Consolidated Financial Statement for Six Months Ended September 30, 2007
(April 1, 2007 - September 30, 2007)
November 9, 2007
UNITIKA LTD.
Listed on the First Section of TSE and OSE (Stock Code: 3103)
URL http://www.unitika.co.jp/eRepresentative: Otofumi ONISHI, President and Chief Executive Officer
Contact Person: Kazuo OTSUKI, GM, Accounting Department Tel: +81-6-6281-5721(Amounts less than one million yen are omitted)

1. Consolidated Performance for the 1st Half FY2007 (April 1, 2007 - September 30, 2007)(1)Consolidated Operating Results
Six months ended September 30

Percentage indicates increase /(decrease) from the previous year

Net sales

Operating income

Ordinary income
Million yen%

Million yen%

Million yen

2007

111,695

7.3

4,456 (16.8)

3,132 (24.9)

1,728 (14.1)

2006

104,060(1.0)

5,358 (20.5)

4,170 (26.5)

2,011 ( 1.4)

Year ended
March 31, 2007

220,572-

11,171

8,458

2,562

-

%

Net income-

Net income per share

Diluted net income per share

Yen

Yen

2007

3.63

-

2006

4.23

-

Year ended
March 31, 2007

5.39

-

Million yen%-(Reference) Equity in earnings of affiliates: September 30, 2007 541 million yen,
September 30, 2006 97 million yen, March 31, 2007 274 million yen(2) Consolidated Financial Position
As of September 30
Total assets

Net assets

Million yen

Million yen

Shareholders’ equity
ratio
%

2007

320,582

39,584

10.9

73.19

2006

326,488

39,412

10.7

73.24

Year ended
328,382
39,959
10.8
March 31, 2007
(Reference) Shareholders’ equity: September 30, 2007 34,807 million yen,
September 30, 2006 34,835 million yen, March 31, 2007 35,310 million yen-1-

Net assets per share
Yen

74.24

(3) Consolidated Cash FlowsSix months ended September 30
Cash and cash
equivalents at theend of period
Million yen

From operating
activities

From investing
activities

From financing
activities

Million yen

Million yen

Million yen

2007

1,846

(1,259)(3,117)

13,142

2006

7,265

(3,870)(2,039)15,744

Year ended
March 31, 2007

11,903(7,097)(3,779)15,4792. Dividends
Years ended/ending March 31
Dividends per share
Record date

InterimYear-end

Total annual

Yen

Yen

Yen

2007

-

2.00

2.00

2008

2.00-3.00

2008(Forecast)

2.00-3.00

3. Forecasts for the Fiscal Year 2007 ending March 31, 2008
Percentage indicates increase from the previous year
Net income per
Net sales
Operating income Ordinary income
Net income
share

FY2007

Million yen%

240,000

8.8

Million yen%

Million yen%

Million yen

%

Yen

9,000

6.4

4,000

56.1

8.41

13,500 20.8

4. Others(1) Changes in major subsidiaries during the subject fiscal year (transfer of specific subsidiaries following achange in the scope of consolidation): None
(2) Changes in accounting rules, procedures, or method relating to the preparation of the consolidated financial
statements (those included in changes in important matters for preparation of consolidated financial
statements ):1. Changes in accordance with revisions to accounting standard: None
2. Other changes: None
(3) Number of share outstanding (Common stock)
1. Number of shares outstanding at the end of period (including treasury stock)
September 30, 2007: 475,969,000
September 30, 2006: 475,969,000
March 31, 2007: 475,969,000
2. Number of treasury stocks at the end of period
September 30, 2007: 375,970
September 30, 2006: 326,822
March 31, 2007: 348,409(Note) For details of basic number of shares to calculate net income per share (consolidated), refer to “Per ShareData” on page 19.

-2-

【Reference】 Non-Consolidated Performance Summary
1. Non-Consolidated Performance for the 1st Half FY2007 (April 1, 2007 - September 30, 2007)(1) Non-Consolidated Operating Results
Six months ended September 30
Net sales

Percentage indicates increase /(decrease) from the previous year
Operating income

Ordinary income%

Million yen

Million yen%

Million yen

2007

48,2122.6

2,887(26.4)

2006

46,970

5.3

3,921

30.7

Year ended
March 31, 2007

96,926

7,212

Net income%

Million yen

2,017(39.8)

1,034(42.4)

3,350

16.2

1,796

99.3

5,223

%

2,355

Net income per share
Yen
2007

2.18

2006
Year ended
March 31, 2007

3.78
4.95

(2) Non-Consolidated Financial Position
As of September 30
Total assets

Net assets

Shareholders’equity ratio

Net assets per share

Million yen

Million yen

%

Yen

2007

258,779
40,68515.7
2006
250,560
40,586
16.2
Year ended
258,149
40,943
15.9
March 31, 2007
(Reference) Shareholders’ equity: September 30, 2007 40,685million yen,
September 30, 2006 40,586 million yen, March31, 2007 40,943 million yen

