BALANCE SHEET. CHORI CO., LTD. (As of March 31, 2006) ASSETS. AMOUNT Thousands of U.S. Dollars ITEM. Millions of Japanese Yen

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1 BALANCE SHEET (As of March 31, 2006) ASSETS ITEM (ASSETS) Current Assets 46, ,883 Cash in Hand and at Banks 3,884 33,066 Deposit at Parent Company 4,500 38,307 Notes Receivable 5,276 44,916 Accounts Receivable, Trade 24, ,017 Inventories 7,218 61,447 Goods in Transit 298 2,544 Advance Payments 209 1,783 Prepaid Expenses Deferred Tax Assets 329 2,800 Short-Term Loans 200 1,705 Other Current Assets 1,008 8,583 Allowance for Doubtful Accounts 137 1,166 Fixed Assets 16, ,263 Tangible Fixed Assets 591 5,035 Buildings and Structures 126 1,075 Machinery and Equipment 345 2,937 Vehicles and Delivery Equipment 4 39 Furniture and Fixtures Land Intangible Fixed Assets 167 1,424 Software 148 1,264 Telephone Rights Investments and Other 15, ,803 Investments in Securities 5,528 47,065 Investments in Subsidiaries 4,314 36,730 Long-Term Loans 2,030 17,282 Claims Provable in Bankruptcy and Rehabilitation 2,439 20,762 Long-Term Prepaid Expenses Deferred Tax Assets 4,718 40,169 Other Investments 1,698 14,462 Allowance for Doubtful Accounts 5,269 44,854 TOTAL ASSETS 63, ,146

2 LIABILITIES & SHAREHOLDERS' EQUITY ITEM (LIABILITIES) Current Liabilities 43, ,163 Notes Payable 17, ,808 Accounts Payable, Trade 22, ,462 Accounts Payable, Other 860 7,327 Accrued Expenses Income Taxes Payable Advance Received 563 4,793 Accrued Employees' Bonuses 435 3,703 Other Current Liabilities 1,436 12,224 Long-Term Liabilities 1,355 11,539 Allowance for Retirement Benefits 1,355 11,539 TOTAL LIABILITIES 44, ,703 (SHAREHOLDERS' EQUITY) Capital Stock 6,800 57,887 Capital Reserves 5,000 42,564 Additional Paid-in Capital 1,700 14,471 Other Capital Reserve 3,300 28,092 Gain from Capital Stock and Additional Paid-in Capital Reduction 3,300 28,092 Retaining Earnings 5,804 49,409 Unappropriated Retained Earnings 5,804 49,409 Net Unrealized Gain on Other Securities 677 5,770 Treasury Stock TOTAL SHAREHOLDERS' EQUITY 18, ,443 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 63, ,146

3 PROFIT AND LOSS STATEMENT (For the Year Ended March 31, 2006) ITEM Ordinary Items Operating Revenue and Expenses Operating Revenue Sales 206,586 1,758,629 Operating Expenses Cost of Sales 191,511 1,630,305 Selling, General and Administrative Expenses 11, ,625 94,603 1,724,909 Operating Income 3,961 33,720 Non-Operating Income and Expenses Non-Operating Income Interest Income Foreign Currency Exchange Gain 420 3,577 Others 735 1,242 6,257 10,573 Non-Operating Expenses Interest 662 5,636 Loss on Sales of Notes Receivable 385 3,280 Others 301 1,348 2,563 11,481 Ordinary Income 3,854 32,811 Extraordinary Items Extraordinary Gains Gain on Sales of Investments in Subsidiaries and Affiliates Gain on Sales of Investments in Securities Gain on Sales of Fixed Assets ,055 Extraordinary Losses Loss on Allowance and Devaluation of Investments in Subsidiaries and Affiliates 465 3,958 Loss on Sales of Investments in Subsidiaries and Affiliates 200 1,708 Loss on Revaluation of Investments in Securities Loss on Disposition of Fixed Assets Loss on Revaluation of Golf Club Memberships ,362 Income Before Income Taxes 3,230 27,504 Income Taxes Current Deferred Net Income 3,291 28,016 Retained Earnings Brought Forward from the Previous Year 2,513 21,393 Unappropriated Retained Earnings 5,804 49,409

4 PROPOSAL FOR APPROPRIATION OF RETAINED EARNINGS (As of March 31, 2006) ITEM Unappropriated Retained Earnings 5,804,187,435 49,409,955 Total 5,804,187,435 49,409,955 The proposed appropriation is as follows: Dividend on the first preferred stock( per share) 48,552, ,314 Dividend on the second preferred stock( per share) 65,394, ,687 Dividend on the third preferred stock( per share) 74,144, ,174 Dividend on the fourth preferred stock(.342 per share) 5,605,200 47,716 Directors' Bonuses 50,000, ,640 Total 243,695,200 2,074,531 Unappropriated Retained Earnings to be carried forward 5,560,492,235 47,335,424

