58th (Fiscal Year 2006) Financial Report
April 1, 2006 to March 31, 2007

MUTOH HOLDINGS CO., LTD.
(Former name: MUTOH INDUSTRIES LTD.)TSE securities code: 7999

Aiming to bolster the creativity ofpeople and enterprises
It is human creativity that evolves lifestyles, industries and the society.
MUTOH’s mission is to offer products and services that increase the creativityof people and enterprises.
As a company that has been working with professionals in manufacturing,
MUTOH will contribute to the creation of new value from its unique perspective.

Making inspiration into excitement
MUTOH helps designers express their ideas in high resolution and in a vivid form.
MUTOH expands excitement.

Making an idea
into a surprise
MUTOH uses information technology to support planning and design.
MUTOH transforms designers’ inspiration into a surprise.

Making an image into acommon language
MUTOH communicates the concepts of designers in a common language: drawings.
MUTOH leads with a passion for manufacturing.

MUTOH HOLDINGS Is Born.
Supporting today's business challenges withconstant innovations, sustained initiativeand social contributions.
MUTOH INDUSTRIES LTD. changed its name from MUTOH INDUSTRIES LTD. to MUTOH HOLDINGS CO., LTD. on
April 1, 2007, acknowledging its fresh start as a holding company. Its core businesses, imaging and information
business and information service business, were transferred to a new company, MUTOH INDUSTRIES LTD.

As a listed company, MUTOH HOLDINGS CO., LTD. takes on an exciting new role as the leader of a dynamic
corporate group with a forward-looking management.

The markets in which MUTOH does business are in the midst of an enormous transformation, driven by rapid
technological innovation. Customers are demanding optimal solutions with the greatest possible amount ofadded value. With its new holding-company structure, MUTOH is confident that it can bolster and expand thevalue of its brand.

MUTOH HOLDINGS CO., LTD. looks forward to optimizing the use of management resources through group
strategy, streamlining decision-making processes for a fast-changing market and reinforcing corporate
governance. Each MUTOH Group company will focus on its area of specialization to maximize synergy and focus
on building shareholder value.

Supported by this new management structure, MUTOH will continue to be innovative and reinvent itself andembrace fresh challenges to contribute to the society in which it does business.

At such an exciting moment in its history, the directors of the MUTOH Group ask shareholders, customers,
business partners and employees for their renewed support and encouragement.

Toshiaki Sato, President
MUTOH HOLDINGS CO., LTD.

1

Consolidated Financial Highlights
We are pleased to bring you the financial reportfor the 58th fiscal year.
To respond to intensifying competition in Japanand overseas and with a trend towards lower
prices, the MUTOH Group worked to streamline
group operations, form business partnerships andcarry out an aggressive management strategy.
Specifically, our efforts include the release of costeffective products, revisions made to the Group’s
sales structure and the integration of corporategroups.
Consolidated net sales climbed 0.5% from theHighlights of the Consolidated Accounts

Segment Information
Sales

Net sales

Imaging & Information Business

58th (FY2006) period:¥ 28,752 million

Information Service Business
Other Business Activities

55th (FY2003) period: 56th (FY2004) period: 57th (FY2005) period:¥26,501million¥28,974million¥28,612million● 58th (FY2006) period:

Ordinary income
58th (FY2006) period:¥28,752 million¥ 2,068 million

3,145

55th (FY2003) period: 56th (FY2004) period: 57th (FY2005) period:¥1,049million¥1,416million

3,403¥1,481million

previous fiscal year, to ¥28,752 million, with themerger of a subsidiary and an affiliated company
engaged chiefly in software development
contracting and the impact of the foreignexchange rates in overseas markets.

Net income
58th (FY2006) period:

22,204¥ 1,073 million

55th (FY2003) period: 56th (FY2004) period: 57th (FY2005) period:¥622million¥690million(¥982million)● 57th (FY2005) period:

With regard to profits and losses, we launched up
the introduction of cost effective products to thelarge-format graphic printer market, combinedwith sales factors, it improved our ability togenerate profits. Consolidated ordinary income

Assets58th (FY2006) period:¥28,612 million¥ 29,723 million

55th (FY2003) period: 56th (FY2004) period: 57th (FY2005) period:¥28,532million¥29,464million

2,915 3,183¥27,683million

soared 39.6% from the previous fiscal year, to¥2,068 million. With ¥39 million in expenses in

Net assets

connection with the switch to the holding

58th (FY2006) period:

company structure and an ¥83 million
impairment loss on fixed assets posted as

22,513¥ 18,744 million

55th (FY2003) period: 56th (FY2004) period: 57th (FY2005) period:¥17,386million¥18,262million¥17,529million

extraordinary losses, the Group improved its● 56th (FY2004) period:

consolidated net income by ¥2,055 million fromthe previous fiscal year, to ¥1,073 million.

