Fiscal Year ending October 31, 2005

Summary of Company Interim Financial Statements
June 10, 2005
Listed Company Name

Kanamoto Company, Ltd.

Company Code Number

9678

Listing Exchanges

Tokyo Stock Exchange, Sapporo Stock Exchange

Head Office Address

1-19, Odori Higashi 3-chome, Chuo-ku, Sapporo, Hokkaido Japan 060-0041(URL http://www.kanamoto.co.jp)
Representative

Kanchu Kanamoto

Inquiries

Nobuhito Utatsu

President

Director & Corporate Officer, Division Manager, Accounting Division
TEL 81-11-209-1600

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

June 10, 2005

Interim Dividend System

The Company has an interim dividend system

Interim Dividend Payment Date
Has the Company adopted a Unit Stock System?

July 19, 2005
Yes (1 unit equals 1,000 shares)

１．Operating Results for the Interim Period ended April 30, 2005 (November 1, 2004–April 30, 2005)(1) Operating Results(Numbers less than one million yen have been rounded down)
Revenues

Operating Income

Millions of yen
Six months ended April
30, 2005
Six months ended April
30, 2004
Fiscal year ended
October 31, 2004％

Six months ended April
30, 2004
Fiscal year ended
October 31, 2004％

Millions of yen

％

- 2.2

1,169

-12.8

1,225

- 8.0

29,726

- 3.0

1,341

-18.6

1,332

-17.8

59,274

1,842

1,827

Net Income per Share ofCommon StockMillions of yen
30, 2005

Millions of yen

29,080Net Income

Six months ended April

Ordinary Income％

Net Income per Share ofCommon Stock Fully Diluted

Yen

Yen

602

-39.4

20.16

−

994

41.1

33.29

−

39.50

−

1,187

Notes 1. Average number of shares outstanding during the period
Six months ended April 30, 2005

29,857,851 shares

Six months ended April 30, 2004

29,868,128 sharesFiscal year ended October 31, 2004

29,865,301 shares

2. Are there any changes in accounting method?

No

3. The percentages shown for revenues, operating income, ordinary income and net income are the percent
increase or decrease compared to the same period of the prior fiscal year

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 39

(2) Dividends
Interim Dividendper Share ofCommon Stock

Annual Dividend per
Share of Common
Stock

Yen

Yen

Six months ended April
30, 2005
Six months ended April
30, 2004
Fiscal year ended
October 31, 2004

9.00

───

9.00

───

───

19.00

(3) Financial Position
Total Assets

Sixmonthsended

April 30, 2005
Six

monthsended

April 30, 2004
Fiscal year ended
October 31, 2004

Shareholders’Shareholders’Shareholders’ Equity

EquityEquity Ratio

per Share

Millions of yen

Millions of yen

Yen

81,65533,41640.9

1,119.22

85,577

32,95838.5

1,103.57

85,46932,93338.5

1,102.69％

Notes 1. Number of shares issued and outstanding at end of period
Six months ended April 30, 2005

29,856,811 shares

Six months ended April 30, 2004

29,865,040 sharesFiscal year ended October 31, 2004

29,859,442 shares

2. Number of shares of treasury stock at end of period
Six months ended April 30, 2005

396,430 shares

Six months ended April 30, 2004

388,201 sharesFiscal year ended October 31, 2004

393,799 shares

2. Projected Operating Results for the Fiscal Year Ending October 31, 2005
(November 1, 2004 - October 31, 2005)
Operating

Ordinary

IncomeIncomeMillions of yen

Millions of yen

Millions of yen

56,920

1,320

1,340

Revenues

Full year

Net Income

Annual Dividend per
Year-end

Millions of yen
350

Yen

Yen

9.00

18.00

Reference: Projected net income per share of common stock (Full year) ¥11.72*The above projections were prepared based upon information available to the Company at the time the projections
were announced as well as various assumptions concerning the future economic and business environment. Actual
operating results may differ from the projected figures depending upon various factors in the future.

