Gulliver International Co., Ltd.

Non-consolidated Results
Fiscal 2006
(March 1, 2006 to February 28, 2007)

This document has been translated from the original Japanese as a guide for non-Japanese investors. It
contains forward-looking statements based on a number of assumptions and beliefs made bymanagement in light of information currently available. Actual financial results may differ materiallydepending on a number of factors, including changing economic conditions and the pricing and productinitiatives of new and existing competitors.

SUMMARY OF FINANCIAL STATEMENTS (Non-consolidated)
Results for the fiscal year ending February 28, 2007

Gulliver International Co., Ltd.

April 18, 2007

Stock Code: 7599
http://www.glv.co.jp/
President: Kenichi Hattori
Date of the meeting of the board of directors: April 18, 2007
Date of regular shareholders’ meeting: May 23, 2007

st

Listed exchanges: Tokyo (1 Section)
Inquiries:
Senior Executive Vice President: Ikuo Murata
Telephone:+81 3 5208-5503
Scheduled date of dividend payment: May 23, 2007
Existence of share trading unit system: Yes (one unit= ten shares)

1. Non-consolidated financial results for the fiscal year ended February 28, 2007
1) Non-consolidated Operating Results

Millions of yen, rounded down

Fiscal year ended
February 28, 2007

Fiscal year ended
February 28, 2006(% change)

Sales ..............................................................
Operating income ...........................................
Ordinary income .............................................
Net income .....................................................
Earnings per share (¥) ....................................
Fully diluted earnings per share (¥) ................
Return on equity (%).......................................
Ratio of ordinary income to total assets (%) ...
Ratio of ordinary income to net sales (%) .......

166,466
10,715
10,5095,645¥577.92¥575.76
33.0
27.6
6.3

(% change)

(1.9)
5.6
3.6
6.1
------

169,735
10,143
10,1355,320¥525.75¥520.30
33.8
31.1
5.9

15.0
5.6
5.7
1.1
------

Notes to the preparation of these financial statements:
1. Average number of shares outstanding during the period: FY ended February 28, 2007 – 9,768,287
FY ended February 28, 2006 – 9,979,943
2. Differences in accounting treatments applied compared to previous fiscal year: No
3. Percentage figures for sales, operating income, ordinary income and net income represent changes compared to the comparable period of
the previous fiscal year.

2) Financial Position
Total assets .....................................................
Net assets .......................................................
Equity ratio (%) ................................................
Net assets per share (¥) ..................................
Notes:

As of February 28, 2007
40,414
18,10144.8
1,850.96

As of February 28, 2006
35,697
16,09445.0
1,631.46

1. Number of shares outstanding at end of period: FY ended February 2007: 9,779,343; FY ended February 2006: 9,865,317
2. Number of treasury shares at end of period: FY ended February 2007: 909,457; FY ended February 2006: 823,483

2. Forecasts for the fiscal year ending February 29, 2008 (March 1, 2007 to February 29, 2008)
Millions of yen

Interim period ending August 31, 2007

FY ending February 29, 2008

Sales ...............................................................
81,200Ordinary income ..............................................
4,500
Net income ......................................................
2,400
Note: Net income per share for the fiscal year ended February 28, 2007: ¥623.76

176,200
11,4006,100

3. Dividends

Interim dividend per share (¥)..........................
Year-end dividend per share (¥) ......................
Annual dividend per share (¥)..........................
Total dividend payment (millions of yen) .........
Dividend payout ratio (%) ................................
Dividend to net assets ratio (%).......................

Fiscal year ended
February 28, 2006

Fiscal year ended
February 28, 2007

79.00
83.00
162.00
1,604
30.8
10.3

81.00
93.00
174.00
1,699
30.1
9.9

Fiscal year ending
February 29, 2008
(forecast)
87.00
87.00
174.00

Forecasts and forward-looking statements in this document are based on a number of assumptions and beliefs made bymanagement in light of information currently available. Actual financial results may differ materially depending on a number offactors, including economic conditions, legislative and regulatory developments, delay in new product or service launches, and1
pricing and product initiatives of competitors.

