Translation

Member of the Financial Accounting Standards Foundation

October 8, 2008

Consolidated Financial Results
for the Three Months Ended August 31, 2008
Listed company name:
Stock exchange listing:Stock code:
Location of headquarters:
Website:Representative:
Contact:

Toyo Tanso Co., Ltd.
Tokyo Stock Exchange, 1st Section
5310
Osaka, Japan
http://www.toyotanso.co.jp
Junko Kondo, President & Chief Operating Officer
Toshimi Boki, Executive Officer, General Manager,
Accounting Department
81-6-6451-2114 (from overseas)

TEL:
Scheduled date for submissionof quarterly report:

October 14, 2008

1. Consolidated financial results for the three months ended August 31, 2008
(From June 1, 2008 to August 31, 2008)(1) Operating results (cumulative total)(Millions of yen, rounded down)
Percentages indicate changes from the same period in the previous fiscal year.

Net sales

Operating profit

Recurring profit%
Three months ended
August 31, 2008
Three months ended
August 31, 2007

Net income

%

%

%

8,762

-

1,812

-

1,871

-

1,212

-

8,451

14.8

2,364

28.9

2,234

16.7

1,332

28.2

Net income per share

Three months ended
August 31, 2008
Three months ended
August 31, 2007

(2) Financial position

Diluted net income
per share

yen

yen

58.50

-

64.09

-

(Millions of yen, rounded down)
Percentages indicate changes from the same period in the previous fiscal year.
Total assets

EquityEquity ratio

Equity per share%yen

As of August 31, 2008

59,72347,97078.6

2,263.82

As of May 31, 2008

57,706

46,52379.0

2,198.73

Reference: Shareholders’ equity
August 31, 2008
May 31, 2008

46,940 million yen
45,606 million yen

12. Dividends
Dividends per share (yen)(Record date)

First quarter end

Interim-end-

Third quarter end

Year-end

Total (Full year)

0.00

-

15.00

15.00

(Actual)Year ending May 31, 20090.00
(Forecast)
Note: Revision of projected dividends in the quarter under review: None

-

-

-

-

20.00

20.00

Year ending May 31, 2008
Year ending May 31, 2009

3. Consolidated results forecast for the fiscal year ending May 31, 2009
(From June 1, 2008 to May 31, 2009)

Net sales(Millions of yen)
Percentages indicate changes on a year-on-year basis.
Net income
Recurring profit
Net income
per share

Operating profit
%

%

%

%

yen

Interim period

18,400

-

3,500

-

3,600

-

2,200

-

105.74

Full year

37,400

8.3

7,800

(2.9)

7,900

1.3

4,900

(4.7)

235.59Note: Revision of consolidated results forecast in the quarter under review: None

4. Others(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries accompanying changes in scope of consolidation):

None(2) Adoption of simple accounting methods and accounting methods specific to the preparation ofquarterly consolidated financial statements: Yes
Note: For details, please refer to ‘4. Others’ in Qualitative Information and Financial Statements on page5.
(3) Changes in accounting policies, procedures, and methods of presentation for preparing theconsolidated quarterly financial statements(those to be described in the section Changes in Significant Items That Form the Basis of Preparations for
Consolidated Quarterly Financial Statements)
i. Changes due to amendment of accounting standards: Yes
ii. Changes due to other reasons: Yes
Note: For details, please refer to ‘4. Others’ in Qualitative Information and Financial Statements on
page 5.
(4) Number of shares outstanding (common stock)i. Number of shares outstanding and issued at the end of period (including treasury stock)
As of August 31, 2008
20,750,688 shares
As of May 31, 2008
20,750,688 shares
ii. Number of treasury stock at the end of period
As of August 31, 2008
15,770 shares
As of May 31, 2008
15,430 sharesiii. Average number of shares during the period (quarter)
First quarter ended August 31, 2008
20,735,140 sharesFirst quarter ended August 31, 2007
20,737,421 shares

