TV Asahi Corporation · TV Asahi’s entertainment shows and drama series also capture ... such as Doraemon and Crayon Shin-chan. TV Asahi Music ... ratings all fell short of last

005_0331001371907.indd 1 2007/06/26 13:06:59

Authorized Number of Shares 3,000,000

Issued Number of Shares 1,006,000

Number of Stockholders 37,980

Number of Shares Held by Foreign Investors 152,003 (15.11%)

Listing Tokyo Stock Exchange

Fiscal Year-End March 31

General Meeting of Stockholders

June

Transfer Agent The Sumitomo Trust & Banking Co., Ltd.

Stock Information

Stockholder Information

Major Stockholders

Corporate Name TV Asahi Corporation

Abbreviation TV Asahi

Head Office 9-1 Roppongi 6-chome, Minato-ku,Tokyo 106-8001, JapanTel. +81-3-6406-1111http://www.company.tv-asahi.co.jp/e/

Date of Establishment November 1, 1957

Date of Service Start February 1, 1959

Paid-in Capital ¥36,642,800,000

Number of Employees 1,218

Daiwa Securities SMBC Co. Ltd.

Nomura Securities Co., Ltd.Nikko Citigroup Limited

Corporate Data

Sub-Underwriter

Underwriter

ChairmanMichisada Hirose

PresidentMasao Kimiwada *

Vice-PresidentHiroshi Hayakawa *

Executive DirectorsKenji KazamaIkuo KamiyamaHidekazu KitamuraHiroaki TakadaKeiji TakanoToshio Fukuda

Members of the BoardToru TakedaMutsuko HorikoshiTakahiro OtsukaSeishi FukudaKojiro WatanabeMichio UematsuHaruki KitazawaKotaro AkiyamaTsuyoshi OkadaYoshitoshi KitajimaMitsuru GondoYoshio NishimuraTetsuzo Hori

Standing Corporate AuditorsSachio ArikuraYasuharu Murase

Corporate AuditorsKoichi KobayashiSawako NomaTakahisa Hamamoto

* Representative Directors

Board of Directors

Board of Directors

Name SharesPercent of

voting rights

Asahi Shimbun Publishing Company 340,495 33.85

Toei Co., Ltd. 161,842 16.09

Dai Nippon Printing Co., Ltd. 40,300 4.01

Kyusyu Asahi Broadcasting Co., Ltd. 32,147 3.20

Mellon Bank Treaty Clients Omnibus 29,876 2.97

Satellite Channels Incorporated 20,854 2.07

The Master Trust Bank of Japan, Ltd.(Trust Account) 16,493 1.64

State Street Bank & Trust Company 505025 16,422 1.63

CBNY-UMB Fund 15,304 1.52

Kodansha Ltd. 13,640 1.36

As of June 27, 2007 As of March 31, 2007

Investor Information

41

TV broadcasting, the mainstay segment of the TV Asahi Group, comprises operations

related to the production and transmission of television programs aired on the TV Asahi

network. These activities are undertaken primarily by TV Asahi and subsidiary TV Asahi

Productions Co., Ltd., and account for approximately 90% of consolidated net sales.

TV Asahi has earned high praise from viewers for news and information programs,

such as Hodo Station—the network’s most recognized weeknight news show—and

Takeshi’s TV Tackle, in which Takeshi Kitano, a world-renowned director, leads weekly

discussions on political, economic and social topics. TV Asahi’s entertainment shows

and drama series also capture strong ratings.

Sports programming is another important genre. TV Asahi delivers major events to

which it has exclusive broadcasting rights, such as the 2007 FINA World Champion-

ships Melbourne and the 2006 FINA Synchronised Swimming World Cup in the past

year. The Company also has an exclusive contract with the Asian Football Confedera-

tion (AFC).

In the animation genre, TV Asahi has continued to focus on programs that appeal

to overseas audiences, such as Doraemon and Crayon Shin-chan.

TV Asahi Music Co., Ltd., the core subsidiary of the Company’s music publication

business, administers copyrights for music compositions, manages artists and scouts

for promising new talent through tie-ups with television programs.

TV Asahi Music is also the exclusive agent for a number of artists particularly well

liked by young adults. HY, KETSUMEISHI, Shonan no Kaze and Sasuke are artists

who continue to grow in popularity.

TV Asahi is involved in activities such as special events production, TV shopping, video and DVD sales, and motion picture investment, as well as content distribution on the Internet and to mobile phones. In the special events business, TV Asahi sponsors Summer Sonic and Fuji Rock Festival, concerts that have become summer traditions. In the TV shopping business, the Company has marketed an array of hit products and continues to work with manufacturers to develop new hit products. In video and DVD sales, a steady stream of new releases, particularly series of popular TV dramas and entertainment shows, has contributed to sales. In motion picture investment, TRICK The Movie 2, based on the popular drama series TRICK, and samurai epic Love and Honor, starring popular Japanese entertainer, Takuya Kimura, and directed by Yoji Yamada, drew large audiences. In the Internet and mobile content distribution business, “Tele Asa com·plete!,” a subscription-based information site for mobile phone users, continues to deliver program-related content.

TV BroadcastingBusiness

Music PublicationBusiness

Other Businesses

TV Asahi at a Glance

005_0331001371907.indd 2 2007/06/26 13:07:01














tion (AFC).










% of 2007 Sales

12,000

9,000

6,000

3,000

003 04 05 06 07

24,000

18,000

12,000

6,000

003 04 05 06 07

Sales (Millions of yen)

Sales (Millions of yen)

(Millions of yen) % of 2007 SalesSales

% of 2007 Sales

240,000

180,000

120,000

60,000

003 04 05 06 07

KETSUMEISHI

Freezing PointGrand Prix of FigureSkating Final 2006

2007 FINA WorldChampionships Melbourne

Shonan no KazeHY

Hodo Station Music Station Takeshi’s TV Tackle

London Hearts PartnersOh! My Mother in Law!

TRICK The Movie 2Summer Sonic Chii Sanpo

Special Programming

Regular Programming

©2006 TRICK The Movie 2Production Committee



Other Businesses

87.4%

3.6%

9.0%

�

010_0331001371907.indd 1 2007/06/26 13:01:02

�

03 To Our Stakeholders

04 New Medium-Term Management Plan

07 Companywide Reform Campaign Overview

�� TV Asahi's Broadband Businesses

�3 Japan's TV Industry and Terrestrial Digital Broadcasting Efforts

�4 Protecting the Environment, Contributing to Society

�6 Corporate Governance

�7 Financial Section

39 TV Asahi Network

40 Principal Subsidiaries and Affiliates

4� Board of Directors

4� Investor Information

C O N T E N T S

Forward-Looking StatementsThis report contains forward-looking statements that are based on management’s assumptions and beliefs in l ight of the information currently available to it. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this report. Such risks include but are not limited to market trends and economic conditions.

Consolidated Financial HighlightsTV Asahi Corporation and Consolidated SubsidiariesYears ended March 31, 2007 and 2006

Millions of yen Percentage change Thousands of U.S. dollars

2007 2006 2007/2006 2007

For the Year: Net sales: ¥251,125 ¥249,384 0.7% $2,127,277 TV broadcasting: 219,410 218,813 0.3 1,858,619 Network time 95,110 93,384 1.8 805,676 Spot 99,071 100,563 -1.5 839,229 Sales of programs 11,381 11,303 0.7 96,408 Other 13,848 13,563 2.1 117,306 Music publication 9,195 10,759 -14.5 77,891 Other businesses 22,520 19,812 13.7 190,767 Operating income 13,678 17,076 -19.9 115,866 Net income 10,304 9,467 8.8 87,285 Capital expenditures 4,670 5,042 -7.4 39,560 Depreciation and amortization 8,383 8,560 -2.1 71,012

At Year-End: Total assets 314,466 316,080 -0.5 2,663,837 Total net assets 249,444 244,514 2.0 2,113,037

Yen Percentage change U.S.dollars

Per Share of Common Stock: Net income—basic ¥ 10,242 ¥ 9,226 11.0% $ 87 Net assets 245,678 241,216 1.8 2,081

Percent Change

Key Ratios: Equity ratio 78.6% 76.8% 1.8% Return on equity (ROE) 4.2 4.0 0.2

Notes: 1. For convenience only, U.S. dollar amounts have been translated from Japanese yen at the rate of ¥118.05 to US$1, the rate of exchange prevailing on the Tokyo Foreign Exchange Market on March 30, 2007.

2. For total net assets, see Note 1 ( l ) of the Notes to Consolidated Financial Statements. 3. For calculations per share of common stock, see Note 8 of the Notes to Consolidated Financial Statements. 4. Return on equity (ROE) = 100 x [Net income ÷ (Average net assets—Average minority interests)].

010_0331001371907.indd 2 2007/06/26 13:01:03

3

To Our Stakeholders

First of all, I would like to take this opportunity to offer my sincer-

est gratitude to each one of our stakeholders for your support of

the TV Asahi Group.

Recently in the advertising industry, despite such high-profile

events as 2006 FIFA World Cup™ Germany, unstable climatic

conditions, rises in material costs and a weak recovery in

consumer spending dampened business activity, resulting in

sluggish market conditions.

Fiscal 2007, ended March 31, 2007, was the final year of

TV Asahi’s Companywide Reform Campaign. We focused on

strengthening our competence to maintain high viewer ratings

and to secure stable revenue. In terms of viewer ratings, we

captured the number one position in prime time 2 (11 p.m. to 1

a.m.) for the second straight year. However, our all-day (6 a.m.

to midnight), golden time (7 p.m. to 10 p.m.) and prime time

(7 p.m. to 11 p.m.) ratings all fell short of last year’s levels.

Such outcome has defined the areas and issues we need to

tackle going forward.

In our financial results, our efforts to gain higher profits in

both our advertising and nonadvertising businesses in fiscal

2007 led to a ¥700 million increase in net sales to ¥251.1 bil-

lion. Operating income decreased ¥3.3 billion, to ¥13.6 billion,

and net income rose ¥800 million, to ¥10.3 billion, owing to

reduced tax expenses.

Fiscal 2008 is the first year of TV Asahi’s New Medium-

Term Management Plan. Our five-year plan encompasses

our consolidated group companies, clarifies our corporate

priorities and is simple in its purpose of engendering a common

understanding throughout our group. The celebration of TV

Asahi’s 50th anniversary will take place during the period of our

New Medium-Term Management Plan, and in fiscal 2012, the

last year of the Plan, the complete transition of digital terrestrial

broadcasting will take place. The next five years will bring major

changes in the broadcasting industry and many challenges for

the TV Asahi Group. To meet these challenges, we will reinforce

our content production and acquisition capabilities gained in the

Companywide Reform Campaign and strengthen our corporate

cornerstone that promises another 50 years of growth.

On behalf of the Board of Directors and all the employees at

TV Asahi, we thank you for your continued understanding and

support as we strive to achieve our goals.

June 2007

Masao Kimiwada

President

010_0331001371907.indd 3 2007/06/26 13:01:07

4

New Medium-Term Management Plan

Goals of the New Medium-Term Management Plan

Net sales ¥251.1 ¥282.0 ¥300.0 19.5% 3.6%

Operating income 13.7 12.5 20.0 46.2% 7.9%

Operating profit margin 5.4% 4.4% 6.7% — —

(Billions of yen)

1. Achieve the number one position in prime time ratings in fiscal 2012

2. Achieve consolidated net sales of ¥300 billion and operating income of

¥20 billion in fiscal 2012

3. Build a corporate culture that maximizes the creativity of all employees

Consolidated Net Sales and Operating Income TargetsFY 2007

resultsFY 2010

goalsFY 2012

goalsPercentage

growthPercentage growth

(annual average)

New Medium-Term Management Plan andTV Asahi’s 50th Anniversary Celebration

The 50th anniversary of TV Asahi’s establishment is on November 1, 2007, and the 50th anniversary of the launch of TV Asahi’s broadcasting service is on February 1, 2009—both during the course of the New Medium-Term Management Plan. We are therefore designating the period of one year and five months from November 1, 2007 to March 31, 2009, as TV Asahi’s 50th Anniversary Celebration period. Our 50th Anniversary Celebration will play a central role in strengthening our content production capabilities. In addition to producing large-scale special programs, we will actively sponsor major events in order to reinforce our production structure.

FY2008 FY2009 FY2010 FY2011 FY2012

50th Anniversary CelebrationNov. 1, 2007 — Mar. 31, 2009

New Medium-Term Management Plan FY2008—FY2012

TV Asahi’s mission is “to become the industry leader in content creation.” The Companywide

Reform Campaign conducted over the last five years was a great success. At the same time,

it helped us identify the future challenges we need to face for continued development. In our

New Medium-Term Management Plan, which duration is for five years beginning April 2007, our

business priority is to further strengthen our content creation capability as we strive to reach the

next stage of our growth.

010_0331001371907.indd 4 2007/06/26 13:01:08

�

Strategies for New Medium-Term Management PlanBoosting Content Production Capabilities

Through the Companywide Reform Campaign, TV Asahi has steadily increased viewer ratings to

contend for the number two position in prime time. In the next five years, our top priority is to reinforce

our ability to produce strong content. Our aim is to firmly establish ourselves as number two in prime

time ratings in fiscal 2010, and to take the number one position in fiscal 2012. Achieving these goals

will require us to maintain stable high ratings in our regular programming. To this end, we will increase

personnel in production sections, strengthen relationships with production companies and artist

management companies, and continue to enhance sports content. We will also review our morning and

daytime news and information programming and improve practices that capture higher viewer ratings.

Our enhanced production capabilities will enable us to exercise our creativity to continually develop

new content that can be distributed across diverse media outlets. By securing production budgets and

promoting a corporate culture that values the spirit of challenge, TV Asahi will become the leader in

content creation.

Expanding TV Advertising Revenues

Despite the current weak growth in the advertising market, TV Asahi will steadily regain market share in

order to achieve overall advertising revenue growth. Furthermore, as our advertising revenue is currently

weighted toward spot sales, we aim to expand the time sales ratio for a more stable revenue stream.

Our target is to increase time revenue from our regular programming, which is contingent upon our

increasing viewer ratings.

For spot sales, we will continue to raise our spot market share. We will also proactively respond to

sponsors’ needs by thinking out of the box and advancing projects and services across various market-

ing platforms, including the Internet, special events and the One-Seg service.

