■ 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

＜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. O utstanding dividends can be received at headquarters andbranches of Mitsubishi UFJ Trust and Banking Corporation.
4. The Company posts its nonconsolidated balance sheets,
non-consolidated statements of income, consolidatedbalance sheets and consolidated statements of income on
its website (http://www.dkkaraoke.co.jp/).

Shareholder Special Beneﬁts
Shareholders recorded in the ﬁnal
shareholder registry on March 31, 2012as 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

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

Vol.33 April 1, 2011 to March 31, 2012

Business Report for the 37th Term（＊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 theshares held.

Timing of delivery: On or after June 22, 2012
Validity period: July 1, 2012 to December 31, 2012

CONTENTS
To Our Shareholders
Overview by Segment
Consolidated Financial Summary
Close-up: Exploring Daiichikosho s BusinessCorporate ProﬁleStatus of the Shares of the Company

To Our Shareholders

President

Saburo Hayashi

It gives me great pleasure to present Business Report ofDaiichikosho Co., Ltd. for 37th Term (April 1, 2011 toMarch 31, 2012).
The fiscal year ended March 31, 2012 was marked byunstable situations due to such factors as a downturn inproduction operations caused by the Great East Japan
Earthquake and a decline in personal consumption.
However, the inherent value of songs and music was reexamined and a business recovery was seen earlier thanforecast. Amid these circumstances, the Company saw
the steady growth, recording all-time highs for both
operating income and ordinary income.
In addition to its traditional presence in the karaoke
market, the Company is seeking to tap into new markets.
Initially, karaoke was developed as“entertainment,”butsinging’s“health effects”are gradually beginning to berecognized socially. Having named the market aimed
specifically at seniors“Plus 65”market, the Company has
become involved in maintaining and improving seniors’
health as well as in care prevention, while rapidly
expanding the installation of its karaoke equipment atseniors’ nursing homes. This market can be reasonably
expected to become an earnings driver in years to come.
In collaboration with the United Nations-approved
NGO, Friends of the United Nations, the Company has
conducted the“Friends of the United Nations Sing for

1

Smile Program,”an initiative of circuit psychosomatic
treatment operations using a Karaoke Car with the aim ofproviding psychological care for people in disasteraffected areas. By helping to make people feel good andgreatly helping to revitalize communities, these activities
have received significantly good reputation.
In this manner, the Daiichikosho Group makes efforts tobe a corporate group that can contribute to society
through continuous provision of joy and fun to everyone
through songs and music.
Following his retirement in April 2012, Company
founder, Chairman and Representative Director Tadahiko
Hoshi was appointed Honorary Chairman.
Looking ahead, the Company will endeavor to further
improve our business performance under the new system
by offering new services accommodating changes in thetimes, while adhering to management policies that havebeen built up over the years, including maintaining a“hands-on approach”and remaining“customer-driven.”
The entire Company will work as one to meet the
expectation of all its shareholders. Please accept mysincerest thanks in anticipation of your ongoing support
and patronage.

resulted in strong sales. In the Company’s music software
business the range of mainstay artists’ products contributed
to earnings.
As a result of the above and because karaoke cabin andrestaurant business’s net sales increased significantly,
while sales in the commercial karaoke, music softwareand other businesses decreased, net sales for the fiscal
year under review amounted to 127,246 million yen(down 0.5% compared with the previous fiscal year). Fromthe income standpoint, the other business suffered a
profit decline, while the karaoke cabin and restaurant
business significantly increased profit. The commercial
karaoke and music software businesses ensured a profit
due to such factors as lower selling expenses. Operating
income totaled 18,774 million yen (up 13.7%) and, due toan improvement in non-operating income and expenses,
ordinary income amounted to 20,544 million yen (up 17.7%),
both of which marked record earnings figures. Although
tax burden increased due to a reversal of deferred tax
assets associated with revisions to the tax system, net
income totaled 10,689 million yen (up 11.5%).

O ve rvie w of F Y 2 0 1 1

Against a backdrop of steady personal consumption andpost-earthquake recovery demand, the Japanese
economy is expected to trend toward a gradual recovery.
In contrast, there are many concerns about thepossibilities of an economic downturn, due to such factors
as a recurrence of the sovereign debt crisis in Europe,anxieties about economic slowdown or stagnation indeveloping countries, and sharp rises in the crude oil
price. Therefore, the business environment surrounding
the Company is forecasted to remain demanding.
Amid such conditions, as a leading company in the karaokeindustry, the Daiichikosho Group will focus on rejuvenating
the karaoke market as a way for all age groups—from theyoung generation to seniors—to have fun. Moreover, as
karaoke’s beneficial effects in care prevention andmaintaining health attract more attention, the Company will
work on social contribution activities through cooperationand collaboration on government welfare policies.
The business performance forecast for the fiscal year
ending March 31, 2013 is 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.

