Fiscal Year ending October 31, 2000

Summary of Company Interim Financial Statements
June 15, 2000
Listed Company Name

Kanamoto Company, Ltd.

Listing Exchanges

Company Code Number

9678

Tokyo Stock Exchange

Head Office Address

Sapporo Stock Exchange
1-19, Odori Higashi 3-chome, Chuo-ku, Sapporo, Hokkaido Japan 060-0041(URL

http://www.kanamoto.co.jp)

Inquiries

Person to Contact

Director and Division Manager, Accounting Division

Name

Nobuhito Utatsu

TEL (011)-209-1600

Please send inquiries in English to takayama@kanamoto.co.jp
Date of Report to the Board of Directors

June 15, 2000

Interim Dividend System

The Company has an interim dividend system

Interim Dividend Payment Date

July 21, 2000

1. Operating Results for the Interim Period ended April 30, 2000 (November 1, 1999 - April 30, 2000)(1) Operating Results(Numbers less than one million yen have been rounded down)
Revenues
Millions of yen
Six months endedApril 30, 2000
Six months endedApril 30, 1999
Fiscal year ended
October 31, 1999

Operating Income％

Millions of yen

Ordinary Income％

Millions of yen％

29,4520.4

2,036– 13.3

1,738– 19.729,338

2.0

2,349

32.2

2,164

23.7

60,584

4,091

Net Income

3,715

Net Income per Share ofCommon StockYen

Millions of yen％
Six months ended
993
– 2.8
April 30, 2000
Six months ended
1,022– 21.7
April 30, 1999
Fiscal year ended
1,726
October 31, 1999
Notes 1. Average number of shares outstanding during the period
Six months ended April 30, 2000
29,607,447 shares
Six months ended April 30, 1999
29,205,135 sharesFiscal year ended October 31, 1999
29,290,498 shares
2. Are there any changes in accounting method?
No

33.56
35.01
58.95

(2) Dividends

Six months endedApril 30, 2000
Six months endedApril 30, 1999
Fiscal year ended
October 31, 1999

Interim Dividend per
Share of Common
Stock

Annual Dividend per
Share of Common
Stock

Yen

Yen

9.00

---

9.00

---

---

19.00

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1

(3) Financial Position
Shareholders’EquityMillions of yen

Total Assets
Millions of yen
Six months endedApril 30, 2000
Six months endedApril 30, 1999
Fiscal year ended
October 31, 1999

Shareholders’Equity Ratio％

Shareholders’Equity per ShareYen

102,156

30,72230.1

1,017.39

98,75928,97629.3

989.53102,194

29,50228.9

1,000.85

Notes 1. Number of shares issued and outstanding at end of period
Six months ended April 30, 2000
30,197,241 shares
Six months ended April 30, 1999
29,283,019 sharesFiscal year ended October 31, 1999
29,477,019 shares
2. Difference between market value and the interim period balance sheet
book value of negotiable securities¥839 million

3. Difference between market value and contractual value of derivativetransactions as of the end of the interim period¥ − million

2. Projected Operating Results for the Fiscal Year Ending October 31, 2001
(November 1, 1999 - October 31, 2000)
Revenues

Full year

Ordinary Income

Net Income

Millions of yen

Millions of yen

Millions of yen

59,980

3,310

1,660

Annual Dividend per
Share of Common Stock
Year-end
Yen

Yen

9.00

18.00

Reference: Projected net income per share of common stock (Full year) ¥54.97

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .2

Attachment
Current condition of the Company and affiliates
The business activities conducted by the Company and its affiliates (one subsidiary and six affiliatedcompanies) are centered on the rental and sale of construction equipment, temporary construction
materials, security equipment and other products, the sale of steel materials, and the rental and sale ofinformation technology equipment (computers and peripheral equipment, etc.). The Company is also
undertaking development of electric power supply and service businesses and food and beveragebusinesses as supplemental business activities. An explanation of the position of the Company and its
affiliates in each business activity, and the relationships of the segments by type of business, is provided
below.
〔Businesses related to the Construction Equipment Rental Division〕
The Company and Taniguchi Co., Ltd. (an affiliated company) are both engaged in the construction
equipment rental business. Taniguchi Co., Ltd. operates in designated marketing areas and borrows
rental equipment assets from the Company as needed in order to meet customer demand.
SRG Kanamoto Co., Ltd. (a subsidiary) operates a rental business to promote the rental of temporary
materials for construction use. Assist Co., Ltd. (an affiliated company) is engaged in the rental of
security products for the construction industry. The Company and Taniguchi Co., Ltd. borrow rental
assets from both SRG Kanamoto Co., Ltd. and Assist Co., Ltd. as needed to rent to their own customers.
〔Businesses related to the Computer and Peripheral Equipment Rental Division〕
Together with the Company, Unitech Co., Ltd. and Active Technology Co., Ltd. (both affiliatedcompanies) are engaged in the sale of computers and computer peripheral equipment. The Company
supplies semiconductor products to Unitech Co., Ltd. and imports and supplies wireless LAN devices to
Active Technology Co., Ltd.
〔Other supplemental businesses〕
Active Power Co., Ltd. (an affiliated company) is engaged in the sale of microturbine electricalgenerators, and supplies these products to the Company, among others. Providence Brewery Co., Ltd. (anaffiliated company) brews and sells regional beers and operates a brewpub restaurant.
〔Illustration of operating business relationships〕

Customers

SRG Kanamoto Co., Ltd.

