Mission Statement
Over forty years of continually challenging the potential of the construction equipment rental business.
Always striving to achieve the highest level of service.
Kanamoto's growth has been synonymous with the development of Japan's construction equipment rental business. Whether the concern is products,
quality assurance, supply channels, or a state-of-the-art business model developed to meet changing times, helping customers rationalize theiroperations has always been our foremost goal.
With support from customer firms nationwide, Kanamoto will further expand the possibilities for construction equipment rental solutions in the years
ahead.
For purposes of this report, the Balance Sheets and Statements of Income were created using financial data prepared according to Japan’s Securities Report guidelines.

CONTENTS
3 Financial Highlights
4
6
8
Report of Operating Results and Financial

10 Position for the six month ended April 30,2007
13 Consolidated Financial Statements
17 Non-Consolidated Financial Data Statements
20 At a Glance
22 Topics
23 Corporate Data

Forward-Looking Statements
Statements included as part of the Kanamoto Co., Ltd. plans and strategies described in this report, other than statements of actual past facts, are descriptions of theCompany’s outlook concerning future operating results and are assumptions based on information currently available.
These descriptions of the future outlook contain known risks and unidentified risks, as well as other uncertainty factors, and the actual management performance andoperating results of Kanamoto Co., Ltd. may vary substantially from the descriptions provided herein.

2

Kanamoto Semiannual Report 2007

Financial Highlights (Consolidated)
Millions of Yen

Thousands of
U.S. dollars

April 30, 2006 October 31, 2006 April 30, 2007
Rental revenues and sales of goods
Operating income
Net income
Total shareholders’ equity
Total assets

34,5202,873
1,048
35,26287,00368,023
4,068
1,742
35,54086,81536,2303,438
2,382
37,622
90,867

Yen

35.12
9.00

57.41
18.00

$ 302,426
28,70019,890314,048
758,494
U.S. dollars

April 30, 2006 October 31, 2006 April 30, 2007
Net income per share of common stock
Cash dividends per share of common stock

April 30, 2007

72.53
9.00

April 30, 2007
$ 0.61

Note U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥119.80=US$1, the approximate excange rate on April 30, 2007

Kanamoto Semiannual Report 2007

3

4

Kanamoto Semiannual Report 2007

Kanamoto Semiannual Report 2007

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6

Kanamoto Semiannual Report 2007

Kanamoto Semiannual Report 2007

7

8

Kanamoto Semiannual Report 2007

Kanamoto Semiannual Report 20079

Report of Operating Results and Financial Position

November 1, 2006 - April 30, 2007

for the six months ended April 30, 2007

Report of Operating Results and Financial Position
for the six months ended April 30, 2007
Consolidated Financial PositionNon-consolidated Financial Position

Preparation of Financial Stafements and Depriciation
and Amortization Expense
1. For purposes of this report, the Balance Sheets andStatements of Income were created using financial dataprepared according to Japan’s Securities Report
Guidelines.
Kanamoto's financial statements are audited by Shin
Nihon & Co. and Kanamoto's Audit Committee. Englishlanguage versions of the Company's financial
statements, which include changes to the reporting
categories, are reports prepared internally by Kanamoto
and are not audited by the Company's auditors or its
Audit Committee.
2. Kanamoto uses a variety of techniques whenintroducing rental assets. In addition to purchasing
assets by installments, the Company also uses financeleases (including operating leases) , which are an offbalance sheet item (details are provided in the notes tothe accounting statements).
Kanamoto has adopted the declining balance methodfor depreciation and amortization expense. As shown
below, this results in a situation where paper gains areeasily produced if assets can be used over long periodsof time because the depreciation and amortization
expense is large for the first year, then grows smaller inlater years. The difference in depreciation according to
the declining balance method and the straight-line
method is shown in the diagram.