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 40

Company Financial Statements
１ ． Comparative Balance Sheets

Ⅸ

PeriodAmountCategory(Unit: Thousands of yen)

End of Prior Fiscal Year
Interim Period(As of April 30, 2004)
Percent

End of Current Fiscal
Year Interim Period(As of April 30, 2005)
Amount％( A s s e t s )Percent

Prior Fiscal Year
Summary Balance Sheet(As of October 31, 2004)
Amount％Percent％

Ⅰ Current Assets
14,464,048

17,732,891

10,911,377

10,821,369

2,317,748

10,889,913

7,920,844

8,687,044

11,067,221

530,632

346,111344,870

Other current assets

2,751,175

2,764,063

2,586,085

Allowance for doubtful
accounts- 569,845-573,665-629,663

Total Current Assets

35,918,224

Cash

and

deposits

N o t e s r e c e i v a b l e , t r a d e *1
Accounts receivable, trade
I

n

v

e

Ⅱ Fixed

n

t

o

r

y

42.0

31,274,193

38.3

35,169,805

41.1

A s s e t s(1) Tangible Fixed Assets *2
Rental equipment

10,670,114

9,980,521

9,719,372

Buildings and structures

5,654,104

5,542,979

5,731,090*4

24,381,774

25,788,514

25,838,381

*4

Land
Other
tangible
assetsTotal Tangible
Assetsfixed

2,445,952

2,187,840

2,235,645

Fixed

43,151,946

43,499,856

43,524,490(2) Intangible Fixed Assets

108,188

208,273

226,860

Investment securities

3,743,612

4,196,108

3,800,470

Other assets

3,481,145

3,363,991

3,591,554

Allowance for doubtful
a c c o u n t sReserve for investment
lossesTotal Investments andOther Assets- 596,090-606,832-564,006- 229,402-280,000-280,000

6,399,264

6,673,267

6,548,018

Investments and Other(3)
AssetsTotal Fixed Assets

49,659,400

58.0

50,381,396

61.7

50,299,369

58.9

Total Assets

85,577,625

100.0

81,655,589

100.0

85,469,174

100.0

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 41

(Unit: Thousands of yen)
PeriodCategory

End of Prior Fiscal Year
Interim Period(As of April 30, 2004)
AmountPercent

End of Current Fiscal
Year Interim Period(As of April 30, 2005)
Amount％( L i a b i l i t i e s )Percent

Prior Fiscal Year
Summary Balance Sheet(As of October 31, 2004)
Amount％Percent％

Ⅰ Current Liabilities
Notes payable, trade*1,5

7,738,928

9,313,631

8,967,156

Accounts payable, trade*5

2,182,236

1,930,210

2,838,409

10,356,000

10,324,000

10,747,000

Accounts payable, other

4,715,460

3,249,439

4,065,427

Corporate taxes payable

636,363646,600

362,284

Accrued bonuses to
e m p l o y e e s

449,264

466,202436,029

Equipment notes payable

93,278

231,998

174,013

Other current liabilities

554,106

502,749

485,855

Total Current Liabilities

26,725,637

Short-term bank loans

31.2

26,664,832

32.7

28,076,177

32.9

Ⅱ Long-term Liabilities
Long-term bank loans

21,104,000

18,040,000

20,735,000

Long-term accrued
e x p e n s e s
Accrued employees
retirement benefits
Retirement allowance todirectors and auditors

3,532,304

2,125,996

2,426,551

1,184,745

1,315,092

1,226,848

72,746

93,236

71,542

Total Long-term Liabilities

25,893,796

30.3

21,574,325

26.4

24,459,941

28.6

T o t a l

52,619,433

61.5

48,239,158

59.1

52,536,118

61.5

8,596,737

10.0

8,596,737

10.5

8,596,737

10.0

L i a b i l i t i e s（Shareholders’ Equity）

Ⅰ Common stock
Ⅱ Capital surplus
Additional paid-in capital

9,720,343

Total capital surplus

9,720,343

9,720,343
11.4

9,720,343

9,720,343
11.9

9,720,343

11.4

Ⅲ Earned surplus
1,375,287

1,375,287

1,375,287

reserve

11,281,684

11,831,684

11,281,684

Unappropriated retained
earnings (interim period)

1,519,528

1,189,722

1,443,580

Total earned surplus

14,176,500

16.6

14,396,694

17.6

14,100,552

16.5

Ⅳ other

Valuation difference onnegotiable

643,9020.7

886,693

1.1

697,897

0.8

Ⅴ Treasury stock-179,292-0.2-184,036-0.2-182,475-0.2

Total Shareholders’ Equity

32,958,191

38.5

33,416,431

40.9

32,933,055

38.5

Total Liabilities andShareholders’ Equity

85,577,625

100.0

81,655,589

100.0

85,469,174

100.0

Legal earned surplus
GeneralSummary of Company Interim Financial Statements, FY ending October 31, 2005