2

* Disclaimer regarding appropriate use of forecasts and related points of note
1. Commencing the current fiscal year, the Company is applying the Accounting Standard for
Quarterly Financial Reporting (Accounting Standards Board of Japan Statement No. 12 issued on
March 14, 2007) and the Guidance on Accounting Standard for Quarterly Financial Reporting(ASBJ Guidance No. 14 issued on March 14, 2007). Quarterly consolidated financial statements areprepared according to the Rules for Quarterly Consolidated Financial Statements.
2. The results forecast has been prepared based on information that was available on the date of releaseof this document. Actual results may differ from the forecast depending on various factors. For
further information on the results forecast, please refer to ‘3. Qualitative Information Regarding
Consolidated Results Forecast’ in Qualitative Information and Financial Statements on page 5.

3

[Qualitative Information and Financial Statements]
1. Qualitative Information Regarding Consolidated Operating Results
During the first quarter under review, the slowdown of the Japanese economy accelerated,with capital expenditure and exports weakening on the back of continued rises in the prices ofraw materials and fuel (including crude oil), exchange rate fluctuations, and the slowdown in
the U.S. and European economies due to the turmoil on the financial market triggered by the
U.S. economy. Downside risks in overseas economies increased globally against a backdrop ofconcern over the downturn in the U.S. and European economies, although the global economy
was driven by emerging economies, especially those in Asia.
In the circumstances, the Toyo Tanso group vigorously promoted a shift to high value-added
products and fast-growing sectors, especially products for solar cells, on which the group has
focused from early on, and other environment and energy-related products. Meanwhile, thegroup effectively met demand from domestic and foreign customers by expanding the sales ofcompound materials products, including C/C composites, in addition to isotropic graphite
products, the group’s mainstay.
With regard to the mainstay special graphite products, the electronics sector continued to
grow considerably, mainly due to a substantial expansion in domestic and foreign demand for
products used in the manufacturing of solar cells, although sales of products used in theprocessing of single crystal silicon were weak due to the market slowdown. In the generalindustries sector, sales of EDM (electrical discharge machining) electrodes and products used
for continuous casting were weak, due in part to the effects of the sluggish auto industry and the
housing market.
In carbon products for general industries, sales of carbon products for mechanicalapplications were firm, especially products used as bearings and sealing materials, while salesof products for electrical applications saw sluggish growth due to the effect of the slumping U.S.
and European economies.
In the compound materials and other products segment, sales of SiC (silicon carbide)-coatedgraphite products and C/C composites expanded steadily owing to growth in solar cells andprogress in the shift to high value-added products, despite the stagnant semiconductor market
having a certain impact.
As a result of the above performance, in addition to increased costs due to the soaring pricesof raw materials and fuel along with a significant rise in depreciation costs, consolidated sales in
the first quarter under review rose 3.7% year on year to 8,762 million yen. Operating profit fell
23.4% to 1,812 million yen, recurring profit declined 16.3% to 1,871 million yen, and net
income slipped 8.9% to 1,212 million yen.
The table below shows sales by product category in the first quarter under review.
(Thousands of yen)
Products
Special graphite products
Carbon products for generalindustries(for mechanical applications)
Carbon products for generalindustries(for electrical applications)Compound materials andother products
Related goods
Total

Three months ended
August 31, 2007
(thousand yen)
4,401,951

Three months ended
August 31, 2008
(thousand yen)
4,561,752

732,282

732,9290.1

1,273,383

1,198,225(5.9)

1,806,658

2,075,334

14.9

236,949

193,845(18.2)

8,451,225

8,762,088

3.7*The year-on-year changes are included for reference.