Exercising “Selection and Concentration” of Nonadvertising Businesses

TV Asahi will enhance nonadvertising businesses by selecting and concentrating on profitable areas.

We will focus our efforts on the development and distribution of content that creates synergy between

terrestrial broadcasting and other media outlets. Particularly, investment in motion pictures is an area

where we believe more opportunities for synergy can be sought.

For example, in the past TV Asahi drew large audiences with two theatrical releases of the popular TV

drama series TRICK. Moreover, video and DVD sales of the drama series and the two feature films also

recorded high sales. Going forward, we will continue to strengthen our relationships with film studios

010_0331001371907.indd 5 2007/06/26 13:01:09

6

while actively pursuing ventures in which we can increase our control of the film productions.

In the TV shopping business, we will streamline the group and parent company’s operation of the

business and gradually shift to an e-commerce growth strategy.

In our Internet-related business, our current focus is on providing TV program-related content on

subscription-based mobile phone services. In the future, however, we will also pursue business oppor-

tunities on the Internet that will expand the TV Asahi fan base.

In our special events business, we will continue to sponsor and develop various events, including

major events for TV Asahi’s 50th Anniversary Celebration.

Growth of Group Companies

For TV Asahi to continue to grow, we must strengthen our group companies. As such, we will bolster

opportunities for expansion and encourage the development of new lines of business.

TV Asahi Music Co., Ltd., handles the music publication arm of the TV Asahi Group and has been

successful in artist management. Going forward, we will expand the music publication business by

cooperating with network affiliate stations to identify and recruit budding talent on a nationwide basis.

Moreover, we will reassess our financial investments in group companies to boost the content pro-

duction capability of the TV Asahi Group. We will also combine our data broadcast production functions

to make operations more efficient.

TV Asahi will also expand its content business management. As an initial step, we have established

BrostarTV LLC as a joint venture with DIGITALSCAPE Co., Ltd., with the aim of scouting for and

developing new content, and expanding our content licensing business. The new company runs the

BrostarTV website, to which professional and semi-professional content creators upload their content

for public review and competition. One of TV Asahi’s late night shows in the past, The Frogman Show—

a computer-generated animation—was discovered on this site. We will work to develop BrostarTV into

one of our future sources for new content.

Game: The Tower of Moai/ Takahirou

Movie: RUN AWAY/ Toyojun

BrostarTV home page

010_0331001371907.indd 6 2007/06/26 13:01:09

Companywide Reform Campaign OverviewTV Asahi’s five-year Companywide Reform Campaign brought about

extensive changes for the Company. Viewer ratings and overall

performance increased dramatically. Especially in prime time ratings,

TV Asahi’s standing has risen and the Company is now vying for the

number two position. Our reputation among sponsors and viewers

has improved, and TV Asahi is now known to be strong in sports and

entertainment shows, in addition to being the leading station for

news and information programs.

7

010_0331001371907.indd 7 2007/06/26 13:02:24

�

I want to deliver wonders and sensations as they are!

Forever a big TV Asahi fan! Go for the Top! Think in the other

person’s shoes!! Live soccer broadcasts— keep smiling, even in

remote locations!!

Love TV, Love TV lovers.

Review of the Companywide Reform CampaignIn June 2002, TV Asahi launched the Companywide Reform Campaign to prompt structural reforms

across the Company. Until then, TV Asahi had perennially been number four in the industry in terms

of viewer ratings, income and reputation. The aim of the Companywide Reform Campaign was to give

end to the stagnation within TV Asahi and instill a culture that values challenge and the determination to

prevail in a competitive environment.

To achieve such objective, we set high goals in our Companywide Reform Campaign: 1) achieve the

top prime time rating, 2) transform into a company with a high-profit structure and 3) build a corporate

culture that enables the pursuit of individual aspirations and ideals. Among these goals and throughout

the term of the Companywide Reform Campaign, our top management priority was to capture higher

ratings. The main focus of Phase One of the Companywide Reform Campaign (June 2002 to March

2005) was to increase viewer ratings, and our major objective in Phase Two (April 2005 to March 2007),

was to consistently achieve high ratings.

We adopted various measures to achieve these goals. To raise ratings, we rejuvenated the executive

team in the programming production section, the most important area of broadcasting operations. This

created clearer lines of responsibility and smoother communication between the executive team and the

production staff. We also channeled more personnel into the production sections to reinforce creative

capabilities. Moreover, we established the practice of promoting popular late-night shows to prime time

which enhanced the quality of our entertainment shows.

In sports programming, we broke our old ratings records one after another by broadcasting high-

profile international matches through our exclusive contract with the Asian Football Confederation (AFC).

In TV dramas, numerous successful large-scale special programs cemented bonds of trust between

production staff, actors and entertainers.

TV Asahi also established a structure to support and promote programs on a companywide scale.

We applied new approaches to marketing and advertising programs, which drove a steady stream of

programs to capture mainstream interest.

This resulted in dramatic increases in TV Asahi viewer

ratings across all time slots during the five-year period. In

particular, in fiscal 2006 the Company achieved its first solo

number two ranking in prime time, as well as the number one

position in prime time 2 for two consecutive years—fiscal 2006

and fiscal 2007.

TV Asahi’s business performance is also trending upward.

Higher ratings are generating increased advertising revenues,

and our nonadvertising businesses—such as special events,

TV shopping and investment in motion pictures—are expand-

ing into new territories.

010_0331001371907.indd 8 2007/06/26 13:02:29

9

I want to deliver wonders and sensations as they are!

Forever a big TV Asahi fan! Go for the Top! Think in the other

person’s shoes!! Live soccer broadcasts— keep smiling, even in

remote locations!!

Love TV, Love TV lovers.

In the five-year span of the Companywide Reform

Campaign, we have strengthened the source of our competi-

tive advantage. We implemented organizational reforms,

vastly improved the capabilities and motivation of staff

engaged in program production, and enhanced our ability to

create content that reflects the corporate values of TV Asahi.

The success of the Companywide Reform Campaign is the

foundation on which we will expand our corporate mission.

Overview of Fiscal 2007Viewer Ratings

TV Asahi’s new programming plans for fiscal 2007 involved developing new programs and

drama series, allocating programs to their ideal time slots, expanding morning programming

and producing major sports events. We put in our utmost efforts to achieve ratings of 13.0%

or higher in golden time and prime time, and 8.0% or higher in all-day and prime time 2, as set

forth in our goals for Phase Two of the Companywide Reform Campaign. While we attained

an 8.6% rating in prime time 2 for the year—0.6 percentage point over our target—our 11.4%

golden time rating, 12.2% prime time rating and 7.5% all-day rating all fell short of our targets.

In sports programming, the TV Asahi broadcast of the Japan vs. Croatia game during 2006

FIFA World CupTM Germany achieved a remarkable 52.7% rating, the highest in the Company’s history.

Our exclusive broadcast of the 2006 Grand Prix of Figure Skating Final garnered an average 14.3% rating,

and the 2006 FINA Synchronised Swimming World Cup attained a four-night average rating of 13.2%,

reinforcing TV Asahi’s image as a broadcaster with a strong sports lineup.

Entertainment shows remained popular, with Takeshi’s TV Tackle sustaining high ratings and London

Hearts and Golden Legend continuing to attract viewers with their original content. Night-time entertainment

shows at 11 p.m. continue to enjoy a strong following, particularly from young viewers.

In the drama genre, the detective drama Partners hit a series high of 16.3% in average ratings during

2006 FINA Synchronised Swimming World Cup

TV Asahi’s Viewer Ratings by Rating Time Periods (%)

2003 2004 2005 2006 2007

Prime Time 2 (11 p.m. — 1 a.m.) Prime Time (7 p.m. — 11 p.m.)

Golden Time (7 p.m. — 10 p.m.) All-Day (6 a.m. — midnight)

Source: Video Research Ltd.

14

12

10

8

6

Viewer Ratings for Japan’s Top Four Commercial Broadcasters Source: Video Research Ltd.

All-Day (6 a.m. — midnight)

TV Asahi Company A Company B Company C

(%)

2003 2004 2005 2006 2007

12.0

10.5

9.0

7.5

6.0

Golden Time (7 p.m. — 10 p.m.)

(%)

2003 2004 2005 2006 2007

16

14

12

10

8

Prime Time (7 p.m. — 11 p.m.)

(%)

2003 2004 2005 2006 2007

16

14

12

10

8

Prime Time 2 (11 p.m. — 1 a.m.)

(%)

2003 2004 2005 2006 2007

10

9

8

7

6

010_0331001371907.indd 9 2007/06/26 13:02:32

�0

I want to makeeveryone beautiful!

Onward! Hand in handwith the times.

Lifelong memories froma momentary dream!!

its fifth season. Hitoshi Tadano, the Extraordinary Undercover Detective, airing on the Friday night drama

slot from 11 p.m., achieved ratings of 14.4%.

In news and information programming, Hodo Station turned in an average rating of 14.1% for the

year by maintaining its faithful viewer base.

On the other hand, our new drama series and other regular programming lacked overall momentum,

compared to the previous year. We will continue to work on enhancing such programs as we strive to

attain stable high ratings.

Advertising Revenues (Non-Consolidated)Time RevenueAs a rule, network time is sold in six-month blocks under program sponsorship contracts. Since higher

time sales are closely linked to a broadcaster’s ability to sustain consistently high ratings in regular pro-

gramming, TV Asahi focuses on maintaining stable high ratings for each program in prime time. Major one-

off programs, such as sports events and special dramas, influence time sales as well. We therefore strive

to secure rights to major sports events and develop special programs that will lead to higher time sales.

In fiscal 2007, time sales reached ¥95.7 billion, up ¥1.5 billion on a year-on-year basis. Time sales for

regular programming remained strong, supported by the improved sales performance of programs with

stable high ratings, as well as special programming such as 2006 FIFA World CupTM Germany, the 2006

FINA Synchronised Swimming World Cup, the Grand Prix of Figure Skating Series and special drama

mini-series Freezing Point.

Spot Revenue

TV Asahi’s spot ads target the Kanto region, the area surrounding Tokyo. In fiscal 2007, spending on

advertising in the Tokyo spot market decreased 2.3% from the previous fiscal year, and TV Asahi’s spot

sales fell ¥1.4 billion, to ¥99.4 billion. However, our share of the spot market in the Kanto region reached

20.9%, surpassing the previous year’s 20.8% and marking the fourth straight year of growth. Although

we recorded increased revenues from the “service and entertainment” industry segment, which includes

telecommunications; and the “publishing” segment, which includes magazines and music CDs; we

experienced a sharp decline from the “finance and insurance” industry segment, which recorded high

sales in the previous year; as well as a decrease from the “retail” and “automobiles” sectors.

Nonadvertising Revenues (Non-Consolidated)Advertising revenues are prone to considerable fluctuation, depending on the economy. To create a

financial structure that is more resilient to changes in the domestic economy, TV Asahi strives to secure

revenues from activities other than advertising. We are actively engaged in businesses that utilize our

infrastructure and content as a TV broadcaster. These include TV shopping, special events production,

investment in motion pictures and subscription-based services for mobile phones.

TV Asahi’s Time Sales Revenues (Non-Consolidated) (Billions of yen)

2003 2004 2005 2006 2007

100

75

50

25

0

TV Asahi’s Spot Sales Revenuesand TV Asahi’s Share of Spot Sales(Non-Consolidated)

(Billions of yen) (%)

2003 2004 2005 2006 2007

120

90

60

30

0

26

22

18

14

10

Spot Sales TV Asahi’s Share of Spot Sales

010_0331001371907.indd 10 2007/06/26 13:02:38

11

I want to makeeveryone beautiful!

Onward! Hand in handwith the times.

Lifelong memories froma momentary dream!!

Music Publication BusinessTV Asahi Music Co., Ltd., handles TV Asahi’s music publication business. HY, one of the company’s exclusive artists, released their fourth album Confidence, and tickets for their concert tour sold out at venues across Japan, contributing to sales. KETSUMEISHI also released two singles—Tabiudo in April and Danjo Rokunin Natsu Monogatari in July—and Shonan no Kaze released their third album, Shonan no Kaze ~Riders High~, in August, garnering support from legions of fans. TV Asahi Music will continue to scout for and develop promising new talent and will strive consistently to deliver hit artists and hit songs.

Confidence(HY)

Shonan no Kaze~Riders High~

(Shonan no Kaze)

Danjo Rokunin Natsu Monogatari (KETSUMEISHI)

OurTVshoppingbusinesscontinuestogrow,supportedbyanumberofhitproductsshowcased

duringtheTVshoppingsegmentofinformationprogramChii Sanpo—broadcastinthemorning—and

thelate-nightTVshoppingshowSelection X.

OurspecialeventsbusinesssponsoredthepopularFuji Rock FestivalandSummer Sonic 2006

musicevents,bothwhichhavebecomesummertraditions.Othermajorspecialeventsincludethe

BritishMuseumexhibitionMummy: the Inside Story, exhibitionof Centre Pompidou ArtistesÉtrangers à

Paris 1900–2005 andtheBroadwaymusical West Side Story.

Inthemotionpictureinvestmentbusiness,wereleasedanumberofsuccessfulfilms.Featurefilm

versionsofanimationprograms,suchasDoraemonandCrayon Shin-chan,continuedtodrawmanymovie

fanstotheaters.Inaddition,TRICK The Movie 2—thesecondfeaturefilmreleaseofourdramaseries

TRICK—attractedevenlargeraudiencesthanthefirstrelease.ThesamuraiepicLove and Honor,starring

TakuyaKimuraanddirectedbyYojiYamada,becameamajorhitwith¥4billioninbox-officereceipts.

Inthecommunicationsatellite(CS)business,TVAsahitookovertheoperationofTVAsahiChannel,

aCSchannel,fromCSOneTen,Ltd.,andthenumberofsubscribershasbeenincreasing.

TVAsahialsocarriedoutaggressivemarketingactivitiesinitsInternetbusinesses,suchas“TeleAsa

com·plete!,”asubscription-basedinformationserviceformobilephoneusers,aswellasinvideoandDVD

repackagingofpopularTVprograms,publishingactivitiesandmerchandisesales.