P. 42

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

Prior Fiscal Year
Current Fiscal Year
Prior Fiscal Year Interim
Summary Statement ofInterim Period
PeriodIncome(From November 1, 2003 (From November 1, 2004
(From November 1, 2003
to April 30, 2004)
to April 30, 2005)
to October 31, 2004)
AmountPercent

AmountPercent％

Amount％Percent％

Ⅰ

Operating revenues

29,726,200

100.0

29,080,330

100.0

59,274,381

100.0

Ⅱ

Cost of revenues

22,481,134

75.6

21,963,898

75.5

45,811,415

77.3

7,245,066

24.4

7,116,431

24.5

13,462,966

22.7

Selling, general andadministrative

5,903,507

19.9

5,946,705

20.5

11,620,779

19.6

Operating

1,341,558

4.5

1,169,725

4.0

1,842,186

3.1*2

262,7840.9

283,977

1.0

529,4620.9*3271,7730.9

227,9810.8

544,1460.9

1,332,569

4.5

1,225,721

4.2

1,827,502

3.1

G r o s sⅢⅣⅤ

p r o f i t

incomeNon-operatingr e v e n u e s
Non-operatinge x p e n s e s
Ordinary

incomeⅥ

Extraordinary profits*4612,176

2.0

107,3120.4

620,226

1.0

Ⅶ

Extraordinary losses*595,9580.3

246,400

0.9

204,949

0.3

1,848,787

6.2

1,086,633

3.7

2,242,779

3.8

597,6172.0

571,986

2.0

832,7901.4

256,8970.9-87,388-0.3

222,880

0.4

i n c o m e994,2713.3

602,0352.0

1,187,109

2.0

Profit carry-forwardfrom prior period

557,483

587,686

557,483

d i v i d e n d s−−

268,785

Loss on elimination ofstock of affiliated32,226−32,226

1,519,528

1,189,722

1,443,580

Income before taxes anda d j u s t m e n t s
Corporate, local andbusiness taxes
Adjustment forcorporate and otherN e t

C a s hUnappropriatedearnings

retained

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 43

３．Notes to the Interim Financial Statements and Significant Accounting Policies

Item

Period Prior Fiscal Year Interim Period(From November 1, 2003 to
April 30, 2004)

1. Valuation standards

Current Fiscal Year Interim
Period(From November 1, 2004
to April 30, 2005)

Prior Fiscal Year Summary
Statement of Income(From November 1, 2003
to October 31, 2004)(1) Negotiable securities(1) Negotiable securities(1) Negotiable securities

Common stock ofCommon stock ofCommon stock ofsubsidiaries and affiliatedsubsidiaries and affiliatedsubsidiaries and affiliatedcompanies

companies

companies

and valuation methods
for assets

The

Company

hasSame as at left

Same as at left

adopted the cost method
based

upon

the

movingaverage method
Other negotiable securities

Other negotiable securities

Other negotiable

Negotiable securities with a

Negotiable securities with asecurities

market on a securities

market on a securities

Negotiable securities with aexchangeexchangemarket on a securities

The

Company

hasSame as at left

exchange

adopted the market value

The

Companyhasmethod (the full amount of

adopted the market value

the valuation difference ismethod (the full amount ofcharged to equity using thethe valuation difference isdirect transfer to capitalcharged to equity using themethod, with the disposal

direct transfer to capital

cost

method, with the disposal

determined

by

the

moving average method)

cost

based on the market pricemovingontheclosing

interimdate

periodorsimilarpricesdeterminedbyaveragethemethod)based on the market price
Other negotiable securities
Same as at left

on the accounting period
closingdateorsimilarpricesOther negotiable securities
The