4

Year on year (%)
3.6

2. Qualitative Information Regarding Consolidated Financial Position
Total assets as of August 31, 2008 increased by 2,016 million yen from the end of theprevious fiscal year. This was mainly because of a rise of 758 million yen in cash on hand and inbanks due to the collection of notes and accounts receivable-trade, and an increase of 1,034
million yen in inventory due to a production increase.
Total liabilities rose 570 million yen from the end of the previous fiscal year. This came as aresult of decreases, including a fall of 391 million yen in income taxes payable due to income
tax payments being more than offset by a rise of 656 million yen in trade notes and accounts
payable, an increase of 226 million yen in short-term borrowings, and other factors attributable
to increased raw material purchases due to a production increase, among other reasons.
Equity climbed 1,446 million yen, attributable to a rise in retained earnings as a result of net
income of 1,212 million yen.
3. Qualitative Information Regarding Consolidated Results Forecast
The global economy seems to be moving toward a synchronized global slowdown because of
the consistently high prices of raw materials and fuel, currency movements, and concern overthe business downturn in the U.S. and Europe triggered by the turmoil in the financial market.
With regard to the environment around the Toyo Tanso group, strong demand for high-function
carbon products is expected to continue, especially in the sectors related to energy and theenvironment. This is driven by demand for products used in the manufacturing of solar cells,
which will grow further.
In the circumstances, the Toyo Tanso group will focus on a shift to fast-growing sectors andthe development of high value-added products, especially compound materials. Meanwhile, thegroup will endeavor to pass the soaring prices of raw materials and fuel on to selling prices.
Based on the above situation, we are not altering our forecasts for the interim period and fullyear of the fiscal year ending May 31, 2009 as announced on July 15, 2008.
4. Others(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries accompanying changes in scope of consolidation)
None(2) Adoption of simple accounting methods and accounting methods specific to the
preparation of quarterly consolidated financial statements(i) Inventory valuation method
In calculating inventory at the end of the first quarter under review, the Company has
omitted physical stocktaking and has calculated inventory in a reasonable manner based on
the physical inventory at the end of the previous fiscal year.
(ii) Tax expense calculation
Tax expenses are calculated by multiplying profit before income taxes by an effective tax
rate, which is reasonably estimated by applying tax effect accounting to estimated profit
before income taxes for the fiscal year including the first quarter under review.
The income taxes-deferred is included in income taxes.
(iii) Method of calculating deferred tax assets and deferred tax liabilities
Since the business environment and the temporary difference are not considered to havechanged significantly since the end of the previous fiscal year, the Company has used theresults forecast and tax planning used at the end of the previous fiscal year.

5(3) Changes in accounting policies, procedures, and methods of presentation for preparing
the consolidated quarterly financial statements(i) Commencing the current fiscal year, the Company is applying the Accounting Standard for
Quarterly Financial Reporting (Accounting Standards Board of Japan Statement No. 12
issued on March 14, 2007) and the Guidance on Accounting Standard for Quarterly Financial
Reporting (ASBJ Guidance No. 14 issued on March 14, 2007). Quarterly consolidated
financial statements are prepared according to the Rules for Quarterly Consolidated Financial
Statements.
(ii) Changes in evaluation criteria and evaluation method for inventories
Commencing the first quarter under review, the Company is applying the AccountingStandard for Measurement of Inventories (ASBJ Statement No. 9 issued on July 5, 2006). The
evaluation method has been changed from the cost method to the cost method where the bookvalue (balance sheet value) is reduced in accordance with decreases in profitability.
The effect of the changes on operating profit, recurring profit, and profit before income
taxes is minor.
(iii) Commencing the first quarter under review, the Company is applying the Practical
Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements (Practical Issues Task Force No. 18 issued on May 17,2006) and is making the necessary adjustments for consolidated accounting.
In association with this, retained earnings at the beginning of the quarter increased 53
million yen. The impact on operating profit, recurring profit, and profit before income taxes isminor.
(iv) Change in the method of converting the revenue and expenditure of foreign subsidiaries
The revenue and expenditure of foreign subsidiaries were previously converted into yen
based on the spot exchange rate on the closing date. However, commencing the first quarter
under review, they are converted into yen based on the average exchange rate for the period.
The change was made to eliminate the influence of short-term exchange rate fluctuations,and to calculate earnings for the quarter more appropriately in line with the increasing
importance of foreign subsidiaries’ production and sales transactions.
As a result of the change, net sales, operating profit, recurring profit, and profit before
income taxes fell 78 million yen, 22 million yen, 23 million yen, and 23 million yen,respectively.
The effects of the change are also described in ‘(5) Segment information’ underConsolidated Quarterly Financial Statements on page 12.
(v) Application of Accounting Standard for Lease Transactions
Finance lease transactions that do not transfer ownership were previously accounted for ina manner similar to accounting for ordinary operating lease transactions. Commencing thefirst quarter under review, however, finance lease transactions are accounted for in a manner
similar to the accounting treatment for ordinary sale and purchase transactions under the
Accounting Standard for Lease Transactions (ASBJ Statement No. 13 issued by the First
Subcommittee of the Business Accounting Council on June 17, 1993 and revised on March 30,2007) and the Guidance on Accounting Standard for Lease Transactions (ASBJ Guidance No.
16 issued by the Accounting Committee of the Japanese Institute of Certified Public
Accountants on January 18, 1994 and revised on March 30, 2007). This is because theaccounting standard and guidance are now applicable to quarterly consolidated financial
statements related to consolidated accounting periods commencing on or after April 1, 2008.
In depreciating the leased assets related to finance lease transactions that do not transfer
ownership, we consider the lease period to be durable years and use the straight-line method,
setting the residual value to zero.
Finance lease transactions that do not transfer ownership, which commenced prior to thebeginning of the first fiscal year in which the standard and guidance are applied, continue tobe accounted for in a manner similar to accounting for ordinary lease transactions.
6

