Fiscal Year ended October 31, 2004

Summary of Company Financial Statements
December 13, 2004

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

December 13, 2004

Interim Dividend System

The Company has an interim dividend system

Regular General Meeting of the Shareholders

January 28, 2005

Has the Company adopted a Unit Stock System?

Yes (One unit equals 1,000 shares)

1. Operating Results for the Fiscal year ended October 31, 2004
(November 1, 2003–October 31, 2004)(Numbers less than one million yen have been rounded down)(1) Operating Results
Revenues

Operating Income

Millions of yen

Millions of yen％

Ordinary Income
Millions of yen％％

Fiscal year ended
October 31, 2004

59,274

– 2.0

1,842

–21.6

1,827

–25.3

Fiscal year ended
October 31, 2003

60,494

– 0.2

2,350

4.2

2,447

– 1.2

Return on
Shareholders’EquityReturn on
Total
AssetsOrdinary
IncomeMargin

％

％

％

％

Yen

Net Income
per Share ofCommonStock Fully
Diluted
Yen

Fiscal year ended
October 31, 2004

1,187 （ 24.4）

39.50

-

3.7

2.1

3.1

Fiscal year ended
October 31, 2003

953

31.30

28.30

3.0

2.7

4.1

Net Income
per Share ofCommonStock

Net Income

Millions of yen（−15.9）(Notes) 1. Average number of shares outstanding during the fiscal year
Fiscal Year ended October 31, 2004

29,865,301 sharesFiscal Year ended October 31, 2003

30,030,383 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 prior fiscal year(2) Dividends
Annual Dividend per Share ofCommon Stock
InterimYear-end

Yen

Yen

Yen

Total
Dividends(Annual)Dividend
Payout Ratio

Dividends as a Percentageof Shareholders’ Equity%%

Millions of yen

Fiscal year ended
October 31, 2004

18.00

9.00

10.00

567

48.1

1.7

Fiscal year ended
October 31, 2003

18.00

9.00

9. 00

537

57.5

1.7

Note: Breakdown of the year-end dividend for the fiscal year ended October 31, 2004
Regular dividend: ¥9.00

Commemorative dividend: ¥1.00
Summary of Company Financial Statements, FY Ended October 31, 2004

P. 1

(3) Financial Position
Total Assets

Shareholders’ Equity

Shareholders’Equity Ratio

Shareholders’Equity per Share

Millions of yen

Millions of yen

Yen

Fiscal year ended
October 31, 2004

85,46932,93338.5

1,102.69

Fiscal year ended
October 31, 2003

87,62732,00436.5

1,071.50％(Notes) 1. Number of shares issued and outstanding at fiscal year-end
Fiscal Year ended October 31, 2004

29,859,442 sharesFiscal Year ended October 31, 2003

29,868,824 shares

2. Number of shares of treasury stock at fiscal year-end
Fiscal year ended October 31, 2004

393,799 sharesFiscal year ended October 31, 2003

384,417 shares

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

Operating
IncomeOrdinary
IncomeNet Income

Annual Dividend per Share ofCommon Stock
InterimYear-end

Yen

YenMillions of yen

Millions of yen

Millions of yen

Millions of yen

Interim period

28,740

1,190

1,150

580

9.00

-----

-----

Full year

57,050

1,960

1,890

900

------

9.00

18.00

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

Yen¥30.14(Note) The above projections were prepared based upon information available to the Company at the time theprojections were announced as well as various assumptions concerning the future economic and businessenvironment. Actual operating results may differ from the projected figures depending upon various factors in
the future.

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 2

VIII Company Financial Statements
1. Comparative Balance Sheets

Period(Assets)(Unit: Thousands of yen)

Prior Fiscal Year(As of October 31, 2003)
Amount¥ thousands

Current Assets
Cash and deposits

Percent％

Current Fiscal Year(As of October 31, 2004)
Amount¥ thousands

Percent％

Change from prioryear
Amount¥ thousands

Ⅰ

Notes receivable, trade
Accounts receivable, trade
Negotiable securities

11,346,085
10,148,086

10,911,377
10,889,913- 434,707
741,827

11,159,099

11,067,221−- 39,192

39,192- 91,878

Merchandise inventory

321,595

284,707- 36,888

Construction equipment

1,958,064

1,556,528- 401,535

Supplies

54,41960,163

5,744

Prepaid expenses

227,240

219,510- 7,730

Deferred tax assets

227,744−

500,000

500,000

229,340

1,595

174,548

80,705- 93,842– 490,153– 629,663- 139,510

Tax receivables
Other current assets
Allowance for doubtful
accounts
Total Current Assets