Company

has

Other negotiable securities

adopted the cost method
based

upon

the

Same as at left

movingaverage method(2) Construction equipment
Amountafter(2) Construction equipment
Amountafter(2) Construction equipment
Amountafter

deduction of depreciation

deduction of depreciation

deduction of depreciation

expensecalculated

expensecalculated

expensecalculated

accordingtoaccordingtoaccording

to

the

the

the

declining-balance

declining-balance

declining-balancemethod from the original

method from the original

method from the original

prices, by separate fiscal

prices, by separate fiscal

prices, by separate fiscal

year of purchaseyear of purchase(3) Merchandise inventories(3) Merchandise inventories

year of purchase(3) Merchandise inventories

and supplies

and supplies

and supplies

Merchandise inventory

Merchandise inventory

Merchandise inventory

Lower of cost orSame as at left

Same as at left

market based on thelast-in, first-out
methodSupplies
The Latest purchase

Supplies
Same as at left

Supplies
Same as at left

cost method

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 44

2.Depreciation

methodfor fixed assets(1) Tangible fixed assets
The(1) Tangible fixed assets

Company

adoptedthehas(1) Tangible fixed assets

Same as at left

Same as at left

declining-balancemethod.

Buildings on land that isleased under a fixed-term
land

lease

agreement,

however, are depreciated
using

the

straight-line

methodusing

theremaining period of the
fixed-term lease as thedepreciable life and zero
residual value.
The

depreciable

lives

used

the

mainlybyCompany are as follows.
Rental assets:
5-10 years
Buildings:
31-34 years(2) Intangible fixed assets(2) Intangible fixed assets

Software for use withintheCompany

depreciatedSame as at left

(3) Long-term prepaid(3) Long-term prepaid

is

using

straight-line(2) Intangible fixed assets

Same as at leftthemethodbased on the assumed
useful life for internal use(5 years).
(3) Long-term prepaid
expensesThe

expensesCompany

adoptedhas

expensesSame as at left

Same as at left

straight-line

depreciation.
3. Accounting standards
for allowances andreserves(1) Allowance for doubtful(1)

Allowancefordoubtful (1) Allowance for doubtful

accounts

accounts
To provide for losses on

accounts

Same as at left

Same as at left

(2) Accrued bonuses to(2) Accrued bonuses todoubtful accounts such asaccounts receivable, theCompany charges toincome an amount basedon actual loss experience
for normal accounts, plus
an amount for projected
unrecoverable amounts
based on assessments ofindividual accounts.
(2) Accrued bonuses to
employees
To

fully

employees
providefor

Same as at left

employees
To

fully

providefor

expenditures of bonuses

expenditures of bonuses

the Company will pay to

the Company will pay toemployees, an amount is

employees, an amount isappropriatedreserveinterimtotheappropriatedduringthereserve during the fiscal

basedyear based upon a salary

periodupon a salary estimate

to

the

estimate amount.

amount.

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 45

(3) Accrued employees(3) Accrued employees(3) Accrued employees

retirement benefits

retirement benefits

retirement benefits

The Company provides

Same as at left

The Company provides

for accrued employees’for employees’ accrued

retirement

retirement

benefits

benefits

based

upon

the

based

upon

the

projected

amountsofprojected

amountsofthe liability for accrued

the liability for accrued

employees

employees’

retirement

retirement

benefits and the value

benefits and the valueof pension assets at theof pension assets at theend of the fiscal year. At

end of the fiscal year. At

the end of each interim

the end of each fiscal

period,

year,

the

CompanytheCompany

appropriates an amountappropriates an amount

to

to

the

reservetothereservetoprovide for the liability

provide for the liability

recognizedrecognized

duringtheduringtheperiod.

Pastyears’

period.

Pastyears’

serviceliabilities

areserviceliabilities

arefully written off in the

fully written off in theyear incurred.

year incurred.

The difference based on

The difference based onan actuarial calculationan actuarial calculationisischargedtoincomechargedtoincomebeginning in the fiscal

beginning in the fiscal

year following the year

year following the year

in which incurred, within which incurred, withthe amounts

the amounts allocatedallocated

proportionately
the

using

straight-line

method,based

specified

numberon

proportionately
the

using

straight-lineamethod,basedofspecified

numberonaofyears (10 years) that isyears (10 years) that isless than the averageless than the averageremainingofremainingfor

employment

periodemployment

periodofforemployees at the time

employees at the timethe difference arises.

the difference arises.

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 46

(Supplemental information)
On January 1, 2004 the--------(Supplemental information)
On January 1, 2004 theCompany received

Company received

approval from the Minister

approval from the Ministerof Health, Labour andof Health, Labour andWelfare for exemption

Welfare for exemption

from the obligation tofrom the obligation to

make future payments formake future payments forthe entrusted portion of

the entrusted portion of

the Employee Welfare

the Employee Welfare

Pension Fund,

Pension Fund,

accompanying

accompanying

enforcement of theenforcement of theDefined Benefit Corporate

Defined Benefit Corporate

Pension Law.

