Gulliver International Co., Ltd.

Non-consolidated Results
Interim period of the fiscal year ending February 28, 2007
(March 1, 2006 to August 31, 2006)

This document has been translated from the original Japanese as a guide for non-Japanese investors. It
contains forward-looking statements based on a number of assumptions and beliefs made bymanagement in light of information currently available. Actual financial results may differ materiallydepending on a number of factors, including changing economic conditions and the pricing and productinitiatives of new and existing competitors.

SUMMARY OF FINANCIAL STATEMENTS (Non-consolidated)
Results for the interim period of the fiscal year ending February 28, 2007

Gulliver International Co., Ltd.

October 17, 2006
st

Stock Code: 7599
Listed exchanges: Tokyo (1 Section)
http://www.glv.co.jp/
Home office:Tokyo
President: Kenichi Hatori
Inquiries:
Senior Managing Director: Ikuo Murata
Date of the meeting of the board of directors: October 17, 2006
Telephone:+81 3 5208-5503
Scheduled date of payment of interim dividend: November 14, 2006
Share trading unit: one unit = ten shares
1. Non-consolidated financial results for the interim period of the fiscal year ending February 28, 2007
1) Non-consolidated Operating Results

Millions of yen, rounded downInterim period ended
August 31, 2006

Interim period ended
August 31, 2005(% change)

Sales ....................................................................
Operating income.................................................
Ordinary income...................................................
Net income ...........................................................
Earnings per share (¥)..........................................
Fully diluted earnings per share (¥) ......................

80,061
4,274
4,273
2,272
232.40231.03

(0.5)
12.5
11.8
8.9
---

Fiscal year ended February
28, 2006(% change)

80,486
3,797
3,819
2,085
208.14205.60

29.5
7.2
7.9
4.0
---

(% change)

169,735
10,143
10,135
5,320
525.75520.30---Notes to the preparation of these financial statements:
1. Average number of shares outstanding during the period: Interim period of FY ending February 28, 2007 – 9,778,218; Interim period of FY ended
February 28, 2006 – 10,017,053; FY ended February 28, 2006 – 9,979,943
2. Differences in accounting treatments applied compared to previous consolidated fiscal year: Yes
3. Percentage figures for sales, operating income, ordinary income and net income represent changes compared to the comparable period of theprevious fiscal year.

2) Financial Position (non-consolidated)

Millions of yen, rounded downInterim period ended
August 31, 2006
Total assets..........................................................
Net assets ............................................................
Equity ratio (%).....................................................
Net assets per share ............................................

35,342
15,41943.6
1,581.83

Interim period ended
August 31, 2005

Fiscal year ended
February 28, 2006

30,341
14,94649.3
1,502.82

35,697
16,09445.0
1,631.46

Notes:
1. Number of shares outstanding at end of period: Interim period of FY ending February 28, 2007: 9,747,607; Interim period of FY ended February 28,
2006: 9,945,687; FY ended February 28, 2006: 9,865,317
2. Number of treasury shares at end of period: Interim period of FY ending February 28, 2007: 941, 193; Interim period of FY ended February 28, 2006:
743,113; FY ended February 28, 2006: 823,483

2. Forecasts for the fiscal year ending February 28, 2007 (March 1, 2006 to February 28, 2007)
Millions of yen

FY ending February 28, 2007
Sales .......................................................................................................
Ordinary income......................................................................................
Net income ..............................................................................................
Net income per share (¥).......................................................................

190,000
11,7006,700687.34

3. Dividend status
Cash dividends
First quarter (¥) .............................................
Interim period (¥) ..........................................
Third quarter (¥)............................................
Full year (¥) ..................................................
Other (¥) .......................................................
Total for year (¥) ...........................................

(yen)

FY ended February 28, 2006
-79.00-83.00-162.00

FY ending February 28, 2007 (forecast)-81.00-81.00-162.001

Non-consolidated Balance SheetASSETS

As of
August 31, 2006
% of
total

As of
August 31, 2005
% of
total

Millions of yen
As ofFebruary 28, 2006
% of
total

Current assets
Cash and deposits............................

1,947

3,303

2,107

Accounts receivable.........................

4,773

4,612

7,235

Marketable securities .......................

--

--

100

Inventory ..........................................
Temporary loans to relatedcompanies........................................
Deferred tax assets ..........................