Non-consolidated Balance Sheets

Millions of yen rounded down

As of February 28, 2007ASSETSAs of February 28, 2006

% of total% of total

Current assets
Cash and deposits........................................................

3,337

2,107

Accounts receivable.....................................................

5,854

7,235

Marketable securities....................................................

--

100

Merchandise ................................................................

2,953

3,229

Stored goods................................................................

112

79

Advanced payments ....................................................

4

4Pre-paid expenses .......................................................

627

567

Accounts due ...............................................................

1,098

570

Advances .....................................................................

351

223

Short-term loans to related companies ........................

5,373

2,769

Deferred tax assets ......................................................

447

448

Others...........................................................................

2

11

Allowance for doubtful accounts...................................

(229)

(98)

Total current assets..................................................

19,93349.3

17,24948.3

Fixed assets
Tangible fixed assets
Buildings .......................................................................

8,074

6,712

Depreciation..............................................................

(1,467)(1,154)Structures .....................................................................

1,809

1,712

Depreciation..............................................................

(608)

(464)

Tools, fixtures and equipment ......................................

2,817

3,090

Depreciation..............................................................

(1,500)(1,411)Land.............................................................................

327

327

Construction in progress...............................................

109

Total tangible fixed assets

9,561

409
23.7

9,221

25.8

Intangible fixed assets
Business rights............................................................

5

10

Trademarks .................................................................

9

11

Software .......................................................................

1,910

2,694

Telephone subscription rights ......................................

63

63

Facility use rights .........................................................

9Total intangible fixed assets .....................................

1,998

9
4.9

2,789

7.8

Investments and other assets
Investment securities ...................................................

96

199

Shares of affiliates .......................................................

2,191

494

Investments ..................................................................

00Long-term loans............................................................

7--

Long-term staff loans ...................................................

02

Long-term loans to affiliates .........................................

--

500
367

Defaulted claims, etc. .................................................

33

Long-term prepaid expenses........................................

120

153

Deposits and guarantee money ...................................

3,651

3,011

Construction cooperation money .................................

2,508

1,890

Insurance reserves.......................................................

72

65

Deferred tax assets ......................................................

270

105

Allowance for doubtful accounts ..................................

(33)

Total investment and other assets ...............................

8,921

Total fixed assets .....................................................
Total Assets....................................................................

(352)
22.1

6,436

18.1

20,48050.7

18,44751.7

40,414100.0

35,697100.0
2

Non-consolidated Balance Sheets
Millions of yen, rounded down
As of February 28, 2007
LIABILITIESCurrent liabilities
Accounts payable ............................................................
Short-term borrowing.......................................................
Accrued expenses...........................................................
Accrued corporate taxes .................................................
Accrued consumption tax ................................................
Accrued expenses...........................................................
Advances received ..........................................................
Deposits received............................................................
Reserve for bonuses .......................................................
Reserve for directors’ bonuses........................................
Accrued liability for equipment.........................................
Total current liabilities ...................................................
Long-term liabilities
Guarantee deposits received...........................................
Total long-term liabilities ...............................................
Total liabilities .............................................................
CAPITAL
Paid-in capital..................................................................
Capital surplus
Capital reserve ................................................................
Total capital surplus ........................................................
Retained earnings
Profit reserve ...................................................................
Unappropriated profit.......................................................
Total retained earnings ...............................................
Unrealized gains and losses in other securities
Treasury stock.................................................................
Total shareholders’ equity...........................................
Total Liabilities and Shareholders’ Equity ....................
NET ASSETS
Paid in capital..................................................................
Capital surplus
Capital reserve ................................................................
Total capital surplus ...................................................
Retained profit
Earned reserve ..................................................................
Other earned reserve
Earned surplus carried forward....................................
Total retained profit ......................................................
Treasury stock ...................................................................
Total shareholders’ equity...........................................
Valuation difference on other marketable securities .......
Total valuation and differences due to foreign exchange ..
Total net assets .................................................................
Total liabilities and net assets........................................