Taniguchi Co., Ltd.
Assist Co., Ltd.

Unitech Co., Ltd.

Kanamoto Company

Active Technology Co., Ltd.

Computer and Peripheral
Equipment Rental Division
Active Power Co., Ltd.

Construction Equipment

Other supplemental businesses
Providence Brewery Co., Ltd.

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .3

Management Policies(1) Basic policies concerning business management and distribution of earnings
Every company’s mission is to achieve successful results that produce the maximum satisfaction for allparties involved with the company, including customers, shareholders and the local community. At
Kanamoto, we’
ve added to this premise our commitment to change – embodied in the philosophy “neverbe satisfied with present conditions and constantly move ahead, regardless of the environment.”
Together, these concepts form the fundamental management outlook for developing our businesses. In
order to ensure the long-term, integrated expansion of shareholders’profits, we continue to focus
comprehensively on both capital investments based on our medium-term profit plan, and on profitability,
dividend trend and financial health. We also remain committed to our policy of stable dividend growth.
To accomplish these goals we have focused from the very start on the importance of cash flow and placed
particular importance on the growth of EBITDA (earnings before interest, taxes and depreciation andamortization).
(2) Medium to long-term corporate management strategy
Over the long term, Kanamoto Company faces a situation in which expense budgets at public enterprises
are shrinking. Under these circumstances it may appear difficult to assert that the future of construction
equipment rentals – our company’s principal business – looks promising. That having been said, however,the percentage of equipment used at construction sites that is rented is also showing an upward trend.
There are also other numerous avenues that enable Kanamoto to grow, such as the expansion of ourbusiness into regions where we currently do not have branches and the strengthening of our
responsiveness to private sector demand and the construction industry. We are also continuing our
venture business support activities, in order to nurture new businesses that will follow in the footsteps of
our construction equipment rental business.
The principal elements of our 1999-2002 Medium-Term Management Plan for November 1999 throughOctober 2002 are the following.
① Expand our service area, by opening branches in western Japan where we still do not have branches
and building our group of business alliances.
② Continue to invest in venture businesses within the framework of a specified amount of net income.
③ Refine our financial strategy of focusing on global standards, and strive to improve our debt rating.
In separate action we formed a collaborative business alliance for construction equipment rental in
December 1999 with Komatsu Group.

Both companies will benefit by avoiding redundant investments

and achieving more effective utilization of owned assets, and we are continuing to coordinate ouractivities in each marketing region.

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .4

Operating results(1) Summary of mid-term operating results
Despite a sense during the interim operating period that the large-scale economic stimulus package
approved by the administration of former Prime Minister Obuchi was continuing to lessen the economic
malaise engulfing Japan’s economy, individual consumption in general remained cool. Despite an overallmood of business recovery in the Bank of Japan’s most recent “tankan” short-term business outlook
Diffusion Index survey (March 2000), economic results were still negative. The feeling continues that
there is still excess capital investment and employment, and currently the economic recovery can be
described as uncertain at best.
In the construction industry, which remains Kanamoto’s leading customer, bullish sentiment prevailed
over the aforementioned large-scale economic stimulus package (including ¥2.7 trillion in the second
revision for public enterprise-related expenses in Fiscal 1999), a large share of which was allocated tofavored activities centered on local public organizations. Nevertheless, because of problems such as theresolution of bad loans still held by financial institutions, uncertainty over the direction of public
enterprises and lackluster consumer demand, it was a time for companies in the construction industry toreview the nature of their business.
Looking at construction equipment rental revenues, despite a decline in the Hokkaido region where
public works construction took a breather, the Tohoku region achieved broad revenue growth as ourefforts to become the dominant player came to fruition and the Sea of Japan region also remained strong.
In the Kanto area, the construction equipment rental business into which we have recently focused ourefforts turned in a good performance despite increasingly aggressive competition from other firms, withrevenues unchanged from the same period of the prior fiscal year. Finally, revenues also climbed in the
Kinki and Tokai regions as a result of our new branches, despite further stoking of competitors’efforts.
As a result, total rental revenue rose by 3.5% over the prior year.
Sales revenues for the division fell as sales of used equipment were postponed due to the influence of
positive inquiries regarding equipment rentals, and sales of new equipment also declined as construction
companies refrained from new purchases. Compared to the same period of the prior fiscal year, sales
revenues edged downward 3.6%. Revenues for the division as a whole were up 1.8%, a slight increase.
The Company adjusted its branch network by opening six new branches, including two branches in the
Hokkaido region, three branches in the Tohoku region and one branch in the Kinki-Tokai region. The
Company closed one branch in the Sea of Japan region.
In the Steel Sales Division, despite industry progress in reducing inventories the steel market continued
to witness a decline in actual demand and sales were off 5.4% from the same period of the prior fiscal
year. In the Computer and Peripheral Equipment Rental Division, although there was no change inrental revenue from the prior year, sales of newly-handled items (LAN boards for factories) that had
experienced strong growth in the same period of the prior year declined, resulting in a 17.3% drop insales revenue from the same period of the prior year for the division as a whole.
As a result of the above performance, total revenue was ¥29,452 million (up 0.4% compared to prior year).
Ordinary income was ¥1,738 million (down 19.7% from the prior year), and net income for the interim
period was ¥993 million (down 2.8% from the prior year).
As part of the effort to improve its financial position, the Company issued ¥5,000 million of
yen-denominated convertible bonds in the Swiss market on November 1, 1999.
At the present time the Company’s venture business support activities include capital investments or