Under Japan’s current accounting system, large
variances between actual asset values and book values
can occur in asset value assessments. One reason is thefact durable lives are stipulated by the Tax Code. For
assets handled by Kanamoto in particular,
implementing planned rental asset introductions
suitable to the size of its business and keeping balance
sheet depreciation and amortization expense uniform
are extremely difficult because the durable lives
established by law are different for each equipment
model.
Accordingly, to achieve results more closely
approximating the market-value accounting concept,
Kanamoto also introduces assets by utilizing both
operating leases and finance leases in an effort toequalize depreciation and amortization expense.

10

Kanamoto Semiannual Report 2007

Operating Results
Summary of fiscal year interim period operating results
Viewed comprehensively, during the fiscal year interim period
under review Japan's economy exhibited a weakening of the yenfrom the middle of the period, and steady positive growth centeredon export-related industries. The economic recovery progressed
mainly among Japan’s major corporations and the largest
metropolitan areas and the bracket of especially wealthy
consumers, and the effects of the economic recovery began toappear widely as the unemployment rate, which highlights theemployment environment, also fell below 4% after an interval offour years. Nevertheless, the economic upswing could be describedas one in which the benefits of the recovery remain lopsided, underwhich local regions strapped by severe fiscal circumstances, as wellas many individuals, cannot sense any real improvement.
Despite the harsh business environment in local regions faced withstringent fiscal conditions as stated above, the revenues of theKanamoto Group grew at a steady pace in each region. This
included higher revenues in both large metropolitan areas and local
regions for the Construction Equipment Rental Division,
Kanamoto's main business, as the result of efforts to cultivate
private sector demand and fight tenaciously to not lose any of the
few public works projects being initiated. Revenues from equipment
sales by this division also exceeded Kanamoto's initial plan.
Business related to the Construction Equipment Rental
DivisionIn the construction-related businesses of the entire Kanamoto
Group, both revenues and earnings were higher. For the
consolidated fiscal year interim period under review, consolidated
revenues increased 7.8% from the prior consolidated fiscal year to¥33,668 million, and operating income rose 22.0% year-on-year to¥3,346 million.
< Kanamoto Co., Ltd. on an non-consolidated basis >As the level of public works shrinks with each passing year, an
extremely harsh business environment has continued in regions
where private sector demand cannot be anticipated to supplement
the shortfall. To capture the scarce available demand, Kanamotosought to exploit new markets, by aggressively developing businessin markets such as architecture-related and event-related sites, forexample, where until now the Company had been slow to seek
customers, while further strengthening its sales offensive.
Construction equipment rental revenues on a non-consolidated
basis by region rose 5.2% year-on-year in the Hokkaido Region,
where Kanamoto was successful in strengthening its marketing andin uncovering private sector demand, and were up 5.8% from thesame period of the prior fiscal year in the Tohoku Region, where theCompany continued its excellent momentum from the prior fiscal
year. In the Kanto & Shinetsu Region, where special procurementfor disaster recovery work in both Niigata and Nagano Prefecture
came to an end, revenues edged down 1.9% year on-year.
Following an early surge, revenues in the Kinki & Chubu Region
eased to 3.4% growth for the period, despite vigorous private sector
demand in the Nagoya area, as sales softened because of aslowdown in demand in Hyogo Prefecture. The percentage ofrevenues accounted for by Hokkaido and by Honshu and otherregions was 32.3% and 67.7%, respectively.
As a result of these factors, for Kanamoto’s Construction Equipment
Rental Division on a stand-alone basis, rental revenues increased
3.0% year-on-year to ¥22,073 million, revenues from sales rose
29.2% year-on-year to ¥7,813 million and total revenues increased
8.7% from the same period of the prior consolidated fiscal year to¥29,886 million.
During the consolidated fiscal year interim period under review,
Kanamoto opened two new branches at the Chiba Shinminato
Branch (Chiba City, Mihama Ward) and in Higashidori (Higashidori,Shimokita-gun, Aomori Prefecture) and closed the Ojiya Branch(Ojiya City, Niigata Prefecture). As a result, at the end of the interim
period Kanamoto had 148 branches.
< Consolidated subsidiaries>
Daiichi Kikai Co., Ltd. experienced a slowdown in large-scaledisaster recovery demand, but as a result of securing both private
sector demand and government demand and efforts to cultivate
customers from a broadened marketing perspective, revenues wereup 8.2% from the same period of the prior consolidated fiscal year,
and operating income increased 57.7% year-on-year.
SRG Kanamoto Co., Ltd. continued to achieve steady growth inrentals of temporary scaffolding for condominium construction.
Revenues expanded 25.1% increase from the same period of theprior consolidated fiscal year, and operating income showed a¥16.513 million improvement, producing the company's first
positive earnings as an interim period operating result.
At Assist Co., Ltd., revenues were slightly lower than the initial plan
because revenues and earnings for the measurement equipment
rental business transferred by the company were eliminated. As aresult, revenues were 1.6% lower than in the same period of theprior consolidated fiscal year, and operating income also decreased
14.3% year-on-year.
At Kanki Corporation, which is restructuring its management,
revenues were 8.0% less than in the same period of the priorconsolidated fiscal year because a decrease in construction
equipment rental demand in Hyogo Prefecture and the influence ofunit price reductions. Earnings also were affected by the increased