¥28,974 million

However, we regret to announce that we have

3,161

3,316

decided not to pay a dividend this term, as we
will be allocating the entire surplus to internal
reserves to bolster our financial standing in

22,496consideration of future business circumstances.
We ask our shareholders for you understanding.

CONTENTS

Forecast of results for the next fiscal year

Message from the President ................. 1
Consolidated Financial Highlights ........ 2
Topics ..................................................... 3

2

Millions of yen

Net sales

OperatingincomeOrdinary
incomeNet income

29,500

2,100

2,100

1,100

Overview of Business Segments
Imaging & Information Business ........... 4

Forecast of consolidated
business results

Information Service Business /Other Business ....................................... 5

In the imaging & information business, the MUTOH Group’s products are subject toFinancial Statements

downward price trends and intensifying competition in the market. This segment will

Consolidated Financial Statements ...... 6continue to endeavor to develop and release large-format inkjet printers with highNon-consolidated Financial Statements ..... 8

performance and value while the information service business will be taking steps toCompany Profile / Directors / Stock
Information ............................................ 9

expand its own branded CAD software with good profitability.

Topics

Introduction to MUTOH’s New Symbol Graphics“Mutoh Earth”“Chart of the MUTOH Group”

The main concept of the new graphics is creation, which iscentral to our corporate activities.
The radiating light represents the new MUTOH HOLDINGS and
its aggressive stance in group management. The shining earth
symbolizes global expansion of the MUTOH Group.
The MUTOH Group will be committed to increasing customer
satisfaction as well as corporate value.
Ever-shining MUTOH Earth embodies the future vision of
MUTOH HOLDINGS.

Centered on MUTOH HOLDINGS responsible for businessstrategies, the MUTOH Group has seven business companies
engaged in providing best suited proposals and highest value.
In the above chart, group companies are color-coded bybusiness segment so that their business operations may be easy
to understand.

Notice of relocation of headquarters

Map

For the purposes of streamlining office operations and strengthening thegroup management, the headquarters was moved in April 2007.
New address:
Phones:No.5 TOC Building, 21-1, Nishi-Gotanda, 7-chome,
Shinagawa-ku, Tokyo 141-8683
MUTOH HOLDINGS 03-5740-8700
MUTOH Industries 03-5740-7000

To give customers in Japan and abroad the opportunity toexperience the look and feel of MUTOH products...

The showroom is full of
liveliness today, as usual.

Image PhotoAt the showroom, you can watch someprinters working to get a real feel of the top
quality of MUTOH products.

Headquarters showroom
From Gotanda Station on JR Lines or Toei Asakusa Line, 8-minute walk.
From Fudomae Station on Tokyu Meguro Line, 6-minute walk.
From Osaki Hirokoji Station on Tokyu Ikegami Line, 6-minute walk.

3

Overview of Business Segments
Breakdown of net sales by region
Other regions

North America

77.2%

Asia

EuropeJapan¥22,204 million

Imaging & Information Business
Overview
Centering on large-format inkjet printers, this business segment
launched a new line of graphic printers with high value
performance in the face of falling prices, following intensifying
competition.
Despite healthy sales in overseas markets, slumping performance in
the Japanese market led to a 1.4% decrease from the previous
fiscal year in net sales, to ¥22,204 million. Operating income rose asubstantial 85.2% from the previous fiscal year, to ¥1,640 million.
This is thanks primarily to the effect of new products and theinfluence of foreign exchange rates.

Both indoors and outdoors, MUTOH’s printing technology
attracts people’s attention at every corner of the globe.
Sample works

VJ-2606
VJ-1604

VJ-1204
Series

PJ-2646
SeriesOsprey 3300

4

Information Service Business
Overview
MUTOH’s CAD software operations added new 3D software to the M-Draf Series of profitable
Mutoh-brand software solutions for manufacturers to actively improve their profit earning
capability. To further streamline the solution business, the MUTOH Group merged a subsidiary andan affiliated company, both of which engaged mainly in software development contracting. As aresult, net sales were up 16.7% from the previous fiscal year, to ¥3,403 million, and operating
income also up 7.3% from the previous fiscal year, to ¥26 million.