As of February 28, 2006

% of total

2,953
11,600
1,696
2,590
244
709
178
721
415
73
261
21,443% of total

53.1

3,386
8,000
1,642
1,815
414
848
335
451
513
-1,59819,007

53.3

869
869
22,313

2.1
55.2

594
594
19,602

1.7
55.0

--

--

4,157

11.6

---

---

4,032
4,032

11.3

----------------

39
15,866
15,90567(8,067)
16,09435,69744.5
0.2(22.6)
45.0
100.0

4,157

10.3

--

--

4,032
4,032

10.0

---

---

--

--

--

--

--------------

39
19,406
19,445(9,540)18,0946
6
18,10140,41448.1(23.6)
44.8
0.0
0.0
44.8
100.0

3

Non-consolidated Statements of Income
March 1, 2006 to
February 28, 2007

Millions of yen
March 1, 2005 to
February 28, 2006

%

%

Sales
Sales of merchandise.....................................

159,401

161,198

Other operating revenues ...............................

7,065

8,537

Total ............................................................

166,466

100.0

169,735

100.0

Cost of goods soldInventory at start of period..............................

3,034

3,743

Purchases during the year .............................

125,799

125,545

Total............................................................

128,833

129,288

Inventory at end of period ..............................

2,953

3,229

Other transfers ..............................................

18

126

Net: cost of goods sold .................................

125,862

125,932

Other operating revenues cost of goods
sold.................................................................

663

918

Total............................................................

126,52676.0

126,850

74.7

Gross profit on sales .....................................

39,94024.0

42,884

25.3

Sales, general and administrative expenses
Advertising ....................................................

4,532

6,210

Directors’ remuneration.................................

281

280

Salaries.........................................................

7,450

8,436

Bonuses........................................................

1,242

1,603

Addition to reserve for directors’ bonuses .....

73--

Addition to reserve for bonuses.....................

415

513

Statutory welfare expense .............................

1,136

1,210

Contracting fees ............................................

2,031

1,910

Travel and transportation ..............................

960

1,127

Communication expense ..............................

726

1,028

Consumables ................................................

375

507

Depreciation..................................................

2,318

2,045

Rent ..............................................................

322

469

Land rent.......................................................

4,150

3,381

Addition to allowance for doubtful accounts..

040

Other.............................................................

3,204

3,973

Total............................................................

29,22417.6

32,74019.3

Operating income........................................

10,715

6.4

10,1436.0

4

Non-consolidated Statements of Income

Millions of yen
Millions of yen

March 1, 2006 to
February 28, 2007

March 1, 2005 to
February 28, 2006

Non-operating income
Interest income ..................................................

15

13

Dividend income ................................................

80Commission income ..........................................

7

16

Interest on securities .........................................

0

0

Other .................................................................

29

Total...............................................................

61

38
0.1

68

0.0

Non-operating expenses
Interest expense................................................

46

14

New share issue expense .................................

--

0

Addition to allowance for doubtful accounts ......

181

28

Cancellation penalties .......................................

3

9

Unrealized losses on investment partnerships ..

--2

Other .................................................................

37

Total...............................................................

268

0.2

Ordinary income ................................................

10,509

6.3

22

77

10,135

6.0

Extraordinary income
Gains on sale of fixed assets Note 3 ..................

--

Gains from insurance ........................................

--

6

Gains on sales of investment securities ............

--

45

Gains on sales of affiliates’ shares ....................

520

Total...............................................................

520

3

-0.3

54

0.0

Extraordinary loss
Losses on disposal of fixed assets Note 4 ..........

689

879

Losses on cancellation of insurance contracts ..

----Impairment losses Note 5 ...................................

278

--

Evaluation loss on affiliates’ shares...................

Legal settlements ...........................................

