##### Table of Contents



UNITED
STATESSECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 Date of event requiring this shell company report
 Commission file number 1-7616
 PIONEER KABUSHIKI KAISHA
  PIONEER CORPORATION
  JAPAN
 4-1, MEGURO 1-CHOME, MEGURO-KU, TOKYO 153-8654, JAPAN
  Title of each class
    
    Name of each exchange on which registeredNone
    
    None
   
    
   Outstanding as of March 31, 2006Title of class
    
    (Japan time)Common Stock
    
    174,421,890
  þ o
 15(d)
 o þ
   þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
  þ o
  o þ




---



##### 



PageCertain Defined Terms
    
    
    3Cautionary Statement with Respect to Forward-Looking Statements
    
    
    3PART IItem 1. Identity of Directors, Senior Management and Advisers
    
    
    3Item 2. Offer Statistics and Expected Timetable
    
    
    3Item 3. Key Information
    
    
    4Item 4. Information on the Company
    
    
    12Item 4A. Unresolved Staff Comments
    
    
    24Item 5. Operating and Financial Review and Prospects
    
    
    25Item 6. Directors, Senior Management and Employees
    
    
    48Item 7. Major Shareholders and Related Party Transactions
    
    
    55Item 8. Financial Information
    
    
    56Item 9. The Offer and Listing
    
    
    58Item 10. Additional Information
    
    
    59Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    77Item 12. Description of Securities Other than Equity Securities
    
    
    79PART IIItem 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    80Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    80Item 15. Controls and Procedures
    
    
    80Item 16. [Reserved]
    
    
    81Item 16A. Audit Committee Financial Expert
    
    
    81Item 16B. Code of Ethics
    
    
    81Item 16C. Principal Accountant Fees and Services
    
    
    82Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    83Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    83PART IIIItem 17. Financial Statements
    
    
    84Item 18. Financial Statements
    
    
    84Item 19. Exhibits
    
    
    84EX-1.01 THE ARTICLES OF INCORPORATION OF PIONEER CORPORATIONEX-1.02 REGULATIONS OF THE BOARD OF DIRECTORS, AS AMENDED AND CURRENTLY IN EFFECT (ENGLISH TRANSLATION)EX-2.01 SHARE HANDLING REGULATIONS OF PIONEER CORPORATIONEX-12.01 CERTIFICATIONEX-12.02 CERTIFICATIONEX-13.01 CERTIFICATION
  2




---



##### Table of Contents



Certain Defined Terms
    
 Cautionary Statement with Respect to Forward-Looking Statements
  
 PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  3




---



##### Table of Contents



Item 3. Key Information
 A. Selected financial data
  Year ended March 312002
    
    2003
    
    2004
    
    2005
    
    2006(In millions of yen, except per share data)Consolidated Statements of Operations Data:Operating revenue (Note 4) (Note 5)
    
    ¥
    624,978
    
    
    ¥
    664,828
    
    
    ¥
    684,749
    
    
    ¥
    711,042
    
    
    ¥
    754,964Income (loss) from continuing operations
before income taxes (Note 5)
    
    
    7,268
    
    
    
    15,029
    
    
    
    19,464
    
    
    
    (10,112
    )
    
    
    (85,758
    )Income (loss) from discontinued operations,
net of tax (Note 5)
    
    
    779
    
    
    
    1,049
    
    
    
    5,374
    
    
    
    1,323
    
    
    
    772Net income (loss)
    
    
    8,047
    
    
    
    16,078
    
    
    
    24,838
    
    
    
    (8,789
    )
    
    
    (84,986
    )Per share of common stock:Income (loss) from continuing operations:Basic
    
    
    40.37
    
    
    
    84.35
    
    
    
    110.95
    
    
    
    (57.65
    )
    
    
    (491.66
    )Diluted
    
    
    40.36
    
    
    
    84.35
    
    
    
    110.09
    
    
    
    (57.65
    )
    
    
    (491.66
    )Net income (loss):Basic
    
    
    44.70
    
    
    
    90.24
    
    
    
    141.58
    
    
    
    (50.11
    )
    
    
    (487.23
    )Diluted
    
    
    44.69
    
    
    
    90.24
    
    
    
    140.52
    
    
    
    (50.11
    )
    
    
    (487.23
    )Consolidated Balance Sheets Data:Total assets
    
    ¥
    645,129
    
    
    ¥
    647,029
    
    
    ¥
    722,542
    
    
    ¥
    725,167
    
    
    ¥
    678,046Short-term borrowings
    
    
    45,867
    
    
    
    29,893
    
    
    
    23,327
    
    
    
    33,152
    
    
    
    23,205Current portion of long-term debt
    
    
    2,551
    
    
    
    974
    
    
    
    4,510
    
    
    
    19,276
    
    
    
    7,165Long-term debt, less current portion
    
    
    35,677
    
    
    
    32,196
    
    
    
    89,691
    
    
    
    81,219
    
    
    
    92,970Shareholders equity
    
    
    347,003
    
    
    
    318,393
    
    
    
    332,938
    
    
    
    332,239
    
    
    
    273,250Common stock
    
    
    49,049
    
    
    
    49,049
    
    
    
    49,049
    
    
    
    49,049
    
    
    
    49,049Number of shares issued (in thousands)
    
    
    180,064
    
    
    
    180,064
    
    
    
    180,064
    
    
    
    180,064
    
    
    
    180,064
 4




---



##### Table of Contents



Year ended March 312002
    
    2003
    
    2004
    
    2005
    
    2006(In millions of yen,
except per share data and percentage amounts)Other Data:Capital expenditures
    
    ¥
    46,909
    
    
    ¥
    40,493
    
    
    ¥
    57,978
    
    
    ¥
    63,866
    
    
    ¥
    40,325Research and development (R&D) expenses
    
    
    39,033
    
    
    
    45,366
    
    
    
    51,449
    
    
    
    55,858
    
    
    
    63,442Cash flows from operating activities
    
    
    57,358
    
    
    
    91,509
    
    
    
    60,378
    
    
    
    19,946
    
    
    
    68,329Cash flows from investing activities
    
    
    (51,396
    )
    
    
    (35,228
    )
    
    
    (52,754
    )
    
    
    (93,516
    )
    
    
    (29,759
    )Cash flows from financing activities
    
    
    (4,207
    )
    
    
    (34,680
    )
    
    
    51,827
    
    
    
    (4,019
    )
    
    
    (38,551
    )Return on equity (Note 1)
    
    
    2.4
    %
    
    
    4.8
    %
    
    
    7.6
    %
    
    
    (2.6
    %)
    
    
    (28.1
    %)Return on assets (Note 2)
    
    
    1.3
    %
    
    
    2.5
    %
    
    
    3.6
    %
    
    
    (1.2
    %)
    
    
    (12.1
    %)Cash dividends declared
per share of common stock (Note 3):Interim      (in yen)
    
    
    7.50
    
    
    
    7.50
    
    
    
    12.50
    
    
    
    12.50
    
    
    
    7.50(in U.S. dollars)
    
    
    0.06
    
    
    
    0.06
    
    
    
    0.12
    
    
    
    0.12
    
    
    
    0.06Year-end   (in yen)
    
    
    7.50
    
    
    
    10.00
    
    
    
    12.50
    
    
    
    12.50
    
    
    
    2.50(in U.S. dollars)
    
    
    0.06
    
    
    
    0.08
    
    
    
    0.11
    
    
    
    0.11
    
    
    
    0.02
 
 Notes: 1.
    
    Net income (loss) as a percentage of average (simple average of beginning and end of year
balances) shareholders equity.2.
    
    Net income (loss) as a percentage of average (simple average of beginning and
end of year balances) total assets.3.
    
    Cash dividends in U.S. dollars are based on the noon buying rate in yen for
cable transfers in New York City as certified for customs purposes by the Federal
Reserve Bank of New York on the date of the dividend payment.4.
    
    In fiscal 2003, we adopted EITF (Emerging Issues Task Force) 01-9 Accounting
for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendors
Products). The adoption resulted in a reduction in net sales and a corresponding
decrease in selling, general and administrative expenses. Previously reported amounts
have been reclassified accordingly.5.
    
    In fiscal 2006, we sold a subsidiary engaged in the development of cable TV
software, and reached a preliminary agreement on the sale of subsidiaries involved in
the electronic components business. As a result, the operating results of these
subsidiaries, and the gain on the sale are presented as income from discontinued
operations in the consolidated statements of operations in accordance with Statement of
Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. Corresponding figures for the previous fiscal years
have been reclassified accordingly. 5




---



##### Table of Contents



Exchange rates (yen per U.S. dollar)
  Average
    
    High
    
    Low
    
    Period-endYear ended March 312002
    
    ¥
    125.64
    
    
    ¥
    115.89
    
    
    ¥
    134.77
    
    
    ¥
    132.702003
    
    
    121.10
    
    
    
    115.71
    
    
    
    133.40
    
    
    
    118.072004
    
    
    112.75
    
    
    
    104.18
    
    
    
    120.55
    
    
    
    104.182005
    
    
    107.28
    
    
    
    102.26
    
    
    
    114.30
    
    
    
    107.222006
    
    
    113.67
    
    
    
    104.41
    
    
    
    120.93
    
    
    
    117.482006January
    
    
    
    
    
    
    113.96
    
    
    
    117.55February
    
    
    
    
    
    
    115.82
    
    
    
    118.95March
    
    
    
    
    
    
    115.89
    
    
    
    119.07April
    
    
    
    
    
    
    113.79
    
    
    
    118.66May
    
    
    
    
    
    
    110.07
    
    
    
    113.46June
    
    
    
    
    
    
    111.66
    
    
    
    116.42
  B. Capitalization and indebtedness
  C. Reasons for the offer and use of proceeds
  D. Risk factors
 Cautionary Statement with Respect to Forward-Looking Statements
 Economic conditions may adversely affect our sales and profitability
  6




---



##### Table of Contents



Fluctuations in foreign currency exchange rates may adversely affect our business results and
financial condition
   If we are unable to innovate and to develop attractive new products, our future growth and
profitability may be adversely affected
   
    
    We may be unable to obtain adequate funding and resources
necessary for investments in new products and technologies.
    
    Our long-term investments and commitment of significant resources
may not result in successful new products or technologies.
    
    We may not be able to anticipate successfully the new products and
technologies which will gain market acceptance and that such
products can be successfully marketed.
    
    Our newly developed products or technologies may not be
successfully protected as proprietary intellectual property
rights.
 7




---



##### Table of Contents




    
    Our products may become obsolete earlier than expected due to
rapid advancements in technology and changes in consumer
preferences.
    
    A delay in commercializing new technologies now under development
may prevent us from keeping up with market demand.
  Competition generally, and especially on the basis of price and standardization of products,
may adversely affect our results of operations
   Failure of our next generation optical disc format to gain broad market acceptance may
adversely affect our business and results of operations
   de facto
 A substantial decline in our royalty revenue as a result of the expiration of many of our
existing patents relating to laser optical disc technologies may adversely affect our
profitability
  8




---



##### Table of Contents



If we are unable to successfully manage the risks inherent in our international activities and
our overseas expansion, our results of operations and production capacity could be adversely
affected
  
    
    Unexpected legal or regulatory changes;
    
    Unfavorable political or economic factors;
    
    Difficulties in recruiting and retaining personnel;
    
    Labor disputes including strikes;
    
    Less developed technological infrastructure, which can affect our production or other activities or result in lower
customer acceptance of our products and services;
    
    Potentially adverse tax consequences; and
    
    Social, political or economic turmoil due to terrorism, war, or other factors.
  Our dependence on certain third-party manufacturers and suppliers for parts and components
could adversely affect our production capacity and results of operations
  9




---



##### Table of Contents



Our performance in the OEM business is substantially dependent on the performance of our
customers businesses
  Because our products and technologies are dependent on the service of capable engineers and
other key personnel, difficulty in recruiting and developing key personnel could have an adverse
impact on our future growth
   Limits on intellectual property protection may make us vulnerable to competition from third
parties that use our technology and expertise
  Product defects resulting in a large-scale product recall or successful products liability
claims against us could result in a significant cost or a negative impact on our reputation and
adversely affect our business results of operations
  10




---



##### Table of Contents



Failure to achieve the goals of collaborations, technological tie-ups, and joint ventures with
third parties may adversely affect our results of operations and future growth
  Governmental regulation may limit our activities or increase our costs of operations
  Damage to our production facilities as a result of disasters, power outages or similar events
may significantly reduce our production capacity
  Employee retirement benefit costs and obligations may adversely affect our results of
operations
  11




---



##### Table of Contents



Item 4. Information on the Company
 A. History and development of the Company
 History
      Registered office
  Principal capital expenditures, investments and divestitures
  12




---



##### Table of Contents



B. Business overview
 Nature of operations
     13




---



##### Table of Contents



14




---



##### Table of Contents



Operating Revenue from Unaffiliated Customers by Business Segments
 Year ended March 312004
    
    2005
    
    2006(In millions of yen, except for percentage amounts)Home ElectronicsDomestic
    
    ¥
    82,580
    
    
    
    12.1
    %
    
    ¥
    90,838
    
    
    
    12.8
    %
    
    ¥
    81,998
    
    
    
    10.9
    %Overseas
    
    
    223,625
    
    
    
    32.6
    
    
    
    231,933
    
    
    
    32.6
    
    
    
    272,692
    
    
    
    36.1Total
    
    ¥
    306,205
    
    
    
    44.7
    %
    
    ¥
    322,771
    
    
    
    45.4
    %
    
    ¥
    354,690
    
    
    
    47.0
    %Car ElectronicsDomestic
    
    ¥
    121,708
    
    
    
    17.8
    %
    
    ¥
    120,260
    
    
    
    16.9
    %
    
    ¥
    117,560
    
    
    
    15.6
    %Overseas
    
    
    170,479
    
    
    
    24.9
    
    
    
    183,150
    
    
    
    25.8
    
    
    
    212,962
    
    
    
    28.2Total
    
    ¥
    292,187
    
    
    
    42.7
    %
    
    ¥
    303,410
    
    
    
    42.7
    %
    
    ¥
    330,522
    
    
    
    43.8
    %OthersDomestic
    
    ¥
    44,502
    
    
    
    6.5
    %
    
    ¥
    37,653
    
    
    
    5.3
    %
    
    ¥
    33,208
    
    
    
    4.3
    %Overseas
    
    
    30,034
    
    
    
    4.4
    
    
    
    36,971
    
    
    
    5.2
    
    
    
    28,004
    
    
    
    3.8Total
    
    ¥
    74,536
    
    
    
    10.9
    %
    
    ¥
    74,624
    
    
    
    10.5
    %
    
    ¥
    61,212
    
    
    
    8.1
    %Patent Licensing
    
    ¥
    11,821
    
    
    
    1.7
    %
    
    ¥
    10,237
    
    
    
    1.4
    %
    
    ¥
    8,540
    
    
    
    1.1
    %Total Operating Revenue
    
    ¥
    684,749
    
    
    
    100.0
    %
    
    ¥
    711,042
    
    
    
    100.0
    %
    
    ¥
    754,964
    
    
    
    100.0
    %
 Home Electronics:
    15




---



##### Table of Contents



Car Electronics:
    Patent Licensing:
    Others:
   16




---



##### Table of Contents



Principal markets
  Operating Revenue by Geographic Market
 Year ended March 312004
    
    
    2005
    
    
    2006(In millions of yen, except for percentage amounts)Japan
    
    ¥
    248,790
    
    
    
    36.3
    %
    
    ¥
    248,751
    
    
    
    35.0
    %
    
    ¥
    232,766
    
    
    
    30.8
    %North America
    
    
    170,702
    
    
    
    24.9
    
    
    
    174,106
    
    
    
    24.5
    
    
    
    201,378
    
    
    
    26.7Europe
    
    
    146,250
    
    
    
    21.4
    
    
    
    150,770
    
    
    
    21.2
    
    
    
    171,912
    
    
    
    22.8Other Regions
    
    
    119,007
    
    
    
    17.4
    
    
    
    137,415
    
    
    
    19.3
    
    
    
    148,908
    
    
    
    19.7Total
    
    ¥
    684,749
    
    
    
    100.0
    %
    
    ¥
    711,042
    
    
    
    100.0
    %
    
    ¥
    754,964
    
    
    
    100.0
    %
 Note:
    
    Operating revenue by geographic market represents revenue from unaffiliated customers, based
on the geographic location of each unaffiliated customer.
 Seasonality
  Marketing channels
  After-sales service
   17




---



##### Table of Contents



Raw materials and sources of supply
     Patents and licenses
  18




---



##### Table of Contents



Competition
  Import restrictions
  Governmental regulation
  19




---



##### Table of Contents



C. Organizational structure
  
 20




---



##### Table of Contents



OwnershipCountry of
    
    interest andName of subsidiary
    
    incorporation
    
    voting interest
    
    Principal businessTohoku Pioneer
Corporation
    
    Japan
    
    
    67.0
    %
    
    Manufacture of car electronics
products, FA systems and OLED
display panelsPioneer Display
Products Corporation
    
    Japan
    
    
    100.0
    %
    
    Manufacture of plasma displaysPioneer Plasma Display
Corporation
    
    Japan
    
    
    100.0
    %
    
    Manufacture of plasma displaysPioneer North America,
Inc.
    
    U.S.A.
    
    
    100.0
    %
    
    Coordination of the activities of
Pioneers North American
subsidiaries and affiliatesPioneer Electronics
(USA) Inc.
    
    U.S.A.
    
    
    100.0
    %
    
    Distribution of electronics productsPioneer Electronics
Capital Inc.
    
    U.S.A.
    