3,195

4,222

3,309

2,910

--

2,769

619

418

448

Others ..............................................

1,691

2,274

1,378

Allowance for doubtful accounts.......

(83)

(58)

(98)

Total current assets ......................

15,05442.6

14,77348.7

17,24948.3

Fixed assets
Tangible fixed assets
Buildings & structures.......................

7,487

5,749

6,805

Tools, fixtures & equipment ...............

1,495

1,215

1,679

Land ..................................................

327

327

327

Others ...............................................

166

203

409

Total tangible fixed assets ............

9,475

26.8

7,495

24.7

9,221

25.8

Intangible fixed assets
Software ...........................................

2,442

2,659

2,694

Others ...............................................

91

98

95

Total intangible fixed assets..........

2,534

7.2

2,757

9.1

2,789

7.8

Investments and other assets
Investment securities.........................

89

270

199

Shares of affiliates.............................

2,321

--

494

Deposits and guarantee money.........

3,278

2,323

3,011

Construction cooperation money.......

3,206

1,432

1,890

Deferred tax assets ...........................

142

102

105

Others ...............................................

564

1,499

1,088

Allowance for doubtful accounts........

(334)

(313)

(352)

Total investment and other assets ..

8,777

Total fixed assets ..........................
Total Assets .......................................

23.4

5,315

17.5

6,436

20,28757.4

35,342

100.0

18.1

15,56851.3

18,44751.7

30,341

100.0

35,697100.0

Forecasts and forward-looking statements in this document are based on a number of assumptions and beliefs made bymanagement in light of information currently available. Actual financial results may differ materially depending on a number offactors, including economic conditions, legislative and regulatory developments, delay in new product or service launches, andpricing and product initiatives of competitors.

2

Non-consolidated Balance Sheet

LIABILITIESCurrent liabilities
Accounts payable ..........................
Short-term borrowing .....................
Accrued expenses .........................
Accrued corporate taxes................
Advances received ........................
Deposits received ..........................
Reserve for bonuses .....................
Others............................................
Total current liabilities..................
Long-term liabilities
Guarantee deposits received.........
Total long-term liabilities..............
Total liabilities............................
CAPITAL
Paid-in capital ................................
Capital surplus...............................
Total capital surplus.......................
Retained earnings
Profit reserve .................................
Interim unappropriated profit..........
Total retained earnings .............
Unrealized gains and losses inother securities...........................
Treasury stock ...............................
Total shareholders’ equity .........
Total Liabilities andShareholders’ Equity .................
NET ASSETS
Shareholders’ equity
Common stock.............................
Capital surplus
Capital reserves ...........................
Total capital surplus
Accumulated earnings
Profit reserve................................
Other accumulated earnings ........
Deferred accumulated earnings ...
Total accumulated earnings
Treasury stock..............................
Total shareholders’ equity
Valuation and differences due toforeign exchange
Valuation difference on othermarketable securities ................
Total valuation and differences due
to foreign exchange
Total net assets
Total liabilities and other net assets

As ofAugust 31, 2006
% of total
2,264
10,600
1,710
1,943
276
512
853
968
19,129793
793
19,923----

Millions of yen, rounded down
As of
As of
August 31, 2005
February 28, 2006
% of total% of total

54.1

2,753
6,050
1,744
1,446
382
686
556
1,131
14,751

2.3
56.4

643
643
15,395

---

4,157
4.032
4,032

----

48.6

3,386
8,000
3,241
1,815
335
451
513
1,263
19,007

53.3

2.1
50.7

594
594
19,602

1.7
55.0

13.7
13.3

4,157
4,032
4,032

--

39
13,636
13,67545.1

39
15,866
15,905

44.5

----

----

50
(6,969)14,9460.2(23.0)
49.3

67(8.067)
16,0940.2(22.6)
45.0

--

--

30,341

100.0

35,697

100.0

4,157

11.8

--

--

--

--

4,032
4,032

11.4

---

--

---

--

39
17,055
17,05517,095(9,873)
15,411

48.3(27.9)
43.6------------------

----

7

0.0

--

--

--

--

7
15,41935,342

0.0
43.6
100.0

----

----

----

----

3

11.6
11.3

Non-consolidated Statements of Income
March 1, 2006 to
August 31, 2006

Millions of yen

March 1, 2005 toAugust 31, 2005

% of total

March 1, 2005 to
February 28, 2006

% of total% of total

Sales...........................................................

