Nov.15,2007
Name of listed company: ISEKI & CO., LTD.
Company Code:
6310(URL http://www.iseki.co.jp)
Representative: Title President
Title Corporate Executive Officer
Enquiries:
General Manager of Financial Dept.
Date of filing of the Interim Report:

Stock Exchange Listing Tokyo, Osaka
Head Office:Tokyo
Name Seiichiro Gamo
Name Yasunori Maki
Telephone: +81 3 5604 7671
Dec.21,2007

Summary Announcement of Consolidated Financial Results
for the Six Months Ended September 30, 2007

I. Financial Results for the six months ended September 30, 2007 (April 1, 2007－September 30, 2007)
A. Results of operations(Rounded down to millions of yen, % indicates changes from the previous period)

Net Sales
Operating Income
Ordinary Income
Net Income
Net Income per Share (yen)Non-diluted
Fully Diluted

Six Months
Ended Sep. 30,
2007
71,200(319)(377)(2,200)

%
(6.6)
―
―
―
―

Six Months
Ended Sep. 30,
2006
76,240
2,402
2,314
1,273

(9.74)－%(3.8)(19.3)(20.1)
4.9

Year
Ended Mar. 31,
2007
153,728
2,243
1,276
18

―
5.64
5.18

0.08
0.07

Notes:
Investment gain (loss) by equity method:
Six months ended Sep. 30, 2007：－

Six months ended Sep. 30, 2006：－

Year ended Mar. 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)

Six Months
Ended Sep. 30
2007180,791
52,67228.3
226.21

Notes:
Shareholders’ Equity:
Six months ended Sep. 30, 2007: 51,085 million yen
Six months ended Sep. 30, 2006: 55,463 million yen
Year ended Mar. 31, 2007:

54,138 million yen-1-

Six Months
Ended Sep. 30
2006
189,396
57,02929.3
245.57Year
Ended
Mar. 31, 2007
181,362
55,72429.8
239.71

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

Cash Flows from Operating Activities

Six Months
Ended Sep. 30
2007(2,869)Six Months
Ended Sep. 30
2006(4,177)Year
Ended
Mar. 31, 2007
902

Cash Flows from Investing Activities(243)(2,420)(4,718)Cash Flows from Financing Activities

4,853

6,874

2,207

Cash and Cash Equivalents
at End of Period

6,833

6,844

4,985

II. Payment of Dividends
Dividend per Share
End of Period
AnnualDate of Record
FY2007
FY2008FY2008 (Estimate)

-

(yen)

0.0

(yen)

0.0

III. Performance Forecast for the Fiscal Year ending March 31, 2008 (April 1, 2007－March 31, 2008)(Rounded down to Millions of yen,%)

Net Sales

Annual

149,000(3.1)

Operating Income

1,100(51.0)

Ordinary Income

100(92.2)Net Income(2,300)－Net Income per
Share (yen)(10.18)

IV. Others
A. Change in important subsidiaries during the period (change in specified subsidiaries which accompanies a change in the range ofconsolidation): 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 of Consolidated Financial
Statements”)
1) Change which accompanies revision of accounting standards: Yes
2) Change other than No.1.

None(Note) For details, please refer to Changes in accounting principles” stated in “Changes in essential matters which provide abasis for preparation of Consolidated Interim Financial Statements”), P14.
C. Outstanding shares (Common shares)
1) Outstanding shares (Including treasury shares)

2) Outstanding treasury shares

As of September 30, 2007

226,536,329 shares

As of September 30, 2006

226,536,329 shares

As of March 31, 2007

226,536,329 shares

As of September 30, 2007

700,128 shares

As of September 30, 2006

679,748 shares

As of March 31, 2007

690,113 shares(Note) Please refer to P21 “Per share information” as to the number of shares which provides a base for calculating net income
per share (consolidated).

-2-

(Reference) Outline of Non-consolidated financial performance
I. Financial Results for the six months ended September 30, 2007 (April 1, 2007－September 30, 2007)
A. Results of operations(Rounded down to millions of yen, %)Six Months
Ended Sep. 30,
2007
41,313

Net Sales
Operating Income
Ordinary Income
Net Income
Net Income per Share (yen)Non-diluted
Fully Diluted%(13.6)

157
462
(844)

Six Months
Ended Sep. 30,
2006
47,792

(0.3)

1,620
2,038
1,044

(13.8)(14.8)(19.8)(90.3)(77.3)―(3.74)%

Year
Ended Mar. 31,
2007
90,784744
841(4,818)

4.63(21.34)

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

Six Months
Ended Sep. 30
2007
120,980
48,371
40.0
214.19Total Assets
Net Assets
Shareholders’ Equity to Total Assets Ratio (%)
Net Assets per share(yen)

Six Months
Ended Sep. 30
2006
134,877
56,02141.5
248.04Year
Ended
Mar. 31, 2007
130,054
50,07538.5
221.72

Notes:
Shareholders’ Equity:
Six months ended Sep. 30, 2007: 48,371 million yen
Six months ended Sep. 30, 2006: 56,021 million yen
Year ended Mar. 31, 2007:

50,075 million yen

II. Performance Forecast the Fiscal Year Ending March 31, 2008 (April 1, 2007－March 31, 2008)(Rounded down to millions of yen, % indicates changes from the previous period)

Net Sales

Operating Income

Ordinary Income

Net Income

Net Income per
ShareMillions of Yen %Millions of Yen %Millions of Yen %Millions of Yen %Yen－(9.74)

Annual
86,000(5.3)(1,400)－(1,100)－(2,200)Note. Cautionary statement regarding appropriate use of performance forecasts, and other special comments.
1. Descriptions contained in this announcement regarding future such as business performance forecasts are based on
information available as of the day of this announcement, and actual results could differ considerably depending on
various factors.
2. Full year business performance forecasts announced on August 9, 2007 have been revised as stated above. As for thereasons of the revision, please refer to “Notice of Revision of Business Performance Forecast” announced today,
November 15, 2007.

-3-

Management Performance & Financial Position
1. Management Performance(1) The Interim Period in Review

