Gulliver International Co., Ltd.

Financial Results for the Interim Periodof the Fiscal Year Ending February 29, 2008
(March 1, 2007 to August 31, 2007)

This document is a translation of sections of the original Japanese as a guide for non-Japanese
investors. It contains forward-looking statements based on a number of assumptions and beliefs madeby management 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 (Consolidated)
Results for the interim period of the fiscal year ending February 29, 2008

Gulliver International Co., Ltd.
Stock Code: 7599
http://www.glv.co.jp/
President: Kenichi Hatori

October 17, 2007

Listed exchanges: Tokyo (1st Section)
Inquiries: Senior Managing Director: Ikuo Murata
Telephone: +81 3 5208-5503

Notes to preparation of these interim financial statements
1. Scheduled date for submission of the interim financial report: November 28, 2007
2. Scheduled date for distribution of dividends: November 13, 2007
I.

Consolidated financial results for the interim period of the fiscal year ending February 29, 2008
Percentage figures represent changes compared to the previous fiscal period

1) Consolidated Operating Results

Millions of yen, rounded downInterim period ended
August 31, 2007

Interim period ended
August 31, 2006(% change)

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

87,226
4,752
4,778
2,707
279.43279.28

(0.8)
6.4
8.2
(18.4)

Fiscal year ended
February 28, 2007(% change)

87,999
4,463
4,414
3,320
339.56337.56

1.4
27.8
27.4
103.2
---

(% change)

182,166
11,123
10,9986,566
672.19669.68Notes:
Investment gains and losses under the equity method: Interim period of FY ending February 29, 2008: ¥ -- million; Interim period of FY ended
February 28, 2007: ¥ -- million; FY ended February 28, 2007: ¥ -- million

2) Financial Position (consolidated)

Total assets....................................................................
Net assets ......................................................................
Equity ratio (%) ..............................................................
Shareholders’ equity per share (¥) .................................

Millions of yen, rounded down

As ofAugust 31, 2007
44,164
19,76443.8
2,018.80

As ofAugust 31, 2006
40,381
16,74540.6
1,680.60

As ofFebruary 28, 2007
45,947
19,30341.2
1,936.38

Note: Shareholders’ equity: Interim period of FY ending February 29, 2008: 19,374 million yen; Interim period of FY ended February 28, 2007:
16,381 million yen; Full year ended February 28, 2007: 18,936 million yen

3) Consolidated cash flows

Cash flow from operating activities ................................
Cash flow from investing activities .................................
Cash flow from financing activities .................................
Cash and cash equivalents at end of period ..................
2. Dividends

Millions of yen, rounded downInterim period ended
August 31, 2007
2,303
(1,741)(2,676)2,927Interim period ended
August 31, 2006
2,564
(3,223)348
3,064

Fiscal year ended
February 28, 2007

Fiscal year ending
February 29, 2008

Interim dividend per share (¥) .......................................
Year-end dividend per share (¥) ...................................
Annual dividend per share (¥) .......................................

81.00
93.00
174.00Fiscal year ended
February 28, 2007
6,103
(5,604)
9784,855
Fiscal year ended
February 29, 2008
(Forecast)-87.00174.0087.00---

3. Forecasts for the fiscal year ending February 29, 2008 (March 1, 2007 to February 29, 2008)
Percentage figures represent changes compared to the previous fiscal year

Millions of yen, rounded down

FY ending February 29, 2008
Sales .............................................................................
Operating income..........................................................
Ordinary income............................................................
Net Income....................................................................
Forecast earnings per share

194,400
12,10012,1006,500
670.95

－ 1 －

6.7%
8.8%
10.0%
(1.0)%--

4. Other
1)
2)

Transfer of important subsidiaries during the period (Transfers of certain subsidiaries resulting in changes in the scope of consolidation):
Yes Consolidated companies: New: 1 (Name: G-Care Kyousaikai) Newly eliminated companies: 1 (Carbross Co., Ltd.)
Changes in accounting methods, procedures and presentation in the preparation of these financial statements (Key items mentioned inMaterial Items Forming the Basis for the Preparation of the Consolidated Financial Statements for the Fiscal Year)
1. Changes following revisions to accounting standards: Yes
2. Other changes: No
Note: Please see Changes in Accounting Treatment on page 18 for details.

3)

Number of shares outstanding (ordinary shares)
1. Number of shares outstanding at end of period (including treasury shares):Interim period of FY ending February 29, 2008:10,688,800
shares; Interim period of FY ended February 28, 2007:10,688,800 shares; Fiscal year ended February 28, 2007: 10,688,800 shares
2. Number of treasury shares at end of period: Interim period of FY ending February 29, 2008:1,091,721 shares; Interim period of FY ended
February 28, 2007: 941,193 shares; Fiscal year ended February 28, 2007: 909,457 shares

Reference: Outline of Non-Consolidated Interim Financial Results
1. Non-Consolidated financial results for the interim period of the fiscal year ending February 29, 2008
Percentage figures represent changes compared to the previous fiscal period1) Non-Consolidated Operating Results

Millions of yen, rounded downInterim period ended
August 31, 2007

Interim period ended
August 31, 2006(% change)

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

76,442
4,425
4,469
2,475
255.50

(4.5)
3.5
4.5
8.9
--

(% change)

80,061
4,274
4,273
2,272
232.402) Financial Position (Non-Consolidated)

Total assets ..................................................
Net assets.....................................................
Equity ratio (%) .............................................
Shareholders’ equity per share (¥)................

Fiscal year ended
February 28, 2007

(0.5)
12.5
11.8
8.9
--

166,466
10,715
10,5095,645
577.92------

Millions of yen, rounded down

As ofAugust 31, 2007
37,717
18,40448.8
1,917.72

As ofAugust 31, 2006
35,342
15,41943.6
1,581.83

As ofFebruary 28, 2007
40,414
18,10144.8
1,850.96

Note: Shareholders’ equity: Interim period of FY ending February 29, 2008: 18,404 million yen; Interim period of FY ended February 28,
2007: 15,419 million yen; Fiscal year ended February 28, 2007: 18,101 million yen

2. Non-Consolidated forecasts for the fiscal year ending February 29, 2008 (March 1, 2007 to February 29, 2008)
Percentage figures represent changes compared to the previous fiscal year

Millions of yen, rounded down

FY ending February 29, 2008
Sales............................................................
Operating income.........................................
Ordinary income...........................................
Net Income...................................................
Forecast annual dividend per share

176,200
11,40011,4006,100635.61

－ 2 －

5.8%
6.4%
8.5%
8.1%
--

1. Operating Results and Financial Position
A. Outline of consolidated interim operating results
Gulliver operates 295 directly operated stores involved in the sale and purchase of cars (17 more than at the endof the interim period of the previous fiscal year and 4 more than at the end of the previous fiscal year) and has
158 franchise stores (36 fewer than at the end of the interim period of the previous fiscal year and 26 fewer thanat the end of the previous fiscal year). In total, Gulliver operates 453 stores (19 fewer than at the end of theinterim period of the previous fiscal year and 22 fewer than at the end of the previous fiscal year).

In our directly operated store operations, we closed a number of branches in the first quarter of the year, but the
opening of new branches is continuing smoothly. In the interim period under review we acted as primary sponsorof the Pro baseball All-star game in July, and continued to restrain advertisement costs and carry out effective
marketing activities.

Vehicles handled by Gulliver are sold quickly, with an average timeframe of only one week to ten days required toachieve a sale via channels that include 1) auction sites throughout Japan, 2) the company’s unique on-screen
selling system ‘Dolphinet’, and 3) GAO! Auction, the Internet-based real-time auction aimed at used car dealers.
The number of cars handled through each of these channels has increased even though advertising-related
expenses and cost of sales have been reduced.

We also steadily increased the operating base and profitability of our consolidated subsidiary G-One Financial
Services Co., Ltd., a company that primarily handles auto-loans.
As a result of the factors noted above, consolidated net sales for the interim period under review decreased 0.8%(¥773 million) to ¥87,226 million, while operating income increased 6.4% (¥289 million) to ¥4,752 million.
Ordinary income increased 8.2% (¥364 million) to ¥4,778 million and net income decreased 18.4% (¥613 million)to ¥2,707 million.

Performance by Segment
i. Sales of used automobiles
In comparison to the interim period of the previous fiscal year, as a result of implementing efficient investments
in advertising, the numbers of cars handled at Gulliver directly managed stores slightly decreased; however, cost
efficiencies, as measured by expenses relative to benefits, improved.
As a result, consolidated net sales for the interim period under review decreased 2.5% (¥2,152 million) to¥81,532 million, while operating income increased 7.7% (¥432 million) to ¥5,975 million.

－ 3 －ii. Financing business
The number of auto-loans handled by G-One Financial Services Co., Ltd. increased.
As a result, consolidated net sales for the interim period under review increased 85.7% (¥911 million) to ¥1,975
million, and operating income increased 101.6% (¥108 million) to ¥215 million.

iii. Other businesses
Due to the decrease in the number of Gulliver franchise stores compared to the previous fiscal year, income
from this area of business decreased.
As a result, consolidated net sales for the interim period under review increased 14.3% (¥467 million) to ¥3,719
million, while operating income decreased 7.0% (¥98 million) to ¥1,302 million.

Note: As detailed in Note 4 of “Segment Information by Business Type for the Current Interim Consolidated
Accounting Period”, the business segments have been changed. Therefore, calculations of net sales andoperating income for the previous fiscal are based on revised amounts for the previous fiscal year.

