May 15, 2008
Stock Exchange Listing Tokyo, Osaka
Name of listed company: ISEKI & CO., LTD
6310
Company Code:(URL http://www.iseki.co.jp)
Representative: Title President
Name Seiichiro Gamo
Enquiries:
Title General Manager of FinanceName Hiroshi Yunoki
Telephone: +81 3 5604 7671
Date of the Regular Meeting of Shareholders:June 26, 2008
Date of Submission of the Securities Report:
June 27, 2008

Summary Announcement of Consolidated Financial Results
for the Fiscal Year Ended March 31, 2008
I. Financial Results for the Fiscal Year Ended March 31, 2008

(April 1, 2007－March 31, 2008)

A. Results of operations(Rounded down to millions of yen, % indicates changes from the previous period)

Year EndedYear Ended

March 31, 2008%

144,714735
34(1,466)(5.9)(67.2)(97.3)-Net Sales
Operating Income
Ordinary Income
Net Income

March 31, 2007
153,728
2,243
1,276
18

%
(5.0)
(64.5)(77.7)(99.3)Net Income per Share (yen)Basic(6.49)

0.08

－

0.07

(2,8)

0.0

0.0

0.7

0.5

1.5

DilutedReturn on Equity(%)

Return on Total Assets(%)

Ordinary Income to Net Sales(%)

Notes: Investment gain (loss) by equity method:Year ended March 31, 2008－

Year ended March 31, 2007

B. Financial Position(Rounded down to millions of yen)

Total Assets
Net Assets
Shareholders’ Equity to Total Assets Ratio (%)
Net Assets per Share(yen)

March 31, 2008

March 31, 2007

173,198
52,55629.4
225.76

181,362
55,72429.8
239.71

Notes:
Shareholders’ equity:Year ended March 31, 2008 ¥50,981 mil.

Year ended March 31, 2007 ¥54,138 mil.

1－

C. Cash Flows(Rounded down to millions of yen)

Year EndedYear Ended

March 31, 2008

March 31, 2007

Cash Flows from Operating Activities
Cash Flows from Investing Activities
Cash Flows from Financing Activities
Cash and Cash Equivalents at End of Period

3,861(2,904)
(412)
5,687

902
(4,718)
2,207
4,985

II. Dividends

Year EndedYear EndedYear ending

March 31,

March 31,

March 31, 2009

2008

2007

Forecast

－

－

－

0.00

0.00

0.00

－
－
－

－
－
－

－

Dividend per share （yen）
End of fiscal year
AnnualAnnual cash dividend per share
Payout ratio (%, consolidated)
Ratio of dividend to net assets(%, consolidated)

III. Forecast for the Fiscal Year Ending March 31, 2009 (April 1, 2008－March 31, 2009)(Rounded down to millions of yen, % indicates changes from the previous period)
Net Sales

Operating Income

OrdinaryNet

Net Income per

IncomeIncomeshare (yen)Interim74,500 4.6

0

－

(600)

－

(1,400)－(6.20)

Annual

154,500 6.8

3,300 348.6

1,900

－

600

－

2.66

IV. Others
A Change in important subsidiaries during the period (change in specified subsidiaries which accompanies a change
in the range of consolidation): None.
B Change in principle, procedure and method of statement of accounting procedures in preparation of consolidated
financial statements (as stated in “Changes in essential matters which provide a basis for preparation ofConsolidated Financial Statements”)
1) Change which accompanies revision of accounting standards: Yes
2) Change other than No.1.
No(Note) For details, please refer to (Change in accounting principle) in the “Changes in essential matters which
provide a basis for preparation of Consolidated Financial Statements”, P18.
C Outstanding shares (Common shares)
1) Outstanding shares (Including treasury shares)
As of March 31, 2008
226,536,329 shares
As of March 31, 2007
226,536,329 shares
2) Outstanding treasury shares
As of March 31, 2008
711,509 shares
As of March 31, 2007
690,113 shares(Note) Please refer to P26 “Per share information” as to the number of shares which provides a base for calculating net

2

income per share (consolidated).
(Reference) Non-consolidated Financial Results
I. Financial Results for the Fiscal Year Ended March 31, 2008

(April 1, 2007－March 31, 2008)

A. Results of operations(Rounded down to millions of yen, % indicates changes from previous period)
Year EndedYear Ended

March 31, 2008%

March 31, 2007%

Net Sales

84,965(6.4)

90,784(3.2)

Operating Income

(455)

－

744

(76.2)

Ordinary Income

(193)

－

841

(78.0)Net Income(1,430)－(4,818)－Net Income per Share (yen)Non-diluted
Fully Diluted(6.33)－（21.34）－

B. Financial Position(Rounded down to millions of yen)March 31, 2008

March 31, 2007

Total Assets

123,716130,054

Shareholders’ Equity

46,96150,075

(%)

38.0

38.5

(yen)

207.96221.72

Shareholders’ Equity to Total Assets Ratio
Shareholders’ Equity per Share
Notes: Shareholders’ Equity

Year ended March 31, 2008 ¥46,961 mil.

Year ended March 31, 2007 ¥50,075 mil.

II. Forecast for the Fiscal Year Ending March 31, 2009 (April 1, 2008－March 31, 2009)(Rounded down to millions of yen, % indicates changes from the previous period)
Net Sales

Operating Income

Ordinary Income

Net Income

Net Income pershare (yen)Interim43,000 0(4.1)

(700)

－

(400)

－

(500)

－

(2.21)

Annual

91,0000 (7.1)

700

－

700

－

600

－

2.66

Cautionary statement: The forecast for operating results has been produced based on information presently
available. It is possible that in the future actual results may differ from the anticipatedfigures for a variety of reasons. Please refer to page5of attached material for the matter
concerning the above-mentioned expectation.

3

1．Management Performance(1) Analysis of Management Performance1) The Fiscal Period in Review
During the fiscal year under review, the Japanese economy as a whole continued its gradual recovery
pattern. While the economy maintained its solid recovery trend in the first half of the year, as it entered the second
half, there were downturn of the US economy and change in the financial and capital market in the back of the subprime housing loan problem, hike in the oil price, restrained improvement in the corporate earnings, almost
leveled off consumer spending and gradual increase, in capital investment.
Domestic demand for agricultural machinery continued very inactive by structural problems such asaging and dwindling farmers coupled with restrained purchase and wait-and-see attitude as a result of dropped rice
price and agriculture policy reform, there is also a sign of bottoming out by a move to review the agriculture
policy as well as broke of dropped rice price. On the other hand, the export continued to shift favorably from theprevious fiscal year.
Under the circumstances, the ISEKI Group has made efforts to broaden its line of new products to meetthe diverse needs of customers, and has also aggressively promoted sales activities trying to increase both
domestic sales and exports.
(Consolidated business performance of the fiscal year)
In the fiscal year, sales declined ¥9.014 billion from the previous period to ¥144.714 billion (down 5.9%).
Domestic sales declined ¥12.202 billion to ¥122.673 billion (down 9.0%) centering on agricultural machinery due
to an inactive trend in the agricultural machinery market. Overseas sales increased ¥3.187 billion from theprevious period to ¥22.041 billion (up 16.9%) contributed by solid sales in the European and Asian markets.
Operating income declined ¥1.508 billion to ¥0.735 billion (down 67.2%) due to decreased gross profit whichreflected reduced sales as well as lowered gross margin.
Ordinary income decreased ¥1.241 billion from the previous period to ¥34 million (down 97.3%). Net
income decreased to ¥1.485 billion to a net loss of ¥1.466 billion due to reversal of deferred tax assets etc.
(Non-consolidated business performance of the fiscal year)
In the current fiscal year, sales were ¥84.965 billion (down 6.4% from the previous period), operating
income was a loss of ¥455 million and ordinary income was a loss of ¥193 million. Net income resulted in a lossof ¥1.43 billion due to reversal of deferred tax assets etc.

2) Sales by Product(Domestic)
Sales of machinery for soil preparation (tractors, tillers, etc) dropped to ¥26.937 billion (down 8.3% fromthe previous period). While sales of tillers and high clearance multi purpose vehicles increased, sales of tractors
which are our main products declined. Sales of cultivating machinery (rice transplanters and vegetabletransplanters) increased to ¥11.475 billion (up 8.3% from the previous period) helped by strong sales of PZ series
rice transplanters, which were put on the market from the previous fiscal year. Sales of harvesting and processing
machines were at ¥24.232 billion (down 15.5%) due to decreased sales of main force combine harvesters anddrying machines. Sales of farming implements and spare parts were ¥27.862 billion (down 6.5%). Sales of other4

agricultural related items stood at ¥21.532 billion (down 13.4%). Sales of agricultural facilities stood at ¥4.051
billion (down 36.1%). Other sales were ¥10.632 billion (down 8.0%).
(Overseas)
Sales of machinery for soil preparation increased to ¥16.933 billion (up 11.0% from the previous period)
mainly contributed by active sales in Europe more than offsetting reduced tractor sales in North America. Sales ofcultivating machinery rose to ¥2.366 billion (up 104.7%), harvesting and processing machinery rose to ¥1.096
billion (up 9.6%), and farming implements and spare parts increased to ¥1.102 billion (up 9.2%).