Sales in the interim period in review declined by ¥5.039 billion from the same period last year to ¥71.2
billion (down 6.6%). Domestic sales dropped by ¥5.725 billion to ¥61.825 billion (down 8.5%) due to a sluggish
agricultural machinery market. In the meantime, overseas sales increased by ¥0.685 billion to ¥9.375 billion (up 7.9%),
compensating for the effect of inventory reduction by an OEM partner in North America by active sales in Europe andAsia.
Operating income declined ¥2.721 billion from the same period last year, resulting in a loss of ¥0.377
billion mainly due to decreased gross income by reduced revenue as well as deteriorated profitability caused byintensified competition.
Ordinary income decreased ¥2.691 billion with a loss of ¥0.377 billion. Interim net income decreased¥3.473 billion with a net loss of ¥2.2 billion mainly due to the reversal of deferred tax assets.
(2) Sales by Product1. Domestic
Sales of machinery for soil preparation (tractors, tillers, etc) dropped to ¥16.393 billion (down 9.3% fromthe same period last year). Sales of cultivating machinery (rice transplanters, vegetable transplanters) were at ¥7.464
billion (up 11.2%). Sales of harvesting and processing machines (combine harvesters, drying machines, etc) were at¥6.659 billion (down 26.6%). Sales of farming implements and spare parts were at ¥14.514 billion (down 7.2%). Salesof other agriculture-related items stood at ¥11.447 billion (down 8.2%), of which sales of agricultural facilities were¥1.79 billion, down 40.1% from the same period last year. Other sales were at ¥5.346 billion (down 4.3%).
2. Overseas
Sales of machinery for soil preparation increased to ¥7.369 billion (up 3.2% from the same period last year)
mainly due to an increased sale of lawn mowers and others. Sales of cultivating machinery were at ¥0.671 billion (up227.5%), thanks to increased sales of rice transplanters. Sales of harvesting and processing machinery were at ¥0.62
billion (down 8.0%) mainly affected by decreased sales of combine harvesters.
(3) Forecast for the Fiscal Year Ending March 31, 2008
We expect sales for the current fiscal year to be ¥149.0 billion, ¥5.0 billion less than the previous forecast
announced on August 9, 2007.
1. Domestic
We expect sales to decrease as we anticipate the unfavorable business climate to continue in the agricultural
machinery market.
2. Overseas
While we expect the inventory reduction by our OEM partner in North America to continue until the end of
the current fiscal year, we expect that it will be compensated by the sales expansion in European as well as Asianmarkets which remain active.
With respect to the forecast of operating income, we expect it to be ¥1.1 billion, ¥1.9 billion less than theprevious forecast based on the actual results in the interim period just ended.
2. Financial Position
1) Financial Position
Total assets as of the end of the interim fiscal period just ended decreased ¥4.357 billion from the same
period last year to ¥52.672 billion. In terms of assets, current assets decreased ¥5.632 billion. Main components were a¥6.49 billion decrease in notes receivables and accounts receivable due to declined sales and a ¥1.259 billion increase
in inventories. Fixed assets decreased ¥2.971 billion from the same period last year. Main components were a decrease-4-

of ¥2.431 billion by an appraisal by market value of listed shares of investment securities and sale off of suchsecurities etc. In the meantime, total liabilities decreased ¥4.247 billion from the same period last year due to a ¥1.18
billion decrease of allowance for retirement benefit and others.
2) Cash Flow
(Cash flow from operating activities)
Cash flow from operating activities for the interim period resulted in net expenditures of ¥2.869 billion (adecrease of ¥1.307 billion from the same period last year) mainly due to a net before tax loss of ¥0.978 billion and a ¥1.592
billion increase in account receivables.
(Cash flow from investment activities)
Cash flow from investment activities resulted in net expenditures of ¥0.243 billion (a decrease of ¥2.177 billion
from the same period last year) mainly due to expenditures of ¥2.455 billion for capital investment and revenues of ¥1.762
billion from sale of investment securities.
(Cash flow from financing activities)
Cash flow from financing activities resulted in revenues of ¥4.853 billion (a decrease of ¥2.02 billion from thesame period last year) mainly due to increased repayment of short-term borrowings and increased long-term debt.
The trend of cash flow indicators is as follows.
Indicator

Mar. 31,2005

Mar. 31,2006

Sep.302006

Mar. 31,2007

Sep. 30,
2007

Equity ratio

(%)

27.1

30.5

29.3

29.8

28.3

Market-based equity ratio

(%)

39.2

66.2

42.1

30.4

24.6

Cash flow to interest bearing(times)liabilities

9.7

13.8

－

64.6

－

Interest coverage ratio

4.8

4.0

0.9

－

(times)－・ Equity ratio: Shareholders’ equity / Total assets
・ Market-based equity ratio: Total market price of shares / Total assets
・ Cash flow to interest bearing liabilities: Interest bearing liabilities / Cash flow
・ Interest coverage ratio: Cash flow 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 calculated based on the total number of shares outstanding (less treasury
stocks) at the end of the interim 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 the Consolidated Statement of
Cash Flows.
4. Cash flow to interest bearing liabilities for the interim period was not given due to negative operating cash
flow.
3．Our policy on Profit Distribution
We recognize that the method for determining dividends to be paid to shareholders is one of the most important
policies to be made. Our basic policy is to keep a steady and improved dividend distribution taking into consideration, notjust consolidated financial results, but our Group’s financial position, future business movements and changing businessenvironments etc. steady and improved dividend distribution.
With respect to dividend for the fiscal year ending March 31, 2008, we sincerely apologize to our shareholders
that we were obliged to suspend end of period dividend payment due to substantial worsening of the financial
performance for the period.

-5-The Iseki GroupAs there has been no significant change in “Schematic diagram of the Iseki Group (Business of the Group)” and“Situation of the Group Companies” since we filed latest Securities Report (Submitted on June 29, 2007), we omitted suchdisclosure in this statement.

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 agriculturalindustry as a full-line manufacturer specializing in agricultural machinery. Over the period, we have consistently pursued
efficient and laborsaving advances in agriculture, and have served the market by pioneering the development 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, the role performed by the farming sector is significant and our duty to society
as a manufacturer of agricultural machinery becomes even more important.
ISEKI will continue to engage in speedy reforms of profit structure in order to create our corporate strength
which enables us to secure stable profit for the future among drastically changing business environments.
We will make efforts in maintaining and expanding sales through enhanced customer satisfaction by offering low
priced and high quality products as well as services that delight our customers. We are also determined to promote theestablishment of a low cost corporate structure and strengthen consolidated financial position.
2. Mid to Long-term Management Strategies
Our basic strategies are as follows:(1) Expansion of overseas sales(2) Secure 20% of the share in the domestic agricultural machinery market(3) Further strengthening of international product competitiveness(4) Improve consolidated financial position by strengthening earning power and cash flow
With respect to our engagement in environmental issues, we will enforce our commitment to resource
conservation, energy conservation, recycling, and the exhaust gases and noise pollution by an introduction of environment
manage mental system at each group company level.
3. Issues to be addressed
Preparation of an organization system related to internal control and work process
We prepared an organization system related to internal control and work process by creating a“Management Control Section” under control of Head of the Development & Production Division of ISEKI
which assumes ordinary monitoring function of manufacturing subsidiaries, and for sales and other subsidiaries,
we let them handle internal auditing themselves by having an internal auditing function at each company alongwith creation of a “Management Control Section” under Head of the Business Division.
We created a “Management Supervisory Committee” which is comprised of the President aschairperson, all directors as members and all auditors as observers, so that we can follow up monthly progress
and the degree of completeness of corporate compliance.

-6-

Consolidated Interim Financial Statements
Consolidated Interim Balance Sheets

Account(millions of yen)Previous Period
Interim Period(as at Sep. 30, 2006) (as at Sep. 30, 2007)
AmountRatio

AmountRatio

ChangefromPrevious
PeriodAmountFY 2007(as at Mar. 31,
2007)
AmountRatio(Assets)
I Current Assets
Cash and time deposits
Notes and accounts receivable
Inventories
OthersAllowance for doubtful accounts

94,454
7,293
40,033
43,955
3,325
(154)

49.9

88,821
7,277
33,54345,215
2,928
(143)

49.1

(5,632)(15)(6,490)
1,259
(397)
11

86,371
5,270
31,95045,511
3,764
(125)

47.6

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

94,942
79,84615,196
8,661
50,206
5,782

50.1
42.1

91,97079,683
15,264
9,634
50,585
4,199

50.9
44.1

(2,971)
(162)
68
972
379
(1,582)

94,99080,152
15,608
9,725
50,562
4,256

52.4
44.2

2. Intangible fixed assets

1,059

0.6

895

0.5

(163)

986

0.6

3. Investments and other assets
Investment securities
OthersAllowance for doubtful accounts

14,036
8,953
5,842
(759)

7.4

11,390
6,521
5,574
(706)

6.3

(2,645)(2,431)(268)
53

13,851
8,823
5,719
(691)