    
    100.0
    %
    
    Financing to Pioneer and its
subsidiariesDiscovision Associates*
    
    U.S.A.
    
    
    100.0
    %
    
    Licensing of worldwide patents
relating to laser optical disc
technologiesPioneer Europe NV
    
    Belgium
    
    
    100.0
    %
    
    Coordination of the activities of
Pioneers European subsidiaries and
affiliates, and distribution of
electronics productsPioneer Electronics
Asiacentre, Pte. Ltd.
    
    Singapore
    
    
    100.0
    %
    
    Coordination of the activities of
Pioneers Asian subsidiaries and
affiliates, and manufacture and
distribution of electronics
productsPioneer China Holding
Co., Ltd.
    
    China
    
    
    100.0
    %
    
    Coordination of the activities of
Pioneers Chinese subsidiaries and
affiliates and distribution of
electronics products
 
 *
    
    Discovision Associates is a general partnership organized under the laws of the State of
California in the United States. 21




---



##### Table of Contents



D. Property, plants and equipment
  Name of plant
    
    
    
    Floor space(Name of company
    
    
    
    (square feet)which owns the plant)
    
    Location
    
    [leased space]
    
    Principal productsJapanKagoshima Plant
    
    Izumi, Kagoshima
    
    
    1,281,000
    
    
    Plasma displays(Pioneer Plasma
Display Corporation)Yamanashi Plant
    
    Nakakoma, Yamanashi
    
    
    874,000
    
    
    Plasma displays(Pioneer Display
Products Corporation)Shizuoka Plant
    
    Fukuroi, Shizuoka
    
    
    730,000
    
    
    Plasma displays(Pioneer Display
Products Corporation)Kawagoe Plant
    
    Kawagoe, Saitama
    
    
    553,000
    
    
    Car stereos, Car navigation systems(Pioneer Corporation)Tendo Plant
    
    Tendo, Yamagata
    
    
    459,000
    
    
    Car stereos, Car speakers, Loudspeakers(Tohoku Pioneer
Corporation)Yonezawa Plant
    
    Yonezawa, Yamagata
    
    
    243,000
    
    
    OLED displays(Tohoku Pioneer
Corporation)Kokubo Plant
    
    Kofu, Yamanashi
    
    
    194,000
    
    
    ICs, LSIs(Pioneer Micro
Technology
Corporation)Tendo the 2nd Plant
    
    Tendo, Yamagata
    
    
    186,000
    
    
    FA systems(Tohoku Pioneer
Corporation)
 22




---



##### Table of Contents



Name of plant
    
    
    
    Floor space(Name of company
    
    
    
    (square feet)which owns the plant)
    
    Location
    
    [leased space]
    
    Principal productsOutside JapanShanghai Plant
    
    Shanghai, China
    
    
    458,000
    
    
    Car speakers(Shanghai Pioneer
Speakers Co., Ltd.)Mexico Plant
    
    Baja California,
    
    
    397,000
    
    
    Car speakers(Pioneer Speakers,
    
    MexicoS.A. de C.V.)Shanghai Plant
    
    Shanghai, China
    
    
    374,000
    
    
    DVD Recorders, Car AV systems, Car stereos(Pioneer Technology
    
    
    
    
    [22,000](Shanghai) Co., Ltd.)Thailand Plant
    
    Ayutthaya, Thailand
    
    
    300,000
    
    
    Car stereos, Stereo systems(Pioneer
Manufacturing
(Thailand) Co., Ltd.)Malaysia Plant
    
    Johor, Malaysia
    
    
    262,000
    
    
    Stereo systems, Car stereos(Pioneer Technology
(Malaysia) Sdn. Bhd.)Guang Dong Plant
    
    Guang Dong, China
    
    
    255,000
    
    
    Recordable DVD drives, DVD Recorders(Pioneer Technology(Dongguan) Co., Ltd.)Guang Dong Plant
    
    Guang Dong, China
    
    
    237,000
    
    
    Speaker systems(Dongguan Monetech
    
    
    
    
    [237,000]Electronic Co., Ltd.)California Plant
    
    California, U.S.A.
    
    
    208,000
    
    
    Plasma displays, Speaker systems(Pioneer Electronics
Technology, Inc.)U.K. Plant
    
    West Yorkshire,
    
    
    184,000
    
    
    Plasma displays(Pioneer Technology
    
    United Kingdom(U.K.) Ltd.)Ohio Plant
    
    Ohio, U.S.A.
    
    
    157,000
    
    
    Car stereos(Pioneer Automotive
Technologies, Inc.)
 23




---



##### Table of Contents



Item 4A. Unresolved Staff Comments
  24




---



##### Table of Contents



Item 5. Operating and Financial Review and Prospects
 Overview
    Organizational restructuring
 Reduce fixed costs
 Review employee numbers.
   25




---



##### Table of Contents



Operating Revenue by Business Segments
 Year ended March 312004
    
    
    2005
    
    
    2006(In millions of yen, except for percentage amounts)Home Electronics
    
    ¥
    306,205
    
    
    
    44.7
    %
    
    ¥
    322,771
    
    
    
    45.4
    %
    
    ¥
    354,690
    
    
    
    47.0
    %Car Electronics
    
    
    292,187
    
    
    
    42.7
    
    
    
    303,410
    
    
    
    42.7
    
    
    
    330,522
    
    
    
    43.8Patent Licensing
    
    
    11,821
    
    
    
    1.7
    
    
    
    10,237
    
    
    
    1.4
    
    
    
    8,540
    
    
    
    1.1Others
    
    
    74,536
    
    
    
    10.9
    
    
    
    74,624
    
    
    
    10.5
    
    
    
    61,212
    
    
    
    8.1Total
    
    ¥
    684,749
    
    
    
    100.0
    %
    
    ¥
    711,042
    
    
    
    100.0
    %
    
    ¥
    754,964
    
    
    
    100.0
    %
  26




---



##### Table of Contents



Operating Revenue by Geographic Market
 Year ended March 312004
    
    
    2005
    
    2006(In millions of yen, except for percentage amounts)Japan
    
    ¥
    248,790
    
    
    
    36.3
    %
    
    ¥
    248,751
    
    
    
    35.0
    %
    
    ¥
    232,766
    
    
    
    30.8
    %North America
    
    
    170,702
    
    
    
    24.9
    
    
    
    174,106
    
    
    
    24.5
    
    
    
    201,378
    
    
    
    26.7Europe
    
    
    146,250
    
    
    
    21.4
    
    
    
    150,770
    
    
    
    21.2
    
    
    
    171,912
    
    
    
    22.8Other Regions
    
    
    119,007
    
    
    
    17.4
    
    
    
    137,415
    
    
    
    19.3
    
    
    
    148,908
    
    
    
    19.7Total
    
    ¥
    684,749
    
    
    
    100.0
    %
    
    ¥
    711,042
    
    
    
    100.0
    %
    
    ¥
    754,964
    
    
    
    100.0
    %
 Note:
    
    Operating revenue by geographic market represents revenue from unaffiliated customers, based
on the geographic location of each unaffiliated customer.
 Home Electronics, Car Electronics and Others
      Patent Licensing
  27




---



##### Table of Contents



Currency fluctuations
     Critical accounting policies and estimates
   28




---



##### Table of Contents



Revenue recognition
     29




---



##### Table of Contents



Warranties
  Inventories
   Beginning
    
    Provision
    
    Reversal from sale or disposal
    
    Other
    
    End(In billions of yen)¥ 10.3
    
    

    
    ¥ 10.0
    
    

    
    ¥ (8.4)
    
    

    
    ¥ 0.3
    
    

    
    ¥ 12.2
 Impairment of long-lived assets
  30




---



##### Table of Contents



Deferred tax assets
  Pension benefit costs
    Effect on shareholders equity
    
    Net periodic pension costat March 31, 2006
    
    for fiscal 2007(In billions of yen)Discount rate:0.5% increase
    
    
    ¥ 4.7
    
    
    
    ¥ (0.7
    )0.5% decrease
    
    
    (5.3
    )
    
    
    0.7Expected long-term rate of return:0.5% increase
    
    
    
    
    
    
    (0.4
    )0.5% decrease
    
    
    
    
    
    
    0.4
 31




---



##### Table of Contents



Fiscal 2006 compared with fiscal 2005
  Home Electronics
  Car Electronics
 Patent Licensing
 Others
 Other revenues (Revenues excluding net sales and royalty revenue)
  32




---



##### Table of Contents



Cost and expenses
 Cost of sales
 Selling, general and administrative (SGA) expenses
  R&D expenses
 Loss on sale and disposal of fixed assets
 Other deductions
  33




---



##### Table of Contents



Income (loss) from continuing operations before income taxes
  Income taxes
  Equity in losses of affiliated companies
  Income from discontinued operations, net of tax
 
 Net loss
  34




---



##### Table of Contents



Fiscal 2005 compared with fiscal 2004
 Operating revenue
  Home Electronics
 Car Electronics
 Patent Licensing
 Others
 Other revenues (Revenues excluding net sales and royalty revenue)
  35




---



##### Table of Contents



Cost and expenses
 Cost of sales
 SGA expenses
  R&D expenses
 Loss on sale and disposal of fixed assets
 Other deductions
 36




---



##### Table of Contents



Income (loss) from continuing operations before income taxes
  Income taxes
  Equity in losses of affiliated companies
  Net income (loss)
  37




---



##### Table of Contents



Segment information
  Business Segments
 Year ended March 31, 2006CorporateHome
    
    Car
    
    Patent
    
    
    
    
    
    andElectronics
    
    Electronics
    
    Licensing
    
    Others
    
    Eliminations
    
    Consolidated(In millions of yen)Operating revenue:Unaffiliated customers
    
    ¥
    354,690
    
    
    ¥
    330,522
    
    
    ¥
    8,540
    
    
    ¥
    61,212
    
    
    
    
    
    
    ¥
    754,964Inter-segment
    
    
    2,123
    
    
    
    1,579
    
    
    
    2,048
    
    
    
    37,645
    
    
    ¥
    (43,395
    )
    
    
    Total
    
    ¥
    356,813
    
    
    ¥
    332,101
    
    
    ¥
    10,588
    
    
    ¥
    98,857
    
    
    ¥
    (43,395
    )
    
    ¥
    754,964Segment income (loss)
    
    ¥
    (35,184
    )
    
    ¥
    17,486
    
    
    ¥
    7,217
    
    
    ¥
    (3,991
    )
    
    ¥
    (1,937
    )
    
    ¥
    (16,409
    )Identifiable assets
    
    ¥
    177,367
    
    
    ¥
    169,338
    
    
    ¥
    1,474
    
    
    ¥
    74,326
    
    
    ¥
    255,541
    
    
    ¥
    678,046Depreciation and
amortization
    
    ¥
    20,654
    
    
    ¥
    11,511
    
    
    ¥
    963
    
    
    ¥
    8,532
    
    
    ¥
    4,897
    
    
    ¥
    46,557Capital expenditures
(additions to fixed assets)
    
    ¥
    16,317
    
    
    ¥
    12,214
    
    
    ¥
    60
    
    
    ¥
    8,462
    
    
    ¥
    1,973
    
    
    ¥
    39,026
 Year ended March 31, 2005CorporateHome
    
    Car
    
    Patent
    
    
    
    
    
    andElectronics
    
    Electronics
    
    Licensing
    
    Others
    
    Eliminations
    
    Consolidated(In millions of yen)Operating revenue:Unaffiliated customers
    
    ¥
    322,771
    
    
    ¥
    303,410
    
    
    ¥
    10,237
    
    
    ¥
    74,624
    
    
    
    
    
    
    ¥
    711,042Inter-segment
    
    
    2,332
    
    
    
    1,321
    
    
    
    1,362
    
    
    
    36,683
    
    
    ¥
    (41,698
    )
    
    
    Total
    
    ¥
    325,103
    
    
    ¥
    304,731
    
    
    ¥
    11,599
    
    
    ¥
    111,307
    
    
    ¥
    (41,698
    )
    
    ¥
    711,042Segment income (loss)
    
    ¥
    (24,628
    )
    
    ¥
    18,591
    
    
    ¥
    9,389
    
    
    ¥
    61
    
    
    ¥
    (2,722
    )
    
    ¥
    691Identifiable assets
    
    ¥
    240,923
    
    
    ¥
    167,346
    
    
    ¥
    2,852
    
    
    ¥
    92,478
    
    
    ¥
    221,568
    
    
    ¥
    725,167Depreciation and
amortization
    
    ¥
    22,073
    
    
    ¥
    12,514
    
    
    ¥
    311
    
    
    ¥
    8,439
    
    
    ¥
    3,478
    
    
    ¥
    46,815Capital expenditures
(additions to fixed assets)
    
    ¥
    32,769
    
    
    ¥
    12,358
    
    
    
    
    
    
    ¥
    9,501
    
    
    ¥
    9,568
    
    
    ¥
    64,196
 
 Notes: 1.
    
    Segment income (loss) represents operating revenue less cost of sales, selling, general
and administrative expenses and subsidy from the government.2.
    
    Effective from 2006, we changed our business segment classification for
certain businesses. Results related to plasma displays for business use and DJ
equipment have been moved from Others to Home Electronics. Corresponding figures
for the previously reported operating revenue by segment and segment information have
been reclassified accordingly. 38




---



##### Table of Contents



3.
    
    In fiscal 2006, we sold a subsidiary engaged in the development of cable TV
software, and reached a preliminary agreement on the sale of subsidiaries involved in
the electronic components business. As a result, the operating results of these
subsidiaries, and the gain on the sale, are presented as income from discontinued
operations in the consolidated statements of operations in accordance with Statement
of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. Corresponding figures for the previous fiscal year
have been reclassified accordingly. Income (loss) by business segments
 Home Electronics
 Car Electronics
 Patent Licensing
 Others
 39




---



##### Table of Contents



Geographic Segments
 Year ended March 31, 2006CorporateNorth
    
    
    
    
    
    Other
    
    andJapan
    
    America
    
    Europe
    
    Regions
    
    Eliminations
    
    Consolidated(In millions of yen)Operating revenue:Unaffiliated customers
    
    ¥
    270,771
    
    
    ¥
    196,809
    
    
    ¥
    163,361
    
    
    ¥
    124,023
    
    
    
    
    
    
    ¥
    754,964Inter-area
    
    
    333,878
    
    
    
    6,161
    
    
    
    341
    
    
    
    209,919
    
    
    ¥
    (550,299
    )
    
    
    Total
    
    ¥
    604,649
    
    
    ¥
    202,970
    
    
    ¥
    163,702
    
    
    ¥
    333,942
    
    
    ¥
    (550,299
    )
    
    ¥
    754,964Segment income (loss)
    
    ¥
    (25,832
    )
    
    ¥
    3,368
    
    
    ¥
    3,519
    
    
    ¥
    3,697
    
    
    ¥
    (1,161
    )
    
    ¥
    (16,409
    )Identifiable assets
    
    ¥
    245,695
    
    
    ¥
    43,317
    
    
    ¥
    65,071
    
    
    ¥
    119,273
    
    
    ¥
    204,690
    
    
    ¥
    678,046Depreciation and
amortization
    
    ¥
    28,966
    
    
    ¥
    3,109
    
    
    ¥
    2,180
    
    
    ¥
    7,405
    
    
    ¥
    4,897
    
    
    ¥
    46,557Capital expenditures
(additions to fixed assets)
    
    ¥
    25,961
    
    
    ¥
    1,346
    
    
    ¥
    1,097
    
    
    ¥
    8,649
    
    
    ¥
    1,973
    
    
    ¥
    39,026
 Year ended March 31, 2005CorporateNorth
    
    
    
    
    
    Other
    
    andJapan
    
    America
    
    Europe
    
    Regions
    
    Eliminations
    
    Consolidated(In millions of yen)Operating revenue:Unaffiliated customers
    
    ¥
    286,090
    
    
    ¥
    171,947
    
    
    ¥
    149,117
    
    
    ¥
    103,888
    
    
    
    
    
    
    ¥
    711,042Inter-area
    
    
    288,196
    
    
    
    5,030
    
    
    
    805
    
    
    
    175,698
    
    
    ¥
    (469,729
    )
    
    
    Total
    
    ¥
    574,286
    
    
    ¥
    176,977
    
    
    ¥
    149,922
    
    
    ¥
    279,586
    
    
    ¥
    (469,729
    )
    
    ¥
    711,042Segment income (loss)
    
    ¥
    (7,106
    )
    
    ¥
    (2,738
    )
    
    ¥
    (308
    )
    
    ¥
    6,986
    
    
    ¥
    3,857
    
    
    ¥
    691Identifiable assets
    
    ¥
    315,252
    
    
    ¥
    60,799
    
    
    ¥
    60,463
    
    
    ¥
    112,312
    
    
    ¥
    176,341
    
    
    ¥
    725,167Depreciation and
amortization
    
    ¥
    31,819
    
    
    ¥
    2,344
    
    
    ¥
    2,444
    
    
    ¥
    6,730
    
    
    ¥
    3,478
    
    
    ¥
    46,815Capital expenditures
(additions to fixed assets)
    
    ¥
    44,658
    
    
    ¥
    1,911
    
    
    ¥
    1,005
    
    
    ¥
    7,054
    
    
    ¥
    9,568
    
    
    ¥
    64,196
 
 Notes: 1.
    
    Operating revenue reported in geographic segment information above represents that of
Pioneer and its domestic subsidiaries in Japan, and each subsidiary in North America, Europe,
and Other Regions.2.
    
    Segment income (loss) represents operating revenue less cost of sales, selling,
general and administrative expenses and subsidy from the government.3.
    