Ⅱ

35,165,921

40.1

35,169,805

41.1

3,883

Fixed Assets(1) Tangible Fixed Assets
Rental equipment

12,932,042

9,719,372

Buildings

5,825,344

5,731,090- 94,253

Structures

1,200,747

1,000,057- 200,689

960,715

878,585- 82,130

3,567

2,738

- 828

Machinery and equipment
Vehicles and delivery
equipment
Tools, furnishings andfixtures
Land
Construction in progress
Total Tangible Fixed Assets- 3,212,669

436,799

351,469- 85,329

24,381,774

25,838,381

1,456,607

1,892

2,793

901

45,742,882

52.2

43,524,490

50.9- 2,218,392

97,3670.1

226,8600.3

129,492(2) Intangible Fixed Assets
Total Intangible Fixed
Assets(3) Investments and Other

3,391,710

3,800,470

408,760

1,025,082

1,037,210

12,128Advances

111,569

100,778- 10,791

Claims in bankruptcy,
claims in reorganizationand other similar claims

540,255

564,006

23,750Long-term prepaid
expenses

66,75867,029270

Deferred tax assets

Investment securities
Stockofcompanies

affiliated1,453,438

1,004,962- 448,475

Insurance reserve

98,411

50,572- 47,838

Other
Allowance for doubtful
accounts
Reserve for investment
lossesTotal Investments andOther Assets
Total Fixed Assets

703,723

766,995

63,271- 540,255- 564,006- 23,750- 229,402- 280,000- 50,597

Total Assets

6,621,291

7.6

6,548,018

7.7- 73,272

52,461,541

59.9

50,299,369

58.9- 2,162,172

87,627,462

100.0

85,469,174

100.0- 2,158,288

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 3

(Unit: Thousands of yen)
PeriodCategory

Prior Fiscal Year(As of October 31, 2003)
Amount¥ thousands(Liabilities)

Percent%

Current Fiscal Year(As of October 31, 2004)
Amount¥ thousands

Percent%

Change from prioryear
Amount¥ thousands

Current Liabilities

Ⅰ

Notes payable, trade

7,387,353

8,967,156

1,579,803

Accounts payable, trade

3,048,841

2,838,409- 210,432

Short-term bank loans

9,576,000

10,747,000

1,171,000

Accounts payable, other

5,785,173

4,065,427- 1,719,745

Accrued expenses

230,977

223,844- 7,132

Corporate taxes payable
Consumption and other taxes
payableAccrued bonuses to employees

644,977

362,284- 282,693

174,665

148,864- 25,801

428,739

436,029

7,290

Equipment notes payable

362,936

174,013- 188,923

Other current liabilities

117,093

113,147- 3,946

Total Current Liabilities

27,756,758

31.7

28,076,177

32.9

319,418

Long-term Liabilities

Ⅱ

Long-term bank loans

20,592,000

20,735,000

143,000

Long-term accrued expenses

5,321,023

2,426,551- 2,894,471

176,210

71,542- 104,668

1,776,890

1,226,848- 550,042

Retirement
allowancetodirectors and auditors
Accruedemployees
retirement benefits
Accruedemployees
retirement benefits

27,866,123

31.8

24,459,941

28.6- 3,406,182

Total Liabilities

55,622,882

63.5

52,536,118

61.5- 3,086,763

8,596,737

9.8

8,596,737

10.0−( S h a r e h o l d e r s ’ E q u i t y)Ⅰ

ⅡⅢ

Common stock
Capital surplus
Additional paid-in capital

9,720,343

Total capital surplus

9,720,343

9,720,343
11.1

9,720,343

−
11.4

−

Earned surplus
Legal earned surplus

1,375,287

1,375,287−(1） Voluntary reserves

10,981,684

11,281,684

300,000(2)

Unappropriatedearnings

retained

1,140,402

1,443,580

303,177

13,497,374

15.4

14,100,552

16.5

603,177

Ⅳ

Total earned surplus
Valuationdifferenceonother negotiable securities
Treasury stock