3) Forecast for the next consolidated fiscal year
With respect to the current business climate, there is a concern for a turndown of the Japanese economy
in view of the standstill of the recovery momentum of the economy in the midst of rising material price caused by
hiked oil and iron ore price. On the other hand, we anticipate that tough situation will persist in the environment
surrounding agriculture leading to more intense competition in the market, in spite of some sign of improvement.
Under such circumstances, we will try to secure sales by aggressive introduction of new products.
Domestically, we expect demand for agricultural machinery to remain at approximately the same level in light of
the agriculture policy review and brake of dropped rice price. We expect expanded domestic sales by thesynergetic effect of continuous introduction of new products, further enrichment of our service as well as
reinforced sales power. In overseas, we expect further sales expansion in already active Asian market and arecovery of orders received in the North American market by termination of the inventory adjustment by an OEM
partner. In furtherance, we expect improved gross margin by the effect of the cost structure reform implemented
during the fiscal year ended March 31, 2008.

(2) Financial position
Total assets at the end of the fiscal year decreased ¥ 8.2 billion to ¥173.2 billion. In total assets, current
assets decreased ¥ 5.7 billion from the previous fiscal year. Main components were decreased notes receivables andaccounts receivables of ¥ 3.1 billion due to reduced sales and decreased inventory of ¥ 2.9 billion. Fixed assets
decreased ¥ 2.5 billion. Investments and other assets decreased ¥2.0 billion centering on investment securities. Total
liabilities decreased ¥ 5.0 billion as a result of reduced accounts payable and allowance for retirement benefits. Net
assets decreased by ¥ 3.2 billion from the previous fiscal year to ¥ 52.6 billion. Equity ratio was 29.4%.
(Cash flows from operating activities)
Cash flow from operating activities resulted in a net revenue ¥ 3.9 billion (net revenue increased ¥ 3.0
billion from the same period last year) due to before tax net loss of ¥0.5 billion, a decrease in inventory assets of ¥2.9
billion and a decrease in accounts receivable of ¥ 3.1 billion etc.
(Cash flows from investment activities)
Cash flow from investment activities resulted in net expenditure of ¥ 2.9 billion (a decrease of ¥1.8 billion
from the same period last year), mainly due to capital investment expenditure of ¥5.2 billion, revenue from a sale ofinvestment securities of ¥2.6 billion and an expense for purchase of investment securities of ¥1.6 billion.
(Cash flows from financial activities)
Cash flow from financial activities resulted in a net expenditure of ¥0.4 billion (an increase of ¥2.6 billion
from the same period last year), due to increased long-term borrowings and repayment of debts.

5

The trend of cash flow indicators is as follows.
Indicator

Mar. 31,Mar. 31,Mar. 31,Mar. 31,

2005

2006

2007

2008

Equity ratio

(%)

27.1

30.5

29.8

29.4

Market-based equity ratio

(%)

39.2

66.2

30.4

21.1

Cash flow/Interest bearing liabilities Ratio (times)

9.7

13.8

64.6

15.0

Interest coverage ratio

4.8

4.0

0.9

3.3

(times)・Equity ratio: Shareholders’ equity / Total assets
・Market-based equity ratio: Total market price of shares / Total assets
・Cash flow/Interest bearing liabilities ratio: Interest-bearing liabilities / Operating cash flow・Interest coverage ratio: Cash flows from operating activities / Interest payments
Notes: 1. All figures have been calculated using consolidated-based financial figures.
2. The total market price of shares is the product of the per-share closing price at the end of the period
and the total number of shares outstanding (less treasury stocks) at the end of the period.
3. The Operating cash flow uses the cash flows from operating activities as per the Consolidated
Statement of Cash Flows. Interest-bearing liabilities use all the borrowings and debt as recorded in
the Consolidated Balance Sheets. The Interest payments use the interest paid as recorded in theConsolidated Statement of Cash Flows.
(3) Basic Policy on Profit Distribution and Dividends for Fiscal Year 2007 and 2008
We recognize that the method for determining dividends to be paid to shareholders is one of the mostimportant policies to be made. Our basic policy is to keep steady and improved dividend distribution, taking
into consideration, not just consolidated financial results, but our Group’s financial position and future businessmovements.
With respect to dividends for the fiscal year ending March 31, 2009, we apologize to the shareholders
but we would like to pass on the end of year dividend in light of the sharply deteriorated business performanceof the current fiscal year.
With respect to dividends for the fiscal year ending March 31, 2008, we will also be obliged to pass on
the dividend payment. We are determined to take the necessary steps in order to reinforce a basis of earnings sothat we will be able to secure profit stability, aiming at the earliest possible resumption of dividend.
(4) Risks Which Could Affect Our Business
Latent risks and uncertainties which could affect our future financial performance are exemplified as
below:
1) Economic Conditions and Changes in the Environment of Agriculture
Sluggishness of domestic and/or overseas economic conditions and any change in the agriculture policy
may negatively affect our financial performance through reduced demand for agricultural machinery.
2) Exchange Rate Fluctuation
There is a possibility that fluctuation of foreign exchange may negatively affect our financial
performance.
3) Hike in Interest Rates
There is a possibility that a hike in interest rate may harm our financial performance.
4) Stock Market Fluctuation
As we hold securities, downward of the stock price may cause a loss.
5) Competition with Other Companies
We are involved in fierce competition with other companies in the market, and unless overall productcompetitiveness, including relevant services should be maintained, there is the possibility of a decline in our

6performance.
6) Risks Derived from International Business
Unexpected changes in tax and legal systems or political unrest of any particular country may cause
harm to our financial performance.
7) Dependency on Specific Customers or Suppliers
Any change of business policy, business depression and failure of our specific customers or suppliers
may harm our financial performance.
8) Serious Defects in Products and Services
The occurrence of serious defects in our products or services may negatively affect our financial
performance.
9) Government Regulation on Environmental Issues, etc. and Occurrence of Related Difficulties.
Substantial costs may be incurred related to our products or business activities due to necessitatedresponses to public regulation of environmental issues etc, corrective measures undertaken upon theoccurrence of troubles, law suites and other situations which could lead to a deterioration of our financial
performance.
10) Risk of Natural Disasters and Accidents
Earthquakes, typhoons or unexpected accidents may occur, which may do harm to our financial
performance.
11) Risk of legal violation
In offering products and service of ISEKI Group, we are subject to provisions of laws such thetruth-in-advertising laws and the JIS law, etc. In purchasing raw materials, the Anti Trust Law as well as thesubcontract law requires fair and transparent dealings. Also application of environmental laws requires
compliance oriented management, and we are determined to dedicate ourselves in a body to accomplish
complete legal compliance, by preparing internal control system. In spite of such efforts, if any of ourdirectors and/or employees should conduct themselves in any way violating laws and regulations, there is apossibility that the business activities of our group will be restrained causing increased costs or decreased
revenues, leading to deteriorated performance.
The forecasts for future results and target figures produced by ISEKI & CO., LTD., are based on information
available as the day of this announcement, and or assumptions made as of the same day regarding a number of latentrisks and uncertainties that could affect future financial performance. Actual results could differ considerably
depending on economic conditions, market trends, and future conditions for business operations hereafter.

7

2. The Iseki GroupThe main business of the Iseki Group is the development, manufacture and sale of agricultural machinery forrice and vegetable farming. We also market consumer-oriented products, manufacture testing equipment, and are
currently developing our sales and service as well as other business activities.
Below is a diagrammatic representation of the Iseki Group.
(Agricultural Machinery)
The development and design of agricultural machinery is primarily handled by the parent company.
Ten companies, including Iseki-Matsuyama Mfg. Co., Ltd. and Iseki-Kumamoto Mfg. Co., Ltd., handle ouragricultural machinery manufacturing and component processing activities, and 14 domestic sales companies market
and sell the machinery across the country. Overseas marketing operations are handled by local distributors andaffiliates as well as a wholly owned subsidiary in China, Iseki - Changzhou Mfg. Co., Ltd.
(Other Businesses)
Isec Co., Ltd. markets consumer-oriented products. SUM Electro Mechanics Co., Ltd. is responsible for the
manufacture and sale of testing equipment, and System Equipment Co., Ltd. provides information processing
services.
Following is a schematic diagram of the Iseki Group.

(A g ri c uDomestic Users & Customers

l t u r

a l

M

a c h

i n e r y)

(Other Businesses)

Sales

Sales

Consolidated Subsidiaries:

Subsidiary
N.V.ISEKI EUROPE S.A.
(Belgium)

Iseki-Hokkaido Co., Ltd.
Iseki-Tohoku Co., Ltd.

Affiliated company
ISEKI-MASCHINEN GMBH
DEUTSCHLAND (Germany)and 12 other companies

Products

Sales
Products& Parts

Consolidated Subsidiary:
Iseki BUTSURYU Co., Ltd.

& Parts
Transport

Agricultural Machinery

Others

ISEKI
Parts

Consolidated Subsidiary：
Iseki - Changzhou Mfg. Co.,
Ltd. (China)

Products & Parts

Consolidated Subsidiaries:
Iseki-Matsuyama Mfg .Co., Ltd.
Iseki-Kumamoto Mfg. Co., Ltd.
and 7 other companiesi8Consumer-oriented products, testing equipment, and other

Overseas Users &Customers←Consolidated Subsidiaries：
Isec Co., Ltd.
SUM Electro Mechanics Co., Ltd.
Iseki Constructions Co.,Ltd..
System Equipment Co., Ltd.