In the fiscal year ended March 31, 2012, the Japanese
economy was significantly affected by a number offactors. These included temporarily stalled domestic
demand in the aftermath of the Great East Japan
Earthquake, supply chain disruption caused by floods inThailand, and record-high appreciation of the yen against
a backdrop of a European debt crisis. Nevertheless, fromJanuary onward, the economy showed a moderate
recovery due to correction of the yen’s appreciation andreviving domestic demand.
Amid circumstances of this kind, the Daiichikosho Group
strengthened its operating activities in the priority strategicarea of its commercial karaoke business, as well as focusedon developing the seniors market that is set to expand, andsteadily increased the number of Daiichikosho Amusement
Multimedia (DAM) system in operation. In its karaoke cabin
and restaurant business, amid a reappraisal of karaoke as aform of affordable entertainment that is close to peoples’
hearts, the Company successfully implemented measures
to improve the profitability of existing karaoke shops, whichO ut l o o k f o r F Y 2 0 1 2

Consolidated Financial Highlights
Net sales(Millions of yen)

130,000

125,083

125,300

127,885

127,246(Forecast)

34th Term

35th Term

36th Term

37th Term

38th Term

Operating income(Millions of yen)

16,65917,43916,51034th Term

35th Term

36th Term

18,80018,774(Forecast)

37th Term

38th Term

Ordinary income(Millions of yen)

17,46018,40817,45734th Term

35th Term

36th Term

19,70020,544(Forecast)

37th Term

38th Term

Net income(Millions of yen)

10,885

10,72534th Term

35th Term

9,590

36th Term

11,40010,689(Forecast)

37th Term

38th Term

2

Overview by Segment
Commercial Karaoke Business
N e t

s a l e s :62,402 million yen

49.0 % (year-on-year decrease of 5.6%)

Operating income:

12,266 million yen(year-on-year increase of 0.4%）

66,09136th Term(Millions of yen)

62,40237th Term

Operating income

12,22036th Term(Millions of yen)

12,266

Amid an aging population trend, the Daiichikosho Group has named the potential growth market for seniors aged 65 or over
“Plus 65”market and will work to maintain and improve seniors’ health, provide care prevention, and create communities
with the theme of health and songs.
The Company has recommended DK ELDER SYSTEM and it achieved rapid growth with the installation of around 6,800
machines, including FREE DAM, at nursing homes and other welfare facilities. The new Elder Premium Content was addedin April 2012. The Company will add content that will help health maintenance and care prevention and make plans to
expand its services.

Elder Premium Contents
Hatsuratsu kyoshitsu (Exercise Program for Senior)(Supervised by the TOKYO METROPOLITAN GERIATRICHOSPITAL AND INSTITUTE OF GERONTOLOGY)

Contents cover care prevention developedb y N T T I T C o r p o r a t i o n un d e r t h esupervision of the Tokyo Metropolitan
Geria t ric Ho spi t al and In s t i t u t e o f
Gerontolog y (formerl y the Tok yo
Metropolitan Institute of Gerontology).

Changes in the Number of DK ELDER SYSTEM*
installed in Facilities(Machines)(Machines)

Omoide Eigakan(Good Old Movies)

Contents comprises nostalgic movie
footage of various regions in Japan
categorized into the five periods with every
three years in the 15-year period from 1958
to 1972

37th Term

4,000

1,000

3,000

30

36th Term

24

37th Term

2011

37th Term(Thousands of machines)

2010

66

2009

(Thousands of agreements)

Number of DAM shipments

2007

37th Term

2008

36th Term

2006

37th Term

1,000
2004

36th Term

2,000

2005

（116）

36th Term

1,500

2003

（108）

Number of equipment rental agreementsⒸ Chunichi Eiga-Sha Co., Ltd.

(Thousands of machines)

231

5,000

2001

(Number of which are operated via broadband)

223

6,000

2,000

0

(Thousands of machines)