    In fiscal 2006, we sold a subsidiary engaged in the development of cable TV
software, and reached a preliminary agreement on the sale of subsidiaries involved in
the electronic components business. As a result, the operating results of these
subsidiaries, and the gain on the sale, are presented as income from discontinued
operations in the consolidated statements of operations in accordance with Statement of
Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. Corresponding figures for the previous fiscal year have
been reclassified accordingly. 40




---



##### Table of Contents



B. Liquidity and capital resources
 Cash flows
 Summarized Consolidated Statements of Cash Flows
 Year ended March 312005
    
    
    2006(In millions of yen)Net cash provided by operating activities
    
    ¥
    19,946
    
    
    ¥
    68,329Net cash used in investing activities
    
    
    (93,516
    )
    
    
    (29,759
    )Net cash used in financing activities
    
    
    (4,019
    )
    
    
    (38,551
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    1,851
    
    
    
    4,980Net increase (decrease) in cash and cash equivalents
    
    ¥
    (75,738
    )
    
    ¥
    4,999
     Capital requirements
   41




---



##### Table of Contents



Financial management
   C. Research and development, patents and licenses, etc.
   42




---



##### Table of Contents



D. Trend information
  Home Electronics
  DVD products.
 Plasma displays.
 Car Electronics
   43




---



##### Table of Contents



Patent Licensing
   Patent licensing
 Others
 OLED displays
 E. Off-balance sheet arrangements
     44




---



##### Table of Contents



F. Tabular disclosure of contractual obligation
  Payment Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 year
    
    

13 years
    
    

35 years
    
    
    5 years(In billions of yen)Contractual obligations:Long-term debt
    
    ¥
    98.7
    
    
    ¥
    7.2
    
    
    ¥
    20.3
    
    
    ¥
    6.6
    
    
    ¥
    64.6Operating leases
    
    
    8.4
    
    
    
    2.5
    
    
    
    3.4
    
    
    
    1.3
    
    
    
    1.2Purchase commitment
    
    
    26.1
    
    
    
    26.1
    
    
    
    
    
    
    
    
    
    
    
    Interest payments
    
    
    4.4
    
    
    
    1.2
    
    
    
    2.0
    
    
    
    1.1
    
    
    
    0.1Contribution to
defined benefit
plans
    
    
    6.7
    
    
    
    6.7
    
    
    
    
    
    
    
    
    
    
    
    
 
 Notes: 1.
    
    Total long-term debt of ¥98.7 billion does not include ¥1.5 billion unamortized issue
premium on convertible bonds.2.
    
    Long-term debt includes capital lease obligations.3.
    
    Contractual obligations do not include ¥0.2 billion deferred income which is
presented as other long-term liabilities on the consolidated balance sheets.4.
    
    The amount that we will contribute under our defined pension plans is based on
a number of factors, primarily rate of salary increase and the number of employees. As
such, we have estimated the amount of such contribution for the year ending March 31,
2007 and not the contribution for the years thereafter.  New Accounting Standards
 Inventory Costs
  45




---



##### Table of Contents



Exchanges of Nonmonetary Assets
  Share-Based Payment
  Accounting Changes and Error Corrections
  Accounting for Electronic Equipment Waste Obligations
  46




---



##### Table of Contents



The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments
  Accounting for Certain Hybrid Financial Instruments
  Accounting for Servicing of Financial Assets
  47




---



##### Table of Contents



Item 6. Directors, Senior Management and Employees
 A. Directors and senior management
  Directors
 Name
    
    Current Position(Date of birth)
    
    (Month and year of expiration)
    
    Prior PositionTamihiko Sudo
(Apr. 28, 1947)
    
    President and Representative Director;
Chief Executive Officer
(June 2007)
    
    June 2005:Executive Vice President and
Representative Director;
Chief Financial Officer; and in
charge of Corporate Strategy
Planning Group, Corporate
Management Group, Export
Management and Quality Control in
generalHajime Ishizuka
(May 3, 1947)
    
    Senior Managing Director and
Representative Director;
Chief Financial Officer;
in charge of Corporate Management Group,
export management in general, and
Procurement Group
(June 2007)
    
    July 2005:Senior Managing Director and
Representative Director; President
of Pioneers Home Entertainment
Business Company and AV Business
Company; and in charge of
Procurement GroupOsamu Yamada
(Mar. 16, 1944)
    
    Senior Managing Director;
General Manager of Research & Development
Group and Corporate Research &
Development Laboratories
(June 2007)
    
    June 2003:Managing Director; General Manager
of Research & Development Group
and Corporate Research &
Development LaboratoriesSatoshi Matsumoto
(Apr. 15, 1954)
    
    Managing Director;
in charge of Quality Control Division
(June 2007)
    
    Nov. 2003:Managing Director; General Manager
of Environmental Preservation
Group and Environmental
Preservation Division
 48




---



##### Table of Contents



Name
    
    Current Position(Date of birth)
    
    (Month and year of expiration)
    
    Prior PositionAkira Haeno
(Feb. 14, 1949)
    
    Managing Director;
General Manager of Mobile Entertainment
Business Group
(June 2007)
    
    June 2004:Executive Officer; Plant Manager
of Kawagoe Plant; and General
Manager of Production Division of
Kawagoe Plant of Pioneers Mobile
Entertainment CompanyShinji Yasuda
(June 10, 1945)
    
    Managing Director;
General Manager of Home Entertainment
Business Group and General Manager of
Omori Plant
(June 2007)
    
    Jan. 2006:Senior Executive Officer;
General Manager of Home
Entertainment Business Group and
General Manager of Omori PlantTatsuhiro Ishikawa
(Apr. 4, 1939)
    
    Director
(June 2007)
    
    Dec. 2001 to present:Attorney-at-LawShunichi Sato
(Feb. 10, 1941)
    
    Director 
(June 2007)
    
    Apr. 2000: Japanese Ambassador Extraordinary
and Plenipotentiary to Belgium
 Executive Officers
 Name
    
    Current Position(Date of birth)
    
    (Month and year of expiration)
    
    Prior PositionMasao Kawabata
(Aug. 10, 1948)
    
    Senior Executive Officer;
General Manager of Corporate Branding and
Communications Division
(June 2007)
    
    June 2001:Executive Officer; General Manager
of Corporate Communications
DivisionYoshio Taniyama
(Nov. 9, 1948)
    
    Senior Executive Officer;
General Manager of Corporate Planning
Division
(June 2007)
    
    June 2001:Executive Officer; General Manager
of Finance DivisionHideki Okayasu
(May 12, 1950)
    
    Senior Executive Officer;
General Manager of Finance and Accounting
Division
(June 2007)
    
    June 2001:Executive Officer; General Manager
of Accounting Division
 49




---



##### Table of Contents



Name
    
    Current Position(Date of birth)
    
    (Month and year of expiration)
    
    Prior PositionBuntarou Nishikawa
(Mar. 24, 1946)
    
    Senior Executive Officer;
in charge of OEM Sales Division and
Domestic Sales Division of Mobile
Entertainment Business Group, and in
charge of Pioneer Marketing Corporation
and Pioneer Solutions Corporation
(June 2007)
    
    June 2001:Executive Officer; General Manager
of Domestic Sales Division of
Pioneers Mobile Entertainment
CompanyYoichi Sato
    
    Senior Executive Officer;
    
    June 2005:(Jan. 15, 1950)
    
    Chief Technology Executive, Deputy
General Manager of Research & Development
Group, General Manager of PDP Development
Center, and in charge of Plasma Panel
Engineering Division of Home
Entertainment Business Group
(June 2007)
    
    Managing Director; Deputy General
Manager of Research & Development
Group; and General Manager of PDP
Development CenterSumitaka Matsumura
(Oct. 10, 1948)
    
    Executive Officer;
Deputy General Manager of Research &
Development Group; General Manager of
Optical Disc & Systems Development
Center; and in charge of Standards &
Copyright Management Center
(June 2007)
    
    Jan. 2001:Deputy General Manager of Research
& Development Group; and General
Manager of AV & Network
Development CenterKenji Sato 
(Aug. 29, 1947)
    
    Executive Officer;
General Manager of General Administration
Division
(June 2007)
    
    June 1998:General Manager of General
Administration DivisionSusumu Kotani
(Apr. 12, 1950)
    
    Executive Officer;
General Manager of International Business
Division
(June 2007)
    
    Sept. 2002:Managing Director of Pioneer Europe
NVTsutomu Haga
(June 2, 1948)
    
    Executive Officer;
President & Chief Operating Officer of
Pioneer North America, Inc.
(June 2007)
    
    July 2003:President & Chief Operating
Officer of Pioneer Electronics
(USA) Inc.Kaoru Sato
(July 27, 1948)
    
    Executive Officer; General Manager of
Tokorozawa Plant of Home Entertainment
Business Group 
(June 2007)
    
    June 2004:President of Components Business
Company of Home Entertainment
Business Company
 50




---



##### Table of Contents



Name
    
    Current Position(Date of birth)
    
    (Month and year of expiration)
    
    Prior PositionKeiichi Yamauchi
(Apr. 12, 1952)
    
    Executive Officer;
in charge of software and platform
development of Home Entertainment
Business Group; and General Manager of
Engineering Division of Tokorozawa Plant
(June 2007)
    
    Nov. 2003:General Manager of Mobile Systems
Development Center of Research &
Development GroupKazumi Kuriyama
(Sept. 12, 1953)
    
    Executive Officer;
General Manager of Intellectual Property
Division
(June 2007)
    
    July 2005:Deputy General Manager of
Corporate Research & Development
Laboratories of Research &
Development GroupToshiyuki Ito
(Oct. 17, 1950)
    
    Executive Officer;
Chairman & Managing Director of Pioneer
Europe NV
(June 2007)
    
    Apr. 2005:Managing Executive Officer of
Tohoku Pioneer CorporationTatsuo Takeuchi
(Oct. 23, 1950)
    
    Executive Officer;
General Manager of Personnel Division
(June 2007)
    
    Dec. 2004:Managing Director of Pioneer
Electronics Asiacentre, Pte. Ltd.Masanori Kurosaki
(Aug. 12, 1952)
    
    Executive Officer;
General Manager of OEM Sales Division of
Mobile Entertainment Business Group
(June 2007)
    
    Nov. 2002:General Manager of Planning &
Coordination Division of Mobile
Entertainment Company
 Corporate Auditors
 Name
    
    Current Position(Date of birth)
    
    (Month and year of expiration)
    
    Prior PositionMakoto Koshiba
(Nov. 21, 1943)
    
    Corporate Auditor (full time)
(June 2007)
    
    Sept. 1999:Director; General Manager of
Accounting Division; in charge of Finance DivisionIsao Moriya
(Sept. 5, 1937)
    
    Corporate Auditor
(June 2007)
    
    Mar. 1968 to present:Certified Public AccountantKeiichi Nishikido
(May 2, 1953)
    
    Corporate Auditor
(June 2007)
    
    Jan. 1994 to present:Attorney-at-Law;
Managing Partner of Kohwa Sohgoh
Law Offices, Japan
 51




---



##### Table of Contents



B. Compensation
   C. Board practices
    52




---



##### Table of Contents



shikko yakuin
     53




---



##### Table of Contents



D. Employees
  Year ended March 312004
    
    2005
    
    2006Number of employees
    
    
    32,526
    
    
    
    33,409
    
    
    
    38,826
  E. Share ownership
  Title of class
    
    Identity of person or group
    
    Number of shares owned
    
    Percent of classCommon Stock
    
    Directors, Executive
Officers and Corporate
Auditors as a group
    
    484,000 shares*
    
    
    0.27%
 
 *
    
    None of Pioneers Directors, Executive Officers and Corporate Auditors is the owner of more
than one percent of Pioneers common stock.  Total number ofshares covered by
    
    
    
    Current
    
    Number of sharesFiscal year
    
    option
    
    
    
    exercise price
    
    exercisedgranted
    
    (in thousands)
    
    Exercise period
    
    per share
    
    (in thousands)2003
    
    564
    
    From July 1, 2004 to June 29, 2007
    
    ¥2,477
    
    42004
    
    313
    
    From July 1, 2005 to June 30, 2008
    
    ¥2,951
    
    2005
    
    316
    
    From July 3, 2006 to June 30, 2009
    
    ¥2,944
    
    2006
    
    315
    
    From July 2, 2007 to June 30, 2010
    
    ¥1,828
    
    
 54




---



##### Table of Contents



Item 7. Major Shareholders and Related Party Transactions
 A. Major shareholders
  Number of shares
    
    Percentage ofTitle of class
    
    Name
    
    (in thousands)
    
    outstanding sharesCommon Stock
    
    The Master Trust Bank of Japan,
Ltd. (Trust Account)
    
    
    11,980
    
    
    
    6.65
    %Common Stock
    
    Japan Trustee Services Bank, Ltd.
(Trust Account)
    
    
    11,020
    
    
    
    6.12
    %
   Voting rights
    B. Related party transactions
  C. Interests of experts and counsel
  55




---



##### Table of Contents



Item 8. Financial Information
 A. Consolidated statements and other financial information
 Consolidated financial statements
  Legal proceedings
   Dividend policy
 Dividends.
 56




---



##### Table of Contents



Dividend per shareRecord date
    
    Yen
    
    DollarsMarch 31, 2002
    
    
    7.50
    
    
    
    0.06September 30, 2002
    
    
    7.50
    
    
    
    0.06March 31, 2003
    
    
    10.00
    
    
    
    0.08September 30, 2003
    
    
    12.50
    
    
    
    0.12March 31, 2004
    
    
    12.50
    
    
    
    0.11September 30, 2004
    
    
    12.50
    
    
    
    0.12March 31, 2005
    
    
    12.50
    
    
    
    0.11September 30, 2005
    
    
    7.50
    
    
    
    0.06March 31, 2006
    
    
    2.50
    
    
    
    0.02
  B. Significant changes
  57




---



##### Table of Contents



Item 9. The Offer and Listing
 A. Offer and listing details
  Tokyo Stock Exchange
    
    New York Stock ExchangePrice per share of Common Stock
    
    Price per share of ADS(yen)
    
    (U.S. dollars)High
    
    Low
    
    High
    
    LowAnnual highs and lowsYear ended March 31,2002
    
    ¥
    4,250
    
    
    ¥
    2,150
    
    
    $
    34.70
    
    
    $
    16.752003
    
    
    2,860
    
    
    
    1,805
    
    
    
    21.98
    
    
    
    14.832004
    
    
    3,370
    
    
    
    2,225
    
    
    
    31.25
    
    
    
    18.902005
    
    
    3,390
    
    
    
    1,820
    
    
    
    30.85
    
    
    
    17.112006
    
    
    2,040
    
    
    
    1,410Quarterly highs and lowsFiscal 20051st quarter
    
    
    3,390
    
    
    
    2,635
    
    
    
    30.85
    
    
    
    23.752nd quarter
    
    
    2,850
    
    
    
    2,215
    
    
    
    25.90
    
    
    
    20.303rd quarter
    
    
    2,430
    
    
    
    1,820
    
    
    
    21.85
    
    
    
    18.054th quarter
    
    
    2,055
    
    
    
    1,827
    
    
    
    19.90
    
    
    
    17.11Fiscal 20061st quarter
    
    
    2,040
    
    
    
    1,655
    
    
    
    18.82
    
    
    
    15.152nd quarter
    
    
    1,785
    
    
    
    1,604
    
    
    
    16.10
    
    
    
    14.233rd quarter
    
    
    1,764
    
    
    
    1,410
    
    
    
    15.03
    
    
    
    12.224th quarter
    
    
    1,989
    
    
    
    1,530
    
    
    
    
    
    
    
    Fiscal 20071st quarter
    
    
    2,120
    
    
    
    1,628
    
    
    
    
    
    
    
    Monthly highs and lows2006January
    
    
    1,695
    
    
    
    1,530
    
    
    
    
    
    
    
    February
    
    
    1,952
    
    
    
    1,682
    
    
    
    
    
    
    
    March
    
    
    1,989
    
    
    
    1,792
    
    
    
    
    
    
    
    April
    
    
    2,120
    
    
    
    1,888
    
    
    
    
    
    
    
    May
    
    
    2,120
    
    
    
    1,828
    
    
    
    
    
    
    
    June
    
    
    1,963
    
    
    
    1,628
    
    
    
    
    
    
    
    
 B. Plan of distribution
  58




---



##### Table of Contents



C. Markets
   D. Selling shareholders
  E. Dilution
  F. Expenses of the issue
  
 Item 10. Additional Information
 A. Share capital
  B. Memorandum and articles of association
 Organization
 (kabushiki kaisha) (Kaishaho) (shogyo tokibo)
 Objects and purposes
  
    
    manufacture and sale of electronic and electrical machinery and appliances;
    
    manufacture and sale of optical instruments, medical instruments, and other machinery and appliances;
    
    planning, production, manufacture and sale of audio, video and computer software;
    
    manufacture and sale of woodwork;
    
    manufacture and sale of agricultural products and plants for their cultivation;
    
    sale of food and beverages, including liquor, and operation of restaurants and amusement facilities;
    
    sale and purchase, rental and lease, and management of real estate and real estate agency business;
    
    publishing and printing business, advertising agency business, construction business and non-life insurance agency business;
 59




---



##### Table of Contents




    
    acquisition, management and transfer of industrial property
rights, copyrights and other intellectual property rights;
and
    
    all business incidental and related to each and every one of
the businesses in the preceding paragraphs.
 Directors
   Common Stock
 General
    60




---



##### Table of Contents



Authorized capital
    Distribution of Surplus
    61




---



##### Table of Contents



62




---



##### Table of Contents



renketsu haito kisei
tekiyo kaisha
  Stock splits
  63




---



##### Table of Contents



Consolidation of shares
  General meeting of shareholders
      Voting rights
 Unit share system
 64