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .5

purchases of debentures at eight companies, plus support in the form of business collaboration with two
more firms.
In another area, the Company expects Active Power Co., Ltd., which is marketing microturbine electricalgenerators produced by Capstone Corporation in the U.S., to begin shipping soundproofed-type
microturbine electrical generators based on Capstone’s specifications by the end of 2000, as originallyplanned.

(2) Outlook for the fiscal year
In the budget for Fiscal 2000, public enterprise spending will remain at the level of the prior fiscal year(¥9,430.7 billion). To this amount another ¥500.0 billion has been added as reserve funds for public
enterprises. As a result of these aggressive government economic measures, the equipment investment
posture of firms is gradually improving.
On another positive note, according to the Fiscal 1999 survey by the Japan Civil Engineering Association
the use of construction equipment rentals to meet equipment needs rose 1.1% over the prior fiscal year to55.2%, the highest level ever recorded. The use of rental equipment by general contractors increased
2.7% to 74.2%, while the use of rentals by sub-contractors also rose 1.2% to 43.3%, continuing the steadytrend towards outsourcing of recent years.
With regard to the current situation facing the Construction Equipment Rental Division, the Company’sprincipal business sector, although a reasonable level of demand is expected but growing competition tosurvive the shakeout in the rental equipment industry will be unavoidable. Particularly in regions otherthan the Tokyo metropolitan area, demand from the private sector is minimal, and the construction
equipment rental industry will face a tough time trying to improve its operating results
During the fiscal year Kanamoto will selectively strengthen its dominant position, particularly in
Hokkaido and the Tohoku region, to ensure the Construction Equipment Rental Division’s marketposition is not eroded through careless oversight. During the fiscal year we plan to open 12 branches,
including six branches in Hokkaido (including two already opened in the first half), five branches in the
Tohoku region (including 3 already opened), and one branch in the Kinki-Tokai region (already opened).
We will also open two delivery yards, one in Hokkaido and one in the Sea of Japan region.
The Computer and Peripheral Equipment Rental Division has begun marketing a high-speed wirelesstransmission product for home use. Because the product’s video transmission capabilities are far
superior to those of products already marketed by other companies, the product is expected to become
one of the division’s leading products.
In summary, private sector capital investment in the construction equipment rental market remains
fluid, recovery of the steel market is not expected, and sales of used equipment have declined more thanin our initial plan. Therefore, for the full fiscal year the Company’s total revenues are projected to edge
downward by 1.0% to ¥59,980 million, ordinary income is projected to decline by 10.9% to ¥3,310 million,
and net income is projected to shrink 3.8% to ¥1,660 million.

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .6

VIII
Company Financial Statements
1. Comparative Balance Sheets(Unit: Thousands of yen)

Period End of Prior Fiscal Year
Interim Period(As of April 30, 1999)
Category

AmountII(As of April 30, 2000)
Amount％(Assets)
I

Percent

End of Current Fiscal
Prior Fiscal Year
Year Interim Period Summary Balance Sheet
Percent(As of October 31,1999)
Amount％Percent％

Current Assets
Cash and deposits

18,964,310

17,887,632

16,192,095

Notes receivable, trade

13,222,006

14,487,679

14,784,165

Accounts receivable, trade

8,384,919

7,743,666

10,774,469

Inventory

1,211,535

991,060

918,040

Other current assets
Allowance for doubtful
accounts
Total Current Assets

3,950,871

5,762,929

4,904,800– 114,671– 166,584– 135,602

45,618,972

46.2

46,706,384

45.7

47,437,967

46.4

Fixed Assets(1） Tangible Fixed Assets
Rental equipment
Buildings&
structures
Land
Other tangible fixed
assetsTotal Tangible Fixed
Assets(2） Intangible Fixed
Assets(3） Investments andOther Assets
Allowancefordoubtful accounts
Total
Investments
and Other Assets
Total Fixed Assets