62

No. of machines installed at facilities

500●Key ﬁgures
DAM machines in operation

7,000

2,500 ■ Net increase

2002

3

Net sales

T O P I C S（Commercial Karaoke Business）

2000

Since the Company had intensive shipment in commercial
karaoke business segment shipments for the previous
fiscal year due to replacement demand at major karaokebox chains following the launch of LIVE DAM, the number
of DAM shipments decreased in the fiscal year underreview. In contrast, shipments to other businesses—
35.5 %
including those of the Company’s mainstay LIVE DAM
product and the FREE DAM recommended for seniors thatwas launched in October 2011—were highly rated as
equipment designed to improve seniors’ lifestyles andgeneral functional ability and thus recorded steady sales
performance. In addition to strengthening sales instrategic areas, demand for resumption of operation in theearthquake-affected regions, and dramatic growth wasseen in the seniors market, such as for care prevention
and at seniors nursing homes, which brought about an
8.6 %increasein the number of DAM machines in operation.
As a result of the above, information fee revenues
increased in association with the increased number ofmachines in operation. However, primarily as a reaction to
the advanced shipments for replacement demand withmachines to major karaoke box operators in the previous
fiscal year, sales decreased 5.6 % compared with theprevious fiscal year. Operating income increased 0.4% due
to efforts made to reduce sales expenses, etc.
As the current initiative, the Company will focus on
6.9 %increasing the number of machines in operation driven by
expanding DAM sales. This will include making deeper
inroads in the ongoing priority strategic areas, further
development of the seniors market that is set for growth,and anticipating the possibility of new karaoke demand
and market creation by the emergence of shops catering
to people who want to enjoy karaoke alone. To fortify the

DAM’s unrivaled position against its competitors, theCompany will enhance one of its major strengths, that ofits video and sound content, as well as maintaining a
focus on providing the new“DAM★Tomo”service andaccelerating the development of content specificallydesigned for the seniors market. The Company will also
leverage the shop management expertise accumulatedt h r o u g h i t s “B i g E c h o” s h o p s i n s u p p o r t o f t h e
rejuvenation of regional, small- to medium-scale karaokeroom operators, and work to develop its“Karaoke CLUBDAM”franchise brand.

0* DK ELDER SYSTEM is equipment designed to improveseniors’ lifestyles and general functional ability.

LIVE DAM, the industry’s first communication karaoke using full high-definition video enjoys great popularity for having
meet customer needs. The Company will upgrade the visuals by improving the lines of videos in which the artists
themselves appear and LIVE video as well as by using anime and the Vocaloid TM singing synthesizer.“DAM CHANNEL,”
which has already become familiar through DAM, will welcome a new MC, imparting a wide variety of music information.

Anime and VocaloidTM Videos
Set For Consecutive
Release!

Anime videos including
the immensely
popular Gintama
are constantly being
distributed.
The Company
has also started
to upgrade its
video content with
VocaloidTM, which has
been established as a
new music genre.

ⓒ SEGAⓒ Crypton Future Media, Inc.
Cooperation for design:Nendoroid

DAM CHANNEL with“KYARY PAMYU PAMYU”
Goes on Air!
“DAM CHANNEL,”which provides
the latest music and entertainment
news in the intervals between
karaoke performances, has signed“KYARY PAMYU PAMYU”to be its
10th MC. A charismatic girl among
teen girls brings more excitement toyour karaoke performance throughthe program!

ⓒ Hideaki Sorachi / SHUEISHA Inc.;TV TOKYO Corporation; DENTSU
INC.; Sunrise Inc.; Aniplex Inc.

4

49.0 %

Overview by Segment
Karaoke Cabin and Restaurant Business
N e t
35.5 %

s a l e s :45,117 million yen(year-on-year increase of 10.8%)
Operating income:

7,140 million yen

base, for instance by ongoing development of highlybusiness efficient complexes featuring a“BIG ECHO”andrestaurants, efforts to combine business categories
involving multiple brands, and ensuring further
improvements in the quality of service.

5“BIG ECHO”◆Launch of Women-Only Francfranc Rooms(year-on year increase of 39.2%）

Amid the difficulties in determining market trends in theaftermath of the Great East Japan Earthquake, thekaraoke cabin and restaurant business held back newinvestment and focused on measures to revitalize
existing shops. Since there was also post-earthquake
recoverydemand and a reappraisal of karaoke as a form
8.6 %of affordable entertainment that is close to peoples’
hearts, both karaoke cabins and restaurants attracted
customers and recorded steady sales. In its karaokecabin business the Company targeted service
optimization and improvements in earning power geared
to location, focusing on developing“BIG ECHO”as multibrand. Improvements in attracting customers andmanagement efficiency were also targeted in therestaurant business in which a great deal of effort was
6.9 %put into
meticulous business selection and realignment
by combining a variety of business category brands—
including Japanese, Western, and ethnic—and providing
services tailored to customers’ needs.
As a result of the above, net sales increased 10.8%
compared with the previous fiscal year, with the effect ofrevitalization measures at existing shops as one of thecontributory factors, and operating income surged 39.2%
compared with the previous fiscal year. The figures forboth net sales and operating income represented alltime highs.
In targeting improvements to the BIG ECHO brand, thekaraoke cabin business will hone its development as
multi-brand to pinpoint regional and consumer needs inparallel with ladies and kids room enhancements andmake all-out efforts to offer the services it does best,such as the best sound and space. In the restaurant
business, initiatives will be made to enhance the revenue

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

Net sales

40,72736th Term(Millions of yen)

Operating income

45,117(Millions of yen)

7,140
5,129

37th Term

36th Term

37th Term

Francfranc Room●Key ﬁgures
No. of karaoke shops

No. of complexes(Shops)