80,061100.0

80,486100.0

169,735

100.0

Cost of goods sold..................................

60,67775.8

60,35675.0

126,850

74.7

Gross profit on sales ................................

19,38324.2

20,12925.0

42,884

25.3

Sales, general and administrative
expenses ................................................

15,10818.9

16,332

20.3

32,74019.2

Operating income ...................................

4,274

5.3

3,797

4.7

10,1436.0

Non-operating income ..............................

54

0.1

43

0.0

68

0.0

Non-operating expenses ..........................

56

0.1

20

0.0

77

0.0

Ordinary income .....................................

4,273

5.3

3,819

4.7

10,135

6.0

Extraordinary income ...............................

34

0.0

58

0.0

54

0.0

Extraordinary expenses ...........................

291

0.3

281

0.3

1,000

0.6

Net income before taxes.........................

4,016

5.0

3,597

4.4

9,189

5.4

Corporate income tax, inhabitants tax
and enterprise tax ...............................

1,909

Corporate tax adjustments .....................

(166)

2.2

92

1.8

47

2.3

Net income .............................................

2,272

2.8

2,085

2.6

5,320

3.1

Profits carried forward from the previous
year.....................................................

----

11,718Interim dividends ....................................

--

--

--

Loss on disposal of treasury shares .......

--

--

167

387

Unappropriated profits at end of period ..

----13,636

15,866

1,419

3,820

11,718--785

4

(3) Changes to interim shareholders’ equity
Interim period March 1, 2006 to August 31, 2006
Millions of yen
Shareholders’ equity
Capital surplus

Capital

Other

Capitalreserves

Accumulated earnings
Other accumulated

Total

capitalcapitalsurplussurplus--

4,032

Profitearnings

reserve

Deferred profit

Total

Treasury

accumulated

stock

Total
shareholders’equityearnings

reserve
Balance as of February 28, 2006

4,157

4,032

39

15,866

15,905(8,067)

16,027

(818)

(818)

(818)

(73)

(73)

(73)

2,272

2,272

2,272
(2,079)(2,079)

(190)

(190)

273

83

Change during interim accounting period
Surplus dividend
Bonuses to directors through profit
appropriation
Interim net income
Acquisition of treasury stock
Disposal of treasury stock
Changes to items other thanshareholders’ equity during the interim

--

--

--

--

--

--

--

--

--

--

--

--

--

--

1,189

1,189

(1,805)

(616)

4,157

4,032

--

4,032

39

17,05517,095(9,873)

15,411accounting period
Total change during interim accounting
periodBalance as of August 31, 2006

Millions of yen
Valuation and differences due to foreign exchange
Valuation differences on

Total valuation andother marketabledifferences due to foreign

securities
Balance as of February 28, 2006

Total net assets

exchange
67

67

16,094

Change during interim accounting period
Surplus dividend(818)

Bonuses to directors through profit(73)

appropriation
Interim net income

2,272

Acquisition of treasury stock(2,079)

Disposal of treasury stock

83

Changes to items other thanshareholders’ equity during the interim

(59)

(59)

(59)

(59)

(59)

(675)

7

7

15,419accounting period
Total change during interim accounting
periodBalance as of August 31, 2006

5

Material Items Forming the Basis for the Preparation of the Non-consolidated
Financial Statements
Item

1. Valuation criteria andvaluation methods formaterial assets

March 1, 2006 –August 31, 2006

March 1, 2005 –August 31, 2005

1) Marketable securities
Bonds intended to be held tomaturity.
As at right1) Marketable securities
Bonds intended to be held tomaturity.
Amortizing cost method(straight-line method)
Shares of subsidiaries
The cost method using themoving average method
Other securitiesThose with market value:
Market value method based onmarket value as of the interim
financial closing date(valuation gains or losses aretaken directly into capital andthe cost of sales calculatedusing the moving averagemethod)Those without market value:
Cost method using the moving
average method
2) Inventory
Merchandise
Vehicles:Cost method using actual cost
methodOther:
Cost method under first-in,
first-out method
Stored goods:
Final purchase cost method

Shares of subsidiaries
As at right
Other securitiesThose with market value:
Market value method based onmarket value as of the interim
financial closing date (valuation
gains or losses are taken directly
into capital and the cost of sales
calculated using the moving
average method)Those without market value:
As at right2) Inventory
Merchandise
Vehicles:As at right
Other:
As at rightStored goods:
As at right
2. Fixed asset
depreciation method

1) Tangible fixed assets
As at right1) Tangible Fixed Assets
The Declining Balance Method isapplied. However, for buildings(excluding attached equipment)
acquired since April 1, 1998, theStraight Line Method has been
applied. The useful lives are as
follows:
Buildings and structures: 15-20 yrs.