The change has no effect on operating profit, recurring profit, or profit before income
taxes.
(4) Additional information
Changes in the durable years of tangible fixed assets
Commencing the first quarter under review, the Company and its domestic consolidated
subsidiaries revised and shortened the durable years of tangible fixed assets in the wake of therevision of the legal durable years of machinery and equipment in the tax system revision forfiscal 2008.
In association with the revision, depreciation cost rose 87 million yen, while operating profit,
recurring profit, and profit before income taxes each fell 87 million yen.
The effects of the changes are also described in ‘(5) Segment information’ underConsolidated Quarterly Financial Statements on page 12.

7

5. Consolidated Quarterly Financial Statements(1) Consolidated balance sheets(Thousands of yen, rounded down)
As of August 31, 2008
AmountAssetsCurrent assets
Cash on hand and in banks
Trade notes and accounts receivable
Merchandise and finished goods
Work in process
Raw materials and stores
Other
Allowance for doubtful accounts
Total current assets
Fixed assets. Tangible fixed assets
Buildings and structures
Machinery, equipment, and vehicles
Land
Construction in progress
Other
Total tangible fixed assets
Intangible fixed assets
Investments and other assets
Total fixed assets
Total assets

8

As of May 31, 2008
Amount

14,401,508
11,069,216
3,218,863
3,638,208
1,402,160
1,268,723(133,864)
34,864,817

13,642,899
10,992,382
2,915,957
3,276,681
1,031,929
1,261,971(139,261)
32,982,561

6,168,026
8,671,655
5,382,093
674,062
545,808
21,441,646
399,639
3,017,239
24,858,525
59,723,342

6,176,874
8,755,666
5,380,948
475,397
480,917
21,269,806
376,647
3,077,541
24,723,995
57,706,556

(Thousands of yen, rounded down)
As of August 31, 2008

As of May 31, 2008

AmountAmountLiabilities
Current liabilities
Trade notes and accounts payable
Short-term borrowings
Accrued amount payable
Income taxes payable
Reserve for employees’ bonuses
Reserve for directors’ and corporate
auditors’ bonuses
Other
Total current liabilities
Long-term liabilities
Long-term borrowings
Reserve for employees’ retirement
benefits
Other
Total long-term liabilities
Total liabilities
EquitySareholders’ Equity
Common Stock
Capital surplus
Retained earnings
Treasury stock - at cost
Unrealized gains (losses) on
available-for-sale securities
Foreign currency translation adjustments
Total
Minority interests
Total equity
Total liabilities and equity