85.55
85.33
86.09

2. Non-Consolidated Forecasts for the Fiscal Year 2007 ending March 31, 2008
Percentage indicates increase /(decrease) from the previous year
Net sales
Operating income
Ordinary income
Net income
Million yen %Million yen %Million yen %Million yen %Yen) ％FY 2007
105,000 8.3
7,500
4.0
4,500 (13.8)
2,000 (15.1)
Net income per shareYen
FY 2007

4.21* Note to ensure the appropriate use of the result forecast and the other special information
Any result forecast and future outlook statements contained in this material are based on the current
information available to and judged as reasonable by the company management. Actual performance andresults may significantly differ from these descriptions because of a number of factors.
-3-

Consolidated Operating Results(1) Analysis of consolidated operating results
1. Summary of the current midterm
During the midterm under review, the Japanese economy on the whole was on a track to recovery ascapital investment and export to Asia and Europe remained active. However, the current worldwide
destabilization of the financial market triggered by the subprime loan issue in the United States, it was
unable to sweep off the sense of uncertainty in the future under such circumstance as the decelerating
U.S. economy, decreasing corporate profit margin due to an upward trend of crude oil and raw
material prices and apprehensions for a sluggish growth of consumer spending.
Under these circumstances, the Unitika Group has worked at various measures including without
limitation the reinforcement of its businesses with a dominant market share, promotion ofdifferentiation strategies and a drastic cost reduction under the 3-year midterm management
plan ,“New Progress (NP)-8”. However, due to an insufficient revision of product prices to absorb
soaring prices of petrochemical feedstock and fuels exceeding the initial forecast, the subject interim
period FY2007 recorded net sales of 111,695 million yen (7,635 million yen increase compared to theprevious year), operation income of 4,456 million yean (902 million yen decrease compared to theprevious year), ordinary income of 3,132 million yen (1,037 million yen decrease compared to theprevious year) and net income of 1,728 million yen (283 million yen decrease compared to theprevious year).
Following are results by business segment.

[Polymers]
Profitability of the polymer business as a whole continued to be adversely influenced by sustained
high prices of raw materials and fuels. Under such situation, we endeavored to secure earnings bymeans of a continuous revision of product price and a drastic cost reduction.
In the film business, domestic sales of nylon film increased mainly through differentiated products,
and improvement in earnings of overseas subsidiaries was achieved, but an additional increase of raw
materials prices put pressure on profits. Polyester film for both packaging and industrial applications
saw sluggish growth under the competition with imported products and impact of inventory
adjustment. Consequently, the film business as a whole recorded increased sales but a reduced profit.
In the resin business, sales of PET resin for a bottle application decreased due to an inflow ofcompeting overseas products into the Japanese market. On the other hand, the revenue of polyarylate
resin “U-Polymer” increased steadily supported by a strong demand from the automobile andelectronics industry, and at the same time, sales of nylon resin with a nanocomposite grade resin as acentral product also increased generally for automobile applications. Consequently, the resin businessas a whole recorded an increased revenue, but its profit remained the same as in the previous year.
In the nonwoven fabrics business, sales of spunbond fabrics for agriculture, civil engineering androofing applications remained sluggish. However, the sales expanded for hygienic goods including
diapers, new applications for automobile interior materials and export market. The cotton spunlacebusiness generally remained steady mainly for cosmetic applications. As a result, the business as awhole recorded an increased revenue, but its profit remained the same as in the previous year.
“TERRAMAC®”, biodegradable biomass plastic, was actively promoted as film, resin, nonwoven
fabrics and fiber materials, and its applications were extended to food containers for convenience
stores, bedding products, lighting equipment for residence. The scope of practical use of“TERRAMAC®” has been steadily expanding backed by the technical improvement in moldability
and productivity under the established technology for accelerated crystallization at the fastest level inthe world.
As a result, the polymer business recorded sales of 34,693 million yen (1,934 million yen increase
compared to the previous year) and operating income of 3,004 million yen (1,012 million yen
decrease compared to the previous year).
-4-

[Environmental Business and Advanced Materials]
In the environmental business, engineering works of the backlog mainly in the waste treatment
segment increased earnings, and the business in private sectors and chemicals for processing
continued to be firm. Consequently, earnings of the whole business improved. In the current status ofdemand orders, the recovery sign of public works spending was slow because of postponedconstruction plans, and a downward trend of order prices continues reflecting intensified competitionsin this industry.
In the advanced materials business, glass fibers for the IC cloth market was affected by theirinventory adjustment, but bug filters and glass cloth for fireproof electric wires in the industrial
material market marked a steady sales increase. Sales of glass beads for reflective materials increased,
and at the same time the business of active carbon fibers for waste water purification anddeodorization continued to be firm. Consequently, the business as a whole accounted for increased
revenue and profit.
As a result, environmental business and advanced materials business recorded sales of 14,472 million
yen (3,009 million yen increase compared to the previous year) and operating income of 701 million
yen (415 million yen increase compared to the previous year).
[Fibers and Textiles]
In the synthetic fiber business, amid the cost increase of mainly raw materials and fuels, we focused
our efforts on the revision of product prices and the improvement in product mix. Nylon business was
slightly dull, but sales of polyester fibers continued to rise firmly mostly owing to the expanded
demand mainly for industrial applications including nonwoven. With regard to the vinylon business,sales of vinylon fibers for cement reinforcement used as substitute asbestos continued to increasesteadily in both domestic and export markets, and the market demand for construction materials andconstruction reinforcement materials remained strong. In the natural fiber business, despite a revenue
rise from the special procurement demand for uniform wears, the business suffered a slip in earnings
under the influence of the unseasonable weather and the strong Chinese yuan in the foreign exchange
market. We focused our efforts on shifting of cost increase to product prices to cover jumps in raw
material and fuel prices, and reducing selling and administrative expenses, but the revenue as a wholeremained weak.
As a result, sales of fibers business rose to 51,809 million yen (1,649 million yen increase comparedto the previous year) but operating income dropped to 696 million yen (62 million yen decrease
compared to the previous year).