15,539,064

16,626,408

16,909,278

5,899,046

6,281,962

5,686,554

24,003,732

24,042,786

24,033,210

3,892,675

3,812,620

4,137,023

49,334,519

50,763,777

50,766,066

40,03467,36140,1783,994,108

4,834,259

4,135,381– 227,727– 214,786– 184,825

3,766,381

4,619,472

3,950,555

53,140,935

53.8

55,450,611

54.3

54,756,801

53.6

Total Assets

98,759,908

100.0

102,156,996

100.0

102,194,769

100.0

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .7

(Unit: Thousands of yen)
Period End of Prior Fiscal Year
Interim Period(As of April 30, 1999)
Category

AmountII(As of April 30, 2000)
Amount％(Liabilities)
I

Percent

End of Current Fiscal
Prior Fiscal Year
Year Interim Period Summary Balance Sheet
Percent(As of October 31,1999)
Amount％Percent％

Current Liabilities
Notes payable, trade7,404,283

8,557,213

9,195,512

Accounts payable, trade2,505,852

2,052,541

2,605,958

Short-term bank loans

15,716,815

14,090,200

15,799,590

Accounts payable, other7,026,995

7,986,053

8,333,094

Corporate taxes payable
Accruedbonusestoemployees
Equipment notes payable

1,156,449

772,980

1,556,903

459,471477,625

479,417635,562

857,930

917,963

Other current liabilities

641,754

496,487

473,229

Total Current Liabilities

35,547,183

36.0

35,291,031

34.5

39,361,668

38.5

Long-term Liabilities
Straight bonds

5,277,692

5,277,692

5,277,692

Convertible bonds

5,923,000

9,866,000

5,641,000

Long-term bank loans

15,373,200

11,993,000

13,504,000

Long-term accrued
expenses
Retirement allowances todirectors and auditors
Total Long-term Liabilities

7,394,186

8,719,457

8,629,522

268,138

287,454

278,801

34,236,216

34.7

36,143,603

35.4

33,331,015

32.6

Total Liabilities

69,783,400

70.7

71,434,635

69.9

72,692,684

71.1(Shareholders’Equity)
I

Common stock

8,273,876

8.4

8,584,473

8.4

8,316,362

8.2

II

Additional paid-in
capital9,397,801

9.5

9,708,135

9.5

9,440,093

9.2

III Legal earned surplus

1,091,735

1.1

1,218,086

1.2

1,118,086

1.1

IV Retained earnings
General reserve
Unappropriatedretained earnings(interim period)
Total other reserves

8,250,000

9,550,000

8,250,000

1,963,094

1,661,665

2,377,542

10,213,094

10.3

11,211,665

11.0

10,627,542

Shareholders’Equity

28,976,507

29.3

30,722,361

30.1

29,502,085

28.9

Total Liabilities andShareholders’Equity

98,759,908

100.0

102,156,996

100.0

102,194,769

100.0

10.4

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .8

2. Comparative Statements of Income
PeriodCategory(Unit: Thousands of yen)

Prior Fiscal Year
Interim Period

Current Fiscal Year
Interim Period(From November 1, 1998 (From November 1, 1999
(From November 1, 1998
to April 30, 1999)
to April 30, 2000)
to October 31, 1999)
AmountPercent
AmountPercent
AmountPercent％

I

Operating revenues

Prior Fiscal Year
Summary Statement of
Income％％29,338,113

100.0

29,452,753

100.0

60,584,159

100.0

II Cost of revenues

21,499,207

73.3

21,743,306

73.8

45,226,804

74.6

Gross profit
general and
III Selling,
administrative expenses
Operating income

7,838,905

26.7

7,709,447

26.2

15,357,354

25.4

5,489,289

18.7

5,673,123

19.3

11,265,682

18.6

2,349,616

8.0

2,036,324

6.9

4,091,672

6.8

IV Non-operating revenues

330,472

1.1

373,316

1.3

626,334

1.0

V Non-operating expenses

515,616

1.7

671,432

2.3

1,002,484

1.7

2,164,472

7.4

1,738,208

5.9

3,715,522

6.1

VI Extraordinary profits

600

0.0

134,0480.5

17,0800.1

VII Extraordinary losses

Ordinary income

92,464

0.3

97,035

0.3

177,704

0.3

Income before taxes andadjustments
Corporate, local andbusiness taxes
Adjustment for corporate
and other taxes
Net income
Profit carry-forward fromprior period
Adjustment for priorfiscal year tax effects
Cash dividends

2,072,608

7.1

1,775,220

6.0

3,554,899

5.9

1,142,863

3.9

735,9432.5

2,080,920

3.4– 92,705– 0.3

45,7070.1– 252,783– 0.4

1,022,450

3.5

993,569

3.4

1,726,762

2.9

656,720

668,096656,720

283,923−

283,923−−

263,513Additions to legal reserve−−

26,351

Unappropriated retained
earnings

1,963,094

1,661,665

2,377,542

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .9

Significant accounting policies for the interim period financial statements
Prior fiscal year
interim accounting period(From November 1, 1998
To April 30, 1999)

