Consolidated Financial Statement for Year Ended March 31, 2008
(April 1, 2007 - March 31, 2008)
May 9, 2008
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 Year FY2007 (April 1, 2007 - March 31, 2008)(1)Consolidated Operating Results
Years ended March 31

Percentage indicates increase / (decrease) from the previous year

Net sales

Operating income

Ordinary income

Million yen%

Million yen%

Million yen

2008

234,744

6.4

11,553

3.4

8,013

2007

220,572

2.1

11,171(21.4)Net income%

Million yen

(5.3)

1,550

(39.5)

8,458 (27.7)

2,562(43.1)

Yen

Diluted net
income per
share
Yen

2008

3.26

-

4.5

2.5

4.9

2007

5.39

-

7.3

2.6

5.1

Net income
per share%

Return on
equityReturn on asset

Operatingincome ratio

%

%

%

(Reference) Equity in earnings of affiliates: March 31, 2008 562 million yen,March 31, 2007 274 million yen(2) Consolidated Financial Position
As of March 31
Total assets

Net assets

Million yen

Million yen

Shareholders’ equity
ratio
%

2008

309,043

38,378

10.9

70.67

2007

328,382

39,959

10.8

74.24

(Reference) Shareholders’ equity: March 31, 2008 33,611 million yen,March 31, 2007 35,310 million yen-1-

Net assets per shareYen(3) Consolidated Cash Flows
Years ended March 31
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

2008

8,129

(5,500)(5,113)

13,2092007

11,903(7,097)(3,779)15,4792. Dividends
Years ended/ending March 31
Total

Dividends per share

dividends

Record date

Dividend
payout ratio(consolidated)

Dividend on
equity ratio(consolidated)%%

InterimYear-end

Total annual

Yen

Yen

Yen

paid
(total annual)Million yen

2007

-

2.00

2.00

951

37.1

2.7

2008

-

2.00

2.00

951

61.3

2.8

2009
(Forecast)

-

2.00

2.00

23.8

3. Forecasts for the Fiscal Year 2008 ending March 31, 2009
Percentage indicates increase / (decrease) from the previous year
Net sales
Million yen%

Operating income

Ordinary income

Million yen%

Million yen

1.0Interim period

115,000 3.0

4,500

Fiscal year

245,000 4.4

13,000 12.5%

Net income pershare

Net income
Million yen%

Yen

2,500 (20.2)

500 (71.1)

1.05

9,000

4,000 157.9

8.41

12.3

4. Others(1) Changes in major subsidiaries during the subject fiscal year (transfer of specific subsidiaries following achange in the scope of consolidation): Yes
New company: 0 Exempted company: 1 (Unitika Uji Products Co., Ltd.)(Note) For details, refer to “Status of Corporate Group” on page 7.
(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: Yes(Note) For details, refer to “Basic matters for preparation of consolidated financial statements” on page 16.
(3) Number of share outstanding (Common stock) :1. Number of shares outstanding at the end of period (including treasury stock)
March 31, 2008: 475,969,000
March 31, 2007: 475,969,000
2. Number of treasury stocks at the end of period
March 31, 2008: 393,124
March 31, 2007: 348,409(Note) For details of basic number of shares to calculate net income per share (consolidated), refer to “Per
Share Data” on page 20.
-2-【Reference】 Non-Consolidated Performance Summary
1. Non-Consolidated Performance for Year FY2007 (April 1, 2007 - March 31, 2008)(1) Non-Consolidated Operating Results
Years ended March 31
Net sales

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

Ordinary income

Net income

Million yen%

Million yen%

Million yen

2008

103,825

7.1

7,237

0.3

5,025

(3.8)

417

(82.3)

2007

96,926

2.3

7,212

(4.3)

5,223 (25.4)

2,355(22.1)Net income per
share

Diluted net income
per share

Yen

Yen

2008

0.88

-

2007

4.95

-

%

Million yen%(2) Non-Consolidated Financial Position
As of March 31
Total assets

Net assets

Shareholders’equity ratio

Net assets per share

Million yen

Million yen

%

Yen

2008

257,038

39,287

15.3

82.61

2007

258,149

40,943

15.9

86.09

(Reference) Shareholders’ equity: March 31, 2008 39,287 million yen,March 31, 2007 40,943 million yen