[Healthcare & Amenity and Others]
In the healthcare & amenity business, while the wellness market remained in the doldrums owing to
the cooled consumer interest in health foods, sales of the business as a whole stayed strong reflecting
reinforced sales policies including a release of new health supplements in the market and thepromotion of an over-the-counter sale in drug stores. In the medical business, the biochemistry field
was slightly weak. However, earnings of anti-thrombotic catheter which is a core product in thebiomedical materials field increased supported by the intensified sales promotion to remain the salesof the business on the whole flat and improve earnings, accordingly. In other businesses, sales ofcondominiums proceeded smoothly, but revenue from other real estate businesses decreased.
As a result, sales of the healthcare & amenity and other businesses increased to 10,719 million yen(1,041 million yen increase compared to the previous year), but operating income decreased to 1,087
million yen (221 million yen decrease compared to the previous year).
2. Outlook for the fiscal year ending March 31, 2008
In the fiscal year 2007 ending March 31, 2008, while the domestic economy is on a recovery track,
the business environment will remain uncertain under the influence of skyrocketing costs of raw
materials and fuels and also the financial uncertainty.
Under these business environment, the Unitika Group continues to exert its best efforts to strengthen
its businesses with a dominant market share, promote differentiation strategies and also reduce costs
drastically to cope with surging prices of raw materials and fuels, optimize the product mix under the-5-3-year midterm management plan “New Progress (NP)-8” aiming for a high-level stabilization of
earnings. In addition, the Group will strive to further improve its financial standing.
For the fiscal year ending March 31, 2008, we envisage net sales of 240,000 million yen, operating
income of 13,500 million yen, ordinary income of 9,000 million yen, and net income of 4,000 million
yen as originally estimated.

(2) Analysis of Financial Position
Total assets decreased by 7,799 million yen from the end of fiscal year 2006 to 320,582 million yen,mainly due to a decreased account receivable and selling of investment securities.
The status of cash flows is as follows.
(Cash flow from operating activities)
Net cash provided by operating activities increased by 1,846 million yen reflecting the decrease of cash
inflow consisting of interim net income and depreciation expense and the decrease of accounts
receivable.
(Cash flow from investing activities)
Net cash used in investing activities decreased by 1,259 million yen reflecting an expense of 3,552
million yen for capital investment.
(Cash flow from financial activities)
Net cash used in financial activities decreased by 3,117 million yen reflecting the cut-down ofinterest-bearing debts and the payment of dividend.
As a result, the balance of cash and cash equivalents at the end of the interim period under review
decreased by 2,337 million yen from March 31, 2007, to 13,142 million yen.
Indicators of Financial Position are shown below:(1) Shareholders’ equity ratio (%)(2)

Shareholders’ equity ratio based onmarket value (%)(3) Interest-bearing debt to cash flow ratio (Years)(4) Interest coverage ratio (Times)

Sept 30,2007

Sept 30,
2006

Mar 31,
2007

Mar 31,
2006

10.9

10.7

10.8

10.6

20.3

23.7

23.8

31.4

-

-

17.1

18.6

0.9

4.1

3.1

3.0

(Notes)Shareholders’ equity ratio……………………………… shareholders’ equity / total assets
Shareholders’ equity ratio based on market value ……… aggregate market value / total assets
Interest-bearing debt to cash flow ratio………………… interest-bearing debt / operating cash flows(not listed in the interim report)
Interest coverage ratio…………………………………… operating cash flows / interest expense※ Ratios above are computed using consolidated financial data.
※ Operating cash flows is used for the ratio computation purpose. Interest-bearing debt consist of allinterest-paid debt among liabilities accounted for in the balance sheet.

(3) Basic policy concerning distribution of profits and dividend for the fiscal year ending March 31,
2008
The Unitika Group considers that the distribution of profits to its shareholders is one of material
management issues, and makes it a basic policy to maintain a continuous and stable distribution ofdividend taking its earnings into consideration. Internal reserve will be utilized with shareholder interests
in mind for future investments, etc. aiming further improvement of our financial strength and expansionof our businesses.
Under this policy, we intend to distribute a dividend of 2 to 3 yen per share for the fiscal year ending
March 31, 2008, and to withhold the declaration of dividend for the interim term under review.

-6-Status of Corporate GroupNo material change was made in the “organization chart of business (business description)” and the “statusof associated companies” in the latest financial statements (submitted on June 28, 2007) and their disclosure
was omitted.