9
40

121
--

Total...............................................................

1,018

0.6

1,000

0.6

Net income before taxes ...................................
Corporate income tax, inhabitants tax andenterprise tax ....................................................
Corporate tax adjustments ................................

10,010

6.0

9,189

5.4

Total ..............................................................

4,365

2.6

3,868

2.3

Net income........................................................

5,645

3.4

5,320

3.1

Profits carried forward from the previous year...

--11,718Interim dividends ...............................................

--

785

Losses on disposal of treasury shares ..............

--

387

Unappropriated profits at end of period .............

--

15,866

4,486

3,820

(121)

47

5

Planned Profit Appropriation(Millions of yen)

As of May 24, 2006
Unappropriated profits at end of period

15,866

Profits appropriatedDividends

818

Directors’ bonuses

73(of which, auditors’ bonuses)

(0)

Total
Profits carried forward

892
14,973

Note: These figures are dated as of the general meeting of shareholders.

6Changes in non-consolidated shareholders’ equity
Millions of yen

For the fiscal year ended February 28, 2007
Shareholders’ equity
Retained profit
Capital surplus
Other
CapitalCapitalreserve

Other

Total

Revenue

capitalcapitalsurplussurplus--4,032

reserveretained

Total

Total

profitretainedcarriedprofitTreasury stock shareholders’equityforwardBalance as of February 28, 2006

4,157

4,032

39

15,866

15,905(8,067)

16,027(1,608)(1,608)(1,608)

(73)

(73)

(73)

5,645

5,645

5,645
(2,079)(2,079)

(423)

(423)

606

183

--

--

--

--

Change during the period
Surplus dividend
Bonuses to directors through profit
appropriation
Net income
Acquisition of treasury stock
Disposal of treasury stock
Changes to items other thanshareholders’ equity
Total change during the period
Balance as of February 28, 2007

--

--

--

--

--

--

--

--

--

--

3,539

3,539

(1,472)

2,067

4,157

4,032

--

4,032

39

19,406

19,445(9,540)18,094

Valuation and differences due to foreign exchange

Balance as of February 28, 2006

Total net assets

Valuation differences on otherTotal valuation andmarketable securities

translation differences
67

67

16,094

Change during the period
Surplus dividend(1,608)Bonuses to directors through(73)

profit appropriation
Net income

5,645

Acquisition of treasury stock(2,079)

Disposal of treasury stock

183

Changes to items other thanshareholders’ equity during the

(60)

(60)

(60)

(60)

(60)

2,006

6

6

18,101

periodTotal change during the period
Balance as of February 28, 2007

7

Material Items Forming the Basis for the Preparationof the Non-consolidated Financial Statements
Item
1. Valuation
criteria andvaluation methods
for material assets

March 1, 2006 – February 28, 2007
(1) Bonds intended to be held to maturity.
As at rightMarch 1, 2005 – February 28, 2006
(1) Bonds intended to be held to maturity.
Amortizing cost method (straight-line
method)(2) Shares of subsidiaries
As at right(2) Shares of subsidiaries
The cost method using the moving averagemethod(3) Other securities(3) Other securitiesThose with market value:Those with market value:

Market value method based on market value as

Market value method based on marketof the financial closing date (valuation gains orvalue as of the financial closing datelosses are taken directly into net assets and the(valuation gains or losses are taken directly

cost of sales calculated using the moving

into capital and the cost of sales calculated

average method)using the moving average method)Those without market value:
As at rightThose without market value:
Cost method using the moving averagemethod

2. Basis forvaluation of
inventory andvaluation method(1) Merchandise(1) Merchandise
As at right

Vehicles:Cost method using actual cost method
Other:(2) Stored goods
As at right

Cost method under first-in, first-out method(2) Stored goods
Final purchase cost method

3. Fixed asset
depreciation
method

4. Treatment ofDeferred assets

1) Tangible fixed assets
As at right1) Tangible Fixed Assets
The Declining Balance Method is applied.
However, for buildings (excluding attachedequipment) acquired since April 1, 1998, theStraight Line Method has been applied. The useful
lives are as follows:
Buildings and structures: 15-20 yrs.