291

299

31

33

36th Term

37th Term

No. of restaurants

115

36th Term

On June 12, 2012, the 37-room BIG ECHO Shin-Yurakucho shop
in Tokyo opened with nine newly established“Francfranc rooms”
as a dedicated women’s floor in a tie-up with the Francfranc
interior design store. Targeted at women who espouse a casual
but sensitive lifestyle, the room designs andcolors—and naturally the furniture and fittings—
incorporate the Francfranc concept to realize
most pleasant, high-quality casual spaces.
Customers can comfortably spend time with
their shoes off at six of the nine rooms. The shop
comprises three concepts: besides“Francfranc,”
there are“Dining,”where customers can enjoy
specialist fare, and“Luxury,”which overflows
with opulence.
Aiming for“BIG ECHO with multi-choice,”theCompany will create shops and develop services
depending on location, customer base, andintended use.

(Shops)116

37th Term

No. of karaoke cabins

7,902

8,122

36th Term

37th Term

No. of seats

14,56336th Term◆LED light bulbs to be installed at all shops(Cabins)(Seats)

14,79137th Term

The gradual replacement of incandescentlighting by LED light bulbs has been under
way since December 2009. Businesses wererequired to save power consumption after lastyear’s Great East Japan Earthquake, but, as
the decision was
taken to increaseelectricity rates, wewill have completed
th e ch an ge ove r to
LED lighting in all BIG
ECHO shops by theend of June 2012. It
is anticipated that themove will decreaseelectricity charges byaround ¥100 million
a year. The Company
will undertake more
efforts that are
beneficial to theenvironment.

Shin-Yurakucho Shop
ORE Yurakucho 2-3-5, Yurakucho, Chiyoda-ku, Tokyo☎03-3569-1077

Choice of rooms. Three-variety concept

Luxury Room

(Note: Photos are representative only)

Dining RoomDining Bars
In March 2012, two“Irish & Sport Bar CELTS”wereopened next to BIG ECHO reception areas. Fully
equipped with large TV monitors, these Irish-style bars
are where customers can feel free to enjoy a drink,
while everyone unites in excitement during a sports
event. The bars stock a wide range of more thanten types of beer and more than 50 cocktails. They
can also be hired as venues for wedding gatherings,
parties, and events.
A total of four CELTS bars are in operation and theplan is to add more. Please make a point of spending
a pleasant time there with like-minded friends.

NEW OPEN
Kanda-Ogawamachi shop
(next to BIG ECHO Kanda-Ogawamachi shop)
2-2-6 Kanda-Ogawamachi, Chiyoda-ku,
Tokyo☎03-5217-0055

Yokohama-Kannai shop
(next to BIG ECHO Yokohama-Kannai shop)
4-39 Masago-cho, Naka-ku, Yokohamashi, Kanagawa☎045-680-4177

6

35.5 %

Overview by Segment
49.0 %Music Software Business
N e t

s a l e s :10,974 million yen(year-on-year decrease of 5.5%)

8.6 %Operating income:

1,433

million yen(year-on-year increase of 9.0%）
35.5 % establishing management efficiency through cost
While
controls, the music software business recorded stablesales of enka (popular ballad) works, including those by
Saburo Kitajima (signed to the Nippon Crown Co., Ltd.),
6.9 %celebrating his 50th year as an artist, and Kaori
who wasMizumori (Tokuma Japan Communications Co., Ltd.
(“Tokuma”)). The albums by Perfume (Tokuma) andStudio Ghibli-produced DVDs also contributed toearnings. In music distribution, Sonar Pocket (Tokuma)
made significant contributions.
%
8.6
Consequently,
despite a 5.5% year-on-year drop in net
sales due to fewer releases by major artists, operating
income increased by 9.0% compared with the previous
fiscal year resulting from reduced selling expenses

Other Business
6.9 %

N e t

s a l e s :8,751 million yen(year-on-year decrease of 7.4%)
Operating income:

683 million yen(year-on-year decrease of 17.7%)

Because the number of subscribers to mobile phone
content services is tending to decrease, the otherbusiness endeavored to reduce costs, for example byconsolidating and disposing contents, and focused on
improving profit. Unprofitability caused by dwindlingnumbers of subscribers prompted a withdrawal from part7

brought about by such factors as lower advertisingexpenses.
The future activities of the music software business will
center on finding and nurturing new artists and creating
artists who will release a string of hits. This is expected of
Misaki Iwasa (Tokuma), who is a member of AKB48 andhas made her solo debut as an enka singer, and Sonar
Po c k e t ( T o k u m a) , w h o s e p o p u lar i ty i s r i s i n g . Th e
Daiichikosho Group will conduct support and promotional
activities that leverage its overall capabilities.