11.8%¥3,403 million

Providing solutions that really work, that satisfy customers’
needs and that bring them lasting value.
As a manufacturer, we listen to designers and manufacturing workers from the same
perspective, as they have to offer IT solutions that really improve customers’ work efficiency.

• Providing total solutions that increase the efficiency of design environmentson the basis of integration between 2D and 3D CAD• A middle-range 3D CAD tool
Supports upstream design operations in engineering.

• A middle-range versatile 2D CAD tool
Is a design and drafting tool compliant with the domestic generalrules for drawings and suited to designers’ practical operations.

• A low-cost 2D CAD tool for implementation design
Is a perfect drafting tool for implementation design, sales andmanufacturing.
M-Draf Suite• An integrated 2D and 3D package(composed of M-Draft 3D and M-Draf Spirit)
Supports seamless data linkage to 2D drawings.

• Ensuring seamless group sharing of design data to improve operations and to strongly support business growth.
• Performs comprehensive managementof drawing data.

• Multi-purpose raster drafting software

From hand-drafted drawings to CAD data

Offers powerful support for the shift from paper
drawings to digital ones

• Supports data relations.

• DXF/DWG conversion support software

Comes with a browser viewer as standard.

Supports operation of DXF data from various angles• Authentication workflow software
Supports the work group process.

Other BusinessNet sales ratio by operation

11.0%¥3,145 million

Other
Design drafting
equipment
Sports-care
products Optical measuring
instruments

Overview
Other business consists of stable operations such as designdrafting equipment, optical measuring instruments, sports-care
products and retail outlets selling products such as books andstationery. Net sales in this segment declined 1.2% over theprevious fiscal year, to ¥3,145 million, while operating income
attained a 14.2% from the previous fiscal year ¥272 million, as aresult of curtailing sales expenses and making other efforts.

5

Financial Statements

Consolidated Financial Statements■ Consolidated Balance Sheets(Millions of yen)

(Millions of yen)

As of March 31, As of March 31,
2007
2006

As of March 31, As of March 31,
2007
2006

AssetsCurrent assets

Liabilities
Current liabilities

17,93918,814

Cash and bank deposits

5,819

7,192

Notes and accounts payable

Notes and accounts receivable

6,574

6,764

Inventories

4,612

4,514

Short-term bank loans and current
portion of long-term debt

932

343

OthersFixed assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
Investment securities
OthersTotal assets

8,869

11,783

6,977

9,866
180

144

1,736

1,747

1,015

1,181

721

566
27,68329,723

Others

6,712

6,488

4,034

4,179

82

147

2,595

2,162

Long-term liabilities

4,266

3,665

Long-term debt

1,125

1,352

Others

3,141

2,312

Total liabilities

10,978

10,154——

Common stock—

10,199

Capital surplus

—

4,592

Retained earnings

—

3,980

Unrealized gains (losses) on othersecurities, net—

388

Foreign currency translation adjustments

—

(993)

Treasury stock

—

(638)

Total shareholders’ equity—

17,529Total liabilities, minority interestsand shareholders’ equity—

27,683

Shareholders’ equity

18,733—

Common stock

10,199—

Capital surplus

4,182

—

Retained earnings

5,437

—

Treasury stock(1,084)—

Valuation and translation adjustments

(310)

—

Minority interests

320—

Total net assets

18,744—

Total liabilities and net assets

29,723—

Minority interests
Minority interests
Shareholders’ equity

Net assets

Consolidated Statement of Changes in Net Assets
In accordance with the new Corporation Law enforced in May 1,
2006, the Statement of Changes in Net Assets has been newly
established. The Net Assets Section newly established in thebalance sheets has been created to report on the reasons andamounts of changes to each item under Shareholders’ Equity,which refers to the portion primarily attributed to shareholders.

■ Consolidated Statement of Changes in Net Assets (From April 1, 2006 to March 31, 2007)(Millions of yen)

Valuation andtranslation
Common stock Capital surplus Retained earnings Treasury stock Total shareholders' equity adjustments

Minority
interests

Total net
assets(605)—

17,529

Shareholders' equity

Balance as of March 31, 2006

10,199(638)

18,134

4,592

3,980

(410)

410

—

—

(27)

(27)

(27)

1,073

1,073

1,073

(446)

(446)

(446)

0

0

0

Changes during the period
Reversal for capital surplus
Decrease in retained earnings due to
exclusion from the equity method
Net income
Acquisition of treasury stock0