3.Iseki’s Management Policies
1. Iseki’s Basic Management Principles
During the 80 years since its establishment, ISEKI has contributed to the modernization of Japan’s
agricultural industry as a full-line manufacturer specializing in agricultural machinery. Over this time, we haveconsistently pursued efficient and laborsaving advances in agriculture, and have served the market by pioneering thedevelopment of a quantity great deal of agricultural machinery and facilities.
When we consider the questions of an increasing world population and food supply, and then our own
nation’s food self-sufficiency and land preservation, our role to serve the farming sector becomes important and our
duty to society as a manufacturer of agricultural machinery becomes even more significant.
ISEKI will continue to operate under a basic business philosophy of “providing products that delight ourconsumers” so that the company can contribute to agriculture, both in Japan and throughout the world.
To reach this goal, our highest priority objectives are “to promote our brand name products, to improve
quality, to accelerate cost-cutting measures and to strengthen our service”. We are aiming for a corporate culture thatcan maintain a stable operating performance and will continue in our efforts to reform our profit structure.
2. Three-year Plan Management Strategies
Basic management strategies are as follows:(1) The expansion of overseas sales(2) To secure 20% share of the domestic agricultural machinery market(3) To strengthen product competitiveness further(4) To improve consolidated financial position by strengthening earning power and cash flow
3. Issues to be Addressed
1) Group internal control
A. Compliance oriented management
We have strived to consolidate our internal control system, positioning the firm establishment of the groupinternal control system as a most important issue of management policy. With respect to the system, to ensure
efficient execution of the job of directors, we have not merely prepared various regulations and systems such as
job assignment regulation and internal control regulation. Rather, important issues are given multilateral discussion
and study at the management meeting. Furthermore, we have a system to properly keep in custody and control any
information related to their job execution such as the minutes of the board of directors and to approval documents.
In terms of a compliance system, we created an across the organization “compliance team” under thesupervision of the director in charge of compliance as of June 1, 2007. We endeavor to prevent any occurrence of
injustice and misconduct by ensuring a full understanding of compliance on the part of all directors and employees
by continuously holding compliance seminars with the initiative of the team.
As an organization concerned with internal control, we created a “Management Control Section” under thecontrol of the Head of the Development & Production Division as of June 1, 2007 which assumed the ordinary
monitoring function of our manufacturing subsidiaries. Thus, we intend to strengthen the control function of ourmanufacturing subsidiaries.
For sales and other subsidiaries, we let them handle internal auditing themselves by having an internal
auditing function at each company. Furthermore, we created a “Management Control Section” under the Head of theBusiness Division as of June 1, 2007 which inspects the degree of implementation of internal auditing and gives
necessary guidance.

9

We also created a “Management Supervisory Committee” as of June 1, 2007 which is comprised of the
President as chairperson, all directors as members and all auditors as observers, so that we can follow up the
progress of measures to prevent a recurrence of misconduct as well as to check the degree of completeness,
We are determined not to have a repeat of the problem of inappropriate accounting practices, and ISEKI and
our consolidated subsidiaries will try hard together to regain lost confidence. Our shareholders’ generous
understanding and support would be most appreciated.
B. Rejection of antisocial forces
We actively work against any possibility of a relationship with antisocial forces or groups, manifesting thepolicy in the “ISEKI Group Code of Ethical Behavior”. In order to establish corporate ethics of ISEKI and the groupcompanies, we show action guidelines regarding antisocial forces in the “ISEKI Group Code of Ethical Behavior”
and we have prepared a system to reject antisocial forces and relevant activities.

The General Affairs Department isin charge of control and correspondence regarding the issue, and depending on the circumstances we act inconsultation with the relevant section. We maintain ordinary contacts and association with external organizations
such as the police department, anti violation movement promotion centers and lawyers, thus preparing a system tocope with antisocial forces. We also belong to the Metropolitan area violation prevention association to receive
regular guidance andsharing of information.

2) Important issues
In the midst of a drastically changing market environment, we will speed up our earning structure reform inorder to build corporate fundamentals which will enable us to secure a stable earning for the foreseeable future.
Along with our efforts to maintain and expand sales through enhanced customer satisfaction by way of providing
high quality products at low prices and offer service from the standpoint of customers, we endeavor to establish
low-cost structure and strengthen consolidated financial stability.

A. Recovery of domestic sales and expansion of overseas sales
While competition in the market intensifies, we position “Recovery of domestic sales and expansion ofoverseas sales” as our most important managerial issue, trying to attain comprehensive enhancement of efficiency,
quality, price and service by concentrating on the total group potentiality to strengthen our product competitiveness.
We will not only carry out fundamental quality improvement of products, with an accurate comprehension of themarket needs, but also make a timely product planning and introduction to the market. In the domestic market, we
aim at achieving a recovery of sales by promoting efficient sales promotion, taking advantage of sales companies
with wide territories and a functional new organization, as well as by further enhancement of customer satisfaction
by strengthened sales and service performance power. Also, in regard to favorably expanding overseas sales, we will
try to expand further sales by recovery of the North American market through the introduction of new products andstrengthening of our sales and service system in Europe where solid demand continues and in the Asian market
which has potential growth.

B. Securing of profitability by cost structure reformIn the midst of a substantial hike in material prices we will make efforts at all company and divisionlevels to secure profitability by trying to reduce costs, through reduction of administration losses and cost reduction.

10

C. Reform of consciousness to be more “Communicative corporate culture”.
During the fiscal year under review, ISEKI Group has been dedicated to establishing a group control
system. We will create a more communicative corporate culture in response to our policy of obligatory internal
control reporting systems and changes in the accounting standards to implement a quarterly financial settlement.
Also, we are engaged in response to environmental issues as one of the most important managerial issues. We will
strengthen our commitment to resource saving, energy saving, recycling, exhaustion gas and noise, etc.

4. Other important issues of corporate management
Not particularly.

11Consolidated Financial Statements
Consolidated Balance Sheets

Account(millions of yen)
FY2007
FY2008(as at Mar. 31, 2007) (as at Mar. 31,2008)
AmountRatio

AmountRatio

Changefromprevious
periodAmount(Assets)
I Current Assets
Cash and time deposits
Notes and accounts receivable
Marketable securities
Inventories
Deferred income taxes
OthersAllowance for doubtful accounts

86,371
5,270
31,95023
45,511
578
3,162
(125)

47.6

80,691
5,817
28,84053
42,642
313
3,117
(93)

46.6

(5,680)546(3,110)29(2,868)
(265)
(45)
32

II Fixsed Assets
1. Tangible fixed assets
Buildings and structures
Machinery,equipment and vehicles
Land
Construction in progress
Others

94,99080,152
15,608
9,725
50,562
1,139
3,116

52.4
44.2

92,506
79,820
16,2939,047
50,729
651
3,099

53.4
46.1

(2,484)
(332)
684
(678)
167
(488)
(17)

986

0.6

835

0.5

(151)

13,851
8,823
204
696
4,817
(691)

7.6

11,850
6,324
188
596
5,396
(655)

6.8

(2,000)(2,498)
(16)
(100)
578
36

%

2. Intangible fixed assets
3. Investments and other assets
Investment securities
Long-term loans
Deferred income taxes
OthersAllowance for doubtful accounts
Total Assets

181,362

12

100

%

173,198

100(8,164)

Consolidated Balance Sheets

Account(millions of yen)AmountI(Liabilities)
Current Liabilities
Notes and accounts payable, trade
Short-term borrowings
Bonds(due within one year)
Long-term debt
(due within one year)
Accrued income taxes
OthersII Long - term Liabilities
Bonds
Long-term debt
Deferred income taxes
Deferred tax liability from land
revaluation gain
Accrued retirement benefits for

Ratio

Amount%83,02642,352
24,150Changefromprevious
period

FY2008(as at Mar.
31,2008)

FY2007(as at Mar.
31,2007)

45.8

Ratio

Amount%83,06640,78825,09248.0

40(1,564)
942

140

100

(40)

7,525

9,469

1,944

612
8,245

511
7,103

(101)
(1,141)

42,612
8,045
18,455
1,226

23.5

37,575
2,545
20,726854

21.7(5,036)(5,500)
2,271
(372)

7,595

7,595

－

5,185

4,164

(1,021)

benefits

306
1,797

318
1,371

12
(426)

Total Liabilities(Net Assets)
I. Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock

125,63869.3 120,641

69.7

40,98522,784
12,815
5,548(163)
13,153

22.6
12.6
7.1
3.0
(0.1)
7.2

39,51422,784
12,815
4,081(167)
11,46622.8 (1,470)
13.1
－
7.4
－
2.4 (1,466)
(0.1)
(4)
6.6 (1,686)

2,598
10,527

1.4
5.8

907
10,5270.5
6.1(1,690)
－

28
1,585

0.0
0.9

31
1,575

0.0
0.9

3
(10)

30.7 52,556
100 173,198

30.3
100

(3,167)(8,164)

employees

Accrued directors' retirement
OthersII. Difference of appreciation and
Net unrealized holding gain on
securities
Land revaluation reserve
Foreign currency translation
adjustments
III. Minority interests
in Consolidated Subsidiaries
Total Net Assets
Total Liabilities and Net Assets

55,724
181,362

13(4,996)

Consolidated Statement of Income

Account(millions of yen)
ChangeFY2008from(Apr. 1,2007
previous- Mar. 31,2008)
period

FY2007(Apr.1,2006- Mar. 31,2007)
AmountRatio

Amount%Ratio

Amount%I Net sales
II Cost of sales
Gross Profit

153,728
105,30948,419100

144,714
99,602
45,112

100

68.5
31.5

68.8
31.2

(9,014)(5,707)(3,307)