2. Non-Consolidated Forecasts for the Fiscal Year 2008 ending March 31, 2009
Percentage indicates increase / (decrease) from the previous year
Net sales
Million yen

Operating income Ordinary income%

Million yen%

Million yen%

Net income pershare

Net income
Million yen%

Yen

Interim period

50,000

3.7

3,000

3.9

1,500

(25.6)

200 (80.7)

0.42

Fiscal year

110,000

5.9

8,000

10.5

5,000

(0.5)

1,500 259.6

3.15* 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-

1. Consolidated Operating Results(1) Analysis of consolidated operating results
1. Summary of the current period
Although a continued upward trend in exports was seen during the current period, a slowdown of theJapanese economy became apparent, and serious concern for the future of business accelerated
because of the effects on corporate profit margins and consumer spending by rising crude oil and raw
material prices, the instability of the financial market with the extended subprime issue, the rapidly
increasing value of the yen, and the sluggishness in construction investments.
Under these circumstances, the Unitika Group has worked at various measures including theunrestricted 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”. Also, to absorb the soaring prices of petrochemical feedstock and fuels,
we emphasized product repricing. However, due to an insufficient revision of product prices to absorb
soaring prices of petrochemical feedstock and fuels exceeding the initial forecast, the subject current
period FY2007 recorded net sales of 234,744 million yen (14,172 million yen increase compared tothe previous year), operating income of 11,553 million yen, (382 million yen increase compared tothe previous year), ordinary income of 8,013 million yen, (445 million yen decrease compared to theprevious year), and the current net income of 1,550 million yen (1,011 million yen decrease comparedto the previous year) because of our early execution of “Accounting Standard Relating to the
Evaluation of Inventories.”
In addition, we intend to distribute a dividend of 2 yen per share for the fiscal year ended March 31,
2008, an amount equal to that of last 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, and the further price increases. Under such situation, we
endeavored to secure earnings by means of a continuous product repricing and drastic cost reduction.
In the film business, domestic sales of nylon film increased mainly through differentiated products
such as barrier materials, and an improvement in earnings of overseas subsidiaries was achieved, but
the increase of raw materials prices put pressure on profits. Sales of polyester films expanded in thefield of vacuum evaporation packaging, but, sales in the industrial field saw sluggish growth becauseof continuing market adjustments. Consequently, the film business as a whole recorded increased
sales but a reduced profit.
In the resin business, sales volume of various materials, with the exception of PET resin for bottle
application, expanded but profitability of nylon and polyester was adversely influenced by theincrease of raw materials prices. On the other hand, the revenue of our owned polyarylate resin“U-Polymer” increased under strong demand from the automotive and electronics industries.
Consequently, the resin business as a whole recorded increased revenues and profits.
In the nonwoven fabrics business, sales of spunbond fabrics for agriculture applications remainedsluggish. Affront a background of a decrease in construction starts, sales of roofing and construction
materials also decreased. However, business in the fields of carpets, diapers, vehicle applications andexport markets remained steady. In the cotton spunlace business, sales expanded for applications forhygienic goods and cosmetics. Consequently, the business as a whole recorded an increase in revenue
but reduced profits because of the effects of increased raw materials prices.
“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, drum covers of complex machines, head rest covers, bedding products, etc. The scope ofpractical use of “TERRAMAC®” has been steadily expanding backed by the technical improvement
in moldability and productivity owing to established technology for accelerated crystallization at thefastest level in the world.
-4-

As a result, the polymer business recorded sales of 70,919 million yen (4,721 million yen increase
compared to the previous year) and operating income of 7,078 million yen (562 million yen decrease
compared to the previous year).