Net sales

11,61336th Term(Millions of yen)

10,97437th Term

Operating income

1,315

36th Term(Millions of yen)

1,433

37th Termof the satellite broadcasting business on March 31, 2012.
The parking business performed steadily, contrasting withthe hotel business, where post-earthquake recovery
remained weak.
As a result, net sales in other business decreased 7.4%
year on year, and operating income fell 17.7% comparedwith the previous fiscal year.

T O P I C S（Music Software Business）

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

With their popularity rising fast,
Sonar Pocket outshone all-comers
to make the No.1 spot with
Sukidayo (Hyakukai no Koukai) in
the 2011 RecoChoku rankings*.
Their third album, Sona Poke
Ism Vol.3 , which was releasedin January 2012, also hit the big
time, making its first appearance
at No.2 on the Oricon Album
Weekly Ranking. Having decided*This ranking combined the total to hold their concert at the Nippon
number of times a single had been Budokan for the first time in August
downloaded on Chaku Uta Full ®and 2012, don’t miss their actions as
they ride on the wave of success.
Chaku Uta Full Plus ®in 2011.

BUCK-TICK

This year, rock band BUCK-TICK
celebrates their 25 year anniversary
since making their debut. Their firstsingle on their own“Lingua Sounda”
l abel, Elise no T ame Ni , w asreleased in May at the same time as
the DVD and Blu-ray disc versions of
their December 2011 concert at the
Nippon Budokan. These events will
be followed in quick succession on
July 4 by sales of their second single
on Lingua Sounda, MISS TAKE—
Boku wa Misu Teiku , and sales of atribute album performed by otherartists. It is the 25th anniversary froma debut, the force doesn’t still stop.

MAN WITH A MISSION

Net sales

9,452

36th Term(Millions of yen)

8,751

37th Term

Operating income(Millions of yen)

829

683

36th Term

37th Term

Released in April 2012, MAN WITH AMISSION’s single, distance , rapidly hit
the big time by entering the OriconSingle Weekly Ranking at No.6.
Their eagerly awaited second album,
MASH UP THE WORLD , is set for
release on July 18. The“wolves”willbe on the rampage at music festivals
throughout Japan this summer!

Saburo Kitajima

On June 5, 2012, Saburo Kitajima
marked 50 years to the day since
his debut by releasing Shokunin ,a work by his master Toru
Funamura, which depicts a man’s
way of life through the life andthoughts of the craftsman. Please
expect a lot more from Saburo
Kitajima as he energetically lights
up the stages at Tokyo’s Meijiza
Theater (July), the Hakataza
Theater in Fukuoka (September),and the Misonoza Theater in
Nagoya (November).

Kaori Mizumori

With pop songs having
monopolized the top spots in the
Oricon Single Weekly Ranking inrecent years, her April release,
Hitori Nagaragawa , came in at
No.4! She has been smashing her
own record as No.1 in the annals
of women enka singers with entry
into the Top 10: her ninth record
to make it into the Top 10 in total
for the ninth consecutive year andthe ninth consecutive song.

Misaki Iwasa

The first enka singer from AKB48(T e am A) made her debut in
February 2012. That is Misaki
Iwasa, known as “Wasamin,”whose solo debut song is Mujin
Eki . She also have entered theOricon Single Weekly Ranking at
No.5. Misaki Iwasa is a promising
young talent in the world of enka.

8Consolidated Financial Summary■Summarized Consolidated Balance Sheets
Item
A s s e t s
Current assets
Noncurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total assets
L i a b i l i t i e s
Current liabilities
Noncurrent liabilities
Total liabilities
N e t a s s e t s
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Minority interests
Total net assets
Total liabilities and net assets

36th Term(millions of yen)

37th Term

As of March 31, 2011 As of March 31, 2012

50,44687,00147,085
8,063
31,852
137,447
25,39824,01449,41387,934
12,35014,03561,552
△4
△ 851
91
△ 777
△ 164
951
88,034137,447*Amounts of less than one million yen are truncated.

52,50889,73051,074
6,553
32,102
142,238
26,15922,274
48,43392,996
12,35012,90568,730
△ 989
△ 170
793
△ 777
△ 186
978
93,804142,238P O I N T
●Current assets
Current assets increased 2,062 million yen mainly due to an increase in cash
and deposits of 7,264 million yen, and decreases in notes and accounts
receivable-trade of 3,589 million yen and inventories of 2,198 million yen.
●Noncurrent assets
Noncurrent assets increased 2,729 million yen mainly due to increases inland of 5,172 million yen and investment securities of 973 million yen, anda decrease in sound delivery / video software of 1,259 million yen
included in other under intangible assets.
●Current liabilities
Current liabilities increased 761 million yen mainly due to increases inincome taxes payable of 2,233 million yen and accounts payable-other of
1,318 million yen, and a decrease in notes and accounts payable-trade of
2,762 million yen.
●Noncurrent liabilities
Noncurrent liabilities decreased 1,740 million yen mainly due to adecrease of 1,827 million yen in long-term loans payable.