III Selling, general and administrative
expenses
Operating Income

46,175
2,243

30.0
1.5

44,376
735

30.7
0.5

(1,799)(1,508)IV Non-operating Income
Interest and dividend income
OthersV Non-operating Expenses
Interest expenses
OthersOrdinary Income

1,509
358
1,150
2,476
1,135
1,341
1,276

0.9

1,599
366
1,232
2,300
1,312
988
34

1.1

90
7
82
(176)
177
(353)
(1,241)

44
44

0.0

1,447
56

1.0

VI Extraordinary Gains
Gain on sale and disposal of property,
plant and equipment
Gain on sale of investment securities
Reversal of allowance for diredors'
retirement benefits
OthersVII Extraordinary Losses
Loss on sale and disposal of property,
plant and equipment
Impairment loss
Loss on bad debt
Transfer to allowance for
doubtful accounts
Special retirement benefits
Cost of measures for product recall
OthersIncome before income taxes
and minority interests
Income taxes
Reversal of past year corporate and other taxes

Income taxes, deferred
Minority interests in consolidated
subsidiaries
Net Income

1.6

0.8

1.6

0.0

1,403
12

－

1,346

1,346

－
－
513

28
15
2,004

28
15
1,490

0.3

1.4

312
25
－

282
－
385

(29)
(25)
385

119
－
－
55
807

0.5

－
920
180
235
(521)

(0.4)

(119)
920
180
180
(1,329)

866
－
(112)
35

0.6
－
(0.1)
0.0

649
(852)
1,139
8

0.4
(0.6)
0.8
0.0

(216)
(852)
1,252
(27)

18

0.0

(1,466)(1.0)(1,485)14

Consolidated Statement of Changes in Net Assets
FY 2007 (Apr.1, 2006-Mar. 31, 2007)
当(millions of yen)
Shareholders' equity

Capitalsurplus

Commonstock

Retainedearnings

Treasury
stock

Total
shareholders'equity22,784

12,815

6,207

(154)

41,653

Dividends from surplus

－

－

(677)

－

(677)

Net income

－

－

18

－

18

Purchse of tresury stock

－

－

－

(8)

(8)

Net changes of items other thanshareholders'equity

－

－

－

－

－

Total changes of items during the period

－

－

(659)

(8)

(667)

22,784

12,815

5,548

(163)

40,985

Balance at March 31, 2006
Changes of items during the period

Balance at Mar. 31, 2007

Difference of appreciation and conversion
Total
Foreigndifference
currencyoftranslation appreciation
adjustments
andconversion

Minority
Interests

Total net
assets13,4381,558

56,650

－

－

－

(677)

－

－

－

－

18

－

－

－

－

－

(8)

Net changes of items other thanshareholders'equity

(297)

－

12

(285)

27

(258)

Total changes of items during the period

(297)

－

12

(285)

27

(926)

Balance at March 31, 2007

2,598

10,52728

13,153

1,585

55,724

Net unrealized
holding gains
on securities

Land
revaluation
reserve

2,896

10,527

15

Dividends from surplus－－

Net income－

Purchase of treasury stock

Balance at March 31, 2006
Changes of items during the period

15Consolidated Statement of Changes in Net Assets
FY 2008 (Apr.1, 2007-Mar. 31, 2008)
当(millions of yen)
Shareholders' equity

Commonstock

CapitalsurplusRetainedearnings

Treasury
stock

Total
shareholders'equity22,784

12,815

5,548

(163)

40,985Net loss－－(1,466)－(1,466)

Purchse of tresury stock

－

－

－

(4)

(4)

Net changes of items other thanshareholders'equity

－

－

－

－

－

Total changes of items during the period－－(1,466)(4)(1,470)22,784

12,815

4,081

(167)

39,514

Balance at March 31, 2007
Changes of items during the period

Balance at Mar. 31, 2008

Difference of appreciation and conversion

Net unrealized
holding gains
on securities

Land
revaluation
reserve

Foreigncurrencytranslation
adjustments

Total
differenceofappreciation
andconversion

2,598

10,52728

Net loss－－

Purchase of treasury stock－

Net changes of items other thanshareholders'equity
Total changes of items during the period

Balance at March 31, 2007

Minority
Interests

Total net
assets13,153

1,585

55,724－－－(1,466)

－

－

－

－

(4)

(1,690)－3(1,686)(10)(1,696)(1,690)－3(1,686)(10)(3,167)907

10,52731

11,466

1,575

52,556

Changes of items during the period

Balance at March 31, 200816

Consolidated Statement of Cash Flows(millions of yen)
FY2007(Apr.1, 2006
- M ar.31,
2007)

FY2008(Apr.1, 2007
- Mar.31,
2008)

Change fromprevious
periodIncom e before in come taxes and minority interests
Depreciation and amo rtization
Impairment loss
Goodwill Amortization
Increase in reserve for retirement b enefits
Loss (gain) on sales of investment securities
Interest and dividend income
Interest expenses
Effect of exchan ge rate changes
Loss on sales of tangible and intangible fixed assets
Loss on liquidatio n of a subsidary
Decrease in n otes and accounts receivable
Decrease(increase)in inventories
Increase(decrease) in no tes and accounts payable
OthersSubtotal

807
3,708
25
(118)
376
－
(358)
1,015
15
268
－
2,896
(5,594)748(1,202)
2,587

(521)
4,363
－
(337)
(1,021)(1,346)
(366)
1,163
(142)
226
920
3,110
2,868
(1,564)(1,022)
6,328(1,329)
654
(25)
(219)
(1,397)(1,346)
(7)
148
(157)
(41)
920
213
8,462
(2,312)180
3,740Interest and dividends received
Interest paid
Special retiremen t benefits paid
Incom e taxes paid
Refunded inco me taxes

356(1,025)－(1,591)575

370(1,162)
(920)
(813)
59

13
(136)
(920)
778
(516)

Net cash provided by (used in) operating activities
Cash Flows from Investing Activities

902

3,861

2,958

Payments for purchases of marketable securities
Pro ceeds from sale of short-term securities
Payments for purchases of tangible and intangible fixed assets
Pro ceeds from sale of tan gible and intangible fixed assets
Payments for purchase of investment securities
Pro ceeds from sale of in vestment securities
Paymemt for purchase o f subsid iary
Net decrease in lon g-term loans
Net decrease in time deposits
Others(23)
146(5,692)
990
(100)
－
(276)
33
96
106

(23)
23
(5,211)695(1,615)
2,597
－
35
155
438

0
(123)
480
(295)
(1,515)
2,597
276
2
58
331

Net cash used in (provided by)investing activities
Cash Flows from Financing Activities(4,718)(2,904)

1,813

Net decrease in short-term borrowings
Pro ceeds from long-term debt
Repayments of long-term debt
Redemption of bonds
Payments for purchases of treasury stock
Payment of dividends
Others

4,255
18,180(19,437)
(100)
(8)
(677)
(3)

929
12,490(8,274)(5,540)(4)－(13)(3,326)(5,690)11,163(5,440)
4
677
(9)

2,207

(412)

(2,620)3(1,604)
6,589

157
702
4,985

154
2,306
(1,604)

4,985

5,687

702

Account

I

II

III

Cash Flows from Operating Activities

Net cash used in financing activities
Effect of Exchange rate Changes on Cash andCash Equivalents
Net Decrease in Cash and Cash Equivalents
V
VI Cash and Cash Equivalents at beginning of year
VII Cash and Cash Equivalents at end of yearIV17

Important Basic Items for Prepare Consolidated Financial Statements
1.

Scope of consolidation
Number of consolidated subsidiaries
29 companies(including Iseki-Matsuyama Mfg. Co., Ltd., Iseki-Kumamoto Mfg. Co., Ltd., Iseki-Hokkaido Co., Ltd. andIseki-Tohoku Co., Ltd.)

2. Scope of the equity method companies
The equity method is not applied to any of the group companies.
3. Consolidated accounting period

Of the consolidated subsidiaries, 15 companies (including Iseki-Hokkaido Co., Ltd.) use an
end-of-period balance sheet date of December 31. Fourteen companies (including Iseki-Matsuyama Mfg.
Co., Ltd.) use a balance sheet date of March 31.With regard to the preparation of the consolidated financial
statements, the financial statements as of the balance sheet dates of respective companies are used. And
necessary adjustments at consolidation are made for any significant transactions that occur between the
consolidated balance sheet date and these dates.
4.