5 .Significant Accounting Policies 1. Basis and Method of Valuation of Major Assets a) Securities ) Investments in subsidiaries and affiliates are stated at cost, cost being determined by the moving average method. ) Marketable "Other Securities" are stated at fair value at the year end. (Unrealized holding gains or losses, net of applicable taxes, are included in shareholder's equity. The cost of their sales is determined by the moving average method.) Unquoted "Other Securities" are stated at cost, cost being determined by the moving average method. b) Derivatives are stated at fair value. Inventories are stated at cost, cost being determined by the monthly average method. 2. Depreciation of Fixed Assets a) Depreciation of tangible fixed assets is computed using the declining balance method over the estimated useful lives of the assets. However depreciation of buildings is computed using the straight-line method over the estimated useful lives of the assets. The range of useful lives is summarized as follows. Buildings and Structures 2 40 years Machinery and Equipment 2 15 years b) Amortization of intangible fixed assets is computed using the straight-line method over the estimated useful lives. Software for internal use is amortized using the straight-line method over the estimated useful lives (within five years). 3. Translation of the Foreign Currency Assets and Liabilities Foreign currency receivables and payables are translated into Japanese yen at the exchange rates prevailing at the Balance Sheet date. Resulting difference and losses are included in net profit or loss for the year when incurred. 4. Allowance a) Allowance for Doubtful Accounts To prepare for loss on bad debt expense, allowance for receivables is provided based upon the Companies' past credit loss experience. Allowance for doubtful receivables are provided based upon an evaluation of the uncollectible amount. b) Accrued Employees' Bonuses Accrued employees' bonuses are provided based on the estimated amount to be paid for service rendered from the employees for the calculation period, of which is attributed to this fiscal year. c) Allowance for Retirement Benefits Allowance for retirement benefits are provided based on the amount of the projected benefit obligations. Unrecognized transition amount is amortized within 15 years. Unrecognized prior service cost is amortized within the average remaining service period (13 years). Unrecognized actuarial difference is amortized within the average remaining service period (13 years) from the next year when incurred. 5. Lease Leases that transfer substantially all the risks and rewards of ownership of the assets are accounted for as capital leases. Leases that do not transfer ownership of the assets at the end of the lease term are accounted for as operating leases, in accordance with accounting principles and practices generally accepted in japan. 6. Hedge Accounting a) Hedging Activities Gains or losses arising from valuating by the fair value of the derivatives designated as hedging instruments are deferred as an asset or liability. Also forward exchange contracts are designated as hedging instruments for foreign receivables and payables. b) Hedging Instruments and Hedging Items Hedging Instruments Hedging Items Forward Exchange Contracts Foreign currency receivables and payables and Future foreign currency transactions c) In order to hedge the risk of changes in exchange rate, derivative transactions are used in accordance with the Company's internal regulations. d) Effectiveness of hedging activities are evaluated by referring to the accumulated gains or losses on the hedging instruments and the related hedged items from the commencement of the hedges. 7. Consumption taxes are not included in the amount of sales, cost of sales and selling, general and administrative expenses, etc.

6 .Newly Adopted Accounting Standard For the year ended March 31,2006, the Company adopted the new accounting standard for impairment of fixed assets ("Opinion Concerning Establishment of Accounting Standard for Impairment of Fixed Assets issued by the Business Accounting Deliberation Council on August 9, 2002) and the implementation guidance for the accounting standard for impairment of fixed assets (the Financial Accounting Standard Implementation Guidance No.6 issued by the Accounting Standards Board of Japan on October 31, 2003). As a result of adopting the new accounting standard, there was no impact on the Company's results of operations and financial position..notes 1. Receivables, Payables and Transactions with Controlling Company a) Receivables from and Payables to Controlling Company Receivables Short - Term 5,454 46,431 Payables Short - Term 3,345 28,482 b) Transactions with Controlling Company Sales 4,407 37,523 Purchases 12, ,886 Other Transactions Receivables, Payables and Transactions with Subsidiaries a) Receivables from and Payables to Subsidiaries Receivables Short - Term 2,655 22,604 Long - Term 174 1,488 Payables Short - Term 706 6,011 b) Transactions with Subsidiaries Sales 6,176 52,579 Purchases 3,620 30,822 Other Transactions 1,666 14, Accumulated Depreciation Tangible Fixed Assets 1,115 9, Contingent Liabilities Guaranty Obligations 1,441 12,275 Discounted Export Notes 2,485 21,157 Repurchase Obligation to Notes Receivable Sold 12, , Significant Leased Assets Information system equipments are leased, other than fixed assets recorded in balance sheets. 6. Increase in net assets stipulated in Article 124, Paragraph 3 of the enforcement regulations of the Commercial Code in Japan, which is valued at market price 677 5, Net Income per Share U.S.Dollars Treasury Stock Common Stock 164,024 shares

7 NOTES TO RETIREMENT BENEFITS PLAN (Information about Retirement Benefits Plan). Retirement Benefits Plan The Company established unfunded lump-sum benefit plan. In addition, the Company would pay extra severance payment under certain circumstances.. Allowance for Retirement Benefits (as of March 31,2006) (1) Projected benefit obligations *1 2,941 25,042 (2) Unrecognized transition amount 1,142 9,721 (3) Unrecognized actuarial difference 850 7,240 (4) Unrecognized prior service cost (decrease of obligation) 406 3,459 (5) Allowance for Retirement Benefits ( (1)+(2)+(3)+(4) )*1 1,355 11,539 *1 Amounts recognized by abolishment of contributory benefits plan of \ million ($6,559 thousand) are included in projected benefit obligations.. Net pension expense related to the retirement benefits (for the year ended March 31, 2006) (1) Service cost 120 1,026 (2) Interest cost (3) Amortization of unrecognized transition amount 126 1,080 (4) Amortization of unrecognized actuarial difference (5) Amortization of unrecognized prior service cost (6) Net Pension Expenses ( (1)+(2)+(3)+(4)+(5) ) 329 2,804. Assumptions used in calculation of the Retirement Benefits (1) Method of attributing the projected benefits to period of services Straight-line basis (2) Discount rate 2.0% (3) Amortization of unrecognized prior service cost 13 years Unrecognized prior service cost is amortized over a certain period within the average remaining service period. (4) Amortization of unrecognized actuarial difference 13 years Unrecognized actuarial difference is amortized over a certain period within the average remaining service period from the next year when incurred. (5) Amortization of unrecognized transition amount 15 years