Pension Law.

The Company has

The Company has

adopted the interim

adopted the interim

measures prescribed inmeasures prescribed in

Paragraph 47-2 of theParagraph 47-2 of theBusiness Guidelines

Business Guidelines

Concerning Retirement

Concerning Retirement

Benefit Accounting

Benefit Accounting(Interim Report)(Interim Report)

concerning return of theconcerning return of theentrusted portion of theentrusted portion of thecorporate Employee

corporate Employee

Welfare Pension Fund (The

Welfare Pension Fund (TheJapanese Institute ofJapanese Institute ofCertified PublicCertified Public

Accountants, Accounting

Accountants, Accounting

System Committee Report

System Committee Report

No. 13), and on the day

No. 13), and on the day

authorization was received

authorization was received

the Company accounted

the Company accounted

for the retirement benefit

for the retirement benefit

liability related to theliability related to theentrusted portion and theentrusted portion and thepension assets equivalentpension assets equivalent

to the return amount as

to the return amount as

being extinguished.

being extinguished.

The Company accounted

The Company accounted

for the affects

for the affects

accompanying thisaccompanying thistreatment by booking

treatment by booking

extraordinary profits ofextraordinary profits of¥606,420 thousand as of¥606,420 thousand as ofthe end of the interim

the end of the accounting

accounting period.

period.

The returned equivalent

The returned equivalentamount (minimum

amount (minimum

actuarial liability)

actuarial liability)

measured as of the end of

measured as of the end of

the interim accounting

the prior accounting

period under review wasperiod was ¥1,296,434¥1,316,579 thousand.

thousand.

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 47

(4) Retirement allowances todirectors and auditors
The Company provides(4) Retirement allowances
to directors and auditors
Same as at left

(4) Retirement allowances todirectors and auditors
The Company provides

for retirement allowances

for retirement allowances

to directors and auditors

to directors and auditors

based upon pertinent

based upon pertinent

rules and appropriated torules and appropriated tothe account at the end of

the account at the end of

the interim period

the fiscal year

proportionately based

proportionately based

upon length of service.
(5) Reserve for investment
lossesThe Company provides(5) Reserve for investment
lossesSame as at left

upon length of service.
(5) Reserve for investment
lossesSame as at left

for losses from thedecline in real prices ofassets such as the stockof subsidiary companies
that are subject to asset
impairment accounting
by applying internallyestablished standards
that take into
consideration subsidiarycompany operating
results and asset quality.
4. Lease transactions

For finance lease

Same as at left

Same as at left

(1) Hedge transactions(1) Hedge transactions

Same as at left

Same as at lefttransactions except forleases that transfer
ownership of the property
to the lessee, rent
expenses are charged toincome as payments are
5. Hedge transactions

made.
(1) Hedge transactions
The Company accounts
for hedge transactions
using allocations basedon accounting standards
forforeigncurrency-

denominatedtransactions, and special
ruleaccounting

based

on accounting standards
for financial products.

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 48

(2) Hedge methods and(2) Hedge methods and(2) Hedge methods andhedged transactions

hedged transactions

hedged transactions

The Company uses

Same as at left

Same as at leftcurrency swaps andforward transactions inorder to avoid thecurrency fluctuation risk
related to the Company’s
foreign currencydenominated straightbonds and liabilities forimport payments. The
Company also uses
interest swaps to avoid
interest rate fluctuation
risk related to interest onbank borrowing.
(3) Hedging policies(3) Hedging policies

The Company’s use ofSame as at left

(3) Hedging policies
Same as at leftderivative transactions islimited to hedging risk
within the scope of theCompany’s assets andliabilities subject tomarket fluctuation risk.
(4) Method for evaluating(4) Method for evaluating(4) Method for evaluating

the effectiveness ofthe effectiveness ofthe effectiveness ofhedgeshedgeshedgesThe Company does notevaluate

Same as at left

Same as at lefttheeffectiveness
hedge

of

its

transactions

because it can assume
that its currency swap
transactions and forward
transactions

will

completely

offsetmarketfluctuations

changes

in

from

the

begins

cash
time

until

or
flow

hedge
it

is

terminated. In addition,
the Company’s interest
swap transactions fulfill
therequirementsforspecial rule accounting,and the Company has
elected to use this inplace of an evaluation ofeffectiveness.