---



##### Table of Contents



(1)
    
    acquisition of its own shares from a specific party other than its subsidiaries;(2)
    
    consolidation of shares;(3)
    
    any offering of new shares at a specially favorable price (or any offering of stock
acquisition rights to acquire shares of capital stock, or bonds with stock acquisition rights
at specially favorable conditions) to any persons other than shareholders;(4)
    
    the removal of a Corporate Auditor;(5)
    
    the exemption of liability of a Director, Corporate Auditor or independent auditor with
certain exceptions;(6)
    
    a reduction of stated capital with certain exceptions in which a shareholders resolution is
not required;(7)
    
    a distribution of in-kind dividends which meets certain requirements;(8)
    
    dissolution, merger, consolidation, or corporate split with certain exceptions in which a
shareholders resolution is not required;(9)
    
    the transfer of the whole or a material part of the business;(10)
    
    the taking over of the whole of the business of any other corporation with certain exceptions
in which a shareholders resolution is not required; or(11)
    
    share exchange or share transfer for the purpose of establishing 100 percent
parent-subsidiary relationships with certain exceptions in which a shareholders resolution is
not required.
 Issue of additional shares and pre-emptive rights
 Voting rights
  65




---



##### Table of Contents



Liquidation rights
  Record date
  Acquisition by Pioneer of its Common Stock
  Distributions of Surplus
 66




---



##### Table of Contents



Issue of additional shares and
pre-emptive rights
 Unit share system
      67




---



##### Table of Contents



Sale by Pioneer of shares held by shareholders whose location is unknown
   Reporting of substantial shareholdings
     C. Material contracts
  68




---



##### Table of Contents



D. Exchange controls
   
    
    individuals who are not resident in Japan; and
 
    
    corporations whose principal offices are located outside Japan.
   
    
    individuals who are exchange non-residents;
 
    
    corporations that are organized under the laws of foreign
countries or whose principal offices are located outside Japan;
and
 
    
    corporations (1) of which 50% or more of their shares are held by
individuals who are exchange non-residents and/or corporations (a)
that are organized under the laws of foreign countries or (b)
whose principal offices are located outside Japan or (2) a
majority of whose officers, or officers having the power of
representation, are individuals who are exchange non-residents.
   69




---



##### Table of Contents



E. Taxation
   
    
    a citizen or individual resident of the United States,
    
    a corporation or other entity taxable as a corporation for U.S. federal income tax purposes organized
in or under the laws of the United States, any State, or the District of Columbia,
    
    an estate the income of which is subject to U.S. federal income tax without regard to its source, or
    
    a trust that is (i) subject to the primary supervision of a U.S. court and the control of one or more
U.S. persons, or (ii) that has a valid election in effect under applicable Treasury regulations to be
treated as a U.S. person.
  
    
    is a resident of the United States for purposes of the Treaty,
    
    does not maintain a permanent establishment in Japan (i) with which shares of common stock or ADSs are
effectively connected and through which the U.S. holder carries on or has carried on business or (ii)
of which shares of common stock or ADSs form part of the business property, and
    
    is eligible for benefits under the Treaty with respect to income and gain derived in connection with
the shares of common stock or ADSs.
  70




---



##### Table of Contents



The discussion below is intended for general information only and does not constitute a
complete analysis of all tax consequences relating to the acquisition, ownership and disposition of
shares of common stock or the ADSs. Investors in shares of common stock or the ADSs should consult
their own tax advisors concerning the tax consequences of their particular situations.
 Japanese taxation
     71




---



##### Table of Contents



U.S. federal income taxation
 U.S. Holders
  72




---



##### Table of Contents



Taxation of Dividends
       73




---



##### Table of Contents




    
    has held shares of common stock or ADSs for less than a specified minimum period, or
 
    
    is obligated to make payments related to our dividends,
  Taxation of Capital Gains
  Passive Foreign Investment Companies
   74




---



##### Table of Contents



Non-U.S. Holders
      Backup withholding and information reporting
  75




---



##### Table of Contents



F. Dividends and paying agents
  G. Statement by experts
  H. Documents on display
  I. Subsidiary information
  76




---



##### Table of Contents



Item 11. Quantitative and Qualitative Disclosures About Market Risk
   Foreign exchange risk
    Yen
    
    Yen
    
    Yen
    
    Yen
    
    A$
    
    EURFunctional currency
    
    US$/
    
    Yen/
    
    EUR/
    
    THB/
    
    A$/
    
    EUR/Sell/Buy
    
    Yen
    
    US$
    
    Yen
    
    Yen
    
    US$
    
    GBP
    
    Total(In millions of yen except average rates)Contract amounts
    
    ¥
    12,652
    
    
    ¥
    446
    
    
    ¥
    23,053
    
    
    ¥
    144
    
    
    ¥
    1,290
    
    
    ¥
    1,279
    
    
    ¥
    38,864Average contractual
exchange rates
    
    
    116.28
    
    
    
    114.29
    
    
    
    139.72
    
    
    
    2.8900
    
    
    
    0.7495
    
    
    
    0.6970Fair value
    
    ¥
    28
    
    
    ¥
    3
    
    
    ¥
    (336
    )
    
    ¥
    (5
    )
    
    ¥
    62
    
    
    ¥
    1
    
    
    ¥
    (247
    )
  Functional currency
    
    YenSell/Buy
    
    US$/Yen
    
    Yen/US$
    
    Total(In millions of yen except average rates)Notional amount
    
    ¥
    9,128
    
    
    ¥
    9,128
    
    
    ¥
    18,256Average execution
rates
    
    
    115.44
    
    
    
    115.44Fair value
    
    ¥
    (37
    )
    
    ¥
    46
    
    
    ¥
    9
 77




---



##### Table of Contents



Expected maturity dateContract amounts
    
    
    (year ending March 31)Buy
    
    
    Sell
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    Total
    
    
    Fair value(In millions except average rates)Functional currency: Yen
    
    ¥
    55,667
    
    
    US$
    490
    
    
    ¥
    49,148
    
    
    
    
    
    
    ¥
    6,519
    
    
    ¥
    55,667
    
    
    ¥
    (2,581
    )Average contractual exchange rate
    
    
    
    
    
    
    
    
    
    
    114.30
    
    
    
    
    
    
    
    108.65
 Interest rate risk
 Interest rate risk
   Expected maturity dateContract amounts
    
    
    (year ending March 31)Buy
    
    
    Sell
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    Total
    
    
    Fair value(In millions except average rates)Functional currency: YenFixed (US$) to Fixed (Yen)
    
    ¥
    55,667
    
    
    US$
    490
    
    
    ¥
    49,148
    
    
    
    
    
    
    ¥
    6,519
    
    
    ¥
    55,667
    
    
    ¥
    (2,581
    )Average pay rate
    
    
    
    
    
    
    
    
    
    
    (0.37
    )%
    
    
    
    
    
    
    (0.24
    )%Average receive rate
    
    
    
    
    
    
    
    
    
    
    3.73
    %
    
    
    
    
    
    
    3.43
    %
   Functional
    
    
    Expected maturity date (year ending March 31)Currency
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    Thereafter
    
    
    Total
    
    
    Fair value(In millions of yen except average rates)Fixed rate (Yen)
    
    Yen
    
    ¥
    4,064
    
    
    
    4,064
    
    
    
    13,064
    
    
    
    2,664
    
    
    
    2,664
    
    
    
    65,327
    
    
    ¥
    91,847
    
    
    ¥
    86,279Average interest rate
    
    
    
    
    
    
    2.03
    %
    
    
    2.03
    %
    
    
    2.70
    %
    
    
    2.57
    %
    
    
    2.57
    %
    
    
    0.15
    %
    
    
    0.82
    %Interest free loan
(EUR)
    
    EUR
    
    
    7
    
    
    
    7
    
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    37Total
    
    
    
    
    
    ¥
    4,071
    
    
    
    4,071
    
    
    
    13,087
    
    
    
    2,664
    
    
    
    2,664
    
    
    
    65,327
    
    
    ¥
    91,884
    
    
    ¥
    86,316
 78




---



##### Table of Contents



Market price risks on available-for-sale securities
  2006Cost
    
    Fair value(In millions of yen)Debt securities (by contractual maturities)Maturing over one year
    
    ¥
    94
    
    
    ¥
    124Equity securities
    
    ¥
    4,627
    
    
    ¥
    24,609
 
 Item 12. Description of Securities Other than Equity Securities
 Not applicable
 79




---



##### Table of Contents



PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
   80




---



##### Table of Contents



Item 16. [Reserved]
 
 Item 16A. Audit Committee Financial Expert
   
 Item 16B. Code of Ethics
  81




---



##### Table of Contents



Item 16C. Principal Accountant Fees and Services
  Year ended March 312005
    
    
    2006(In millions of yen)Audit Fees (1)
    
    ¥
    343
    
    
    ¥
    417Audit-Related Fees (2)
    
    
    48
    
    
    
    96Tax Fees (3)
    
    
    58
    
    
    
    74All Other Fees (4)
    
    
    42
    
    
    
    46Total
    
    ¥
    491
    
    
    ¥
    633
 
 (1)
    
    Includes fees for the audit of our annual financial statements included in our Form 20-F and
for services provided in connection with statutory and regulatory filings or engagements. This
also includes fees billed for issuance of comfort letters and consent letters.(2)
    
    Includes fees for assurance and related services that are performed by the independent
accountant which include employee benefit plan audits, accounting consultations and audits in
connection with internal control reviews, attest services that are not required by statute or
regulation and consultation concerning financial accounting and reporting standards.(3)
    
    Includes fees for services related to tax compliance, including the preparation of tax
returns and claims for refund, tax planning and tax advice.(4)
    
    Includes fees for other than the services reported in paragraphs (1) through (3). Policy and procedures of the Board of Corporate Auditors for pre-approval
   82




---



##### Table of Contents



Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  (c) Total Number
    
    
    (d) Maximumof Shares
    
    
    Number ofPurchased as
    
    
    Shares that May(a) Total
    
    
    
    
    
    
    Part of Publicly
    
    
    Yet BeNumber of
    
    
    (b) Average
    
    
    Announced
    
    
    Purchased UnderShares
    
    
    Price Paid per
    
    
    Plans or
    
    
    the Plans orPeriod
    
    Purchased
    
    
    Share
    
    
    Programs
    
    
    ProgramsApril 1 to April 30, 2005
    
    
    287
    
    
    ¥
    1,909.01
    
    
    
    
    
    
    
    May 1 to May 31, 2005
    
    
    208
    
    
    ¥
    1,759.39
    
    
    
    
    
    
    
    June 1 to June 30, 2005
    
    
    241
    
    
    ¥
    1,702.98
    
    
    
    
    
    
    
    July 1 to July 31, 2005
    
    
    982
    
    
    ¥
    1,651.51
    
    
    
    
    
    
    
    August 1 to August 31, 2005
    
    
    1,142
    
    
    ¥
    1,695.36
    
    
    
    
    
    
    
    September 1 to September 30, 2005
    
    
    638
    
    
    ¥
    1,716.43
    
    
    
    
    
    
    
    October 1 to October 31, 2005
    
    
    442
    
    
    ¥
    1,637.51
    
    
    
    
    
    
    
    November 1 to November 30, 2005
    
    
    678
    
    
    ¥
    1,542.05
    
    
    
    
    
    
    
    December 1 to December 31, 2005
    
    
    798
    
    
    ¥
    1,646.15
    
    
    
    
    
    
    
    January 1 to January 31, 2006
    
    
    625
    
    
    ¥
    1,596.48
    
    
    
    
    
    
    
    February 1 to February 28, 2006
    
    
    592
    
    
    ¥
    1,789.29
    
    
    
    
    
    
    
    March 1 to March 31, 2006
    
    
    559
    
    
    ¥
    1,832.59
    
    
    
    
    
    
    
    Total
    
    
    7,192
    
    
    ¥
    1,688.21
    
    
    
    
    
    
    
    
 Note:
    
    A holder of shares constituting less than one unit may require Pioneer to purchase such shares at their market value in accordance with the provision of the Share Handling
Regulations of Pioneer, under the Company Law of Japan. All purchases in the above table were
made in accordance with such requests.
 83




---



##### 



PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  
 Item 19. Exhibits
 PageConsolidated
financial statementsIndex to Consolidated Financial Statements
    
    
    F-1Report
of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of March 31, 2005 and 2006
    
    
    F-3Consolidated Statements of Operations for the years ended March 31, 2004, 2005 and 2006
    
    
    F-5Consolidated Statements of Shareholders Equity for the years ended March 31, 2004, 2005 and 2006
    
    
    F-6Consolidated Statements of Cash Flows for the years ended March 31, 2004, 2005 and 2006
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-8
 Exhibits1.01
    
    The Articles of Incorporation, as amended and currently in effect (English translation)1.02
    
    Regulations of the Board of Directors, as amended and currently in effect (English
translation)2.01
    
    Share Handling Regulations, as amended and currently in effect (English translation)12.01
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 200212.02
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 200213.01
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
  84




---



##### Table of Contents



PIONEER CORPORATION
(Registrant)Date: July 7, 2006
    By
    /s/ Hajime IshizukaHajime IshizukaChief Financial Officer 85




---



##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageConsolidated financial statementsReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of March 31, 2005 and 2006
    
    
    F-3Consolidated Statements of Operations
for the years ended March 31, 2004, 2005 and 2006
    
    
    F-5Consolidated Statements of Shareholders Equity
for the years ended March 31, 2004, 2005 and 2006
    
    
    F-6Consolidated Statements of Cash Flows
for the years ended March 31, 2004, 2005 and 2006
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-8




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
       /s/ Deloitte Touche TohmatsuDeloitte Touche TohmatsuTokyo, Japan




---



##### Table of Contents



Consolidated Balance Sheets
   Thousands ofU.S. DollarsMillions of Yen
    
    
    (Note 1)Assets
    
    2005
    
    
    2006
    
    
    2006Current assets:Cash and cash equivalentsCash, including time deposits of ¥48,211 million
$412,060 thousand (¥52,275 million in 2005)
    
    ¥
    116,681
    
    
    ¥
    121,680
    
    
    $
    1,040,000Trade receivablesNotes
    
    
    2,516
    
    
    
    1,729
    
    
    
    14,778Accounts (Note 6)
    
    
    132,110
    
    
    
    108,893
    
    
    
    930,709Allowance for doubtful notes and accounts (Note 23)
    
    
    (2,450
    )
    
    
    (3,059
    )
    
    
    (26,145
    )Inventories (Note 7)
    
    
    109,015
    
    
    
    104,226
    
    
    
    890,820Deferred income taxes (Note 13)
    
    
    25,519
    
    
    
    27,802
    
    
    
    237,624Assets held for sale (Note 4)
    
    
    
    
    
    
    25,577
    
    
    
    218,607Prepaid expenses and other current assets
    
    
    43,505
    
    
    
    41,824
    
    
    
    357,470Total current assets
    
    
    426,896
    
    
    
    428,672
    
    
    
    3,663,863Investments and long-term receivables:Available-for-sale securities (Note 5)
    
    
    22,268
    
    
    
    24,733
    
    
    
    211,393Investments in and advances to affiliated companies (Note 8)
    
    
    2,987
    
    
    
    1,705
    
    
    
    14,573Sundry investments (Notes 5 and 21)
    
    
    3,388
    
    
    
    3,189
    
    
    
    27,257Long-term receivables, less allowance for doubtful accounts of
¥106 million$906 thousand (¥160 million in 2005) (Note 23)
    
    
    185
    
    
    
    145
    
    
    
    1,239Total investments and long-term receivables
    
    
    28,828
    
    
    
    29,772
    
    
    
    254,462Property, plant and equipment(Note 10 and 11):Land
    
    
    32,965
    
    
    
    30,611
    
    
    
    261,633Buildings
    
    
    136,372
    
    
    
    119,312
    
    
    
    1,019,761Machinery and equipment
    
    
    293,359
    
    
    
    243,811
    
    
    
    2,083,855Construction in progress
    
    
    1,056
    
    
    
    1,999
    
    
    
    17,085Total
    
    
    463,752
    
    
    
    395,733
    
    
    
    3,382,334Accumulated depreciation
    
    
    (253,607
    )
    
    
    (235,502
    )
    
    
    (2,012,838
    )Net property, plant and equipment
    
    
    210,145
    
    
    
    160,231
    
    
    
    1,369,496Other assets:Intangible assets (Note 9)
    
    
    24,052
    
    
    
    20,576
    
    
    
    175,863Deferred income taxes (Note 13)
    
    
    25,420
    
    
    
    28,933
    
    
    
    247,291Other
    
    
    9,826
    
    
    
    9,862
    
    
    
    84,290Total other assets
    
    
    59,298
    
    
    
    59,371
    
    
    
    507,444Total assets
    
    ¥
    725,167
    
    
    ¥
    678,046
    
    
    $
    5,795,265
  F-3




---



##### Table of Contents



Thousands ofU.S. DollarsMillions of Yen
    
    
    (Note 1)Liabilities and Shareholders Equity
    
    2005
    
    
    2006
    
    
    2006Current liabilities:Short-term borrowings (Note 11)
    
    ¥
    33,152
    
    
    ¥
    23,205
    
    
    $
    198,333Current portion of long-term debt (Note 11)
    
    
    19,276
    
    
    
    7,165
    
    
    
    61,239Trade payables
    
    
    96,335
    
    
    
    102,082
    
    
    
    872,496Accrued liabilitiesTaxes on income
    
    
    4,938
    
    
    