B. Consolidated financial position and related analysis
Assets, liabilities and shareholders’ equity
1. Current assets
The balance of current assets at the end of the interim period under review increased ¥2,632 million to ¥24,746
million compared to the end of the previous fiscal period due primarily to a ¥1,406 million increase in accounts
receivable
2. Fixed assets
The balance of fixed assets at the end of the interim period under review increased ¥1,150 million to ¥19,418
million compared to the end of the previous fiscal period largely due to a ¥939 million increase in construction
cooperation money security and guarantee deposits due to the expansion of new directly operated stores.
3. Current liabilities
The balance of current liabilities at the end of the interim period under review decreased ¥2,563 million to¥19,675 million compared to the end of the previous fiscal period due primarily to a ¥2,080 million decrease
from the shift of funds used for the expansion of operations from short-term borrowings to long-termborrowings.
4. Fixed liabilities
The balance of fixed liabilities at the end of the interim period under review increased ¥3,327 million to ¥4,724
million compared to the end of the previous fiscal period due primarily to ¥2,896 million increase in long-term
debt from the expansion of operations.
5. Net assets
The balance of net assets at the end of the interim period under review increased ¥3,019 million to ¥19,764
million compared to the end of the previous fiscal period primarily due to a ¥3,798 million increase in retained
profit.

－ 4 －Cash flow
For the interim period of the fiscal year ending February 29, 2008, cash flow from operating activities andfinancing activities were positive and cash flow from investing activities was negative, while overall cash flow wasa negative figure of ¥2,114 million. The balance of cash and cash equivalents at the end of the period was ¥2,927
million.
Cash flow from operating activities
Cash and cash equivalents (“cash”) generated from operating activities was ¥2,303 million.
Principal components of this included interim net income before adjustment for taxes of ¥4,657 million, a decline
in trade receivables of ¥1,459 million, and a ¥2,825 payment of income taxes.
Cash flow from investing activities
Net cash used in investing activities was ¥1,741 million. The principal factor contributing to this result wasinvestment in the opening of new directly operated stores and in internal systems.
Cash flow from financing activities
Net cash used in financing activities was ¥2,676 million partly due to an outflow due to the acquisition of treasury
stock.
Trends in Gulliver’s cash flow indicators are as follows:
Interim FY 2005

FY 2005

Interim FY 2006

FY 2006

Interim FY 2007

Equity ratio (%)

44.6

41.3

40.6

41.2

43.8

Equity ratio based on market
capitalization (%)

357.7

338.5

230.5

181.9

127.5

Debt redemption years(years)

6.5

2.1

3.8

2.3

5.9

Interest coverage ratio

92.4

141.3

134.9

93.6

43.0

Notes:
1. Breakdown of each indicator
Equity ratio = shareholders’ equity/total assets
Equity ratio based on market capitalization = Market capitalization/ Total assets
Debt redemption years = Interest bearing debt/Operating cash flow
Interest coverage ratio = Operating cash flow/Interest payments
2. Each index is calculated from values on a consolidated base
3. Market capitalization is calculated using the formula: closing share price at period end x number of shares in issuance(excluding treasury stock).

C. Basic policy concerning distribution of profits
We have identified the return of profits to investors as an important management issue and also place emphasis
on our dividend payout ratio. Specifically, we are targeting a dividend payout of approximately 30% of
non-consolidated net income for the period.
With the intention of further increasing profits and increasing corporate value, as well as strengthening
competitiveness and improving services, retained capital will be used to carry out effective and efficientinvestments in such areas as opening new directly operated stores, strengthening internal infrastructure (IT),developing new business, and training and nurturing personnel.
－ 5 －(3) Consolidated financial position and related analysis
1. Basic management policy
Gulliver has adopted ‘Growing together’ as its corporate philosophy and, under the principle of coexistence andmutual prosperity, the company is aiming for continued growth with our five main stakeholder groups—society,our customers, employees, partners and shareholders. Under this philosophy, Group management is making
every effort to create an attractive company that is worthy of support from customers. We also aim to bring abouta revolution in the distribution of cars, and to support the ‘car life’ of our customers.

2. Management targets
We consider return on equity (ROE) to be an important management financial indicator and aim to maintain ROE
above 20% over the medium to long term, excepting the financial business. Further, we are aiming to achieve a
Gulliver Group annual purchase volume of one million cars.

3) Medium- to long-term management strategy
We have set an annual purchase volume of one million cars as a specific objective, with the aim of securing adominant market share in the used car industry. We feel that, in order to realize our goal of bringing about arevolution in the distribution of cars, this is the volume necessary to ensure a dominant number one position in
the industry. In order to achieve this goal, the following measures are being taken.
・ Continued opening of directly operated stores
・ Increasing productivity at each store
・ Increasing business capabilities through strengthening personnel development and training
・ Enhancing brand power and recognition
・ Improving service quality and customer satisfaction
・ Improving retail sales through ‘Dolphinet System’
・ Improving in-house sales utilizing ‘GAO! Auction
・ Expand the scope of the automobile distribution related business(4) Tasks ahead
In Japan’s very large market for used vehicles, where eight million vehicles (including buses, trucks, etc.) areregistered each year, there are a range of issues that must be addressed by the Group in order to maintain ourleading market share and improve profitability. As part of our strategic marketing activities, these include further
enhancing our brand power, broadening our customer base through improving brand recognition in a wide rangeof age groups, making qualitative improvements in service and customer satisfaction, and strengthening
operations through personnel development and training.

(5) Items relating to the parent company
None

－ 6 －

Consolidated Balance Sheets
Millions of yen
As of August 31, 2007ASSETSAs of August 31, 2006%

As of February 28, 2007%%

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

2,927

3,064

4,855

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

12,293

10,886

13,664Inventory ................................................

5,369

4,811

4,668

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

731

695

445

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

2,745

3,315

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

3,479
(55)

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

24,746(88)
56.0

22,114(69)
54.8

26,88058.5

Fixed assets
Tangible fixed assets *1 ...........................
Building and structures...........................

7,933

7,494

7,832

Tools, fixtures and equipment ................

1,315

1504

1,384

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

327

327

327

Other ......................................................

129

175

143

Total tangible fixed assets

9,705

22.0

9,500

23.5

9,687

21.1

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

2,092

2,456

2,082

Other .....................................................

159

139

110

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

2,251

5.1

2,596

6.4

2,192

4.8

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

112

98

96

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

3,635

3,340

3,749

Construction cooperation fund ...............

2,852

2,206

2,508

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

252

150

489

Other ......................................................

823

745

417

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

(216)

(372)

(74)

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

19,41844.0

18,26745.2

19,066

41.5

Total Assets ............................................

44,164100.0

40,381100.0

45,947

100.0

－ 7 －

Consolidated Balance Sheets
Millions of yen
As of August 31, 2007
LIABILITIESAs of August 31, 2006

As of February 28, 2007%%

Current liabilities
2,414

2,512

3,303

Short-term borrowing..............................

10,15012,23013,590Accrued expenses ..................................

2,554

2,504

2,900

Accrued corporate taxes.........................

1,970

2,229

2,957

Deposits received ...................................

461

540

809

Accounts payable ...................................

Reserve for bonuses ..............................

743

899

453

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

1,380

1,321

1,209

Total current liabilities...........................

19,675

44.6

22,23855.1

25,22454.9

Fixed liabilities
Long-term borrowing ..............................

3,500

603

550

Guarantee deposits received .................

845

793

869

Other

378

--

--

Total fixed liabilities ..............................

4,724

10.7

1,397

3.4

1,419

3.1

Total liabilities ....................................

24,39955.3

23,63658.5

26,64358.0

NET ASSETS
Paid in capital .........................................

4,157

9.4

4,157

10.3

4,157

9.1

Capital surplus........................................

4,032

9.1

4,032

10.0

4,032

8.8

Retained profit ........................................

21,85849.5

18,06044.7

20,283

44.1

Treasury stock ........................................

(10,678)(24.2)(9,873)(24.4)(9,540)(20.8)

Total shareholders’ equity..................

19,36943.8

16,37640.6

18,932

41.2

8

0.0

7

0.0

6

0.0

(3)

(0.0)

(1)

(0.0)

(2)

(0.0)

4

0.0

5

0.0

3

0.0

2

0.0

--

--

1

0.0

387

0.9

363

0.9

366

0.8

Total net assets ...............................

19,76444.7

16,74541.5

19,30342.0

Total liabilities and net assets........

44,164100.0

40,381100.0

45,947100.0

Valuation difference on othermarketable securities ............................
Valuation and translation
adjustments ........................................
Translation adjustments .........................
Warrants for new shares...........................
Minority interests－ 8 －Consolidated Statements of Income
Millions of yen
March 1, 2006 to

March 1, 2007 to
August 31, 2007

March 1, 2006 to
February 28, 2007

August 31, 2006%%
Sales ...................................................................

87,226100.0

87,999100.0

182,166

100.0

Cost of sales .......................................................

66,453

76.2

67,82277.1

140,228

77.0

Gross profit...................................................

20,772

23.8

20,17722.9

41,937

23.0

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

16,02018.4

15,71417.8

30,813

16.9

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

4,752

5.4

4,463

5.1

11,1236.1*1

Non-operating income
Interest received ..............................................

3

1

0

Dividends received ..................... ....................

4

0

1

Commissions received.....................................

2

4

7

Subsidies received ..........................................

--

11

--

Compensation received ...................................

15

--

--

Other ...............................................................

75

21

68

Total non-operating income

101

0.1

39

0.0

79

0.0

Non-operating expenses
Interest paid ....................................................

53

24

65

Share issuance expenses...............................

--

7

7

Other ..............................................................

21

56

132

Total non-operating expenses ............................

75

0.1

88

0.1

204

0.1

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

4,778

5.4

4,414

5.0

10,9986.0

Extraordinary profit
Gain on cancellation of insurance contracts ...