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 49

6. Other significant
matters for

Accounting treatment of

Accounting treatment of

Accounting treatment ofconsumption tax

consumption tax

consumption tax

preparation of theConsumption

tax

is

interim period (fiscal

taken

of

all

year) financial

Statement

statements

items and Balance Sheet

outofSame as at left

Same as at left

Incomeitems, except mainly forreceivables

andpayables.
The suspense accounts
forconsumption

tax

receipts

andconsumption

tax

payable are included in“other current liabilities”
becausetheimportanceisfinancialminimalafter the amounts areoffset.

Change in Reporting Method
Current Fiscal Year Interim Period

Prior Fiscal Year Interim Period(From November 1, 2004

(From November 1, 2003 to April 30, 2004)--------

to April 30, 2005)(Interim Balance Sheet)
1. “Investment securities” were included in Investments
and Other Assets until the prior fiscal year interim period,
but have been disclosed separately at the end of thecurrent fiscal year interim period because they exceeded
5% of total assets.
The amount of “Investment securities” at the end of theprior fiscal year interim period was ¥3,743,612,000.
2. Following promulgation of The Law to Revise Parts of
the Securities and Exchange Law (Law No. 97 of 2004) on
June 9, 2004 and its enforcement on December 1, 2004
andrevision

Accounting
Institute

of

for

of

the

Practical

Financial

Certified

Guidelines

Instruments

PublicConcerning(The

Accountants,

Japanese
Accounting

Committee Report No. 14) dated February 15, 2005, theCompanychangedpartnerships

for

its

methodinvestmentforreportingandinvestments

limitedinassociations similar to such partnerships (instruments
regarded as negotiable securities under the provisions ofArticle 2 paragraph 2 of the Securities and Exchange Law)
to show them as “investment securities” beginning fromthe current fiscal year interim period.
Theamountofsuchinvestments

includedin“Investment securities” for the interim accounting period
under review is ¥93,642,000, and the amount of suchinvestments included in “Other” in Investments and otherassets

in

the

prior

fiscalyear

interimperiodis¥88,290,000.

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 50

Notes(Notes to the Interim Period Balance Sheets)
PeriodItem

Current Fiscal Year Interim
Period(As of April 30, 2005)--------

Notes and bills maturing on
the last day of the interim
periodaresettledandprocessed on the note and billclearing date. Because thelast day of the Company’s
current fiscal year interim
accounting period was afinancial institution holiday,
notes and bills maturing on
the final day of the followinginterim period are included inthefiscalyear
interimaccounting period balance.

Notes and bills maturing on
the last day of the fiscal year
are settled and processed on
the note and bill clearing
date. Because the last day of
the Company’s fiscal year
was a financial institution
holiday,
notes
and
bills
maturing on the final day of
the following fiscal year are
included in the fiscal yearend balance.

Notes receivable,

Notes receivable, 766,154,000*1. Notes and bills
maturing at the end ofthe (interim period)
fiscal year

42,930,000

trade
1,330,120,000

trade

Total

(As of October 31, 2004)

trade

Notes payable,*2.

Prior Fiscal Year

Prior Fiscal Year Interim
Period(As of April 30, 2004)

Notes payable,

900,142,000

tradeaccumulated

depreciation

for38,412,724,000

38,769,434,000

38,291,314,000

26,097,000

31,294,000

25,669,000

tangible fixed assets*3. Contingent liabilities
Joint

and

severalguarantee of employeebank loans

Guaranteesofborrowed indebtednessofsubsidiarycompanies

Company
Guaranteed

Company

AmountDaiichi Kikai(Daiichi Kikai Co., Ltd.,

Daiichi Kikai

Assist Co., Ltd., Kanki

Co., Ltd

Corporation)

Active Poweraffiliated（ Activeandcompany.

Power

Co.,

Company

250,000,000

Co., Ltd.
Total

269,500,000
519,500,000

Co., Ltd
Assist Co., Ltd.