Doraemon©Fujiko-Pro, Shogakukan, TV Asahi,

Shin-ei, ADK 2007

Major Nonadvertising Revenues (Non-Consolidated)

Special Events Motion Pictures Video and DVD TV Shopping Internet–based Operations Merchandise Sales CS Broadcasting

(Billions of yen)

2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007

6.0

4.5

3.0

1.5

0

1.4

2.4

3.33.6

3.8

0.9

1.51.2

0.8

1.41.1

1.72.2 2.1

3.1

0.1

1.8

4.34.7

5.0

1.31.5

1.82.1

1.9

0.10.3

0.50.3 0.4

0.1

1.5

0.0 0.0 0.0

010_0331001371907.indd 11 2007/07/03 23:03:33

��

TV Asahi’s Broadband Businesses

TV Asahi offers a variety of broadband services aimed at raising the value of its content and diversifying its revenue streams.

Diverse Broadband-based ServicesOur broadband business is part of our effort to expand our content distribution activities. The “TV

Asahi bb” site, accessible from the TV Asahi home page, offers subscription-based video content,

such as news, animation, professional wrestling and children’s programs. We have also enriched

our shopping site, which allows consumers to purchase items presented on our TV shopping

programs and other program-related merchandise. We have implemented an easy-to-use ordering

format to facilitate the buying process. Additionally, “Tele Asa com.plete!,” a subscription-based

content distribution service on mobile phones, offers news and downloadable content related to

dramas, animation and entertainment shows.

Joint Study of One-Seg ServiceOne of the enhanced services made available through terrestrial digital broadcasting is One-Seg,

a broadcast service for mobile phones and other mobile devices which commenced in April 2006.

One-Seg is a free-of-charge service using airwaves and it enables users to watch TV programs

and receive data broadcasting. Data broadcasting, which delivers news and program information,

allows users to link to fee-based mobile sites as well.

TV Asahi performed a joint study with KDDI, a major telecommunications company, to assess

the potential of One-Seg as a medium for content distribution and advertising, and as a means for

conducting e-commerce. Our research verified that One-Seg data broadcasting links can be used to

efficiently guide viewers to fee-based sites on various online media. Currently, the broadcast content

on One-Seg is the same as that of terrestrial television, but in 2008 independent programming is

scheduled to become available on One-Seg. TV Asahi will continue to examine and evaluate new

business models on One-Seg with the development of independent programs in mind.

Use of Broadband Technology in Live ShowsOnce a year, TV Asahi airs Test the Nation, an annual live-broadcast program that gauges the IQ

of viewers. This special program provides an interactive service during the broadcast that enables

viewers to participate via computer, mobile phone, terrestrial digital data broadcasting and One-

Seg service. This groundbreaking service tabulates online participant data and reflects the data

gathered in the program in real time.

Test the Nation became popular across Japan when it debuted in fiscal 2003. In fiscal 2007,

the program focused on testing the viewers’ emotional intelligence, “EQ,” and drew hits from a

large number of viewers through terrestrial digital data broadcasting—over twice as many as in the

previous year.

This use of broadband in a live show attracted considerable interest from the TV industry as a fine

example of how broadband can complement terrestrial digital broadcasting. TV Asahi will continue to

research and develop methods of data broadcasting to enhance the television viewing experience.

TV Asahi bb site

One-Seg service

Test the Nation (Data broadcasting)

Test the Nation (One-Seg service)

010_0331001371907.indd 12 2007/06/26 13:02:49

�3

Japan’s TV Industry and Terrestrial Digital Broadcasting Efforts

The transition to digital broadcasting is triggering major changes in Japan’s TV industry. This new business environment presents a vast potential for new services that highlight the cooperation between broadcasting and telecommunications.

Regulation in the TV IndustryJapan Broadcasting Corporation—the publicly funded broad-

caster more familiarly known as NHK—and five key commercial

broadcasters in Tokyo are the leaders in the national TV industry.

The industry is regulated by the Radio Law and Broadcast Law.

Radio waves are considered a public good, and thus, a company

must attain a license from the government in order to engage in

broadcasting operations.

Broadcasters have a duty to serve the public. They must abide

by various rules and regulations in their broadcasting business,

such as providing emergency reporting in times of natural disasters,

upholding public order and standards of decency in broadcast

content and taking a politically impartial stand.

Commercial broadcasters transmit programs to viewers free

of charge, and each broadcaster relies primarily on its advertis-

ing revenues for funding. A voluntary limit is set on the amount

of advertising a network can run by The National Association of

Commercial Broadcasters in Japan.

The Nationwide Network of Key Stations and Affiliate Stations

There are 127 commercial broadcasters in Japan. Commercial

broadcasting licenses are issued for each district and are valid

for a specific zone therein. In addition, to enable as many people

as possible to engage in free speech through broadcasting, the

Radio Law limits ownership of local stations by the five key com-

mercial broadcasters in Tokyo.

The five key commercial broadcasters in Tokyo have built

national affiliate networks with local stations to ensure compre-

hensive news coverage. Another important feature of having a

national network is the nationwide reach of commercials, which

makes time sales possible.

Thus, affiliate stations are not subsidiaries or affiliates in the

corporate sense, but they are valuable partners in the execution

of broadcasting operations.

Expansion of the Terrestrial Digital Broadcasting Area

In line with government policy, terrestrial digital broadcasting

commenced in December 2003 in three regions: Kanto, centering

on Tokyo; Chukyo, surrounding Nagoya; and Kinki, covering

Kyoto, Osaka, Kobe and Nara. The terrestrial digital broadcasting

area was launched in all prefectural government locations in

December 2006, with conventional analog broadcasting sched-

uled to terminate in July 2011. As of December 1, 2006, the

reach of terrestrial digital broadcasting has expanded to cover

84.0% of all households in Japan.

The digitization of terrestrial broadcasting is part of the

national government’s strategy to promote information technol-

ogy, and its implementation will make more effective use of

airwaves and raise broadcasting quality. Terrestrial digital

broadcasting offers the advantages of high-definition picture and

high-fidelity sound quality, as well as electronic program guides,

interactive services, data broadcasting and other features that

benefit the elderly and the disabled.

TV Asahi is making steady progress toward the full nationwide

transition to digital broadcasting in 2011, bringing the high-defi-

nition rate of its programming up to 82.3% for all-day and 100%

for prime time (as of April 2007). TV Asahi will continue to provide

broadcasting services that take advantage of digital technology,

such as program-related data broadcasting, Dolby Digital 5.1ch

surround for regular programs and One-Seg services for mobile

phones and other portable devices.

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�4

Protecting the Environment, Contributing to Society

Ongoing Improvement of Environmental Management Systems

TV Asahi has produced programs, such as the documentary

Spaceship Earth and Naturing Special, that emphasize the

importance of protecting the environment.

Moreover, we also practice environment-friendly measures

throughout our day-to-day business activities, including setting

up environmental improvement projects. For example, the Archive

Operation & Reengineering Department has incorporated various

procedures that lessen our burden on the environment, such as

collecting used videotapes and implementing a recycling program.

In July 2002, these efforts were recognized by the International

Standards Organization with ISO 14001 certification, the interna-

tional standard for environmental management systems.

Since acquiring ISO 14001, TV Asahi has continued to

enhance its environmental management practices. We review

routine practices in detail to identify ways to reduce the impact

our daily operations have on the environment, saving energy and

materials by promoting the effective and efficient use of natural

resources.

Integrated Learning Support ActivitiesTV Asahi has conducted tours of its facilities since November

2003 as part of its integrated learning support activities for stu-

dents from the elementary school to university levels. As of March

31, 2007, 1,036 schools throughout Japan have participated.

In February 2005, TV Asahi began offering “Cater Classes,”

through which TV Asahi personnel visit schools and teach

classes, the first such endeavor for a key Tokyo station. As

of March 31, 2007, 44 employees have visited 182 schools,

offering interactive classes that give students a look into news

broadcasting and other TV station activities.

In addition, in August 2006 the Company held a hands-on

summer vacation event called tv asahi no tv asobi (“TV fun at TV

Asahi”). The project put us in direct contact with a large number

of viewers, giving them enjoyable insights into the workings of

a TV station. Events included interactive experiences of news

reporting, animation sound-overs and weather forecasting, and

tours included a satellite news gathering truck and a virtual

production set.

TV Asahi conducts these integrated learning support activities

to promote media literacy. In order to obtain an objective evalua-

tion of and advance its efforts, TV Asahi will perform a joint study

with the Graduate School of Interdisciplinary Information Studies

at the University of Tokyo over a three-year period beginning

June 2007. This study, called PROJECT ROPPON, will focus

on building a new media literacy framework that fosters mutual

learning between broadcasters and the community. Moreover,

we intend for the new framework to be widely used by TV Asahi’s

affiliate network stations and other broadcasters.

Social Contributions through the TV Asahi Social Welfare Organization

The TV Asahi Social Welfare Organization (the “Organization”)

was established in 1977 as the first social welfare Organization

in the commercial broadcasting industry. Since its founding,

the Organization has promoted broad-ranging programs for the

elderly, the mentally and physically disabled, and children.

Welfare activities for the elderly include “rehabilitation danc-

ing,” an activity the Organization has promoted for the past 20

years, visiting nursing homes mainly in the Kanto area. TV Asahi

has also sponsored visits to nursing homes by veteran singers

since 1989. Marking the 100th visit, actress Mitsuyo Asaka held

a special sword-dance show, and celebrity reporter Masaru

Nashimoto held a talk show.

TV Asahi also sponsors activities for mentally and physically

challenged individuals. Such activities include rehabilitation with

the cooperation of the Tokyo Music Volunteer Association, national

blind judo tournaments, wheelchair basketball tournaments and a

national sign language speech contest for high school students.

While TV Asahi fulfills its public duty and mission through its TV broadcasting business, the Company is also actively involved in protecting the environment and contributing to the well-being of society.

tv asahi no tv asobi(“TV fun at TV Asahi”)

“Cater Classes”

010_0331001371907.indd 14 2007/06/26 13:02:51

��

Welfare activities for children include the annual sponsorship of

homestays abroad for high school students in Tokyo orphanages.

Most recently, participants engaged in volunteer activities and

enjoyed river rafting in Oregon, U.S.A.

TV Asahi believes in the importance of grass-roots commu-

nity activities. In line with this view, the Organization participated

in the Ministry of Justice-sponsored “The 56th Brighter Society

Campaign” Healthy Development of Youth Event in Roppongi—

held in the Roppongi Hills Arena in Tokyo—inviting the world-

renowned jazz trumpeter Terumasa Hino. In addition, the

Organization sponsored the 1st Philanthropy LPGA Players

Championship, a women’s golf tournament aimed primarily at

supporting child and maternal welfare and child welfare efforts.

Donations, such as 10% of player winnings, 10% of spectator

entrance fees and revenues from various spectator events were

given to infant homes, orphanages and nursery schools across

Japan through the Organization.

The Company also sponsors sumo wrestling charity events

in cooperation with the Nihon Sumo Kyokai, with the intention

of raising awareness of social issues, such as traffic safety.

The proceeds from such events are donated to organizations

involved in relevant social welfare programs.

In 1999, TV Asahi set up the Doraemon Charity Fund.

Doraemon is one of the most popular animation characters in

Japan, and the animation series has been broadcast on the

TV Asahi network since 1979. The fund provides assistance to

victims of natural disasters both in Japan and abroad. To date,

TV Asahi has undertaken 10 fundraising campaigns to help

the victims of large natural disasters such as the earthquake

in Taiwan (September 1999), the volcanic eruptions and earth-

quakes that hit the Izu Islands off the coast of Tokyo (summer

of 2000), the Niigata Chuetsu earthquake (October 2004), the

earthquakes and tsunamis in the Indian Ocean (December 2004)

the Northern Pakistan earthquake (October 2005) and the Java

earthquakes (May and July 2006). The collected funds were

delivered to the affected regions through the TV Asahi Social

Welfare Organization.

Selected for the FTSE4Good Index SeriesTV Asahi has been selected for inclusion in the FTSE4Good

Index Series, a measure of corporate social responsibility

(SRI index) developed by FTSE, an independent U.K.-based

company that provides equity and bond indices to investors.

The FTSE4Good Index Series is designed to measure the

performance of companies that meet globally recognized cor-

porate responsibility standards and is applied widely throughout

the world. Companies are selected according to their work

towards environmental sustainability, their development of

positive relationships with stakeholders and their championing

of and support for universal human rights.

TV Asahi’s inclusion in the FTSE4Good Index Series indicates

that our wide-ranging public efforts have been internationally

recognized. Such efforts include an array

of environmental protection activities, aid

to disaster sites in Japan and overseas

through the Doraemon Charity Fund and

other societal contributions through the

TV Asahi Social Welfare Organization.

Wheelchair basketball tournament(Photograph by Kazuji Shimizu)

Nursing home visit by Mitsuyo Asaka Homestay abroad: River rafting in Oregon

1st Philanthropy LPGA Players Championship Sumo wrestling charity event

010_0331001371907.indd 15 2007/06/26 13:02:58

�6

Corporate Governance

Basic Policy on Corporate GovernanceTV Asahi regards the reinforcement of corporate governance

measures to be one of the most essential tasks of management.

The Company’s management supervision system relies on the

practice of ethics and corporate compliance.

Moreover, in the establishment of its corporate governance

policy and all its operations, TV Asahi aims to pursue profits in

an equitable manner without forfeiting its fundamental duty to

serve the public. In particular, in light of TV Asahi’s corporate

character, it is both crucial and strategic for TV Asahi to continue

to contribute to society, to provide vital information and enter-

tainment to viewers and to maintain good relationships with all

our stakeholders.

Corporate Governance StructureOf TV Asahi’s 21 Board members, five are from outside the

Company. In addition, three of our five corporate auditors are

external auditors.

Business activities are carried out by executive officers who are

appointed by the Board and also by full-time internal members of

the Board who assist the executive officers. The meetings of the

Board of Directors are attended by the five corporate auditors.

Full-time internal directors form the Council of Executive Directors,

which as a rule holds weekly meetings. Business activities are

reported and discussions are held concerning the operation of the

business sections for which the respective directors are respon-

sible. The Council effectively acts as the checking mechanism for

the execution of each business activity.

The Company’s outside directors apply their extensive experi-

ence and expertise to offer suggestions to increase corporate

value through new business expansion and content develop-

ment.

