FINANCIAL STATEMENTS. (From April 1, 2010 to March 31, 2011)

FINANCIAL STATEMENTS (From April 1, 2010 to March 31, 2011)

Note: The official text of the accompanying consolidated financial statements, prepared pursuant to the Japanese Companies Act, is written in Japanese. The accompanying English audit report and financial statements were translated into English solely for the convenience of the reader. The business report and supporting schedules have been omitted. The U.S. dollar amounts included in the accompanying consolidated financial statements and notes thereto represent the conversion of Japanese yen to U.S. dollars on the basis of 83.15 to U.S. $1, the effective rate of exchange on March 31, 2011. These conversions are not intended to imply that such assets and liabilities have been or could readily be converted, realized or settled in dollars at 83.15 to U.S. $1.

(TRANSLATION) INDEPENDENT AUDITORS REPORT May 6, 2011 To the Board of Directors of Chori Co., Ltd.: Deloitte Touche Tohmatsu LLC Designated Unlimited Liability Partner, Engagement Partner, Certified Public Accountant: Akira Tsujiuchi Designated Unlimited Liability Partner, Engagement Partner, Certified Public Accountant: Satoshi Nakayama Pursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated financial statements, namely, the consolidated balance sheet as of March 31, 2011 of Chori Co., Ltd. (the Company ) and consolidated subsidiaries, and the related consolidated statements of income and changes in equity, and the related notes for the fiscal year from April 1, 2010 to March 31, 2011. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company and consolidated subsidiaries as of March 31, 2011, and the results of their operations for the year then ended in conformity with accounting principles generally accepted in Japan. Our firm and the engagement partners do not have any financial interest in the Company for which disclosure is required under the provisions of the Certified Public Accountants Law. The above represents a translation, for convenience only, of the original report issued in the Japanese language.

CONSOLIDATED BALANCE SHEET As of March 31, 2011 Assets Item ASSETS Millions of Japanese Yen Amount Thousands of Current assets 58,171 699,592 Cash and deposits 5,906 71,032 Deposit paid to parent company 3,000 36,079 Notes and accounts receivable-trade 35,189 423,205 Merchandise and finished goods 9,448 113,632 Work in process 57 696 Raw materials and supplies 16 194 Goods in transit 168 2,021 Deferred tax assets 786 9,462 Other current assets 3,672 44,162 Allowance for doubtful accounts (74) (896) Fixed assets 6,219 74,795 Tangible fixed assets 534 6,424 Buildings and structures 204 2,457 Accumulated depreciation (68) (825) Machinery, equipment and vehicles 874 10,520 Accumulated depreciation (638) (7,678) Furniture and fixtures 411 4,953 Accumulated depreciation (275) (3,314) Land 25 311 Intangible fixed assets 86 1,040 Investments and other assets 5,598 67,330 Investment securities 2,990 35,960 Long-term loans 44 538 Deferred tax assets 518 6,234 Other assets 2,950 35,485 Allowance for doubtful accounts (905) (10,888) Total assets 64,390 774,387

LIABILITIES AND EQUITY Amount Item Millions of Japanese Yen Thousands of Liabilities Current liabilities 37,038 445,443 Notes and accounts payable-trade 31,883 383,451 Short-term loans payable 271 3,260 Accrued income taxes 204 2,453 Accrued employees bonuses 503 6,055 Allowance for sales returns 1 19 Allowance for losses from liquidation of affiliates 42 506 Other current liabilities 4,132 49,696 Non-current liabilities 1,524 18,338 Deferred tax liabilities 3 40 Allowance for retirement benefits 1,168 14,053 Allowance for directors and corporate auditors retirement benefits 116 1,404 Negative goodwill 236 2,839 Total liabilities 38,563 463,781 Equity Shareholders' equity 27,830 334,697 Capital stock 6,800 81,779 Capital surplus 1,700 20,444 Retained earnings 19,373 232,997 Treasury stock (43) (524) Accumulated other comprehensive income (2,184) (26,269) Unrealized loss on available-for-sale securities (344) (4,146) Deferred gain on derivatives under hedge accounting 56 681 Foreign currency translation adjustments (1,896) (22,804) Minority interests 181 2,177 Total equity 25,826 310,606 Total liabilities and equity 64,390 774,387

