the Company’s website (Japanese only) : http://www.dkkaraoke.co.jp/stockinfo/■Summarized Consolidated Statements of Income (Interim Period)(Millions of yen)

Item

Interim Period of 37th Term Interim Period of 38th Termfrom April 1, 2011
to September 30, 2011

from April 1, 2012
to September 30, 2012

Net sales

62,150Gross profit

25,813

26,127

9,111

9,464

Cost of sales
Selling, general and administrative expenses

Operating income

Non-operating income

Non-operating expenses

Ordinary income

Extraordinary income
Extraordinary loss

36,336

16,701
1,151
318

62,74736,62016,663
973
302

9,944

10,135

812

162

39

31

Income before income taxes and minority interests

9,171

10,004

Income taxes—deferred△ 362

Minority interests in income
Net income

5,292

△ 22

5,952

5,256

5,911

Income taxes—current

Income before minority interests

4,241

35

*Amounts of less than one million yen are truncated.
[Notes]Interim Period of 37th Term
Net income per share

81.99 yen

4,073

40

Interim Period of 38th Term

94.77 yen

■Summarized Statements of Cash Flows (Interim Period)(Millions of yen)

Item

Interim Period of 37th Term Interim Period of 38th Termfrom April 1, 2011
to September 30, 2011

from April 1, 2012
to September 30, 2012

Net cash provided by (used in) operating activities

14,488

11,965

Net cash provided by (used in) investing activities△ 10,109△ 8,311

Net cash provided by (used in) financing activities△ 3,840

5,821

Effect of exchange rate change on cash and cash equivalents

△ 26

△ 27

Net increase (decrease) in cash and cash equivalents

511

9,447

Cash and cash equivalents at beginning of period

26,57334,367

Cash and cash equivalents at end of period

27,08543,814*Amounts of less than one million yen are truncated.

P O I N T
●Net sales

Although the music software business and otherbusiness experienced reduced sales, sales increasedin the commercial karaoke business as well as in the
karaoke cabin and restaurant business. As a result,net sales totaled 62,747 million yen, a 1.0% increase
compared with the corresponding period in theprevious fiscal year.

●Operating income and ordinary income

Although the commercial karaoke businessexperienced a drop in income due to a temporary
increase in operating expenses, the karaoke cabin andrestaurant business, the music software business, andthe other business all recorded increases in income.
As a result, operating income totaled 9,464 million
yen, a 3.9% increase compared with the corresponding
period in the previous fiscal year, and ordinary income
rose 1.9%, to 10,135 million yen.

●Net income

Net income totaled 5,911 million yen, an increase of
12.5% compared with the corresponding period of
the previous fiscal year, due to the improvements inextraordinary income and extraordinary loss.

P O I N T
●Net cash provided by (used in) operating activities
・Income before income taxes and minority interests 10,004 million yen
・Depreciation and amortization
6,441 million yen
・Increase in notes and accounts payable—trade
1,853 million yen
・Income taxes paid
5,402 million yen●Net cash provided by (used in) investing activities
・Purchase of property, plant and equipment 5,051 million yen
・Purchase of intangible assets
1,816 million yen
・Payments for acquisition of video license
806 million yen●Net cash provided by (used in) financing activities
・Proceeds from issuance of bonds
9,946 million yen
・Proceeds from long-term loans payable 1,850 million yen
・Repayment of long-term loans payable
2,481 million yen
・Cash dividends paid
1,882 million yen
・Purchase of treasury stock
1,667 million yen

10C l o s e - u p Exploring Daiichikosho's Business

Vol.6

New Content and Functions Incorporated into Three Potent New Products Unveiled“DK FESTA 2012”New Product Launch Events Held in Five Cities in JapanIn October, Daiichikosho held new product launch events“DK FESTA 2012”in five main cities: Tokyo, Osaka,
Fukuoka, Nagoya, and Sendai. Among the highlights with great excitement at the Tokyo event were live

Content in“LIVE DAM GOLD EDITION”“LIVE Karaoke”

Customers can enjoy karaoke whilefeeling the buzz and the air of excitementof live venues through full HD videos
vividly delivering the images of live
performances by popular artists andunparalleled sound.

NMB48

Content for Children

We further boosted the lineup of content
for children and anime fans by preparing

ANPANMAN, CASE CLOSED (DETECTIVE
CONAN) NAZOTOKI KARAOKESHINJITSU WA ITSUMO HITOTSU which

provides entertainment such as ratings ofperformance and quiz games, and Anime/
Special Effect Heroes Films which offers
images ranging from nostalgic
masterpieces to the very latest
presentations. Every family member canenjoy karaoke even when they bringalong children.