2) Intangible Fixed Assets
As at right2) Intangible Fixed Assets
The Straight Line Method is applied. However, withrespect to software for internal use, the StraightLine Method based on useful lives for internal use(five years) has been applied.

3) Long-term prepaid expenses
As at right3) Long-term prepaid expenses
Straight line method is applied

Expenses related to share purchase:
Expensed in their entirety at time of expenditure

New share issue expenses:
Expensed in their entirety at time of expenditure85. Criteria for
Recording Material
Reserves

6. Treatment ofMaterial Lease
Transactions
7. Other Material
Items in the
Preparation of theNon-consolidated
Financial Accounts

1) Reserve for Doubtful Accounts
As at right1) Reserve for Doubtful Accounts
To prepare for losses occurring from bad loans, theactual bad loan rate is applied. Specific claims,
such as those where there are concerns on theprobability for recovery, are assessed on an
individual basis and estimated unrecoverable
amounts are recorded.

2) Reserve for Bonuses
As at right2) Reserve for Bonuses
To prepare for the payment of bonuses to
employees, amounts are recorded based on theestimated payment amount.

3) Reserve for Directors’ Bonuses
To prepare for the payment of bonuses to directors,
amounts are recorded based on the estimatedpayment amount.
As at right3)

Accounting Treatment of Consumption Tax:1)
As at right-------------

Finance leases other than those lease assets
whose title is deemed to pass to the lessee havebeen accounted for in accordance with methods
applied to normal lease transactions
Accounting Treatment of Consumption Tax:
(1) Tax Exclusion Method is applied in theaccounting treatment of consumption tax.

9

Changes to Accounting Treatment
March 1, 2006 – February 28 2007

March 1, 2005 – February 28, 2006

Accounting standards relating to impairment losses on
fixed assets
As of the fiscal year ending February 28, 2007 the‘Statement Regarding the Establishment of Accounting
Policies for Impairment Losses on Fixed Assets’ (BusinessAccounting Council, August 9, 2002) and ‘Guidelines for
the Application of Accounting Policies for Impairment
Losses on Fixed Assets (Guideline for Application ofBusiness Accounting Policies, Article 6; BusinessAccounting Council, October 31, 2003) have been applied
as accounting standards relating to impairment losses.
As a result of this change, and in comparison to previous
accounting methods, there is a ¥278 million decrease in net
income before taxes.

----------------------------

Accounting standards relating to presentation of net
assets on balance sheets
From the fiscal year ending February 28, 2007, the‘Statement Regarding the Presentation of Net Assets on the
Balance Sheet’ (Business Accounting Council, December 9,2005, Article No. 5) and ‘’Guidelines for the Application of
Accounting Policies for the Presentation of Net Assets on the
Balance Sheet’ (Guidelines for the Application of BusinessAccounting Polices, Article 8; Business Accounting Council,
December 9, 2005) have been applied. The equivalentamount previously recorded as ‘Capital’ is ¥18,101 million.
Following changes to the regulations on financial
statements, net assets on the balance sheet have beenrecorded in accordance with the revised regulations.

----------------------------

Accounting standards relating to directors’ bonuses----------------------------

From the fiscal year ending February 28, 2007, the‘Accounting Standard Regarding Directors’ Bonuses’(Business Accounting Council, November 11, 2005, Article
No. 4) has been applied. As a result, ordinary income andnet income before adjustment for income taxes have eachdecreased ¥73 million.

Changes to Presentation Method
March 1, 2006 – February 28, 2007-----------------------March 1, 2005 – February 28, 2006
Method of presentation of liquid assets
In the previous fiscal year, ‘Accounts Due’ were
presented as ‘Others’ in Current Assets. As they have
now increased to more than 1% of assets, they arerecorded separately. Accounts Due at the end of theprevious fiscal year totaled ¥260 million.