CONSOLIDATED STATEMENT OF INCOME Year Ended March 31, 2011 Item Millions of Japanese Yen Amount Thousands of Net sales 222,074 2,670,767 Cost of sales (203,255) (2,444,448 ) Gross profit 18,818 226,319 Selling, general and administrative expenses (13,641) (164,054 ) Operating income 5,177 62,265 Non-operating income Interest income 96 1,161 Dividend income 106 1,276 Equity in earnings of affiliates 11 136 Amortization of negative goodwill 62 757 Gain on adjustment of liability accounts 144 1,737 Miscellaneous income 184 605 2,213 7,283 Non-operating expenses Interest (93) (1,126) Loss on sales of notes receivable (90) (1,092) Sales discounts (85) (1,030) Foreign currency exchange losses (59) (720) Miscellaneous expenses (108) (439) (1,310) (5,279) Ordinary income 5,343 64,269 Extraordinary income Reversal of allowance for doubtful accounts 291 3,508 Gain on sales of investment securities 17 216 Gain on sales of fixed assets 2 312 30 3,754 Extraordinary losses Loss on valuation of investment securities (266) (3,207) Loss on disaster (34) (413) Loss on sales of stocks of affiliates (33) (404) Loss on disposal of fixed assets (15) (192) Loss on valuation of golf club memberships (12) (150) Loss on sales of investment securities (0) (363) (5) (4,373) Income before income taxes and minority interests 5,292 63,650 Income taxes Current (341) (4,105) Deferred 431 89 5,184 1,078 Net income before minority interests 5,382 64,729 Minority interests in net income (10) (121) Net income 5,372 64,607

(Reference) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year Ended March 31, 2011 Item Millions of Japanese Yen Amount Thousands of Net income before minority interests 5,382 64,729 Other comprehensive income Unrealized loss on available-for-sale securities (57) (694) Deferred loss on derivatives under hedge accounting (32) (396) Foreign currency translation adjustments (419) (5,044) Share of other comprehensive income of associates accounted for using equity method (114) (1,372) Total other comprehensive income (624) (7,507) Comprehensive income 4,758 57,221 Total comprehensive income attributable to: Owners of the parent 4,752 57,160 Minority interests 5 61

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year Ended March 31, 2011 Capital stock Capital surplus Shareholders equity Retained earnings Treasury stock Total shareholders' equity (Millions of Japanese Yen) Accumulative other comprehensive income Unrealized loss on availablefor-sale securities Deferred gains or losses on hedges Foreign currency translation adjustments Total accumulative Minority other interests comprehensive income Balance as of March 31, 2010 6,800 1,700 14,514 (40) 22,974 (287) 89 (1,367) (1,565) 180 21,590 Changes of items during the period Dividends from earnings (508) (508) (508) Net income 5,372 5,372 5,372 Purchase of treasury stock (3) (3) (3) Disposal of treasury stock (0) 0 0 0 Others (4) (4) (4) Net changes of items other than shareholders (57) (32) (528) (619) 0 (618) equity during the fiscal year Total changes of items during the 4,859 (3) 4,855 (57) (32) (528) (619) 0 4,236 period Balance as of March 31, 2011 6,800 1,700 19,373 (43) 27,830 (344) 56 (1,896) (2,184) 181 25,826 Total equity Capital stock Capital surplus Shareholders equity Retained earnings Treasury stock Total shareholders' equity Unrealized loss on availablefor-sale securities (Thousands of ) Accumulative other comprehensive income Deferred gains or losses on hedges Foreign currency translation adjustments Total accumulative Minority other interests comprehensive income Balance as of March 31, 2010 81,779 20,444 174,559 (482) 276,302 (3,452) 1,078 (16,448) (18,822) 2,171 259,651 Changes of items during the period Dividends from earnings (6,116) (6,116) (6,116) Net income 64,607 64,607 64,607 Purchase of treasury stock (44) (44) (44) Disposal of treasury stock (0) 2 1 1 Others (52) (52) (52) Net changes of items other than shareholders (693) (396) (6,356) (7,446) 5 (7,440) equity during the fiscal year Total changes of items during the period 58,437 (42) 58,395 (693) (396) (6,356) (7,446) 5 50,954 Balance as of March 31, 2011 81,779 20,444 232,997 (524) 334,697 (4,146) 681 (22,804) (26,269) 2,177 310,606 Total equity