Guaranteed
Daiichi Kikai

AmountCo., Ltd
200,000,000

Kanki

94,435,000

Kanki Corporation 1,207,500,000
Total

1,501,935,000

Ltd.)*4. Reduction to bookvalue

Assist Co., Ltd.
Corporation
Active Power
Co., Ltd.
Total

AmountsforassetsAmountsforassetsGuaranteed
Amount210,000,000
223,183,000
1,260,000,000
269,500,000
1,962,683,000

Amountsforassetsacquired in prior fiscal years

acquired in prior fiscal years

acquired in prior fiscal years

for which accumulated bookfor which accumulated bookfor which accumulated bookvaluesvaluesvalueswerereducedbywerereducedbywerereducedbygovernment subsidies

government subsidies

government subsidies

Machinery and5,044,000

Machinery and5,044,000

Machinery and5,044,000

equipmentLand

3,569,000

equipmentLand

3,569,000

equipmentLand

3,569,000

8,613,000

Total

8,613,000

Total

8,613,000

Total

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 51

*5. Affiliated companies----------------The Company had thefollowing liabilities in addition
to liabilities to affiliatedcompanies separately
classified elsewhere.
Current liabilities
Notes

and

accounts

payable, trade
6. Contingent liabilities--------The Company liquidates bill

¥953,248,000--------

receivables based on notes
receivables transfer program.
Notes receivable,
trade¥8,324,410,000

The amount of notes
receivable, trade with a rightof recourse to the Company
included in balance of notes
receivable, trade is¥1,337,614,000.

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 52

(Notes to the Interim Period Statements of Income)
PeriodItem

Prior Fiscal Year
Interim Period(As of April 30, 2004)

Current Fiscal Year
Interim Period(As of April 30, 2005)

Prior Fiscal Year(As of October 31, 2004)*1. Transactions with affiliates
Seconded employees’ salaries-

50,482,000

75,636,000

Rent receipts-

76,928,000

67,141,000

1,634,000

4,212,000

7,275,000

Gain on sale of investment
securities

34,466,000

17,807,000

47,261,000

Rents received

76,308,000

121,507,000

176,170,000

Insurance benefits

16,893,000

16,601,000

28,850,000

656,000

888,000

1,283,000

164,759,000

158,531,000

332,619,000

606,420,000-

606,420,000-

192,465,000-

2,244,384,000

2,096,491,000

4,625,583,000

10,469,000

27,596,000

54,117,000*2. Principal items included in nonoperating revenues

Interest received

Cash bonus received*3. Principal items included in nonoperating expenses
Interest expense*4.

Principal

items

includedinextraordinary profits
Gain on return of entrusted portionof welfare pension fund*5.

Principal items
extraordinary loss

includedinTransfer to allowance for doubtful
Accounts to affiliated companies*6. Depreciation and amortization
Tangible fixed assets
Intangible fixed assets

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 53

(Lease Transactions)
PeriodItem
1. For finance leasetransactions
except leases thattransfer ownershipof the property to
the lessee

Prior Fiscal Year Interim
Period(From November 1, 2003 to
April 30, 2004)

Current Fiscal Year Interim
Period(From November 1, 2004
to April 30, 2005)

Prior Fiscal Year Summary
Statement of Income(From November 1, 2003
to October 31, 2004)

1. Amounts corresponding
to lease property
acquisition prices,
accumulated depreciationand outstanding balanceat the end of the interim
period

1. Amounts corresponding
to lease property
acquisition prices,
accumulated depreciationand outstanding balanceat the end of the interim
period

1. Amounts corresponding
to lease property
acquisition prices,
accumulated depreciationand outstanding balanceat the end of the fiscal
year accounting period

Please refer to Annex A

Please refer to Annex B

Please refer to Annex C

2. Outstanding balance of

2. Outstanding balance of

Outstanding balance of

future lease payments at the

future lease payments at

future lease payments at

end of the interim period

the end of the interim period

the end of the fiscal year

¥’000

¥’000

¥’000

Within one year

5,613,634

Within one year

5,367,170

Within one year

5,242,607

After one year

16,855,922

After one year

15,941,251

After one year

15,577,358

Total

22,469,557

Total

21,308,422

Total

20,819,966

of

3.

of

3.

3.