Current fiscal year
interim accounting period(From November 1, 1999
To April 30, 2000)

The estimated amount of annualSame as at left

PeriodCategory
1. Accounting principles
used for normal
accounting treatment
and standards foraccounting methods thatdiffer according tostatement preparation(1) Deferred treatment ofoperating expenses anddeferred amounts① Depreciation expensedepreciation expense at the end of thecurrent interim accounting period isappropriated proportionately over theterm.
②

Amount of transfer

For accrued bonuses to employees,

For accrued bonuses to employees,

for accrued bonuses

an amount is appropriated to thean amount is appropriated to thefor employeesinterim accounting period for theinterim accounting period for theestimated amount arising during theestimated amount arising during theyear, using the period as a standard.

year, using the period as a standard.

On the balance sheets, an amountOn the balance sheets, an amountequal to the amount of the interim

equal to the amount of the interim

period accounting liability, less theperiod accounting liability, less theamount already paid for the interim

amount already paid for the interim

accounting period, is shown as theaccounting period, is shown as theaccrued bonuses for employees.

accrued bonuses for employees.

（Supplemental information）
In prior years, accrued bonuses to
employees were appropriated as theamount equivalent to the maximum
deposit according to the hour salarystandard for salaries as based onprovisions of the Corporate Tax Law.
Following amendment of the Corporate
Tax Law in Fiscal 1998, however,
beginning with this interim period themethodwaschangedtoanappropriation of a salary estimate
amount. The effective amount based
upon this change is immaterial.
③

Amount of transfer

The

company

providedforfor retirement

retirement allowances to directors andallowances toauditors based upon pertinent rules

directors

and appropriated proportionately toSame as at left

the account based upon length ofservice.

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 0(2) Method for appropriatingAn

amountcalculatedSame as at leftisincome taxes and businessappropriated to the current interim

taxes

period income before income taxes byapplying the prescribed tax rate tochangesinincome

due

to

tax

accounting adjustments on the tax
return.
2. Appraisal standards andAmountafter

deduction

appraisal method for

depreciation

expenseconstruction equipment

accordingthetoSame as at leftof

calculated

declining-balancemethod from the original prices, byseparate fiscal year of purchase
3. Appraisal standards and(1) Merchandise inventories(1) Merchandise inventories

appraisal method for

Lower of cost or market based onmerchandise inventories

the Last-in, First-out method

Same as at left

and supplies(2) Supplies(2) Supplies

The Latest Purchase Cost method
4. Appraisal standards
when using standards

Same as at left

Negotiable securities that have a

Negotiable securities that have amarket on a securities exchange

market on a securities exchange

other than principle… … Lower of cost or market

standards, for assets

methodother than merchandise

moving average method

based

upon

Same as at lefttheinventory and supplies

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 1

Prior fiscal year
interim accounting period(From November 1, 1998
To April 30, 1999)

Current fiscal year
interim accounting period(From November 1, 1999
To April 30, 2000)

Declining-balance method based upon

Declining-balance method based upon

provisions in the corporate tax codeprovisions in the corporate tax code

PeriodCategory
5. Depreciation method fortangible fixed assets（Change in depreciable life）
Beginning in the current period, thedepreciable

life

for

(excluding

equipment

buildings
installedinbuildings) has been shortened based
upon amendment of the Corporate
Income Tax Law in Fiscal Year 1998.
As a result, depreciation expense
increased by ¥41,368,000 over what it
would have been using the standards
applied in the prior period, andordinary income and income before
income taxes, respectively, have been
decreased by the same amount.
6. Deferred charges

Stock issue expenses are charged toincome as incurred.

7. Lease transactions

Stock and bond issue expenses arecharged to income as incurred.

For finance lease transactions except

Same as at left

for leases that transfer ownership ofthepropertytothelessee,rent

expenses are charged to income aspayments are made.
8. Other significant mattersthat are standard policies
for the interim financial
statements
Accounting treatment for
consumption tax

Consumption tax is taken out of all
StatementsofIncomeitems

Same as at left

andBalance Sheet items, except mainly forreceivables and payables.
Furthermore, because the monetaryamount of the tax is relatively minor
when consumption taxes received andpaid are offset, the amount is included
in “Other current liabilities”.

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 2

Supplemental information
Prior fiscal year
interim accounting period(From November 1, 1998
To April 30, 1999)

PeriodCategory
1. Allowance for doubtful
accounts

Current fiscal year
interim accounting period(From November 1, 1999
To April 30, 2000)

In the past, the allowance for
doubtful accounts was provided at an
estimated amount of probable bad
debts and the maximum amount that
could be charged to income under the
Corporate

IncomeTax

Law.