cost burden for the company’s greatly expanded selection of rental
equipment assets and the cost to move its business office to a newlocation, and the company posted an operating loss.
Kanatech Co., Ltd., successfully revised its product pricing in
conjunction with the sudden rise in cost of materials, and released
new modular housing units. As a result, revenues increased 21.7%
year-on-year, and operating income rose ¥15.453 million comparedwith the same period of the prior consolidated fiscal year, restoring
this company to profitability.
Business related to the Steel Sales Division
Demand fell for both private sector construction such as
condominiums in Sapporo, which had demonstrated strong steady
growth until the interim period under review, and for steel towers
for the telecommunications industry. Price adjustments because ofexcess inventory concerns also were less effective than anticipated.
As a result, revenues decreased 23.3% from the same period of theprior consolidated fiscal year to ¥2,345 million, and the division
posted a small operating loss of ¥13 million.
Business related to the Information Products Division andOther Businesses
Low rental fee conditions for personal computers prevailed, but
rental demand for personal computers grew at a steady pace, andrevenues for the Information Products Division increased 5.5%
compared with the same period of the prior consolidated fiscal year.
On the other hand, revenues from sales of used devices fell 47.9%
year-on-year as the business entered its off season. Revenues forthe entire division dipped 1.3% year-on-year to ¥216 million, andoperating income decreased 2.4% from the same period of theprior consolidated fiscal year to ¥21 million.

Fiscal Year ending October 31, 2006 Interim Consolidated Operating Results
Revenues(Million yen; % change from prior year)

Consolidated FY interim period
Prior FY interim period

36,23034,520

5.0
4.2

Operating
IncomeOrdinary
IncomeNet Income

3,438 19.7
2,873 122.5

3,422 22.2
2,801 136.3

2,382 127.3
1,048 126.1

Management Policies
Management indicators established as objectives
The Kanamoto Group's core operations in the construction
equipment rental business require a substantial capital investment
burden. Moreover, the structure of this business requires a profit
and loss outlook extending over several years. Given these
considerations, the Kanamoto group has always positioned growth
in EBITDA+ (earnings before interest, taxes, depreciation andamortization) as its most important management indicator, while
also taking into consideration ROI (return on investment).
With regard to the numerical targets set in the long-term
management plan Kanamoto currently is implementing (November
2003 - October 2008), there remains uncertainty concerning thetrend in construction demand during the plan period, and on
several occasions in the past the Company has revised its targets
compared with initial plan. On May 28, 2007, the Company
released the latest revisions to its full-year operating results outlook
for the current consolidated fiscal year. After taking into

(Millions of yen, except net income per share)