Management Policies(1) Basic management policies
The management principle of the Unitika Group is the “linkage between human living and technologies”
and the Group is aiming for “contribution to human living and environment, and a company with asocial presence.” While promoting the “expansion of its core businesses and consolidated businessperformance,” “reinforcement of its businesses related to environment and daily living,” “strengtheningof its corporate structure and shareholders’ equity,” the Group is confident that the contribution to thesociety will enhance its corporate value and result in the contribution to its shareholders.
(2) Targeted management index
The Unitika Group gives greater importance on amount of sales, operating income and ordinary income
representing the achievement of its business activities. The Group also put a high priority on
shareholders’ equity ratio, and its performance goal of shareholders’ equity ratio is 20% in the FY 2008
which is the last year for the midterm management plan “New Progress (NP)-8”. With the deduction ofinterest-bearing debt in mind, the Group will place the focus on cash flows through its intensive
management.
(3) Long-term management and business strategies and issues to approach
Under the influence of cost increase caused by sustained high prices of raw materials and fuels on its
corporate performance, the Unitika Group strives to improve profitability taking necessary measures at
each stage of manufacture, sales and distribution, and at the same time to improve and strengthen
continuously its revenue base by promoting reinforcement measures listed in the 3-year midterm
management plan, “New Progress (NP)-8,” in other words, promoting sales in the major field centeredby the polymers business and differentiation strategies in the field of functional materials including
functional resins and glass-related materials, etc.
Respective business strategies and issues to be addressed are as follows.
Polymers: In the film business, we will further advance the global operation for nylon film “Emblem®”
including promotion of strategies in Asia and strengthened operations in Europe and the U.S. markets,and strive to expand sales of differentiated products centering on high-barrier films such as “SEVIX®”.
In the resins business, we will strengthen the presence of “U-Polymer®” in the established field andexpand sales through development of its new applications. Further, we will vigorously develop
automotive applications for nano-composite nylon resin and establish a firm business operation structure
for the sensor components business. In the nonwoven fabrics business, we will address the sales
expansion in overseas markets and the development of new applications in highly value added fields forboth spunbond and spunlace fabrics to increase the sales volume. With regard to biomass plastic“TERRAMAC®”, we will promote its commercialization based on the development of our unique
technologies, and introduce “TERRAMAC®” extensively to the electronic equipment, automobile andfood container industries aiming at an increased sales volume.
Environmental Business and Advanced Materials: In the environmental business, we will review ourbusiness management system, and endeavor to strengthen our cost competitiveness and also ouroperating base securing an order inflow for business projects and focusing our business efforts on thestrategic businesses. In the advanced materials business, we will strive to expand sales of glass fibers,
highly value added IC cloth and high grade glass beads for industrial applications in the markets
domestic and overseas, and concentrate on the development of applications of activated carbon fibers-7-

for various types of filters and on the reinforcement of their sales.
Fibers and Textiles: In the synthetic fiber business, we continue to shift their application towardindustrial use and expand sales of differentiated products to improve product mix. In the vinylon
business, we will promote the sales expansion for high-strength vinylon fibers and, at the same time,increase and bolster sales of vinylon fibers for cement reinforcement in the domestic and overseas
markets, of which production is scheduled to be increased in 2008. In the natural fiber business, we will
focus our efforts on the development of owned differentiated products and the expansion of their export
and also improvement of profits by means of thorough cost reduction.
Healthcare & Amenity and Others: In the healthcare & amenity business, we will diversify its sales
channel, promote sales of newly launched products including “Hanabiratake Club®”, and expand salesof functional food materials such as ceramide. In the medical business, we will strengthen the sales
promotion of competitive anti-thrombotic catheter for the circulatory system, and promote the sales
expansion of enzyme and diagnostic products through the development of prospective customers.
For overseas business development, we will further promote operations mainly for polymers, functional
materials and fibers and textiles in Asian countries focusing our efforts on the operations in the Chinese
market as well as the European and the U.S. markets in a positive manner. In addition, with regard tomeasures aiming for the expansion of consolidated business area, we will continue to review suchactivities as M&A, mainly in the field in which a synergistic effect of existing businesses of the Unitika
Group is expected.
We consider that the total cost reduction is a permanent issue, and will review the cost structure
drastically to reduce manufacturing cost, allocate selling and administrative expenses to the fully
effective extent, implement effective fund management, reduce interest-bearing debt, and to enhanceenergy efficiency by switching to environment-friendly natural gas.

