ANNUAL REPORT

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The evolution of the book value of the Company’s portfolio since March 31, 2008, can be summarized as follows: Evolution of book value (In JPY millions) Fiscal year ended March 31 2008 Additions Disposals Fair value adjustments Impairment 2009 Investments in subsidiaries – At cost less impairment Asahi Tec 25,984 7,769 - - (19,753) 14,000 CME 7,817 - - - (4,817) 3,000 D&M 10,515 - (10,515) - - - HIT 32,993 - - - (32,993) - Niles 16,619 - - - - 16,619 Phoenix Seagaia Resort 21,709 1,000 - - (17,209) 5,500 115,637 8,769 (10,515) 0 (74,772) 39,119 Investments in associates – At cost less impairment Shaklee 12,244 276 - - (6,050) 6,470 SigmaXYZ - 1,085 - - - 1,085 U-shin 8,038 - - - (4,838) 3,200 20,282 1,361 0 0 (10,888) 10,755 Other investments - At fair value 21,530 897 (9,030) (5,016) (2,299) 6,082 Total investments 157,449 11,027 (19,545) (5,016) (87,959) 55,956 Cash and cash equivalents (parent company only) 50,347 8,379 - - - 58,726 Loans 2,361 2,584 - - - 4,945 Total portfolio 210,157 21,990 (19,545) (5,016) (87,959) 119,627 Book value per share (in JPY) 2,457 257 (229) (59) (1,028) 1,398 (In EUR millions) Fiscal year ended March 31 2008 Additions Disposals Fair value adjustments Impairment 2009 Investments in subsidiaries – At cost less impairment Asahi Tec 198.1 59.2 - - (150.6) 106.7 CME 59.6 - - - (36.7) 22.9 D&M 80.2 - (80.2) - - - HIT 251.5 - - - (251.5) - Niles 126.7 - - - - 126.7 Phoenix Seagaia Resort 165.5 7.6 - - (131.2) 41.9 881.6 66.9 (80.2) 0.0 (570.0) 298.2 Investments in associates – At cost less impairment Shaklee 93.3 2.1 - - (46.1) 49.3 SigmaXYZ - 8.3 - - - 8.3 U-shin 61.3 - - - (36.9) 24.4 154.6 10.4 0.0 0.0 (83.0) 82.0 Other investments - At fair value 164.1 6.8 (68.8) (38.2) (17.5) 46.4 Total investments 1,200.3 84.1 (149.0) (38.2) (670.6) 426.6 Cash and cash equivalents (parent company only) 383.8 63.9 - - - 447.7 Loans 18.0 19.7 - - - 37.7 Total portfolio 1,602.2 167.6 (149.0) (38.2) (670.6) 912.0 Book value per share (in EUR) 18.7 2.0 (1.7) (0.4) (7.8) 10.7 The table above reflects the Company’s investments’ book values as reflected in the non-consolidated financial statements, except for the other investments which are reflected at fair market value. The Company believes that the non-consolidated financial statements provide for the most relevant measure of its liquidity and financial position as the consolidated financial statements are merely an aggregation of its consolidated subsidiaries that operate in diverse industries. Furthermore, the consolidated financial statements for the year ended March 31, 2009, include losses and negative equity contributions from certain consolidated subsidiaries that the Company and its shareholders will not be exposed to as there is no binding obligation to cover such losses. Except for a guarantee of up to JPY 3,400 million (EUR 26.1 million) on the debt of Phoenix Seagaia Resort, RHJI’s financial exposure from its investments is limited to the invested capital. This exposure is reflected by the book values reflected in the non-consolidated financial statements. 8
LETTER TO SHAREHOLDERS AND BUSINESS REVIEW Investments and disposals The evolution in terms of total invested capital of the Company’s portfolio during the fiscal year ended March 31, 2009, can be summarized as follows: • The Company increased the capital of Asahi Tec by JPY 7,769 million (EUR 59.2 million) for purposes of (a) curing a breach of covenants by its US based subsidiary Metaldyne (JPY 1,800 million or EUR 13.7 million), (b) providing Metaldyne with additional liquidity (JPY 1,051 million or EUR 8 million) and (c) funding Metaldyne’s bond tender (JPY 4,918 million or EUR 37.5 million); • The Company subscribed to JPY 1,000 million (EUR 7.6 million) of new shares of Phoenix Seagaia Resort to cover scheduled reimbursement of its debt as well as to provide liquidity for working capital requirements; • The Company invested JPY 1,085 million (EUR 8.3 million) in SigmaXYZ, a newly formed joint venture in IT consulting with Mitsubishi Corporation; • The Company acquired 457,000 additional existing shares of Shaklee for an aggregate consideration of JPY 276 million (EUR 2.1 million), increasing its ownership to 42.5 %; • The Company closed the sale of D&M to K.K. BCJ-2, a corporation owned by investment funds advised by Bain Capital Partners, LLC, for cash consideration of JPY 23,115 million (EUR 176.2 million); • The Company disposed of a non-controlling minority investment for JPY 9,030 million (EUR 68.8 million), initially acquired for JPY 5,600 million (EUR 42.7 million). The other investments also include a new investment of JPY 730 million (EUR 5.6 million). Fair value adjustments Other investments consist of several non-controlling ownership interests and certain undisclosed investments. The noncontrolling ownership interests are “available for sale financial assets”, and are reported at fair market value. The downward adjustment since March 31, 2008, is attributable to a decrease in the fair market value of the investment in Commercial International Bank (Egypt) SAE (“CIB”) by JPY 5,016 million (EUR 38.2 million). Subsequent to year-end, on July 8, 2009, 63% of the stake in CIB was sold for cash consideration of JPY 5,235 million (EUR 40.2 million). Impairment The Company prepares both consolidated and non-consolidated financial statements. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"), while the non-consolidated financial statements are prepared in accordance with Belgian Generally Accepted Accounting Principles (“Belgian GAAP”). An impairment review was carried out for both the consolidated and the non-consolidated financial statements. It should be noted that there are significant differences in the valuation approach, nature and outcome of these reviews resulting from divergent methodologies of determining an asset’s recoverable amount between IFRS and Belgian GAAP. IFRS defines the recoverable amount of an asset as the higher of (a) the asset’s fair value less cost to sell or (b) its value in use. The value in use is based on the discounted cash flows projected to be derived from the asset’s continuing use. Belgian GAAP requires the recognition of impairment of an asset if its carrying value is projected to permanently exceed its recoverable amount, which can be determined using undiscounted cash flow estimates. As a result, the impairment charges in the consolidated and the non-consolidated financial statements for the fiscal year ended March 31, 2009, are different, and amounted to JPY 123,259 million (EUR 939.7 million) and JPY 87,959 million (EUR 670.6 million), respectively. Non-consolidated Financial Statements The Company reviewed the carrying value of its investments as reflected in the non-consolidated financial statements for the fiscal year ended March 31, 2009, prepared in accordance with Belgian GAAP. In particular, the Company assessed whether the carrying value of each individual investment was in excess of their future recoverable amount. The assessment included a review and analysis of (a) publicly observed market prices for the publicly listed investments, (b) valuation multiples for groups of publicly listed, comparable companies, and with respect to the consolidated subsidiaries, (c) the projected financial performance based on budgets and business plans prepared by their respective managements. It should be noted that the future recoverable amount of the Company’s consolidated subsidiaries has been determined by applying currently applicable valuation multiples to the consolidated subsidiaries’ undiscounted projected earnings, and that the resulting amounts do not purport to indicate the current realizable value of the Company’s investments in consolidated subsidiaries. The impact of the economic recession on the consolidated subsidiaries’ financial performance, together with the Company’s stance, which it believes to be conservative, on the timing and the extent of the recovery of the global economy, and the current market valuations in general and in the industries relevant to the Company’s investments in particular, resulted in the recognition of impairment charges at March 31, 2009, of JPY 87,959 million (EUR 670.6 million) as reflected in the table on the previous page. The Company will continue to monitor the recoverable amount of its investments and in the event that the reasons underlying the recognition of the impairment are no longer valid, the impairment charges could be reversed in the future. In addition to the impairment above, the Company adjusted the carrying value in its subsidiary RHJI Services SA by JPY 6,937 million (EUR 52.9 million) to reflect its net asset value of JPY 5,156 million (EUR 39.3 million). RHJI Services SA is a management subsidiary that provides advisory services and engages in intra-group financing. 9
Page 1: ANNUAL REPORT Year Ended March 31,
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Page 8 and 9: Support to our portfolio companies
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Page 31 and 32: FINANCIAL STATEMENTS FOR THE FISCAL
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FINANCIAL STATEMENTS FOR THE FISCAL
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PART III CORPORATE GOVERNANCE
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CORPORATE GOVERNANCE The Belgian Co
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CORPORATE GOVERNANCE The following
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CORPORATE GOVERNANCE (1997 to 2000)
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CORPORATE GOVERNANCE INVESTMENT AND
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CORPORATE GOVERNANCE Mr. Fischer ha
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CORPORATE GOVERNANCE OTHER TERMS RH
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CORPORATE GOVERNANCE STATUTORY AUDI
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CORPORATE GOVERNANCE 121
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PART IV SHAREHOLDERS’ INFORMATION
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SHAREHOLDERS’ INFORMATION SHARE P
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NOTES 127
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Co-ordination and Production : IPAC
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ANNUAL REPORT

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