Consolidated operating results
Non-consolidated operating
results (Kanamoto Company)

consideration construction demand in regions where economic
recovery has been slow, at this time the Company has not madeany additional changes to the numerical targets for the fiscal year
ending in October 2008. The Company will work to improve theprofitability of the entire Kanamoto group, focusing on maintaining
and expanding EBITDA+, which has a direct influence on
Kanamoto's consolidated operating results.
Medium to long-term corporate management strategy
The Company has now completed the fourth period of its longrange management plan Metamorphose (November 2003 October 2008). During this four-year period, the Company has
gradually realized the results of measures it has promoted, centeredon reorganization of its earnings profile and improvement of its
financial position, and as a result has three times revised its initial
operating results projections upwards. By continuing to practiceearnings-focused management and further expanding operating

Fiscal Year ending
October 2007

Fiscal Year ending
October 2009

68,7004,700
73.05
62,0004,700
19,11770,9804,560
67.87
63,6704,500
19,960

Revenues
Ordinary income
Net income per share (yen)
Revenues
Ordinary income
EBITDA+EBITDA+ = Operating income + Depriciation expense + Other depriciation and amotization expense + Low price rental assets, and others
EBITDA+ is an indicator used only for the construction equipment rental business and excludes steel products and information products

Kanamoto Semiannual Report 200711

results, the Company seeks to build a strong Kanamoto that will
be evaluated positively by the market.
(1)Maintain an earnings-focused rental equipment asset portfolio
In addition to replacing its large rental assets with the latest
emissions-controlled models, and extending rental periods for such
assets, the Company will seek to improve profit margins by also
strengthening its emphasis on equipment boasting high returns.
(2)Execute a bold scrap and build program
The Company has adopted a fundamental approach of giving
priority to establishing new branches in the Tokyo metropolitan
area and regions surrounding other large metropolitan areas, while
maintaining its existing branch network in other regions. In areas
where the Kanamoto group has not yet opened branches, theCompany’s policy is to investigate moving aggressively into a region
after analyzing all pertinent information and available opportunities.
The Company also will carefully scrutinize the possibilities for
expanding operating results and improving the profitability of eachbranch, and continue to close and integrate branches. The
Company also will actively utilize techniques such as M&A as
engines of growth.
(3)Build a powerful marketing organization and alliance groupwhere customers are always Number One
Kanamoto seeks to be a firm that enjoys a high level of customer
trust and is firmly rooted in its local communities. The Company
pursues this objective by offering services that take maximum
advantage of its corporate scale, such as Kanamoto’s
comprehensive compensation system and agreements with local
governments to respond to urgent requests following a disaster, andoffering products that are linked directly to customers' needs.
In addition, the Kanamoto group forms a network reaching from
Hokkaido to Okinawa, and the Company will continue to strengthen
cooperation among all Kanamoto group firms, and increase thesynergistic effects from this approach.

Outlook for the fiscal year
Japan's economy is following a recovery trend that is being driven
by the strong operating results of leading companies, and ismaintaining the longest growth period on record, supported byfactors such as an improved employment environment. Conditions
still remain subject to international circumstances, however,including the sharp rise in crude oil prices and the uncertain outlook
for the business climate in the U.S. A close look at the underpinningof the current expansion reveals the polarization of domestic
economic disparity, such as the problems of local administrative
authorities faced with a fiscal bankruptcy crisis or the burgeoning
number of socially vulnerable families, has not been resolved.
Construction demand, which is intimately related to Kanamoto's
main business of construction equipment rentals, is expanding in
the Tokyo metropolitan area and in major metropolitan centers inareas such as the Chukyo Region and the Kansai Region because ofongoing capital investment against the backdrop of the recovery incorporate operating performance. In regions that must rely heavily
on public works, however, private sector construction demand forredevelopment projects or condominium construction can be
expected in certain local cities, but this remains inadequate to offset
the sharp cutbacks in public works, and economic severity is still
projected to continue. Other factors, such as delays in construction
project starts under the influence of the House of Councilors
election in July, can also be assumed.
Accordingly, although Kanamoto revised its full-year projection on
May 28, management believes the business environment willremain extremely difficult because, in its view, there will not be any
major improvements in local construction demand trends. The
Kanamoto group will strive to maintain its current revenue andearnings growth trends, through efforts such as strengthening thecooperation among each group company and proactive saledevelopment. In June 2007, Kanamoto established its Hiroshima
Branch (Asaminami-ku, Hiroshima), the Company’s first foothold in
the Chugoku Region, and plans to continue adding branches in theTokyo metropolitan area, Nagoya and Osaka.