Notes to the Consolidated Financial Statements Amounts less than one million yen have been rounded down in the consolidated financial statements. Significant Items Forming the Basis of Preparation for the Consolidated Financial Statements 1. Scope of Consolidation (1) Consolidated Subsidiaries a) Number of consolidated subsidiaries 24 b) Name of significant subsidiaries Tokyo Kutsushita Co., Ltd., Chori Imaging Corporation, Shanghai Xindie Tanaka Garments Co., Ltd., Chori America, Inc., Chori (China) Co., Ltd. (2) Non-consolidated Subsidiaries a) Name of significant non-consolidated subsidiaries Chori Iran Co., Ltd b) Reasons for exclusion from the scope of consolidation Total assets, sales, net income/loss and retained earnings (the amounts corresponding to equity share) of non-consolidated subsidiaries are excluded from the scope of consolidation as they do not have a material effect on the consolidated financial statements. 2. Application of Equity Method Non-consolidated subsidiaries and affiliated companies accounted for by the equity method a) Number of non-consolidated subsidiaries and affiliated companies 12 b) Names of significant companies Red Butterfly Strontium Industry Co., Ltd Dazu Chongqing 3. Changes of Scope of Consolidation and Application of Equity Method (1) Consolidation One company was included in the scope of consolidation due to the commencement of its business and one company was excluded from the scope of consolidation due to its liquidation. (2) Equity Method One company was excluded from application of the equity method due to the sale of the equity investment in the company. 4. Significant Accounting Policies (1) Evaluation Standards and Methods for Significant Assets a) Securities Available-for-sale securities With market value Valued at fair value at the balance sheet date (unrealized gains and losses are included in the equity section of the balance sheet, and cost of securities sold is primarily calculated using the moving-average method) Without market value Valued at cost using generally by the moving-average method b) Derivatives are stated at fair value. c) Inventories are stated at cost, generally determined by the monthly average method. (Carrying costs on the consolidated balance sheet were written down based on decreased profitability of such assets.) (2) Depreciation Methods for Significant Assets a) Depreciation of tangible fixed assets is generally computed using the declining-balance method over the estimated useful lives of the assets. However, depreciation of buildings (including buildings and accompanying facilities) is generally computed using the straight-line method. The ranges of useful lives for assets are summarized as follows. Buildings and structures 3-24 years Machinery and equipment 2-10 years b) Amortization of intangible fixed assets is generally computed using the straight-line method. Software for internal use is generally amortized using the straight-line method over the estimated useful lives (five years or less).