367,4420.4

697,8970.8

330,454- 177,318- 0.2- 182,475- 0.2- 5,157

Total Shareholders’ Equity

32,004,580

36.5

32,933,055

38.5

928,475

Total Liabilities and Shareholders’Equity87,627,462

100.0

85,469,174

100.0- 2,158,288

General reserve

Ⅴ

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 4

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

Prior Fiscal Year(As of October 31, 2003)
AmountPercent

Current Fiscal Year(As of October 31, 2004)

Change from prioryear

AmountPercent

Amount¥ thousands

59,274,381

%
100.0

- 1,219,900

Ⅰ

Operating revenues

60,494,281

%
100.0

Ⅱ

Cost of revenues

46,694,601

77.2

45,811,415

77.3- 883,186

Gross profit

13,799,680

22.8

13,462,966

22.7- 336,714

Ⅲ

Selling, general andadministrative expenses

11,449,012

18.9

11,620,779

19.6

171,767

Operating income

2,350,667

3.9

1,842,186

3.1- 508,481

Ⅳ

Non-operating revenues

609,1441.0

529,462

0.9- 79,681

Interest and dividends
Gain on sale ofinvestment securities
Rents received
Insurance benefits
received
Cash bonus received
Gain on redemption ofstraight bonds
Other81,474

77,222- 4,251

134,900

47,261- 87,638

153,875

176,170

22,294

23,14828,8505,702

18,733

1,283- 17,450

890

−

- 890

Ⅴ

Non-operating expenses
Interest expense
Bond interest expense
Other
Ordinary income

Ⅵ

Extraordinary profits
Gain on disposal of fixed
assetsValuation gain
investment enterprisepartnership
Gain on liquidation ofaffiliated company
Gain on return of
entrusted portion of
corporate Employee
Welfare Pension Fund
Other

Ⅶ

Extraordinary losses
Loss on sale or disposal
fixed assets
Valuationloss
oninvestment securities
Transfer to reserve forinvestment losses
Other
Income before taxes andadjustments¥ thousands

196,121
512,783
348,875
23,947
139,960

198,673¥ thousands

2,552

0.8

544,146
332,619−
211,5270.9

31,362- 16,256- 23,947
71,5662,447,028

4.1

1,827,502

3.1- 619,525

49,9520.1

620,2261.0

570,274

365

8,334

7,968

23,4085,130- 18,278

22,311−- 22,311−

606,420

606,420

3,866

342

- 3,524

640,1691.1

204,949

0.3- 435,219

86,447

94,392

7,944

259,639

41,898- 217,741

229,40250,597- 178,805

64,67918,062- 46,616

1,856,811

3.1

2,242,779

3.8

385,968

1,031,595

1.7

832,790

1.4- 198,805- 128,717- 0.2

222,8800.4

351,598

Net income

953,933

1.6

1,187,109

2.0

233,175

Profit carry-forward fromprior period
Cash dividends

588,999

557,483- 31,515

268,978

268,785- 193

133,551

32,226- 101,324

1,140,402

1,443,580

303,177

Corporate, local and business
taxes
Adjustment for corporate andother taxes

Loss on cancellation ofaffiliated company stock
related to merger
Unappropriated retained
earnings

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 5

3. Comparative Appropriation of Retained Earnings
PeriodCategory

Unappropriated retained
earnings(Unit: Thousands of yen)

Prior Fiscal Year General
Meeting of the
Shareholders approvaldate (January 27, 2004)

Current Fiscal Year(proposed)
General Meeting of the
Shareholders approvaldate (January 28, 2005)¥ thousands¥ thousands

Change from prioryear¥ thousands

1,140,402

1,443,580

303,177

582,919855,894

272,975

268,819(¥9 per share)

298,594(¥10 per share)

29,775

Directors bonuses

14,1007,300- 6,800(Auditors bonuses)(1,700)(1,800)(100)

300,000

550,000

250,000

587,686

30,202

To be appropriated as follows
Amount of appropriated retained
earnings(Note) Cash dividends

Voluntary reserve
General reserve
Net income carried forward to
the next period

557,483(Notes) 1. The Company paid an interim dividend of ¥268,785,000 (¥9 per share) on July 20, 2004.
2. The shareholder dividend is calculated excluding 393,799 shares of treasury stock.