92,965,957
1,504,271
2,556,307
577,673
546,359

2,309,322
1,277,401
2,694,254
969,107880,309

12,96051,842

1,772,619
9,936,150

1,279,782
9,462,020

363,650

423,980

296,548

147,111

1,156,676
1,816,874
11,753,025

1,149,846
1,720,938
11,182,958

7,692,575
9,534,686
29,406,731(55,514)

7,692,575
9,534,686
28,558,305(53,599)

12,622

29,684

349,073
46,940,176
1,030,141
47,970,317
59,723,342(155,283)
45,606,368
917,228
46,523,598
57,706,556

(2) Consolidated quarterly statements of income
Three months ended August 31, 2008
(Thousands of yen, rounded down)
Three months ended August 31, 2008
AmountNet sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Dividend income
Dividends earned
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Valuation loss on investment securities
Loss on currency options
Other
Total non-operating expenses
Recurring profit
Extraordinary profit
Gain on sale of fixed assets
Total extraordinary profit
Extraordinary losses
Loss on sale of fixed assets
Loss on disposal of fixed assets
Total extraordinary losses

8,762,088
5,394,052
3,368,036
1,555,945
1,812,090

Profit before income taxes

1,868,146

Income taxes
Minority interests
Net income

547,056
108,146
1,212,942

34,384
5,947
79,74415,302
135,379
10,24939,21422,7494,011
76,224
1,871,244
680
680
1,213
2,565
3,779

10

(3) Consolidated quarterly statements of cash flows(Thousands of yen, rounded down)
Three months ended August 31, 2008
AmountCash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in reserve for employees’ retirement benefits
Increase (decrease) in reserve for employees’ bonuses
Increase (decrease) in reserve for directors’ bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Foreign exchange loss (gain)
Valuation loss (gain) on investment securities
Gain on sale of tangible fixed assets
Loss on disposal and sale of tangible fixed assets
Decrease (increase) in notes and accounts receivable - trade
Decrease (Increase) in inventories
Increase (decrease) in notes and accounts payable - tradeOther

1,868,146
753,234
2,726
53,711(336,412)(38,882)(9,512)(40,332)
10,249(79,744)
39,214(680)
3,779
186,373(879,793)
476,138
298,274

Sub-total

2,306,488

Interest and dividend received
Interest paid
Income taxes paid

40,332(8,839)(962,858)

Net cash provided by operating activities
Cash flows from investing activities
Payments for time deposits
Proceeds from time deposits
Payments for acquisition of tangible fixed assets
Proceeds from sale of tangible fixed assets
Payments for acquisition of intangible fixed assets
Other
Net cash used in investing activities

1,375,122(4,333,661)
830,058(592,075)
1,001(19,001)
15,950(4,097,728)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayment of long-term borrowings
Repayment of finance lease payables
Payments for acquisition of treasury stock
Payments for dividends
Payments for dividends to minority interests
Net cash provided by (used in) financing activities

276,954(119,517)(1,259)(1,914)(311,028)(22,196)(178,963)
146,892(2,754,675)
10,491,890
7,737,214

Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

11Starting the current fiscal year, the Company applies the Accounting Standard for Quarterly Financial Reporting(Accounting Standards Board of Japan Statement No. 12 issued on March 14, 2007) and the Guidance on
Accounting Standard for Quarterly Financial Reporting (ASBJ Guidance No. 14 issued on March 14, 2007).
Quarterly consolidated financial statements are prepared under the Rules for Quarterly Consolidated Financial
Statements.

(4) Notes regarding the premise of a going concern
Not applicable.
(5) Segment information
a. Business Segment Information
From June 1, 2008 to August 31, 2008
Business segment information has been omitted because the entire business of the Company and its
subsidiaries falls under the single business category of carbon product related business.
b. Geographic Segment Information(From June 1, 2008 to August 31, 2008)(Thousands of yen, rounded down)
Japan

North
America

EuropeAsia(1) Sales to unaffiliated customers

4,675,938

871,993855,759

2,358,397(2) Intersegment sales or transfers

1,364,089

38,042

2,750

42,655

Total

6,040,028

910,035

858,5102,401,053

852,997

125,541

119,573

756,989

Corporateand Elim.