11

CASE CLOSED (DETECTIVE CONAN) NAZOTOKI KARAOKE© Gosho Aoyama/Shogakukan･YTV･TMS 1996

Content in“Cyber DAM HD” Functions in“SmartDAM”

Other Content

A wide range of dance videos is installed,
including FURIKARA, which enables
customers to check artists' dancechoreography from various angles. Thishas broadened the ways that karaoke isenjoyed by providing options of dancing
to music and exercising. By including theimmensely popular Hatsune Miku singing
synthesizer application, the delivery of
V o c a l o i d TM m u s i c h a s a l s o b e e nenhanced. We also deliver various kindsof VocaloidTM videos, such as LIVE video
and collaborations with PIAPRO. A
number of heart touching scenes fromFuji TV's program The Nonfiction havebeen installed as karaoke backgroundimages. Scenes taken from true stories
will move the customers more than ever.

Anime/Special Effect Heroes Films
ANPANMANFURIKARA
KARA

VocaloidTM video
Hatsune Miku –Project DIVA– f© SEGA/© Crypton Future Media, Inc. www.crypton.net

A still from The Nonfiction© Fuji Television Network, Inc.

© Takashi Yanase/Froebel-Kan, TMS, NTV© Takashi Yanase/Anpanman Project

performances by the popular artist KYARY PAMYU PAMYU and the talented singer Ms.OOJA. Showcased
here were the new content and functions incorporated into the three new products presented at the events.

16:9 full HD video vividly shows each artist's world view andconveys the atmosphere created by each music in its
background images. Its high-quality videos spectacularlypresent enjoyable nighttime scenes. In addition, a vast
amount of cutting-edge and unique content is prepared:
DOKUSEN! SHUTTER CHANCE!!, which provides customers
with“after-singing fun”
to browse through acollection of still shotsfrom videos of idols byusing the DAM button
at the desired time
during performance,
and Virtual Karaoke, DOKUSEN! SHUTTER CHANCE!!
which offers theenjoyment of a virtual
duet with a woman
acting realistically on
the screen.

In addition to a standard screen that retains a conventional TOP
screen, the SmartDAM comes with new top screens; Kids
DENMOKU, which enables children to select tracks while playing
with it, and Raku Raku DENMOKU, which simplifies searches by asimple, easy-to-view menu. These selectable screens increased theflexibility for users and usage scenes. Meanwhile, the searchfunction has also been enhanced.
Besides Matrix Tabs that shorten
the search time by controlling thesearch screen with vertical andhorizontal tabs, it is equipped with
Keyword Search, which enables afree word search using words thatform an impression of a song; Lyric Kids DENMOKU
Search that enables searches with Search screenspartial lyrics; and Album CoverPhoto Search that shows CD
jackets on the search screen. Songsearches have been made morerefined by these search functions.

Virtual Karaoke

Matrix Tabs

Enhanced Functions in“DAM★Tomo”

Customer Management Function

Since the member registration for“DAM ★ Tomo”(DAM Karaoke Web
services) was introduced, it is now possible to access and log-in to it from
“SmartDAM”machines at shops; log-in has also been made possible without
a conventional member card or FeliCa* card.“DAM★Tomo Video,”withwhich customers upload and replay videos they shot, has been madecompatible with a maximum of six screens working together. Moreover,“DAM★Tomo Recording,”which enables customers to enjoy high-quality
recordings that characterizes DAM, was also improved to overdub amaximum of 12 voices.

For the purpose of supporting sales increases for each shop, we are providing the“MAMA-SAN* DENMOKU”function.
We are supporting improvements in shop services by means of a customer management function in which“SmartDAM”collectively manages customer information such as name, age, favorite alcoholic drink, and songselection history. It is also planned that, in spring 2013, it will be possible to send mass messages giving
campaign information, etc., from stores to the e-mail addresses of customers registered on our list. Furthermore,
it is possible for customers to create their own greeting messages, such as for their friends' birthdays andpromotions at work, on the DENMOKU screen, and show these on the main monitor as surprise performances.

Log-in screen on DAM★TomoDAM★Tomo Video* FeliCa is a contactless IC card technology developed by Sony Corporation.

＊MAMA-SAN means owner of a drinking bar

TOP screensStandard

Raku Raku DENMOKUAlbum Cover Photo Search

Customer management function

12

Corporate Profile(as of September 30, 2012)

Corporate Profile (as of September 30, 2012)

The Daiichikosho Group

Corporate nameLocation(as of September 30, 2012)

Established
Paid-in capital
Number of employees
Listing on JASDAQ

Daiichikosho Co., Ltd.
5-5-26 Kitashinagawa, Shinagawa-ku,
Tokyo 141-8701
Telephone: +81-3-3280-2151 (switchboard)
April 16, 1973
12,350 million yen
The Company 1,524
The Group 3,013
September 19, 1995

Officers (as of September 30, 2012)
Honorary Chairman

Tadahiko Hoshi

President

Saburo Hayashi

The Company and consolidated subsidiaries

37

companies

Main Business Activities

Commercial karaoke businessKaraoke cabin and restaurant business
Music software business

Domestic sales subsidiaries: 24 companies

Shonan Daiichikosho Co., Ltd.

Keihan Daiichikosho Co., Ltd.

Gunma Daiichikosho Co., Ltd.

Niigata Daiichikosho Co., Ltd.

Hyogo Daiichikosho Co., Ltd.