Fiscal year ending October 2007 Revision of projected operating results (Consolidated)(November 1, 2006 - October 31, 2007)(Millions of yen)

Full-year projected results
Prior fiscal year results (fiscal year ended October 2006)

Revenues

Operating
IncomeOrdinary
IncomeNet Income

68,70068,023

4,600
4,068

4,700
3,788

2,400
1,742

Revenues

Operating
IncomeOrdinary
IncomeNet Income

62,00060,753

4,300
3,715

4,700
3,739

3,000
1,720

Fiscal year ending October 2007 Revision of projected operating results (Non-Consolidated)(November 1, 2006 - October 31, 2007)(Millions of yen)

Full-year projected results
Prior fiscal year results (fiscal year ended October 2006)

12

Kanamoto Semiannual Report 2007

Consolidated Financial Statements

Interim Consolidated Balance Sheets
ASSETS

Thousands of
U.S. dollars (Note)

Millions of yen
October 31,2006

April 30,2007(Unaudited)¥ 21,062
13,243
641
317
1,810
(605)
36,468¥ 18,398
14,959
560
392
1,946
(523)
35,732¥ 22,466
13,013
685
357
1,423
(523)
37,421$ 187,527
108,6215,720
2,976
11,879(4,367)
312,356

Land
Construction in progress
Total property and equipment

37,16915,965
5,393(41,960)
16,567
25,792
24
42,38337,784
16,5625,450(42,825)
16,971
25,906247
43,12437,03816,517
5,468(41,443)
17,58026,26487
43,931

309,166
137,873
45,640(345,933)
146,746
219,233727
366,706

Investments and other assets:
Investment securities
Other assets
Less : Allowance for doubtful accounts
Total investments and other assets
Total assets

6,601
2,389
(837)
8,153
¥ 87,004

6,224
2,411
(675)
7,960
¥ 86,816

7,754
2,498
(736)
9,516
¥ 90,868

64,721
20,851(6,140)79,432$ 758,494

April 30,2006(Unaudited)

Current assets:
Cash and cash equivalents
Notes and accounts receivable, trade
Inventories
Deferred income taxes
Other current assets
Less : Allowance for doubtful accounts
Total current assets
Property and equipment:
Rental equipment
Buildings and structures
Machinery and equipment
Less: Accumulated depreciation

April 30,2007(Unaudited)

Note U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥119.80=US$1, the approximate excange rate on April 30, 2007

Kanamoto Semiannual Report 200713

Consolidated Financial Statements

Interim Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDERS' EQUITY

Thousands of
U.S. dollars (Note)

Millions of yen
April 30,2006(Unaudited)

October 31,2006

April 30,2007(Unaudited)

April 30,2007(Unaudited)

Current liabilities :Short-term bank loans
Current portion of long-term debt
Notes and accounts payable, trade
Accrued income taxes
Accrued bonuses
Other current liabilities
Total current liabilities¥ 559
10,57013,441
1,158
567
3,788
30,083¥ 498
11,574
12,419
1,365
512
2,203
28,571¥ 390
9,773
13,225
1,828
537
3,682
29,435$ 3,255
81,576110,391
15,262
4,486
30,734
245,704

Non-current liabilities:
Long-term debt
Accrued pension and severance costs
Other liabilities
Total non-current liabilities

17,545
1,592
2,409
21,546

17,618
1,682
893
20,193

16,205
1,764
3,064
21,033

135,266
14,72025,575
175,561

8,597
9,720
14,464
(191)
2,673
112
35,375¥ 87,004

9,697
10,96014,890(6)
2,419
92
38,052¥ 86,816

9,697
10,961
16,977
(11)
2,648
128
40,400¥ 90,868

80,941
91,493
141,710(95)
22,115
1,065
337,229$ 758,494

Shareholders' equity:
Common stock :Capital surplus
Retained earnings
Treasury stock
Unrealized holding gain on securities
Minority interests
Total shareholders' equity
Total liabilities and shareholders' equity