-8-

Consolidated Financial Statements(1) Consolidated Statements of Income
Unit:Millions of yen
Six months ended September 30
2006

2007

Increase(Decrease)104,060
83,384
20,675

111,695
91,751
19,943

7,635
8,367
(731)

220,572
178,21142,36015,316

15,487170

31,189

5,358

4,456

(902)

11,171

123
106
499

109
99
2

(14)
(7)
(496)

252
146
578

484

299

(185)

975

107
97

72
541

(34)
444

225
274

606
2,025

1,010
2,135

403
109

1,295
3,748

1,872
702

2,024
702

151
0

3,875
1,368

638
3,213

731
3,458

92
245

1,217
6,461

Ordinary income
VI. Extraordinary incomes
Gain on sale of property, plant andequipment
Gain on sale of affiliate securities

4,170

3,132

(1,037)

8,458

5

747

742

41

512

512

Total extraordinary incomes
VII. Extraordinary losses
Loss on sale of property, plant andequipment
Write-down of inventories
Loss on restructuring of businesses
Other losses
Total extraordinary losses

5

1,260

1,255

41

350

373

22

974

112
799
482
1,744

265
479
671
1,789

153
(320)
189
45

496
2,477
1,181
5,129

2,431

2,603

171

3,369

586
(52)
(114)

678
253
(57)

91
305
57

1,303
(355)
(140)

2,011

1,728

(283)

2,562

I. Net sales
II. Cost of sales
Gross profit
III. Selling, general andadministrative expenses
Operating income

Year ended
March 31,2007

IV. Non-operating incomesInterest income
Dividend income
Gain on sale of investment
securities
Retirement benefits for employees
for prior period
Rent
Equity in income of unconsolidated
subsidiaries and affiliates
Other incomes
Total non-operating incomes
V. Non-operating expenses
Interest expense
Salaries paid to dispatchedemployees
Other expenses
Total non-operating expenses

Income before income taxes
Income taxes - Current
Income taxes - Deferred
Minority interest in income of
consolidated subsidiaries
Net income

-

-9-

-

(2) Consolidated Balance Sheet
Unit:Millions of yen
Mar 31,2007

Sept 30,2007

16,50149,73414,14247,653

Increase(Decrease)

Sept 30,2006

16,73545,87330
62,925
1,694
7,383
(70)

ASSETS
I.Current assets
Cash and cash equivalents
Notes and accounts receivable
Securities
Inventories
Deferred income taxes
Other current assets
Allowance for doubtfulreceivables
Total current assets
II.Fixed assets(1) Property,plant and equipment
Buildings and structures
Machinery and equipments
Furniture and fixtures
Land
Construction in progress
Total property,plant and equipment--

65,266
1,639
7,016
(93)

66,178
1,767
6,550
(65)

(2,359)(2,081)
912
128
(465)
28

140,065

136,228(3,837)

134,572

26,66627,9671,290
107,0091,180
164,115

25,95028,548
1,402
107,369
1,327
164,598

(716)
580
111
359
147
482

27,411
27,9601,313
107,280
1,016
164,981(2) Intangible fixed assets
Goodwill
OthersTotal intangible fixed assets

704
947
1,651

624
985
1,610

(79)
38
(41)

629
963
1,592

(3) Investments and other assets
Investment securities
Contribution
Long-term loans
Deferred income taxes
Other assets
Allowance for doubtful receivables

11,517
37
1,917
6,937
2,505
(365)

8,580
35
513
6,835
2,693
(512)

(2,937)(1)(1,404)
(101)
187
(146)

12,126
37
1,595
9,065
3,077
(562)

Total investments and other assetes

22,55018,146(4,404)25,340Total fixed assets

188,317

184,354(3,962)

191,915

Total assets

328,382

320,582(7,799)326,488- 10 -

Unit:Millions of yen

Mar 31,2007

Sept 30,2007

Increase(Decrease)

Sept 30,2006

41,99966,391
39,968
400
1,063
2,390
36

37,90768,80357,269
400
1,087
2,347
29

(4,091)
2,411
17,30023(42)(6)

34,98864,45435,742
400
825
2,378
8

16,749168,999

16,203
184,048(545)
15,04917,209156,008

1,200
88,9982,874

1,000
67,5092,851(200)(21,489)
(23)

1,400
96,544
2,904

LIABILITIESI.Current liabilities
Notes and accounts payable
Short-term debt
Long-term debt due within one year
Bonds due within one year
Accrued income taxes
Accrued bonuses
Reserve for compensation forcompleted works
Other current liabilities
Total current liabilities
II.Long-term liabilities
Bonds
Long-term debt
Deferred income taxes onland revaluation
Deferred income taxes
Allowance for retirement benefits
Allowance for directors' retirement
bonuses
負債、少数株主持分及びOther long-term liabilities
Total long-term liabilities

18,5993,926
494

18,623
3,443
408

23
(483)
(86)

21,151
4,830
499

3,329
119,423

3,114
96,950(215)(22,473)3,736
131,067

Total liabilities

288,423

280,998(7,424)

287,075

23,798
1,661
6,660
(37)
32,082

23,798
1,661
7,382
(41)
32,801

722
(4)
718

23,798
1,661
5,968
(33)
31,394

1,039

694

(345)

1,292

2

(5)

(7)

9

3,444
(1,258)3,475(2,158)

31
(900)

3,645
(1,506)

3,227
4,649

2,006
4,777

(1,221)
128

3,440
4,576

39,95939,584(375)

39,412

328,382

320,582(7,799)326,488

NET ASSETS
I.Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
II.Valuation and translation adjustments
Unrealized gain (loss) on othersecurities
Deferred gain (loss) on derivatives
under hedges accounting
Land revaluation excess
Foreign currencytranslation adjustments
Total valuation and translation adjustments
III.Minority interests inconsolidated subsidiaries
Total net assets
Total liabilities and net assets- 11 -