Amountpayments,

leasedepreciation

expenseandinterest

expenseAmountpayments,
expenselease

depreciation
andinterest

expenseAmountpayments,
expenseof

leasedepreciation
andinterest

expense

¥’000

¥’000

¥’000

Lease payments

2,884,662

Lease payments

3,198,490

Lease payments

5,721,008

Depreciation expense

2,744,006

Depreciation expense

2,923,044

Depreciation expense

5,369,497

Interest expense

422,324

Interest expense

393,624

Interest expense

754,622

4. Accounting method foramount equivalent todepreciation expense
Straight-line
depreciation
lease

using

the

as

the

term

4. Accounting method
for amount equivalent todepreciation expense
Same as at left

4. Accounting method
for amount equivalent todepreciation expense
Same as at left

5. Accounting method for5. Accounting method foramountamountdepreciable life and zero
residual value.
5. Accounting method foramountequivalenttoequivalent

tointerest expenseinterest expense
Interest method using

equivalent

tointerest expense

Same as at left

Same as at left

Future lease payments

Future lease payments

the difference between
total

lease

payments

and the acquisition priceof the lease property,
allocated equally to eachyear.
2. Operating leases

Future lease payments
¥’000

¥’000

¥’000

Within one year

1,601,250

Within one year

1,612,110

Within one year

1,813,177

After one year

2,242,280

After one year

3,538,018

After one year

3,434,039

Total

3,843,530

Total

5,150,129

Total

5,247,217(Negotiable Securities)
The stock of the Company’s subsidiary companies and affiliated companies does not have a market price.

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 54

Annex A
Acquisition
price

Accumulated
depreciation

Outstandingbalance

Rental assets¥ ‘00031,713,019¥ ‘0008,697,337¥ ‘00023,015,682

Other assets

400,596

171,671

228,924

32,113,615

8,869,008

23,244,606

Total

Annex B
Acquisition
price

Accumulated
depreciation

Outstandingbalance¥ ‘000¥ ‘000¥ ‘000Rental assets

33,216,539

11,773,455

21,443,084

Other assets

364,877

199,124

165,752

33,581,417

11,972,580

21,608,837

Acquisition
price

Accumulated
depreciation

Outstandingbalance

Total

Annex C

Rental assets¥ ‘00031,262,997¥ ‘00010,026,592¥ ‘00021,236,404

Other assets

416,266

214,161

202,104

31,679,264

10,240,754

21,438,509

Total

Summary of Company Interim Financial Statements, FY ending October 31, 2005

P. 55

(Per Share Information)
PeriodItem

Prior Fiscal Year Interim
Current Fiscal Year
Prior Fiscal Year Summary
PeriodInterim Period
Statement of Income(From November 1, 2003 (From November 1, 2004 (From November 1, 2003
to April 30, 2004)
to April 30, 2005)
to October 31, 2004)

Net assets per share¥1,103.57¥1,119.22¥1,102.69

Interim period net income pershare¥33.29¥20.16¥39.50Interim period net income pershare on a fully diluted basis

-

-

-

The Company has not

The Company has notreported net income perreported net income pershare of common stock

share of common stock

after

after

adjustment

potentialforordinary

adjustment

potentialforordinaryshares because it does

shares because it does

not have any potential

not have any potential

shares that would haveshares that would havea dilution effect.

a dilution effect.

Note: The basis for calculating net income per share and net income per share on a fully diluted basis is provided
below.

PeriodItem
Interim period (fiscal year) net
income (¥ ‘000)
Amountnotattributed
tocommonstock
shareholders(¥ ‘000)
Interim period (fiscal year) net
income related to common stock(¥ ‘000)
Average number of outstanding
shares during the period
Summary of latent stock notincluded in the calculation ofinterimperiod(fiscalyear)
earnings per share on a fully
diluted basis because it does nothave a dilution effectPrior Fiscal Year Interim
Current Fiscal Year
Prior Fiscal Year Summary
PeriodInterim Period
Statement of Income(From November 1, 2003 (From November 1, 2004 (From November 1, 2003
to April 30, 2004)
to April 30, 2005)
to October 31, 2004)

New994,271602,035

1,187,109

-

-

7,300

994,271602,035

1,179,809

29,868,128

29,857,851

29,865,301

stock

warrants--------

New

stock

warrants(stock options) based on(stock options) based on

the provisions of Article

the provisions of Article

280-19280-19oftheCommercial Code

old

of

the

old

Commercial CodeSummary of Company Interim Financial Statements, FY ending October 31, 2005

P. 56