14

Kanamoto Semiannual Report 2007

Interim Consolidated Statements of Income
Thousands of
U.S. dollars (Note)

Millions of yen
April 30,2006(Unaudited)

Revenue
Rentals
Sales
Cost of revenue
Rentals
Sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income
Gains on sale of fixed assets
Interest expenses
Impairment loss on fixed assets
Others, net
Income before income taxes and minority interests
Income taxes
Current
Deferred
Minority interests in subsidiaries
Net income

October 31,2006

April 30,2007(Unaudited)¥ 24,004
10,51634,520¥ 46,059
21,96568,024¥ 24,777
11,45436,231$ 206,816
95,610302,426

16,447
8,145
24,592
9,928
7,055
2,873

32,697
17,04849,745
18,27914,2104,069

16,7098,576
25,285
10,946
7,508
3,438

139,472
71,585211,057
91,36962,66828,701

10
–
(168)
(595)
59
2,179

43
–
(358)
(595)
295
3,454

26
921
(194)
(1)
105
4,295

216
7,685
(1,621)(7)879
35,853

1,122
(32)
1,090
41
¥ 1,048

1,768
(78)
1,690
21
¥ 1,743

1,779
98
1,877
35
¥ 2,383

14,846820
15,666296$ 19,891

April 30,2006(Unaudited)

October 31,2006

April 30,2007(Unaudited)

April 30,2007(Unaudited)¥ 35.12–¥ 57.41–¥ 72.53–$ 0.61–Yen

Per share of common stock :Net income
Basic
DilutedConsolidated Statements of Cash Flows

U.S. dollars (Note)

Thousands of
U.S. dollars (Note)

Millions of yen
April 30,2006(Unaudited)

Net cash provided by operating activities
Net cash provided (used) in investing activities
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period

April 30,2007(Unaudited)¥ 9,184
501(2,732)
6,953
14,109¥ 21,062

October 31,2006¥ 8,414(489)(3,636)
4,289
14,109¥ 18,398

April 30,2007(Unaudited)¥ 6,775(1,105)(1,602)
4,068
18,398¥ 22,466

April 30,2007(Unaudited)$ 56,551(9,228)(13,371)
33,952
153,575$ 187,527

Note U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥119.80=US$1, the approximate excange rate on April 30, 2007

Kanamoto Semiannual Report 200715

Consolidated Financial Statements

Segment information

Millions of yen

For the six months ended April 30, 2007

Sales
Outside customers
Intersegment
Total
Operating expenses
Operating profit

Construction
related business

Steel related
business

Information andcommunication related
and other business¥ 33,669–
33,66930,322¥ 3,347¥ 2,345
–
2,345
2,359
(¥ 14)

¥ 217
–
217
196
¥ 21

Total

¥ 36,231–
36,23132,877¥ 3,354

Eliminations
and corporate
items

¥–
–
–
(84)
¥ 84

Consolidated¥ 36,231–
36,23132,793¥ 3,438

Thousands of U.S. dollars

For the six months ended April 30, 2007

Sales
Outside customers
Intersegment
Total
Operating expenses
Operating profit

16

Kanamoto Semiannual Report 2007

Construction
related business

Steel related
business

Information andcommunication related
and other business

Total

Eliminations
and corporate
items

Consolidated$281,039–
281,039
253,105$27,934$19,576–
19,576
19,690($114)$1,811
–
1,811
1,632
$179

$302,426–
302,426
274,427$27,999

$–
–
–
(702)
$ 702

$302,426–
302,426
273,725$28,701

Non-Consolidated Financial Statements

Interim Non-Consolidated Balance Sheets
ASSETS
April 30,2006(Unaudited)

Current assets :Cash and time deposits
Notes receivable, trade
Accounts receivable, trade
Inventories
Other current assets
Less : Allowance for doubtful accounts
Total current assets