Accounting policies(1) Valuation basis and methods of important assets(a) Securities
Held-to-maturity debt securities ...................... recorded at amortized cost
Other securities- Securities with fair market value............. recorded at market value, based on the fair market priceat the closing date of the consolidated reporting period.
(Any estimate variance is credited or debited toShareholders’ Equity)- Securities without at fair market value.... recorded at cost, based on the moving-average method(b) Inventories ........................................................ mainly recorded at the lower of cost or market value
using the gross average method(c) Derivatives........................................................ recorded using the market value method(2) Depreciation methods for material depreciable assets(a) Tangible fixed assets
The straight-line method is used to depreciate tools. For others, the declining-balance method is used.
However, for new buildings (not including building fixtures and furnishings) acquired on or after April
1, 1998, the straight-line method is used.
(Change in accounting policy)
In response to the revision of the Corporate Tax Law (Law No.6, March 30, 2007, Law to revise part of,
the Income Tax Law) and (Cabinet order No.83, March 30, 2007, Cabinet order to revise part of theenforcement ordinance of the Corporate Tax Law), ISEKI and its domestic consolidated subsidiaries
have changed to employ a method based on the revised corporate tax law in regard to tangible fixed
assets acquired on and after April 1, 2007. The impact on profit and loss is negligible.
(Additional information)
In response to the revised Corporate Tax Law, and starting from the fiscal year under review, ISEKI

18

and its domestic consolidated subsidiaries are employing a method to depreciate in a straight-line infive years after depreciation had been completed to the depreciable limited amount in regard totangible fixed assets acquired on or before March 31, 2007.
As a result, compared with the former method, operating income and ordinary income were reducedby ¥427 million. Also, before tax, net loss increased by ¥427 million.
(b) Intangible fixed assets
Straight-line method is used .However, software for internal use is depreciated using the straight-line
method over an expected useful life within the company of five years, while software for marketing isdepreciated using the straight-line method over an expected marketable period of three years.
(3) Allowances and reserves(a)Allowance for doubtful accounts
A likely unrecoverable amount is calculated by applying the historical bad debt ratio to common
receivables. For specific receivables, such as doubtful debt receivables, allowances are made byindividually evaluating the likelihood of them being collected.

(b) Accrued retirement benefits for employees
Accrued retirement benefits for employees is recorded as at the end of the consolidated accounting
period, and is principally based on the amounts for the obligation for employees' retirement benefits andpension plan assets. Disparities arising out of changes to accounting standards are expensed pro rata over
15 years. Past service liabilities are amortized using the straight-line method over the average of theestimated remaining years of service. Actuarial differences are amortized using the straight-line method
over the average of the estimated remaining years of service, with the first expense being recognized in
the following consolidated fiscal period.
(c) Accrued directors’ retirement benefits
The company and some of the consolidated subsidiaries record an accrued directors’ retirement benefits
to provide for directors' retirement benefits in an amount as required by companies’ internal
regulations.
(4) Foreign currency translation
Monetary assets and liabilities in foreign currencies are translated into yen at the rates of exchange in effectat the balance sheet date. Gains or losses resulting from the translation are credited or charged to income.
Balance sheet accounts (except for shareholders’ equity) and revenue and expense accounts of the overseas
subsidiary are translated into yen at the rates of exchange in effect at the balance sheet dates. Differences
arising from the translation are presented as “Foreign currency translation adjustments” in shareholders’equity and financial statements.
(5) Leases
Finance leases, other than those leases which transfer the ownership of the assets to the lessee, areaccounted for based on the regular treatment of operating leases.
(6) Hedge accounting(a) Hedge accounting
Recorded in accordance with deferred hedge accounting. Such receivables and payables, which aredenominated in foreign currencies and for which forward exchange contracts have been entered, arerecorded using the forward exchange rates.
(b) Hedging instruments and hedged items(i) Hedging instruments
Forward exchange contracts and interest rate swap agreements(ii) Hedged items
Receivables and payables denominated in foreign currencies and borrowings(c) Hedging policies
Forward exchange contracts and interest rate swap agreements are entered into in order to hedge the19risks associated with fluctuations in foreign currencies exchange rates and interest rates.
(7) Other notes pertaining to the preparation of the Consolidated Financial Statements
Accounting treatment of consumption tax
Consumption tax and local consumption taxes are accounted for using a tax-exclusive method.

5. Evaluation of consolidated subsidiaries’ assets and liabilities
The market value method is used to value the consolidated subsidiaries’ assets and liabilities.

6. Amortization of goodwill and negative goodwill
The consolidation adjustment account is amortized by the straight line method over a period of no longer
than 20 years.

7. Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks with draw able on demand, andshort-term investments which are readily convertible to cash subject to an insignificant risk of any change
in their value and which were purchased with an original maturity of three months or less.

Notes(Consolidated Balance Sheet Information)
FY2008
Variance
FY2007
Accumulated depreciation of
1. tangible fixsed assets
87,024 million yen
87,995 million yen
970 million yen
2. Guaranteed liabilities
9,706 million yen
9,639 million yen(66 million yen)
3. Notes receivable less discount65 million yen
98 million yen
32 million yen)
4. Endorsed notes receivable
639 million yen
507 million yen(132 million yen)
5. Matured bill as of the end of consolidated fiscal year
The last day of the current fiscal year fell on a holiday of all financial institutions. The recording is made assuming they
were settled on the maturity date. Matured bills as of the end of current consolidated fiscal year are as follows.
Notes receivable
25 million yen
Notes payable
2,274 million yen
Notes payable for equioment
169 million yen
6. Revaluation of land for business use
Iseki has revalued its land for business use pursuant to the law (Law No. 19, announced on March 31, 2001) whichrevises parts of the law relating to the revaluation of land. The equivalent tax related to the change in the said
revaluation has been recorded in the liabilities (fixed liability) as a "Deferred tax liability from land revaluation gain"・ Revaluation method
・・・・・The revaluation of land has been determined using a reasonable adjustment to theassessed value of the fixed assets as stipulated in Paragraph 3, Article 2 of theenforcement order (Government ordinance number 119, announced on March 31,
1998).
・ Revaluation date・・・・・March 31, 2001
・ Variance between themarket value of therevalued land at the end of・・・・(9,582 million yen)
the period and therevalued book value

20

(Consolidated Statement of Income Infomation)

1. Research and development expenses

FY2007

FY20084,498 million yen

3,894 million yen

Variance(603) million yen

2 . Impairment loss
FY 2007 (April 1, 2006-March 31, 2007)(millions of yen)
Usage

Type

Idle property

Land
Buildings, land
Total
(Reason to recognized impairment loss)

Location

Impairment loss

Ebetsu-shi, Hokkaido
Tsugaru-shi, Aomori Pref.

17
8
25

We realized impairment loss of the above assets as they are not being used, with no prospect to be used in
the future, and besides, market price of the land is declining.
(Measurement of recoverable amount)
Recoverable amount is measured using net selling price. In case of land, the price is determined byapplying reasonable adjustments to the assessed value of fixed assets for property tax.
FY 2008 （April 1, 2006-March 31, 2008）
There was no corresponding impairment loss.
(Consolidated Statements of Changes in Net Assets)
FY 2007 （April 1, 2006-March 31, 2007）

1. Matters concerning the classes and number of outstanding stock and classes and number of treasury stock.
Number of shares(as of Mar. 31, 2006)

Decrease in
Increase in
Number of shares
number of shares number of shares(as of Mar.31, 2007)
during period
during period(Number of outstanding shares)
226,536,329
226,536,329－－
Common stock(Treasury stock)666,946
23,167690,113－
Common stock
Increase in the number of shares, 23,167 shares during the period was by purchasing of shares below stock tradingunit.

2. Matters concerning dividends（Resolution）
General meeting ofshareholders(June 27, 2006)

Total amount of Dividend per
dividends
shareClass of shares
Date of record(millions of yen)
(yen)

Effective dateCommon stockJun.27,2006

677

3

Mar.31,2006

FY 2008 （April 1, 2006-March 31, 2007）
Number of shares(as of Mar. 31, 2007)

Decrease in
Increase in
Number of shares
number of shares number of shares(as of Mar.31, 2008)
during period
during period(Number of outstanding shares)
226,536,329
226,536,329－－
Common stock(Treasury stock)690,113
21,396
711,509－
Common stock
Increase in the number of shares, 21,396 shares during the period was by purchasing of shares below stock trading
unit.

21

(Consolidated Statements of Cash Flows Information)

Reconciliation between the end of period balance of cash and cash equivalents and the amount reported in
the Consolidated Balance Sheet.
FY2007
Cash and time deposits

FY2008

Variance

5,270 million yen

5,817 million yen

546 million yen

3 months or more

(285)

(130)

155

Cash and cash equivalents

4,985

5,687

702

Time deposits with terms of(Segment Information)
1. Business Segment Information
For this period (April 1, 2007 – March 31, 2008) and the previous period (April 1, 2006 – March 31, 2007),the total sales, operating income, and total assets of the “Agricultural machinery related operations” segment
accounted for more than 90% of all segments. Accordingly, the breakdown of segment information by businesstype is not presented.

2. Geographical Segment Information
For this period (April 1, 2007 – March 31, 2008) and the previous period (April 1, 2006 – March 31, 2007), thetotal sales and total assets of the “Japan” segment accounted for more than 90% of all segments. Accordingly, thebreakdown of segment information by region is not presented.

3. Overseas sales Information
FY 2007 (April 1, 2006 – March 31, 2007)(millions of yen)
The

EuropeOthers

Total

UnitedStatesI

Overseas sales

II

Consolidated net sales

III

Overseas sales as a percentage ofconsolidated net sales

(%)

6,751

8,936

3,165

18,853－－－

153,728

4.4

5.8

2.1

12.3

22

FY 2006 (April 1, 2007 – March 31, 2008)(millions of yen)
The

EuropeOthers

Total

UnitedStatesI

Overseas sales

II

Consolidated net sales

5,679

11,2205,141

22,041－－－

144,714

3.9

7.8

3.5

15.2

III Overseas sales as a percentage ofconsolidated net sales(%)(a) Countries and regions are defined based on geographical proximity.
(b) Classification by Area
Europe: France, Germany, the United Kingdom, Belgium, Switzerland, the Netherlands, etc.
Other geographical areas: South Korea, Taiwan, China, Thailand, Australia, New Zealand, etc.

(Tax Effect Accounting)1.