Following amendment of the Tax Codeduring Fiscal Year 1998, the reserve
calculation was changed by replacing
the maximum amount that could becharged to income under the Corporate
Income Tax Law with the maximum
amount that is actually charged toincome under the Code. As a result,operating income, ordinary income andincome before taxes decreased by¥11,642,000 compared to what theywould have been using the standards
applied in the prior period.
2. Application of tax effectaccounting

Beginning with this fiscal year
accounting

period,Kanamoto

apply tax effect accounting.

will
As a

result, net income and unappropriatedretained earnings for the interim
accounting

period¥92,705,000

andincreasedby¥376,628,000,

respectively, compared to what they
would

have

been

if

tax

effectaccounting were not applied.

Change in reporting method
Prior fiscal year interim accounting period(From November 1, 1998
To April 30, 1999)

Current fiscal year interim accounting period(From November 1, 1999
To April 30, 2000)

In prior year interim periods, business taxes
payable and branch location taxes payable werereported in business taxes payable. Beginning withthis interim period, business taxes payable of
241,023,000 are included in corporate taxes payable,
and branch location taxes of ¥6,398,000 are includedin accounts payable, other.

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 3

(Notes to the Interim Period Balance Sheets)
Category

PeriodTotal
accumulated
depreciation for tangible fixed
assetsEnd of Prior Fiscal Year
Interim Period(As of April 30, 1999)

End of Current Fiscal
Year Interim Period(As of April 30, 2000)

End of Prior Fiscal Year¥48,112,335,000¥49,283,118,000¥49,200,962,000¥27,464,000¥27,958,000¥26,795,000

1,595 shares

1,313 shares

1,384 shares¥1,097,000¥1,017,000¥972,000

Contingent liabilities
Guarantees
Treasury stock
Treasury stock shares
Amount carried on thebalance sheets
Reasons for increase
number of shares issuedin(As of October 31,1999)

Exercise of new stock (1) Exercise of new stock Exercise of new stock
subscription rights
subscription rights
subscription rights(Stock options)(Stock options)(Stock options)Shares issued: 95,000

Shares issued: 69,000

Shares issued: 289,000

Issue price per share: ¥437

Issue price per share: ¥437

Issue price per share: ¥437

Amount credited to capital Amount credited to capital Amount credited to capitalsurplus:¥219

surplus:¥219

surplus:¥219(2) Conversion of yen
denominatedconvertible bonds
maturing 2003
Number of shares

Reduction to book value651,222 shares

Per share conversion price¥777

Capitalization amount¥389

Amounts for assets acquiredThe

in prior fiscal years forbuildings was reduced by

reduced by ¥883,000 for

which

accumulated¥48,132,000

government

valueswerereducedbookbygovernment subsidies

book

value

of
for

&

¥5,044,000

equipment
Land

expropriations during theduring the period.

The amounts byamounts

which

the

accumulatedbookamounts

accumulated
of

other

Total

¥7,730,000

by

were

government

government

subsidies

Machinery &

Land

book

reducedbysubsidieswere as follows.
¥5,044,000

Machinery &¥5,044,000

equipment¥3,569,000

Total

The
which

amounts of other assets

assets were reduced byequipment¥2,686,000

subsidies

period.

were as follows.
Machinery

The book value of land was¥8,613,000Land¥3,569,000
Total¥8,613,000

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 4

Accounting treatment of notes
maturing at the end of theperiod─────The interim period-end
wasafinancial
institution holiday inJapan. Notes receivableandpayablethatmatured on that datewere settled on theimmediately following
business day, as iscustomary in Japan.
Notes outstanding forwhich settlement was
postponed and which
are included in theinterim balances wereas follows.
¥1,347,094,000

Notes

payable,¥917,557,000

trade
Equipment
notes payableNotes¥1,291,723,000

receivable, tradereceivable, trade
Notes

The period-end was afinancial
institution
holiday in Japan. Notes
receivable and payablethat matured on thatdate were settled on theimmediately following
business day, as iscustomary in Japan.
Notes outstanding forwhich settlement was
postponed and which
are included in theinterim balances wereas follows.

Notes

payable,¥896,634,000

trade¥181,029,000

Equipment¥85,141,000

notes payable

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 5(Notes to the Interim Period Statements of Income)
PeriodCategory※1. Principal items included in
non-operating revenues
Interest received
Gain on redemptionof corporate bonds bypurchase※2. Principal items included in
non-operating expenses
Interest expense anddiscounts
New stock issuance
expenseInterest on corporate
bonds
※ 3.
Depreciation
andamortization
Tangible fixed assets

Prior Fiscal Year
Prior Fiscal Year
Current Fiscal Year
Summary Statement ofInterim Period
Interim Period
Income(From November 1, 1998 (From November 1, 1999 (From November
1, 1998
to April 30, 1999)
to April 30, 2000)
to October 31, 1999)¥43,487,000¥7,069,000¥56,818,000¥64,654,000¥25,024,000¥93,413,000¥303,320,000¥234,517,000¥569,406,000¥534,000¥1,152,000¥1,003,000−¥147,500,000¥4,259,000¥3,372,783,000¥3,388,128,000¥7,168,438,000(Additional information)
In prior periods
business taxes were
included in general andadministrative
expenses.
Beginningin this interim period,
businesstaxes
areincluded in corporate,
local
and
businesstaxes.
As a result,operatingincome,ordinary income andincome before taxes,
respectively, increasedby ¥235,543,000 overwhat they would have
been
using
the
standards applied inprior
interimaccounting periods.