7.6

189,396100

180,791100(8,604) 181,362

100

Total Assets

%

-7-

%

%

Consolidated Interim Balance Sheets

Account

I(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 tax liability from land
revaluation gain
Accrued retirement benefits for
employees
Accrued directors' retirement
benefits
OthersI(millions of yen)Previous Period(as at Sep. 30, 2006)

Interim Period(as at Sep. 30, 2007)

ChangefromPrevious
Period

FY2007(as at Mar.31, 2007)

AmountAmountRatio

AmountAmount87,85442,212
23,78948.6(7,654)(761)(3,396)83,02642,352
24,15095,50942,974
27,185

Ratio

%
50.4

%

140

5500

5,360

140

15,534

8,370(7,164)

7,525

738
8,935

614
7,368

(124)
(1,566)

612
8,245

3,407
(5,500)10,94342,612
8,045
18,45536,857
8,065
12,03919.5

40,264
2,565
22,983

22.3

7,595

7,595

－

7,595

5,044

3,863

(1,180)

5,185

276
3,836

299
2,957

22
(878)

306
3,024

Ratio

%
45.8

23.5

Total Liabilities(Net Assets)
Shareholders' Equity

132,366

69.9

128,11970.9(4,247)

125,638

69.3

42,24322.3

38,782

21.5(3,460)40,985

22.6

Common stock

22,78412.0

22,784

12.6-

22,784

12.6

Capital surplus

12,815

6.8

12,815

7.1-

12,815

7.1

Retained earnings

6,802

3.6

3,347

1.9

(3,455)

5,548

3.0

Treasury stock

(159)

(0.1)

(165)

(0.1)

(5)

(163)

(0.1)

13,2207.0

12,3036.8(917)

13,153

7.2

2,679
10,527

1.4
5.6

1,738
10,527

1.0
5.8

(940)
-

2,598
10,527

1.4
5.8

14

0.0

37

0.0

23

28

0.0

Minority Interests
in Consolidated Subsidiaries

1,566

0.8

1,586

0.8

20

1,585

0.9

Total Net Assets
Total Liabilities and Net Assets

57,029189,39630.1
100

52,672
180,79129.1
100(4,357)(8,604)55,724
181,362

30.7
100

II Difference of Appreciation andConversion
Net unrealized holding gain on
securities
Land revaluation reserve
Foreign currency translation
adjustments
III

-8-

Consolidated Interim Statements of Income(millions of yen)Account

Previous Period(Apr.1, 2006
- Sep. 30, 2006)
AmountInterim Period(Apr.1, 2007
- Sep. 30, 2007)

Ratio

Amount%Net sales
Cost of sales
Gross Profit

76,24051,137
25,102

100

III Selling, general and administrative
expenses
Operating Income

Ratio

ChangefromPrevious
PeriodAmountAmountRatio

153,728
105,30948,419100

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

%

%

100

67.1
32.9

71,20049,467
21,733

69.5
30.5(5,039)(1,670)(3,369)22,700
2,402

29.8
3.1

22,053
(319)

30.9
(0.4)

(647)
(2,721)

46,175
2,243

30.0
1.5

Non-operating Income
Interest and dividend income
OthersNon-operating Expenses
Interest expenses
OthersOrdinary Income

731
148
582
818
540
278
2,314

1.0

1.1

(0.5)

42
16
26
12
72
(60)
(2,691)

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

0.9

3.0

773
164
608
830
613
217
(377)

Extraordinary Gains
Gain on sale and property,
plant and equipment
Gain on sale of investment securities
Reversal of allowance forretirement benefits for directors
VII Extraordinary Losses
Loss on sale of property, plantand equipment
Impairment loss
Loss from bad debts
Transfer to allowance for
doubtful accounts
Special retiremental benefit
Cost for product recall
OthersIncome before income taxes
and minority interests

35

0.1

982

1.3

946

44

0.0

(7)
925

44
－

28
1,269

－
513

I
II

IV

V

VI

Income taxes
Income taxes, deferred
Minority interests in consolidated
subsidiaries
Net Income

1.1

35
－
－
313

1.2

27
925

0.4

28
1,583

2.2

114
25
－

84
－
385

(30)
(25)
385

312
25
－

130
－
－
42

－
920
140
53

(130)
920
140
10

119
－
－
55

68.5
31.5

1.6

0.8

0.3

2,036

2.7

(978)

(1.4)

(3,014)

807

0.5

559
189

0.7
0.3

430
783

0.6
1.1

(129)
594

866
(112)

0.6
(0.1)

13
1,273

0.0
1.7

8
(2,200)

0.0
(3.1)

(5)
(3,473)

35
18

0.0
0.0

-9-

Consolidated Interim Statements of Changes in Net Assets
Interim Period of the previous fiscal year(Apr.1, 2006-Sep. 30, 2006)(millions of yen)
Shareholders' equity

Commonstock

CapitalsurplusRetainedearnings

Treasury
stock

Total
shareholders'equity22,784

12,815

6,207

(154)

41,653

Dividends from surplus

－

－

(677)

－

(677)

Net income

－

－

1,273

－

1,273

Purchases of tresury stock

－

－

－

(5)

(5)

Net changes of items other thanshareholders'equity

－

－

－

－

－

Total changes of items during the period

－

－

595

(5)

590

22,784

12,815

6,802

(159)

42,243

Balance at end of year
Changes of items during the period

Balance at end of interim period

Difference of appreciation and conversion
Total
Minority
Foreigndifference
interests incurrencyofconsolidated
translation appreciation subsudiaries
adjustments
andconversion

Total net
assetsNet unrealized
holding gain on
securities

Land
revaluation
reserve

2,896

10,52715

13,4381,558

56,650

Dividends from surplus

－

－

－

－

－

(677)

Net income

－

－

－

－

－

1,273

Purchases of tresury stock

－

－

－

－

－

(5)

Net changes of items other thanshareholders'equity

(217)

－

(1)

(218)

7

(210)

Total changes of items during the period

(217)

－

(1)

(218)

7

379

Balance at end of interim period

2,679

10,527

14

13,2201,566

57,029Balance at end of year
Changes of items during the period- 10 -

Consolidated Interim Statements of Changes in Net Assets
Interim Period of the current fiscal year(Apr.1, 2007-Sep. 30, 2007)(millions of yen)
Shareholders' equity

Capitalsurplus

Commonstock

Retainedearnings

Treasury
stock

Total
shareholders'equity22,784

12,815

5,548

(163)

40,985Net loss－－(2,200)－(2,200)Purchases of tresury stock

－

－

－

(2)

(2)

Net changes of items other thanshareholders'equity

－

－

－

－

－

Total changes of items during the period－－(2,200)(2)(2,202)

22,784

12,815

3,347

(165)

38,782

Balance at end of year
Changes of items during the period

Balance at end of interim period

Difference of appreciation and conversion
Total
Minoritydifference
Foreigninterests inofcurrency
consolidated
translation appreciation subsudiaries
andadjustments
conversion

Total net
assetsNet unrealized
holding gain on
securities

Land
revaluation
reserve

2,598

10,52728

13,153

1,585

55,724

Net loss

－

－

－

－

－

(2,200)Purchases of tresury stock

－

－

－

－

－

(2)

Net changes of items other thanshareholders'equity

(859)

－

9

(850)

1

(849)

Total changes of items during the period

(859)

－

9

(850)

1

(3,051)

Balance at end of interim period

1,738

10,52737

12,303

1,586

52,672

Balance at end of year
Changes of items during the period- 11 -

Previous fiscal year(Apr.1, 2006-Mar. 31, 2007)(millions of yen)
Shareholders' equity