20

--

--

Reversal of allowance for doubtfulreceivables .....................................................

1

3

--

Unrealized profit on installment sales.............

--

1,164

1,164

Other ....................................................................

25

Total extraordinary profit.................................

47

-0.1

--

1,168

1.3

1,164

0.3

689

0.6

Extraordinary losses
Loss on disposal of fixed assets*2 ...................

168

291

*3
Impairment losses ........................................

--

--

278

Other...............................................................

--

--

45

Total extraordinary losses...............................

168

0.2

291

0.3

1,013

0.5

Income before taxes, etc. ...............................

4,657

5.3

5,291

6.0

11,149

6.1

Income tax, inhabitants tax and enterprise
tax ................................................................

1,903

2,183

4,880

Corporate tax adjustment................................

13

(225)

(313)

Total tax and adjustments...............................

1,916

2.2

1,957

2.2

4,566

2.5

Minority interests.............................................

34

0.0

13

0.0

16

0.0

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

2,707

3.1

3,320

3.8

6,566

3.6

－ 9 －

Changes in Consolidated Interim Shareholders’ Equity March 1 2007 to August 31 2007
Millions of yen
Shareholders’ equity
CapitalBalance as of February 28, 2007

Capital surplus
4,157

Retained profit

4,032

Treasury stock

20,283

Total shareholders’ equity(9,540)18,932

Change during interim accounting period
Surplus dividend

(909)

(909)

Interim net income

2,707

2,707

Acquisition of treasury stock
Disposal of treasury stock(126)

Decrease in retained profit followingchanges to the scope of consolidation
Increase in retained profit followingchanges to the scope of consolidation(1,320)(1,320)

182

56

(174)

(174)

78

78

Changes to items other thanshareholders’ equity during the interim

―

―

―

―

―

―

―

1,574

(1,137)

437

4,157

4,032

21,858(10,678)

19,369accounting period
Total change during interim accounting
periodBalance as of August 31, 2007

Valuation and differences due to foreign exchange
Valuation

Total valuation anddifferences on other Adjustment due tomarketableexchange ratetranslation

Warrants for new
sharesMinority interests

Total net assets

366

19,303

adjustments

securities
Balance as of February 28, 2007

6

(2)

3

1

Change during interim accounting
periodSurplus dividend(909)

Interim net income

2,707

Acquisition of treasury stock(1,320)

Disposal of treasury stock56

Decrease in retained profit(174)

following changes to the scopeof consolidation
Increase in retained profit

78

following changes to the scopeof consolidation
Changes to items other thanshareholders’ equity during the

1

(0)

0

1

21

23

1

(0)

0

1

21

461

8

(3)

4

2

387

19,764interim accounting period
Total change during interim
accounting period
Balance as of August 31, 2007

－ 10 －

Changes in Consolidated Interim Shareholders’ Equity March 1 2006 to August 31 2006
Millions of yen
Shareholders’ equity
CapitalBalance as of February 28, 2006

Capital surplus
4,157

Retained profit

4,032

Treasury stock

15,822(8,067)

Total shareholders’equity15,944

Change during interim accounting
periodSurplus dividend

(818)

(818)

(73)

(73)

3,320

3,320

Bonuses to directors throughprofit appropriation
Interim net income
Acquisition of treasury stock
Disposal of treasury stock(2,079)(2,079)

(190)

273

83

Changes to items other than
―

―

―

―

―

―

―

2,237

(1,805)

431

4,157

4,032

18,060(9,873)

16,376

Minority interests

Total net assets

352

16,364

shareholders’ equity during theinterim accounting period
Total change during interim
accounting period
Balance as of August 31, 2006

Valuation and differences due to foreign exchange
Valuation differenceson other marketablesecurities
Balance as of February 28, 2006

67

Adjustment due toexchange rate

Total valuation andtranslation
adjustments

(0)

67

Change during interim accounting
periodSurplus dividend(818)

Bonuses to directors through(73)

profit appropriation
Interim net income

3,320

Acquisition of treasury stock(2,079)

Disposal of treasury stock

83

Changes to items other thanshareholders’ equity during the

(59)

(1)

(61)

11

(50)

(59)

(1)

(61)

11

381

7

(1)

5

363

16,745interim accounting period
Total change during interim
accounting period
Balance as of August 31, 2006

－ 11 －

Changes in Consolidated Interim Shareholders’ Equity March 1 2006 to February 28 2007
Millions of yen
Shareholders’ equity
CapitalBalance as of February 28, 2006

4,157

Capital surplus

Retained profit

4,032

15,822

Treasury stock

Total shareholders’equity(8,067)

15,944

Change during interim accounting
periodSurplus dividend(1,608)(1,608)

(73)

(73)

6,566

6,566

Bonuses to directors throughprofit appropriation
Interim net income
Acquisition of treasury stock
Disposal of treasury stock(2,079)(2,079)

(423)

606

183

Changes to items other than
―

―

―

―

―

―

―

4,460

(1,472)

2,988

4,157

4,032

20,283(9,540)18,932shareholders’ equity during theinterim accounting period
Total change during interim
accounting period
Balance as of February 28, 2007

Valuation and differences due to foreign exchange
Valuationdifferences on other Adjustment due tomarketableexchange ratesecurities
Balance as of February 28, 2006

67

Total valuation andWarrants for new

translation

sharesMinority interests

Total net assets

352

16,364(5)(1,613)

adjustments

(0)

67

―

Change during interim accounting
periodSurplus dividend
Bonuses to directors through(73)

profit appropriation
Interim net income

6,566

Acquisition of treasury stock(2,079)

Disposal of treasury stock

183

Changes to items other thanshareholders’ equity during the

(60)

(2)

(63)

1

19

(42)

(60)

(2)

(63)

1

13

2,939

6

(2)

3

1

366

19,303interim accounting period
Total change during interim
accounting period
Balance as of February 28, 2007

－ 12 －

Consolidated Statements of Cash flows

Millions of yen
March 1, 2006 to
February 28, 2007

March 1, 2007 to
August 31, 2007

March 1, 2006 to
August 31, 2006

4,657
1,069
290
127
(20)
(8)
53
-168
-1
(73)
1,459
(701)
(982)
(411)
(133)
(323)
5,173
8
(53)
(2,825)
2,303

5,291
1,087
377
5
-(2)
24
7
291
--(73)
211(73)(1,087)
(734)
(294)
(742)
4,288
1
(24)
(1,700)2,564

11,149
2,352
(68)
(66)
-(2)
65
7
689
278
-(73)
(2,825)108444(1,292)
(177)
(749)
9,838
2
(65)
(3,671)
6,103-(838)-(476)-(225)
10(210)-(1,741)100(2,494)
0
(184)
(5)
(44)
14
(615)
5
(3,223)100(3,731)
1
(581)
(5)
(61)
6
(1,327)(5)(5,604)(3,440)(50)
3,000(1,320)56-(909)(5)--(2,676)

2,730
(54)
500
(2,079)
83
(7)
(818)
(5)
(6)
-348

4,190
(207)
500
(2,079)183(7)(1,608)
(5)
-13
978

--

0

3

(2,114)
4,855

(310)
3,374

1,481
3,374

186

--

--

2,927

3,064

4,855

I. Cash flow from operating activities
Income before taxes, etc. .................................................................
Depreciation .....................................................................................
Increase (decrease) in reserve for bonuses .....................................
Increase (decrease) in allowance for doubtful accounts ..................
Increase (decrease) in insurance reserves ......................................
Interest and dividends received........................................................
Interest paid ......................................................................................
Share issuance expense ..................................................................
Loss on disposal of fixed assets .......................................................
Impairment losses ............................................................................
Amortization of goodwill....................................................................
Payment of directors’ bonuses .........................................................
Increase (decrease) in accounts receivable .....................................
Increase (decrease) in inventory ......................................................
Increase (decrease) in accounts payable.........................................
Increase (decrease) in operating loans ............................................
Increase (decrease) in accrued consumption tax.............................
Other.................................................................................................
Subtotal.............................................................................................
Interest and dividends received........................................................
Interest paid ......................................................................................
Corporate taxes paid ........................................................................
Cash flow from operating activities ..............................................
II. Cash flow from investing activities
Proceeds from sale and redemption of investment securities ..........
Payments for purchase of marketable securities..............................
Proceeds from sale of marketable securities....................................
Payments for acquisition of intangible fixed assets ..........................
Payments for acquisition of shares of affiliates ................................
Amounts lent.....................................................................................
Proceeds from repayment of loans...................................................
Increase (decrease) in deposits and guarantee payments...............
Other.................................................................................................
Cash flow from investing activities ..............................................
III. Cash flow from financing activities
Net increase (decrease) in short term borrowings
Repayment of long-term loans .........................................................
Proceeds from long-term loans ........................................................
Payments for acquisition of treasury stock .......................................
Proceeds from disposal of treasury stock.........................................
Proceeds from issuance of new shares............................................
Payment of dividends .......................................................................
Dividends paid to minority shareholders...........................................
Repayments to minority shareholders ..............................................
Other.................................................................................................
Cash flow from financing activities ..............................................
IV. Cash and cash equivalents currency translationdifferences..................................................................................
V. (Decrease) increase in cash and cash equivalents ...................
VI. Cash and cash equivalents at beginning of period ..................
VII. Increase in cash and cash equivalents from change inscope of consolidation ..............................................................
VIII. Cash and cash equivalents at end of period...........................