    6,987
    
    
    
    59,718Payroll
    
    
    17,203
    
    
    
    16,640
    
    
    
    142,222Royalty
    
    
    14,811
    
    
    
    17,579
    
    
    
    150,248Other
    
    
    36,843
    
    
    
    56,656
    
    
    
    484,239Warranty reserve (Note 23)
    
    
    5,722
    
    
    
    6,603
    
    
    
    56,436Dividends payable
    
    
    2,180
    
    
    
    436
    
    
    
    3,727Liabilities held for sale (Note 4)
    
    
    
    
    
    
    17,863
    
    
    
    152,675Other current liabilities
    
    
    20,710
    
    
    
    17,076
    
    
    
    145,949Total current liabilities
    
    
    251,170
    
    
    
    272,292
    
    
    
    2,327,282Long-term liabilities:Long-term debt (Note 11)
    
    
    81,219
    
    
    
    92,970
    
    
    
    794,615Accrued pension and severance cost (Note 12)
    
    
    40,022
    
    
    
    23,475
    
    
    
    200,641Deferred income taxes (Note 13)
    
    
    1,630
    
    
    
    1,718
    
    
    
    14,684Other long-term liabilities
    
    
    719
    
    
    
    232
    
    
    
    1,983Total long-term liabilities
    
    
    123,590
    
    
    
    118,395
    
    
    
    1,011,923Commitments and contingent liabilities(Note 24)Minority interests
    
    
    18,168
    
    
    
    14,109
    
    
    
    120,590Shareholders equity(Note 14):Common stock, no par valueAuthorized 400,000,000 sharesIssued180,063,836 shares2005 and 2006
    
    
    49,049
    
    
    
    49,049
    
    
    
    419,222Capital surplus
    
    
    82,735
    
    
    
    82,910
    
    
    
    708,632Retained earnings
    
    
    260,556
    
    
    
    173,826
    
    
    
    1,485,692Accumulated other comprehensive loss (Note 16)
    
    
    (47,669
    )
    
    
    (20,092
    )
    
    
    (171,726
    )Treasury stock at cost, 5,635,190 shares2005
and 5,641,946 shares2006
    
    
    (12,432
    )
    
    
    (12,443
    )
    
    
    (106,350
    )Total shareholders equity
    
    
    332,239
    
    
    
    273,250
    
    
    
    2,335,470Total liabilities and shareholders equity
    
    ¥
    725,167
    
    
    ¥
    678,046
    
    
    $
    5,795,265
  F-4




---



##### Table of Contents



Consolidated Statements of Operations
   Thousands ofU.S. DollarsMillions of Yen
    
    
    (Note 1)2004
    
    
    2005
    
    
    2006
    
    
    2006Revenues:Operating revenue:Net sales
    
    ¥
    672,928
    
    
    ¥
    700,805
    
    
    ¥
    746,424
    
    
    $
    6,379,692Royalty revenue
    
    
    11,821
    
    
    
    10,237
    
    
    
    8,540
    
    
    
    72,991Total operating revenue
    
    
    684,749
    
    
    
    711,042
    
    
    
    754,964
    
    
    
    6,452,683Interest income
    
    
    1,420
    
    
    
    1,929
    
    
    
    2,658
    
    
    
    22,718Other income (Notes 5 and 18)
    
    
    479
    
    
    
    3,424
    
    
    
    6,789
    
    
    
    58,026Total revenues
    
    
    686,648
    
    
    
    716,395
    
    
    
    764,411
    
    
    
    6,533,427Cost and expenses:Cost of sales (Note 12)
    
    
    473,972
    
    
    
    564,457
    
    
    
    593,238
    
    
    
    5,070,410Selling, general and administrative expenses (Note 12)
    
    
    164,951
    
    
    
    194,591
    
    
    
    178,135
    
    
    
    1,522,522Subsidy from the government (Note 12)
    
    
    
    
    
    
    (48,697
    )
    
    
    
    
    
    
    Interest expense
    
    
    2,154
    
    
    
    1,741
    
    
    
    1,479
    
    
    
    12,641Loss on sale and disposal of fixed assets
    
    
    3,454
    
    
    
    34
    
    
    
    2,704
    
    
    
    23,111Other deductions (Notes 10, 17 and 18)
    
    
    1,589
    
    
    
    6,336
    
    
    
    60,020
    
    
    
    512,991Total cost and expenses
    
    
    646,120
    
    
    
    718,462
    
    
    
    835,576
    
    
    
    7,141,675Income (loss) from continuing operations before income taxes
    
    
    40,528
    
    
    
    (2,067
    )
    
    
    (71,165
    )
    
    
    (608,248
    )Income taxes(Note 13):Current
    
    
    17,118
    
    
    
    7,169
    
    
    
    8,074
    
    
    
    69,009Deferred
    
    
    1,051
    
    
    
    (2,882
    )
    
    
    (12,734
    )
    
    
    (108,838
    )Total income taxes
    
    
    18,169
    
    
    
    4,287
    
    
    
    (4,660
    )
    
    
    (39,829
    )Income (loss) from continuing operations before minority interest
and equity in losses
    
    
    22,359
    
    
    
    (6,354
    )
    
    
    (66,505
    )
    
    
    (568,419
    )Minority interest in losses (earnings) of subsidiaries
    
    
    (651
    )
    
    
    (690
    )
    
    
    4,774
    
    
    
    40,804Equity in losses of affiliated companies(Note 8)
    
    
    (2,244
    )
    
    
    (3,068
    )
    
    
    (24,027
    )
    
    
    (205,359
    )Income (loss) from continuing operations
    
    
    19,464
    
    
    
    (10,112
    )
    
    
    (85,758
    )
    
    
    (732,974
    )Income from discontinued operations, net of tax (Note 4)
    
    
    5,374
    
    
    
    1,323
    
    
    
    772
    
    
    
    6,598Net income (loss)
    
    ¥
    24,838
    
    
    ¥
    (8,789
    )
    
    ¥
    (84,986
    )
    
    $
    (726,376
    )
 Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Per share of common stock(Note 22):Basic:Continuing operations
    
    ¥
    110.95
    
    
    ¥
    (57.65
    )
    
    ¥
    (491.66
    )
    
    $
    (4.20
    )Discontinued operations
    
    
    30.63
    
    
    
    7.54
    
    
    
    4.43
    
    
    
    0.04Net income (loss)
    
    ¥
    141.58
    
    
    ¥
    (50.11
    )
    
    ¥
    (487.23
    )
    
    $
    (4.16
    )Diluted:Continuing operations
    
    ¥
    110.09
    
    
    ¥
    (57.65
    )
    
    ¥
    (491.66
    )
    
    $
    (4.20
    )Discontinued operations
    
    
    30.43
    
    
    
    7.54
    
    
    
    4.43
    
    
    
    0.04Net income (loss)
    
    ¥
    140.52
    
    
    ¥
    (50.11
    )
    
    ¥
    (487.23
    )
    
    $
    (4.16
    )
  F-5




---



##### Table of Contents



Consolidated Statements of Shareholders Equity
   Millions of YenNumber of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedShares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalIssued
    
    
    Common
    
    
    Capital
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    Shareholders(Thousands)
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at March 31, 2003
    
    
    180,064
    
    
    ¥
    49,049
    
    
    ¥
    82,159
    
    
    ¥
    253,266
    
    
    ¥
    (55,629
    )
    
    ¥
    (10,452
    )
    
    ¥
    318,393Comprehensive income (loss):Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,838
    
    
    
    
    
    
    
    
    
    
    
    24,838Other comprehensive loss (Note 16)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,200
    )
    
    
    
    
    
    
    (6,200
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,638Value ascribed to stock
options (Note 15)
    
    
    
    
    
    
    
    
    
    
    305
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    305Purchase of treasury stock (Note 14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    (14
    )Sales of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Cash dividends (¥25.00 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,386
    )
    
    
    
    
    
    
    
    
    
    
    (4,386
    )Balance at March 31, 2004
    
    
    180,064
    
    
    
    49,049
    
    
    
    82,464
    
    
    
    273,718
    
    
    
    (61,829
    )
    
    
    (10,464
    )
    
    
    332,938Comprehensive income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,789
    )
    
    
    
    
    
    
    
    
    
    
    (8,789
    )Other comprehensive income (Note 16)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,160
    
    
    
    
    
    
    
    14,160Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,371Value ascribed to stock
options (Note 15)
    
    
    
    
    
    
    
    
    
    
    270
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    270Purchase of treasury stock (Note 14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,979
    )
    
    
    (1,979
    )Sales of treasury stock
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    12Cash dividends (¥25.00 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,373
    )
    
    
    
    
    
    
    
    
    
    
    (4,373
    )Balance at March 31, 2005
    
    
    180,064
    
    
    
    49,049
    
    
    
    82,735
    
    
    
    260,556
    
    
    
    (47,669
    )
    
    
    (12,432
    )
    
    
    332,239Comprehensive income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (84,986
    )
    
    
    
    
    
    
    
    
    
    
    (84,986
    )Other comprehensive income (Note 16)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,577
    
    
    
    
    
    
    
    27,577Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,409
    )Value ascribed to stock
options (Note 15)
    
    
    
    
    
    
    
    
    
    
    175
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    175Purchase of treasury stock (Note 14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    (12
    )Sales of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Cash dividends (¥10.00 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,744
    )
    
    
    
    
    
    
    
    
    
    
    (1,744
    )Balance at March 31, 2006
    
    
    180,064
    
    
    ¥
    49,049
    
    
    ¥
    82,910
    
    
    ¥
    173,826
    
    
    ¥
    (20,092
    )
    
    ¥
    (12,443
    )
    
    ¥
    273,250Thousands of U.S. Dollars (Note 1)AccumulatedOther
    
    
    
    
    
    
    TotalCommon
    
    
    Capital
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    ShareholdersStock
    
    
    Surplus
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at March 31, 2005
    




    $
    419,222
    
    
    $
    707,137
    
    
    $
    2,226,974
    
    
    $
    (407,427
    )
    
    $
    (106,256
    )
    
    $
    2,839,650Comprehensive income (loss):Net loss
    




    
    
    
    
    
    
    
    
    
    (726,376
    )
    
    
    
    
    
    
    
    
    
    
    (726,376
    )Other comprehensive income (Note 16)
    




    
    
    
    
    
    
    
    
    
    
    
    
    
    235,701
    
    
    
    
    
    
    
    235,701Comprehensive loss
    




    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (490,675
    )Value ascribed to stock
options (Note 15)
    




    
    
    
    
    
    1,495
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,495Purchase of treasury stock (Note 14)
    




    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (103
    )
    
    
    (103
    )Sales of treasury stock
    




    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    9Cash dividends ($0.09 per share)
    




    
    
    
    
    
    
    
    
    
    (14,906
    )
    
    
    
    
    
    
    
    
    
    
    (14,906
    )Balance at March 31, 2006
    




    $
    419,222
    
    
    $
    708,632
    
    
    $
    1,485,692
    
    
    $
    (171,726
    )
    
    $
    (106,350
    )
    
    $
    2,335,470
  F-6




---



##### Table of Contents



Consolidated Statements of Cash Flows
   Thousands ofU.S. DollarsMillions of Yen
    
    
    (Note 1)2004
    
    
    2005
    
    
    2006
    
    
    2006Operating activities:Net income (loss)
    
    ¥
    24,838
    
    
    ¥
    (8,789
    )
    
    ¥
    (84,986
    )
    
    $
    (726,376
    )Adjustments to reconcile net income (loss) to net cash providedby operating activities:Depreciation and amortization
    
    
    41,047
    
    
    
    46,990
    
    
    
    46,703
    
    
    
    399,171Minority interest in (losses) earnings of subsidiaries
    
    
    654
    
    
    
    692
    
    
    
    (4,773
    )
    
    
    (40,795
    )Equity in losses of affiliated companies, less dividends
    
    
    2,248
    
    
    
    3,072
    
    
    
    24,031
    
    
    
    205,393Deferred income taxes
    
    
    758
    
    
    
    (2,846
    )
    
    
    (13,056
    )
    
    
    (111,590
    )Provision for pension and severance cost, less payments
    
    
    3,579
    
    
    
    2,463
    
    
    
    (2,862
    )
    
    
    (24,462
    )Loss on sale and disposal of fixed assets
    
    
    3,464
    
    
    
    40
    
    
    
    2,704
    
    
    
    23,111Impairment of long-lived assets
    
    
    
    
    
    
    4,460
    
    
    
    41,422
    
    
    
    354,034Write-down of available-for-sale securities and sundry investments
    
    
    245
    
    
    
    51
    
    
    
    133
    
    
    
    1,137Gains on sale of available-for-sale securities and
sundry investments, net
    
    
    (37
    )
    
    
    (2,309
    )
    
    
    (5,673
    )
    
    
    (48,487
    )Gain on sale of discontinued operations
    
    
    (1,825
    )
    
    
    
    
    
    
    (434
    )
    
    
    (3,709
    )Stock-based compensation expenses
    
    
    305
    
    
    
    270
    
    
    
    175
    
    
    
    1,495Decrease (increase) in trade notes and accounts receivable
    
    
    (7,797
    )
    
    
    (12,322
    )
    
    
    19,329
    
    
    
    165,205Decrease (increase) in inventories
    
    
    (20,724
    )
    
    
    6,317
    
    
    
    9,530
    
    
    
    81,453Increase in prepaid expenses and other current assets
    
    
    (12,688
    )
    
    
    (5,051
    )
    
    
    (7,898
    )
    
    
    (67,504
    )Increase in trade payables
    
    
    18,289
    
    
    
    4,405
    
    
    
    13,941
    
    
    
    119,154Increase (decrease) in accrued taxes on income
    
    
    3,559
    
    
    
    (4,473
    )
    
    
    2,069
    
    
    
    17,684Increase (decrease) in other accrued liabilities
    
    
    7,530
    
    
    
    (5,898
    )
    
    
    22,045
    
    
    
    188,419Other
    
    
    (3,067
    )
    
    
    (7,126
    )
    
    
    5,929
    
    
    
    50,676Net cash provided by operating activities
    
    
    60,378
    
    
    
    19,946
    
    
    
    68,329
    
    
    
    584,009Investing activities:Payment for purchase of fixed assets
    
    
    (57,978
    )
    
    
    (63,866
    )
    
    
    (40,325
    )
    
    
    (344,658
    )Payment for purchase of investment securities
    
    
    (595
    )
    
    
    (510
    )
    
    
    (6
    )
    
    
    (51
    )Payment for purchase of available-for-sale securities
    
    
    (53
    )
    
    
    
    
    
    
    (1
    )
    
    
    (9
    )Payment for purchase of a subsidiary, net of cash acquired
    
    
    
    
    
    
    (34,015
    )
    
    
    
    
    
    
    Payment for other assets
    
    
    (953
    )
    
    
    (1,252
    )
    
    
    (578
    )
    
    
    (4,940
    )Proceeds from sale of fixed assets
    
    
    1,458
    
    
    
    2,184
    
    
    
    3,049
    
    
    
    26,060Proceeds from sale of discontinued operations
    
    
    4,897
    
    
    
    
    
    
    
    754
    
    
    
    6,444Proceeds from sale of investment securities
    
    
    53
    
    
    
    12
    
    
    
    282
    
    
    
    2,410Proceeds from sale of available-for-sale securities
    
    
    156
    
    
    
    3,091
    
    
    
    7,068
    
    
    
    60,410Other
    
    
    261
    
    
    
    840
    
    
    
    (2
    )
    
    
    (16
    )Net cash used in investing activities
    
    
    (52,754
    )
    
    
    (93,516
    )
    
    
    (29,759
    )
    
    
    (254,350
    )Financing activities:Proceeds from issuance of convertible bonds
(net of issuance cost ¥1,586 million)
    
    
    60,514
    
    
    
    
    
    
    
    
    
    
    
    Payment of long-term debt
    
    
    (934
    )
    
    
    (6,246
    )
    
    
    (26,123
    )
    
    
    (223,274
    )Increase (decrease) in short-term borrowings
    
    
    (3,509
    )
    
    
    9,025
    
    
    
    (8,616
    )
    
    
    (73,641
    )Purchase of treasury stock (Note 14)
    
    
    (14
    )
    
    
    (1,979
    )
    
    
    (12
    )
    
    
    (103
    )Proceeds from sale of treasury stock
    
    
    2
    
    
    
    12
    
    
    
    1
    
    
    
    9Dividends paid
    
    
    (3,947
    )
    
    
    (4,386
    )
    
    
    (3,499
    )
    
    
    (29,906
    )Dividends paid to minority interests
    
    
    (285
    )
    
    
    (445
    )
    
    
    (302
    )
    
    
    (2,581
    )Net cash provided by (used in) financing activities
    
    
    51,827
    
    
    
    (4,019
    )
    
    
    (38,551
    )
    
    
    (329,496
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (9,512
    )
    
    
    1,851
    
    
    
    4,980
    
    
    
    42,563Net increase (decrease) in cash and cash equivalents
    
    
    49,939
    
    
    
    (75,738
    )
    
    
    4,999
    
    
    
    42,726Cash and cash equivalents, beginning of year
    
    
    142,480
    
    
    
    192,419
    
    
    
    116,681
    
    
    
    997,274Cash and cash equivalents, end of year
    
    ¥
    192,419
    
    
    ¥
    116,681
    
    
    ¥
    121,680
    
    
    $
    1,040,000
  F-7




---



##### Table of Contents



Notes to Consolidated Financial Statements
  1. Basis of presentation and significant accounting policies:
 1) Basis of Presentation
           2) Summary of Significant Accounting Policies
   F-8