Commonstock

CapitalsurplusRetainedearnings

Treasury
stock

Total
shareholders'equity22,784

12,815

6,207

(154)

41,653

Dividends from surplus

－

－

(677)

－

(677)

Net loss

－

－

18

－

18

Purchases 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 end of year
Changes of items during the period

Balance at end of interim period

Difference of appreciation and conversion
Total
Minority
Foreigndifference
interests incurrencyofconsolidated
translation appreciation subsudiaries
adjustments
andconversion

Total net
assetsNet unrealized
holding gain on
securities

Land
revaluation
reserve

2,896

10,52715

13,4381,558

56,650

Dividends from surplus

－

－

－

－

－

(677)

Net loss

－

－

－

－

－

18

Purchases of tresury stock

－

－

－

－

－

(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 end of interim period

2,598

10,52728

13,153

1,585

55,724

Balance at end of year
Changes of items during the period- 12 -

(millions of yen)

Consolidated Interim Statements of Cash Flows

Previous
FY2007
Interim Period Change from
Period(Apr.1, 2006(Apr.1, 2007Previous(Apr.1, 2006Mar.31,
Sep.30, 2007)
Period
Sep.30, 2006)
2007)

Account

I

II

III

Cash Flows from Operating Activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Goodwill Amortization
Increase in reserve for retirement benefits
Loss (gain) on sales of investment securities
Interest and dividend income
Interest expenses
Effect of exchange rate changes
Loss on sales of tangible and intangible fixed assets
Special retirement benefit
Decrease(increase) in notes and accounts receivable
Decrease(increase)in inventories
decrease(Increase) in notes and accounts payable
OthersSubtotal

2,036
1,777
25
(110)
234
－
(148)
481
16
78
－
(5,163)(4,038)1,369
119(3,321)

(978)
2,117
－
(168)
(1,332)
(925)
(164)
537
(71)
56
920
(1,592)
295
(140)
216
(1,219)(3,014)
339
(25)
(58)
(1,556)
(925)
(16)
56
(87)
(22)
920
3,570
4,334
(1,509)
97
2,101

807
3,708
25
(118)
376
－
(358)
1,015
15
268
－
2,896
(5,594)748(1,202)
2,587Interest and dividends received
Interest paid
Special retirement benefit
Income taxes paid
Refunded income taxes

145
(472)
－
(1,106)
575

168
(531)
(920)
(426)
59

22
(59)
920
680
(516)

356
(1,025)－(1,591)575

Net cash provided by (used in) operating activities(4,177)(2,869)

1,307

902

Payments for purchases of marketable securities
Proceeds from sale of short-term securities
Payments for purchases of tangible and intangible fixed assets
Proceeds from sale of tangible and intangible fixed assets
Payments for purchase of investment securities
Proceeds from sale of investment securities
Payment for purchase of subsidiary
Net decrease (increase) of loans receivable
Net decrease (increase) of time deposits
Others(21)
145(2,999)
552
(100)
－
(276)
(16)
(66)
362

(1)
1
(2,455)
254
(0)
1,762
－
25
(157)
327

20
(143)
543
(297)
99
1,762
276
42
(91)
(34)

(23)
146
(5,692)
990
(100)
－
(276)
33
96
106

Net cash used in (provided by)investing activities
Cash Flows from Financing Activities(2,420)

(243)

2,177

(4,718)Net decrease(increase) in short-term borrowings
Proceeds from long-term debt
Repayments of long-term debt
Redemption of bonds
Payments for purchases of treasury stock
Payment of dividends
Others7,303
6,840(6,503)
(80)
(5)
(677)
(3)

(394)
9,550
(4,176)
(120)
(2)
－
(3)

(7,698)
2,710
2,326
(40)
3
677
(0)

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

6,874

4,853

(2,020)

2,207

(20)

108

128

3

254
6,589

1,848
4,985

1,593
(1,604)(1,604)
6,589

6,844

6,833

(10)

4,985

Cash Flows from Investing Activities

Net cash used in financing activities
Effect of Exchange rate Changes on Cash and Cash
Equivalents
Net Increase (decrease) in Cash and Cash Equivalents
V
VI Cash and Cash Equivalents at beginning of year
VII Cash and Cash Equivalents at end of interim periodIV- 13 -

Base of Interim Consolidated Financial Statements
1.

Scope of consolidation
Number of consolidated subsidiaries 34 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. Interim consolidated accounting period
Of the consolidated subsidiaries, Iseki-Hokkaido Co., Ltd. and 19 other companies use an interim periodbalance sheet date of June 30. Iseki-Matsuyama Mfg. Co., Ltd. and 13 other companies use an interim period balance
sheet date of September 30. In preparing interim period consolidated financial statements, we use interim period
settlement financial statements as of the date, and necessary adjustment for consolidation is made regarding importanttransactions which occur during the interim consolidated balance sheet date.
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 price at theclosing date of the consolidated interim reporting period.
(Any estimate variance is credited or debited to net assets)
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 thegross 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.
(Changes in accounting policies)
In accordance with revised Corporate Tax Law (“Law No.6, March 30, 2007, Law to revise part of Income
Tax Law etc.” and “Decree No.83, March 30, 2007, Decree to revise part of Enforcement Ordinance ofCorporate Tax Law”), ISEKI and its consolidated domestic subsidiaries have changed to apply method basedon the revised Corporate Tax Law starting from the consolidated interim accounting period under review withrespect to tangible fixed assets acquired on and after April 1, 2007. The influence created by the change isnegligible.
(Additional information)
In accordance with the revised Corporate Tax Law, with respect to tangible fixed assets acquired before
March 31, 2007, ISEKI and its consolidated domestic subsidiaries depend on a method of equal
depreciation in five years since the following year when such depreciation has reached allowable limit ofdepreciation.
As a result, operating loss, ordinary loss as well as interim net loss before tax increased ¥214 million
respectively.
- 14 -

(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 is depreciated using
the straight-line method over an expected marketable period of three years.
(3) Allowance 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 by individually 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, andis principally based on the amounts for the obligation for employees' retirement benefits and pension 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 estimated remaining years ofservice. Actuarial differences are amortized using the straight-line method over the average of the estimatedremaining 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 in an
amount as required by companies’ internal regulations to be prepared for payment of directors retirement
benefits.
(4) Foreign currency translation
Monetary assets and liabilities in foreign currencies are translated into yen at the rates of exchange in effect at thebalance 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 aretranslated into yen at the rates of exchange in effect at the balance sheet dates. Differences arising from thetranslation are presented as “Foreign currency translation adjustments” in net assets and financial statements.
(5) Leases
Finance leases, other than those leases which transfer the ownership of the assets to the lessee, are accounted forbased 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, are recorded
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 the risks
associated with fluctuations in foreign currencies exchange rates and interest rates.
(7) Other notes pertaining to the preparation of the Consolidated Interim Financial Statements(a) Accounting treatment of consumption tax
Consumption tax and local consumption taxes are accounted for using a tax-exclusive method.
5. Range of funds in the interim statements
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.
- 15 -

Notes(Consolidated Interim Balance Sheet infomation)
Previous Period

Interim Period

FY 2007

1. Accumulated depreciation of
tangible fixsed assets

86,827 million yen

87,924 million yen

87,024 million yen

2. Guaranteed liabilities

9,874 million yen

9,647 million yen

9,706 million yen

3. Notes receivable less discount

101 million yen

19 million yen

65 million yen

4. Endorsed notes receivable

636 million yen

593 million yen

639 million yen

5. Matured notes as of the end of the consolidated interim period
The last day of the interim period just ended coincidentally fell on a holiday for financial institutions, so the recording of
matured notes was made on an assumption that the settlements were made as of the date of maturity. Following areoutstanding matured notes as of the end of the consolidated interim period.