－ 13 －

Material Items Forming the Basis for the Preparation of theInterim Consolidated Financial Statements
Item
1.Items relating to
the scope of
consolidation

2. Application of theequity method

March 1, 2007 –March 1, 2006 –March 1, 2006 –August 31, 2007

August 31, 2006

February 28, 2007

(1) Number of consolidated
subsidiaries: 9
G Trading Co., Ltd.
G One Financial Services
Co., Ltd.
Gulliver Europe Ltd.
Hucobo Co., Ltd.
SAMURAI MOTORS CO.
Ltd.
G-Bus, Ltd.
Carbross Co., Ltd.
TAKEOFF Co., Ltd.
G-Trading Rus LLC
G-Care Kyousaikai(Change in scope of
consolidation)
Of the above G-Care
Kyousaikai has been includedin the scope of consolidation
since its significance has
increased during the fiscal
year.
Carbross Co., Ltd. has been
excluded from consolidation
since its significance has
decreased during the fiscal
period.

(1) Number of consolidated
subsidiaries: 8
G Trading Co., Ltd.
G One Financial Services
Co., Ltd.
Gulliver Europe Ltd.
Hucobo Co., Ltd.
SAMURAI MOTORS CO.
Ltd.
G-Bus, Ltd.
Carbross Co., Ltd.
TAKEOFF Co., Ltd.
(Change in scope of
consolidation)
Of the above TAKEOFF Co.,
Ltd. was established in theinterim period under review andhas been included in the scopeof consolidation.

(1) Number of consolidated
subsidiaries: 9
G Trading Co., Ltd.
G One Financial Services
Co., Ltd.
Gulliver Europe Ltd.
Hucobo Co., Ltd.
SAMURAI MOTORS CO.
Ltd.
G-Bus., Ltd.
Carbross Co., Ltd.
TAKEOFF Co., Ltd.
G-Trading Rus LLC(Change in scope of
consolidation)
TAKEOFF Co., Ltd. has been
included in the scope of
consolidation due to theacquisition of shares during the
fiscal year. G-Trading Rus LLC
has also been included, since it
was newly established during
the fiscal year.

(2) Main non-consolidated
subsidiaries:
Gulliver USA Inc.
Carbross Co., Ltd.

(2) Main non-consolidated
subsidiaries:
Gulliver USA Inc.

(2) Main non-consolidated
subsidiaries:
Gulliver USA Inc.

Reasons for exclusion fromconsolidation:
Gulliver USA, Inc. and Carboss
Co., Ltd. are small and their
total assets, sales, net income
and retained profit, etc. do no t
significantly affect theconsolidated financial
statements.
Non-consolidated subsidiaries
and affiliates to which theequity method is not applied:Gulliver USA Inc.
Carbross Co., Ltd.
UG Powers Co., Ltd.

Reasons for exclusion fromconsolidation:
Gulliver USA, Inc. is small andits total assets, sales, net
income and retained profit, etc.
do not significantly affect theconsolidated financial
statements.

Reasons for exclusion fromconsolidation:
Gulliver USA, Inc. is small andits total assets, sales, net
income and retained profit, etc.
do not significantly affect theconsolidated financial
statements

Non-consolidated subsidiaries
and affiliates to which theequity method is not applied:Gulliver USA Inc.
UG Powers Co., Ltd.

Non-consolidated subsidiaries
and affiliates to which theequity method is not applied:Gulliver USA Inc.
UG Powers Co., Ltd.

As at rightReasons for not applying theequity method: The effect of thecompany on net income andretained profit is immaterial andits overall importance is low.

Reasons for not applying theequity method: The effect of thecompany on net income andretained profit is immaterial andits overall importance is low.

－ 14 －

March 1, 2007 –Item
3. Items relating tothe (interim)
settlement datesof consolidated
subsidiaries

March 1, 2006 –March 1, 2006 –August 31, 2007

August 31, 2006

February 28, 2007

Consolidated subsidiaries witha settlement date that differsfrom the Consolidated
Settlement Date are as follows:(Settlement date of June 30)
Gulliver Europe Ltd.
SAMURAI MOTORS
G-Trading RUS LLC
As the gap between thesettlement dates for the above
3 companies does not exceed
3 months, consolidation is
performed based on the said
subsidiary’s financial
statements. For materialtransactions occurring
between the settlement dates
necessary consolidation
adjustments are made.

Of the consolidated
subsidiaries, Gulliver Europe
Ltd., SAMURAI MOTORS and
TAKEOFF Co., LTD. have asettlement date (December
31, June 30 and end of
February respectively) thatdiffers from the Consolidated
Settlement Date (endFebruary). With regard to
Gulliver Europe Ltd. and
SAMURAI MOTORS, in
preparing the Consolidated
Interim Financial Statements,
as the gap between thesettlement dates does notexceed 3 months,
consolidation is performed
based on the said subsidiary’s
financial statements. For
material transactions
occurring between thesettlement dates necessary
consolidation adjustments are
made.
In the case of TAKEOFF Co.,
Ltd., as the gap exceeds 3months, consolidation is
performed based onprovisional statements.

Of the consolidated
subsidiaries, the following
companies have a settlement
date that differs from theconsolidated settlement date(end February):
Gulliver Europe Ltd.,SAMURAI MOTORS,
G-Trading RUS LLC(December 31)
TAKEOFF Co., Ltd.(August31). Since the gap between
the Consolidated Financial
Statements settlement datesof Gulliver Europe Ltd.,SAMURAI MOTORS, and
G-Trading RUS LLC does notexceed 3 months,
consolidation is performed
based on the said subsidiary’s
financial statements. For
material transactions
occurring between thesettlement dates necessary
consolidation adjustments are
made.
In the case of TAKEOFF Co.,
Ltd., as the gap exceeds 3months, consolidation is
performed based onprovisional statements.

(Settlement date of end
February)
TAKEOFF Co., Ltd.
(Settlement date of September
30)
G-Care Kyousaikai

In the case of the above 2
companies, as the gap
exceeds 3 months,
consolidation is performed
based on provisional
statements.
4. Items relating
1. Marketable securities
1. Marketable securities
1. Marketable securities
to accounting
Bonds intended to be held to
Bonds intended to be held to Bonds intended to be held totreatment
maturity:
maturity:
maturity:
As at rightAmortizing cost method
As at left
(straight line)(1) Valuation
Other marketable securities
Other marketable securities
Other marketable securities
criteria andThose with a market price:
Those with a market price: Those with a market price:valuation
As at right
Valued by the market method Valued by the market method
methods forbased on the market price as based on the market price asmaterial assets
at the accounting date. at the accounting date.
Valuation gains or losses are Valuation gains or losses aretaken direct to capital and the taken direct to net assets andbook value is determined by the book value is determinedmoving average method.
by moving average method.
Those without a market value:
As at right
Shareholdings in subsidiaries:
As at right
2. Derivatives
As at right
3. Inventories
A. Merchandise:
Vehicles: As at right
Other: As at right

B. Supplies:
As at rightThose without a market value: Those without a market value:
The cost method using the
As at left
moving average method
Shareholdings in subsidiaries: Shareholdings in subsidiaries:
The cost method using the
As at left
moving average method
2. Derivatives
2. Derivatives
Market price method
As at left
3. Inventories
3. Inventories
A. Merchandise:
A. Merchandise
Vehicles: Actual cost method
Vehicles: As at left
Other:
Cost
methodOther: As at left
under first in, first out
methodB. Supplies:
B. Supplies:
Cost method under last
As at left
purchase method－ 15 －

March 1, 2007 –Item(2) Depreciation
methods
applied tomaterial
depreciable
assets(3) Treatment ofdeferred
assets(4) Criteria forrecordingmaterial
reserves

August 31, 2007

March 1, 2006 –March 1, 2006 –August 31, 2006

February 28, 2007(i) Tangible Fixed Assets
As at right(i) Tangible Fixed Assets(i) Tangible Fixed Assets
Declining Balance Method is
As at left
applied. However, for buildings(excluding attachedequipment)acquired since April
1, 1998,
the Straight Line Method has
been applied. The useful lives
are as follows:
Buildings and Structures: 15 –20 years(ii) Intangible Fixed Assets
As at right(ii) Intangible Fixed Assets
The Straight Line Method isapplied. However, with respect
to software for internal use, theStraight Line Method based on
useful lives for internal use (5years) has been applied.

(ii) Intangible Fixed Assets
As at left(iii) Long Term Prepaid Expenses (iii) Long Term Prepaid Expenses (iii) Long Term Prepaid Expenses
As at left
As at right
The Straight Line Method isappliedNew share issue expenses
New share issue expenses
New share issue expenses
As at rightExpensed in their entirety at the
As at lefttime of expenditure(i) Reserve for Doubtful
Accounts
As at right(i) Reserve for Doubtful
Accounts
To prepare for the losses
occurring from bad debts, withrespect to general claims theactual bad debt to loan rate isapplied. Specific claims, suchas those where there areconcerns on the probability ofrecovery, are assessed on an
individual basis and estimatedunrecoverable amounts arerecorded.

(ii) Reserve for Bonuses
As at right(ii) Reserve for Bonuses
To prepare for the payment ofbonuses to employees, amounts
are recorded based on theestimated payment amount.

(iii) Reserve for Directors’
Bonuses-----------------(i) Reserve for Doubtful Accounts
As at left(ii) Reserve for Bonuses
As at left(iii) Reserve for Directors’(iii) Reserve for Directors’ Bonuses
BonusesAmount based on forecasted---------------provisional amount in preparation
for payment of bonuses todirectors.