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 6

(Lease Transactions)
Prior Fiscal Year
Interim Period(From November 1, 1998
to April 30, 1999)

PeriodCategory

Current Fiscal Year
Interim Period(From November 1, 1999
to April 30, 2000)

1. For finance lease 1. Amounts corresponding to 1.

Prior Fiscal Year Summary
Statement of Income(From November 1, 1998
to October 31, 1999)

Amounts corresponding to

1. Amounts corresponding totransactions

lease property acquisitionlease property acquisitionlease property acquisition

except leases thatprices,prices,prices,transfer

depreciation

ownership of theproperty totheaccumulated

accumulated

accumulated

anddepreciation

outstanding balance at theoutstanding balance at theoutstanding

end of the interim period

end of the interim period

the end of the fiscal year

depreciationandlessee.

andbalanceataccounting period.

¥ ‘000

¥ ‘
000

¥ ‘
000

¥ ‘000

¥ ‘
000

¥ ‘
000

7,670,140

8,986,843

Rental
15,605,416
assets5,922,316

9,683,099

537,854234,860

302,994

Other
assets593,459

360,127

233,331

Total

17,194,839

7,905,000

9,289,838

Total

16,198,875

6,282,444

9,916,431

2.

Outstanding¥ ‘000¥ ‘
000
Rentalassets

16,656,984

291,675

Other
assets5,288,395 10,433,850

Rentalassets15,110,865

Other
assets611,379

Total

15,722,245

2.

Outstanding

4,968,691 10,142,174
319,704balanceofAcquisition Accumulated Outstanding
price
depreciation
balanceAcquisition Accumulated Outstanding
price
depreciation
balanceAcquisition Accumulated Outstanding
price
depreciation
balance¥ ‘000balanceof2.

Outstandingbalanceoffuture lease payments at the

future lease payments at the

future lease payments at

end of the interim period

end of the interim period

the end of the fiscal year
accounting period.

3.

Within one year

¥2,987,850,000

Within one year

¥2,814,451,000

Within one year

¥2,880,127,000

After one year

¥7,498,116,000

After one year

¥6,199,145,000

After one year

¥7,130,792,000

Total¥10,485,966,000

Total¥9,013,596,000

Total¥10,010,919,000

Amountofleasedepreciation

payments,

expense

3.

of

lease

payments,

expense3.

Amountofleasedepreciation

andpayments,

expenseandinterest expenseinterest expenseinterest expense

4.

Amountdepreciation

andLease payments ¥1,497,694,000

Lease payments¥1,618,672,000

Lease payments¥2,982,359,000

Depreciation expense ¥1,370,096,000

Depreciation expense¥1,531,426,000

Depreciation expense¥2,717,859,000Interest expense¥172,320,000

Interest expense¥153,393,000Interest expense¥327,507,000

methodfor4.

methodfor4.

equivalenttoequivalenttoAccounting
amountdepreciation expense
Straight-line

Accounting
amountAccounting
amountmethodforequivalenttodepreciation expensedepreciation expense

Same as at left

Same as at leftdepreciation

using the lease term as thedepreciable life and zero
residual value.
5.

Accounting

methodforamountequivalent

tointerest expense

5.

Accounting

methodforamountequivalent

tointerest expense

Interest method using thedifference

between5.

Accounting

methodforamountequivalent

tointerest expense

Same as at left

Same as at left

Future lease payments

Future lease payments

totallease payments and theacquisition price of thelease property, allocatedequally to each year.

2. Operating leases

Future lease payments
Within one year

¥829,601,000

Within one year

¥1,036,303,000

Within one year

¥994,391,000

After one year

¥2,217,684,000

After one year

¥1,908,879,000

After one year

¥1,922,620,000

Total¥3,047,285,000

Total¥2,945,182,000

Total¥2,917,011,000

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 7

3. Revenue by division
Revenues by operating division were as follows.
(Unit: ¥ ‘
000)PeriodSales

RentalDivisionFirst Half, Prior Fiscal Year
(From November 1, 1998
To April 30, 1999)

First Half, Current Fiscal Year
(From November 1, 1999
To April 30, 2000)

Construction equipment

19,092,220

19,752,759

Steel materials

3,681,642( 73,888)

3,482,750( 81,575)

Construction equipment
and steel materials

6,037,337

5,817,071

Other sales

526,913400,172

Subtotal

10,245,892

9,699,994

29,338,113

29,452,753

Total

Notes 1. For sales amounts the information is shown in summary form because the extensive number of
product categories makes it difficult to create a detailed sales volume table.
2. Numbers with parentheses indicate export sales amounts.
3. Figures for rental revenue include transport revenues related to the relevant rental.