---



##### Table of Contents



F-9




---



##### Table of Contents



Buildings
    
    1565 yearsMachinery and equipment
    
    210 years
       F-10




---



##### Table of Contents



F-11




---



##### Table of Contents



F-12




---



##### Table of Contents



F-13




---



##### Table of Contents



2. Supplemental cash flow information:
  Thousands ofMillions of Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Cash payment for interest
    
    ¥
    2,458
    
    
    ¥
    2,038
    
    
    ¥
    1,652
    
    
    $
    14,120Cash payment for income taxes
    
    
    14,260
    
    
    
    17,195
    
    
    
    9,039
    
    
    
    77,256Noncash investing activities:Acquisition of a subsidiary:Fair value of assets, net of cash acquired
    
    
    
    
    
    
    60,736
    
    
    
    
    
    
    
    Liability assumed including capital lease obligation of
¥12,882 million
    
    
    
    
    
    
    (26,721
    )
    
    
    
    
    
    
    Payment for acquisition of a subsidiary, net of cash acquired
    
    
    
    
    
    
    34,015
    
    
    
    
    
    
    
    Sales of discontinued operations:Transferred assets
    
    
    14,932
    
    
    
    
    
    
    
    1,527
    
    
    
    13,051Transferred liabilities
    
    
    (11,823
    )
    
    
    
    
    
    
    (1,080
    )
    
    
    (9,231
    )Foreign currency translation adjustments
    
    
    (37
    )
    
    
    
    
    
    
    (127
    )
    
    
    (1,085
    )Gain on sales
    
    
    1,825
    
    
    
    
    
    
    
    434
    
    
    
    3,709Cash receivednet
    
    
    4,897
    
    
    
    
    
    
    
    754
    
    
    
    6,444Noncash financing activities:Assumption of long-term debts from an affiliated company
    
    
    
    
    
    
    
    
    
    
    25,357
    
    
    
    216,726
 3. Acquisition:
    F-14




---



##### Table of Contents



Millions of YenCurrent assets
    
    ¥
    15,390Property, plant and equipment
    
    
    37,426Acquired intangible asset of patent
    
    
    6,937Other assets
    
    
    2,065Current liabilities
    
    
    (17,420
    )Long-term liabilities
    
    
    (9,301
    )Net assets acquired
    
    ¥
    35,097
  UnauditedMillions of Yen2004
    
    
    2005Revenues
    
    ¥
    736,697
    
    
    ¥
    731,563Net income (loss)
    
    
    17,332
    
    
    
    (19,002
    )
 Yen2004
    
    
    2005Net income (loss) per share:Basic
    
    ¥
    98.80
    
    
    ¥
    (108.34
    )Diluted
    
    
    98.02
    
    
    
    (108.34
    )
 4. Discontinued operations:
     F-15




---



##### Table of Contents



Millions of Yen2004Revenues
    
    ¥
    16,664Cost and expenses
    
    
    16,324Income before income taxes
    
    
    340Gain on sales of discontinued operations
    
    
    1,825Income taxes benefit
    
    
    2,310Income from discontinued operations
    
    ¥
    4,475
       F-16




---



##### Table of Contents



Thousands ofMillions of Yen
    
    
    U.S. Dollars2006
    
    
    2006Current assets held for sale:Trade receivables
    
    ¥
    10,421
    
    
    $
    89,068Inventories
    
    
    1,569
    
    
    
    13,410Other current assets
    
    
    10,775
    
    
    
    92,094Property, plant and equipment
    
    
    2,258
    
    
    
    19,299Other assets
    
    
    554
    
    
    
    4,736Total
    
    ¥
    25,577
    
    
    $
    218,607Current liabilities held for sale:Trade payables
    
    ¥
    10,673
    
    
    $
    91,222Accrued liabilities
    
    
    1,129
    
    
    
    9,650Other current liabilities
    
    
    4,629
    
    
    
    39,564Other long-term liabilities
    
    
    1,432
    
    
    
    12,239Total
    
    ¥
    17,863
    
    
    $
    152,675
  Thousands ofMillions of Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Revenues
    
    ¥
    16,161
    
    
    ¥
    22,598
    
    
    ¥
    30,282
    
    
    $
    258,821Cost and expenses
    
    
    14,844
    
    
    
    20,720
    
    
    
    29,462
    
    
    
    251,812Income before income taxes
    
    
    1,317
    
    
    
    1,878
    
    
    
    820
    
    
    
    7,009Gain on sales of discontinued operations
    
    
    
    
    
    
    
    
    
    
    434
    
    
    
    3,709Income taxes
    
    
    418
    
    
    
    555
    
    
    
    482
    
    
    
    4,120Income from discontinued operations
    
    ¥
    899
    
    
    ¥
    1,323
    
    
    ¥
    772
    
    
    $
    6,598
 F-17




---



##### Table of Contents



5. Available-for-sale securities and sundry investments:
  Millions of Yen2005
    
    
    2006Gross
    
    
    Gross
    
    
    
    
    
    
    
    
    
    
    Gross
    
    
    GrossUnrealized
    
    
    Unrealized
    
    
    
    
    
    
    
    
    
    
    Unrealized
    
    
    UnrealizedHolding
    
    
    Holding
    
    
    Aggregate
    
    
    
    
    
    
    Holding
    
    
    Holding
    
    
    AggregateCost
    
    
    Gains
    
    
    Losses
    
    
    Fair Value
    
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueMarketable equity securities:Non-current
    
    ¥
    5,734
    
    
    ¥
    16,438
    
    
    ¥
    2
    
    
    ¥
    22,170
    
    
    ¥
    4,627
    
    
    ¥
    19,982
    
    
    
    
    
    
    ¥
    24,609Marketable debt securities:Non-current
    
    
    94
    
    
    
    4
    
    
    
    
    
    
    
    98
    
    
    
    94
    
    
    
    30
    
    
    
    
    
    
    
    124Total
    
    ¥
    5,828
    
    
    ¥
    16,442
    
    
    ¥
    2
    
    
    ¥
    22,268
    
    
    ¥
    4,721
    
    
    ¥
    20,012
    
    
    
    
    
    
    ¥
    24,733
 Thousands of U.S. Dollars2006Gross
    
    
    GrossUnrealized
    
    
    UnrealizedHolding
    
    
    Holding
    
    
    AggregateCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueMarketable equity securities:Non-current
    
    $
    39,547
    
    
    $
    170,786
    
    
    
    
    
    
    $
    210,333Marketable debt securities:Non-current
    
    
    803
    
    
    
    257
    
    
    
    
    
    
    
    1,060Total
    
    $
    40,350
    
    
    $
    171,043
    
    
    
    
    
    
    $
    211,393
    F-18




---



##### Table of Contents



6. Accounts receivable securitization programs:
    7. Inventories:
  Thousands ofMillions of Yen
    
    
    U.S. Dollars2005
    
    
    2006
    
    
    2006Finished products
    
    ¥
    52,807
    
    
    ¥
    48,622
    
    
    $
    415,572Work in process
    
    
    26,330
    
    
    
    27,175
    
    
    
    232,265Materials and supplies
    
    
    29,878
    
    
    
    28,429
    
    
    
    242,983Total
    
    ¥
    109,015
    
    
    ¥
    104,226
    
    
    $
    890,820
 F-19




---



##### Table of Contents



8. Investments in and advances to affiliated companies:
    Thousands ofMillions of Yen
    
    
    U.S. Dollars2005
    
    
    2006
    
    
    2006Current assets
    
    ¥
    8,427
    
    
    ¥
    2,528
    
    
    $
    21,607Property, plant and equipment
    
    
    25,326
    
    
    
    638
    
    
    
    5,453Other assets
    
    
    403
    
    
    
    210
    
    
    
    1,795Total assets
    
    ¥
    34,156
    
    
    ¥
    3,376
    
    
    $
    28,855Current liabilities
    
    ¥
    5,116
    
    
    ¥
    1,110
    
    
    $
    9,487Long-term liabilities
    
    
    24,736
    
    
    
    294
    
    
    
    2,513Shareholders equity
    
    
    4,304
    
    
    
    1,972
    
    
    
    16,855Total liabilities and shareholders equity
    
    ¥
    34,156
    
    
    ¥
    3,376
    
    
    $
    28,855
 Thousands ofMillions of Yen
    
    
    U.S. DollarsYears ended March 31
    
    2004
    
    
    2005
    
    
    2006
    
    
    2006Net sales
    
    ¥
    8,408
    
    
    ¥
    9,229
    
    
    ¥
    6,974
    
    
    $
    59,607Gross profit (loss)
    
    
    1,004
    
    
    
    (1,932
    )
    
    
    941
    
    
    
    8,043Net loss
    
    
    5,023
    
    
    
    5,801
    
    
    
    24,720
    
    
    
    211,282
 F-20




---



##### Table of Contents



9. Intangible assets:
   Thousands ofMillions of Yen
    
    
    U.S. Dollars2005
    
    
    2006
    
    
    2006Gross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationSoftware
    
    ¥
    34,281
    
    
    ¥
    (19,595
    )
    
    ¥
    30,503
    
    
    ¥
    (17,164
    )
    
    $
    260,709
    
    
    $
    (146,701
    )Patents
    
    
    28,107
    
    
    
    (20,538
    )
    
    
    30,319
    
    
    
    (24,593
    )
    
    
    259,137
    
    
    
    (210,197
    )Other
    
    
    2,737
    
    
    
    (940
    )
    
    
    2,588
    
    
    
    (1,077
    )
    
    
    22,120
    
    
    
    (9,205
    )Total
    
    ¥
    65,125
    
    
    ¥
    (41,073
    )
    
    ¥
    63,410
    
    
    ¥
    (42,834
    )
    
    $
    541,966
    
    
    $
    (366,103
    )
  Thousands ofYears ending March 31
    
    Millions of Yen
    
    
    U.S. Dollars2007
    
    ¥
    7,786
    
    
    $
    66,5472008
    
    
    4,485
    
    
    
    38,3332009
    
    
    3,109
    
    
    
    26,5732010
    
    
    1,539
    
    
    
    13,1542011
    
    
    827
    
    
    
    7,068
 F-21




---



##### Table of Contents



10. Impairment losses of long-lived assets:
      F-22




---



##### Table of Contents



11. Short-term borrowings and long-term debt:
  Thousands ofMillions of Yen
    
    U.S. Dollars2005
    
    2006
    
    2006Bank loans:Weighted-average interest rate 1.25% at March 31, 2005
and 1.62% at March 31, 2006:Uncollateralized
    
    ¥
    33,152
    
    
    ¥
    23,205
    
    
    $
    198,333
  Thousands ofMillions of Yen
    
    
    U.S. Dollars2005
    
    
    2006
    
    
    2006Loans, principally from banks, maturing serially through 2013
interest ranging from 2.90% to 3.06% at March 31, 2005 and from 0.95%
to 2.90% at March 31, 2006:Collateralized
    
    ¥
    1,960
    
    
    ¥
    4,916
    
    
    $
    42,017Uncollateralized
    
    
    50
    
    
    
    15,452
    
    
    
    132,0682.35% Uncollateralized bonds due 2005
    
    
    15,000
    
    
    
    
    
    
    
    2.80% Uncollateralized bonds due 2008
    
    
    10,000
    
    
    
    10,000
    
    
    
    85,470Zero coupon convertible bonds due 2011, including unamortized issue premium,
¥1,779 million at March 31, 2005 and ¥1,479 million ($12,641 thousand)
at March 31, 2006 (effective annual rate 0.5%)
    
    
    61,779
    
    
    
    61,479
    
    
    
    525,462Long-term capital lease obligations, 1.25% to 3.26% at March 31, 2005
and 2006 due principally 2012
    
    
    11,129
    
    
    
    8,251
    
    
    
    70,521Industrial development U.S. dollar revenue bonds due 2005 with fluctuating
interest rates (1.70% at March 31, 2005), subject to maximum rate of 15%
in 2005 and other
    
    
    577
    
    
    
    37
    
    
    
    316Total
    
    
    100,495
    
    
    
    100,135
    
    
    
    855,854Less  Portion due within one year
    
    
    19,276
    
    
    
    7,165
    
    
    
    61,239Total
    
    ¥
    81,219
    
    
    ¥
    92,970
    
    
    $
    794,615
    F-23




---



##### Table of Contents



Thousands ofYears ending March 31
    
    Millions of Yen
    
    
    U.S. Dollars2007
    
    ¥
    7,165
    
    
    $
    61,2392008
    
    
    6,632
    
    
    
    56,6842009
    
    
    13,694
    
    
    
    117,0432010
    
    
    3,271
    
    
    
    27,9572011
    
    
    3,267
    
    
    
    27,9232012 and thereafter
    
    
    66,106
    
    
    
    565,008Total
    
    ¥
    100,135
    
    
    $
    855,854
  F-24




---



##### Table of Contents



12. Pension plans and accrued severance cost:
        F-25




---



##### Table of Contents



Thousands ofMillions of Yen

    
    U.S. Dollars2004

    
    2005

    
    2006
    

    2006Domestic
    

    Foreign
    

    Domestic
    

    Foreign
    

    Domestic
    

    Foreign
    

    Domestic
    

    ForeignPlans
    

    Plans
    

    Plans
    

    Plans
    

    Plans
    

    Plans
    

    Plans
    

    PlansService cost
    
    ¥
    5,752
    
    
    ¥
    542
    
    
    ¥
    4,540
    
    
    ¥
    565
    
    
    ¥
    4,552
    
    
    ¥
    417
    
    
    $
    38,906
    
    
    $
    3,564Interest cost
    
    
    4,819
    
    
    
    639
    
    
    
    5,224
    
    
    
    693
    
    
    
    2,361
    
    
    
    755
    
    
    
    20,179
    
    
    
    6,453Expected return on assets
    
    
    (3,127
    )
    
    
    (442
    )
    
    
    (3,729
    )
    
    
    (580
    )
    
    
    (2,313
    )
    
    
    (684
    )
    
    
    (19,769
    )
    
    
    (5,846
    )Amortization of unrecognized
net actuarial loss
    
    
    4,060
    
    
    
    11
    
    
    
    3,225
    
    
    
    52
    
    
    
    2,211
    
    
    
    45
    
    
    
    18,897
    
    
    
    385Amortization of unrecognized
net assets at date of application
    
    
    (504
    )
    
    
    
    
    
    
    (504
    )
    
    
    
    
    
    
    (504
    )
    
    
    
    
    
    
    (4,308
    )
    
    
    Amortization of unrecognized
prior service (gain) loss
    
    
    (899
    )
    
    
    16
    
    
    
    (899
    )
    
    
    4
    
    
    
    (1,573
    )
    
    
    3
    
    
    
    (13,444
    )
    
    
    25Settlement loss
    
    
    
    
    
    
    
    
    
    
    51,893
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Curtailment (gain) loss
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    26
    
    
    
    (15
    )
    
    
    
    
    
    
    (128
    )
    
    
    Derecognition of previously
accrued salary progression
    
    
    
    
    
    
    
    
    
    
    (2,402
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    ¥
    10,101
    
    
    ¥
    748
    
    
    ¥
    57,348
    
    
    ¥
    760
    
    
    ¥
    4,719
    
    
    ¥
    536
    
    
    $
    40,333
    
    
    $
    4,581Actuarial assumptions used to
determine net periodic
pension cost:Discount rate
    
    
    3.2
    %
    
    
    6.1
    %
    
    
    3.4
    %
    
    
    5.6
    %
    
    
    2.5
    %
    
    
    5.4
    %Rate of salary increase
    
    
    2.6
    %
    
    
    3.9
    %
    
    
    2.6
    %
    
    
    4.0
    %
    
    
    
    *
    
    
    4.0
    %Long-term rate of return
on plan assets
    
    
    3.9
    %
    
    
    7.6
    %
    
    
    3.9
    %
    
    
    7.0
    %
    
    
    3.9
    %
    
    
    7.2
    %
 *
    
    The net periodic pension costs are determined using cumulative points and not salaries. The net
periodic pension costs for the year ended March 31, 2006 was calculated on the basis of an annual
increase in points of 3.0%.
 F-26




---



##### Table of Contents



Thousands ofMillions of Yen
    
    
    U.S. Dollars2005
    
    
    2006
    
    
    
    
    
    
    2006Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    Foreign
    
    
    Domestic
    
    
    ForeignPlans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansChange in benefit obligation:Benefit obligation at beginning of year
    
    ¥
    154,125
    
    
    ¥
    12,574
    
    
    ¥
    94,410
    
    
    ¥
    13,595
    
    
    $
    806,923
    
    
    $
    116,197Service cost
    
    
    4,540
    
    
    
    565
    
    
    
    4,552
    
    
    
    417
    
    
    
    38,906
    
    
    
    3,564Interest cost
    
    
    5,224
    
    
    
    693
    
    
    
    2,361
    
    
    
    755
    
    
    
    20,179
    
    
    
    6,453Plan participants contribution
    
    
    39
    
    
    
    110
    
    
    
    
    
    
    
    113
    
    
    
    
    
    
    
    966Actuarial loss
    
    
    36,091
    
    
    
    781
    
    
    
    1,222
    
    
    
    1,784
    
    
    
    10,444
    
    
    
    15,248Lump-sum cash payments
    
    
    (1,878
    )
    
    
    
    
    
    
    (2,462
    )
    
    
    
    
    
    
    (21,043
    )
    
    
    Benefits paid
    
    
    (1,910
    )
    
    
    (228
    )
    
    
    (1,655
    )
    
    
    (298
    )
    
    
    (14,145
    )
    
    
    (2,547
    )Transfer of substitutional portion
    
    
    (92,219
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Plan amendment
    
    
    (9,602
    )
    