2) Intangible Fixed Assets
As at right2) Intangible Fixed Assets
The Straight Line Method isapplied. However, with respect tosoftware for internal use, theStraight Line Method based on
useful lives for internal use (fiveyears) has been applied.

3) Long-term prepaid expenses
As at right
3. Treatment ofDeferred assets

Share reissuing expense:
Expensed in their entirety at timeof expenditure

March 1, 2005 –February 28, 2006
1) Marketable securities
Bonds intended to be held tomaturity.
As at left
Shares of subsidiaries
As at left
Other securitiesThose with market value:
Market value method based onmarket value as of the financial
closing date (valuation gains orlosses are taken directly into
capital and the cost of sales
calculated using the moving
average method)Those without market value:
As at left
2) Inventory
Merchandise
Vehicles:As at left
Other:
As at left
Stored goods:
As at left
1) Tangible Fixed Assets
The Declining Balance Method isapplied. However, for buildings(excluding attached equipment)
acquired since April 1, 1998, theStraight Line Method has been
applied. The useful lives are as
follows:
Buildings and structures: 15-20 yrs.
Vehicle and transportationequipment: 2-6 yrs
2) Intangible Fixed Assets
As at left

3) Long-term prepaid expenses
Straight line method is applied

3) Long-term prepaid expenses
As at left

New share issue expenses:
Expensed in their entirety at timeof expenditure

New share issue expenses:
As at left

6

Item

4. Criteria for Recording
Material Reserves

March 1, 2006 –August 31, 2006

March 1, 2005 –August 31, 2005

March 1, 2005 –February 28, 2006

1) Reserve for Doubtful Accounts
As at right1) Reserve for Doubtful Accounts
To prepare for losses occurringfrom bad loans, the actual badloan rate is applied. Specificclaims, such as those where
there are concerns on theprobability for recovery, areassessed on an individual basis
and estimated unrecoverable
amounts are recorded.

1) Reserve for Doubtful Accounts
As at left

2) Reserve for Bonuses
As at right

5. Treatment of material
Lease Transactions

6. Other Material Items
Forming the Basis for
the Preparation of theinterimNon-consolidated
Financial Accounts

As at right

Accounting Treatment ofConsumption Tax:
As at right2) Reserve for Bonuses
To prepare for the payment ofbonuses to employees, amounts
are recorded based on theestimated payment amount.
Financing leases other than thoselease assets whose title isdeemed to pass to the lessee
have been accounted for inaccordance with methods
applied to normal leasetransactions
Accounting Treatment ofConsumption Tax:
Tax Exclusion Method is appliedin the accounting treatment ofconsumption tax.
Further, provisional receipts ofconsumption tax are offset
against provisional payments
and shown under ‘Others’ in
Current Liabilities

2) Reserve for Bonuses
As at left

As at left

Accounting Treatment ofConsumption Tax:
Tax Exclusion Method is appliedin the accounting treatment ofconsumption tax.

7

Changes to Material Items Forming the Basis for the Preparation of theNon-consolidated Financial Statements
March 1, 2006 –August 31, 2006
Accounting standards relating to impairment
losses on fixed assets

March 1, 2005 –A u g u s t 3 1 , 2005

March 1, 2005 –February 28, 2006――――――――――――――――――――――――――――――――――――

From the interim period of the fiscal year ending
February 28, 2007 the ‘Statement Regarding theEstablishment of Accounting Policies for Impairment
Loss on Fixed Assets’ (Business Accounting Council,
August 9, 2002) and ‘Guidelines for the Application of
Accounting Policies for Impairment Loss on Fixed
Assets (Guideline for Application of BusinessAccounting Policies, Article 6; Business Accounting
Council, October 31, 2003) have been applied as
accounting standards relating to impairment loss.
This change has not affected profits and losses.