-----------------------

Method of presentation of non-operating expenses
In the previous fiscal year, ‘Interest Expense’ wasincluded as ‘Others’ in Non-operating Expenses. As it
has now increased to over 10% of Non-operating
Expenses, it is recorded separately. Interest expense in
the previous fiscal year totaled ¥1 million.

10Additional Information
March 1, 2006 – February 28, 2007

March 1, 2005 – February 28, 2006---------------------

Treatment of the tax based on business size portionof corporate taxes in the statements of income
Following the promulgation of ‘Treatment of the tax basedon business size portion of corporate taxes in theStatements of Income’ (February 13, 2004, Corporate
Accounting Standards Committee Practice Report 12), fromthis accounting period the proportionate amounts ofcorporation tax on value added and capital have been
included in Selling, General and Administrative expenses.
As a result Selling, General and Administration expenses
increased by ¥122 million and operating income, ordinary
income and income before taxes, etc. each decreased by¥122 million.

Notes to Balance Sheet
February 28, 2007
*1*2-----------------------------------------

February 28, 2006
*1 Total number ofshares approved to
be issued by theCompany
Total number of shares
outstanding*2 Number of treasury
sharesOrdinary shares

40,000,000

Ordinary shares

10,688,880

Ordinary shares

823,48311

Notes to Statements of Income
Millions of yen (rounded down)

March 1, 2006– February 28, 2007

March 1, 2005 – February 28, 2006

1. Breakdown of other operating revenues is as follows:

1. Breakdown of other operating revenues is as follows:

Membership fee revenue:

Membership fee revenue:

161

112

Royalty revenue

2,038

Royalty revenue

Other

4,865

Other

5,872

Total

7,065

Total

8,537

2. Other transfers break down as follows:

2,552

2. Other transfers break down as follows:

Merchandise

15

Merchandise

126

Total

15

Total

126

3.

------------------

3. Breakdown of the gains from the sales of fixed assets is
as follows:
Tools, fixtures and3equipment
Total

3

4. Breakdown of losses from disposal of fixed assets is as

4. Breakdown of losses from disposal of fixed assets is asfollows:

follows:

Building

266

Building

465

Structures

59

Structures

233

Tools, fixtures and54

Vehicle transport

0

Tools, fixtures and50

equipment
Software
Long-term prepaid

1080

expenses
Restoration expenses

191

Other

8

Total

689

equipment
Construction in progress

51

Software80

Long-term prepaid

0

expenses
Total

879

12

March 1, 2006 – February 28, 2007

March 1, 2005 - February 28, 2006

5. Impairment losses

5.

----------------

During the fiscal year ended February 28, 2007, theGroup recognized impairment losses on the following
group assets(1) Assets for which impairment losses recorded
Place

Usage

Type

AmountSoftware273

Chiyoda-ku,

Other

Tokyo

businesses

Chiyoda-ku,

OtherTools &

Tokyo

businesses

equipment

4(2) Details of recognition of impairment losses
For certain businesses in ‘other businesses’ where theinitially expected business has been cancelled orsuspended and there is no future use for the asset,
impairment losses have been recognized.
(3) Method of grouping assets
According to our application of accounting for impaired
assets, the minimum cash flow generating unit ismainly a store. For unutilized assets, the individual
assets are grouped.
(4) Method for calculating recoverable value
The recoverable amount is calculated based on theuseful value using estimates of future cash flows.

13

(Changes to shareholders’ equity and other items)
Non-consolidated fiscal year March 1, 2006 to February 28, 2007
1. Items related to number and types of treasury shares
Number of sharesat end of previous
fiscal year
Ordinary shares
Total(Thousands of shares)

Increase

Number ofshares at endof current
fiscal year

Decrease

823

143

58

909

823

143

58

909

(Note) 1. The increase of 143,000 in ordinary shares of treasury stock results form a market purchase authorized by a decision by theboard of directors.

14