(3) Consolidated Statements of Changes in Net Assets
Six months ended September 30, 2006

Unit:Millions of yen

Shareholders' equity
Commonstock

Balance as of March 31, 2006

Capitalsurplus23,798Retainedearnings

1,661

4,766

Treasury
stock

(30)

Total
shareholders'equity30,195

Change of items during
the period
Cash dividends paid（Note）

(951)

(951)

Net income

2,011

2,011

141

141

Reversal adjustment of land
revaluation excess
Treasury stock purchased/disposed
Net change of items other thanshareholders' equity
Total
Balance as of Septmber 30, 2006

(3)

(3)

-

-

1,202

(3)

1,198

23,798

1,661

5,968

(33)

31,394

Valuation and translation adjustments
Deferred
Unrealized
gain (loss) on
Landgain (loss) on
derivatives revaluation
other
under hedges
excesssecurities
accounting

Balance as of March 31, 2006

2,749

-

3,987

Foreigncurrencytranslation
adjustments

Minority
interests in
Total
valuation and consolidated
subsidiaries
translation
adjustments(1,625)

5,111

4,684

Total net
assets39,992

Change of items during
the period
Cash dividends paid（Note）(951)

Net income

2,011

Reversal adjustment of land
revaluation excess
Treasury stock purchased/disposed
Net change of items other thanshareholders' equity

(141)

(141)

(3)

(1,457)

9

(200)

118

(1,529)(108)(1,637)

Total(1,457)

9

(342)

118

(1,670)

(108)

(580)

Balance as of Septmber 30, 2006

1,292

9

3,645

(1,506)

3,440

4,576

39,412(Note) items in appropriation of earning resolved in General Shareholders Meeting held in June, 2006

- 12 -Six months ended September 30, 2007

Unit:Millions of yen

Shareholders' equity
Commonstock

Balance as of March 31, 2007

Capitalsurplus23,798Retainedearnings

1,661

6,660

Treasury
stock

(37)

Total
shareholders'equity32,082

Change of items during
the period
Cash dividends paid

(951)

(951)

Net income

1,728

1,728

(54)

(54)

Reversal adjustment of land
revaluation excess
Treasury stock purchased/disposed
Net change of items other thanshareholders' equity
Total
Balance as of Septmber 30, 2007

23,798

1,661

(4)

(4)

722

(4)

718

7,382

(41)

32,801

Valuation and translation adjustments
Deferred
Unrealized
gain (loss) on
gain (loss) on
derivatives
otherunder hedges
securities
accounting

Balance as of March 31, 2007

1,039

Land
revaluation
excessForeigncurrencytranslation
adjustments

Totalvaluation andtranslation
adjustments

3,444(1,258)3,227

2

Minority
interests inconsolidated
subsidiaries

4,649

Total net
assets39,959Change of items during
the period
Cash dividends paid

(951)

Net income

1,728

Reversal adjustment of land
revaluation excess
Treasury stock purchased/disposed
Net change of items other thanshareholders' equity

54

54

(4)

(345)

(7)

(22)

(900)

(1,276)128(1,148)

Total

(345)

(7)

31

(900)

(1,221)

128

(375)

Balance as of Septmber 30, 2007

694

(5)

3,475

(2,158)

2,006

4,777

39,584- 13 -

Year ended March 31, 2007

Unit:Millions of yen

Shareholders' equity
Commonstock

Balance as of March 31, 2006

Capitalsurplus23,798Retainedearnings

1,661

4,766

Treasury
stock

(30)

Total
shareholders'equity30,195

Change of items during
the period
Cash dividends paid（Note）

(951)

(951)

Net income

2,562

2,562

282

282

Reversal adjustment of land
revaluation excess
Treasury stock purchased/disposed
Net change of items otherthan shareholders' equity
Total
Balance as of March 31, 2007

23,798

1,661

(6)

(6)

1,893

(6)

1,886

6,660

(37)

32,082

Valuation and translation adjustments

Balance as of March 31, 2006

Unrealized
gain (loss) on
othersecurities

Deferredgain (loss) on
derivatives
under hedges
accountingLandrevaluation
excess

2,749

-

3,987

Minority
interests in
ForeignTotal
currency valuation and consolidated
subsidiaries
translation translation
adjustments adjustments(1,625)

5,111

4,684

Total net
assets39,992

Change of items during
the period
Cash dividends paid（Note）(951)

Net income

2,562

Reversal adjustment of land
revaluation excess
Treasury stock purchased/disposed
Net change of items otherthan shareholders' equity

(282)

(282)

(6)

(1,709)

2

(260)

366

(1,601)(35)(1,637)

Total(1,709)

2

(543)

366

(1,884)

(35)

(33)

Balance as of March 31, 2007

1,039

2

3,444

(1,258)

3,227

4,649

39,959(Note) items in appropriation of earning resolved in General Shareholders Meeting held in June, 2006

- 14 -

(4) Consolidated Statements of Cash Flow
Unit:Millions of yen

Six months ended September 30
2006Year ended

2007

March 31,2007

2,431
3,230
(15)
1,872
(499)
6,999
(2,029)(1,093)(1,583)
9,313
242(1,783)
(507)
7,265