Itemized basis of deferred tax assets and deferred tax liabilities
FY2007

FY2008(Deferred tax assets)
Accrued retirement benefits for employees

1,473 million yen

662 million yen

Accrued bonuses

325

140

Unrealized gains on sales of inventories

55

50

Tax loss carry forwards

501

103

Others426

191

Offset to deferred tax liabilities(1,507)(239)

Net deferred tax assets

1,275

909

(Deferred tax liabilities)
Deferred gain on sale of properties
Prepaid pension cost
Net unrealized holding gain on securities

175 million yen

113 million yen

541
1,735

106
648

315

274

Offset to deferred tax assets(1,507)(239)

Net deferred tax liabilities

1,260

902

Others23

Securities
1. Held-to-maturity debt securities with fair market value(millions of yen)
FY2008(year ended March 31, 2008)

FY2007(year ended March 31, 2007)
Category

as recorded on
Consolidated
Balance Sheet

Fair Market
Value

Variance

as recorded on
Consolidated
Balance Sheet

Fair Market
Value

Variance

Securities whose market value dose not exceed thevalue recorded in the Consolidated Balance Sheet

250

248

(1)

250

249

0

Total

250

248

(1)

250

249

0

2. Other securities with fair market value(millions of yen)
FY2007(year ended March 31, 2007)

Category
Purchase cost

as recorded on
Consolidated
Balance Sheet

Variance

Purchase cost

as recorded on
Consolidated
Balance Sheet

2,718

7,064

4,346

2,994

4,617

1,623

2,718

7,064

4,346

2
2,996

2
4,620

0
1,623

Shares

16

10

(5)

598

501

(96)

Others

100

92

(7)

97

77

(19)

16
2,834

103
7,168

(12)
4,333

696
3,692

579
5,199

(116)
1,506

Securities whose market value
exceeds the value recorded in the Shares
Consolidated Balance Sheet(Subtotal)
Securities whose market value
dose not exceed the value
recorded in the Consolidated
Balance Sheet(Subtotal)
Total

FY2008(year ended March 31, 2008)

3. Major securities not valued at fair market value
Category(1)(2)

Variance(millions of yen)

FY2007 (year ended March 31, 2007)

FY2008 (year ended March 31, 2008)

in the Consolidated Balance Sheetin the Consolidated Balance Sheet

Held-to-maturity securities
Discounted bank debenture
Other securities
Non-listed shares (excluding over-thecounter shares)

24

23

23

1,326

826

(Employees’ Retirement Benefits)
1.

Overview of Employees’ Retirement Benefit Plans

Iseki and its consolidated subsidiaries maintain both an approved pension plan and a lump-sum
benefit retirement plan as defined benefit plans. Also, premium severance benefits are paid when certain
employees retire.
2.

Employees’ retirement benefits obligations information

FY2007
FY2008(30,208)(25,410)
1 Retirement benefit obligation
14,56011,196
2 Pension plan assets(15,647)(14,213)
3 Unfunded retirement benefit obligation
4 Unrecognized net transition obligation
11,683
10,2231,021
1,902
5 Unrecognized actuarial differences
(857)
(723)
6 Unrecognized past service liabilities(3,800)(2,811)
7 Net amount recorded on Consolidated
8 Prepaid pension cost
1,385
1,352
9 Accrued retirement benefits for employees(5,185)(4,164)
Notes: Some consolidated subsidiaries employ by simplified methods to estimate the benefits
obligation.
3.

Employees’ retirement benefits expenses information

1
2
3
4
5
6
7
8

Service costs
Interest costs
Expected return on pension plan assets
Amortized net transition obligations
Amortized actuarial differences
Amortized past service liabilities
Other expenses
Retirement benefits expenses( (1+2+3+4+5+6+7)
9 Special retirement benefits paid
Total (8+9)

FY2007

FY2008(millions of yen)(millions of yen)

1,408
501
(195)
1,460
232
(98)
51

1,514
495
(241)
1,460
215
(134)
64

3,360

3,374

－

920

3,360

4,295

Notes: The value of allocations to defined contribution pension plan is included within the “Other
expenses” item.

25

4.

The assumptions in calculating the retirement benefit obligation information

FY2008FY2007

1 Method used to apportion the expected
retirement benefit
2 Discount rate
3 Expected rate of return on pension
4 Amortization period of past service

Straight-line over theStraight-line over theperiodperiod
2.0%
2.0%
2.0%
2.0%
10-13 years
10-13 years(to be amortized using the straight-line method over the
average of the estimated remaining years of service.)

5 Amortization period of actuarial

10-13 years

differences
6 Amortization period of differences
due to accounting standard change

10-13 years(to be amortized using the straight-line method over the
average of the estimated remaining years of service.)
15 years
15 years(Per share information)(yen)
FY 2007

FY 2008

Net assets per share

239.71225.76

Net income per share

0.08(6.49)Net income per share after adjustment for dilutive securities

0.07

－

(Note) Basis of calculation of net income per share and net income per share after adjustment for dilutive
securities are as follows.
FY 2007

FY 2008

Net income per share
Net income per share on consolidated profit and loss statement

18(1,466)(millions of yen)
Net income attributed to common shares(millions of yen)

18

(1,466)

Net income not attributable to common shares(millions of yen)－－(shares)

225,856,320

225,836,333(millions of yen)－－(shares)

20,103,550

12,729,858(20,103,550)(12,729,858)

During period average number of common shares

Net income per share after adjustment for dilutive securities
Adjustment of net income
Increased number of common shares(equity warrants, shares)
Outline of deferred equity which was not included in thecalculation of net income per share after adjustment for dilutive
securities as it does not have dilutive effect.

26

－

－

(Omission from disclosure)
The following items of note were omitted from disclosure as the necessity of disclosure in summary
announcement of financial results is not considered big.
-lease commitments-

transactions with parties concerned-

Corporate union etc.

Also, the following items are omitted from disclosure as they have no corresponding fact.
-

derivative transactions-

stock options.

-

important issues which occurred later

Production, Orders & Sales
1. Production results per product –type(millions of yen)
FY2007(Apr 1, 2006
- Mar 31, 2007)

FY2008(Apr 1, 2007
- Mar 31, 2008)

Changefrom previous period

Product-type
Machinery for soil preparation

45,84343,514(2,329)Cultivating machinery

15,187

16,2931106

Harvesting and processing machinery

30,24625,499(4,747)

Parts and farming implements

2,576

2,295

(281)

Agricultural machinery related
Others

8,055
2,263

5,765
1,845

(2,290)
(418)

Total

104,173

95,213(8,959)2. Orders
We operate a system whereby production is based mostly on projected demand. We hardly ever produce on
3. Sales results per product-type(millions of yen)
FY2007(Apr 1, 2006
-Mar 31, 2007)
Product-type

amount

FY2008(Apr 1, 2007
- Mar 31, 2008）

ratio

amountChangefrom previous period

ratio

%

amount%ratio%

Machinery for soil preparation

44,64129.0

43,871

30.3

769

(1.7)

Cultivating machinery

11,755

7.7

13,841

9.6

2,085

17.7

Harvesting and processing machinery

29,671

19.3

25,329

17.5

4,342

(14.6)

Parts and farming implements

30,79820.0

28,965

20.0

1,833

(6.0)

Agricultural machinery related
Others25,13011,732

16.4
7.6

21,928
10,778

15.2
7.4

3,201
953

(12.7)
(8.1)

Total

153,728100

144,714

100

9,014

(5.9)

27

(2) Domestic(millions of yen)
FY2007(Apr 1, 2006
- Mar 31, 2007)

Product-type

amount

FY2008(Apr 1, 2007
- Mar 31, 2008)

ratio

amountChangefrom previous period

ratio

%

amount

ratio

%

%

Machinery for soil preparation

29,38921.8

26,93722.0(2,451)(8.3)

Cultivating machinery

10,5997.8

11,475

9.4

875

8.3

Harvesting and processing machinery

28,67021.3

24,232

19.7(4,437)(15.5)

Parts and farming implements

29,78822.1

27,86222.7(1,926)(6.5)

Agricultural machinery related
Others

24,864
11,562

18.4
8.6

21,532
10,632

17.5
8.7(3,332)(929)(13.4)
(8.0)

Total

134,875100

122,673100(12,202)(9.0)(3) Overseas(millions of yen)
FY2007(Apr 1, 2006
-Mar 31, 2007)
Product-type

amount

FY2008(Apr 1, 2007
- Mar 31, 2008）

ratio

amountChangefrom previous period

ratio

%

Machinery for soil preparation

15,251

Cultivating machinery
Harvesting and processing machinery
Parts and farming implements
Agricultural machinery related

amount

ratio

%

%

80.9

16,933

76.8

1,681

11.0

1,155

6.1

2,366

10.7

1,210

104.7

1,000

5.3

1,096

5.0

95

9.6

1,009

5.4

1,102

5.0

93

9.2

Others

265
169

1.4
0.9

396
145

1.8
0.7

130
(23)

49.1
(14.2)

Total

18,853100

22,041

100

3,187

16.9

28

Non-consolidated Balance Sheets

Account(millions of yen)
FY2007(as at Mar. 31, 2007)

FY2008(as at Mar. 31,2008)

AmountAmountRatio

Changefromprevious
periodAmountRatio(Assets)
I Current Assets
Cash and time deposits
Notes receivable
Accounts receivable
Marketable securities
Finished goods & parts for sales
Work in process
Raw materials & supplies
Advance payments
Prepaid expenses
Short-tern loans receivable
Deferred income taxes
OthersAllowance for doubtful accounts