Previous
・ Notes receivable

Interim Period
102 million yen
2,609 million yen
52 million yen

・ Notes payable
・ Notes payable for equipment

94 million yen
2,419 million yen
105 million yen

FY200725 million yen
2,274 million yen
169 million yen(Consolidated Interim Statements of Income Information)
1 . Impairment loss
Previous interim period (Apr.1, 2006-Sep.30, 2006)
Impairment loss has been realized recognized regarding following assets.
Usage
Idle property

Type
Land
Building, land
Total

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

(millions of yen)
Impairment loss
17
825Interim period (Apr.1, 2007 -Sep.30, 2007)
There was no corresponding impairment loss.
Previous Period (Apr.1, 2006 -Mar.31, 2007)
Impairment loss was realized regarding following assets.
Usage
Idle property

Type
Land
Building, land
Total

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

(millions of yen)
Impairment loss
17
8
25

(Reason to recognized impairment loss)
We realized impairment loss of the above assets as they are not being used, with no prospect to be used in the future, andbesides, 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 by applying reasonableadjustments to the assessed value of fixed assets for property tax.
- 16 -

(Consolidated Interim Statements of changes in Net Assets)
Interim Period （Apr. 1, 2006-Sep. 30, 2006）

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 Sep.30, 2006)
during period
during period(Number of outstanding shares)
Common stock

226,536,329－－

226,536,329

666,946

12,802－

679,748(Treasury stock)
Common stock

Increase in the number of shares, 12,802 shares during the interim period that just ended was by purchasing of shares
below stock trading unit.

2. Matters concerning dividends dividend payment
Total amount ofdividends
Class of shares

Dividend per
share(millions of yen)

(yen)

677

3

（Resolution）
General meeting ofshareholders(June 27, 2006)

Common stock

Date of record

Effective date

Mar.31,2006

Jun.27,2006

FY2007 （Apr.1, 2007-Sep. 30, 2007）
Matters concerning the classes and number of outstanding stock and classes and number of treasury stock.
Increase in
Decrease in
Number of shares
number of shares number of shares(as of Sep.30, 2007)
during period
during period

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

226,536,329－－

226,536,329

690,113

10,015－700,128(Treasury stock)
Common stock

Increase in the number of shares, 10,015 shares during the interim period that just ended was by purchasing of shares
below stock trading unit.

- 17 -

FY2007 Period （Apr. 1, 2006-Mar. 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)

Increase in
Decrease in
Number of shares
number of shares number of shares(as of Mar.31, 2007)
during period
during period(Number of outstanding shares)
Common stock

226,536,329－－

226,536,329

666,946

23,167－690,113(Treasury stock)
Common stock

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

2. Dividend payment
Total amount ofdividends
Class of shares

Dividend per
share(millions of yen)

(yen)

677

3

（Resolution）
General meeting ofshareholders(June 27, 2006)

Common stock

Date of record

Effective date

Mar.31,2006

Jun.27,2006(Consolidated Interim Statements of Cash Flows Information)
Correlation between balance of cash and cash equivalents at the end of interim period and the amount of items recorded in
the consolidated interim balance sheet.
Previous Period
Cash and time deposits

Interim Period

FY2006

7,293 million yen

7,277 million yen

5,270 million yen

(448)
6,844

(443)
6,833

(285)
4,985

Time deposits with terms of
3 months or more
Cash and cash equivalents- 18 -

(Segment Information）
1. Business Segment Information
For the interim period (Apr. 1, 2007 – Sep. 30, 2007), the previous period (Apr. 1, 2006 – Sep 30, 2006), and FY
2007(Apr. 1, 2006 – Mar. 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 business type is not presented.
2. Geographical Segment Information
For the interim period (Apr. 1, 2007 – Sep. 30, 2007), the previous period (Apr. 1, 2006 – Sep. 30, 2006), and FY
2007(Apr. 1, 2006 – Mar. 31, 2007), the total sales and total assets of the “Japan” segment accounted for more than 90% of
all segments. Accordingly, the breakdown of segment information by region is not presented.
3. Overseas sales Information
Interim Period of FY2007 (Apr. 1, 2006 – Sep. 30, 2006)

I Overseas sales
II Consolidated net sales
III Overseas sales as a percentage ofconsolidated net sales(%)(millions of yen)
Total

The
UnitedStates3,555－Europe

3,769
－

1,363
－

8,689
76,240

4.7

4.9

1.8

11.4

OthersInterim Period (Apr. 1, 2007 – Sep.30, 2007)

I
Overseas sales
II
Consolidated net sales
III Overseas sales as a percentage ofconsolidated net sales(%)(millions of yen)
Total

The
UnitedStates2,627－EuropeOthers

4,903
－

1,843
－

9,375
71,200

3.7

6.9

2.6

13.2

The
UnitedStates6,751－Europe

8,936
－

3,165
－

18,853
153,728

4.4

5.8

2.1

12.3

FY 2007 (Apr. 1, 2006 – Mar. 31, 2007)

I Overseas sales
II Consolidated net sales
III Overseas sales as a percentage ofconsolidated net sales(%)

Others(millions of yen)
Total(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.

- 19 -

(Securities)
1. Held-to-maturity securities with fair market value(millions of yen)Previous Period
as at Sep. 30, 2006
Category

as recordedonConsolidated Fair Market
Interim
Value
Balance
SheetInterim Period
as at Sep. 30, 2007

Variance

as recordedonConsolidated Fair Market
Value
Interim
BalanceSheet

FY 2007
as at Mar.31, 2007

Variance

as recordedon
Fair Market
Consolidated
Value
Balance
Sheet

Variance

Others

250

247

(2)

250

248

(1)

250

248

(1)

Total

250

247

(2)

250

248

(1)

250

248

(1)

2. Other securities with fair market value(millions of yen)Previous Period
as at Sep. 30, 2006
Category(1) Shares(2) Bonds
OthersTotal

as recordedonConsolidated
Purchase cost
Interim
Balance
Sheet
2,734
7,218

Interim Period
as at Sep. 30, 2007
as recordedonConsolidated
Variance Purchase cost
Interim
Balance
Sheet
2,391
5,296
4,484

FY 2007
as at Mar. 31, 2007

Variance

2,904

as recordedon
Purchase cost Consolidated
Balance
Sheet
2,734

7,075

Variance

4,340

100

78

(21)

100

100

－

100

92

(7)

2,834

7,297

4,462

2,491

5,396

2,904

2,834

7,168

4,333

3. Major securities not valued at fair market val(millions of yen)Interim Period
as at Sep. 30, 2006

Interim Period
as at Sep. 30, 2007

FY2007
as at Mar. 31, 2007

as recordedon Consolidated Interim Balance Sheetas recordedon Consolidated Interim Balance Sheetas recordedon Consolidated Balance Sheet

Category(1) Held-to-maturity securities
Discounted bank debenture(2) Other securities
Non-listed shares

23

23

23

1,326

826

1,326

- 20 -

Per share information
Previous Period(Apr.1,2006-Sep.30,2006)

Interim Period(Apr.1,2007-Sep.30,2007)

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

Net asset per share

245.57226.21

239.71

Net income per share

5.64(9.74)

0.08

Fully deluted net income per share

5.18

－

0.07

Note: Basis of calculation for net income per share and fully diluted net income per share are as follows.
Previous Period(Apr.1,2006-Sep.30,2006)