Thousands of
U.S. dollars (Note)

Millions of yen
October 31,2006

April 30,2007(Unaudited)

April 30,2007(Unaudited)¥ 20,186
2,339
9,329
344
1,811
(534)
33,475¥ 17,461
2,877
10,734
259
2,109
(456)
32,984¥ 21,760
2,190
9,140
383
1,458
(453)
34,478$ 181,634
18,28376,2993,199
12,168(3,785)
287,798

Land
Construction in progress
Total property and equipment

34,977
11,322
3,842
5,161(39,381)
15,921
25,52024
41,46535,734
11,763
3,988
5,210(40,267)
16,42825,634247
42,30935,827
11,9784,107
5,336(40,174)
17,07425,99285
43,151

299,056
99,97934,28244,543(335,342)
142,518
216,964707
360,189

Investments and other assets :Investments and other assets
Less : Allowance for doubtful accounts and reserve for investments
Total investments and other assets
Total assets

9,425(1,006)
8,419¥ 83,359

9,173
(951)
8,222
¥ 83,515

10,776(998)
9,778¥ 87,407

89,950(8,333)
81,617$ 729,604

Property and equipment :Rental equipment
Buildings
Structures
Machinery and equipment
Less : Accumulated depreciation

Note U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥119.80=US$1, the approximate excange rate on April 30, 2007

Kanamoto Semiannual Report 200717

Non-Consolidated Financial Statements

Interim Non-Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDERS’ EQUITY

Thousands of
U.S. dollars (Note)

Millions of yen
April 30,2006(Unaudited)

October 31,2006

April 30,2007(Unaudited)

April 30,2007(Unaudited)

Current liabilities :Current portion of long-term bank loans
Notes payable, trade
Accounts payable, trade
Notes payable, otherAccounts payable, otherAccrued income taxes
Accrued bonuses
Other current liabilities
Total current liabilities¥ 10,415
9,574
2,314
265
2,496
1,069
489
1,042
27,664¥ 9,935
8,247
2,522
340
2,563
1,292
438
898
26,235¥ 9,608
9,673
1,753
443
2,839
1,705
481
583
27,085$80,200
80,738
14,633
3,698
23,695
14,2354,017
4,866
226,082

Non-current liabilities :Long-term bank loans
Long-term accounts payable, otherAccrued pension and severance costs
Deferred tax liabilities
Other liabilities
Total non-current liabilities

16,555
1,745
1,567
119
103
20,08915,120
2,030
1,664
–
90
18,904

15,335
2,360
1,748
168
84
19,695

128,005
19,69914,5901,406
702
164,402

8,597
9,720
14,814(191)
2,666
35,606¥ 83,359

9,697
10,96015,311(6)
2,414
38,376¥ 83,515

9,697
10,96017,336(11)
2,645
40,627¥ 87,407

80,941
91,493
144,703(95)
22,078339,120$729,604

Shareholders’ equity :Common stock :Capital surplus
Retained earnings
Treasury stock
Unrealized holding gain on securities
Total shareholders’ equity
Total liabilities and shareholders’ equity

18

Kanamoto Semiannual Report 2007

Interim Non-consolidated Statements of Income
Thousands of
U.S. dollars (Note)

Millions of yen
April 30,2006(Unaudited)

Revenue
Rentals
Sales
Cost of revenue
Rentals
Sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses) :Interest and dividend income
Interest expenses
Gains on sale of fixed assets
Impairment loss on fixed assets
Others, net
Income before income taxes
Income taxes
Current
Deferred
Net income

October 31,2006

April 30,2007(Unaudited)¥ 21,632
9,132
30,764¥ 41,813
18,94160,754¥ 22,276
10,17332,449$185,944
84,917
270,861