67,863
1,988
6,129
24,364－
15,596
17
316
668
212
16,974
289
1,346
(39)

52.2

61,2991,957
7,077
21,12330
14,464
6
301
684
240
13,944
－
1,494
(25)

49.5

(6,563)(30)
948(3,240)30(1,131)
(11)
(14)
16
27
(3,029)
(289)
148
14

II Fixsed Assets
1. Tangible fixed assets
Buildings
Structures
Machinery & equipment
Auto and trucks
Tools, furniture and fixtures
Land
Construction in progress

62,19034,449
3,330
275
3,653
6
1,598
25,455
129

47.8
26.5

62,41634,787
4,244
265
3,090
7
1,571
25,515
93

50.5
28.1

225
338
913
(10)
(562)
1
(27)
59
(35)

2. Intangible fixed assets
Leasehold rights
Software
Others

576
85
422
68

0.4

459
85
270
103

0.4

(116)
－
(151)
34

27,165
8,607
17,660
1,912
364
2,168
(2,592)
(954)

20.9

27,1696,072
18,502
1,910
299
1,907
(260)
(1,263)22.0

3(2,535)
842
(1)
(64)
(260)
2,332
(309)

3. Investments and other assets
Investment securities
Investments in affiliated companies
Long-term loans
Long-term prepaid expenses
OthersAllowance for doubtful accounts
Allowance for loss in investments
Total Assets%

130,054

100

29

%

123,716100(6,337)

Non-consolidated Balance Sheets(millions of yen)Account

FY2008FY2007(as at Mar. 31,2007) (as at Mar. 31,2008)

Changefromprevious
periodAmountAmount(Liabilities)
I Current Liabilities
Notes payable, trade
Accounts payable, trade
Short-term borrowings
Long-term debt( due within one year)

Amount%47,56816,18912,540
10,200
4,341
516
2,621
154
264
96
644
32,411
7,795
13,031
1,061

Account payble, otherAccrued expenses
Appropriation of tax
Advances received
Deposits received
OthersII Long - term Liabilities
Bonds
Long-term debt
Deferred tax liability
Deferred tax liability from land
revaluation gain
Accrued retirement benefits for
employees
Accrued directors' retirement
benefits
Allowance for debr guarantee
Long-term deposits received
Total Liabilities(Net Assets)
I. Shareholders' equity
1.Common stock
1.Capital surplus
3.Retained earnings(1) Other retained earnings
Retained earnings carried forward
4.Treasury stock

36.6

24.9

%

48,294
14,886
13,714
10,100
6,170
589
2,199
140
181
79
231
28,461
2,395
16,130
702

39.0

23.0

725
(1,303)
1,174
(100)
1,828
72
(421)
(13)
(82)
(16)
(412)
(3,949)(5,400)
3,098
(359)

7,595

－

1,594

504

(1,090)

228
40
1,063
79,979246－
887
76,755

17
(40)
(176)
(3,224)

61.5
%
28.4
17.5
10.3
0.7

(0.1)

35,52522,784
13,366
(458)
(458)
(458)
(167)

13,115

10.1

2,588
10,52750,075130,054

30

Ratio

7,595

36,95922,784
13,366
971
971
971
(163)

II. Difference of appreciation and conversion
1.Net unrealized holding gain on
securities
2.Net unrealized holding gain on land
Total Net Assets
Total Liabilities and Net Assets

Ratio

62.0
%
28.7
18.4
10.8
(0.4)

(0.1)

(1,434)－－(1,430)(1,430)(1,430)(4)

11,436

9.3(1,678)

2.0
8.1

909
10,5270.8
8.5(1,678)
－

38.5
100

46,961
123,71638.0
100(3,113)(6,337)

Non-consolidated Statement of Income(millions of yen)
FY2007(Apr.1,2006- Mar. 31,2007)

FY2008(Apr. 1,2007- Mar. 31,2008)

Changefromprevious
periodAmountRatio

AmountRatio

AmountI Net sales
II Cost of sales
Gross Profit
III Selling, general and administrative
expenses
Operating Income

90,78476,834
13,950

%
100
84.6
15.4

84,96573,067
11,897

%
100
86.0
14.0

(5,819)(3,767)(2,052)

13,205
744

14.6
0.8

12,353
(455)

14.5
(0.5)

(851)
(1,200)IV Non-operating Income
Interest and dividend income
Rents
OthersV Non-operating Expenses
Interest expenses
Rental assets expense
OthersOrdinary Income

2,575
808
1,221
546
2,479
486
807
1,185
841

2.8

3.0

0.9

2,580
764
1,429
386
2,318
597
1,154
567
(193)

(0.2)

4
(43)
208
(160)
(160)
110
347
(618)
(1,035)

VI Extraordinary Gains
Gain on sale and disposal of property,
plant and equipment
Gain on sale of investment securities
Gain on allowance for doubtful accounts
Reversal of allowance for directors'
retirement benefits
OthersVII Extraordinary Losses
Loss on sale and disposal of property,
plant and equipment
Evaluation loss on investment securities
Evaluation loss on stock of subsidiaries
Evaluation loss on loans
Transfer to allowance for
doubtful accounts
Provisions for allowance for loss on investment
Evaluation loss on investments and loans toaffiliates
Provision for allowance for loss on guarantees
OthersIncome before income taxes
Income taxes
Income taxes, deferred
Net Income

495

0.5

1,738

2.0

1,242

Account

31

2.7

29
－
461
－
4
6,296

2.7

37
1,346
284
28
6.9

40
1,905

8
1,346
(177)
28
2.2

36
(4,391)

102
－
3,853
244

166
74
－
179

64
74
(3,853)
(64)

1,142
954

92
309

(1,050)
(645)

－

900

900

－
－
(4,959)

(5.5)

180
3
(360)

(0.4)

180
3
4,598

24
(165)
(4,818)

0.0
(0.2)
(5.3)

23
1,046
(1,430)

0.0
1.3
(1.7)

(1)
1,211
3,388

Non-consolidated Statement of Changes in Net Assets(millions of yen)

FY 2007 (Apr.1, 2006-Mar. 31, 2007)
Shareholders' equity
Capital surplus

Commonstock

Balance at March 31, 2006

22,784

Capitalreserve

Total
capitalsurplusCapitalsurplus10,994Retained earnings

2,371

13,366

Change of items during the period

Otherretainedearnings
Retainedearnings
carryfowardTotal
retainedearnings

Total
Treasuryshareholders'stockequity

6,468

6,468

(154)

42,465

(677)

(677)

－

(677)

Dividends from surplus

－

－

－

－

(4,818)(4,818)－(4,818)Net loss

－

－

－

－

－

－

(8)

(8)

Purchase of treaury stock

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

(5,496)(5,496)(8)(5,505)22,784

10,9942,371

13,366

971

971

(163)

36,959Net change of items other thanshareholders' quity
Total changes of items during theperiodBalance at March 31, 2007

Difference of appreciation and conversion
Total
Net
Total netLand
difference of
unrealized
assetsrevaluation
appreciation
holding gains
reserveand coversion
on securities
Balance at March 31, 2006

2,883

10,527

13,41055,875

Dividends from surplus

－

－

－

(677)

Net loss－－－(4,818)Purchase of treaury stock

－

－

－

(8)

Change of items during the period

Net change of items other thanshareholders' quity
Total changes of items during theperiod

(295)

－

(295)

(295)

(295)

－

(295)

(5,800)

Balance at March 31, 2007

2,588

10,527

13,11550,07532

FY 2008 (Apr.1, 2007-Mar. 31, 2008)
Non-consolidated Statement of changes in Net Assets
FY2008(Apr. 1, 2007-Mar. 31, 2008)(millions of yen)
Shareholders' equity
Capital surplus

Commonstock

Balance at March 31, 2007

Capitalreserve

Retained earnings
Otherretainedearnings

Total
capitalsurplusCapitalsurplusRetainedearnings
carryfowardTotal
retainedearnings

Treasury
stock

Total
shareholders'equity22,784

10,9942,371

13,366

971

971

(163)

36,959Net loss

－

－

－

－

(1,430)(1,430)－(1,430)Purchase of treaury stock

－

－

－

－

－

－

(4)

(4)

Net change of items other thanshareholders' quity

－

－

－

－

－

－

－

－

Total changes of items during theperiod－－－－(1,430)(1,430)(4)(1,434)22,784

10,9942,371

13,366

(458)

(458)

(167)

35,525

Change of items during the period

Balance at March 31, 2008

Difference of appreciation and conversionNet
unrealized
holding gains
on securities

Land
revaluation
reserve

Total
difference ofappreciationand coversion

Total net
assets

2,588

10,527

13,11550,075Net loss－－－(1,430)Purchase of treaury stock

－

－

－

(4)

Net change of items other thanshareholders' quity
Total changes of items during theperiod(1,678)－(1,678)(1,678)(1,678)－(1,678)(3,113)

Balance at March 31, 2008

2,588

10,527

11,436

46,961

Balance at March 31, 2007
Change of items during the period

33

Important Accounting Policies
1. Valuation basis and methods of important assets(1) Held-to-maturity debt securities……………………recorded at amortized cost(2) Securities of subsidiaries and affiliates……...recorded at cost, based on the moving-average method(3) Other securities
Securities with fair market value………………… recorded at market value, based on the fair market price at
the closing date of the consolidated reporting period.
(Any estimate variance is credited or debited toShareholders’ Equity)