Routine business activities by employees are covered by

internal control mechanisms. Powers and responsibilities are set

out by written regulations pertaining to organizational authority,

and when necessary, these are checked by a number of internal

departments such as the Compliance Audit Department, the

Legal Affairs Department and the Broadcast Standards and

Practices Department. Reports on the status of activities are

submitted to the Council of Executive Directors and other perti-

nent councils.

Under this structure, Executive Officers also present detailed

reports on the progress of business activities to the Board of

Directors. As a rule, the Board meets once a month.

It is the Board of Directors’ duty to ensure that management

decisions determined at Board meetings and execution of busi-

ness activities are undertaken in accordance with prevailing laws,

the Company’s Articles of Incorporation and other regulations,

and to make certain that business activities are executed in an

appropriate and responsible manner.

It is the corporate auditors’ task to examine the execution of

business activities by the Board of Directors from the perspec-

tive of legality and appropriateness to the Company’s entire

scope of operations.

Internal Controls as the Cornerstone of Compliance

TV Asahi considers the continual monitoring and reinforcement

of internal controls to ensure fairness in the activities of the

TV Asahi Group to be one of the most important tasks of

management. This includes efforts to establish adequate internal

control mechanisms. As a company with corporate auditors, TV

Asahi already has a management supervision system in place.

However, the Company has additionally set up a Compliance

Management Office to support the work of auditors, and will

continue to strengthen its supervision system through mainte-

nance of compliance-based internal controls.

The Company maintains a Compliance Manual and

Compliance Program for its employees to reinforce the

importance of abiding by the law. Within this structure, matters

are dealt with primarily through the Compliance Management

Department, and overall responsibility lies with the President.

Under his direction, TV Asahi has established rules and systems

for appropriately addressing compliance matters, including

compliance-related inquiries, investigation of the causes of

violations and formulation of measures to prevent recurrence.

TV Asahi has a management supervision system that hinges on the maintenance of compliance-based internal controls

010_0331001371907.indd 16 2007/06/26 13:02:58

18 Five-Year Summary

19 Management’s Discussion and Analysis

24 Consolidated Balance Sheets

26 Consolidated Statements of Income

27 Consolidated Statements of Changes in Net Assets

28 Consolidated Statements of Cash Flows

29 Notes to Consolidated Financial Statements

38 Independent Auditors’ Report

FinancialSection

17

011_0331001371907.indd 17 2007/06/25 11:16:10

18

Five-Year SummaryTVAsahiCorporationandConsolidatedSubsidiariesYearsendedMarch31,2007,2006,2005,2004and2003

Millionsofyen ThousandsofU.S.dollars

2007 2006 2005 2004 2003 2007

Fortheyear:

Netsales: ¥251,125 ¥249,384 ¥242,037 ¥218,079 ¥209,035 $2,127,277

TVbroadcastingbusiness: 219,410 218,813 213,640 195,081 194,329 1,858,619

Networktime 95,110 93,384 91,299 88,146 89,040 805,676

Spot 99,071 100,563 98,125 84,606 83,330 839,229

Salesofprograms 11,381 11,303 11,310 11,220 11,062 96,408

Other 13,848 13,563 12,905 11,109 10,897 117,306

Musicpublicationbusiness 9,195 10,759 9,071 7,227 4,061 77,891

Otherbusinesses 22,520 19,812 19,326 15,771 10,645 190,767

Costofsales 177,476 172,179 165,775 156,125 147,000 1,503,397

Selling,generalandadministrativeexpenses 59,971 60,129 62,656 55,433 54,598 508,014

Operatingincome 13,678 17,076 13,606 6,521 7,430 115,866

Incomebeforeincometaxesandminorityinterests 14,568 17,229 12,932 3,797 5,069 123,405

Netincome 10,304 9,467 7,383 1,687 1,908 87,285

Capitalexpenditures 4,670 5,042 6,176 30,701 23,232 39,560

Depreciationandamortization 8,383 8,560 8,389 7,832 6,365 71,012

Atyear-end:

Totalassets ¥314,466 ¥316,080 ¥297,544 ¥288,967 ¥294,047 $2,663,837

Totalcurrentassets 153,200 150,177 146,060 139,416 171,558 1,297,755

Netpropertyandequipment 59,667 63,061 65,898 68,808 67,844 505,438

Totalcurrentliabilities 47,102 50,655 51,921 48,660 57,990 399,000

Interest-bearingdebt — — — 862 3,212 —

Totalnetassets 249,444 244,514 228,139 221,907 217,261 2,113,037

PerShareofCommonStock(YenandU.S.dollars):

Netincome—basic ¥ 10,242 ¥9,226 ¥7,199 ¥1,560 ¥1,780 $ 87

Cashdividends 1,400 1,500 1,300 700 700 12

Netassets 245,678 241,216 225,237 219,193 214,555 2,081

Otherdata:

Numberofsharesoutstanding

(Thousands) 1,006 1,006 1,006 1,006 1,006 —

Numberofemployees

(Non-consolidated) 1,218 1,234 1,250 1,262 1,278 —

Keyratios(%):

Returnonsales 4.1 3.8 3.1 0.8 0.9 —

Returnonequity 4.2 4 3.3 0.8 0.9 —

Returnonassets 3.3 3 2.5 0.6 0.7 —

Equityratio 78.6 76.8 76.2 76.3 73.4 —

Notes:1.Forconvenienceonly,U.S.dollaramountshavebeentranslatedfromJapaneseyenattherateof¥118.05toUS$1,therateofexchangeprevailingontheTokyoForeignExchangeMarketonMarch30,2007.

2.Fortotalnetassets,seeNote1( l )oftheNotestoConsolidatedFinancialStatements. 3.Forthecalculationofpershareofcommonstock,seeNote8ofNotestoConsolidatedFinancialStatements.

011_0331001371907.indd 18 2007/06/25 11:16:10

19

Management’s Discussion and Analysis

Significant Accounting PoliciesThe consolidated financial statements of the TV Asahi Group are prepared in accordance with account-

ing standards generally accepted in Japan as fair and appropriate. Some assets and liabilities, as well

as some income and expenses, are based on estimates and management interpretations at the time the

consolidated financial statements were prepared.

Operating Environment for TV Broadcasting IndustryDuring the fiscal year under review, negative factors affecting the Japanese economy included higher

oil prices, signs of potential decline in the U.S. economy, concerns of interest rate increases following

the cessation of the Bank of Japan’s zero interest rate policy, a worldwide decline in stock prices and

lagging consumer spending due to unchanging income levels. Nevertheless, the Japanese economy

sustained its gradual expansion, buoyed by a rise in corporate profits.

In the broadcasting industry, despite such large worldwide events as the 2006 FIFA World Cup™

Germany, the advertising market suffered as corporations reined in their advertising spending out of

concern for the potential economic impact of such factors as unstable weather conditions, raw material

price increases and the lagging recovery in consumer spending.

Business PerformanceUnder these economic conditions, the TV Asahi Group continued to focus on increasing earnings and

profits in its TV broadcasting, music publication and other businesses. As a result, during the year TV

Asahi (the “Company”) achieved a 0.7% increase in consolidated net sales, to ¥251,125 million. The

combination of cost of sales and selling, general and administrative expenses (“SG&A”) rose 2.2%, to

¥237,447 million, and the resulting decrease in operating income was 19.9%, to ¥13,678 million.

Net income rose 8.8%, to ¥10,304 million, due to a decrease in the Company’s tax payment, stem-

ming from the accounting of tax losses for the loss on devaluation of investment in affiliates posted in

fiscal 2006.

Following is a summary of business performance by segment. Figures for each segment are those

before the elimination of inter-segment sales (except for those used in graphs).

Performance by Business CategoryTV Broadcasting Business

In network time sales, the Company successfully raised rates for regular programs, such as entertain-

ment shows Quiz Presentation Variety Q-SAMA and London Hearts. Special one-off events that ben-

efited the Company in the preceding fiscal year included the 2005 FINA World Championships Montreal

swimming event and the 2006 FIFA World Cup™ Final Asian Qualifiers. In the fiscal year under review,

the Company achieved good sales from 2006 FIFA World Cup™ Germany, the FINA Synchronised

Swimming World Cup 2006, the Grand Prix of Figure Skating 2006, the FINA World Championships

Melbourne 2007 and the special drama mini-series Freezing Point. As a result, network time sales

totaled ¥95,444 million, up 1.6% from the previous year.

For spot sales, the Company struggled with the 2.3% decline in the Tokyo spot market. TV Asahi

posted positive sales in the “services and entertainment” and “publishing” industry segments, but

experienced a substantial decline in the “finance and insurance” segment, which was strong during the

Net Sales and Percentage Growth(Millions of yen)

2003 2004 2005 2006 2007

300,000

225,000

150,000

75,000

0

(%)12

6

0

- 6

-12

Percentage GrowthNet Sales

Sales from TV Broadcasting Business(Millions of yen)

2003 2004 2005 2006 2007

240,000

180,000

120,000

60,000

0

011_0331001371907.indd 19 2007/06/25 11:16:11

20

preceding term, and marked negative growth in the “retail” and “automobiles” segments. Consequently,

spot sales decreased 1.4%, to ¥99,373 million.

Program sales rose 0.9%, to ¥11,987 million. Other revenues increased 2.5%, to ¥14,634 million,

owing to higher broadcasting-related revenue from Trust Network Inc., Housougijyutsusha Co., Ltd., and

other subsidiaries.

As a result, TV broadcasting sales rose 0.2%, to ¥221,438 million, while operating expenses

increased 1.5%, to ¥211,020 million. Operating income fell 19.3%, to ¥10,418 million.

Music Publication Business

The music publication and copyright management business grew favorably, boosted by the expanding

music distribution and download market.

In the music publication business, artist HY’s Confidence album, released in April 2006, and Shonan

no Kaze’s Shonan no Kaze~Rider’s High~, released in August 2006, were hits. In artist management,

performance by exclusive artists under management was strong, with HY and Shonan no Kaze’s con-

cert tour tickets selling out soon after sales commenced. Sales of artist-branded products at concerts

also increased. Thus, despite a falloff from the preceding year’s record-breaking performance,

TV Asahi’s music publication business steadily gained industry presence.

Sales decreased 14.5%, to ¥9,349 million, and operating expenses fell 2.8%, to ¥7,459 million.

Operating income also declined 42.1%, to ¥1,890 million.

Other Businesses

Among investments in motion pictures, the animated picture Crayon Shin-Chan Densetsu wo Yobu

Odore! Amigo!, the comedy LOVELY COMPLEX and the action film Masked Rider Kabuto/ Bouken

Ranger The Movie attracted large audiences. The performance of Trick The Movie 2 surpassed that of

its first release, generating office receipts of ¥2.1 billion. The New Year’s release of samurai movie Love

and Honor, starring Takuya Kimura and directed by Yoji Yamada, was a major hit, accruing ¥4 billion

in box office receipts. Sakuran, the story of an Edo-era courtesan, was released in February, and the

second movie release of the new Doraemon animation series opened in theaters in March. Both pictures

proved popular.

The Company sponsored various special events during the year. These included the Broadway musi-

cal West Side Story, a stage performance of the Company’s hit drama The Black Notebook, the Summer

Sonic 06 rock music event and the Centre Pompidou Artistes Étrangers à Paris 1900–2005 exposition.

The content distribution business generated substantial video and DVD sales from the Partners

drama series and the Uchimura Produce entertainment show. In TV shopping, sales from the Selection

X TV shopping program and the shopping segment in the Chii Sanpo information program contributed

to sales. Internet-based business, comprising mobile phone content subscription services, publishing

and merchandising, were also strong.

In April 2006, the Company took over the operation of the TV Asahi Channel—which is a channel on

communication satellite (CS)—from CS One Ten, Ltd. Higher sales from the CS business, as well as strong

results for videos and DVDs, pushed up sales from other businesses 12.8%, to ¥29,156 million. Operating

expenses grew 11.4%, to ¥27,684 million, and operating income rose 46.9%, to ¥1,472 million.

Sales from Music PublicationBusiness(Millions of yen)

2003 2004 2005 2006 2007

12,000

9,000

6,000

3,000

0

Sales from Other Business(Millions of yen)

2003 2004 2005 2006 2007

24,000

18,000

12,000

6,000

0

011_0331001371907.indd 20 2007/06/25 11:16:11

21

Income and ExpensesNet Sales

Segment sales information for the TV Asahi Group during the fiscal year under review is noted in the

previous section, Performance by Business Category. Total sales, including intersegment sales, grew

0.9%, to ¥259,943 million. Of this amount, intersegment sales accounted for ¥8,818 million, a 6.0%

increase from fiscal 2006. Excluding intersegment transactions, the Group posted 0.7% higher net

sales, of ¥251,125 million.

Cost of Sales and SG&A

Cost of sales grew 3.9%, to ¥177,476 million, while SG&A edged down 0.3%, to ¥59,971 million.

Operating expenses totaled ¥237,447 million, inching up 2.2%, largely because of higher program pro-

duction expenses and increases in other business expenses in line with higher other business revenues.

Operating Income

Operating income fell 19.9% from the previous fiscal year, to ¥13,678 million.

Other Income and Expenses

Other income rose ¥737 million, to ¥890 million, the net result of higher interest and dividend income

and a ¥483 million decrease in the equity in losses of affiliates. This improvement resulted from a

decrease in the losses of Asahi Satellite Broadcasting Limited, an affiliate accounted for under the equity

method.

Net Income

Net income rose 8.8%, to ¥10,304 million.

Financial PositionAssets

Total current assets rose ¥3,023 million, to ¥153,200 million, partly because of a ¥1,647 million increase

in trade notes and accounts receivable.

Fixed assets declined ¥4,636 million from the previous year, to ¥161,266 million.

Although digital relay stations were constructed and added to tangible and intangible assets,

depreciation and amortization of ¥8,383 million was largely responsible for a ¥3,871 million decrease in

this category. Total investments and other assets were down ¥766 million, to ¥95,820 million as a result

of a decrease of ¥1,634 million in other investments and other assets and an increase of ¥808 million in

investments in securities.

Consequently, on March 31, 2007, total assets were ¥314,466 million, down ¥1,614 million from one

year earlier.