－ 16 －

Item

March 1, 2007 –March 1, 2006 –March 1, 2006 –August 31, 2007

August 31, 2006

February 28, 2007

As at right(5) Treatment ofmaterial leasetransactions(6) Material
hedge
accounting

Financing leases other than
As at left
those lease assets whose title
is deemed to pass to the lessee
have been accounted for inaccordance with methods
applied to normal leasetransactions.
(i) Method of Hedge Accounting (i) Method of Hedge Accounting (i) Method of Hedge Accounting
As at left
According to Deferred Hedge
As at rightTreatment, however special
procedures are used forinterest swap transactions
meeting certain conditions(ii) Hedging Tools and Hedge
Target
As at right(ii) Hedging Tools and Hedge
TargetHedging Tools – Interest Rate
Swap
Hedge Target – Interest on
borrowings(iii) Hedging Policy
As at right(iii) Hedging Policy
Interest Rate Swaptransactions
are entered into for the purposeof hedging the risk of interest
rate fluctuation on borrowingsand entered into only for thetarget obligations.

(iv) Method of evaluating hedge (iv) Method of evaluating hedge
effectivenesseffectivenessThe rate fluctuations of the
As at righthedge target and thecumulative cash flow
fluctuations are compared,for evaluating hedge
methods and hedge targets.
However, evaluation ofeffectiveness is omitted forinterest swaps using special
procedures.
Accounting treatment for
Accounting treatment for(7) Other material
Consumption Tax
Consumption Tax
items in the
preparation of the
As at right
The Tax Exclusion Method isinterimapplied in the accounting
consolidated
treatment of Consumption Tax.
financialstatements
As at right
5. Definition of cash
The Market Value Method isin theused for the valuation of all
consolidated
assets and liabilities ofstatements ofconsolidated subsidiaries.
cash flow－ 17 －(ii) Hedging Tools and Hedge
Target
As at leftiii) Hedging Policy
As at left(iv) Method of evaluatinghedge effectivenessAs at left

Accounting treatment for
Consumption Tax
As at left

As at left

Changes in Accounting Treatment
March 1, 2007 – August 31, 2007

March 1, 2006 – August 31, 2006

March 1, 2006 – February 28, 2007--------------------

Accounting
standards
relating
toimpairment losses on fixed assets
From the interim period of the fiscal year
ended February 28, 2007 the ‘Statement
Regarding the Establishment of Accounting
Policies for Impairment Losses on Fixed
Assets’ (Business Accounting Council, August
9, 2002) and ‘Guidelines for the Application of
Accounting Policies for Impairment Losses on
Fixed Assets (Guideline for Application ofBusiness Accounting Policies, Article 6;
Business Accounting Council, October 31,2003) have been applied as accounting
standards relating to impairment losses.
This change has not affected profits andlosses
Accounting treatments relating to income
generated through autoloans
Previously, in respect of autoloans at theconsolidated subsidiary G-One Financial
Services Co., Ltd. the entire amount of theincome was recorded as income over theperiod of the loan. However, from the current
fiscal period, we have begun to employ amethod in which the financing cost for theunexpired portion is accounted for over thecontract period. For the remaining portion,
excluding income related to foreseeable
losses arising from early repayment or
subrogated performance the income isrecorded in full at the time of contracting forthe autoloan.
We made this change as most of the costs
associated with autoloan income occur at thetime of contracting and also because theexpertise and internal data we haveaccumulated on the auto-loans businessallows us to rationally forecast early
repayment or subrogated performance. As aresult we believe the new method betterreflects actual operating conditions.
In order to make loan contracts signed inprevious fiscal years conform to this method,
the balance of unpaid loans at the end of the
fiscal year ended February 28, 2006,
excluding income related to financing rates
and foreseeable losses arising from early
repayment or subrogated performance, hasbeen recorded as extraordinary profit.
As a result of this change, net sales, grossprofit on sales, operating income and ordinary
income have increased by ¥401 million
compared to the previous method, and net
income before adjustment for income taxes
has increased ¥1,565 million.

Accounting
standards
relating
toimpairment losses on fixed assets
From the fiscal year ended February 28, 2007
the ‘Statement Regarding the Establishmentof Accounting Policies for Impairment Losses
on Fixed Assets’ (Business Accounting
Council, August 9, 2002) and ‘Guidelines for
the Application of Accounting Policies for
Impairment Losses on Fixed Assets(Guideline for Application of BusinessAccounting Policies, Article 6; BusinessAccounting Council, October 31, 2003) havebeen applied as accounting standards relating
to impairment losses.
As a result of these changes, net income
before taxes decreased ¥278 million.
Accounting treatments relating to income
generated through autoloans
Previously, in respect of autoloans at theconsolidated subsidiary G-One Financial
Services Co., Ltd. the entire amount of theincome was recorded as income over theperiod of the loan. However, from the current
fiscal period, we have begun to employ amethod in which the financing cost for theunexpired portion is accounted for over thecontract period. For the remaining portion,
excluding income related to foreseeable
losses arising from early repayment or
subrogated performance the income isrecorded in full at the time of contracting forthe autoloan.
We made this change as most of the costs
associated with autoloan income occur at thetime of contracting and also because theexpertise and internal data we haveaccumulated on the auto-loans businessallows us to rationally forecast early
repayment or subrogated performance. As aresult we believe the new method betterreflects actual operating conditions.
In order to make loan contracts signed inprevious fiscal years conform to this method,
the balance of unpaid loans at the end of the
fiscal year ended February 28, 2006,
excluding income related to financing rates
and foreseeable losses arising from early
repayment or subrogated performance, hasbeen recorded as extraordinary profit.
As a result of this change, net sales, grossprofit on sales, operating income and ordinary
income have increased by ¥547 million
compared to the previous method, and net
income before adjustment for income taxes
has increased ¥1,711 million.

－ 18 －

Accounting
standards
relating
topresentation of net assets on balance
sheetsFrom the interim period of the fiscal year
ended February 28, 2007, the ‘Statement
Regarding the Presentation of Net Assets on
the Balance Sheet’ (Business Accounting
Council, December 9, 2005, Article No. 5) and‘’Guidelines for the Application of Accounting
Policies for the Presentation of Net Assets on
the Balance Sheet’ (Guidelines for the
Application of Business Accounting Polices,
Article 8; Business Accounting Council,
December 9, 2005) have been applied. The
equivalent amount previously recorded as‘Capital’ is ¥16,381 million. Followingchanges to the regulations on financial
statements, net assets on the interim balance
sheet have been recorded in accordance withthe revised regulations.

Accounting standards relating topresentation of net assets on balance
sheetsFrom the fiscal year ended February 28, 2007,
the ‘Statement Regarding the Presentation of
Net Assets on the Balance Sheet’ (BusinessAccounting Council, December 9, 2005, Article
No. 5) and ‘’Guidelines for the Application of
Accounting Policies for the Presentation of Net
Assets on the Balance Sheet’ (Guidelines for
the Application of Business Accounting Polices,
Article 8; Business Accounting Council,
December 9, 2005) have been applied. The
equivalent amount previously recorded as‘Capital’ is ¥18,936 million. Followingchanges to the regulations on financial
statements, net assets on the balance sheet
have been recorded in accordance with therevised regulations.

------------------------------

Accounting standards relating to directors’
bonuses
From the fiscal year ended February 28,
2007, the ‘Accounting Standard Regarding
Directors’ Bonuses’ (Business Accounting
Council, November 11, 2005, Article No. 4)
has been applied. As a result each ofordinary income and net income before
adjustment for income taxes havedecreased ¥73 million.

Changes to the depreciation method oftangible fixed assets
From the interim period of the fiscal year
ending February 29, 2008, in accordance withthe revision of Corporation Tax Law (Law
Concerning the Partial Revision of Income Tax
No. 6, issued on March 30, 2007 andGovernment Ordinance Concerning the Partial
Revision of Corporation Tax Law Order No.
83, issued on March 30, 2007), the method ofdepreciation of tangible fixed assets acquired
after April 1, 2007 has been revised. The
effects of this change on operating income,ordinary income or net income before
adjustment for income taxes is immaterial.

------------------------------

Changes to the method of presentation
March 1, 2007 – August 31, 2007

March 1, 2006 – August 31, 2006---------------

Statement of Consolidated Interim Cash Flow
In the interim period of the fiscal year ended February 28, 2006, the“increase (decrease) in accounts receivable” occurring as a result ofinvesting activities by consolidated subsidiary G-One Financial
Services, which conducts financing business, was presented in cash
flows from investing activities. However, since the significance of thissubsidiary has increased, the change is presented in cash flows fromoperating activity as “increase in accounts receivable” occurring as aresult of operating activity.
As a result, compared with calculations based on the former
calculation method, cash flow from operating activities has
decreased by ¥734 million, while cash flow from investing activities
has increased by ¥734 million.

－ 19 －

Notes(Related to the consolidated balance sheets)
March 1, 2007 – August 31, 2007

March 1, 2006 – August 31, 2006

March 1, 2006 – February 28, 2007

*1 Total accumulated depreciation of*1 Total accumulated depreciation of *1 Total accumulated depreciation of
tangible fixed assets:tangible fixed assets:tangible fixed assets:¥4,116 million¥3,411 million¥3,609 million

Millions of yen
March 1, 2006 – February 28, 2007

(Related to the consolidated statements of income)March 1, 2007 – August 31, 2007

March 1, 2006 – August 31, 2006

1. Principal components of SGA expenses

1. Principal components of SGA expenses

Advertising
Contracting fees

Advertising

2,292

876

Advertising

4,619

Contracting fees

1,785

Salaries

4,042

Salaries

4,137

Salaries

8,066

Bonuses

215

Bonuses

235

Bonuses

1,314Transfer to reserve forbonuses
Depreciation
Rent

2.

2,309

Contracting fees

902

1. Principal components of SGA expenses

721

Transfer to reserve forTransfer to reserve forbonusesdoubtful accounts

886

Depreciation

1,069

Rent

2,337

Components of losses on disposal of fixed
assets2.