9▶ For detailed financial information,■Summarized Consolidated Statements of Income
Item
Net sales

36th Term(millions of yen)please see the Investors Relations section on the Company’s website (Japanese only) : http://www.dkkaraoke.co.jp/stockinfo/■Summarized Statements of Cash Flows(millions of yen)

37th Termfrom April 1, 2010
to March 31, 2011

from April 1, 2011
to March 31, 2012

127,885

127,246

36th Term

Item

37th Termfrom April 1, 2010
to March 31, 2011

from April 1, 2011
to March 31, 2012

19,34332,80875,81974,872

Net cash provided by (used in) operating activities

52,06552,37335,55433,598Net cash provided by (used in) investing activities △ 28,213△ 17,619

16,51018,774

Net cash provided by (used in) financing activities

1,626△ 7,404

Non-operating income

1,475

2,267

Effect of exchange rate change on cash and cash equivalents

528

498

△ 61

9

Non-operating expenses

17,457

20,544

Net increase (decrease) in cash and cash equivalents△ 7,304

7,793

383

45

Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income

Ordinary income
Extraordinary income

2,294

1,371

15,546

19,218

Income taxes-current

6,493

8,309

Income taxes-deferred

△ 707

135

Income before minority interests

9,759

10,774

Minority interests in income

169

84

9,590

10,689Extraordinary loss
Income before income taxes

Net income*Amounts of less than one million yen are truncated.
36th Term[Notes]1. Accumulated depreciation of property, plant and equipment
2. Guarantee obligation
3. Pledged assets
Corresponding liabilities
4. Net income per share
5. Net assets per share

57,715 million yen
301 million yen
5,545 million yen
1,997 million yen
147.26 yen
1,356.06 yen

Cash and cash equivalents at beginning of period

33,877

26,573

Cash and cash equivalents at end of period

26,57334,367P O I N T
●Net sales
Net sales decreased 0.5% year on year to 127,246 million yen due todecreases in sales of commercial karaoke business, music software
business and other business, despite significant increase of sales inkaraoke cabin and restaurant business.
●Operating income and ordinary income
Operating income increased 13.7% year on year to 18,774 million yen due tosignificant increase in income in karaoke cabin and restaurant business andincreases in income secured by reductions of selling expenses, etc. in
Commercial Karaoke Business and Music Software Business, despite a decrease
in income in other business. Ordinary income increased 17.7% year on year to
20,544 million yen due to improvement in non-operating income and expenses.
Both operating income and ordinary income marked record high amounts.
●Net income
Net income increased 11.5% year on year to 10,689 million yen despite
an increase of tax burden from reversal of deferred tax assets associatedwith revisions to the tax system.

P O I N T

・Income before income taxes

19,218 million yen

・Depreciation and amortization

14,113 million yen

・Decrease in notes and accounts payable-trade

2,761 million yen●Net cash provided by (used in) investing activities
・Purchase of property, plant and equipment

13,386 million yen

・Purchase of intangible assets

3,125 million yen

・Payments for acquisition of video licenses

1,258 million yen●Net cash provided by (used in) financing activities
・Repayment of long-term loans payable

4,358 million yen

・Cash dividends paid

3,509 million yen

・Proceeds from long-term loans payable

2,513 million yen*Amounts of less than one million yen are truncated.

■Consolidated statements of changes in net assets 37th Term (from April 1, 2011 to March 31, 2012)
Shareholders’ equity

37th Term

59,406 million yen
163 million yen
5,229 million yen
1,605 million yen
167.70 yen
1,477.71 yen●Net cash provided by (used in) operating activities

Balance as of April 1, 2011

(millions of yen)

Accumulated other comprehensive income

Capitalstock

Valuation
Foreign Total accumulated Minority Total net
Total
Revaluation
Capital Retained Treasury
difference on
currency
otherinterests assets
shareholders’reserve forsurplus earnings
stock
available-fortranslation comprehensive
equitylandsale securities
adjustment
income12,35014,03561,552△4

87,934

91

△ 777

△ 164

△ 851

951

88,034

Changes of items during the period
Dividends from surplus△ 3,512Net income

10,689Purchase of treasury stock△ 1,130Retirement of treasury stock△ 3,512
10,68910,689△ 2,115 △ 2,115△ 2,1151,130―

 et changes of items otherNthan shareholders’ equity
Total changes of items during the period
Balance as of March 31, 2012

△ 3,512―702― △ 1,130
12,35012,905

△ 21

680

27

708

7,177

△ 984

5,062

702

―

△ 21

680

27

5,770

68,730△ 989

92,996

793

△ 777

△ 186

△ 170

978

93,804*Amounts of less than one million yen are truncated.