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 6

4. Notes to the Financial Statements(Significant accounting policies)
Prior fiscal year
From November 1, 2002
To October 31, 2003

Current fiscal year
From November 1, 2003
To October 31, 2004

Common stock of subsidiaries andaffiliated companies
The Company has adopted the cost
method based upon the moving
average method

Common stock of subsidiaries andaffiliated companies
Same as at left

PeriodItem
1. Valuation standards andvaluation methods fornegotiable securities

Other negotiable securities
Negotiable securities with a market on
a securities exchange
The Company has adopted themarket value method (the full amountof the valuation difference is charged
to equity using the direct transfer tocapital method, with the disposal cost
determined by the moving averagemethod) based on the market priceon the fiscal year closing date orsimilar prices

Other negotiable securities
Same as at left

Other negotiable securities
The Company has adopted the cost
method based upon the moving
average method
2. Appraisal standards andappraisal method forconstruction equipment

Construction equipment
Amountafter
deductionofdepreciation
expensecalculated
according to the declining-balancemethod from the original prices, byseparate fiscal year of purchase

3. Appraisal standards and(1) Merchandise inventories and supplies

appraisal method for

Merchandise inventory

merchandise inventories

Lower of cost or market based on theand supplies

last-in, first-out method

fixed assets

Same as at left
(2) Supplies

The Latest purchase cost method

Same as at left
(1) Tangible fixed assets(1) Tangible fixed assets
The(1) Merchandise inventories and supplies
Merchandise inventory(2) Supplies

4. Depreciation method forSame as at left

CompanyhasadoptedtheSame as at left

declining-balance method. Buildings
on land that is leased under a fixedterm land lease agreement, however,are depreciated using the straight-line
method using the remaining period ofthefixed-term

depreciable

life

lease
and

zero

as

the

residualvalue.
The depreciable lives mainly usedby the Company are as follows.
Rental assets 5-10 years
Buildings
31-34 years

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 7

(2) Intangible fixed assets
Softwarefor(2) Intangible fixed assets

usewithintheSame as at left

Company is depreciated using thestraight-line method based on theassumed useful life for internal use (5years).
(3) Long-term prepaid expenses
The

Company(3) Long-term prepaid expenses

has

adoptedSame as at left

straight-line depreciation.
5. Accounting standards for(1) Allowance for doubtful accounts(1) Allowance for doubtful accounts

To provide for losses on doubtful

allowances and reserves

Same as at left

accounts such as accounts receivable,
the Company charges to income anamountbasedonactualloss

experience for normal accounts, plusanamountunrecoverableforprojected

amounts

basedonassessments of individual accounts.
(2) Accrued bonuses to employees(2) Accrued bonuses to employees

To fully provide for expenditures ofSame as at left

bonuses the Company will pay toemployees,anamountisappropriated to the reserve during the
fiscal

year

based

upon

a

salaryestimate amount.
(3) Accrued employees retirement(3) Accrued employees retirement

benefits

benefits

The Company provides for accrued

Same as at left

employees retirement benefits based
upon the projected amounts of theliabilityforaccruedemployees

retirement benefits and the value ofpension assets at the end of the fiscal
year. At the end of each fiscal year,
the Company appropriates an amountto the reserve to provide for theliability recognized during the period.
Past years’ service liabilities are fully
written off in the year incurred.
The

difference

based

on

an

actuarial calculation is charged toincome beginning in the fiscal year
following the year in which incurred,
with

the

amounts

allocated

proportionately using the straight-line
method, based on a specified numberof years (10 years) that is less thantheaverageremaining

periodofemployment for employees at thetime the difference arises.

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 8

(Supplemental information)
On January 1, 2004 the Company
received approval from the Minister of
Health,LabourandWelfarefor
exemption from the obligation to makefuture payments for the entrusted
portion of the Employee Welfare
PensionFund,
accompanying
enforcement of the Defined Benefit
Corporate Pension Law.
The Company has adopted the interim
measures prescribed in Paragraph 47-2of the Business Guidelines Concerning
Retirement Benefit Accounting (Interim
Report) concerning return of theentrusted portion of the corporate
Employee
WelfarePensionFund(Japanese Institute of Certified Public
Accountants,
Accounting
SystemCommittee Report No. 13), and on the
day authorization was received theCompany accounted for the retirement
benefit liability related to the entrusted
portionandthepensionassetsequivalent to the return amount as
being extinguished.
The Company accounted for theaffects on earnings accompanying thistreatment
at
the
end
of
the
consolidated fiscal accounting year
under review by booking extraordinary
income of ¥606,420,000.
The returned equivalent amount(minimum actuarial liability) measured
as of the end of the consolidated
accounting fiscal year under review was¥1,296,434,000.
(4) Retirement allowances to directors(4) Retirement allowances to directors
and auditors
Theand auditors

