presslease050815

August 15, 2005

Name of company:	KAGA ELECTRONICS CO., LTD
Stock code:	8154
Stock exchange listing:	Tokyo, Stock Exchange, First Section
Headquarters:	2-2-9, Hongo, Bunkyo-ku, Tokyo
Representative
Title:	Founder & CEO
Name:	Isao Tsukamoto
Contact person
Title:	Senior Managing Director, Finance & Administration Headquarters
Name:	Waichiro Shimoyama
Tel:	+81-(0)3-4455-3111

Notice concerningSubsidiarizationof Kashimura Company Limited through

Subscription of Capital Increase by Third-Party Allocation

KAGA ELECTRONICS CO., LTD. (Founder and CEO: Isao Tsukamoto; Head Office:Bunkyo-ku,

Tokyo; Capital: 11,878 million yen) resolved to subsidize Kashimura Company Limited at our

extraordinary meeting of the board of directors on August 15, 2005, in accordance with a basic

agreement concerning business alliance with the said company, including capital participation, as

informed on July 28, 2005, which is as follows:

1. Purpose of Subsidiarization of Kashimura Company Limited

Kashimura Company Limited, established in 1947, is a general trading company specializing in

photograph and image related products. And we expect that such subsidiarization of the said

company would serve as a complement to and have a synergy effect on the network/know-how of

the said company, as well as on our group's information equipment distribution business centered

on PCs.

2. Stock Acquisition Method

(1) Subscription of Capital Increase by Third-Party Allocation

The extraordinary general meeting of shareholders of Kashimura Company Limited held on this

day has approved and resolved to make a capital increase through third-party allocation to our

company, and at the same time our extraordinary meeting of the board of directors has also

made a resolution to subscribe the capital increase.

Number of New Shares to be issued: 11,000,000 shares (The number of shares issued after such

capital increase will be 19,630,000 shares.)

Number of Shares to be subscribed: 11,000,000 shares (56.04% of the number of shares issued)

Stock Payment Date: August 16, 2005

Purpose of Capital Increase: Appropriation for working capital

(2) Transfer of Shares from Existing Shareholders

We will aim at securing no less than 70% of the total number of issued shares by September 30,

2005, through the transfer of shares from other existing shareholders as mentioned in above (1)

or otherwise.

3. Dispatch of Directors

An extraordinary general meeting of shareholders of Kashimura Company Limited has been

held on this day; and the following eight persons recommended by our company have been

appointed as director and auditor, and have taken office.

Chairman	Isao Tsukamoto	(Founder & CEO of KAGA ELECTRONICS)
CEO	Shinji Takahashi	(Executive Vice President & Representative Director of KAGA ELECTRONICS)
Senior Managing Director	Sadao Hashimoto	(Director of KAGA ELECTRONICS)
Director	Tomohisa Tsukamoto	(Executive Vice President & Representative Director of KAGA ELECTRONICS)
Director	Shinsuke Takahashi	(Senior Managing Director, Headquarters Division Director Information Systems Sales Headquarters of KAGA ELECTRONICS)
Director	Ryoichi Shima	(General Manager President Office of KAGA ELECTRONICS)
Director	Atsushi Mochiduki	(Assigned to KAGA ELECTRONICS)
Auditor	Hiroo Fujita	(Statutory Auditor of KAGA ELECTRONICS)

4. Effects on Business Performance

*Forecast of Business Performance after the Subsidiarization

(1) Parent Business Performance

There are no effects on parent business performance.

(2) Consolidated Business Performance

* The above forecast has been determined and prepared by our company based on information obtained

at the present moment. Please understand that the actual business performance may vary greatly,

depending on the change in business conditions.