Interim Period(Apr.1,2007-Sep.30,2007)

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

Net income per share
Net income on Consolidated
Profit and Loss Statement(millions of yen)

1,273

(2,200)18

Net income pertaining tocommon stock (millions of yen)

1,273

(2,200)18

Net income not pertaining tocommon stock (millions of yen)

－

－

－

225,862,188

225,841,221

225,856,320

Net income per fully diluted share
Diluted net income (millions of yen)

－

－

－

Number of increased shares ofcommon stock (shares)(Equity warrant)
Number of non dilutive securities
not induded in the calculationof net income per dilutive securities

20,103,550－

20,103,550(20,103,550)－(203,103,550)

－

－

－

Average number of common stockduring the period (shares)(Important post-balance sheet events)
On October 5, 2007, we redeemed yen denominated zero coupon CB type warrant bond maturing on October 5, 2009 by
exercise of purchasing right by bond holders.
Redemption of the bond
1. Balance of aggregate face value before redemption

6,795 million yen

2. Amount of redemption

5,400 million yen

3. Aggregate face value after redemption

1,395 million yen(Omission of disclosure)
Disclosures of following annotations have been omitted as we considered the necessity of disclosure in the summary
announcement of financial results is not significant.
・ Lease transactions
Disclosure of following items has been omitted in the absence of corresponding matters.
・ Derivative transactions
・ Stock option, etc.
・ Business combination, etc.

- 21 -

Production, Orders & Sales
1. Production results per product-type(millions of yen)

Product-type

Previous Period(Apr. 1, 2006
- Sep. 30, 2006)

Interim Period(Apr. 1, 2007
- Sep. 30, 2007)

FY 2007(Apr.1, 2006-Mar.31, 2007)

Machinery for soil preparation

21,485

20,42145,843Cultivating machinery

7,037

7,435

15,187

Harvesting and processing machinery

18,172

13,411

30,246

Parts and farming implements

1,402

997

2,576

Agricultural machinery related

3,899

2,629

Others

1,131

1,097

8,055
2,263

Total

53,12845,993

104,173

Note: Figures are shown in terms of sales values.

2. Orders
We operate a system whereby production is based mostly on projected demand. We hardly ever produce on order.
3. Sales results per product-type(1) Total(millions of yen)Previous Period(Apr. 1, 2006
- Sep. 30, 2006)
Product-type

AmountInterim Period(Apr. 1, 2007
- Sep. 30, 2007)

Ratio

AmountFY 2007(Apr.1, 2006-Mar.31, 2007)

Ratio

%

Machinery for soil preparation

25,218Cultivating machinery
Harvesting and processing machinery

Amount

Ratio

%

%

33.1

23,76233.4

44,641

6,917

9.1

8,135

11.4

11,755

7.7

9,747

12.8

7,279

10.2

29,671

19.3

Parts and farming implements

16,13721.1

15,01221.1

30,79820.0

Agricultural machinery related
Others12,518
5,701

16.4
7.5

11,620
5,388

16.3
7.6

25,13011,732

16.4
7.6

Total

76,240100

71,200100

153,728100- 22 -

29.0

(2) Domestic(millions of yen)Previous Period(Apr. 1, 2006
- Sep. 30, 2006)

Product-type

AmountInterim Period(Apr. 1, 2007
- Sep. 30, 2007)

Ratio

AmountFY 2007(Apr.1, 2006-Mar.31, 2007)

Ratio

%

Amount

Ratio

%

%

Machinery for soil preparation

18,07826.8

16,39326.5

29,38921.8

Cultivating machinery

6,712

9.9

7,464

12.1

10,599

7.8

Harvesting and processing machinery

9,073

13.4

6,659

10.8

28,67021.3

Parts and farming implements

15,632

23.1

14,514

23.5

29,78822.1

Agricultural machinery related

12,46618.5

11,44718.5

24,864

18.4

Others

5,588

8.3

5,346

8.6

11,562

8.6

Total

67,550100

61,825100

134,875

100(3) Overseas(millions of yen)Interim Period(Apr. 1, 2007
- Sep. 30, 2007)

Previous Period(Apr. 1, 2006
- Sep. 30, 2006)
Product-type

AmountRatio

AmountFY 2007(Apr.1, 2006-Mar.31, 2007)

Ratio

%

Amount

Ratio

%

%

7,139

82.2

7,369

78.6

15,251

80.9

Cultivating machinery

204

2.3

671

7.2

1,155

6.1

Harvesting and processing machinery

674

7.8

620

6.6

1,000

5.3

Parts and farming implements

504

5.8

497

5.3

1,009

5.4

Agricultural machinery related

52

0.6

173

1.8

265

1.4

Others

112

1.3

42

0.5

169

0.9

Total

8,689

100

9,375

100

18,853100

Machinery for soil preparation- 23 -

Non-Consolidated Interim Financial Statements
Non-Consolidated Interim Balance Sheets

Account(millions of yen)

ChangeInterim Period
Previous Period
from(as at Sep. 30, 2006) (as at Sep. 30, 2007) Previous
PeriodAmountRatio
AmountRatio
AmountFY 2007(as at Mar. 31,
2007)
AmountRatio(Assets)
I Current Assets
Cash and time deposits
Notes receivable
Trade accounts receivables
Inventories
Short-teem loans
OthersAllowance for doubtful accounts

67,724
2,660
5,466
27,01615,03915,942
1,638
(40)

50.2

61,3892,787
5,207
20,337
15,167
16,639
1,280
(31)

50.7

(6,334)126(258)(6,679)
128
696
(357)
9

67,863
1,988
6,129
24,364
15,93016,974
2,516
(39)

52.2

II Fixsed Assets
1. Tangible fixed assets
Buildings and structures
Machinery,equipment and vehicles
Land
Others67,15333,966
3,119
3,078
25,334
2,434

49.8
25.2

59,59034,6783,202
3,292
25,455
2,727

49.3
28.7

(7,562) 62,190
711 34,449
83
3,330
214
3,653
121 25,455
292
2,010

47.8
26.5

622

0.5

503

0.4

32,564
8,744
21,138
4,677(1,996)－24.1

24,4086,315
17,6604,024(2,637)(954)

134,877

100

120,980

2. Intangible fixed assets
3. Investments and other assets
Investment securities
Stocks of affiliates
OthersAllowance for doubtful accounts
Allowance for loss on investment
Total Assets%- 24 -

%

%

(118)

576

0.4

20.2

(8,155) 27,165(2,429) 8,607(3,477) 17,660(652) 4,444(641) (2,592)
(954)
(954)

20.9

100

(13,896) 130,054100Non-Consolidated Interim Balance Sheets(millions of yen)Account(Liabilities)
I Current Liabilities
Notes and accounts payable, trade
Trade accounts payable
Short-term borrowings
Bonds(due within one year)
Long-term debt
(due within one year)
Accrued income taxes
OthersPrevious Period(as at Sep. 30, 2006)

Interim Period(as at Sep. 30, 2007)

AmountAmount52,531
18,338
10,618
4,800

Ratio

%
39.0

42,355
14,949
9,085
4,800

35.0

(10,175)(3,389)(1,533)－47,56816,18912,540
10,200

－

5,400

5,400

－

12,342

4,804(7,537)

4,341

244
6,187

136
3,179

(107)
(3,008)

154
4,142

3,929
(5,400)11,29332,411
7,795
13,031

26,324
7,795
6,203

Total Liabilities(Net Assets)
I Shareholders' Equity
1 Common stock
2 Capital surplus
Additional paid-in capital
Other capital surplus
3 Retained earnings
Other retained earnings
Retained earnings carried forward
4 Treasury stock