Company

retirement

providesallowances

to

for

Same as at left

directors

and auditors based upon pertinent
rules and appropriated to the account
at

the

end

of

the

fiscalyear

proportionately based upon length ofservice.
(5) Reserve for investment losses(5) Reserve for investment losses

The Company provides for losses

Same as at leftfrom the decline in real prices ofassets such as the stock of subsidiarycompanies that are subject to asset
impairment accounting by applying
internally established standards that
take

into

consideration

subsidiarycompany operating result and asset
quality.
6. Lease transactions

Forfinance

exceptfor

leaseleasestransactions
that

Same as at lefttransferownership of the property to thelessee, rent expenses are charged toincome as payments are made.

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 9

Item
7. Hedge transactions

Current fiscal year
From November 1, 2003
To October 31, 2004

Prior fiscal year
From November 1, 2002
To October 31, 2003

Period(1) Hedge transactions(1) Hedge transactions

The Company accounts for hedge

Same as at lefttransactions using allocations basedon accounting standards for foreign
currency-denominatedtransactions,and special rule accounting based on
accounting

standards

forfinancial

products.
(2) Hedge methods and hedged(2) Hedge methods and hedgedtransactionstransactions

The Company uses currency swaps

Same as at left

and forward transactions in order toavoid the currency fluctuation risk
relatedtotheCompany’s

foreigncurrency-denominated straight bonds
and liabilities for import payments.
The

Company

swaps

to

also

avoid

uses

interest

interest

rate

fluctuation risk related to interest onbank borrowing.
(3) Hedging policies(3) Hedging policies

The Company’s use of derivative

Same as at lefttransactions is limited to hedging risk
within the scope of the Company’s
assets and liabilities subject to market
fluctuation risk.
(4) Method for evaluating the(4) Method for evaluating theeffectiveness of hedges

effectiveness of hedges

The Company does not evaluatetheeffectiveness

of

its

Same as at left

hedge

transactions because it can assume
that its currency swap transactions
andforwardtransactions

will

completely offset market fluctuations
or changes in cash flow from the timehedge begins until it is terminated. In
addition, the Company’s interest swap
transactions fulfill the requirements
for special rule accounting, and theCompany has elected to use this in
place

of

an

evaluationofeffectiveness.
8. Other significant mattersfor preparation of the fiscal
year financial statements(1) Accounting treatment of consumptiontax(1) Accounting treatment of consumption
tax

Consumption tax is taken out of all
StatementofIncomeitems

Same as at left

andBalance Sheet items, except mainly
for receivables and payables.
Thesuspense

consumptiontax

accounts

forreceipts

andconsumption tax payable are included
in “other current liabilities” because
the financial importance is minimal
after the amounts are offset.

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 10

（2）Accounting standards for treasury──────

stock and reversal of legal reserves
Beginning in the fiscal year underreview,

Kanamoto

will

apply

the

Accounting Standard for Treasury
Stock

and

Reserves

Reversalof(Corporate

Standard

No.

appliedinLegal

Accounting

1),

which

Japan

to

will

be

financialstatements from the fiscal year thatbegins after April 1, 2002.
The effect of this change on the
Company’s income statement for the
fiscal

year

under

review

is

not

of

the

material.
Based

on

amendment

provisions

concerning

financialstatements, the shareholders’ equity
section of the Comparative Balance
SheetsandtheComparative

Appropriation

of

have

preparedbeen

Retained

Earnedusing

theamended balance sheet provisions.
（3）Per share information──────

Beginning in the fiscal year underreview,

Kanamoto

Accounting
Per

will

Standard

ShareStandardtheEarnings(Corporate

Accounting

No.

and

the

Guidancefor

Implementation2)

AccountingStandard

Per(Corporate

Share

apply

for

for

Earnings

AccountingStandards Implementation Guidance
No. 4), which will be applied in Japantofinancialstatements

from

the

fiscal year that begins after April 1,
2002. The effect of this change is
described in the “Note Concerning
Information Per Share.”Summary of Company Financial Statements, FY Ended October 31, 2004

P. 11

Notes to the Financial Statements(Notes to the Balance Sheets)
PeriodCategory
1.