Disposal of treasury stock
Net changes of items other thanshareholders’ equity during the period
Total changes during the period
Balance as of March 31, 2007

6

294

320

615

—

(410)

1,456

(446)

599

294

320

1,214

10,199

4,182

5,437

(1,084)

18,733(310)

320

18,744

Consolidated Financial Statements■ Consolidated statements of income(Millions of yen)

Year ended
March 31, 2007

Year ended
March 31, 2006

Ordinary income or loss

Trends of net sales (Millions of yen)
The 56th
period28,974th

Net sales

28,752

28,612

Operating income

1,962

1,157

Ordinary income

2,068

1,481

Income (loss) before income taxes and minority interests

1,901

(504)

Net income (loss)

1,073

(982)

The 57
period28,612The 58th
period28,7520

10,00020,00030,000Extraordinary income or loss

Trends of operating income (Millions of yen)
The 56th
period1,209

The 57th
period1,157

The 58th
period■ Consolidated statements of cash flows

1,962(Millions of yen)
0Year ended
March 31, 2007
Net cash from operating activities

1,912

1,845

Net cash from investing activities(2,743)(133)

Net cash from financing activities(796)(1,692)

Effect of exchange rate changes on cash and cash equivalents

200

38

Net increase (decrease) in cash and cash equivalents(1,426)

58

Cash and cash equivalents at beginning of period

7,192

7,133

Cash and cash equivalents at end of period

1,000

1,500

2,000

Trends of ordinary income (Millions of yen)
The 56th
period1,416

The 57th
period1,481

The 58th
period2,068
0Increase (decrease) in cash and cash equivalents due tomerger of consolidated subsidiaries

500

Year ended
March 31, 2006

53

—

5,819

7,192

500

1,000

1,500

2,000

2,500

Trends of net income (loss) (Millions of yen)
The 56th
period■ Consolidated subsidiaries in each business segment
Business segment

Company names ( ) are equity method affiliates.

Imaging & Information
Business

MUTOH INDUSTRIES CO., LTD., MUTOH ENGINEERING INC.,
MUTOH EUROPE N.V., MUTOH DEUTSCHLAND GmbH.,
MUTOH AMERICA INC., (COSMO CO., LTD.)

Information Service
Business

MUTOH INDUSTRIES CO., LTD., MUTOH ITEX CO., LTD.,(Mutoh Mechatronics Co., Ltd.), (DIGTAL MATRIX, INC.)

Other Business

MUTOH ENGINEERING INC., MUTOH ENTERPRISES LTD.

The 57th
period690-982

The 58th
period-1,5001,073-1,000

-500

0

500

1,000

1,500

7

Non-consolidated Financial Statements■ Non-consolidated balance sheets■ Non-consolidated Statements of Income(Millions of yen)

As of March 31, As of March 31,
2007
2006

Year ended
Year ended
March 31, 2007 March 31, 2006

AssetsOrdinary income or loss

Current assets

9,512

12,022

Net sales

Fixed assets

10,094

9,153

Tangible fixed assets

5,013

5,161

Intangible fixed assets

139

117

4,942

3,874

19,607

21,176

Investments and other assets
Total assets(Millions of yen)

3,943

4,217

Long-term liabilities

1,758

2,825

Total liabilities

5,702

7,043

16,712

Operating income (loss)

71

(239)

Ordinary income

413

280

Income (loss) before income taxes
and minority interests

297

(723)

Net income (loss)

322

(832)

Unappropriated income (loss)

—

(410)

Shareholders’ equity

13,622—Extraordinary income or loss

Liabilities
Current liabilities

15,100Net assets

Shareholders’ equity
Common stock—

10,199Common stock

10,199—

Capital surplus

—

4,592

Capital surplus

4,182

—

Retained earnings

—

(410)

Retained earnings

322—

Unrealized gains (losses) on other securities, net—

385

Treasury stock(1,081)—

Treasury stock

—

(634)

282

—

Total shareholders’ equity—

14,132

Total net assets

13,904—

Total liabilities and shareholders’ equity—

21,176

Total liabilities and net assets

19,607—

Valuation and translation adjustments■ Non-consolidated Statement of Changes in Net Assets (From April 1, 2006 to March 31, 2007)(Millions of yen)

Shareholders’ equity

Valuation andCommon stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity translation adjustments
Balance as of March 31, 2006

10,199Total net
assets

4,592

(410)

(410)

410

—

—

322

322

322

(446)

(446)

(446)

0

0

0

(634)

13,746385

14,132

Changes during the period
Reversal for capital surplus (Note)
Net income
Acquisition of treasury stock
Disposal of treasury stock0

Net changes of items other than shareholders’equity during the period
Total changes during the period
Balance as of March 31, 2007

(103)

—

(410)

733

(446)

(124)

(103)

(227)

10,1994,182

322(1,081)

13,622282

13,904

Note: This is the item of disposition at our annual shareholders meeting held in June 2006

8

(103)

Company Profile (As of April 1, 2007)
Name:

MUTOH HOLDINGS CO., LTD.