2,603
3,205
124
2,024
(2)
(512)
2,530
(236)
(4,327)(1,028)4,379
229(2,079)
(683)
1,846

3,369
6,897
(18)
3,875
(578)
3,309
(4,268)
5,733(1,795)
16,525453(3,839)(1,235)
11,903

73
(10)
1,893
(2,560)
33

22
(20)
1,795
(3,552)
887

43
(30)
2,144
(5,170)147(3,301)(3,870)(391)(1,259)(4,231)(7,097)

III.Cash flow from financial activities
Increase in short-term bank loans, net
Proceeds from long-term debt
Repayment of long-term debt
Redemption of debenture
Cash dividends paid
Other, net
Net cash used in financial activities

1,951
17,180(19,881)
(350)
(935)
(4)
(2,039)2,302
19,166(23,450)
(200)
(936)
(3,117)

3,837
31,547(37,670)
(550)
(939)
(4)
(3,779)IV.Adjustment for foreign currency translation
V.Net increase in cash and cash equivalents
VI.Cash and cash equivalents at beginning of the period
VII.Cash and cash equivalents at end of the period

60
1,415
14,32815,744192(2,337)
15,47913,142124
1,150
14,32815,479I.Cash flow from operating activities
Income before income taxes
Depreciation and amortization
Increase (decrease) in allowance for doubtful receivables

Interest expense
Loss on sale of investment securities
Loss on sale of affiliate securities
Decrease in accounts receivable
Increase in inventories
Increase (decrease) in accounts payable
Other, net
Subtotal:Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
II.Cash flow from investing activities
Decrease in time deposit
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of property, plant and equipment
Proceeds from sale of property,
plant and equipment
Other, net
Net cash used in investing activities- 15 -

Basic matters for preparation of consolidated interim financial statements
1. Scope of consolidation
58 subsidiaries are consolidated as of the end of the interim term under review. 7 subsidiaries are notconsolidated. Major consolidated subsidiaries are Unitika Fibers Co., Ltd., Nippon Ester Co., Ltd.,
Unitika Textiles Co., Ltd., etc. Total assets, net sales, interim net income/loss (corresponding to equity)and retained earnings (corresponding to equity) of non-consolidated subsidiaries (Akoh Unitec Service
Co., Ltd., Unitika Uji Kosan Co., Ltd., etc.) are small in value and do not have a significant influence on
the consolidated interim financial statements. There was one subsidiary increased.
2. Adoption of equity method
The equity method is adopted on 7 non-consolidated subsidiaries and 4 affiliated companies (major
company: Ador Co., Ltd.).
3. Interim closing date for consolidated subsidiaries
Among consolidated subsidiaries, Thai Nylon Co., Ltd., Unitika America Corp., Unitika (Shanghai )Ltd., Emblem Asia Co., Ltd., Unitika Emblem China Ltd., Unitika Do Brasil LLC, Brascot LLC, Peking
Unitika Garments LLC and Unitex Co., Ltd. close their accounts on June 30, and Unitika Hong Kong
Ltd. on August 31. For the purpose of preparing the consolidated interim financial statements, theinterim financial statements on respective dates are used, and a necessary adjustment is made withregard to material transactions conducted during the period between the above-mentioned closing date
and the date of consolidated interim closing.
4. Accounting policies(1) Evaluation standards and method for material assets
Marketable securities
Other marketable securities
With market values: market value method based on market values, etc. on the closing date(variance from valuation is reported as a component of shareholders’ equity, and sales cost iscomputed under moving average method)
Without market values: cost method under moving average method
Derivatives
Stated at fair value
Inventories
Stated at cost principally determined by using the moving average method(2) Depreciation method for important depreciable assets
Tangible fixed assets
Principally computed using the declining balance method(3) Accounting standards for important allowances
Allowance for doubtful receivables
In order to cover losses arising from bad debts, collectibility of general receivables is reviewed
based on the loan loss ratio and specific receivables including possible bad debts, etc. are evaluatedindividually to account for non-recoverable amounts.
Accrued bonuses
The allowance for bonus is accounted for based on the estimated bonus amount for payment toemployees.
Reserve for compensation for completed works
The amount computed by multiplying the construction revenue by the ratio of past repair results is
accounted for to appropriate it for free repairs under the liability of security for completed works.
Some of consolidated subsidiaries account for the reserve for compensation for completed works as- 16 -