Total

Prior Fiscal Year(As of October 31, 2003)

Current Fiscal Year(As of October 31, 2004)

accumulated

depreciation for tangible

41,201,008,000

38,291,314,000

20,902,000

25,669,000

fixed assets
2. Guarantees
Joint and several
guarantees of employeebank loans.
Guarantees of borrowed
indebtednessofsubsidiary companies

Active Power(Daiichi Kikai Co., Ltd.,

Co., Ltd.

Assist

Co.,

Ltd.,

Kanki

Corporation)affiliatedGuaranteed

Company

Amount269,500,000

Total

269,500,000

andGuaranteed

Company

AmountDaiichi Kikai

210,000,000

Co., Ltd
Assist Co., Ltd.

223,183,000

Kanki Corporationcompany.

1,260,000,000

Active Power（Active Power Co., Ltd.)269,500,000

Co., Ltd.
Total

3. Notes and bills maturing at──────

the end of the fiscal year

4. Common stock

Shares issued

Notes and bills maturing on the last
day of the fiscal year are settled andprocessed on the note and bill clearing
date. Because the last day of theCompany’s fiscal year was a financial
institution holiday, notes and bills
maturing on the final day of thefollowing fiscal year are included in thefiscal year-end balance.
Notes receivable
766,154,000
Bills receivable
900,142,000
Shares issued

Common stock

66,000,000 shares

Number of shares outstanding
5. Treasury stock

1,962,683,000

Common stock

30,253,241 shares

Common stock

384,417 shares

Common stock

66,000,000 shares

Number of shares outstanding
Common stock

30,253,241 shares

Common stock393,799 shares

6. Reduction to book value
Amounts for assets
acquired for whichaccumulated book values
were reduced bygovernment subsidies
Machinery and equipment

5,044,000

5,044,000

Land

3,569,000

3,569,000

Total
7. Limitation on dividends

8,613,000──────

8,613,000
The amount of the increase in net
assets from applying a market price toassets as provided Article 124 paragraph
3 of the Commercial Code Enforcement
Regulations is ¥697,897,000.

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 12

(Notes to the Statements of Income)
PeriodPrior Fiscal Year
(From November 1, 2002
To October 31, 2003)

Category
1. Transactions with affiliates

Current Fiscal Year
(From November 1, 2003
To October 31, 2004)
Seconded employees
salaries
Rent receipts──────

77,954,000
86,544,000

2. Loss on sale or retirementof fixed assets(Loss on sale of fixed assets)(Loss on sale of fixed assets)
Buildings
Telephonesubscription
rights172,000
123,000Land

309,000

Machinery andequipment
Vehicle transport

32,00051,000equipment(Loss on retirement of fixed assets)
Rental equipment(Loss on retirement of fixed assets)

17,957,000

Rental equipment

Buildings

13,407,000

Buildings

26,476,000

Structures
Machineryequipment

31,529,000

Structures
Machineryequipment

40,233,000

andTools, furnishings
and fixtures

2,827,000
79,000and

20,404,000

5,746,000

Tools, furnishings
and fixtures

473,000

Other

20,349,000

Other

665,000

Total

86,447,000

Total

94,392,000

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 13

（Notes to Leasing Transactions）
Prior Fiscal Year
(From November 1, 2002
to October 31, 2003)

Current Fiscal Year
(From November 1, 2003
to October 31, 2004)

1. Finance lease transactions except for leases that

1. Finance lease transactions except for leases thattransfer ownership of the property to the lessee.

transfer ownership of the property to the lessee.