15,268
6,963
22,231
8,533
6,037
2,496

30,483
14,422
44,905
15,84912,133
3,716

15,418
7,523
22,941
9,508
6,438
3,070

128,700
62,794
191,494
79,36753,741
25,626

14
(152)
–
(595)
189
1,952

48
(327)
–
(595)
448
3,290

29
(178)
921
(1)
233
4,074

242
(1,483)
7,686
(7)
1,944
34,008

1,033
(36)
997
¥ 955

1,684
(114)
1,570
¥ 1,720

1,656
98
1,754
¥ 2,320

13,819820
14,639$19,369

April 30,2006(Unaudited)

October 31,2006

Yen

Per share of common stock :Net income
Basic
DilutedApril 30,2007(Unaudited)¥31.99–¥ 56.67–

U.S. dollars (Note)
April 30,2007(Unaudited)

April 30,2007(Unaudited)¥ 70.62–$ 0.59–Note U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥119.80=US$1, the approximate excange rate on April 30, 2007

Kanamoto Semiannual Report 200719

At a Glance (Consolidated)

20

Kanamoto Semiannual Report 2007

At a Glance (Non-consolidated)

Kanamoto Semiannual Report 200721

Topics

Kanamoto establishes joint venture company in China. Efforts
focus on a quick start to operations.
Kanamoto established Shanghai Jinheyuan Equipment Rental Co.,
Ltd., a joint venture with Shanghai Miyuan International Trading Co.,
Ltd. and ORIX Corporation, and began business activities inShanghai, China in February 2007. Currently this company, theKanamoto group’s first presence overseas, is engaged in importingand exporting construction materials. With plans to also develop theconstruction equipment rental business in the future, the newcompany is working to quickly establish its business model, while
focusing on major projects and large-scale infrastructure
construction being planned in China.

Kanamoto focuses on effective base development andstrengthening group capabilities
Kanamoto established its Chiba Shinminato Branch (Mihama Ward,
Chiba City) in January of this year, followed by the opening of theHiroshima Branch (Asaminami-ku, Hiroshima) in June as the
Kanamoto Group’s first branch in the Chugoku Region. Because they
are positioned in areas with strong demand, both branches are
expected to develop as business bases to support various customer
needs.
In Hokkaido, Kanamoto took over the business of TO Ogasawara
Co., Ltd., a subsidiary company of TO Ogasawara Co., Ltd., a leading
local firm. Also in the same month, Kanamoto focused on measures
to strengthen the Kanamoto group network, including theconversion of Kyushu Kensan Co., Ltd. a firm participating in the
Kanamoto alliance group, into a subsidiary company. Kanamoto
currently is seeking to further expand its market share in various
regions.
Kanamoto takes steps to enhance domestic and overseas IR
activities
Kanamoto has always focused on IR activities. In recent years, theCompany has attempted more proactive development, both in Japanand overseas.
In addition to domestic activities Kanamoto has pursued until now,
such as calling on institutional investors and holding operating
results briefings, and exhibiting at the “Nikkei IR Fair” and “Nomura
Asset Management Fair,” the Company has held company
presentations in regions throughout Japan to introduce Kanamoto to
private investors.
In April of this year, Company management visited institutional
investors in Great Britain and the United States. The Company plansto enhance these IR activities in the future, both at home andabroad.

22

Kanamoto Semiannual Report 2007

Corporate Data (As of Jun, 2007)

Company Name

Stock Code
9678

Head Office
1-19, Odori Higashi 3-chome Chuo-ku,
Sapporo, Hokkaido 060-0041 Japan
Established
October 28, 1964

Common Shares Issued and Outstanding
32,872,241
Fiscal Year-end
October 31
Revenues (Fiscal year ended October 2006)
Consolidated¥68,023 million
Non-Consolidated ¥60,753 million

Capitalization¥9,696 million (Paid-in capital)

Number of Employees
Listing Exchanges
Tokyo Stock Exchange, First Section
Sapporo Stock Exchange(Excluding directors and temporary or part-time workers)

Consolidated
1,452
Non-Consolidated 1,183

Branchi Network

Headquarters Buillding(Sapporo, Hokkaido)

Tokyo Operating Division

Kanamoto Semiannual Report 200723