Consolidated

8,762,088-

8,762,088

1,447,538(1,447,538)-

10,209,627(1,447,538)

8,762,088

1,855,102(43,011)

1,812,090

Total

Sales

Operating Profit(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America:United States(2) Europe:France, Germany, Italy(3) Asia:China, Taiwan
3. Unallocated amounts for operating expenses for the above period are not included in Corporate and Eliminations.
4. Change in method of translating the revenues and expenses of foreign subsidiaries
The revenue and expenditure of foreign subsidiaries were previously converted into yen based on the spot exchange
rate on the closing date. However, commencing the first quarter under review, they are converted into yen based on the
average exchange rate for the period. As a result of the change, net sales fell 13,942 thousand yen in North America,rose 8,408 thousand yen in Europe, and declined 74,752 thousand yen in Asia. Operating profit dropped 1,923 thousand
yen in North America, increased 2,536 thousand yen in Europe, and slipped 23,029 thousand yen in Asia.
5. Change in the durable years of tangible fixed assets
As stated in the additional information, the Company and its domestic consolidated subsidiaries revised and shortened
the durable years of tangible fixed assets for the first quarter under review in the wake of the revision of the legal durable
years of machinery and equipment in the tax system revision for fiscal 2008. In association with the change, depreciation
costs increased 87,479 thousand yen, and operating profit fell 87,479 thousand yen in Japan.

c. Overseas Sales
Three months ended August 31, 2008 (From June 1, 2008 to August 31, 2008)(Thousands of yen, rounded down)North
AmericaI

Overseas Sales

II

Consolidated Sales

III

Overseas sales as a proportion of consolidated sales (%)

EuropeRest of
World

Asia

Total

879,820

1,007,368

3,037,326

46,3704,970,885

-

-

-

-

8,762,088

10.0

11.5

34.7

0.5

56.7

(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America:United States(2) Europe:France, Germany, Italy(3) Asia:China, Taiwan
3. The overseas sales are the sales of the Company or its consolidated subsidiaries in countries or regions excluding Japan.

(6) Notes if the amount of shareholders’ equity has changed significantly
Not applicable.

12Reference materials(1) Summary of Consolidated Statements of Income for Previous First Quarter(thousands of yen, rounded down)
Three months ended August 31, 2007
AmountI.

Net sales

8,451,225

II. Cost of goods sold4,691,744

Gross profit

3,759,481

III. Selling, general and administrative expenses

1,394,499

Operating profit

2,364,981

IV. Non-operating income

65,782V.

1. Interest and dividend income

27,7582. Net realized gain on crude oil swap contracts

21,387

3. Other

16,635Non-operating expenses

196,260

1. Interest expenses

23,2192. Net realized loss on crude oil swap contracts

17,106

3. Foreign exchange loss

131,186

4. Valuation loss on investment securities based on method inwhich valuation losses are recognized as net loss

12,5085. Other

12,238Recurring profit

2,234,503

VI. Extraordinary profit

4,151

1. Gain on sale of fixed assets

235

2. Reversal of allowance for doubtful accounts

3,749

3. Subsidies received

166

VII. Extraordinary losses

7,082

1. Loss on disposal of fixed assets

2,880

2. Loss on sale of fixed assets

4,202

Profit before income taxes

2,231,572

Income taxes

833,524

Minority interests

66,024

Net income

1,332,023

13

(2) Summary of Consolidated Statements of Cash Flows for Previous First Quarter(thousands of yen, rounded down)
Three months ended August 31, 2007
AmountI.