(1)

(1)

Amounts

corresponding

to

lease

property

Amounts

corresponding

to

lease

propertyacquisition price, accumulated depreciation andacquisition price, accumulated depreciation andoutstanding balances at the end of the fiscal year

outstanding balances at the end of the fiscal year

Acquisition
price（¥’000）

Accumulated
depreciation（¥’000）

Outstandingbalance（¥’000）RentalassetsOther
assets27,425,528

7,096,970

20,328,557

458,792

193,647

265,145

Total

27,884,320

7,290,617

20,593,703(2) Outstanding balance of future lease payments at
the end of the fiscal year

Accumulated
depreciation（¥’000）

Outstandingbalance（¥’000）RentalassetsOther
assets31,262,997

10,026,592

21,236,404

416,266

214,161

202,104

Total

31,679,264

10,240,754

21,438,509(2) Outstanding balance of future lease payments at
the end of the fiscal year

Within one year

4,689,094,000

Within one year

5,242,607,000

After one year

16,064,070,000

After one year

15,577,358,000

20,753,164,000

Total
(3)

Acquisition
price（¥’000）

Amountofleasepayments,

depreciation

expense and interest expense

20,819,966,000

Total
(3)

Amountofleasepayments,

depreciation

expense and interest expense

Lease payments

5,279,347,000

Lease payments

5,721,008,000

Depreciation expense

4,720,895,000

Depreciation expense

5,369,497,000Interest expense

656,827,000(4) Accounting method for amount equivalent todepreciation expense

Interest expense

754,622,000(4) Accounting method for amount equivalent todepreciation expense

Straight-line depreciation using the lease term as

Same as at left

the depreciable life and zero residual value.
(5) Accounting method for amount equivalent tointerest expense(5) Accounting method for amount equivalent tointerest expense

Interest method using the difference between total

Same as at left

lease payments and the acquisition price of thelease property, allocated to each year.
2. Operating leases

2. Operating leases

Future lease payments

Future lease payments

Within one year

1,789,778,000

Within one year

1,813,177,000

After one year

3,238,604,000

After one year

3,434,039,000

Total

5,028,382,000

Total

5,247,217,000（Negotiable securities）
For the prior fiscal year (as of October 31, 2003) and the current fiscal year (as of October 31, 2004), thestock of the Company’s subsidiary companies and affiliated companies did not have a market price.

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 14

（Notes Related to Tax Effect Accounting）
Prior Fiscal Year
(From November 1, 2002
to October 31, 2003)

Current Fiscal Year
(From November 1, 2003
to October 31, 2004)

1. Major factors creating deferred tax assets and

1. Major factors creating deferred tax assets anddeferred tax liabilities

deferred tax liabilities

Deferred tax assets
Amount in excess of limit forinclusion
Disallowanceofdeferredbusiness taxes
Excessaccruedemployees
retirement benefit
Excessaccruedemployees
retirement benefit
Amount in excess of limit for
accrued bonuses to employees
Disallowanceof
excessdepreciation
Disallowanceofreserveforinvestment losses

236,877,000

Other

201,224,000

Total deferred tax assets

51,852,000
728,951,000
71,188,000
143,466,000
404,014,000
92,678,000

1,930,255,000

Deferred tax liability
Valuationdifference
negotiable securitieson

Net deferred tax assets

249,072,000
1,681,183,000

Disclosure classifications:
Current assets
Property and equipment

227,744,000
1,453,438,000

Amount in excess of limit forinclusion
Disallowanceofdeferredbusiness taxes
Excessaccruedemployees
retirement benefit
Amount in excess of limit forinclusion
Excessaccruedemployees
retirement benefit

259,935,000
24,011,000
495,646,000
28,902,000

Disallowanceof
excessdepreciation
Disallowanceofreserveforinvestment losses
Other

176,155,000

Total deferred tax assets

249,651,000

Disallowance
depreciationof359,951,000
113,120,000

excess1,707,374,000

on

473,071,000

Deferred tax liability
Valuationdifference
negotiable securities
Net deferred tax assets
Disclosure classifications:
Current assets
Property and equipment

1,234,303,000
229,340,000
1,004,962,000

2. Causes of principal differences between the statutory

2. Causes of principal differences between the statutory

tax rate and burden ratio for corporate and othertax rate and burden ratio for corporate and othertaxes following application of tax effect accounting bytaxes following application of tax effect accounting bymajor category.

major category.