(3) Accounting Standards for Allowances a) Allowance for Doubtful Accounts To provide for losses due to bad debt expense, the allowance for doubtful accounts is recorded at amounts considered to be appropriate based upon past credit loss experience for general receivables and specific consideration for certain receivables deemed doubtful of collection. b) Accrued Employees Bonuses Accrued employees bonuses are provided for based on the estimated amount attributable to services rendered by employees this fiscal year which are paid in the following fiscal year. c) Allowance for Losses from Liquidation of Affiliates To provide for losses arising from the liquidation of affiliated companies, the estimated loss amounts to be borne by the Company are recorded. d) Allowance for Retirement Benefits To provide for employee retirement benefits, the allowance is recorded based on the estimated liability for retirement benefits as of the balance sheet date. Unrecognized transition amounts arising due to changes in accounting standards are amortized ratably over 15 years. Prior service costs are amortized using the straight-line method over a period (12 years) equal to or less than the average remaining service years for employees when incurred. Actuarial differences are amortized using the straight-line method over a period (12 years) equal to or less than the average remaining service years of employees for the fiscal year in which the differences occurred, commencing with the following fiscal year. (Additional Information) As a result of a review by the Company of the amortization periods for actuarial differences and prior service costs in connection with the shortening of the average remaining service years of employees, the amortization period was shortened from 13 to 12 years commencing this fiscal year. The impact of this change on the Company s consolidated income was insignificant. e) Allowance for Directors and Corporate Auditors Retirement Benefits To provide for director and corporate auditor retirement benefits, the allowance is recorded based on the amount of such retirement benefits which would be payable according to the Company s internal policies as of the balance sheet date. (4) Standards for Translation of Foreign Currency-denominated Assets and Liabilities into Japanese Yen All monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rates prevailing at the balance sheet date. The resulting transaction gains or losses are included in the determination of net income. Assets, liabilities, revenue and expenses of overseas subsidiaries are translated into Japanese yen based on spot exchange rates at their respective fiscal closing dates. Differences arising from such translations are included in both Foreign currency translation adjustments and Minority interests in the equity section of the balance sheet. (5) Significant Hedge Accounting Methods a) Methods of Hedge Accounting In principle, the Company uses deferred hedging. Forward exchange contracts qualifying for hedge accounting are translated at the contracted rates. b) Hedging Instruments and Hedging Items Hedging Instruments Related Hedged Items Forward exchange contracts Receivables, payables, and forecasted transactions denominated in foreign currencies c) Hedging Policies The Company and certain of its consolidated subsidiaries use derivatives to mitigate the risk of foreign exchange fluctuations in accordance with internal management rules. d) Methods of Assessing Hedging Effectiveness The Company uses a comparative method based on accumulated fluctuation amounts for prior periods to assess hedging effectiveness. Due to the high correlation between the hedging instruments and the related hedged items, assessment of the effectiveness of the forward exchange contracts at the balance sheet date has been omitted.

(6) Accounting Methods for Consumption Tax Consumption taxes are excluded from items in the consolidated statement of income. Changes in Significant Accounting Policies Applied in the Preparation of the Consolidated Financial Statements (Application of Accounting Standard for Equity Method of Accounting for Investments and Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method ) The Company adopted Accounting Standard for Equity Method of Accounting for Investments (ASBJ Statement No. 16, announced on March 10, 2008) and Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method (PITF No. 24, issued on March 10, 2008) from this fiscal year, and made necessary adjustments at consolidated financial closing. These changes had no effect on the consolidated statement of income. (Application of Accounting Standard for Asset Retirement Obligations ) The Company adopted Accounting Standard for Asset Retirement Obligations (ASBJ Statement No. 18, issued on March 31, 2008) and Guidance on Accounting Standard for Asset Retirement Obligations (ASBJ Guidance No. 21, issued on March 31, 2008) from this fiscal year. These changes had no effect on the consolidated statement of income.. (Application of Accounting Standard for Business Combinations) The Company adopted Accounting Standard for Business Combinations (ASBJ Statement No. 21, issued on December 26, 2008), Accounting Standard for Consolidated Financial Statements (ASBJ Statement No. 22, issued on December 26, 2008), Partial Amendments to Accounting Standard for Research and Development Costs (ASBJ Statement No. 23, issued on December 26, 2008), Revised Accounting Standard for Business Divestitures (ASBJ Statement No. 7, issued on December 26, 2008), Revised Accounting Standard for Equity Method of Accounting for Investments (ASBJ Statement No. 16, announced on December 26, 2008) and Revised Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10, issued on December 26, 2008) from this fiscal year. Changes in Presentation (Consolidated Statement of Income) In connection with the amendment to the Ordinance for Corporate Accounting based on Accounting Standard for Consolidated Financial Statements (ASBJ Statement No. 22, issued on December 26, 2008), the classification Net income before minority interests was presented commencing with this fiscal year. Additional Information (Consolidated Balance Sheet and Consolidated Statement of Changes in Equity) In connection with the amendment to the Ordinance for Corporate Accounting based on Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, issued on June 30, 2010), Valuation and translation adjustments was presented as Accumulated other comprehensive income commencing with this fiscal year. Other Notes to the Consolidated Balance Sheets Contingent Liabilities Millions of Japanese Yen Thousands of U.S. dollars Discounted export notes 960 11,549 Repurchase obligation for notes receivable sold 1,700 20,446

