TERAOKA SEISAKUSHO CO., LTD

INTERIM REPORTThe six-month period ended September 30, 2011

TERAOKA SEISAKUSHO CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Balance Sheets
As of September 30, 2011 and March 31, 2011

Millions ofYen

Millions ofYen

Thousands of
US Dollars

September 30

March 31

September 30

ASSETS
Current Assets:
Cash and time deposits¥8,545¥10,021$111,506

5,417

5,888

70,695

(9)

(9)

(117)

3,894

3,079

50,813

Deferred income taxes

2982983,886

Other current assets

303294

3,960

Total current assets

18,44819,571

240,743

Land

3,940

3,733

51,418

Buildings

8,510

8,502

111,047

Machinery and equipment

22,39622,308292,257

Construction in progress

792

211

10,342

35,63834,754

465,064(24,945)(24,268)(325,531)

10,693

10,486

139,533

61

76

799

Investments in securities

1,992

1,960

25,995

Deferred income taxes

15

53

193

Other

183

208

2,385

Less:Allowance for doubtful accounts

(3)

(24)

(35)

Total investments and other assets

2,187

2,197

28,538¥31,389¥32,330$409,613

Notes and accounts receivable:
TradeLess:Allowance for doubtful accounts
Inventories

Property, Plant and Equipment:

Less: Accumulated depreciation
Property, plant and equipment, net
Intangible Assets
Investments and Other Assets:

Total assets

The accompanying notes to consolidated financial statements are an integral part of these statements.

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LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities:
Notes and accounts payable:
Trade
Short-term borrowings
Current portion of long-term borrowings
Accrued income taxes
Accrued expenses
Provision for loss on disaster
Other current liabilities
Total current liabilities

Millions ofYen

Millions ofYen

Thousands ofUS Dollars

September 30

March 31

September 30¥3,883
3500
30
518
－
814
5,748

¥3,629
3500
357
532
103
1,029
6,153

$50,674
39
6,525
389
6,757
－
10,62675,010Long-term Liabilities:
Long-term borrowings
Retirement and severance benefits:
Employees
Deferred liabilities taxes
Asset retirement obligations
Negative Goodwill
Other
Total long-term liabilities
Total liabilities

1,125

1,375

14,681

432
44－
38253
1,892
7,640

438
18
166
5194
2,142
8,295

5,633
570
－
499
3,299
24,682
99,692NET ASSETSStockholders' Equity:
Common stock:
Authorized: 80,000,000 shares
Issued: 20,081,955 shares as of September 30,
2011 and 2010, respectively
Additional paid-in capital
Retained earnings
Less: Treasury stock, at cost
Total stockholders' equity

3,904
3,491
16,556(137)
23,815

3,904
3,491
16,741(137)
23,99950,95145,560216,051(1,782)
310,780

Accumulated Other Comprehensive Income：Unrealized gains on securities
Foreign currency translation adjustments
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

319(385)(66)
23,749¥31,389

252
(217)
35
24,035¥32,330

4,171(5,030)(859)
309,921$409,613

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TERAOKA SEISAKUSHO CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Income
For the six-month period ended September 30, 2011 and 2010

Millions ofYen

Millions ofYen

Thousands ofUS Dollars

2011

2010

2011

¥10,404¥11,654$135,772

8,241

8,804

107,549

2,163

2,850

28,223

2,041

2,393

26,631

122

457

1,592

Interest and dividend income

3528451

Gain on allotment of shares－16－

Gain on sales of investment securities－

43－

Interest expenses

(17)

(22)

(228)

Foreign exchange gains(losses), net

(69)

(61)

(900)

Loss on disposals of property, plant and equipment

－(3)

－

Disaster loss

(70)

－

(908)

Loss on valuation of marketable securities

(100)

(87)

(1,311)Business structure improvement expenses

－

(189)

－－

(37)

－

Environmental expenses

－

(26)

－

Other, net

35

27

462

(186)

(311)

(2,434)(64)

146(842)2245283(86)
(¥86)

101
¥101

(1,125)($1,125)

Net Sales
Cost of SalesGross profit
Selling, General and Administrative Expenses
Operating income
Other Income and Expenses:

Loss on adjustment for changes of accounting standard
for asset retirement obligations

Income（Loss） before income taxes
Income Taxes:
Total income taxes
Net income（loss） before minority interests
Net income（loss）
Per Share of Common Stock:
YenYenUS Dollars

Net income（loss）(¥4.37)¥5.14($0.06)

Cash dividends paid

5.00

5.00

0.07

The accompanying notes to consolidated financial statements are an integral part of these statements.

3TERAOKA SEISAKUSHO CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Comprehensive Income
For the six-month period ended September 30, 2011 and 2010

Net income（loss） before minority interests

Millions ofYen

Millions ofYen

Thousands ofUS Dollars

2011

2010

2011

(¥86)

¥101

($1,125)

67

(40)

882

Foreign currency translation adjustments

(168)

(92)

(2,199)Total other comprehensive income
Comprehensive Income(101)(¥187)

(132)
(¥31)

(1,317)($2,442)(¥187)(¥31)($2,442)－－－

Other Comrehensive Income
Unrealized gains on securities

Total comprehensive income attributable to:Owners of the parent
Minority interests

The accompanying notes to consolidated financial statements are an integral part of these statements.