78,85658.5

72,60942,82622,784
13,366
10,994
2,371
6,835
6,835
6,835
(159)

31.7
16.9
9.9

Total Net Assets
Total Liabilities and Net Assets

Amount

FY2007(as at Mar.31, 2007)%

II Long - term Liabilities
Bonds
Long-term debt
Deferred tax liability from land
revaluation gain
Accrued retirement benefits for
employees
Accrued directors' retirement
benefits
Allowance for loss on loan guarantee
OthersII Difference of Appreciation andConversion
1 Net unrealized holding gain on
securities
2 Land revaluation reserve

Ratio

Change from
Previous
PeriodAmount19.5

30,253
2,395
17,497

25.0

Ratio

%
36.6

24.9

7,595

7,595

－

7,595

1,534

326

(1,207)

1,594

204
43
2,949

220
38
2,180

16
(4)
(768)

228
40
2,125

60.0

(6,246)

79,979

61.5

29.9
18.8
11.1

(6,713)

0.1

(0.1)

(6,708)(6,708)(6,708)(5)

36,95922,784
13,366
10,994
2,371
971
971
971
(163)

28.4
17.5
10.3

(0.1)

36,112
22,784
13,366
10,994
2,371
127
127
127
(165)

13,1949.8

12,258

10.1

(936)

13,115

10.1

2,667
10,527

2.0
7.8

1,731
10,527

1.4
8.7

(936)
－

2,588
10,5272.0
8.1

56,021
134,877

41.5
100

48,371
120,98040.0
100(7,649)(13,896)

50,075130,054

38.5
100

5.0

- 25 -

－
－
－
－

0.7

(0.1)

Non-Consolidated Interim Statements of Income(millions of yen)Account

Interim Period(Apr.1, 2007
- Sep. 30, 2007)

Previous Period(Apr.1, 2006
- Sep. 30, 2006)
AmountRatio

47,79239,517
8,274

100

III Selling, general and administrative
expenses
Operating Income
IV Non-operating Income
Interest and dividend income
Rent revenue
OthersV Non-operating Expenses
Interest expenses
Expenses for lent assets
OthersOrdinary Income

Net sales
Cost of sales
Gross Profit

VI Extraordinary Gains
Gain on sale and property,
plant and equipmant
Gain on sale of investment
securities
Reversal of allowance for
doubtful accounts
Reversal of allowance forretirement benefits for directors
OthersVII Extraordinary Losses
Loss on sale of property, plantand equipment
Evaluation loss on stocks ofaffiliates
Evaluation loss on invesutment
Transfer to allowance for loss
on investment
Transfer to allowance for doubtful
accounts
Special retirement benefit
Cost for product recall
OthersIncome before income taxes
and minority interests
Income taxes
Income taxes, deferred
Net Income

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

AmountAmountRatio

90,78476,834
13,950100

Amount

Ratio

100

82.7
17.3

41,31335,072
6,241

84.9
15.1

(6,478)(4,445)(2,033)

6,654
1,620

13.9
3.4

6,083
157

14.7
0.4

(570)
(1,462)

13,205
744

14.6
0.8

1,165
316
574
273
747
254
362
131
2,038

2.4

3.0

2.3

1.1

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

2.7

4.3

93
56
101
(64)
206
18
192
(4)
(1,576)

2.8

1.5

1,258
372
676
209
954
272
554
126
462

296

0.6

1,014

2.5

717

495

0.5

%

I
II

ChangefromPrevious
Period

%

%

22

24

1

29

－

925

925

－

271

33

(238)

461

－
2
1,007

28
2
1,263

28
0
256

－
4
6,296

2.1

3.1

32

50

18

102

374
244

－
101

(374)
(142)

3,853
244

－

－

－

954

356
－
－
－

69
900
140
1

(287)
900
140
1

1,142
－
－
－

84.6
15.4

0.9

6.9

1,327

2.8

213

0.5

(1,114)(4,959)

(5.5)

128
154
1,044

0.3
0.3
2.2

11
1,046
(844)

0.0
2.5
(2.0)

(117)
892
(1,889)24(165)(4,818)

0.0
(0.2)
(5.3)

- 26 -

Non-Consolidated Interim Statements of Changes in Net Assets
Previous fiscal year(Apr.1, 2006-Sep. 30, 2006)(millions of yen)
Shareholders' equity
Capital surplus

Retained surplus
Other retained

Common Additional
pain-instock
capitalBalance at end of year
Changes of items during the period
Dividends from surplus
Net income
Purchases of tresury stock
Net changes of items other than shareholders' equity

Total changes of items during the period
Balance at end of interim period

Other
capitalsurplusTotal

earnings

Total
Treasuryshareholders'stockequityTotal

22,784

10,9942,371

Retained earnings
carried forward
13,366
6,468

－
－
－
－
－
22,784－－－－－
10,994

－
－
－
－
－
2,371

－
－
－
－
－
13,366

(677)
1,044
－
－
367
6,835

6,468

(154)

42,465

(677)
1,044
－
－
367
6,835

－
－
(5)
－
(5)
(159)

(677)
1,044
(5)
－
361
42,826

Difference of appreciation and conversion

Net
Total
Total netLand
unrealized
difference ofassetsholding revaluation appreciation
reservegain onandsecurities
conversion
Balance at end of year
Changes of items during the period
Dividends from surplus
Net income
Purchases of tresury stock
Net changes of items other than shareholders' equity

Total changes of items during the period
Balance at end of interim period

2,883

10,527

13,41055,875

－
－
－
(216)
(216)
2,667

－
－
－
－
－
10,527

－
－
－
(216)
(216)
13,194

(677)
1,044
(5)
(216)
145
56,021

Consolidated Interim Statements of Changes in Net Assets
Previous fiscal year(Apr.1, 2007-Sep. 30, 2007)(millions of yen)
Shareholders' equity
Capital surplus

Retained surplus
Other retained

Common Additional
pain-instock
capitalBalance at end of year
Changes of items during the period
Net loss
Purchases of tresury stock
Net changes of items other than shareholders' equity

Total changes of items during the period
Balance at end of interim period

Other
capitalsurplusTotal

22,784

10,994

2,371

－
－
－
－
22,784－－－－
10,994

－
－
－
－
2,371

－
－
－
－
13366

Total
Net
Total netdifference of
unrealizedLand
assetsholding revaluation appreciation
andgain onreserveconversion
securities

Net changes of items other than shareholders' equity

Total changes of items during the period
Balance at end of interim period

Total

Retained earnings
carried forward
13,366971

Difference of appreciation and conversion

Balance at end of year
Changes of items during the period
Net loss
Purchases of tresury stockearnings

2,588

10,527

13,11550,075

－
－
(856)
(856)
1,731

－
－
－
－
10,527

－
－
(856)
(856)
12,258

(844)
(2)
(856)
(1,703)
48,371- 27 -

(844)
－
－
(844)
127

Total
Treasuryshareholders'stockequity971(163)

36,959

(844)
－
－
(844)
127

－
(2)
－
(2)
(165)

(844)
(2)
－
(846)
36,112

Previous fiscal year(Apr.1, 2006-Mar. 31, 2007)(millions of yen)
Shareholders' equity
Capital surplus
surplus
Commonstock Additional
pain-in
capitalBalance at end of year
Changes of items during the period
Dividends from surplus
Net loss
Purchases of tresury stock
Net changes of items other than shareholders' equity