Liabilities

Current liabilities reached ¥47,102 million, down ¥3,553 million, mainly because of a large balance of

accrued income taxes at the end of the previous fiscal year. Non-current liabilities decreased ¥2,991

million, to ¥17,920 million. Consequently, total liabilities were ¥65,022 million, down ¥6,544 million, on

March 31, 2007.

Operating Income and Operating Profit Margin(Millions of yen) (%)

2003 2004 2005 2006 2007

18,000

13,500

9,000

4,500

0

10.0

7.5

5.0

2.5

0.0

Operating IncomeOperating Profit Margin

Net Income and Return on Sales(Millions of yen) (%)

2003 2004 2005 2006 2007

12,000

9,000

6,000

3,000

0

Net IncomeReturn on Sales

6.0

4.5

3.0

1.5

0

Total Assets(Millions of yen)

2003 2004 2005 2006 2007

320,000

240,000

160,000

80,000

0

Return on Equity and Return on Assets

(%)

2003 2004 2005 2006 2007

6.0

4.5

3.0

1.5

0.0

Return on EquityReturn on Assets

011_0331001371907.indd 21 2007/06/25 11:16:11

22

Net Assets

Net assets for the fiscal period under review reached ¥249,444 million.

From the fiscal period under review, the Group adopted the Accounting Standard for Presentation

of Net Assets in the Balance Sheet (Accounting Standards Board of Japan Statement No. 5, December

9, 2005) and the Guidance on Accounting Standard for Presentation of Net Assets in the Balance Sheet

(Accounting Standards Board of Japan Guidance No. 8, December 9, 2005).

Liquidity and Capital ResourcesCash Flow Analysis

During the fiscal period under review, cash and cash equivalents on a consolidated basis decreased

¥6,473 million, to ¥47,480 million.

Cash Flows from Operating Activities

Net cash provided by operating activities was ¥13,688 million, ¥5,830 million less than in the previous

year. Principal contributors were income before income taxes and minority interests, which at ¥14,568

million was ¥2,661 million less than for the preceding term, and a ¥1,609 million increase in trade notes

and accounts receivable.

Cash Flows from Investing Activities

Net cash used in investing activities totaled ¥18,748 million, ¥2,606 million less than in the preceding

term. The main reason for this change was a decrease in short-term investments and a decline in

purchase of investments in securities and investment in subsidiaries.

Cash Flows from Financing Activities

Net cash used in financing activities was ¥1,419 million, down ¥102 million, due to a decrease in divi-

dends paid to stockholders.

Capital Requirements and Financing Policy

TV Asahi will use its own funds to develop and promote terrestrial digital broadcasting and to finance

capital expenditures and other investments that will strengthen its content production capabilities.

In April 2004, a cash management system was implemented whereby TV Asahi, as the head of the

corporate group, oversees fund-raising and cash management for the entire Group.

Outline of Capital InvestmentGroupwide, capital expenditures totaled ¥4,670 million, the majority of which was for the TV broadcast-

ing business. For this segment, capital expenditures totaled ¥4,373 million. Capital expenditures in the

music publication segment were ¥40 million, and investment in other businesses totaled ¥257 million.

These capital expenditures include investments in intangible assets.

Risk InformationDependence on TV Broadcasting Business

TV Asahi derives most of its revenue from TV broadcasting, which relies on corporate advertising expen-

diture. This factor is in turn affected greatly by the state of the Japanese economy.

Net Assets and Equity Ratio(%)

2003 2004 2005 2006 2007

100

75

50

25

0

(Millions of yen)280,000

210,000

140,000

70,000

0

Net AssetsEquity Ratio

Cash Flows from OperatingActivities(Millions of yen)

2003 2004 2005 2006 2007

28,000

21,000

14,000

7,000

0

Cash Flows from InvestingActivities(Millions of yen)

2003 2004 2005 2006 2007

0

-6,000

-12,000

-18,000

-24,000

011_0331001371907.indd 22 2007/06/25 11:16:12

23

Moreover, within the TV broadcasting business, viewer ratings play an essential role in the determina-

tion of price in the sale of advertising time.

Thus, in the event the Japanese economy experiences a downturn and/or the Company is unable

to produce and broadcast programs that are widely popular with viewers, the operating results of the

Company may be influenced.

Competition, Capital Expenditures and Investments

Terrestrial digital broadcasting commenced in Japan on December 1, 2003. In tandem with the move to

its new headquarters building in the previous fiscal year, TV Asahi invested in the broadcasting equip-

ment necessary for terrestrial digital broadcasting. The Company will continue to place management

priority on digital broadcasting until the nationwide transition to digital broadcasting is complete in 2011.

In addition, the advent of terrestrial digital broadcasting may intensify competition with other media

services, such as BS digital broadcasting, CS digital broadcasting, cable television and content broad-

casting on broadband.

Therefore, the Company will continue to allocate appropriate capital expenditure and make other

investments to maintain technical standards, improve its content production competency, acquire

popular content and enhance its media strategy. If sufficient profits cannot be attained to balance such

investments, the operating results of the Company may be influenced.

Regulations (License and Foreign Ownership)

TV broadcasting is the Company’s main business. This business falls under various regulations, such

as the Radio Law and Broadcasting Law of Japan. To launch its TV broadcasting business, TV Asahi

was granted its broadcasting license on January 9, 1959, in accordance with the Radio Law, and the

Company commenced broadcasting on February 1, 1959. The Company has periodically renewed its

license since that time, as Radio Law stipulates a five-year license period.

The Radio Law prohibits a foreign national from being an executive director. The law also restricts to

less than 20% the ownership of voting rights in any free-to-air radio or television broadcaster by foreign

entities or by Japanese companies that are controlled by a foreign entity. In effect, the transfer of stock

registration to a foreign entity or Japanese companies controlled by a foreign entity may be rejected.

Moreover, if the total number of voting rights held by foreign entities or by Japanese companies

controlled by foreign entities reach 15%, the Company must disclose that fact, in accordance with the

Broadcast Law.

011_0331001371907.indd 23 2007/06/25 11:16:12

24

Consolidated Balance SheetsTVAsahiCorporationandConsolidatedSubsidiariesMarch31,2007and2006

MillionsofyenThousandsof

U.S.dollars(note2)

2007 2006 2007

Assets

Current assets:

Cash(note13) ¥ 16,215 ¥ 27,972 $ 137,357

Tradenotesandaccountsreceivable 64,830 63,182 549,174

Short-terminvestments(notes3and13) 48,454 37,883 410,453

Inventories 14,128 14,294 119,678

Deferredincometaxes(note10) 1,561 1,907 13,223

Othercurrentassets 8,083 5,013 68,471

Lessallowancefordoubtfulreceivables 71 74 601

Totalcurrentassets 153,200 150,177 1,297,755

Property and equipment, net of accumulated depreciation;

¥48,440 million ($410,335 thousand) in 2007 and

¥43,900 million in 2006:

Buildingsandstructures 21,896 22,643 185,481

Machineryandvehicles 19,039 21,419 161,279

Land 16,695 16,694 141,423

Constructioninprogress 26 297 220

Other 2,011 2,008 17,035

Netpropertyandequipment 59,667 63,061 505,438

Intangible assets, net:

Software 5,468 5,930 46,319

Other 311 326 2,635

Netintangibleassets 5,779 6,256 48,954

Investments and other assets:

Investmentsinsecurities(notes3and4) 75,281 74,473 637,704

Deferredincometaxes(note10) 988 1,110 8,369

Otherinvestmentsandotherassets 19,734 21,368 167,167

Lessallowancefordoubtfulreceivables 183 365 1,550

Totalinvestmentsandotherassets 95,820 96,586 811,690

Totalassets ¥ 314,466 ¥316,080 $ 2,663,837

Seeaccompanyingnotestoconsolidatedfinancialstatements.

011_0331001371907.indd 24 2007/06/25 11:16:12

25


U.S.dollars(note2)

2007 2006 2007

Liabilities and Net Assets

Current liabilities:

Tradenotesandaccountspayable ¥ 14,672 ¥ 15,341 $ 124,286

Otherpayables 13,202 12,715 111,834

Accruedexpenses 16,932 15,317 143,431

Accruedincometaxes(note10) 394 4,740 3,337

Othercurrentliabilities 1,902 2,542 16,112

Totalcurrentliabilities 47,102 50,655 399,000

Non-current liabilities:

Liabilitiesforretirementandseverancebenefits(note5) 16,896 17,235 143,126

Deferredincometaxes(note10) 840 3,498 7,116

Othernon-currentliabilities 184 178 1,558

Totalnon-currentliabilities 17,920 20,911 151,800

Totalliabilities 65,022 71,566 550,800

Stockholders’ equity:

Commonstock(note6): 36,643 36,643 310,402

Authorized3,000,000shares;issuedand

outstanding1,006,000sharesin2007and2006

Additionalpaid-incapital(notes6and7) 55,343 55,343 468,810

Retainedearnings(note7) 143,355 134,650 1,214,358

Totalstockholders’equity 235,341 226,636 1,993,570

Valuation and translation adjustments:

Netunrealizedgainonothersecurities(note3) 11,777 16,186 99,763

Foreigncurrencytranslationadjustments 34 27 288

Totalvaluationandtranslationadjustments 11,811 16,213 100,051

Minority interests 2,292 1,665 19,416

Totalnetassets 249,444 244,514 2,113,037

Commitments and contingencies(note9)

Totalliabilitiesandnetassets ¥ 314,466 ¥316,080 $ 2,663,837

011_0331001371907.indd 25 2007/06/25 11:16:12

26

Consolidated Statements of IncomeTVAsahiCorporationandConsolidatedSubsidiariesYearsendedMarch31,2007and2006


U.S.dollars(note2)

2007 2006 2007

Net sales ¥ 251,125 ¥249,384 $ 2,127,277

Cost of sales(note5) 177,476 172,179 1,503,397

Grossprofit 73,649 77,205 623,880

Selling, general and administrative expenses(notes5and11) 59,971 60,129 508,014

Operatingincome 13,678 17,076 115,866

Other income (deductions):

Interestincome 428 246 3,626

Dividendincome 521 395 4,413

Interestexpenses — (1) —

Equityinlossesofaffiliates (206) (689) (1,745)

Lossondevaluationofinvestmentsinsecuritiesandotherinvestments (19) (55) (161)

Other,net 166 257 1,406

890 153 7,539

Incomebeforeincometaxesandminorityinterests 14,568 17,229 123,405

Income taxes(note10):

Current 3,113 7,640 26,370

Deferred 837 (156) 7,090

3,950 7,484 33,460

Incomebeforeminorityinterests 10,618 9,745 89,945

Minority interests 314 278 2,660

Netincome ¥ 10,304 ¥ 9,467 $ 87,285


011_0331001371907.indd 26 2007/06/25 11:16:12

27

Consolidated Statements of Changes in Net AssetsTVAsahiCorporationandConsolidatedSubsidiariesYearsendedMarch31,2007and2006

Millionsofyen

Stockholders’equity Valuationandtranslationadjustments

Minorityinterests

TotalnetassetsCommon

stockAdditional

paid-incapitalRetainedearnings Total

Netunrealizedgainonother

securities

Foreigncurrencytranslation

adjustmentsTotal

(note6) (notes6and7) (note7) (note3)

Balance at March 31, 2005 ¥36,643 ¥55,343 ¥126,828 ¥218,814 ¥ 7,961 ¥(46) ¥ 7,915 ¥1,410 ¥228,139

Changes arising during year:

Cashdividends (1,509) (1,509) (1,509)

Bonusestodirectorsand

corporateauditors (141) (141) (141)

Netincome 9,467 9,467 9,467

Other,net 5 5 8,225 73 8,298 255 8,558

Totalchangesduringtheyear — — 7,822 7,822 8,225 73 8,298 255 16,375

Balance at March 31, 2006 36,643 55,343 134,650 226,636 16,186 27 16,213 1,665 244,514


Cashdividends (1,409) (1,409) (1,409)


corporateauditors (186) (186) (186)

Netincome 10,304 10,304 10,304

Other (4) (4) (4)

Netchangesotherthan

stockholders’equity (4,409) 7 (4,402) 627 (3,775)

Totalchangesduringtheyear — — 8,705 8,705 (4,409) 7 (4,402) 627 4,930

Balance at March 31, 2007 ¥36,643 ¥55,343 ¥143,355 ¥235,341 ¥11,777 ¥ 34 ¥11,811 ¥2,292 ¥249,444

ThousandsofU.S.dollars(note2)

Stockholders’equity Valuationandtranslationadjustments

Minorityinterests

TotalnetassetsCommon

stockAdditional

paid-incapitalRetainedearnings Total

Netunrealizedgainonother

securities

Foreigncurrencytranslation

adjustmentsTotal

Balance at March 31, 2006 $310,402 $468,810 $1,140,618 $1,919,830 $ 137,112 $229 $137,341 $14,104 $2,071,275


Cashdividends (11,936) (11,936) (11,936)


corporateauditors (1,575) (1,575) (1,575)

Netincome 87,285 87,285 87,285

Other (34) (34) (34)

Netchangesotherthan

stockholders’equity (37,349) 59 (37,290) 5,312 (31,978)

Totalchangesduringtheyear — — 73,740 73,740 (37,349) 59 (37,290) 5,312 41,762

Balance at March 31, 2007 $310,402 $468,810 $1,214,358 $1,993,570 $ 99,763 $288 $100,051 $19,416 $2,113,037


011_0331001371907.indd 27 2007/06/25 11:16:13

28

Consolidated Statements of Cash FlowsTVAsahiCorporationandConsolidatedSubsidiariesYearsendedMarch31,2007and2006


U.S.dollars(note2)

2007 2006 2007

Cash flows from operating activities:

Incomebeforeincometaxesandminorityinterests ¥ 14,568 ¥17,229 $ 123,405

Adjustmentstoreconcileincomebeforeincometaxesand

minorityintereststonetcashprovidedbyoperatingactivities:

Depreciationandamortization 8,383 8,560 71,012

Lossondisposalofpropertyandequipment 68 164 576

Lossondevaluationofinvestmentsinsecuritiesandotherinvestments 19 55 161

Equityinlossesofaffiliates 206 689 1,745

Allowancefordoubtfulreceivables (186) (142) (1,576)