Notes to the Consolidated Statement of Changes in Equity 1. Numbers and Types of Shares Issued and Treasury Stock Types of stock As of March 31, 2010 Increase Decrease As of March 31, 2011 Shares Issued Common stock (shares) 238,691,442 - - 238,691,442 The third preferred stock (shares) 1,750,000 - - 1,750,000 The fourth preferred stock (shares) 600,000 - - 600,000 Total 241,041,442 - - 241,041,442 Treasury stock Common stock (shares) 287,047 36,495 1,247 322,295 Total 287,047 36,495 1,247 322,295 (Summary of reasons for changes) The increase and decrease in the number of treasury shares of common stock are due to purchases and sales of fractional shares. 2. Dividends (1) Amount of Dividends Paid Resolution (May 18, 2010) (May 18, 2010) (May 18, 2010) Resolution (May 18, 2010) (May 18, 2010) Types of stock Total amount of dividends (Millions of Japanese Yen) (Japanese Yen) Dividends per share Record date Effective date Common stock 476 2.000 March 31, 2010 June 18, 2010 The third preferred stock 24 13.850 March 31, 2010 June 18, 2010 The fourth preferred stock 7 12.600 March 31, 2010 June 18, 2010 Types of stock Total amount of dividends (Thousands of ) () Dividends per share Record date Effective date Common stock 5,734 0.024 March 31, 2010 June 18, 2010 The third preferred stock 291 0.167 March 31, 2010 June 18, 2010 The fourth preferred stock 90 0.152 March 31, 2010 June 18, 2010 (May 18, 2010)

(2) Dividends for which the record date is in the fiscal year ended March 31, 2011 and the effective date is in the following fiscal year. Resolution Types of stock Dividend Source (May 18, 2011) (May 18, 2011) (May 18, 2011) Total amount of dividends (Millions of Japanese Yen) (Japanese Yen) Dividends per share Record date Effective date Common stock Retained Earnings 476 2.000 March 31, 2011 June 16, 2011 The third preferred stock Retained Earnings 22 12.910 March 31, 2011 June 16, 2011 The fourth preferred stock Retained Earnings 6 11.660 March 31, 2011 June 16, 2011 Resolution Types of stock Dividend Source (May 18, 2011) (May 18, 2011) Total amount of dividends (Thousands of ) () Dividends per share Record date Effective date Common stock Retained Earnings 5,733 0.024 March 31, 2011 June 16, 2011 The third preferred stock Retained Earnings 271 0.155 March 31, 2011 June 16, 2011 The fourth preferred stock Retained Earnings 84 0.140 March 31, 2011 June 16, 2011 (May 18, 2011)