    
    
    
    
    
    (1,219
    )
    
    
    
    
    
    
    (10,419
    )
    
    
    Curtailment
    
    
    
    
    
    
    (1,412
    )
    
    
    (141
    )
    
    
    
    
    
    
    (1,204
    )
    
    
    Translation adjustments
    
    
    
    
    
    
    512
    
    
    
    
    
    
    
    695
    
    
    
    
    
    
    
    5,940Benefit obligation at end of year
    
    ¥
    94,410
    
    
    ¥
    13,595
    
    
    ¥
    97,068
    
    
    ¥
    17,061
    
    
    $
    829,641
    
    
    $
    145,821Change in plan assets:Fair value of plan assets at beginning of year
    
    ¥
    95,595
    
    
    ¥
    7,656
    
    
    ¥
    59,325
    
    
    ¥
    9,330
    
    
    $
    507,051
    
    
    $
    79,744Actual return on plan assets
    
    
    2,704
    
    
    
    499
    
    
    
    14,385
    
    
    
    1,339
    
    
    
    122,949
    
    
    
    11,444Employer contribution
    
    
    5,895
    
    
    
    990
    
    
    
    7,661
    
    
    
    726
    
    
    
    65,479
    
    
    
    6,205Plan participants contribution
    
    
    39
    
    
    
    110
    
    
    
    
    
    
    
    113
    
    
    
    
    
    
    
    966Lump-sum cash payments
    
    
    (1,878
    )
    
    
    
    
    
    
    (2,462
    )
    
    
    
    
    
    
    (21,043
    )
    
    
    Benefits paid
    
    
    (1,910
    )
    
    
    (228
    )
    
    
    (1,655
    )
    
    
    (298
    )
    
    
    (14,145
    )
    
    
    (2,547
    )Transfer of substitutional portion
    
    
    (41,120
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Translation adjustments
    
    
    
    
    
    
    303
    
    
    
    
    
    
    
    538
    
    
    
    
    
    
    
    4,598Fair value of plan assets at end of year
    
    ¥
    59,325
    
    
    ¥
    9,330
    
    
    ¥
    77,254
    
    
    ¥
    11,748
    
    
    $
    660,291
    
    
    $
    100,410Funded status
    
    
    (35,085
    )
    
    
    (4,265
    )
    
    
    (19,814
    )
    
    
    (5,313
    )
    
    
    (169,350
    )
    
    
    (45,411
    )Unrecognized actuarial loss
    
    
    44,957
    
    
    
    1,814
    
    
    
    31,770
    
    
    
    2,775
    
    
    
    271,538
    
    
    
    23,719Unrecognized net assets at the date of application
    
    
    (935
    )
    
    
    
    
    
    
    (431
    )
    
    
    
    
    
    
    (3,684
    )
    
    
    Unrecognized prior service cost (gain)
    
    
    (20,612
    )
    
    
    58
    
    
    
    (20,258
    )
    
    
    55
    
    
    
    (173,145
    )
    
    
    470Net amount recognized
    
    ¥
    (11,675
    )
    
    ¥
    (2,393
    )
    
    ¥
    (8,733
    )
    
    ¥
    (2,483
    )
    
    $
    (74,641
    )
    
    $
    (21,222
    )Amounts recognized in the statement of financial
position consist of:Accrued benefit liabilities
    
    ¥
    (32,759
    )
    
    ¥
    (3,263
    )
    
    ¥
    (15,893
    )
    
    ¥
    (4,106
    )
    
    $
    (135,838
    )
    
    $
    (35,094
    )Accumulated other comprehensive income
    
    
    21,084
    
    
    
    870
    
    
    
    7,160
    
    
    
    1,623
    
    
    
    61,197
    
    
    
    13,872Net amount recognized
    
    ¥
    (11,675
    )
    
    ¥
    (2,393
    )
    
    ¥
    (8,733
    )
    
    ¥
    (2,483
    )
    
    $
    (74,641
    )
    
    $
    (21,222
    )Accumulated benefit obligation at end of year
    
    ¥
    92,074
    
    
    ¥
    12,344
    
    
    ¥
    92,161
    
    
    ¥
    15,435
    
    
    $
    787,701
    
    
    $
    131,923Actuarial assumptions used to determine benefit
obligations:Discount rate
    
    
    2.5
    %
    
    
    5.4
    %
    
    
    2.5
    %
    
    
    4.9
    %Rate of salary increase
    
    
    
    *
    
    
    4.0
    %
    
    
    
    *
    
    
    2.5
    %
 *
    
    The benefit obligations are determined using cumulative points and not salaries. The benefit
obligations at March 31, 2005 and 2006 were calculated on the basis of an annual increase in points
of 3.0%.
   F-27




---



##### Table of Contents



Thousands ofMillions of Yen
    
    
    U.S. Dollars2005
    
    
    2006
    
    
    2006Accumulated benefit obligations
    
    ¥
    11,474
    
    
    ¥
    15,161
    
    
    $
    129,581Fair value of plan assets
    
    
    8,369
    
    
    
    11,447
    
    
    
    97,838
    Asset Category
    
    2005
    
    
    2006Equity securities
    
    
    53
    %
    
    
    57
    %Debt securities
    
    
    34
    
    
    
    35Other
    
    
    13
    
    
    
    8Total
    
    
    100
    %
    
    
    100
    %
    F-28




---



##### Table of Contents



Thousands ofYears ending March 31
    
    Millions of Yen
    
    
    U.S. Dollars2007
    
    ¥
    9,402
    
    
    $
    80,3592008
    
    
    3,435
    
    
    
    29,3592009
    
    
    3,878
    
    
    
    33,1452010
    
    
    4,309
    
    
    
    36,8292011
    
    
    4,965
    
    
    
    42,436Years 2012
 2016
    
    
    25,830
    
    
    
    220,769
 13. Income taxes:
    Thousands ofMillions of Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Computed tax expense at normal statutory tax rate
    
    ¥
    17,022
    
    
    ¥
    (847
    )
    
    ¥
    (29,178
    )
    
    $
    (249,385
    )Increase (decrease) resulting from:Loss operations
    
    
    1,294
    
    
    
    6,137
    
    
    
    39,814
    
    
    
    340,291Realization of tax benefit of operating loss carryforwards
    
    
    (395
    )
    
    
    (671
    )
    
    
    (1,005
    )
    
    
    (8,590
    )Expenses not deductible for tax purpose:Domestic
    
    
    272
    
    
    
    243
    
    
    
    192
    
    
    
    1,641Foreign
    
    
    120
    
    
    
    413
    
    
    
    205
    
    
    
    1,752Difference in foreign and Japanese tax rates
    
    
    (1,535
    )
    
    
    (1,784
    )
    
    
    (1,383
    )
    
    
    (11,820
    )Effect of tax rate change on deferred taxes
    
    
    432
    
    
    
    
    
    
    
    
    
    
    
    Liquidation of ELDis, Inc.
    
    
    
    
    
    
    
    
    
    
    (13,503
    )
    
    
    (115,410
    )Tax benefit for discontinued operations
    
    
    3,025
    
    
    
    
    
    
    
    
    
    
    
    Tax credit for research and development expenses
    
    
    (898
    )
    
    
    (232
    )
    
    
    (141
    )
    
    
    (1,205
    )Other
    
    
    (1,168
    )
    
    
    1,028
    
    
    
    339
    
    
    
    2,897Provision for income taxes
    
    ¥
    18,169
    
    
    ¥
    4,287
    
    
    ¥
    (4,660
    )
    
    $
    (39,829
    )
 F-29




---



##### Table of Contents



Thousands ofMillions of Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Provision for income taxes (benefit) on income from continuing operations
    
    ¥
    18,169
    
    
    ¥
    4,287
    
    
    ¥
    (4,660
    )
    
    $
    (39,829
    )Provision for income taxes (benefit) on income from discontinued operations
    
    
    (1,892
    )
    
    
    555
    
    
    
    482
    
    
    
    4,120Shareholders equity  directly charged (credited):Minimum pension liability adjustments
    
    
    6,953
    
    
    
    8,225
    
    
    
    5,505
    
    
    
    47,051Net unrealized gains on securities
    
    
    4,009
    
    
    
    (593
    )
    
    
    1,460
    
    
    
    12,479Total
    
    ¥
    27,239
    
    
    ¥
    12,474
    
    
    ¥
    2,787
    
    
    $
    23,821
  Thousands ofMillions of Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Income (loss) from continuing operations before income taxes:Domestic
    
    ¥
    16,737
    
    
    ¥
    2,649
    
    
    ¥
    (69,834
    )
    
    $
    (596,872
    )Foreign
    
    
    23,791
    
    
    
    (4,716
    )
    
    
    (1,331
    )
    
    
    (11,376
    )Total
    
    ¥
    40,528
    
    
    ¥
    (2,067
    )
    
    ¥
    (71,165
    )
    
    $
    (608,248
    )Income taxes  Current:Domestic
    
    ¥
    9,935
    
    
    ¥
    6,260
    
    
    ¥
    5,232
    
    
    $
    44,718Foreign
    
    
    7,183
    
    
    
    909
    
    
    
    2,842
    
    
    
    24,291Total
    
    ¥
    17,118
    
    
    ¥
    7,169
    
    
    ¥
    8,074
    
    
    $
    69,009Income taxes  Deferred:Domestic
    
    ¥
    (837
    )
    
    ¥
    (1,659
    )
    
    ¥
    (13,854
    )
    
    $
    (118,410
    )Foreign
    
    
    1,888
    
    
    
    (1,223
    )
    
    
    1,120
    
    
    
    9,572Total
    
    ¥
    1,051
    
    
    ¥
    (2,882
    )
    
    ¥
    (12,734
    )
    
    $
    (108,838
    )
 F-30




---



##### Table of Contents



Thousands ofMillions of Yen
    
    
    U.S. Dollars2005
    
    
    2006
    
    
    2006Deferred
    
    
    Deferred
    
    
    Deferred
    
    
    Deferred
    
    
    Deferred
    
    
    DeferredTax
    
    
    Tax
    
    
    Tax
    
    
    Tax
    
    
    Tax
    
    
    TaxAssets
    
    
    Liabilities
    
    
    Assets
    
    
    Liabilities
    
    
    Assets
    
    
    LiabilitiesInventories
    
    ¥
    5,590
    
    
    
    
    
    
    ¥
    6,198
    
    
    
    
    
    
    $
    52,974
    
    
    
    Marketable equity securities
    
    
    2,040
    
    
    ¥
    4,445
    
    
    
    2,092
    
    
    ¥
    7,074
    
    
    
    17,880
    
    
    $
    60,461Allowance for notes and accounts receivable
    
    
    824
    
    
    
    
    
    
    
    871
    
    
    
    
    
    
    
    7,445
    
    
    
    Accrued expenses
    
    
    16,316
    
    
    
    
    
    
    
    22,549
    
    
    
    
    
    
    
    192,726
    
    
    
    Warranty reserve
    
    
    1,863
    
    
    
    
    
    
    
    1,969
    
    
    
    
    
    
    
    16,829
    
    
    
    Tax loss carryforwards
    
    
    21,232
    
    
    
    
    
    
    
    52,832
    
    
    
    
    
    
    
    451,556
    
    
    
    Pension and severance cost
    
    
    15,116
    
    
    
    
    
    
    
    8,905
    
    
    
    
    
    
    
    76,111
    
    
    
    Property
    
    
    4,230
    
    
    
    
    
    
    
    17,981
    
    
    
    
    
    
    
    153,684
    
    
    
    Depreciation
    
    
    3,029
    
    
    
    490
    
    
    
    4,119
    
    
    
    342
    
    
    
    35,205
    
    
    
    2,923Royalty receivable
    
    
    539
    
    
    
    
    
    
    
    472
    
    
    
    
    
    
    
    4,034
    
    
    
    Other
    
    
    6,539
    
    
    
    2,469
    
    
    
    2,275
    
    
    
    4,718
    
    
    
    19,445
    
    
    
    40,325Total
    
    
    77,318
    
    
    
    7,404
    
    
    
    120,263
    
    
    
    12,134
    
    
    
    1,027,889
    
    
    
    103,709Valuation allowance
    
    
    (20,605
    )
    
    
    
    
    
    
    (53,112
    )
    
    
    
    
    
    
    (453,949
    )
    
    
    Total
    
    ¥
    56,713
    
    
    ¥
    7,404
    
    
    ¥
    67,151
    
    
    ¥
    12,134
    
    
    $
    573,940
    
    
    $
    103,709
  Thousands ofMillions of Yen
    
    
    U.S. DollarsValuation Allowance
    
    2004
    
    
    2005
    
    
    2006
    
    
    2006Balance at beginning of year
    
    ¥
    15,292
    
    
    ¥
    11,591
    
    
    ¥
    20,605
    
    
    $
    176,111Addition*
    
    
    1,956
    
    
    
    12,851
    
    
    
    35,118
    
    
    
    300,154Deduction
    
    
    (5,469
    )
    
    
    (3,963
    )
    
    
    (2,948
    )
    
    
    (25,196
    )Translation adjustments
    
    
    (188
    )
    
    
    126
    
    
    
    337
    
    
    
    2,880Balance at end of year
    
    ¥
    11,591
    
    
    ¥
    20,605
    
    
    ¥
    53,112
    
    
    $
    453,949
    F-31




---



##### Table of Contents



Thousands ofYears ending March 31
    
    Millions of Yen
    
    
    U.S. Dollars2007
    
    ¥
    542
    
    
    $
    4,6332008
    
    
    624
    
    
    
    5,3332009
    
    
    285
    
    
    
    2,4362010
    
    
    3,196
    
    
    
    27,3162011
    
    
    7,307
    
    
    
    62,453Thereafter
    
    
    123,075
    
    
    
    1,051,923Total
    
    ¥
    135,029
    
    
    $
    1,154,094
   14. Shareholders equity:
    
   F-32




---



##### Table of Contents



F-33




---



##### Table of Contents



15. Stock-based compensation plans:
   YenWeighted-Average
    
    
    Number ofWeighted-Average
    
    
    Grant Date
    
    
    SharesYears ended March 31
    
    Plan
    
    Exercisable Period
    
    Exercise Price
    
    
    Share Price
    
    
    (Thousands)2002
    
    Stock option
    
    From July 1, 2003 to June 30, 2006
    
    ¥
    3,791
    
    
    ¥
    3,750
    
    
    
    1912003
    
    Stock option
    
    From July 1, 2004 to June 29, 2007
    
    
    2,477
    
    
    
    2,170
    
    
    
    5642004
    
    Stock option
    
    From July 1, 2005 to June 30, 2008
    
    
    2,951
    
    
    
    2,845
    
    
    
    3132005
    
    Stock option
    
    From July 3, 2006 to June 30, 2009
    
    
    2,944
    
    
    
    2,660
    
    
    
    3162006
    
    Stock option
    
    From July 2, 2007 to June 30, 2010
    
    
    1,828
    
    
    
    1,658
    
    
    
    315
 U.S. DollarsWeighted-AverageWeighted-Average
    
    
    Grant DateYear ended March 31
    
    Plan
    
    Exercisable Period
    
    Exercise Price
    
    
    Share Price2006
    
    Stock option
    
    From July 2, 2007 to June 30, 2010
    
    $
    15.62
    
    
    $
    14.17
  F-34




---



##### Table of Contents



2004
    
    
    2005
    
    
    2006Risk-free interest rate
    
    
    0.34
    %
    
    
    0.50
    %
    
    
    0.23
    %Expected lives
    
    3.48 years
    
    3.48 years
    
    3.48 yearsExpected volatility
    
    
    48.13
    %
    
    
    40.02
    %
    
    
    31.98
    %Expected dividends
    
    
    0.88
    %
    
    
    0.93
    %
    
    
    0.90
    %
  Weighted-Average
    
    
    Weighted-Average ExerciseNumber of Shares
    
    
    Remaining Life
    
    
    Price per Share(Thousands)
    
    
    (Years)
    
    
    Yen
    
    
    U.S. DollarsOutstanding at March 31, 2003
    
    
    1,643
    
    
    
    2.5
    
    
    ¥
    3,441Granted
    
    
    313
    
    
    
    
    
    
    
    2,951Expired
    
    
    (284
    )
    
    
    
    
    
    
    4,728Outstanding at March 31, 2004
    
    
    1,672
    
    
    
    2.4
    
    
    ¥
    3,131Granted
    
    
    316
    
    
    
    
    
    
    
    2,944Exercised
    
    
    (4
    )
    
    
    
    
    
    
    2,477Expired
    
    
    (413
    )
    
    
    
    
    
    
    3,266Outstanding at March 31, 2005
    
    
    1,571
    
    
    
    2.5
    
    
    ¥
    3,059
    
    
    $
    26.15Granted
    
    
    315
    
    
    
    
    
    
    
    1,828
    
    
    
    15.62Expired
    
    
    (191
    )
    
    
    
    
    
    
    4,400
    
    
    
    37.61Outstanding at March 31, 2006
    
    
    1,695
    
    
    
    2.3
    
    
    ¥
    2,679
    
    
    $
    22.90Exercisable at March 31, 2005
    
    
    942
    
    
    
    
    
    
    ¥
    3,133Exercisable at March 31, 2006
    
    
    1,064
    
    
    
    
    
    
    ¥
    2,852
    
    
    $
    24.38
 F-35




---



##### Table of Contents



16. Other comprehensive income:
 Millions of YenForeign Currency
    
    
    Total AccumulatedMinimum Pension
    
    
    Net Unrealized
    
    
    Translation
    
    
    Other ComprehensiveLiability Adjustments
    
    
    Gains on Securities
    
    
    Adjustments
    
    
    Income (Loss)Balance at March 31, 2003
    
    ¥
    (32,675
    )
    