Decreaseinliabilitiesforretirementandseverancebenefits (424) (26) (3,592)

Interestanddividendincome (949) (641) (8,039)

Interestexpenses — 1 —

(Increase)decreaseintradenotesandaccountsreceivable (1,609) 501 (13,630)

Decreaseininventories 166 248 1,406

Increaseintradenotesandaccountspayable 893 852 7,565

Other,net (931) (783) (7,886)

Subtotal 20,204 26,707 171,147

Interestanddividendreceived 945 598 8,005

Interestpaid — (1) —

Incometaxespaid (7,461) (7,785) (63,202)

Netcashprovidedbyoperatingactivities 13,688 19,519 115,950

Cash flows from investing activities:

Increaseintimedeposits (5,704) (1) (48,319)

(Increase)decreaseinshort-terminvestments 1,314 (5,390) 11,131

Capitalexpenditures (3,088) (4,420) (26,159)

Proceedsfromsaleofpropertyandequipment 65 11 551

Purchaseofintangibleassets (1,455) (1,096) (12,325)

Purchaseofinvestmentsinsecuritiesandinvestmentsinsubsidiaries (11,313) (12,996) (95,832)

Other,net 1,433 2,538 12,139

Netcashusedininvestingactivities (18,748) (21,354) (158,814)

Cash flows from financing activities:

Dividendspaidtostockholders (1,407) (1,510) (11,919)

Dividendspaidtominoritystockholdersofsubsidiaries (12) (11) (101)

Netcashusedinfinancingactivities (1,419) (1,521) (12,020)

Effect of exchange rate changes on cash and cash equivalents 6 62 51

Net decrease in cash and cash equivalents (6,473) (3,294) (54,833)

Cash and cash equivalents at beginning of year 53,953 57,247 457,035

Cash and cash equivalents at end of year(note13) ¥ 47,480 ¥53,953 $ 402,202


011_0331001371907.indd 28 2007/06/25 11:16:13

29

Notes to Consolidated Financial StatementsTVAsahiCorporationandConsolidatedSubsidiaries

1. Basis of Presentation and Summary of Significant Accounting Policy(a) Basis of PresentationTVAsahiCorporation(theCompany)anditsdomesticsubsidiariesmaintaintheirbooksofaccountinconformitywiththefinancialaccountingstandardsofJapan,anditsforeignsubsidiariesinconformitywiththoseofthecountriesoftheirdomicile. TheaccompanyingconsolidatedfinancialstatementshavebeencompiledfromtheconsolidatedfinancialstatementsfiledwiththeMinistryofFinanceasrequiredbytheSecuritiesandExchangeLawofJapanandincludecertainreclassificationsandadditionalfinancialinformationfortheconvenienceofreadersoutsideJapan.

(b) Principles of ConsolidationTheJapaneseconsolidationstandardsdefinethescopeofconsolidationofsubsidiariesandaffiliatesunderthecontrolorinfluenceconcept.Underthecontrolorinfluenceconcept,acompanyinwhichtheparentcompanyoritsconsolidatedsubsidiariesareabletoexercisecontroloveroperationseitherdirectlyorindirectly,isfullyconsolidated,andacompanyoverwhichtheparentcompanyand/oritsconsolidatedsubsidiarieshavetheabilitytoexercisesignificantinfluenceisaccountedforbytheequitymethod. Inaccordancewiththesestandards,theaccompanyingconsolidatedfinancialstatementsincludetheaccountsoftheCompanyandallofitssubsidiaries,whetherdirectlyorindirectlycontrolled. Theinvestmentsinaffiliatesareaccountedforbytheequitymethod,withtheexceptionofcertainaffiliatesthathavenomaterialeffectontheaccompanyingconsolidatedfinancialstatements. Allsignificantintercompanyaccountsandtransactionshavebeeneliminatedinconsolidation. Thedifferencebetweenthecostandtheunderlyingnetassetsatthedateofinvestmentsinsubsidiariesoraffiliatesisallocatedtoidentifiableassetsandliabilitiesbasedonfairmarketvalueatthedateofinvestments.Theunallocatedportionofthedifference,whichisrecognizedasgoodwillornegativegoodwill,isamortizedusingthestraight-linemethodoverfiveyears.

(c) Cash and Cash EquivalentsForthepurposeofthestatementsofcashflows,theCompanyconsiderscashequivalentstoconsistofallhighlyliquidinvestmentsthathavematuritiesofgenerallythreemonthsorlesswhenpurchasedandthathaveinsignificantriskofchangesinvalue.

(d) Short-term Investments and Investments in SecuritiesUndertheAccountingStandardsforFinancialInstruments,securitiesareclassifiedintofourcategories–“tradingsecurities,”“held-to-maturitysecurities,”“investmentinaffiliates”and“othersecurities.”Securitiesclassifiedas“tradingsecurities”arestatedatfairvalueandunrealizedgainsorlossesarerecordedintheconsolidatedstatementsofincome.Securitiesclassifiedas“held-to-maturitysecurities”arestatedatamortizedcost.Securitiesclassifiedas“othersecurities”withfairvaluearestatedatfairvalueandunrealizedgainsorlosses,netofrelatedtaxes,areexcludedfromearningsandrecordedinaseparatecomponentofnetassets.Realizedgainsandlossesonthoseothersecuritiesaredeterminedbythemovingaveragecost.Debtclassifiedas“othersecurities”forwhichfairvalueisnotavailablearestatedatamortizedcost.Equitysecuritiesclassifiedas“othersecurities”forwhichfairvalueisnotavailablearestatedatmovingaveragecost.HoldingsecuritiesoftheCompanyareclassifiedasheld-to-maturitysecuritiesandothersecurities.

(e) InventoriesInventoriesarestatedatcost.Costisdeterminedprincipallybythespecificidentificationmethod.

(f) Property and EquipmentPropertyandequipmentarestatedatcost.Depreciationofpropertyandequipmentiscalculatedbythestraight-linemethod,overtheestimatedusefullivesoftherespectiveassets. Theestimatedusefullivesareasfollows: Buildings 15-50years Broadcastingequipment 6years

(g) Intangible AssetsIntangibleassetsarecarriedatcostlessamortization.Amortizationofcomputersoftwareforinternaluseiscalculatedbythestraight-linemethod,overtheestimatedusefullifeoffiveyears.Amortizationofotherintangibleassetsiscalculatedbythestraight-linemethodatratesbasedontheestimatedusefullivesoftherespectiveassets.

(h) Allowance for Doubtful AccountsAllowancefordoubtfulreceivablesconsistsoftheamountofuncollectiblereceivablesbasedonhistoricallossratiosandtheamountthattakesintoaccountthepossibilityofcertainliabilities.

( i ) Foreign Currency TranslationUndertheAccountingStandardsforForeignCurrencyTransactions,receivablesandpayablesdenominatedinforeigncurrenciesaretranslatedintoyenattherateofexchangeasofthebalancesheetdates,andgainsorlossesresultingfromthetranslationofforeigncurrenciesarecreditedorchargedtoincome.Assetsandliabilities,andrevenuesandexpensesofoverseassubsidiariesaretranslatedintoyenattherateofexchangeasofthebalancesheetdates.Thus,comprehensiveadjustmentsresultingfromtranslationispresentedinanetassetsas“Foreigncurrencytranslationadjustments.”

011_0331001371907.indd 29 2007/06/25 11:16:13

30

( j ) Income TaxesIncometaxesinJapanapplicabletotheCompanyanditsdomesticconsolidatedsubsidiariesconsistofcorporatetax,inhabitanttaxandbusinesstax.

TheAccountingStandardsforIncomeTaxesrequirethatdeferredincometaxesbeaccountedforundertheassetandliabilitymethod.Deferredtaxassetsandliabilitiesarerecognizedfortheexpectedfuturetaxconsequencesofeventsthathavebeenincludedinthefinancialstatementsortaxreturns.Underthismethod,deferredtaxassetsandliabilitiesaremeasuredusingenactedtaxratesexpectedtoapplytotaxableincomeintheyearsinwhichthosetemporarydifferencesareexpectedtoberecoveredorsettled,andtheeffectondeferredtaxassetsandliabilitiesofachangeintaxratesisrecognizedinincomeintheperiodthatincludestheenactmentdate.

(k) Directors’ BonusEffectivefromtheyearendedMarch31,2007,theCompanyanditsdomesticconsolidatedsubsidiariesadoptedthe“AccountingStandardforDirectors’bonus”(AccountingStandardsBoardofJapanStatementNo.4,issuedbyAccountingStandardsBoardofJapanonNovember29,2005).

AccordingtotheStandard,directors’bonusesareaccountedforasanexpensewhensuchbonusesareaccrued,insteadofbeingaccountedforasanappropriationofretainedearningsuponapprovalatgeneralmeetingofstockholders.Theeffectofadoptionofthenewstandardwasimmaterial.

( l ) Presentation of Net Assets on Balance SheetEffectivefromtheyearendedMarch31,2007,theCompanyadoptedthe“AccountingStandardforPresentationofNetAssetsintheBalanceSheet”(AccountingStandardsBoardofJapanStatementNo.5,issuedbyAccountingStandardsBoardofJapanonDecember9,2005)andthe“GuidanceonAccountingStandardforPresentationofNetAssetsintheBalanceSheet”(AccountingStandardsBoardofJapanGuidanceNo.8,issuedbyAccountingStandardsBoardofJapanonDecember9,2005).

AccordingtotheStandards,former“Stockholders’equity”ispresentedas“Netassets”andclassifiedinto“Stockholders’equity,”“Valuationandtranslationadjustments”and“Minorityinterests.”“Minorityinterests”formerlylistedafter“Liabilities”isincludedin“NetAssets.”Thestockholders’equityamountedto¥247,152million($2,093,621thousand)basedontheformerclassification.

(m) Impairment of Long-lived AssetsEffectiveApril1,2005,theCompanyanditsdomesticconsolidatedsubsidiariesadoptedanewaccountingstandardfortheimpairmentoffixedassets(“OpinionConcerningtheEstablishmentofanAccountingStandardfortheImpairmentofFixedAssets”issuedbytheBusinessAccountingDeliberationCouncilonAugust9,2002)andthe“ImplementationGuidanceontheAccountingStandardfortheImpairmentofFixedAssets”(BusinessAccountingStandardImplementationGuidanceNo.6issuedonOctober31,2003).Theeffectofadoptionofthenewstandardwasnil.

(n) ReclassificationsCertainreclassificationshavebeenmadetotheprioryears’consolidatedfinancialstatementstoconformtothepresentationusedasofandfortheyearendedMarch31,2007.

2. Basis of Financial Statement TranslationTheaccompanyingconsolidatedfinancialstatementsareexpressedinyenand,solelyfortheconvenienceofthereader,havebeentranslatedintoUnitedStatesdollarsattherateof¥118.05=US$1,theappropriateexchangerateprevailingontheTokyoForeignExchangeMarketasofMarch30,2007.ThetranslationshouldnotbeconstruedasarepresentationthatanyamountsshowncouldbeconvertedtoU.S.dollars.

3. Short-term Investments and Investments in SecuritiesBalancesheetamount,fairvalueandgrossunrealizedgainandgrossunrealizedlossofheld-to-maturitysecuritieswithfairvalueasofMarch31,2007and2006aresummarizedasfollows:

Millionsofyen

2007 2006Balancesheet

amountGross

unrealizedgainGross

unrealizedloss FairvalueBalancesheet

amountGross

unrealizedgainGross

unrealizedloss Fairvalue

Governmentbondsecurities ¥13,590 ¥ 0 ¥ (16) ¥13,574 ¥15,099 ¥1 ¥ (17) ¥15,083

Corporatebondsecurities 9,100 6 (201) 8,905 9,905 4 (272) 9,637

¥22,690 ¥ 6 ¥(217) ¥22,479 ¥25,004 ¥5 ¥(289) ¥24,720

ThousandsofU.S.dollars

2007Balancesheet

amountGross

unrealizedgainGross

unrealizedloss Fairvalue

Governmentbondsecurities $115,121 $ 0 $ (136) $114,985

Corporatebondsecurities 77,086 50 (1,702) 75,434

$192,207 $ 50 $ (1,838) $190,419

011_0331001371907.indd 30 2007/06/25 11:16:13

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Acquisitioncost,balancesheetamountandgrossunrealizedgainandgrossunrealizedlossofothersecuritieswithfairvalueasofMarch31,2007and2006issummarizedasfollows:

Millionsofyen

2007 2006Acquisition

costGross

unrealizedgainGross

unrealizedlossBalancesheet

amountAcquisition

costGross

unrealizedgainGross


amount

Equitysecurities ¥23,236 ¥20,407 ¥(588) ¥43,055 ¥14,139 ¥27,502 ¥(320) ¥41,321

Debtsecurities 3,529 11 (13) 3,527 3,529 32 (35) 3,526

Othersecurities 1,529 47 — 1,576 2,028 51 — 2,079

¥28,294 ¥20,465 ¥(601) ¥48,158 ¥19,696 ¥27,585 ¥(355) ¥46,926


2007Acquisition

costGross

unrealizedgainGross


amount

Equitysecurities $196,832 $172,868 $(4,981) $364,719

Debtsecurities 29,894 93 (110) 29,877

Othersecurities 12,952 398 — 13,350

$239,678 $173,359 $(5,091) $407,946

ItisnotpracticabletoestimatethefairvalueofthesecuritieslistedbelowasofMarch31,2007and2006becauseoflackofmarketpriceanddifficultyinestimatingfairvalue.

MillionsofyenThousandsofU.S.dollars

2007 2006 2007

Held-to-maturitysecurities:

Commercialpaper ¥14,988 ¥ 3,500 $126,963

Othersecurities:

Unlistedequitysecurities ¥13,019 ¥12,857 $110,284

Certificatesofdeposit 14,500 13,500 122,829

Cashintrust 4,000 4,000 33,884

¥31,519 ¥30,357 $266,997

Projectedfutureredemptionofothersecuritieswithmaturitiesandheld-to-maturitysecuritiesatMarch31,2007issummarizedasfollows:

Millionsofyen

Duewithinoneyear

Dueafteroneyearthroughfiveyears

Dueafterfiveyearsthroughtenyears

Dueaftertenyears

Debtsecurities ¥28,400 ¥6,500 ¥500 ¥2,300

Othersecurities 69 — — —

¥28,469 ¥6,500 ¥500 ¥2,300


Duewithinoneyear

Dueafteroneyearthroughfiveyears

Dueafterfiveyearsthroughtenyears

Dueaftertenyears

Debtsecurities $240,576 $55,061 $4,235 $19,483

Othersecurities 585 — — —

$241,161 $55,061 $4,235 $19,483

4. Investments in AffiliatesTheaggregatecarryingamountsofinvestmentsinaffiliatesasofMarch31,2007and2006are¥6,380million($54,045thousand)and¥6,565million,respectively.