Securities without at fair market value…………recorded at cost, based on the moving-average method

2.Valuation basis and methods of Derivatives
Derivatives……………………………………recorded using the market value method
3. Depreciation methods for inventories(1) Finished goods and parts for sales…………………..recorded at lower of cost or market method, based on
periodic average method(2) Raw materials and supplies………………………...recorded at lower of cost or market method, based on
periodic average method
4. Depreciation methods for material depreciable assets(1) Tangible fixed assets
a. Buildings…………………………………………..

declining balance method (a straight-line method isused for new buildings (not including building
fixtures and furnishings) acquired on or after April 1,
1998.)

b. Tools………………………………………………..straight-line method
c. Others………………………………………………declining balance method(Change in accounting policy)
In response to the revision of the Corporate Tax Law (Law No.6, March 30, 2007, Law torevise part of, the Income Tax Law) and (Cabinet order No.83, March 30, 2007, Cabinet order torevise part of the enforcement ordinance of the Corporate Tax Law), ISEKI and its domestic
consolidated subsidiaries have changed to employ a method based on the revised corporate tax
law in regard to tangible fixed assets acquired on and after April 1, 2007. The impact on profit andloss is negligible.
(Additional information)
In response to the revised Corporate Tax Law, and starting from the fiscal year under review,
ISEKI and its domestic consolidated subsidiaries are employing a method to depreciate in astraight-line in five years after depreciation had been completed to the depreciable limited amountin regard to tangible fixed assets acquired on or before March 31, 2007.
As a result, compared with the former method, operating loss increased by ¥52 million andordinary loss and before tax, net loss increased by ¥358 million34

(2) Intangible fixed assets
Straight-line method is used .However, software for internal use is depreciated using thestraight-line method over an expected useful life within the company of five years, while software formarketing is depreciated using the straight-line method over an expected marketable period of three years.
5. Foreign currency translation
Monetary assets and liabilities in foreign currencies are translated into yen at the rates of
exchange in effect at the balance sheet date. Gains or losses resulting from the translation are credited or
charged to income.
6. Allowances and reserves(1) Allowance for doubtful accounts
A likely unrecoverable amount is calculated by applying the historical bad debt ratio to common
receivables. For specific receivables, such as doubtful debt receivables, allowances are made byindividually evaluating the likelihood of them being collected.

(2) Allowance for loss on investments
In order to be prepared for loss on investments in affiliates, an estimated amount of loss isappropriated in consideration of the financial situation etc. of the insured.
(3) Accrued retirement benefits for employees
Accrued retirement benefits for employees is recorded as at the end of the consolidated accounting
period, and is principally based on the amounts for the obligation for employees' retirement benefits andpension plan assets. Disparities arising out of changes to accounting standards are expensed pro rata over 15
years. Past service liabilities are amortized using the straight-line method over the average of the estimatedremaining years of service. Actuarial differences are amortized using the straight-line method over the
average of the estimated remaining years of service, with the first expense being recognized in the following
consolidated fiscal period.
(4) Accrued directors’ retirement benefits
The company and some of the consolidated subsidiaries record an accrued directors’ retirement
benefits to provide for directors' retirement benefits in an amount as required by companies’ internal
regulations.
(5) Allowance for loss on guarantees
In order to be prepared for loan guarantee loss, an estimated amount of loan loss is appropriated inconsideration of the financial situation etc. of the insured.
7. Leases
Finance leases, other than those leases which transfer the ownership of the assets to the lessee, areaccounted for based on the regular treatment of operating leases.

35

8. Hedge accounting(1) Hedge accounting
Recorded in accordance with deferred hedge accounting. Such receivables and payables, which aredenominated in foreign currencies and for which forward exchange contracts have been entered, are recorded
using the forward exchange rates.
(2) Hedging instruments and hedged items
a. Hedging instruments
Forward exchange contracts and interest rate swap agreements
b. Hedged items
Receivables and payables denominated in foreign currencies and borrowings(3) Hedging policies
Forward exchange contracts and interest rate swap agreements are entered into in order to hedge
the risks associated with fluctuations in foreign currencies exchange rates and interest rates.
9. Other important matters which provide basis for preparing financial statements(1) Accounting practice of consumption tax etc.
Accounting practice of consumption tax and local consumption tax is net of tax method.

36

Notes(Consolidated Balance Sheet infomation)
FY2008FY2007
1.

Accumulated depreciation of
tangible fixsed assets

2.

Assets to affiliated companies
Notes receivable

3.

4.
5.

Variance

53,317 million yen

52,880 million yen(436 million yen)

1,175 million yen

1,387 million yen

212 million yen

Accounts receivable

19,875 million yen

18,975 million yen(900 million yen)

Short-term loans

16,938 million yen

13,920 million yen(3,018 million yen)

Long-term loans

1,774 million yen

1,799 million yen(25 million yen)

Liabilities to affiliated companies
Notes payable

10,466 million yen

9,482 million yen(983 million yen)Accounts payable

10,175 million yen

11,516 million yen

1,341 million yen

Liabilities for guarantee

22,737 million yen

21,703 million yen(1,034 million yen)

(Incloding loan garantees)

270 million yen

239 million yen(31 million yen)

Matured bill as of the end of fiscal year
The last day of the current fiscal year fell on a holiday of all financial institutions. The recording is made assuming they were settled on thematurity date. Matured bills as of the end of current consolidated fiscal year are as follows.
Notes payable

1,711 million yen

Facility bills payable

162 million yen

Revaluation of land for business use
Iseki has revalued its land for business use pursuant to the law (Law No. 19, announced on March 31, 2001) which revises parts of thelaw relating to the revaluation of land. The equivalent tax related to the change in the said revaluation has been recorded in the liabilities(fixed liability) as a "Deferred tax liability from land revaluation gain" and the deducted amount has been recorded in the assets as a "Land・ Revaluation method
・・・・・The revaluation of land has been determined using a reasonable adjustment to the assessed value ofthe fixed assets as stipulated in Paragraph 3, Article 2 of the enforcement order (Government
ordinance number 119, announced on March 31, 1998).

6.

・ Revaluation date・・・・・March 31, 2001
・ Variance between the market
value of the revalued land at(9,582million yen)
the end of the period and the ・・・・
revalued book value(Consolidate d State me nt of Income Infomation)
FY2007

1. Sales to affiliated companies

FY200864,651 million yen

37

60,335 million yen

Variance(4,316

million yen)( Statement of Changes in Net Assets)
FY 2007 （Apr. 1, 2006-March 31, 2007）

1. Matters concerning the classes and number of treasury stock.
Increase in
number of shares
during period

Number of shares(as of Mar. 31, 2006)

Decrease in
number of shares
during period

Number of shares(as of Mar.31, 2007)(Treasury stock)
Common stock

666,946

23,167－690,113

Increase in the number of shares, 23,167 shares during the period was by purchasing of shares below stock trading unit.

(Tax Effect Accounting)Itemized basis of deferred tax assets and deferred tax liabilities

FY 2008 （Apr. 1, 2007-March 31, 2008）
Matters concerning the classes and number of treasury stock.
Increase in
number of shares
during period

Number of shares(as of Mar. 31, 2007)

Decrease in
number of shares
during period

Number of shares(as of Mar.31, 2008)(Treasury stock)
Common stock

690,113

21,396－

711,509

Increase in the number of shares, 21,396 shares during the period was by purchasing of shares below stock trading unit.

FY2007

FY2008(Deferred tax assets)
146

Accrued retirement benefits for employees

637－

Tax loss carry forwards

470－

Others226－(1,191)－

289－

Offset to deferred tax liabilities
Net deferred tax assets

million yen－ million yen

Accrued bonuses(Deferred tax liabilities)
Net gain from appreciation of other securities

1,720

million yen

604

Prepaid pension expenses

434－

Others98

98

Offset to deferred tax assets(1,191)－

Net deferred tax liabilities

1,061

702

38

million yen

(Change of Directors) (As of June 26, 2008)

1. Candidates for appointment as directors(New position)(Name)(Current position)

Managing Director

Yasuo Seike

Senior Corporate Officer

Head of Business Division

Deputy Head of Product Planning

Deputy Head of Product Planning

Department

Department

Senior general Manager ofSenior general Manager of BusinessBusiness Division

Division
Director

Yasunori Maki

Head of Financial Department

Corporate Officer
Deputy Head of Financial
Department

Director

Kazutaka Yamaji

Deputy Head of Business DivisionCorporate Officer
Deputy Head of Business Division

2. Candidates for appointment as corporate auditors(New position)(Name)(Current position)

Corporate Auditor

Katsuhisa Ishida

Chou Mitsui Business Co., Ltd.
Director & General Manager of
Shiba DivisionCorporate Auditor

Toshifumi Tsukitani

The Norinchukinn Trust &Banking Co., Ltd.
Managing Director

3. Retiring directors(Current position)(Name)(After retirement)

Representative Director & Executive

Hideki Arikawa

Senior Corporate Executive

Managing Director

Officer

Head of Business Division

Chairman of Iseki Kanto Co., Ltd.

Chairman of Iseki Kanto Co., Ltd.

Chairman of Iseki Kansai Co.,

Chairman of Iseki Kansai Co., Ltd.

Ltd.
Hiroyuki Nakano－(Current position)(Name)(After retirement)

Corporate Auditor

Hiroshi Ueno－

Corporate Auditor

Hiroyoshi Enokida－

Director & Advisor

4. Retiring auditors

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