Accounting standards relating to presentationof net assets on balance sheets
From the interim period of the fiscal year ending
February 28, 2007, the ‘Statement Regarding the
Presentation of Net Assets on the Balance Sheet’(Business Accounting Council, December 9, 2005)
and ‘’Guidelines for the Application of Accounting
Policies for the Presentation of Net Assets on the
Balance Sheet’ (Guidelines for the Application ofBusiness Accounting Polices, Article 8; BusinessAccounting Council, December 9, 2005) have been
applied.
The equivalent amount previously recorded as‘Capital’ is ¥15,419 million.
Following changes to the regulations on financial
statements, net assets on the interim balance sheet
have been recorded in accordance with the revised
regulations.

Partial revision of accounting standards
relating to the reduction of treasury stock andreserves
From the interim period of the fiscal year ending
February 28, 2007, the ‘Statement Regarding
Accounting Policies for the Reduction of Treasury
Stock and Reserves’ (Business Accounting Council,
December 27, 2005) and ‘Guidelines for the
Application of Accounting Policies for the Reductionof Treasury Stock and Reserves’ (Guidelines for the
Application of Business Accounting Policies, Article 2;Business Accounting Council, December 27, 2005).
This change has not affected profits and losses.
Following changes to the regulations on financial
statements, net assets on the interim balance sheet
have been recorded in accordance with the revised
regulations

8Changes to Presentation Method
March 1, 2006 – August 31, 2006

March 1, 2005 – August 31, 2005

Presentation of interim balance sheets
In the previous interim period ‘Temporary loans to related companies’, wasrecorded under ‘Others’ in ‘Current assets’, and ‘Shares of affiliates’, wasrecorded under ‘Others’ in ‘Investments and Other Assets’. In this interim
period as each was greater than 5% of total assets they have been recorded
separately.
At the end of the previous interim period, ‘Temporary loans to relatedcompanies was ¥100 million and ‘Shares in affiliates’ was ¥485 million.

――――――

Additional Information
March 1, 2006 – August 31, 2006――――――March 1, 2005 – August 31, 2005
Treatment of the tax based on business size
portion of corporate taxes in the statements ofincome.
Following the promulgation of ‘Treatment of thetax based on business size portion of corporate
taxes in the Statements of Income’ (February 13,
2004, Corporate Accounting Standards
Committee Practice Report 12), from this interim
accounting period the proportionate amounts ofcorporation tax on value added and capital havebeen included in Selling, General and
Administrative expenses. As a result Selling,
General and Administration expenses increasedby ¥56 million and operating income, ordinary
income and income before taxes, etc. eachdecreased by ¥56 million.

March 1, 2005 – February 28, 2006
Treatment of the tax based on business size
portion of corporate taxes in the statements ofincome.
Following the promulgation of ‘Treatment of thetax based on business size portion of corporate
taxes in the Statements of Income’ (February
13, 2004, Corporate Accounting Standards
Committee Practice Report 12), from thisaccounting period the proportionate amounts ofcorporation tax on value added and capital
have been included in Selling, General and
Administrative expenses. As a result Selling,
General and Administration expenses
increased by ¥122 million and operating
income, ordinary income and income before
taxes, etc. each decreased by ¥122 million.

9Notes to Interim Balance Sheet
As of August 31, 2006
*1

Total accumulated depreciation of

As of August 31, 2005
*1

tangible fixed assets:

As of February 28, 2006

Total accumulated depreciation of*1

tangible fixed assets:¥3,387million

Total accumulated depreciation of
tangible fixed assets:¥2,958 million¥3,031 million

Notes to Interim Statements of Income
March 1, 2006 – August 31, 2006
*1

Main non-operating income
Interest received*2

March 1, 2005 – August 31, 2005
*1

¥5 million

Depreciation

Main non-operating income
Interest received*2

March 1, 2005 – February 28, 2006
*1

¥8 million

Depreciation

Main non-operating income
Interest received*2¥13 million

Depreciation

Tangible fixed assets¥672 million

Tangible fixed assets¥522 million

Tangible fixed assets¥1,232 million

Intangible fixed assets¥391 million

Intangible fixed assets¥342 million

Intangible fixed assets¥770 million

Change in shareholders’ equity for the interim period
March 1, 2006 – August 31, 2006
Category and number of shares in issuanceThousands of shares

Ordinary shares
Total

No. of shares at theend of the previous
fiscal year

Increase in number ofshares during theinterim period

Decrease in number ofshares during theinterim period

Number of shares atthe end of the interim
period

823

143

26

941

823

143

26

941

10