Notes of Financial Instruments 1. Matters Concerning Financial Instruments The Group restricts its investment of funds to short term deposits, etc. and procures funds through loans from financial institutions. Risk reduction of customer credit risks related to notes receivable and accounts receivable are handled in accordance with internal management rules. Investment securities primarily consist of stock, and the market values of listed shares are checked quarterly. The usage of loans payable, etc. is for working capital purposes. Derivatives are utilized based on actual demand and in accordance with internal management rules. 2. Matters Concerning the Market Value of Financial Instruments Carrying values on the consolidated balance sheet, market values and the differences as of March 31, 2011 (current consolidated closing date) are as follows. (Millions of Japanese Yen) Carrying value on the consolidated balance sheet ( ) Market value ( ) Difference (1) Cash and deposits 5,906 5,906 - (2) Deposit paid to parent company 3,000 3,000 - (3) Notes and accounts receivable-trade 35,189 35,189 - (4) Investment securities Available-for-sale securities 2,451 2,451 - (5) Notes and accounts payable-trade (31,883) (31,883) - (6) Short-term loans payable (271) (271) - (7) Derivatives 95 95 - (1) Cash and deposits (2) Deposit paid to parent company (3) Notes and accounts receivable-trade (4) Investment securities Carrying value on the consolidated balance sheet ( ) Market value ( ) 71,032 71,032 36,079 36,079 423,205 423,205 (Thousands of ) Difference - - - Available-for-sale securities 29,478 29,478 - (5) Notes and accounts payable-trade (383,451) (383,451) - (6) Short-term loans payable (3,260) (3,260) - (7) Derivatives 1,148 1,148 - (*) Amounts recorded as a liability are shown as ( ). (Note 1) Calculation methods for the market value of financial instruments and matters concerning marketable securities and derivative transactions. (1) Cash and deposits, (2) Deposit paid to parent company, (3) Notes and accounts receivable-trade As these items are settled on a short-term basis with market values closely approximating book values, the subject book values were recognized. (4) Investment securities Market value for stocks refers to quoted prices per stock exchanges. (5) Notes and accounts payable-trade, (6) Short-term loans payable As these items are settled in a short-term basis, with market values closely approximating book values, the subject book values were recognized.

(7) Derivative Transactions a) Items for which hedge accounting is not applied: None b) Items for which hedge accounting is applied: The contracted amounts or principal-equivalent amounts set forth in contracts for each hedge accounting method as of the consolidated fiscal year end were as follows. (Millions of Japanese Yen) Hedge Accounting Method Type of Derivative Contracted Amounts Hedged Item Contracted Amount Financial Instrument Longer than 1 year Market Value (*1) Foreign currency forward contracts Accounts Selling Receivable 5,478 - (*2) Forward contracts qualifying for hedge accounting translated at contract rates. Forward contracts qualifying for hedge accounting for which gains and losses are deferred. Hedge Accounting Method Forward contracts qualifying for hedge accounting translated at contract rates. Forward contracts qualifying for hedge accounting for which gains and losses are deferred. Foreign currency forward contracts Buying Foreign currency forward contracts Selling Foreign currency forward contracts Buying Type of Derivative Financial Instrument Foreign currency forward contracts Selling Foreign currency forward contracts Buying Foreign currency forward contracts Selling Foreign currency forward contracts Buying Accounts Payable Accounts Receivable Accounts Payable Hedged Item Accounts Receivable Accounts Payable Accounts Receivable Accounts Payable Contracted Amount 8,270 - (*2) 785 - (180) 6,430-95,672 (Thousands of ) Contracted Amounts Market Value (*1) Longer than 1 year 65,891 - (*2) 99,464 - (*2) 9,448 - (2) 77,330-1,150 (*1) Calculations of market value were based on prices presented by financial institutions with which the Company has transactions. (*2) The foreign currency forward contracts qualifying for hedge accounting translated at contract rates were accounted for together with the underlying receivables and payables and their market values are included in the market values of such receivables and payables. (Note 2) Non-listed shares, etc. (recorded as 538 million in the consolidated balance sheet) having no market price and estimable future cash flows were recognized as being difficult to determine market value for, and were not included in Available-for-sale securities under (4) Investment securities. Notes of Per Share Information Japanese Yen (1) Equity Per Share 102.54 1.23 (2) Net Income Per Share 22.41 0.27