Transfer to reserve for

1,087

7
448

bonuses

2,138

Components of losses on disposal of
fixed assets

2.

Depreciation

2,352

Rent

4,405

Components of losses on disposal of fixed
assetsBuildings and structures

61

Buildings and structures

205

Buildings and structures

325

Tools & equipment

9

Automotive equipment

12

Tools & equipment

54

Software65

Tools & equipment

18

Software108

Long-term prepaid expenses

0

Software40

24

Long-term prepaid expenses

5

Restoration expenses

7

Others8

Others

8

168

Total

291

Total

689

Restoration expenses
OthersTotal－ 20 －

Long-term prepaid expenses

0191

Millions of yen
March 1, 2006 – February 28, 2007

(Related to the consolidated statements of income)March 1, 2007 – August 31, 2007

March 1, 2006 – August 31, 2006

※3.Impairment losses
During the fiscal year ended February 28, 2007, theGroup recognized impairment losses on thefollowing group assets(1) Assets for which impairment losses recorded
Place

Usage

Type

AmountSoftware¥273 million

Chiyoda-ku,

Other

Tokyo

businesses

Chiyoda-ku,

OtherTools &

Tokyo

businesses

equipment¥4 million(2) Details of recognition of impairment losses
For certain businesses in ‘other businesses’ where
the initially expected business has been cancelledor suspended and there is no future use for theasset, impairment losses have been recognized.
(3) Method of grouping assets
According to the Group’s application of accounting
for impaired assets, the minimum cash flow
generating unit is mainly a store. For unutilized
assets, the individual assets are grouped.
(4) Method for calculating recoverable value
The group’s recoverable value is calculated basedon useful value with future cash flows discounted at
3.15%.

－ 21 －

Changes to Consolidated Interim Shareholders’ Equity
March 1, 2007 to August 31, 2007
Category and number of ordinary and treasury shares in issuanceThousands of shares
No. of shares at theend of the previous
fiscal year

Increase in number ofshares during theinterim period

Decrease in numberof shares during theinterim period

Number of shares at the end of
the interim period

Shares in issuance
Ordinary shares

10,688----

10,688

Total

10,688----

10,688

Ordinary shares

909

200

17

1,091

Total

909

200

17

1,091

Treasury stock

Note: The increase in treasury shares is due to the decision by the Board of directors to acquire 200,000 shares.
The decrease in treasury shares is due to the exercising of 17,000 warrants.
Warrants for new shares and warrants for treasury stock
Classification

Millions of yen

Breakdown of warrants

Consolidated subsidiary total

Balance at the end of the interim period

Stock option share warrants

2

Dividends
Amount of dividends paid
Resolution

Share
category

Regular meeting ofshareholders (May 23,
2007

OrdinarysharesTotal dividend(millions of yen)

Dividend pershare (¥)

909

93

Base date

Effective dateFebruary 28, 2007

May 24, 2007

Dividend payments for which the base date falls within the interim period under review but for which the effective date follows
the end of the period
Total
dividend
Share
Dividend
Dividend per
Base date
Effective date
Resolution(millions of
categorysourceshare (¥)
yen)）
Board
meeting
Ordinary
Retained834
87
August 31, 2007
November 13, 2007
sharesearnings(October17, 2007－ 22 －

Changes to Consolidated Interim Shareholders’ Equity
March 1, 2006 to August 31, 2006
Category and number of ordinary and treasury shares in issuanceThousands of shares
No. of shares at theend of the previous
fiscal year

Increase in number ofshares during theinterim period

Decrease in numberof shares during theinterim period

Number of shares at the end of
the interim period

Shares in issuance
Ordinary shares

10,688----

10,688

Total

10,688----

10,688

Ordinary shares

823

143

26

941

Total

823

143

26

941

Treasury stock

Note: The increase in treasury shares is due to the decision by the Board of directors to acquire 143,000 shares.
The decrease in treasury shares is due to the exercising of 26,000 warrants.
Dividends
Amount of dividends paid
Resolution

Share
category

Regular meeting ofshareholders (May 24,
2006)

OrdinarysharesTotal dividend(millions of yen)

Dividend pershare (¥)

818

83

Base date

Effective dateFebruary 28, 2006

May 25, 2006

Dividend payments for which the base date falls within the consolidated interim period under review but for which the effective
date follows the end of the period
Total
dividend
Share
Dividend
Dividend per
Base date
Effective date
Resolution(millions of
categorysourceshare (¥)
yen)）
Board
meeting
Ordinary
Retained
789
81
August 31, 2006
November 14, 2006
sharesearnings(October17, 2006)－ 23 －

Changes to Consolidated Shareholders’ Equity
March 1, 2006 to February 28, 2007
Category and number of ordinary and treasury shares in issuance
No. of shares at theend of the previous
fiscal year

Shares in issuance

10,688

Ordinary shares

10,688

Thousands of shares

Increase in number ofshares during theinterim period

Decrease in numberof shares during theinterim period--

Number of shares at the end of
the interim period--

10,688----

10,688

Total
Treasury stock
Ordinary shares

823

143

58

909

Total

823

143

58

909

Note: The increase in treasury shares is due to the decision by the Board of directors to acquire 143,000 shares.
The decrease in treasury shares is due to the exercising of 58,000 warrants.
Millions of yen

Warrants for new shares and warrants for treasury stock
Classification

Breakdown of warrants

Consolidated subsidiary total

Balance at the end of the interim period

Stock option share warrants

1

Dividends
Amount of dividends paid
Resolution

Share
category

Regular meeting ofshareholders(May 24, 2006)

OrdinarysharesTotal dividend(millions of yen)

Dividend pershare (¥)

818

83

Base date

Effective dateFebruary 28, 2006

May 25, 2006

Dividend payments for which the base date falls within the interim period under review but for which the effective date follows
the end of the period
Resolution

Share
category

Total dividend(millions of yen)

DividendsourceDividend pershare (¥)

Base date

Effective date

Board meeting(October 17, 2006)

Ordinaryshares789

Retainedearnings

81

August 31,
2006

November
14, 2006－ 24 －

Millions of yen(Related to the consolidated statements of cash flow)
March 1, 2007 – August 31, 2007

March 1, 2006 – August 31, 2006

March 1, 2006 - February 28, 2007

(1) Balance of cash and cash equivalents and(1) Balance of cash and cash
equivalents and other items at endof termother items at end of term

(1) Balance of cash and cash equivalents
and other items at end of term

Cash and deposit accounts

2,927

Cash and cash deposit accounts

3,064

Cash and cash deposit accounts

4,855

Cash and cash equivalents

2,927

Cash and cash equivalents

3,064

Cash and cash equivalents

4,855－ 25 －

4. Segment Information by business typeInterim period of the fiscal year ending February 29, 2008 (March 1, 2007 to August 31, 2007)
Trading of

Financing

Elimination/
Other businessused cars

Millions of yen

Totalbusiness

Consolidated
All company

Sales(1) Sales to external
81,532

1,975

3,719

87,226--87,226

438

283

1,177

1,899

(1,899)--

Total

81,970

2,258

4,896

89,125(1,899)87,226

Operating expenses

75,994

2,043

3,593

81,631

842

82,474

Operating income

5,975

215

1,302

7,494

(2,741)

4,752

customers(2) Inter-segmental sales
or transfers

Notes:
1. Method of business classification: Businesses have been classified according to the classification used in calculating sales.

2. Names of principal products or services attributable to each business classification:
Business Classification

Principal Product Name or Service Name

Used Car Sales

Purchase and sales of used automobiles through directly operated outlets and the like.

Financing business

Consolidated subsidiary G-One Financial Services Co., Ltd. provides financing services such as
auto-loans

Other businessRoyalties arising out of franchise agreements and fees for the provision of training etc., andintermediation in buying and selling of used automobiles, fees arising from financial business and otherbusiness.

3.

Amount and principal content included in the “Elimination or Total Company” item
March 1, 2007 –Millions of yen
Principal content

August 31, 2007

Amount of operating
expense which cannot
be allocated to asegment
４

Expenses relating to head office administration at the parent
company

2,741

Changes to the method of business classification
Previously, “Financing business” was included “Other business”; however, since its significance has increased it has been classified
separately as “Financing business” since the fiscal year ended February 28, 2007. The segment information for the interim period of
the fiscal year ended February 28, 2007 is presented below according to the method of business classification used in the interim
period of the fiscal year ending February 29, 2008.

Trading ofMillions of yen

Financing

Other

Elimination/
Total

used cars

Consolidated

businessbusiness

All company

83,684

1,063

3,252

87,999--87,999

542

185

1,251

1,979

(1,979)--

Total

84,226

1,248

4,503

89,978(1,979)87,999Operating expenses

78,68382,927609

83,536

Operating income

5,543

1,141
3,102
－ 26 －
106
1,401

7,051

(2,588)

4,463

Sales
(1) Sales to externalcustomers(2) Inter-segmental sales
or transfers

Interim period of the fiscal year ended February 28, 2006 (March 1, 2006 to August 31, 2006)
Millions of yen

Trading ofElimination/
Other business

Total

Consolidated

used cars

All company

Sales(1) Sales to external
83,652

4,347

87,999--87,999

--

--

--

--

--

83,652

4,347

87,999--87,999Operating expenses

77,2293,729

80,9592,576

83,536

Operating income

6,422

617

7,040

(2,576)

4,463

customers(2) Inter-segmental sales ortransfers
Total

Notes:
1.

Method of business classification: Businesses have been classified according to the classification used in calculating sales. Further,
due to the increased importance of other business in the ‘Franchise operations’ segment this segment has been renamed ‘Other
businesses’ commencing from the fiscal year ended February 28, 2006.

2.