an expense when paid out.
Allowance for retirement benefits
The amount for payment of retirement benefits to employees which may be regarded as due andpayable at the end of the midterm under review based on the estimated amount of the trust estateand pension assets related to retirement benefit obligations and retirement benefits at the end of the
fiscal year ending March 31, 2008 is accounted for.
The transition difference due to a change in the accounting standards is treated as an expense
equally dividing the difference in 15 years.
The past service liability is accounted for using the straight-line method based on the average yearsof remaining service by employees when the liability is incurred.
A difference in the mathematical calculation is treated as an expense in and after the fiscal year
following the year when the difference is incurred, using the straight-line method based on thenumber of years not more than the average years of remaining service by employees when the
difference is incurred.
Allowance for directors’ retirement bonuses
In the past, the amount payable at the end of the subject midterm under the internal rule was
accounted for to appropriate it for directors’ retirement bonuses payable upon retirement of
directors (including executive officers). However, we abolished the system of providing a bonus toretiring directors for the company and its consolidated subsidiaries in June of 2006 and suspended
the transfer of such amount to allowance for directors’ retirement bonuses.
(4)Settlement method for important leasing operations
Finance lease transactions other than those in which the ownership of leased property is
acknowledged as transferable to lessee was accounted for in accordance with the method
conforming to that regarding ordinary leasing transactions.
(5)Important hedge accounting method
The deferred hedge accounting is adopted. We employ appropriation procedures for forward
foreign exchange contracts which may satisfy requirements for appropriation, and preferential
procedures for interest rate swaps which may satisfy requirements for preferential procedures.
(6)Settlement of consumption tax, etc.
Settled based on the net of tax method
5. Scope of funds in statement of cash flows
Funds (cash and cash equivalents) stated in the consolidated interim cash flows consist of cash on hand,deposits which may be withdrawn from time to time and short term investments in securities easily
available for sale with a maturity of 3 months or less from time of purchase and with a negligible risk
exposure against price fluctuation.

- 17 -

Segment Information
1. Business Segment Information
Six months ended September 30, 2006

Unit:Millions of yen

Polymers

Environmental
Business andAdvanced
Materials(1) Outside customers

32,75911,46250,1609,678

104,060-

104,060(2) Inter-segment net
sales and transfers

1, 951

349

279

1,589

4,170

(4,170)-Total

34,71011,81150,43911,267108,230(4,170)104,060

30,693
4,017

11,525285

49,681
758

9,958
1,308

101,859
6,370(3,157)(1,012)

98,701
5,358

FibersandTextilesHealthcare& Amenity
and Others

Total

EliminationorCorporate

Consolidated Total
total

Net sales and operating income
I. Net sales

II. Operating expenses
Operating income(Note) Unallocated operating expenses disclosed in “Elimination or Corporate” amounted to 1,041 million yen.

Six months ended September 30, 2007

Unit:Millions of yen

Polymers

Environmental
Business andAdvanced
Materials(1) Outside customers

34,693

14,472(2) Inter-segment net
sales and transfers

1,951

Total

FibersandTextilesHealthcare& Amenity
and Others

Total

EliminationorCorporate

51,80910,719111,695-

111,695

287

346

1,843

4,429

(4,429)-36,644

14,75952,156

12,563

116,125(4,429)111,695

33,6403,004

14,058701

51,460696

11,475
1,087

110,635
5,489(3,396)(1,033)

107,239
4,456

Consolidated Total
total

Net sales and operating income
I. Net sales

II. Operating expenses
Operating income(Note) Unallocated operating expenses disclosed in “Elimination or Corporate” amounted to 1,040 million yen.

Fiscal year ended March 31, 2007

Unit: Millions of yen

Polymers

Environmental
Business andAdvanced
Materials

Net sales and operating income
I. Net sales(1) Outside customers(2) Inter-segment net
sales and transfers
Total

66,198
3,832

28,947703

103,236561

22,1903,372

220,572
8,470(8,470)220,572-

70,031

29,650103,798

25,562

229,042(8,470)220,572

II. Operating expenses
Operating income

62,3907,640

27,374
2,276

101,685
2,112

23,391
2,170

214,842
14,200(5,441)(3,028)

209,400
11,171FibersandTextilesHealthcare& Amenity
and Others

Total

EliminationorCorporate

Consolidated Total
total(Note) Unallocated operating expenses disclosed in “Elimination or Corporate” amounted to 3,088 million yen.

- 18 -

2. Geographic Segment Information
This information is omitted because sales generated in Japan accounted for more than 90% of sales
generated in all geographic segments.

3. Overseas Sales
Unit:Millions of yen

Six months ended September 30
2006

2007

Year ended
March 31, 2007

I Overseas sales

15,16816,72130,063

II Consolidated sales

104,060

111,695

220,572

III Percentage of overseas sales tototal consolidated sales

14.6%

15.0%

13.6%

(Note) No single business segment has an overseas sales more than 10% of total consolidated sales.

Per Share Data
As of September 30,2006

As of September 30, 2007

As of March 31, 2007

Net assets per share
73.24 yen
Net income per share 4.23 yen
Diluted net income per share- yen

Net assets per share
73.19 yen
Net income per share 3.63 yen
Diluted net income per share- yen

Net assets per share
74.24 yen
Net income per share 5.39 yen
Diluted net income per share- yen(Note) Basis for the calculation of net income per share for the current midterm are as follows:

Six months ended September 30
2006

2007

2,011

1,728

2,562

-

-

-

2,011

1,728

2,562

475,652475,607475,641

Net income (Million yen)
Net income not attributable to common stock（Million yen）
Net income on common stocks（Million yen）
Average number of common stock(Thousand share）

Year ended
March 31, 2007

(Material subsequent events)
None(Other notes, etc.)
Notes regarding matters relating to lease transactions, marketable securities, derivative transactions, etc.,
have been excluded because they are considered to be less necessary to disclose in the consolidated
midterm financial results.

- 19 -