• Pencils/Pens plotters

Established:

March 5, 1952 (founded: December 1942)• Cutting plotters

Common stock:

10,199 million yen• Image scanners

Head office:No.5 TOC Building, 21-1, Nishi-Gotanda,• Repair and maintenance for the above
products

7-chome, Shinagawa-ku, Tokyo 141-8683
Tel: 03-5740-8700●Information services (CAD/CAM) segment

Fax. 03-5740-8710• 2D-CAD, 3D-CAD and related software

Website address:

http://www.mutoh-hd.co.jp/• System integration services

Main business:• Management of the Group companies●Other businesses segment• Assets management of the Group companies• Design-drafting equipments and opticalmeasuring instruments• Others
Main business activitiesof the Group:●Imaging & Information segment

Sport-care products• Large format inkjet printers for computer

Retails outlets for books, stationeries, etc.
Othersaided design (CAD) and graphics applications• CAD Plotters

Directors (As of June 28, 2007)
Masanori Takayama

Chairman of the Board

Akihide Kobayashi

Full-time Auditor

Toshiaki Sato

President

Yasunori Tokunou

AuditorNobumasa Hayakawa

Director

Tadanori Mitsuhashi

Auditor

Arthur Vanhoutte

Director

Zentaro Maekawa

Director

Stock information (As of March 31, 2007)■ Number of shares issuable

170,000,000■ Number of shares issued

54,818,180■ Number of shares per unit

1,000

■ Number of shareholders

5,402■ Shareholders who holds greater than 10% of the total
number of shares issued
Shareholders

Units held

TCS HOLDINGS CO., LTD.

13,200■ Breakdown of shareholders
Securities companies
0.68% 30

Foreign companies
3.10%
39

Financial institutions
17.29% 41
Individuals and others
40.86%
5,037
Other companies
38.07%
255

Percentage of voting rights
26.0

Note: Above Percentage of voting rights is calculated exclusively the treasury stock (4,242,310
shares).

■ Breakdown by the number of shares held
1 or more
8.75% 2,841
5 or more
3.97% 366
10 or more
10.97% 354
50 or more
4.54% 35

1 or less
0.85% 1,773
1,000 or more
56.08% 9500 or more
8.74% 7100 or more
6.10% 17

9

Shareholder Information
Business year:

From April 1 to March 31 of the following year

Ordinary General Meeting of Shareholders:

In June each year

Year-end Dividend Record Date:

March 31

Interim Dividend Record Date:

September 30

Public Notices:

Public notices shall be made on the Company’s website (http://www.mutohhd.co.jp).
*In case the public notices is not available on the Company’s website due tounavoidable reasons, such notices shall be made on the Nihon Keizai Shinbun

Administrator of Shareholders Register:

The Chuo Mitsui Trust and Banking Company, Ltd.
33-1, Shiba 3-chome, Minato-ku, Tokyo 105-8574, Japan

Business Location:

The Chuo Mitsui Trust and Banking Company, Limited, Head Office33-1, Shiba 3-chome, Minato-ku, Tokyo 105-8574, Japan

Mail address and telephone number
Stock Transfer Agency Department:

The Chuo Mitsui Trust and Banking Company, Ltd.
8-4 Izumi 2-chome Suginami-ku, Tokyo 168-0063
Tel. 0120-78-2031 (toll-free)Agency’s Intermediary Office:Nationwide branches of the Chuo Mitsui and Trust Banking Company, Ltd.
Head Office and branches of Japan Securities Agents, Ltd.

Transferring Fee:Fee of charge

Note:
For inquiries concerning any requisite forms for changing address, names, request for purchase and sell of odd lot shares, etc., shareholders are requested tocontact the at the following toll free number or website address:
Toll-Free Telephone No. 0120-78-2031 (Acceptance time: weekday 9:00 ~ 17:00)
The website address http://www.chuomitsui.co.jp/person/p_06.html

This report is printed on 100% recycled paper with soy ink.