Names of principal products or services attributable to each business classification:

Business Classification

Principal Product Name or Service Name

Used Car Sales

Purchase and sales of used automobiles through directly operated outlets and the like.

Other businessRoyalties arising out of franchise agreements and fees for the provision of training etc., and intermediation inbuying and selling of used automobiles, fees arising from financial business and other business.

3.

Amount and principal content included in the “Elimination or Total Company” item

Amount of operating
expense which cannot
be allocated to asegment

Millions of yen

March 1, 2007 –March 1, 2005 -March 1, 2005 -August 31, 2007

August 31, 2006

February 28, 2006

2,576

－ 27 －

Principal content

Expenses relating to head
office administration at theparent company

Fiscal year ended February 28, 2006 (March 1, 2006 to February 28, 2007)
Millions of yen

Trading of

Financing

Elimination/
Other businessused cars

Totalbusiness

Consolidated
All company

Sales(1) Sales to external
173,289

2,369

6,507

182,166--

182,166

1,140

423

2,596

4,160

(4,160)--Total

174,429

2,792

9,104

186,326(4,160)182,166

Operating expenses

161,295

2,486

6,323

170,105937

171,042

Operating income

13,134305

2,780

16,221(5,097)

11,123customers(2) Inter-segmental sales
or transfers

Notes:
1. Method of business classification: Businesses have been classified according to the classification used in calculating sales.
2. Names of principal products or services attributable to each business classification:

Business Classification

Principal Product Name or Service Name

Used Car Sales

Purchase and sales of used automobiles through directly operated outlets and the like.

Financing business

Consolidated subsidiary G-One Financial Services Co., Ltd. provides financing services such as
auto-loans

Other businessRoyalties arising out of franchise agreements and fees for the provision of training etc., andintermediation in buying and selling of used automobiles, fees arising from financial business and otherbusiness.

3. Amount and principal content included in the “Elimination or Total Company” item

March 1, 2006 –February 28, 2007

March 1, 2005 February 28, 2006

Amount of operating expense
which cannot be allocated to a

5,097

3,696

1,904

10,184

segment
Amount of assets included in“Eliminations or Total
Company” item

Millions of yen

Principal content
Expenses relating to head office administration at theparent company
Expenses related to management of surplus funds
and head office administration at the parent company

Segment information by geographical location
For the interim period of the current consolidated fiscal year and that of the previous fiscal year, despite thepresence of Gulliver consolidated subsidiaries overseas, over 90% of total sales and assets for each segment
were in Japan so segment information by geographical location has been omitted.

Overseas sales
For the interim period of the current consolidated fiscal year, and for the previous fiscal year, overseas sales wereless than 10% of consolidated sales and have therefore been omitted.

－ 28 －

Non-consolidated Balance SheetASSETS

As of
August 31, 2007
% of
total

As of
August 31, 2006
% of
total

Millions of yen
As ofFebruary 28, 2007
% of
total

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

1,583

1,947

3,337

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

3,918

4,773

5,854

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

3,471

3,195

3,065

―

2,910

5,373

692

619

447

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

1,651

1,691

2,084

Allowance for doubtful accounts ......

(87)

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

11,229(83)
29.8

15,054(229)
42.6

19,933

49.3

Fixed assets
Tangible fixed assets*1
7,799

7,487

7,807

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

Buildings & structures.......................

1,183

1,495

1,316

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

327

327

327

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

109

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

9,418

166
25.0

9,475

109
26.8

9,561

23.7

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

2,442

1,914

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

140

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

2,055

1,910

91
5.4

2,534

88
7.2

1,998

4.9

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

100

98

96

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

2,191

2,061

2,321

Long-term loans to affiliates..............

6,500

--

--

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

3,404

3,278

3,651

Construction cooperation money ......

2,852

2,206

2,508

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

91

142

270

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

203

564

236

Allowance for doubtful accounts .......
Total investment and otherassets .............................................
Total fixed assets ........................

(199)

(334)

(33)

15,013

39.8

8,277

23.4

8,921

22.1

26,48770.2

20,28757.4

20,48050.7

Total Assets........................................

37,717100.0

35,342100.0

40,414100.0－ 29 －

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
Long-term debt ..........................
Guarantee deposits received .....
Total long-term liabilities..........
Total liabilities........................
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 translationdifferences
Valuation difference on othermarketable securities ............
Total Valuation and translationdifferences................................
Total net assets..........................
Total liabilities and other net
assets..........................................

As of
August 31, 2007
% of total
2,036
7,500
1,834
1,843
299
428
691
832
15,466

As ofAugust 31, 2006
% of total

Millions of yen
As ofFebruary 28, 2007
% of total

41.0

2,264
10,600
1,710
1,943
276
512
853
968
19,129

3,000
845
3,845
19,312

10.2
51.2

-793
793
19,923

2.3
56.4

-869
869
22,313

4,157

11.0

4,157

11.8

4,157

10.3

4,032
4,032

10.7

4,032
4,032

11.4

4,032
4,032

10.0

39

54.1

2,953
11,600
1,957
2,590
178
721
415
1,027
21,443

53.1

2.1
55.2

39

20,84539

17,055

19,406
19,44548.1

43.6(9,540)18,094(23.6)
44.8

7

0.0

6

0.0

0.0
48.8

7
15,4190.0
43.6

6
18,101

0.0
44.8

100.0

35,342100.0

40,414100.0

20,884(10,678)

55.4(28.3)

17,095(9,873)48.3(27.9)

18,39648.8

15,41180.0

818,40437,717－ 30 －

Non-consolidated Statements of Income
March 1, 2007 to
August 31, 2007

Millions of yen

March 1, 2006 to
August 31, 2006

% of total

March 1, 2006 to
February 28, 2007

% of total% of total

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

76,442100.0

80,061

100.0

166,466

100.0

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

57,632

75.4

60,67775.8

126,526

76.0

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

18,80924.6

19,383

24.2

39,940

24.0

Sales, general and administrative
expenses*5 ..............................................

14,38418.8

15,10818.9

29,224

17.6

5.8

4,274

5.3

10,715

6.4

0.2

54

0.1

61

0.1

0.1

56

0.1

268

0.2

5.9

4,273

5.3

10,509

6.3

20

0.0

34

0.0

520

0.3

298

0.4

291

0.3

1,018

0.6

5.5

4,016

5.0

10,010

6.0

Operating income ....................................
*1

Non-operating income ............................
Non-operating expenses*2 ........................
Ordinary income ......................................
*3
Extraordinary income .............................

Extraordinary expenses*4,6 .......................

4,425
128
84
4,469

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

4,191

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

1,782

1,909

4,486

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

(66)

(166)

(121)

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

2,475

3.3

－ 31 －

2,272

2.8

5,645

3.4

(3) Changes to interim shareholders’ equity
Interim period March 1, 2007 to August 31, 2007
Millions of yen
Shareholders’ equity
Capital surplus

Accumulated earnings
Other accumulated

CapitalCapital

Total capital

Profitearnings

reserves

surplusreserve

Deferred profit

Total

Treasury

accumulated

stock

Total
shareholders’equityearnings

reserve
Balance as of February 28, 2007

4,157

4,032

4,032

39

19,406

19,445(9,540)18,094

(909)

(909)

(909)

2,475

2,475

2,475

Change during interim accounting period
Surplus dividend
Bonuses to directors through profit
appropriation
Interim net income
Acquisition of treasury stock
Disposal of treasury stock(1,320)(1,320)

(126)

(126)

182

56

1,439

1,439

(1,137)301

20,84520,884(10,678)

18,396

Changes to items other thanshareholders’ equity during the interim
accounting period
Total change during interim accounting
periodBalance as of August 31, 2007

4,157

4,032

4,032

39

Millions of yen
Valuation and translation differences
Valuation differences onother marketable

Total net assets

translation differences

securities
Balance as of February 28, 2007

Total valuation and6

6

18,101

Change during interim accounting period
Surplus dividend(909)

Interim net income

2,475(1,320)Acquisition of treasury stock

56

Disposal of treasury stock
Changes to items other than shareholders’

1

1

1

Total change during interim accounting period

1

1

303

Balance as of August 31, 2007

88

18,404

equity during the interim accounting period－ 32 －

Interim period March 1, 2006 to August 31, 2006
Millions of yen
Shareholders’ equity
Capital surplus

Accumulated earnings
Other

Capital

Total

CapitalProfitcapitalreserves

surplusTotal

accumulated

Total

earnings

accumulated

Deferred profit

earnings

reserve

Treasury stock

shareholders’equityreserve
Balance as of February 28, 2006

4,157

4,032

4,032

39

15,866

15,905(8,067)

16,027

(818)

(818)

(818)

(73)

(73)

(73)

2,272

2,272

2,272

Change during interim accounting period
Surplus dividend
Bonuses to directors through profit
appropriation
Interim net income
Acquisition of treasury stock
Disposal of treasury stock(2,079)(2,079)

(190)

(190)

273

83

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 translation differences
Valuation differences onother marketablesecurities
Balance as of February 28, 2006

Total valuation andTotal net assets

translation differences

67

67

16,094

Change during interim accounting period(818)

Surplus dividend
Bonuses to directors through profit(73)

appropriation
Interim net income

2,272

Acquisition of treasury stock(2,079)83

Disposal of treasury stock
Changes to items other than shareholders’equity during the interim accounting period
Total change during interim accounting period
Balance as of August 31, 2006

(59)

(59)

(59)

(59)

(59)

(675)

7

7

15,419－ 33 －

Full year ended February 28, 2007 (March 1, 2006 to February 28, 2007)
Millions of yen
Shareholders’ equity
Capital surplus