10

C l o s e - u p Exploring Daiichikosho’s Business

Vol.5

Actively Working in Collaboration with Public Initiatives
Social Contribution Activities That Leverage“The Power of Karaoke”
Helping to Make People Feel Good Through Singing - The finding that Daiichikosho has demonstrated throughvarious efforts in recent years is entering a stage for a full-scale transformation to a contribution in the actual
society.
From among those initiatives, we would like this time to outline cooperation carried out using what wascalled the“Karaoke Car.”This karaoke-equipped truck was provided to a psychosomatic treatment team
deployed by Friends of the United Nations Asia-Pacific that traveled around the areas affected by the Great
East Japan Earthquake.

Karaoke Car Sent to Disaster-Affected Areas～Friends of the United Nations Sing for Smile Program～
Cooperation in Circuit Psychosomatic Treatment
Deployed by Friends of the United Nations Asia-Pacific
On March 11, 2011, at the time of the Great East Japan
Earthquake, the magnitude 9.0 temblor and subsequenttsunami struck mainly coastal areas and resulted inaround 20,000 people being killed or listed as missing.
The disaster also triggered a serious and inevitably
protracted accident at nuclear power stations. In thedisaster-affected areas many people are even now forced
to live in inconvenient and uneasy condition as evacuees
or in temporary housing. As evacuees from various areas
who do not know each other have come together, theytend to suffer mentally, such as from post-traumatic stress

Ceremony at the Miyata temporary housing area in Ofunato-shi, Iwate

11

disorder (PTSD) from the lack of communication
represented by isolation and withdrawal, and growing
anxiety. Mental stress possibly can be a cause of physicaldisorders for the elder. In response, Friends of the United
Nations Asia-Pacific decided to develop the“Friends of
the United Nations Sing for Smile Program,”by which a
medical team would also take along two Samoyedtherapy dogs and the Karaoke Car (a two-ton truck
modified to the specifications of a karaoke box). Having
received requests from the disaster-affected areas, theCompany cooperated in sending of the Karaoke Car.

At the Sugishita temporary housing area in Ofunato-shi

Interior of the Karaoke Car

A World First:“Psychological Care”by
Karaoke Car and Therapy Dogs
These two initiatives formed part of the Sing for
Smile Project set up by Daiichikosho to assist thedisaster-affected areas in the aftermath of theearthquake. This was the first time to try out theidea of circuit psychosomatic treatment alongwith therapy dogs and the Karaoke Car, which
reportedly attracted a great deal of attention
from overseas.
The Karaoke Car joined head of the medical
team Dr. Jin Hinokida and the two Samoyeds onthe morning of January 20, 2012, when they set
off and headed to their first assignment, theMiyata temporary housing area in the city of
Ofunato, Iwate Prefecture. (The occasion was
picked up by news media.) Many housing area
residents expressed their delight at the use of the
Karaoke Car, and the Company will undertake toextend the duration of its use in support activities.

Therapy dogs

At the Ota temporary housing area, Ofunato-shi～Friends of the United Nations Sing for Smile Program～
Entities conducting activity: Friends of the United Nations Asia-Pacific / Daiichikosho
Co., Ltd. / Mother’s Heart Foundation
Support groups: Society of Preventive & Alternative Medicine / Japan
Medical Science Exchange Association Medical Corps
Cooperating groups: Hinokida Hospital / ALW
Cooperating companies: Sankyo Medical Service Co., Ltd. / Hino Motors, Ltd. /TRANTECHS, LTD.

Participation in Support Activity Debriefing
Held by Friends of the United Nations
Having observed social contribution through these support
activities, the Company received an invitation to a debriefing heldat the UN Headquarters in New York on May 16, 2012. Reports
were given on the psychological care of those affected by natural
disasters, which included the circuit psychosomatic treatment
operation using the Karaoke Car, the importance of humanitarianassistance, and the assessments in the disaster-hit areas.
Senior UN officials, UN-related agencies, and the UN delegations
from several countries showed a fervent interest in the Karaoke Car’s
positive effects and complimented the Company on its activities.
The circuit psychosomatic treatment operation using the
Karaoke Car vividly demonstrated karaoke’s social
significance. The Company considers the activity is ashining example of the kind of psychological care that has
to be supported over the long term.
The Company will continue to cooperate with Friends of
the United Nations and undertake contributory initiatives
through songs and music.

In the plenary session at the UN Headquarters, a letter of appreciation was
granted by Dr. Noel J. Brown, President & CEO of Friends of the United Nations.

12Corporate Profile(as of March 31, 2012)

Corporate Profile (as of March 31, 2012)

The Daiichikosho Group

Corporate nameLocation(As of March 31, 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 1,528
The Group 3,013
September 19, 1995

The Company and consolidated subsidiaries

38

companies

Main Business Activities

Commercial karaoke businessKaraoke cabin and restaurant business
Music software business■Number of authorized shares 200,000,000 shares■Number of shares outstanding

63,420,596 shares■Number of shareholders

17,192■Major shareholders

Number of shares held Ratio of voting rights

Name of shareholder
T

a

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

State Street Bank and Trust Company

Domestic sales subsidiaries: 24 companies

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 .