Total changes of items during the period
Balance at end of interim period

Retained surplus
Other retained

Other
capitalsurplusTotal

22,784

10,994

2,371

－
－
－
－
－
22,784－－－－－
10,994

－
－
－
－
－
2,371

－
－
－
－
－
13,366Total
NetTotal net
unrealized
difference ofLand
assetsholding revaluation appreciation
andgain onreserveconversion
securities

Net changes of items other than shareholders' equity

Total changes of items during the period
Balance at end of interim period

Total

Retained earnings
carried forward
13,366
6,468

Difference of appreciation and conversion

Balance at end of year
Changes of items during the period
Dividends from surplus
Net loss
Purchases of tresury stockearnings

2,883

10,527

13,41055,875

－
－
－
(295)
(295)
2,588

－
－
－
－
－
10,527

－
－
－
(295)
(295)
13,115(677)(4,818)(8)(295)(5,800)50,075- 28 -(677)(4,818)－－(5,496)971

Total
Treasuryshareholders'stockequity

6,468

(154)

42,465(677)(4,818)－－(5,496)
971

－
－
(8)
－
(8)
(163)

(677)
(4,818)(8)－(5,505)36,959Base of Interim Financial Statements(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 price at theclosing date of the consolidated interim reporting period.
(Any estimate variance is credited or debited to net assets)- Securities without at fair market value ... recorded at cost, based on the moving-average method(b). 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 cost, based on the moving-average method(2) Depreciation methods for material depreciable assets(a) Tangible fixed assets
a. Buildings……………………………………declining balance method (a straight-line method is used for newbuildings (not including building fixtures and furnishings)
acquired on or after April 1, 1998.)
b. Tools………………………………………..straight-line method
c. Others……………………………………….declining balance method(Changes in accounting policies)
In accordance with revised Corporate Tax Law (“Law No.6, March 30, 2007, Law to revise part of Income
Tax Law etc.” and “Decree No.83, March 30, 2007, Decree to revise part of Enforcement Ordinance ofCorporate Tax Law”), ISEKI and its consolidated domestic subsidiaries have changed to apply method basedon the revised Corporate Tax Law starting from the consolidated interim accounting period under review withrespect to tangible fixed assets acquired on and after April 1, 2007. The influence created by the change isnegligible.
(Additional information)
In accordance with the revised Corporate Tax Law, with respect to tangible fixed assets acquired before
March 31, 2007, ISEKI and its consolidated domestic subsidiaries depend on a method of equal
depreciation in five years since the following year when such depreciation has reached allowable limit ofdepreciation.
As a result, operating income has been reduced by ¥25 million and ordinary income and interim net
income before tax have been reduced by ¥180 million respectively compared with traditional method.
(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 is depreciated using
the straight-line method over an expected marketable period of three years.
(3) Allowance 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 by individually evaluating the
likelihood of them being collected.
(b) Allowance for loss on investments
Starting from the current fiscal year, allowance for investment loss has been newly appropriated in order to beprepared for investment loss to affiliated companies.
- 29 -

(c) Accrued retirement benefits for employees
Accrued retirement benefits for employees is recorded as at the end of the current fiscal year, and is principally
based on the amounts for the obligation for employees' retirement benefits and pension plan assets. Disparities
arising out of changes to accounting standards are expensed pro rata over 15 years. Past service liabilities areamortized using the straight-line method over the average of the estimated remaining years of service. Actuarial
differences are amortized using the straight-line method over the average of the estimated remaining years ofservice, with the first expense being recognized in the following the end of the current fiscal year(d) Accrued directors’ retirement benefits
The Company and some of the consolidated subsidiaries record an accrued directors’ retirement benefits in an
amount as required by companies’ internal regulations to be prepared for payment of directors retirement
benefits.
(e) 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.
(4)

Foreign currency translation
Monetary assets and liabilities in foreign currencies are translated into yen at the rates of exchange in effect at
the interim balance sheet date. Gains or losses resulting from translation are credited or charged to income.
(5) Leases
Finance leases, other than those leases which transfer the ownership of the assets to the lessee, are accounted forbased 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, are recorded
using the forward exchange rates.
(b) Hedging instruments and hedged items(i) Hedging instruments
Forward exchange contracts(ii) Hedged items
Receivables and payables denominated in foreign currencies and borrowings(c) Hedging policies
Forward exchange contracts are entered into in order to hedge the risks associated with fluctuations in foreign
currencies exchange rates and interest rates.
(7) Other notes pertaining to the preparation of the Consolidated Interim Financial Statements
Accounting treatment of consumption tax
Consumption tax and local consumption taxes are accounted for using a tax-exclusive method.

- 30 -

Notes(Non-Consolidated Interim Balance Sheet infomation)
Previous Period

Interim Period

FY 2007

1. Accumulated depreciation of
tangible fixsed assets

53,458 million yen

53,364 million yen

53,317 million yen

2. Guaranteed liabilities(Incloding loan garantees）

25,933 million yen

23,003 million yen

22,737 million yen

303 million yen

237 million yen

270 million yen

3. Matured notes as of the end of the consolidated interim period
The last day of the interim period just ended coincidentally fell on a holiday for financial institutions, so the recording of
matured notes was made on an assumption that the settlements were made as of the date of maturity. Following areoutstanding matured notes as of the end of the consolidated interim period.
PreviousInterim Period
FY2007・ Notes receivable－ million yen
42 million yen
9 million yen
・ Notes payable
・ Notes payable for equipment

1. Depreciation and amortization
Property
Intangible assets

1,969 million yen
131 million yen

1,778 million yen
102 million yen

1,711 million yen
162 million yen

Previous Period

Interim Period

FY2007457 million yen
98 million yen

679 million yen
94 million yen

981 million yen
207 million yen(Non-Consolidated Interim Statements of changes in Net Assets)
Interim Period （Apr. 1, 2006-Sep. 30, 2006）
Matters concerning the classes and number of outstanding stock and classes and number of treasury stock.
Increase in
Number of shares
Decrease in
Number of shares
number of shares(as of Mar. 31,
number of shares(as of Sep.30, 2006)
during period
2006)
during period(Treasury stock)679,748
666,946
12,802－
Common stock
Increase in the number of shares, 12,802 shares during the interim period that just ended was by purchasing of sharesInterim Period （Apr. 1, 2007-Sep. 30, 2007）
Matters concerning the classes and number of outstanding stock and classes and number of treasury stock.
Number of shares
Increase in
Decrease in
Number of shares(as of Mar. 31,
number of shares
number of shares(as of Sep.30, 2007)
2007)
during period
during period(Treasury stock)690,113
10,015700,128－
Common stock
Increase in the number of shares, 10,015 shares during the interim period that just ended was by purchasing of shares
below stock trading unit.

Previous Period （Apr. 1, 2006-Mar. 31, 2007）
Matters concerning the classes and number of outstanding stock and classes and number of treasury stock.
Number of shares
Increase in
Decrease in
Number of shares(as of Mar. 31,
number of shares
number of shares(as of Mar.31, 2007)2006)
during period
during period(Treasury stock)666,946
23,167690,113－
Common stock
Increase in the number of shares, 23,167 shares during the interim period that just ended was by purchasing of shares
below stock trading unit.

(Important post-balance sheet events)
On October 5, 2007, we redeemed yen denominated zero coupon CB type warrant bond maturing on October 5,2009 by exercise of purchasing right by bond holders.
Redemption of the bond
1. Balance of aggregate face value before redemption

6,795 million yen

2. Amount of redemption

5,400 million yen

3. Aggregate face value after redemption

1,395 million yen- 31 -