Accumulated earnings
Other

Capital

Total

CapitalTotal

earnings

accumulated

Deferred profit

earnings

Profitcapitalreserves

reserve

surplusTotal

accumulated

Treasury stock

shareholders’equityreserve
Balance as of February 28, 2006

4,157

4,032

4,032

39

15,866

15,905(8,067)

16,027(1,608)(1,608)(1,608)

(73)

(73)

(73)

5,645

5,645

5,645

Change during interim accounting period
Surplus dividend
Bonuses to directors through profit
appropriation
Interim net income
Acquisition of treasury stock
Disposal of treasury stock(2,079)(2,079)

(423)

(423)

606

183

3,539

3,539

(1,472)

2,067

19,406

19,445(9,540)18,094

Changes to items other thanshareholders’ equity during the interim
accounting period
Total change during interim accounting
periodBalance as of February 28, 2007

4,157

4,032

4,032

39

Millions of yen
Valuation and translation differences

Balance as of February 28, 2006

Valuation differences on

Total translation

other marketablevaluation andsecurities

differences

67

Total net assets

67

16,094

Change during interim accounting period(1,608)

Surplus dividend
Bonuses to directors through profit(73)

appropriation
Interim net income

5,645

Acquisition of treasury stock(2,079)

Disposal of treasury stock

183

Changes to items other than shareholders’equity during the interim accounting period
Total change during interim accounting period
Balance as of February 28, 2007

(60)

(60)

(60)

(60)

(60)

2,006

6

6

18,101－ 34 －

Material Items Forming the Basis for the Preparation of the Non-consolidated Financial Statements
March 1, 2007 –August 31, 2007

March 1, 2006 –August 31, 2006

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

1) Marketable securities
Bonds intended to be held tomaturity.
As at left

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.

1) Tangible Fixed Assets
As at left

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.

2) Intangible Fixed Assets
As at left

3) Long-term prepaid expenses
As at right3) Long-term prepaid expenses
Straight line method is applied

3) Long-term prepaid expenses
As at left

Share reissuing expense:
Expensed in their entirety at timeof expenditure

Share reissuing expense:
Expensed in their entirety at timeof expenditure

Share reissuing expense:
As at left

Item
1. Valuation criteria andvaluation methods formaterial assets

Shares of subsidiaries
As at right
Other securitiesThose with market value:
As at rightThose 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

3. Treatment ofDeferred assets－ 35 －March 1, 2006 –February 28, 2007

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

Item

March 1, 2007 –August 31, 2007

March 1, 2006 –August 31, 2006

March 1, 2006 –February 28, 2007

4. Criteria for Recording
Material Reserves

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 right2) Reserve for Bonuses
To prepare for the payment ofbonuses to employees, amounts
are recorded based on theestimated payment amount.

2) Reserve for Bonuses
As at left

5. Treatment of material
Lease Transactions

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

As at right

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

Accounting Treatment ofConsumption Tax:
As at right－ 36 －

3) Reserve for Directors’ Bonuses
Calculations are based on theestimated amount required toprovide for directors’ bonuses.
As at left

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

Changes to Material Items Forming the Basis for the Preparation of the Non-consolidated Financial Statements
March 1, 2007 –August 31, 2007――――――――――――March 1, 2006 –August 31, 2006
Accounting standards relating to
impairment losses on fixed assets

March 1, 2006 –February 28, 2007
Accounting standards relating to
impairment losses on fixed assets

From the interim period of the fiscal year
ended February 28, 2007 the ‘Statement
Regarding the Establishment 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 ofBusiness Accounting 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.

From the fiscal year ended 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 Applicationof Accounting Policies for Impairment Loss
on Fixed Assets (Guideline for Applicationof Business Accounting Policies, Article 6;
Business Accounting Council, October 31,2003) have been applied as accounting
standards relating to impairment loss.
As a result of these changes, net income
before taxes is ¥278 million lower
compared to using the previous method.

Accounting standards relating topresentation of net assets on balance
sheets

Accounting standards relating topresentation of net assets onbalance sheets

From the interim period of the fiscal year ended
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;
Business Accounting Council, December 9,2005) have been applied.
The equivalent amount previously recorded as‘Capital’ is ¥18,101 million.
Following changes to the regulations on
financial statements, net assets on the interim
balance sheet have been recorded inaccordance with the revised regulations.

From the fiscal year ended 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 of Business Accounting
Polices, Article 8; Business Accounting
Council, December 9, 2005) have been
applied.
The equivalent amount previously
recorded as ‘Capital’ is ¥18,101 million.
Following changes to the regulations on
the financial statements, net assets on thebalance sheet have been recorded inaccordance with the revised regulations.

Accounting standards relating todirectors’ bonuses
Effective from the fiscal year ended
February 28, 2006, Accounting Standards
Board Statement No. 4, “AccountingStandards for Directors’ Bonuses” issued
by the Accounting Standards Board on
November 29, 2005. The effect of this is adecrease of ¥73 million on each ofoperating income, ordinary income andnet income before adjustment for income
taxes.

Changes to the depreciation methodof tangible fixed assets
From the interim period of the fiscal year
ending February 29, 2008, in accordance withthe revision of Corporation Tax Law (Law
Concerning the Partial Revision of Income Tax
No. 6, issued on March 30, 2007 andGovernment Ordinance Concerning the Partial
Revision of Corporation Tax Law Order No.
83, issued on March 30, 2007), the method ofdepreciation of tangible fixed assets acquired
after April 1, 2007 has been revised. The
effects of this change on operating income,ordinary income or net income before
adjustment for income taxes is immaterial.

－ 37 －

Changes to Presentation Method
March 1, 2007 – August 31, 2007

March 1, 2006 – August 31, 2006
Presentation of interim balance sheets------------In the previous interim period ‘Temporary loans to related companies’,
was recorded under ‘Others’ in ‘Current assets’, and ‘Shares of affiliates’,
was recorded under ‘Others’ in ‘Investments and Other Assets’. In thisinterim period as each was greater than 5% of total assets they have beenrecorded separately.
At the end of the previous interim period, ‘Temporary loans to relatedcompanies was ¥100 million and ‘Shares in affiliates’ was ¥485 million.

Notes to Interim Balance Sheet
As of August 31, 2007
*1

Total accumulated depreciation of

tangible fixed assets:

As of August 31, 2006
*1

As of February 28, 2007

Total accumulated depreciation of tangible

fixed assets:

Total accumulated depreciation of

tangible fixed assets:¥4,072 million¥3,387 million*2 Total lending limit and lending balance:
In order to enable greater Group-wide efficiency
in fund procurement and operations, Gulliver
provides funding to its subsidiaries and affiliates.
The total lending limit and lending balance
amounts are given below.

Total lending limit*1¥8,500

millionLending balance¥6,500

millionDifference¥1,999million

The abovementioned operations are carriedout based on the financial position and fundmanagement of each company; lending
operations will not necessarily be implemented
to the full amount.

－ 38 －¥3,576 million

Notes to Interim Statements of Income
March 1, 2007 – August 31, 2007
*1

Main non-operating income
Interest received*2

Main non-operating expenses*3

Main extraordinary income

Interest paid
Funds returned
from thecancellation of
insurance contracts*4

March 1, 2006 – August 31, 2006
*1
37

Main non-operating income
Interest received*2
35

March 1, 2006 – February 28, 2007
*1
5

Main non-operating expenses
Interest paid

Main non-operating income
Interest received

*2
16

15

Main non-operating expenses
Interest paid

46

*3-------------*3-------------*4-------------*4-------------

20

Main non-operating expenses
Loss on retirementof fixed assets

168

Impairment losses
from subsidiaries*5

129

Depreciation*5

Depreciation*5

Depreciation

Tangible fixed assets

679

Tangible fixed assets

672

Tangible fixed assets

1,493

Intangible fixed assets

337

Intangible fixed assets

391

Intangible fixed assets

784*6 Impairment losses
During the fiscal year ended February 28,
2007, the Group recognized impairment
losses on the following group assets(1) Assets for which impairment losses recorded
Place
Usage
Type
AmountChiyoda-ku Other¥273
SoftwareTokyo
businesses
millionChiyoda-ku Other
Tools &
¥4Tokyo
businesses equipment million(2) Details of recognition of impairment losses
For certain businesses in ‘other businesses’
where the initially expected business has beencancelled or suspended and there is no future
use for the asset, impairment losses have beenrecognized.
(3) Method of grouping assets
According to the Group’s application of
accounting for impaired assets, the minimum
cash flow generating unit is mainly a store. For
unutilized assets, the individual assets aregrouped.
(4) Method for calculating recoverable value
The group’s recoverable amount is calculated
based on future cash flows discounted 3.15%.

－ 39 －

Change in shareholders’ equity for the interim period
March 1, 2007 – August 31, 2007
Category and number of treasury shares in issuanceThousands of shares

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

909

200

17

1,091

909

200

17

1,091

Ordinary shares
Total

Notes:
1. The increase in number of treasury shares was the result of a decision by the board of directors to acquire 200 thousand
shares
2. The decrease in the number of shares was the result of the exercise of warrants for 17 thousand shares

March 1, 2006 – August 31, 2006
Category and number of treasury shares in issuanceThousands of shares

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

Ordinary shares
Total

Notes:
1. The increase in number of treasury shares was the result of a decision by the board of directors to acquire 143 thousand
shares
2. The decrease in the number of treasury shares was the result of the exercise of warrants for 26 thousand shares
March 1, 2006 – February 28, 2007
Category and number of treasury shares in issuanceThousands ofsharesOrdinary 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

58

909

823

143

58

909

Notes:
1. The increase in number of treasury shares was the result of a decision by the board of directors to acquire 143 thousand
shares
2. The decrease in the number of treasury shares was the result of the exercise of warrants for 26 thousand shares－ 40 －