011_0331001371907.indd 31 2007/06/25 11:16:13

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5. Retirement and Severance BenefitsTheCompanyanditsconsolidatedsubsidiarieshavenoncontributorypensionplanstoprovideretirementandseverancebenefitstosubstantiallyallemployees.

Theprincipalpensionplansareunfundeddefinedbenefitpensionplans.Undertheplans,employeesareentitledtolump-sumpaymentsbasedonthecurrentrateofpayandlengthofserviceuponretirementorterminationofemploymentforreasonsotherthandismissalforcause.Inadditiontotheaboveplans,theCompanyandcertainconsolidatedsubsidiarieshavetaxqualifiednoncontributorypensionplans.Theliabilityundertheseplansisfundedbycontributionstotrustedpensionfunds.

UndertheAccountingStandardsforRetirementandSeveranceBenefits,provisionshavebeenmadeintheaccompanyingconsolidatedfinancialstatementsbasedonthepresentvalueoftheprojectedfutureretirementandseverancebenefitsattributabletoemployeeservicesrenderedbytheendoftheyear,lessamountsfundedundernoncontributorypensionplans.

ThefundedstatusofthepensionplansatMarch31,2007and2006isoutlinedasfollows:


2007 2006 2007

Projectedbenefitobligation ¥(24,352) ¥(24,478) $(206,286)

Planassetsatfairvalue 6,662 6,299 56,434

Fundedstatus (17,690) (18,179) (149,852)

Unrecognizedactuarialloss 1,712 1,710 14,502

Unrecognizedpriorservicecost 152 169 1,288

Netamountrecognizedintheconsolidatedbalancesheets (15,826) (16,300) (134,062)

Prepaidpensioncost 50 — 423

Liabilitiesforretirementandseverancebenefits ¥(15,876) ¥(16,300) $(134,485)

NetperiodicpensioncostfortheyearsendedMarch31,2007and2006consistedofthefollowingcomponents:


2007 2006 2007

Servicecost ¥1,156 ¥1,176 $ 9,792

Interestcost 557 558 4,718

Expectedreturnonplanassets (149) (127) (1,262)

Amortizationofunrecognizedactuarialloss 165 202 1,398

Amortizationofunrecognizedpriorservicecost 17 17 144

Netperiodicpensioncost ¥1,746 ¥1,826 $ 14,790

Significantassumptionsofpensionplansusedtodeterminetheseamountsinfiscal2007and2006areasfollows:

2007 2006

Periodicallocationmethodforprojectedbenefit Straight-line Straight-line

Discountrate 2.5% 2.5%

Expectedrateofreturnonplanassets 2.5% 2.5%

Periodforamortizationofunrecognizedactuarialloss 15 years 15years

Periodforamortizationofunrecognizedpriorservicecost 15 years 15years

Directorsandcorporateauditorsarenotcoveredbytheplansdescribedabove.Forsuchpersons,theCompanyandcertainconsolidatedsubsidiarieshavedefinedbenefitpensionplans.Undertheplans,directorsandcorporateauditorsareentitledtolump-sumpaymentsbasedonthecurrentrateofpayandlengthofservicewhentheyleavetheCompany.Theplansarenotfunded;however,provisionhasbeenmadeintheaccompanyingconsolidatedfinancialstatementsforthevestedbenefitstowhichdirectorsandcorporateauditorsareentitlediftheyweretoretireorseverimmediatelyatthebalancesheetdates.AsofMarch31,2007and2006,theliabilityforretirementandseverancebenefitsrelatedtotheseplanswas¥1,020million($8,640thousand)and¥935million,respectively.

6. Common StockOnMay1,2006,anewcorporationlaw(the“CorporationLaw”)becameeffective,whichreformedandreplacedtheCommercialCodeofJapanwithvariousrevisionsthatwould,forthemostpart,beapplicabletoeventsortransactionswhichoccuronorafterMay1,2006andforthefiscalyearsendingonorafterMay1,2006.UndertheCorporationLaw,theentireamountoftheissuepriceofsharesisrequiredtobedesignatedasstatedcommonstockaccountalthoughacompanyinJapanmay,byresolutionofitsBoardofDirectors,accountforanamountnotexceeding50%oftheissuepriceofnewsharesasadditionalpaid-incapital.

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33

7. Legal Reserve and Cash DividendsTheCorporationLawprovidesthatanamountequalto10%ofdistributionsfromretainedearningspaidbytheCompanyanditsJapanesesubsidiariesbeappropriatedasalegalreserve.Nofurtherappropriationsarerequiredwhenthetotalamountoftheadditionalpaid-incapitalandthelegalreserveequals25%oftheirrespectivestatedcapital.TheCorporationLawalsoprovidesthatadditionalpaid-incapitalandlegalreserveareavailableforappropriationsbytheresolutionofthestockholders.Balancesofthelegalreserveareincludedinretainedearningsintheaccompanyingconsolidatedbalancesheets.

CashdividendschargedtoretainedearningsfortheyearsendedMarch31,2007and2006representdividendspaidoutduringthoseyears.TheamountavailablefordividendsisbasedontheamountrecordedintheCompany’snon-consolidatedbooksofaccountinaccordancewiththeCorporationLaw.

DividendspaidduringtheyearendedMarch31,2007whichwasapprovedbythegeneralmeetingofstockholdersheldon

June28,2006areasfollows:

(a)Totaldividends ¥704million($5,963thousand)(b)Cashdividendspercommonshare ¥700($5.93)(c)Recorddate March31,2006(d)Effectivedate June29,2006

DividendspaidduringtheyearendedMarch31,2007whichwasapprovedbytheBoardofDirectorsheldonNovember16,2006areasfollows:

(a)Totaldividends ¥704million($5,963thousand)(b)Cashdividendspercommonshare ¥700($5.93)(c)Recorddate September30,2006(d)Effectivedate December11,2006

DividendstobepaidafterthebalancesheetdatebuttherecorddateforthepaymentbelongstotheyearendedMarch31,2007whichwasapprovedbythegeneralmeetingofstockholdersheldonJune27,2007areasfollows:

(a)Totaldividends ¥1,308million($11,080thousand)(b)Dividendsource Retainedearnings(c)Cashdividendspercommonshare ¥1,300($11.01)(d)Recorddate March31,2007(e)Effectivedate June28,2007

8. Per Share Information(a) Net Income per ShareBasicnetincomepershare,andreconciliationofthenumbersandtheamountsusedinthebasicnetincomepersharecomputationsfortheyearsendedMarch31,2007and2006areasfollows:

Yen U.S.dollars

2007 2006 2007

Basicnetincomepershare ¥10,242.19 ¥9,225.56 $86.76


2007 2006 2007

Netincome ¥10,304 ¥9,467 $87,285

Netincomenotapplicabletocommonstockholders:

Directors’andcorporateauditors’bonuses — (186) —

Netincomeapplicabletocommonstockholders ¥10,304 ¥9,281 $87,285

Numberofshares

2007 2006Weightedaveragenumberofsharesoutstanding

onwhichbasicnetincomepershareiscalculated 1,006,000 1,006,000

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34

(b) Net Assets per ShareNetassetspershare,andreconciliationofthenumbersandtheamountsusedinthenetassetspersharecomputationsatMarch31,2007areasfollows:

Yen U.S.dollars

Netassetspershare ¥245,677.73 $2,081.13

Millionsofyen


Totalnetassets ¥249,444 $2,113,037

Amountdeductedfromtotalnetassets:

Minorityinterests (2,292) (19,416)

Netassetsapplicabletocommonstockholders ¥247,152 $2,093,621

Numberofshares

Numberofsharesoutstandingattheendofyear

onwhichnetassetspershareiscalculated 1,006,000

9. Commitments and ContingenciesAtMarch31,2007,theCompanyhasguaranteed¥2,339million($19,814thousand)ofemployeemortgageloanstofinancialinstitutions,and¥1,279million($10,834thousand)ofthirdpartiesloanstofinancialinstitutions.

10. Income TaxesTheCompanyanditsconsolidatedsubsidiariesaresubjecttoanumberoftaxesbasedonincome.Theaggregatenormaltaxratesfordomesticcompanieswereapproximately40.7%in2007and2006.Foreignconsolidatedsubsidiariesaresubjecttoincometaxesofthecountriesinwhichtheyareincorporated.

ReconciliationbetweenthenormalincometaxrateandtheeffectiveincometaxrateasapercentageofincomebeforeincometaxesandminorityinterestsfortheyearsendedMarch31,2007and2006isasfollows:

2007 2006

Normalincometaxrate 40.7% 40.7%

Expensesnotdeductiblefortaxpurposes 3.9 2.4

Equityinlossesofaffiliates 0.6 1.6

Incomenotcreditedfortaxpurposes (0.9) (0.6)

Devaluationofinvestmentsinaffiliates (17.9) —

Taxcreditforinformationtechnologyinvestment — (0.8)

Other 0.7 0.1

Effectiveincometaxrate 27.1% 43.4%

ThetaxeffectsoftemporarydifferencesthatgiverisetosignificantportionsofthedeferredtaxassetsandliabilitiesasofMarch31,2007and2006arepresentedbelow:


2007 2006 2007

Totalgrossdeferredtaxassets:

Accruedbonuses ¥ 1,223 ¥1,190 $10,360

Accruedbusinesstax 51 416 432

Liabilitiesforretirementandseverancebenefits-employees 6,401 6,573 54,223

Inventories 431 552 3,651

Amortizationofbroadcastingrightsfees 1,222 1,169 10,352

Liabilitiesforretirementandseverancebenefits–directorsandcorporateauditors 417 381 3,532

Other 1,042 1,372 8,827

10,787 11,653 91,377

Totalgrossdeferredtaxliabilities:

Netunrealizedgainonothersecurities (8,087) (11,115) (68,505)

Deferredprofitonsaleofproperty (991) (1,019) (8,395)

(9,078) (12,134) (76,900)

Netdeferredtaxassets(liabilities) ¥ 1,709 ¥ (481) $14,477

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11. Selling, General and Administrative ExpensesSignificantcomponentsofselling,generalandadministrativeexpensesfortheyearsendedMarch31,2007and2006areasfollows:


2007 2006 2007

Salariesandbonuses ¥ 9,876 ¥ 9,990 $ 83,659

Agencycommissions 38,357 38,699 324,922

Advertisingexpense 2,276 2,187 19,280

12. Balances and Transactions with Related PartyTheCompanyacquired14,000,000sharesofTOEICOMPANY,LTD.bysubscribingtoaprivateplacementoftreasurysharesforanaggregatepurchasepriceof¥9,170million($77,679thousand)at¥655($5.55)persharefortheyearendedMarch31,2007.

AtMarch31,2007,theCompanyowns11.76%equityinTOEICOMPANY,LTD.and17.44%oftheCompany’sequityisdirectlyandindirectlyownedbyTOEICOMPANY,LTD.

13. Supplementary Cash Flow InformationReconciliationbetween“Cash”intheaccompanyingconsolidatedbalancesheetsand“Cashandcashequivalents”intheaccompanyingconsolidatedstatementsofcashflowsasofMarch31,2007and2006isasfollows:


2007 2006 2007

Cash ¥16,215 ¥27,972 $137,357

Timedepositswithmaturitiesofoverthreemonthswhenacquired (5,727) (23) (48,514)

Short-terminvestmentswithmaturitiesofthreemonthsorlesswhenacquired 36,992 26,004 313,359

Cashandcashequivalents ¥47,480 ¥53,953 $402,202

14. Segment InformationIndustrysegment,geographicsegmentandoverseassalesoftheCompanyanditsconsolidatedsubsidiariesfortheyearsendedMarch31,2007and2006issummarizedasfollows:

(a) Industry Segment InformationTheCompanyanditssubsidiaries’majorbusinesscategoriesareTVbroadcastingbusiness,musicpublicationbusinessandotherbusinesses.

Millionsofyen

2007TV

broadcastingMusic

publicationOther

businesses TotalElimination/corporate Consolidated

Salestooutsidecustomers ¥ 219,410 ¥ 9,195 ¥ 22,520 ¥ 251,125 ¥ — ¥ 251,125

Inter-segmentsales 2,028 154 6,636 8,818 (8,818) —

221,438 9,349 29,156 259,943 (8,818) 251,125

Operatingexpenses 211,020 7,459 27,684 246,163 (8,716) 237,447

Operatingincome ¥ 10,418 ¥ 1,890 ¥ 1,472 ¥ 13,780 ¥ (102) ¥ 13,678

Assets ¥ 153,376 ¥ 9,647 ¥ 31,687 ¥ 194,710 ¥ 119,756 ¥ 314,466

Depreciationandamortization 7,450 45 888 8,383 — 8,383

Capitalexpenditures 4,373 40 257 4,670 — 4,670

Millionsofyen

2006TV

broadcastingMusic

publicationOther


Salestooutsidecustomers ¥218,813 ¥10,759 ¥19,812 ¥249,384 ¥ — ¥249,384

Inter-segmentsales 2,094 180 6,044 8,318 (8,318) —

220,907 10,939 25,856 257,702 (8,318) 249,384

Operatingexpenses 207,995 7,675 24,854 240,524 (8,216) 232,308

Operatingincome ¥ 12,912 ¥ 3,264 ¥ 1,002 ¥ 17,178 ¥ (102) ¥ 17,076

Assets ¥157,157 ¥ 9,851 ¥32,162 ¥199,170 ¥116,910 ¥316,080

Depreciationandamortization 7,593 49 918 8,560 — 8,560

Capitalexpenditures 4,727 35 280 5,042 — 5,042

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2007TV

broadcastingMusic

publicationOther


Salestooutsidecustomers $ 1,858,619 $ 77,891 $ 190,767 $ 2,127,277 $ — $ 2,127,277

Inter-segmentsales 17,180 1,304 56,213 74,697 (74,697) —

1,875,799 79,195 246,980 2,201,974 (74,697) 2,127,277

Operatingexpenses 1,787,548 63,185 234,511 2,085,244 (73,833) 2,011,411

Operatingincome $ 88,251 $ 16,010 $ 12,469 $ 116,730 $ (864) $ 115,866

Assets $ 1,299,246 $ 81,720 $ 268,420 $ 1,649,386 $ 1,014,451 $ 2,663,837

Depreciationandamortization 63,109 381 7,522 71,012 — 71,012

Capitalexpenditures 37,044 339 2,177 39,560 — 39,560

Corporateassetsof¥128,082million($1,084,981thousand)and¥124,749millionasofMarch31,2007and2006intheElimination/corporatelineconsistprimarilyofsurplusfunds(cashanddeposits,andsecurities),long-terminvestments(investmentsecurities)andassetsrelatingtotheadministrativeoperations.