    ¥
    3,348
    
    
    ¥
    (26,302
    )
    
    ¥
    (55,629
    )Adjustments for the year
    
    
    9,745
    
    
    
    5,755
    
    
    
    (21,700
    )
    
    
    (6,200
    )Balance at March 31, 2004
    
    
    (22,930
    )
    
    
    9,103
    
    
    
    (48,002
    )
    
    
    (61,829
    )Adjustments for the year
    
    
    11,744
    
    
    
    (853
    )
    
    
    3,269
    
    
    
    14,160Balance at March 31, 2005
    
    
    (11,186
    )
    
    
    8,250
    
    
    
    (44,733
    )
    
    
    (47,669
    )Adjustments for the year
    
    
    7,506
    
    
    
    2,102
    
    
    
    17,969
    
    
    
    27,577Balance at March 31, 2006
    
    ¥
    (3,680
    )
    
    ¥
    10,352
    
    
    ¥
    (26,764
    )
    
    ¥
    (20,092
    )
 Thousands of U.S. DollarsForeign Currency
    
    
    Total AccumulatedMinimum Pension
    
    
    Net Unrealized
    
    
    Translation
    
    
    Other ComprehensiveLiability Adjustments
    
    
    Gains on Securities
    
    
    Adjustments
    
    
    Income -Loss)Balance at March 31, 2005
    
    $
    (95,607
    )
    
    $
    70,513
    
    
    $
    (382,333
    )
    
    $
    (407,427
    )Adjustments for the year
    
    
    64,154
    
    
    
    17,966
    
    
    
    153,581
    
    
    
    235,701Balance at March 31, 2006
    
    $
    (31,453
    )
    
    $
    88,479
    
    
    $
    (228,752
    )
    
    $
    (171,726
    )
 F-36




---



##### Table of Contents



Millions of YenBefore-Tax
    
    
    Tax (Expense)
    
    
    Minority
    
    
    Net-of-TaxAmount
    
    
    or Benefit
    
    
    Interest
    
    
    Amount2004:Minimum pension liability adjustments
    
    ¥
    16,803
    
    
    ¥
    (6,953
    )
    
    ¥
    (105
    )
    
    ¥
    9,745Net unrealized gains on securities:Unrealized holding gains arising during year
    
    
    9,790
    
    
    
    (4,013
    )
    
    
    (16
    )
    
    
    5,761LessReclassification adjustment for gains realized in net income
    
    
    (10
    )
    
    
    4
    
    
    
    
    
    
    
    (6
    )Net unrealized gains
    
    
    9,780
    
    
    
    (4,009
    )
    
    
    (16
    )
    
    
    5,755Foreign currency translation adjustments:Foreign currency translation adjustments arising during year
    
    
    (23,010
    )
    
    
    
    
    
    
    912
    
    
    
    (22,098
    )LessReclassification adjustment for losses realized in net income
    
    
    398
    
    
    
    
    
    
    
    
    
    
    
    398Net foreign currency translation adjustments
    
    
    (22,612
    )
    
    
    
    
    
    
    912
    
    
    
    (21,700
    )Other comprehensive income (loss)
    
    ¥
    3,971
    
    
    ¥
    (10,962
    )
    
    ¥
    791
    
    
    ¥
    (6,200
    )2005:Minimum pension liability adjustments
    
    ¥
    20,003
    
    
    ¥
    (8,225
    )
    
    ¥
    (34
    )
    
    ¥
    11,744Net unrealized gains on securities:Unrealized holding gains arising during year
    
    
    843
    
    
    
    (347
    )
    
    
    4
    
    
    
    500LessReclassification adjustment for gains realized in net income
    
    
    (2,293
    )
    
    
    940
    
    
    
    
    
    
    
    (1,353
    )Net unrealized losses
    
    
    (1,450
    )
    
    
    593
    
    
    
    4
    
    
    
    (853
    )Foreign currency translation adjustments
    
    
    3,292
    
    
    
    
    
    
    
    (23
    )
    
    
    3,269Other comprehensive income (loss)
    
    ¥
    21,845
    
    
    ¥
    (7,632
    )
    
    ¥
    (53
    )
    
    ¥
    14,1602006Minimum pension liability adjustments
    
    ¥
    13,171
    
    
    ¥
    (5,505
    )
    
    ¥
    (160
    )
    
    ¥
    7,506Net unrealized gains on securities:Unrealized holding gains arising during year
    
    
    9,534
    
    
    
    (3,904
    )
    
    
    (10
    )
    
    
    5,620LessReclassification adjustment for gains realized in net income
    
    
    (5,962
    )
    
    
    2,444
    
    
    
    
    
    
    
    (3,518
    )Net unrealized gains
    
    
    3,572
    
    
    
    (1,460
    )
    
    
    (10
    )
    
    
    2,102Foreign currency translation adjustments:Foreign currency translation adjustments arising during year
    
    
    18,986
    
    
    
    
    
    
    
    (865
    )
    
    
    18,121LessReclassification adjustment for gains realized in net income
    
    
    (152
    )
    
    
    
    
    
    
    
    
    
    
    (152
    )Foreign currency translation adjustments
    
    
    18,834
    
    
    
    
    
    
    
    (865
    )
    
    
    17,969Other comprehensive income (loss)
    
    ¥
    35,577
    
    
    ¥
    (6,965
    )
    
    ¥
    (1,035
    )
    
    ¥
    27,577
 Thousands of U.S. DollarsBefore-Tax
    
    
    Tax (Expense)
    
    
    Minority
    
    
    Net-of-TaxAmount
    
    
    or Benefit
    
    
    Interest
    
    
    Amount2006Minimum pension liability adjustments
    
    $
    112,573
    
    
    $
    (47,051
    )
    
    $
    (1,368
    )
    
    $
    64,154Net unrealized gains on securities:Unrealized holding gains arising during year
    
    
    81,487
    
    
    
    (33,368
    )
    
    
    (85
    )
    
    
    48,034LessReclassification adjustment for gains realized in net income
    
    
    (50,957
    )
    
    
    20,889
    
    
    
    
    
    
    
    (30,068
    )Net unrealized gains
    
    
    30,530
    
    
    
    (12,479
    )
    
    
    (85
    )
    
    
    17,966Foreign currency translation adjustments:Foreign currency translation adjustments arising during year
    
    
    162,273
    
    
    
    
    
    
    
    (7,393
    )
    
    
    154,880LessReclassification adjustment for gains realized in net income
    
    
    (1,299
    )
    
    
    
    
    
    
    
    
    
    
    (1,299
    )Foreign currency translation adjustments
    
    
    160,974
    
    
    
    
    
    
    
    (7,393
    )
    
    
    153,581Other comprehensive income (loss)
    
    $
    304,077
    
    
    $
    (59,530
    )
    
    $
    (8,846
    )
    
    $
    235,701
 F-37




---



##### Table of Contents



17. Restructuring plans:
       F-38




---



##### Table of Contents



18. Supplemental information:
  Thousands ofMillions of Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Research and development expenses charged to cost and expenses
    
    ¥
    51,449
    
    
    ¥
    55,858
    
    
    ¥
    63,442
    
    
    $
    542,239Advertising costs charged to expense as incurred
    
    
    12,813
    
    
    
    11,587
    
    
    
    10,961
    
    
    
    93,684
  Thousands ofMillions of Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Gain on sale of available-for-sale securities and sundry investments
    
    ¥
    37
    
    
    ¥
    2,309
    
    
    ¥
    5,711
    
    
    $
    48,812Foreign exchange gain, net
    
    
    
    
    
    
    480
    
    
    
    
    
    
    
    Dividend income
    
    
    319
    
    
    
    378
    
    
    
    481
    
    
    
    4,111Other
    
    
    123
    
    
    
    257
    
    
    
    597
    
    
    
    5,103Total other income
    
    ¥
    479
    
    
    ¥
    3,424
    
    
    ¥
    6,789
    
    
    $
    58,026
  Thousands ofMillions of Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Impairment of long-lived assets
    
    
    
    
    
    ¥
    4,460
    
    
    ¥
    41,422
    
    
    $
    354,034Special termination benefits
    
    
    
    
    
    
    25
    
    
    
    14,095
    
    
    
    120,470Write-down of available-for-sale securities and sundry investments
    
    ¥
    245
    
    
    
    51
    
    
    
    133
    
    
    
    1,137Foreign exchange loss, net
    
    
    1,192
    
    
    
    
    
    
    
    2,326
    
    
    
    19,880Other
    
    
    152
    
    
    
    1,800
    
    
    
    2,044
    
    
    
    17,470Total other deductions
    
    ¥
    1,589
    
    
    ¥
    6,336
    
    
    ¥
    60,020
    
    
    $
    512,991
 19. Leased assets:
   Thousands ofMillions of Yen
    
    
    U.S. Dollars2005
    
    
    2006
    
    
    2006Machinery and equipment
    
    ¥
    12,625
    
    
    ¥
    13,041
    
    
    $
    111,461Accumulated depreciation
    
    
    (1,794
    )
    
    
    (5,066
    )
    
    
    (43,299
    )Total
    
    ¥
    10,831
    
    
    ¥
    7,975
    
    
    $
    68,162
 F-39




---



##### Table of Contents



Thousands ofYears ending March 31
    
    Millions of Yen
    
    
    U.S. Dollars2007
    
    ¥
    3,277
    
    
    $
    28,0092008
    
    
    2,649
    
    
    
    22,6412009
    
    
    650
    
    
    
    5,5552010
    
    
    640
    
    
    
    5,4702011
    
    
    629
    
    
    
    5,3762012 and thereafter
    
    
    790
    
    
    
    6,752Total minimum lease payments
    
    
    8,635
    
    
    
    73,803LessAmount representing interest
    
    
    384
    
    
    
    3,282Present value of net minimum lease payment
    
    
    8,251
    
    
    
    70,521LessCurrent obligations
    
    
    3,094
    
    
    
    26,444Long-term capital lease obligations
    
    ¥
    5,157
    
    
    $
    44,077
  F-40




---



##### Table of Contents



Thousands ofYears ending March 31
    
    Millions of Yen
    
    
    U.S. Dollars2007
    
    ¥
    2,511
    
    
    $
    21,4622008
    
    
    1,976
    
    
    
    16,8892009
    
    
    1,470
    
    
    
    12,5642010
    
    
    849
    
    
    
    7,2562011
    
    
    472
    
    
    
    4,034Thereafter
    
    
    1,171
    
    
    
    10,009Total minimum future rentals
    
    ¥
    8,449
    
    
    $
    72,214
 20. Financial instruments:
          F-41




---



##### Table of Contents



21. Fair value of financial instruments:
  Thousands ofMillions of Yen
    
    
    
    
    
    
    U.S. Dollars2005
    
    
    2006
    
    
    2006Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmounts
    
    
    Value
    
    
    Amounts
    
    
    Value
    
    
    Amounts
    
    
    ValueAssets:Available-for-sale securities
    
    ¥
    22,268
    
    
    ¥
    22,268
    
    
    ¥
    24,733
    
    
    ¥
    24,733
    
    
    $
    211,393
    
    
    $
    211,393Sundry investments
    
    
    411
    
    
    
    452
    
    
    
    396
    
    
    
    479
    
    
    
    3,385
    
    
    
    4,094Long-term receivables
    
    
    185
    
    
    
    179
    
    
    
    145
    
    
    
    140
    
    
    
    1,239
    
    
    
    1,197Other financial instruments:Forward exchange contracts
    
    
    50
    
    
    
    50
    
    
    
    105
    
    
    
    105
    
    
    
    897
    
    
    
    897Currency swap
    
    
    190
    
    
    
    190
    
    
    
    2,706
    
    
    
    2,706
    
    
    
    23,128
    
    
    
    23,128Currency option
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    69
    
    
    
    590
    
    
    
    590Liabilities:Long-term debt, including current maturity
    
    
    (100,495
    )
    
    
    
    
    
    
    (100,135
    )
    
    
    
    
    
    
    (855,854
    )LessCapital lease obligations
    
    
    11,129
    
    
    
    
    
    
    
    8,251
    
    
    
    
    
    
    
    70,521Long-term debtnet
    
    
    (89,366
    )
    
    
    (84,301
    )
    
    
    (91,884
    )
    
    
    (86,316
    )
    
    
    (785,333
    )
    
    
    (737,744
    )Other financial instruments:Forward exchange contracts
    
    
    (555
    )
    
    
    (555
    )
    
    
    (352
    )
    
    
    (352
    )
    
    
    (3,009
    )
    
    
    (3,009
    )Currency swap
    
    
    (3,009
    )
    
    
    (3,009
    )
    
    
    (125
    )
    
    
    (125
    )
    
    
    (1,068
    )
    
    
    (1,068
    )Currency option
    
    
    
    
    
    
    
    
    
    
    (60
    )
    
    
    (60
    )
    
    
    (513
    )
    
    
    (513
    )
          F-42




---



##### Table of Contents



22. Basic and diluted earnings per share:
  Thousands ofMillions of Yen
    
    
    U.S. Dollars2004
    
    
    2005
    
    
    2006
    
    
    2006Income (loss) from continuing operations
    
    ¥
    19,464
    
    
    ¥
    (10,112
    )
    
    ¥
    (85,758
    )
    
    $
    (732,974
    )Effect of dilutionZero coupon convertible bonds
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    Income (loss) from continuing operationsdiluted
    
    ¥
    19,443
    
    
    ¥
    (10,112
    )
    
    ¥
    (85,758
    )
    
    $
    (732,974
    )Income from discontinued operations, net of tax
    
    ¥
    5,374
    
    
    ¥
    1,323
    
    
    ¥
    772
    
    
    $
    6,598Net income (loss)
    
    ¥
    24,838
    
    
    ¥
    (8,789
    )
    
    ¥
    (84,986
    )
    
    $
    (726,376
    )Effect of dilutionZero coupon convertible bonds
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    Net income (loss)diluted
    
    ¥
    24,817
    
    
    ¥
    (8,789
    )
    
    ¥
    (84,986
    )
    
    $
    (726,376
    )
 Number of Shares (Thousands)Weighted-average common shares outstanding
    
    
    175,433
    
    
    
    175,389
    
    
    
    174,426Effect of dilutive convertible bonds
    
    
    1,115
    
    
    
    
    
    
    
    Effect of stock options
    
    
    61
    
    
    
    
    
    
    
    Diluted common shares outstanding
    
    
    176,609
    
    
    
    175,389
    
    
    
    174,426
 Yen
    
    
    U.S. DollarsBasic net income per share:Income (loss) from continuing operations
    
    ¥
    110.95
    
    
    ¥
    (57.65
    )
    
    ¥
    (491.66
    )
    
    $
    (4.20
    )Income from discontinued operations, net of tax
    
    
    30.63
    
    
    
    7.54
    
    
    
    4.43
    
    
    
    0.04Net income (loss)
    
    ¥
    141.58
    
    
    ¥
    (50.11
    )
    
    ¥
    (487.23
    )
    
    $
    (4.16
    )Diluted net income per share:Income (loss) from continuing operations
    
    ¥
    110.09
    
    
    ¥
    (57.65
    )
    
    ¥
    (491.66
    )
    
    $
    (4.20
    )Income from discontinued operations, net of tax
    
    
    30.43
    
    
    
    7.54
    
    
    
    4.43
    
    
    
    0.04Net income (loss)
    
    ¥
    140.52
    
    
    ¥
    (50.11
    )
    
    ¥
    (487.23
    )
    
    $
    (4.16
    )
 23. Supplemental schedule:
  Thousands ofMillions of Yen
    
    
    U.S. DollarsAllowance for Doubtful Receivables
    
    2004
    
    
    2005
    
    
    2006
    
    
    2006Balance at beginning of year
    
    ¥
    4,631
    
    
    ¥
    3,534
    
    
    ¥
    2,610
    
    
    $
    22,308Charged (credited) to costs and expenses
    
    
    (667
    )
    
    
    (515
    )
    
    
    850
    
    
    
    7,265Deductions for accounts written off
    
    
    (13
    )
    
    
    (497
    )
    
    
    (517
    )
    
    
    (4,419
    )Translation adjustments
    
    
    (417
    )
    
    
    88
    
    
    
    222
    
    
    
    1,897Balance at end of year
    
    ¥
    3,534
    
    
    ¥
    2,610
    
    
    ¥
    3,165
    
    
    $
    27,051
 F-43




---



##### Table of Contents



Thousands ofMillions of Yen
    
    
    U.S. DollarsWarranty Reserve
    
    2004
    
    
    2005
    
    
    2006
    
    
    2006Balance at beginning of year
    
    ¥
    6,493
    
    
    ¥
    5,419
    
    
    ¥
    5,722
    
    
    $
    48,906Provision
    
    
    6,050
    
    
    
    8,030
    
    
    
    9,506
    
    
    
    81,248Payments
    
    
    (6,669
    )
    
    
    (7,844
    )
    
    
    (8,972
    )
    
    
    (76,684
    )Translation adjustments
    
    
    (455
    )
    
    
    117
    
    
    
    347
    
    
    
    2,966Balance at end of year
    
    ¥
    5,419
    
    
    ¥
    5,722
    
    
    ¥
    6,603
    
    
    $
    56,436
 24. Commitments and contingent liabilities:
    Guaranteed AmountThousands ofGuarantee for
    
    Guaranteed until
    
    Millions of Yen
    
    
    U.S. DollarsAffiliated company
    
    April 1, 2006March 31, 2007
    
    ¥
    235
    
    
    $
    2,009
     25. Remuneration of directors, executive officers and corporate auditors:
  F-44