Managing Director and Senior Corporate Officer Tadahiro Hoshi

Tochigi Daiichikosho Co., Ltd.

Nagano Daiichikosho Co., Ltd.

Kyushu Daiichikosho Co., Ltd.

Saitama Daiichikosho Co., Ltd.

Shizuoka Daiichikosho Co., Ltd.

Okinawa Daiichikosho Co., Ltd.

Mitsuru Yoshikawa

Director

Yoshimi Shimizu

Standing Corporate Auditor (outside)

Fumito Ishizaka

Standing Corporate Auditor (outside)

Nobuaki Otsuka

Tokuma Japan Communications Co., Ltd. Zoom RepublicStanding Corporate Auditor

Nobuyuki Takase

CROWN TOKUMA music distribution Co., Ltd. Union Eiga Co., Ltd.

Corporate Auditor (outside)

Masumi Arichika

Tri-M, Inc.

Corporate Officer Akihito Yoshizawa
Corporate Officer Shigeki Kobayashi
Corporate Officer Hiroshi Kunitsu
Corporate Officer Kenji Otsuka
Corporate Officer Ichio Odagiri

d

a

h

i

r

o

H a r u t o s h i

H

o

s

h

i

H o s h i

H o s h i

C r e a t e

A s a h i

B r e w e r i e s ,L i m i t e d
L t d .

The Chase Manhattan Bank N.A. London S.L. Omnibus Account.
The Master Trust Bank of Japan, Ltd. (Trust Account)

Daiichikosho Employee Shareholding Association

DK Finance Co., Ltd.

DK Music Publishing Co., Ltd.

Nippon Crown Co., Ltd.

Crown Music Enterprise Co.

Maruhagi Yoshu Kogyo Co., Ltd.

(thousands of shares)

（％）

6,846
6,717
4,718
4,449
2,120
1,327
1,209
1,188
1,148
952

11.0
10.8
7.6
7.1
3.4
2.1
1.9
1.9
1.8
1.5

The Company’s website
Information to help everyone invest and thelatest information on BIG ECHO is posted on
DAM★Tomo information, which was updated in
October. (Japanese only)
Please visit us online and find more details.
URL

http://www.dkkaraoke.co.jp/(Notes) 1. The Company holds 2,863 shares of treasury stock.
2. Values in“Number of shares held”and“Ratio of voting rights”arerounded down to the nearest unit.

■Shareholding Ratio by Category (thousands of shares/shareholding ratio)
Financial institutions
7,605（12.3%）
Business companies and other corporations
7,881（12.8%）

Other domestic subsidiaries: 10 companies

Director

Corporate Officer Hisahiro OguraaJapan Trustee Services Bank, Ltd. (Trust Account)Jyoban Daiichikosho Co., Ltd.

Corporate Officer Shinichi Ozawa

T

Mitsubishi UFJ Trust and Banking Corporation

Senior Managing Director and Senior Corporate Officer Hiroshi Mitomi

Corporate Officer Shinji Arima

No. of shares held Ratio of voting rights

Name of shareholder

Hokuriku Daiichikosho Co., Ltd.

Senior Managing Director and Senior Corporate Officer Tatsuya Kumagaiand Corporate Officer Akira Miyake■Major shareholders

Taito Daiichikosho Co., Ltd.

Daiichikosho Kinki Co., Ltd.

Director

16,351

Kushiro Daiichikosho Co., Ltd.

Kyoto Daiichikosho Co., Ltd.

and Corporate Officer Yasuhito Watanabe■Number of shareholders

Tokai Daiichikosho Co., Ltd.

Josai Daiichikosho Co., Ltd.

Director

61,820,596 shares

Johoku Daiichikosho Co., Ltd.
Joto Daiichikosho Co., Ltd.

Managing Director and Senior Corporate Officer Yasutaka Wada

■Number of shares outstanding

Hokkaido Daiichikosho Co., Ltd.

Tohoku Daiichikosho Co., Ltd.

Managing Director and Senior Corporate Officer Yuichi Murai■Number of authorized shares 200,000,000 shares

State Street Bank and Trust Company

Kitatohoku Daiichikosho Co., Ltd.

Senior Managing Director and Senior Corporate Officer Kenichi Nemoto

13

Status of the Shares of the Company

Foreign companies and foreigners
19,922（32.2%）

Financial instruments business operators
72（0.1%）

Front page

BIG ECHO

Individual shareholders and others
26,341（42.6%）

DAM★Tomo■Stock price (monthly candlestick chart)
Stock price trend (yen)

http://big-echo.jp/

2,400
1,600

Overseas subsidiaries: 3 companies
DK KOREA Co., Ltd.

DAIICHIKOSHO (SHANGHAI) TRADE CO., LTD.

8000No. of shares traded (ten thousands of shares)
400
300

Daiichikosho (Shanghai), Ltd.
Note: D.K. Enterprises (Guam), Inc. has been excluded from the scope of
consolidation due to the sale of all its shares.

200
100

2010
2011
2012
Oct. Nov.Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov.Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct.

0

http://www.clubdam.com/damtomo/
Above screen current as of October 31, 201214