Statutory corporate tax rate

41.7％

（Adjustment）

Statutory corporate tax rate

41.7％

（Adjustment）

Local tax equalization

4.3％

Items not included permanently in
losses such as expense account

1.4％

Effect of change
corporate tax rate

1.4％

in

statutoryOther- 0.2％

Burden ratio for corporate andother taxes after application of tax
effect accounting

48.6％

Local tax equalization
Items not included permanently in
losses such as expense accountEffect of change in statutory
corporate tax rate

3.8％
1.4％
2.1％

Other

- 1.9％

Burden ratio for corporate and othertaxes after application of tax effectaccounting

47.1％

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 15

3.

The

statutory

corporate

tax

rate

used

in

the

──────

calculation of deferred tax assets and deferred tax
liabilities for the fiscal year under review was changed
from 41.7% in the prior fiscal year to 40.4% with thepromulgation of the Law to Partially Amend the Local
Tax Law (Law No. 9 of 2003) on March 31, 2003
(However, the amendment is expected to be annulled
after November 1, 2004). As a result, the total
amount of deferred tax assets (the amount after
deductingdeferredtax

liabilities)

decreasedby¥18,006,000, and the adjustment for corporate andother taxes and the valuation difference for othernegotiable securities increased by ¥26,020,000 and¥8,014,000, respectively, compared to what they
otherwise

would

have

been

had

the

statutory

corporate tax rate used in previous periods been
applied.

(Per Share Information)
PeriodPrior Fiscal Year
(From November 1, 2002
to October 31, 2003)

Category
Net assets per share

Current Fiscal Year
(From November 1, 2003
to October 31, 2004)¥1,071.50¥1,102.69¥31.3039.50¥28.30−Net income per share of common stock
Net income per share of common stock
after adjustment for potential ordinary
shares(Supplemental information)

The Company has not reported

Beginning in the fiscal year
under

review,

Kanamotowill

net income per share of common
stock

after

adjustmentfor

apply the Accounting Standard

potential ordinary shares because

for Earnings Per Share (Corporate

it does not have any potential

Accounting Standard No. 2) andshares that would have a dilution

the Implementation Guidance for

effect.

Accounting Standard for Earnings
Per Share (Corporate AccountingStandards

Implementation

Guidance No. 4). Furthermore,for

information

purposespershare information was calculatedbyapplyingtheaccounting

standard and the implementation
guidance to the operating results
for the prior fiscal year and isshown below.
(Prior fiscal year)
Net assets per share¥1,036.63
Net income per share¥36.94
Net income per share on a fully
diluted basis¥28.44
Note: The basis for calculating net income per share and net income per share on a fully diluted basis is provided
below.

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 16

(Unit: Thousands of yen)
PeriodCategory

Prior Fiscal Year
(From November 1, 2002
to October 31, 2003)

Current Fiscal Year
(From November 1, 2003
to October 31, 2004)

Net income per share
Fiscal year net income
Amount not attributable to major
shareholders
Fiscal year net income related tocommon stock
Averagenumberofsharesoutstanding during the fiscal year

953,933

1,187,109

14,1007,300

939,833

1,179,809

30,030,383

29,865,301

13,961−（13,961）−

3,677,771−（3,677,771）−

Net income per share on a fully
diluted basis
Fiscal year net income adjustment(Interest

expense[Taxequivalent deduction amount])
Changeinnumberofsharesofcommon stock (shares)(Convertible bonds)
Summary of latent common stock
not included in the calculation of net
income per share on a fully diluted
basis because it will not have adilution effectCommon stock subscription rights

Same as at left

based on the provisions of Article
280-19 of the old Commercial Code
(Stock Options)(Material events after the close of the consolidated fiscal year)
The Company had no material items to report.

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 17

IX

Changes to directors and auditors
1. Changes to representative directors
There were no changes to the Company’s representative directors.
2. Changes to other directors and auditors
Candidates for new appointments as director
Director
Osamu Kawashima（Current position ORIX Corporation Hokkaido Area Manager, Sapporo &Hakodate Branch Manager）
Candidates for new appointments as auditor
Auditor (Corporate Auditor)（Current position Eiko Certified Public Tax Accountant's Corporation）
Kiyohiro Tsuji
Retiring directors
Directors
Kojiro Satsuma （Current position ORIX Corporation Osaka Sales Department III
General Manager）
Retiring auditors
Auditor (Corporate Auditor)
Kiyoshi Ohnishi （Current position Eiko Certified Public Tax Accountant's Corporation）

Summary of Company Financial Statements, FY Ended October 31, 2004

P. 18