Cash flows from operating activities
1. Profit before income taxes

2,231,572

2. Depreciation

598,744

3. Amortization of goodwill

2,583

4. Decrease in reserve for employees’ retirement benefits(331)

5. Decrease in reserve for employees’ bonuses(377,871)

6. Decrease in reserve for directors’ bonuses(40,914)

7. Decrease in allowance for doubtful accounts(3,794)

8. Interest and dividend income(27,758)

9. Interest expenses

23,219

10. Foreign exchange loss
11. Valuation loss on investment securities based on method inwhich valuation losses are recognized as net loss
12. Gain on sale of tangible fixed assets

131,186
12,508(235)

13. Loss on disposal and sale of tangible fixed assets

7,082

14. Decrease in notes and accounts receivable-trade

49,682

15. Increase in inventories(305,825)

16. Decrease in notes and accounts payable-trade(167,817)

17. Other627,895
Sub-total

2,759,927

18. Interest and dividend received

27,75819. Interest paid

(13,593)

20. Income taxes paid

(1,701,667)

Net cash provided by operating activities

1,072,424

II. Cash flows from investing activities
1. Payments for time deposits(5,133,754)

2. Proceeds from time deposits

151,659

3. Proceeds from redemption of mortgage-backed securities

500,000

4. Payments for acquisition of tangible fixed assets(1,560,089)

5. Proceeds from sale of tangible fixed assets

2,938

6. Payments for acquisition of intangible fixed assets(4,260)

7. Payments for acquisition of investment securities(500,000)

8. Payments for investment in affiliates(124,461)

Net cash used in investing activities(6,667,968)

14

Three months ended August 31, 2007
Amount (thousands of yen, rounded down)
III. Cash flows from financing activities
1. Net increase (decrease) in short-term borrowings

100,844

2. Proceeds from long-term borrowings

50,0003. Repayment of long-term borrowings(273,628)

4. Payments for acquisition of treasury stock(37,372)

5. Payments for dividends(165,918)

6. Payments for dividends to minority interests(23,868)

Net cash provided by (used in) financing activities(349,942)

IV. Effect of exchange rate changes on cash and cash equivalents

59,167

V. Decrease in cash and cash equivalents(5,886,319)

VI. Cash and cash equivalents at beginning of period

11,558,559

VII. Increase in cash and cash equivalents accompanying new
consolidation
VIII. Cash and cash equivalents at end of period

76,943
5,749,184

15

(3) Segment Information
a. Business Segment Information
From June 1, 2007 to August 31, 2007
Business segment information has been omitted because the entire business of the Company and its
subsidiaries falls under the single business category of carbon product related business.

b. Geographic Segment Information(From June 1, 2007 to August 31, 2007)(Thousands of yen, rounded down)
Japan

North
America

Europe

Asia

Total

4,982,672

886,865

881,564

1,700,123

8,451,225

Corporateand Elim.

Consolidated-

8,451,225

Sales(1) Sales to unaffiliated customers

1,269,035

69,954024,425

1,363,415(1,363,415)

-

Total

(2) Intersegment sales or transfers

6,251,707

956,819

881,564

1,724,549

9,814,640(1,363,415)

8,451,225

Operating Expenses

4,667,741

844,376770,283

1,258,891

7,541,292(1,455,048)

6,086,243

Operating Profit

1,583,966

112,443

111,281465,657

2,273,348(91,633)

2,364,981(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America:Unites States(2) Europe:France, Germany, Italy(3) Asia:China, Taiwan
3. Unallocated amounts for operating expenses for the above period are not included in Corporate and Eliminations.

c. Overseas Sales
Three months ended August 31, 2007 (From June 1, 2007 to August 31, 2007)(Thousands of yen, rounded down)

I

Overseas Sales

II

Consolidated Sales

III

Overseas sales as a proportion of consolidated sales (%)

North
America

EuropeAsia

827,391

1,076,587

2,281,873

Rest of
World

Total

49,2934,235,146

-

-

-

-

8,451,225

9.8

12.7

27.0

0.6

50.1

(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America:United States(2) Europe:France, Germany, Italy(3) Asia:China, Taiwan
3. The overseas sales are the sales of the Company or its consolidated subsidiaries in countries or regions excluding Japan.

16