Japan Trustee Services Bank, Ltd. (Trust Account)

Hokkaido Daiichikosho Co., Ltd.

Johoku Daiichikosho Co., Ltd.

Tokai Daiichikosho Co., Ltd.

Kushiro Daiichikosho Co., Ltd.

Taito Daiichikosho Co., Ltd.

Hokuriku Daiichikosho Co., Ltd.

The Master Trust Bank of Japan, Ltd. (Trust Account)

Kitatohoku Daiichikosho Co., Ltd.

Joto Daiichikosho Co., Ltd.

Kyoto Daiichikosho Co., Ltd.

The Chase Manhattan Bank, N.A. London

Tohoku Daiichikosho Co., Ltd.

Josai Daiichikosho Co., Ltd.

Daiichikosho Kinki Co., Ltd.

Senior Managing Director and Senior Corporate Officer Tatsuya Kumagai

Jyoban Daiichikosho Co., Ltd.

Shonan Daiichikosho Co., Ltd.

Keihan Daiichikosho Co., Ltd.

Senior Managing Director and Senior Corporate Officer Hiroshi Mitomi

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.

New management system (as of June 22, 2012)
Honorary Chairman

Tadahiko Hoshi

President

Saburo Hayashi

Senior Managing Director and Senior Corporate Officer Kenichi Nemoto

Managing Director and Senior Corporate Officer Yuichi Murai
Managing Director and Senior Corporate Officer Yasutaka Wada
Directorand Corporate Officer Yasuhito Watanabe

Directorand Corporate Officer Akira Miyake

Mitsuru Yoshikawa

DK Finance Co., Ltd.

DK Music Publishing Co., Ltd.

Nippon Crown Co., Ltd.

Crown Music Enterprise Co.

Director

Yoshimi Shimizu

Standing Corporate Auditor (outside)

Fumito Ishizaka

Standing Corporate Auditor (outside)

Nobuaki Otsuka

Standing Corporate Auditor

Nobuyuki Takase

Corporate Auditor (outside)

Masumi Arichika
Corporate Officer Shinichi Ozawa
Corporate Officer Hisahiro Ogura
Corporate Officer Akihito Yoshizawa
Corporate Officer Shigeki Kobayashi
Corporate Officer Hiroshi Kunitsu
Corporate Officer Kenji Otsuka
Corporate Officer Ichio Odagiri

Mitsubishi UFJ Trust and Banking Corporation

Daiichikosho Employee Shareholding Association

Tokuma Japan Communications Co., Ltd. Zoom Republic(thousands of shares)

(%)

6,846
6,717
4,832
4,439
2,120
1,619
1,148
1,109
1,029
984

10.7
10.5
7.6
7.0
3.3
2.5
1.8
1.7
1.6
1.5

Business companies and other corporations
7,889（12.4%）

Financial instruments business operators

7,952（12.5%）

Foreign companies and foreigners

Individual shareholders and others

27,751（43.8%）

19,736（31.1%）

Stock price trend (yen)

DAIICHIKOSHO (SHANGHAI) TRADE CO., LTD.

Daiichikosho (Shanghai), Ltd. D.K.Enterprises (Guam), Inc.
(Notes) 1. BESTa FOODS Co., Ltd. was dissolved in August 2011 through an absorptiontype merger with the Company as the surviving company.
2. Fukushima Daiichikosho Co., Ltd. was dissolved in October 2011 through anabsorption-type merger with Tohoku Daiichikosho Co., Ltd. as the surviving
company.

Front page

Financial institutions

Tri-M, Inc.

DK KOREA Co., Ltd.

http://www.dkkaraoke.co.jp/

92（0.2%）■Stock price (monthly candlestick chart)

Overseas subsidiaries: 4 companies

URL■Shareholding Ratio by Category (thousands of shares/shareholding ratio)

CROWN TOKUMA music distribution Co., Ltd. Union Eiga Co., Ltd.
Maruhagi Yoshu Kogyo Co., Ltd.

The Company’s website
Our website offers useful information forshareholders, valuable information of BIG ECHO,
introduction of DK ELDER SYSTEM’s contents andmore (Japanese Only). Please visit us online andfind more details.

(Notes) 1. The Company holds 602,863 shares of treasury stock.
2. Values in“Number of shares held”and“Ratio of voting rights”arerounded down to the nearest unit.

Other domestic subsidiaries: 10 companies

Director

Corporate Officer Shinji Arima

13

Status of the Shares of the Company

BIG ECHO

1,800
1,200

600
0

Number of shares traded (ten thousands of shares)
400
300
200
100

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

0

DK ELDER SYSTEM

14