(b) Geographic Segment InformationBothdomesticsalesandassetslocatedinJapanareover90%ofthoseforallsegmentsfortheyearsendedMarch31,2007and2006.

(c) Overseas SalesOverseassales,whichincludeexportsalesoftheCompanyanditsdomesticsubsidiaries,arelessthan10%ofconsolidatedsalesfortheyearsendedMarch31,2007and2006.

15. Lease Information(a) Finance LeasesFinanceleasesotherthanthosethataredeemedtotransfertheownershipoftheleasedassetstolesseesaregenerallyaccountedforbythemethodthatisapplicabletoordinaryoperatingleasesunderaccountingprinciplesgenerallyacceptedinJapan.

CertainkeyinformationaboutsuchleasecontractsoftheCompanyanditsconsolidatedsubsidiariesfortheyearsendedMarch31,2007and2006areasfollows:

(1) Lessee(i)Acquisitioncost,accumulateddepreciationandnetcarryingamountofleasedassets,iftheyhadbeencapitalized:

Millionsofyen

2007 2006Machineryand

vehicles Others TotalMachineryand

vehicles Others Total

Acquisitioncost ¥9,098 ¥1,442 ¥ 10,540 ¥1,011 ¥2,021 ¥3,032

Accumulateddepreciation 6,886 786 7,672 508 1,105 1,613

Netcarryingamount ¥2,212 ¥ 656 ¥ 2,868 ¥ 503 ¥ 916 ¥1,419


2007Machineryand


Acquisitioncost $77,069 $ 12,215 $89,284

Accumulateddepreciation 58,331 6,658 64,989

Netcarryingamount $18,738 $ 5,557 $24,295

(ii)Leaseexpenseandfutureminimumleasepaymentsincludinginterestexpense:


2007 2006 2007

Leaseexpense ¥1,636 ¥ 656 $13,859

Futureminimumleasepayments:

Withinoneyear ¥1,450 ¥ 526 $12,283

Thereafter 1,418 893 12,012

¥2,868 ¥1,419 $24,295

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(2) Lessor(i)Acquisitioncost,accumulateddepreciationandnetbookvalueofleasingassets:

Millionsofyen

2007 2006Machineryand

vehicles Others TotalMachineryand


Acquisitioncost ¥73 ¥ 126 ¥ 199 ¥116 ¥129 ¥245

Accumulateddepreciation 59 41 100 90 25 115

Netcarryingamount ¥14 ¥ 85 ¥ 99 ¥ 26 ¥104 ¥130


2007Machineryand


Acquisitioncost $ 619 $ 1,067 $ 1,686

Accumulateddepreciation 500 347 847

Netcarryingamount $ 119 $ 720 $ 839

(ii)Leaseincome,depreciationandfutureminimumleasepaymentsincludinginterestincome:


2007 2006 2007

Leaseincome ¥ 60 ¥ 66 $508

Depreciation 25 26 212


Withinoneyear ¥ 47 ¥ 60 $398

Thereafter 54 101 458

¥ 101 ¥161 $856

(b) Operating LeasesFutureminimumleasepaymentsrequiredundernoncancellableoperatingleasesasofMarch31,2007and2006,aresummarizedasfollows:


2007 2006 2007


Withinoneyear ¥1,785 ¥1,784 $15,121

Thereafter 1,784 3,569 15,112

¥3,569 ¥5,353 $30,233

16. Subsequent EventsOnMay18,2007,theCompanyacquiredsharesofToeiAnimationCo.,Ltd.,withtheaimofstrengtheningcontentproductioncapability.ToeiAnimationCo.,Ltd.willbeaccountedforbytheequitymethod.(a)Numberofsharesheldbeforeacquisition 2,000thousandshares(14.29%oftotalsharesissued)(b)Numberofsharesacquired 110thousandshares(c)Numberofsharesheldafteracquisition 2,110thousandshares(15.07%oftotalsharesissued)

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TotheBoardofDirectorsof

TVAsahiCorporation:

WehaveauditedtheaccompanyingconsolidatedbalancesheetsofTVAsahiCorporationandconsolidatedsubsidiariesasof

March31,2007and2006,andrelatedconsolidatedstatementsofincome,changesinnetassetsandcashflowsfortheyears

thenended,allexpressedinJapaneseyen.ThesefinancialstatementsaretheresponsibilityoftheCompany’smanagement.

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudits.

WeconductedourauditsinaccordancewithauditingstandardsgenerallyacceptedinJapan.Thosestandardsrequirethatwe

planandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterial

misstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancial

statements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,

aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditsprovideareasonablebasisforour

opinion.

Inouropinion,theconsolidatedfinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancialposition

ofTVAsahiCorporationandconsolidatedsubsidiariesasofMarch31,2007and2006,andtheresultsoftheiroperationsand

theircashflowsfortheyearsthenendedinconformitywithaccountingprinciplesgenerallyacceptedinJapan.

TheaccompanyingconsolidatedfinancialstatementsasofandfortheyearendedMarch31,2007havebeentranslatedinto

UnitedStatesdollarssolelyfortheconvenienceofthereader.Wehaverecomputedthetranslationand,inouropinion,the

consolidatedfinancialstatementsexpressedinyenhavebeentranslatedintoUnitedStatesdollarsonthebasisdescribedin

Note2totheconsolidatedfinancialstatements.

ToyoHorwath

Tokyo,Japan

June27,2007

Independent Auditors’ Report

011_0331001371907.indd 38 2007/06/25 11:16:14

39

Bureaus

America

U New York(TVASAHIAmerica’sbureau)

U Washington D.C. (TVASAHIAmerica’sbureau)

U Los Angeles(TVASAHIAmerica’sbureau)

Europe/Africa

U London

U Moscow

U Cairo

U Paris (ABC’sbureau)

Asia/Oceania

U Bangkok

U Manila

U China General (Beijing)

U Taipei (ABC’sbureau)

U Seoul

U Shanghai(ABC’sbureau)

U TV Asahi Corporation

U HTB HokkaidoTelevisionBroadcastingCo.,Ltd.

U ABA AsahiBroadcastingAomoriCo.,Ltd.

U IAT IwateAsahiTelevisionCo.,Ltd.

U KHB HigashinipponBroadcastingCo.,Ltd.

U AAB AkitaAsahiBroadcastingCo.,Ltd.

U YTS YamagataTelevisionSystemCo.,Ltd.

U KFB FukushimaBroadcastingCo.,Ltd.

U UX TheNiigataTelevisionNetwork21,Inc.

U abn AsahiBroadcastingNaganoCo.,Ltd.

U SATV ShizuokaAsahiTelevisionCo.,Ltd.

U HAB HokurikuAsahiBroadcastingCo.,Ltd.

U FBC FukuiBroadcastingCorporation

U nagoyaTV NagoyaBroadcastingNetwork

U ABC AsahiBroadcastingCorporation

U HOME HiroshimaHomeTelevisionCo.,Ltd.

U yab YamaguchiAsahiBroadcastingCo.,Ltd.

U KSB SetonaikaiBroadcastingCo.,Ltd.

U eat EhimeAsahiTelevisionCo.,Ltd.

Domestic Network

U KBC KyusyuAsahiBroadcastingCo.,Ltd.

U NCC NagasakiCultureTelecastingCorporation

U KAB KumamotoAsahiBroadcastingCo.,Ltd.

U OAB OitaAsahiBroadcastingCo.,Ltd.

U UMK MiyazakiTelecastingCo.,Ltd.

U KKB KagoshimaBroadcastingCorporation

U QAB RyukyuAsahiBroadcastingCorporation

International Network

ABC:AsahiBroadcastingCorporation

4

98

3

72

6

5

1

1311

1210

19

20

21

22

23

24

25

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

8

9

10

11

12

13

1

2

3

4

5

6

7

1

2

5

6

8

3

4

7

9

10

11

13

12

14

1817

1516

19

20 21

2423

22

25

TV Asahi

TV Asahi Network

Cooperation

AmericaCNN USA

Europe/AfricaTF1 FranceRTL GermanyTVP Poland

Asia/OceaniaCCTV ChinaDalian TV Station ChinaCTV TaiwanETTV TaiwanGMA PhilippinesRTM MalaysiaCH7 Australia

011_0331001371907.indd 39 2007/06/25 11:16:15

40Music Publication

Consolidated Subsidiary

TV ASAHI Music Co., Ltd.100.00

Affiliate — equity method applied

BS Asahi Sounds, Ltd.40.00(20.00)

Other Businesses

TV Shopping BusinessConsolidated Subsidiary

TV Asahi Living Co., Ltd.100.00

Businesses Related to Broadcasting FacilitiesConsolidated Subsidiary

Television Asahi Service Co., Ltd.70.00(21.25)

Announcer Training SchoolConsolidated Subsidiary

TV Asahi ASK Co., Ltd.100.00

Facilities Administration BusinessConsolidated Subsidiary

TV Asahi BEST Co., Ltd.100.00

TV Broadcasting

Businesses Related to Program ProductionConsolidated Subsidiaries

Logical Solution & D Inc.100.00(100.00)

Take Systems Co., Ltd.85.00(35.83)

TV Asahi Productions Co., Ltd.40.00

TV Asahi Create Co., Ltd.87.00(37.83)

Trust Network Inc.90.00(45.00)

Video Pack Nippon Company Ltd.42.40

Housougijyutsusha Co., Ltd.100.0(52.50)

TV ASAHI America, Inc.100.00

Affiliates—equitymethodapplied

Japan Cable Television, Ltd.41.74(8.44)

Flex Co., Ltd.25.67

Bunkakobo, Inc.20.00

Media Mix Japan Co., Ltd.23.56(3.56)

JCTV-HQ0.00[100.00]

BS/CS Digital BroadcastingAffiliates — equity method applied

Asahi Satellite Broadcasting Limited29.96(0.50)

CS One Ten, Ltd.33.00

Data Broadcasting Consolidated Subsidiaries

TV Asahi Data Vision Corporation100.00

Digital Cast International Limited48.26(10.00)

Principal Subsidiaries and Affiliates

Note:Figureundereachcompanynameshowsthe equityheldbytheCompany,whichequals thetotalofdirectandindirectholdings. Figuresin()areindirectholdings.

Thefigurein[]correspondstotheholding heldbyanaffiliate.JCTV-HQis100%heldby JapanCableTelevision,Ltd.andiscounted asanaffiliatecompanyofTVAsahi.

011_0331001371907.indd 40 2007/06/25 11:16:15

Authorized Number of Shares 3,000,000

Issued Number of Shares 1,006,000

Number of Stockholders 37,980

Number of Shares Held by Foreign Investors 152,003 (15.11%)

Listing Tokyo Stock Exchange

Fiscal Year-End March 31

General Meeting of Stockholders

June

Transfer Agent The Sumitomo Trust & Banking Co., Ltd.

Stock Information

Stockholder Information

Major Stockholders

Corporate Name TV Asahi Corporation

Abbreviation TV Asahi

Head Office 9-1 Roppongi 6-chome, Minato-ku,Tokyo 106-8001, JapanTel. +81-3-6406-1111http://www.company.tv-asahi.co.jp/e/

Date of Establishment November 1, 1957

Date of Service Start February 1, 1959

Paid-in Capital ¥36,642,800,000

Number of Employees 1,218

Daiwa Securities SMBC Co. Ltd.

Nomura Securities Co., Ltd.Nikko Citigroup Limited

Corporate Data

Sub-Underwriter

Underwriter

ChairmanMichisada Hirose

PresidentMasao Kimiwada *

Vice-PresidentHiroshi Hayakawa *

Executive DirectorsKenji KazamaIkuo KamiyamaHidekazu KitamuraHiroaki TakadaKeiji TakanoToshio Fukuda

Members of the BoardToru TakedaMutsuko HorikoshiTakahiro OtsukaSeishi FukudaKojiro WatanabeMichio UematsuHaruki KitazawaKotaro AkiyamaTsuyoshi OkadaYoshitoshi KitajimaMitsuru GondoYoshio NishimuraTetsuzo Hori

Standing Corporate AuditorsSachio ArikuraYasuharu Murase

Corporate AuditorsKoichi KobayashiSawako NomaTakahisa Hamamoto

* Representative Directors

Board of Directors

Board of Directors

Name SharesPercent of

voting rights

Asahi Shimbun Publishing Company 340,495 33.85

Toei Co., Ltd. 161,842 16.09

Dai Nippon Printing Co., Ltd. 40,300 4.01

Kyusyu Asahi Broadcasting Co., Ltd. 32,147 3.20

Mellon Bank Treaty Clients Omnibus 29,876 2.97

Satellite Channels Incorporated 20,854 2.07

The Master Trust Bank of Japan, Ltd.(Trust Account) 16,493 1.64

State Street Bank & Trust Company 505025 16,422 1.63

CBNY-UMB Fund 15,304 1.52

Kodansha Ltd. 13,640 1.36

As of June 27, 2007 As of March 31, 2007

Investor Information

41














tion (AFC).












Other Businesses

TV Asahi at a Glance

005_0331001371907.indd 2 2007/06/26 13:07:01

005_0331001371907.indd 1 2007/06/26 13:06:59

Documents

TV Asahi Corporation · TV Asahi’s entertainment shows and drama series also capture ... such as Doraemon and Crayon Shin-chan. TV Asahi Music ... ratings all fell short of last