4TERAOKA SEISAKUSHO CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Stockholders' Equity
As of September 30, 2011 and March 31, 2011

Millions ofYen

Millions ofYen

Thousands ofUS Dollars

September 30

March 31

September 30

Common Stock:
Balance at beginning of period¥3,904¥3,904$50,951

Issuance during the period---

Balance at end of period

3,904

3,904

50,951

Balance at beginning of period

3,4913,491

45,560Net change during the period

---

3,491

3,491

45,56016,741

16,269218,463

Cash dividends paid

(99)

(177)

(1,287)Net Income

(86)

649

(1,125)¥16,556¥16,741$216,051

(137)

(136)

(1,782)

Purchase of treasury stock

0(1)

0

Balance at end of period

(137)

(137)

(1,782)

Balance at beginning of period

252

284

3,289

Net change during the period

67

(32)

882

Balance at end of period

319

252

4,171

Balance at beginning of period

(217)

(143)

(2,831)

Net change during the period

(168)

(74)

(2,199)Balance at end of period(¥385)(¥217)($5,030)

Additional Paid in Capital:

Balance at end of period
Retained Earnings:
Balance at beginning of period

Balance at end of period
Treasury Stock, at cost:
Balance at beginning of period

Accumulated Other Comprehensive Income（Loss）:
Unrealized Gains on Securities:

Foreign Currency Translation Adjustments:

The accompanying notes to consolidated financial statements are an integral part of these statements.

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TERAOKA SEISAKUSHO CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Cash Flows
For the six-month period ended September 30, 2011 and 2010

Operating Activities:
Net Income
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization
Allowance for doubtful accounts
Provision for retirement benefits
Loss on disposal of property, plant and equipment
Gain on sales of investment securities
Loss on valuation of marketable securities
Business structure improvement expenses
Changes in assets and liabilities:(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Increase (decrease) in accrued income taxes
Other, net
Total adjustment
Net cash provided by operating activities
Investing Activities:
Payment for purchases of property, plant and equipment
Payment for purchases of intangible assets
Payment for purchases of investment in securities
Proceeds from sales of investment in securities
Net cash used in investing activities
Financing Activities:
Increase(decrease) in short-term borrowings
Increase(decrease) in long-term borrowings
Dividends paid
Otner, net
Net cash used in financing activities
Effect of Exchange Rate Changes on Cash and Cash Equivalen
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period

Millions ofYen

Millions ofYen

201120102011(¥86)¥101($1,125)

715
(21)
(6)
3－
100－

933
(3)
55
－
(43)
87
189

9,329
(280)
(83)
39
－
1,311－

442
(823)
287
(355)
(205)
137
51

480
(329)
(79)
12
26
1,328
1,429

5,764
(10,737)
3,750(4,632)(2,675)
1,786
661(1,077)－(2)－(1,079)

(356)
(3)
(2)
140
(221)

(14,058)－(25)－(14,083)1(250)
(99)
(0)
(348)

3(250)(79)－(326)

13(3,263)(1,287)(4)(4,541)(100)(1,476)
10,021¥8,545

(58)
824
7,420
¥8,244(1,304)(19,267)
130,773$111,506

The accompanying notes to consolidated financial statements are an integral part of these statements.

6Thousands ofUS Dollars

TERAOKA SEISAKUSHO CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements
1. The translation of Yen amounts into U.S. dollars is included solely for the convenience of readers outside Japan,using the prevailing exchange rate at September 30, 2011, which was ￥76.63 to U.S.＄1.
2. Consolidated subsidiaries
Shin-ei Shoji Co., LtdTeraoka Seisakusho (Hong Kong) Co., Ltd.
Teraoka Seisakusho (Shanghai) Co., Ltd.
Teraoka Seisakusho (Shenzhen) Co., Ltd.
PT. Teraoka Seisakusho Indonesia
3. Contingent liabilities in respect of trade notes and export bills discounted with banks with recourse in the ordinary
course of business at September 30, 2011 and 2010, amounted to ￥2million (US$ 29 thousand) and ￥23 million
respectively.

Corporate Information(as of September 30, 2011)

Head Office

4-22, Hiromachi 1-chome
Shinagawa-ku, Tokyo 140-8711, Japan
Tel: +81-3-3491-1141
Fax: +81-3-3491-5316

FoundedFebruary 11, 1921

Paid-in Capital￥3,904 million

Shareholders

2,633

Stock Listing

Tokyo Stock Exchange, 2nd Section

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome
Chiyoda-ku, Tokyo 100-8212, Japan

Employees

549（Consolidated:595）

Branch Offices

Tokyo, Osaka, Nagoya, Ohmiya, Sendai

R&D CenterTokyo

Factories

Ibaraki, Sano, Kannami

Websitehttp://www.teraokatape.co.jp

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