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 8

4. Negotiable securities

PeriodMarket value of negotiable securities
End of the prior fiscal year interim period End of the current fiscal year interim period(As of April 30, 1999)(As of April 30, 2000)
Amountshown oninterimbalance sheet

Marketvalue

A s s e t sclassified
as currenta s s e t s
Stocks48,980

Bonds
Other

Type

Subtotal(Unit: ¥ ‘000)

End of the prior fiscal year
(As of October 31, 1999)
AmountValuation
shown onMarketValuation
year-end
profit or loss
value
profit or loss
balance sheet

Valuation
profit or loss

Amountshown oninterimbalance sheet

Marketvalue

58,421

9,441

417,810434,286

16,476

54,68071,94017,260223,258

222,870−388

269,130

268,447−682

233,752

234,203

450

−

−

−

−

−

−

−

−

−

272,239281,291

9,052

686,940

702,734

15,793

288,433

306,143

17,710517,796 1,036,833 2,081,287 1,044,453 1,049,410 1,860,600

811,190A s s e t sclassified
as fixeda s s e t s
Stocks1,069,387 1,587,183

Bonds

13,595

Other

1,026,520

14,918

1,322

118,863

803,342 −223,178 1,000,578

119,190326

121,233

779,380 −221,198 1,000,578

122,136902

762,945 −237,633

Subtotal 2,109,503 2,405,443

295,940 2,156,274 2,979,857

823,582 2,171,222 2,745,681

574,459

Total

304,992 2,843,215 3,682,591

839,375 2,459,655 3,051,825

592,170

2,381,742 2,686,735

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .1 9（Notes）
End of the prior fiscal year
End of the current fiscal year
End of the prior fiscal year
interim accounting periodinterim accounting period(As of October 31, 1999)(As of April 30, 1999)(As of April 30, 2000)
1. Market value calculation methods 1. Market value calculation methods 1. Market value calculation methods(1) Listed negotiable securities(1) Listed negotiable securities(1) Listed negotiable securities
Valued mainly on the basis of
the final closing prices on theTokyo Stock Exchange(2) Over-the-counter negotiablesecurities
Valued on the basis of trading
prices such as those publishedby the Japan Association of
Securities Dealers(3) Beneficiary certificates forunlisted security investment
trustsValued on the basis of eachtrust’
s standard valuation.
2. Stocks classified as current
assets including treasury stock.

Same as at left

Same as at left

(2) Over-the-counter negotiablesecurities
Same as at left

Same as at left

(3) Beneficiary certificates forunlisted security investment
trustsSame as at left

(3) Beneficiary certificates forunlisted security investment
trustsSame as at left

2. Stocks classified as current
assets including treasury stock.

Valuation profit or loss

Valuation profit or loss

Assetsclassified
current assets

Assets classified
current assetsas(2) Over-the-counter negotiablesecurities

2. Stocks classified as current
assets including treasury stock.
Valuation profit or lossas

Assetsclassified
as−¥168,000−¥11,000¥106,000
current assets
3. Interim period balance sheet
3. Interim period balance sheet
3. Interim period balance sheet
valuation of negotiable securities
valuation of negotiable securities
valuation of negotiable securities
that are excluded fromthat are excluded fromthat are excluded fromdisclosure requirements
disclosure requirements
disclosure requirements
Assets classified as current
Assets classified as current
Assets classified as current
assetsassetsassetsUnlisted foreign
Unlisted foreign
bonds with a
Beneficiary certificatesbonds with a¥300,000,000
during the trust’s¥135,919,000¥498,932,000
remainingremainingamortization period of
closed period
amortization period ofless than one year
less than one year
Beneficiary
certificatesU n l i s t e d f o r e i g n ¥109,853,000
during the trust’s¥35,942,000
b
o
n
d
s
closed period

U n l i s t e d f o r e i g n ¥99,800,000
b
o
n
d
s
Assets classified as fixed assets
Unlisted stock except
for over-the-counter ¥198,750,000
stocksGovernment bondinvestment trust¥10,000,000

Corporate bonds withstock warrants
attached¥10,000,000

Unlisted foreignbonds¥99,800,000

Assets classified as fixed assets
Unlisted stock except
for over-the-counter ¥509,510,000
stocksCorporate bonds with
¥10,000,000
stock warrants
attached
Unlisted foreign
bonds

Assets classified as fixed assets
Unlisted stock except
for over-the-counter ¥359,750,000
stocksCorporate bonds with
¥10,000,000
stock warrants
attached¥305,156,000

5. Derivative contract amount, market value and valuation profit and loss
From time to time Kanamoto Company utilizes interest rate and currency derivative transactions.
The amounts of these contracts and the amounts equivalent to valuation profit and loss are very small.
Details of the transactions have been omitted because the amounts are deemed to have little influenceon the company’s financial position.

Summary of Company Interim Financial Statements, FY ending October 31, 2000
P .2 0