[Environmental Business and Advanced Materials]
In the environmental business, engineering works on backlog increased earnings and the maintenancebusiness remained firm. However, with violent changes in the market environment and fluctuations indemand order prices amidst intensifying competition, improvements in profitability have been
delayed. Consequently, improved earnings of the whole business led to an increase in revenue, but afull scale recovery of the business has not been achieved. Moreover, no great change for the better has
been seen in the environment surrounding public projects and, with a limited increase in businessvolume, growth of demand orders is being restrained.
In the advanced materials business, sales of glass fibers for the IC cloth market were sluggish withinventory adjustments of the electronic parts industry taking much longer than expected. In theindustrial material market, business in cloth for bug filters, fireproof electric wires and automobile
shock absorbers marked a steady increase in sales. Sales of glass beads for reflective materials
increased, and, at the same time, the business of active carbon fibers for wastewater purification andautomobile deodorization stayed firm. Consequently, the business as a whole accounted for increased
revenues and profits.
As a result, the business of environmental business and advanced materials recorded sales of 35,195
million yen (6,248 million yen increase compared to the previous year) and operating income of
3,218 million yen (942 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 cost reduction, product repricing and improvement in product mixes. The nylon fibers
and polyester long fibers faced severe conditions. However, demand for nonwoven fabric expanded,industrial material applications such as polyester cotton progressed smoothly. With regard to thevinylon business, sales of vinylon fibers for cement reinforcement, which is used as a substitute forasbestos, continued to increase steadily due to market expansion overseas and strong market demandfor construction materials and construction reinforcement materials.
In the natural fiber business, sales were affected by the high prices of raw materials and fuels and also
by the strong Chinese yuan in the foreign exchange market. Growth in demand for uniforms was slow
and, with the sluggish general clothing market, overall revenue remained at a low level.
As a result, sales of the fibers business rose to 104,577 million yen (1,340 million yen increase
compared to the previous year), but operating income dropped to 1,710 million yen (402 million yen
decrease compared to the previous year).
[Healthcare & Amenity and Others]
In the healthcare & amenity business, sales of healthcare supplement foods related to the existing“Hanabiratake Club®” and various other supplements slowed down in a dullish wellness market.
However, functional food ingredients such as ceramide and arabinose were adopted for major
products by large scale users and the business as the whole remained on the same past level.
In the medical business, together with a new anti-thrombotic catheter, which is a core product for thecirculatory system, sales of biochemical field products including enzymes and diagnostic drugs
expanded firmly and revenue of the business increased on the whole. In other business, sales ofcondominiums proceeded smoothly.
As a result, sales of the healthcare & amenity and other businesses increased to 24,051 million yen(1,861 million yen increase compared to the previous year) and operating income of 2,862 million
yen (691 million yen increase compared to the previous year).
2. Outlook for the fiscal year ending March 31, 2009
In the Fiscal Year ending March 31, 2009, it is believed that outlook of business, both in Japan andoverseas, will become further uncertain because of a reduction in general consumption consequent to
the increase in crude oil prices and other general commodity prices.
In this business environment, the Unitika Group will seek revenue increasing measures for businesses-5-that were sluggish during the last period under the “New Progress (NP)-8” 3-year midterm
management plan and, in coping with surging prices of raw materials and fuels, optimization of
profitability will be pursued via continued implementation of drastic cost reductions, productrepricing, and improvement of product mixes. In addition, the Group will strive to further improve its
financial standing. For the fiscal year ending March 31, 2009, we envisage net sales of 245,000
million yen, operating income of 13,000 million yen, ordinary income of 9,000 million yen, and net
income of 4,000 million yen.

(2) Analysis of Financial Position
Total assets decreased by 19,338 million yen from the end of fiscal year 2006 to 309,043 million yen,mainly due to decreased inventories by the early application of “Accounting Standard Relating to the
Evaluation of Inventories,” decrease in deferred income taxes, and selling of investment securities, etc.
The status of cash flows is as follows.
(Cash flow from operating activities)
Net cash provided by operating activities increased by 8,129 million yen reflecting the decrease of cash
inflow consisting of income before income taxes and depreciation and amortization.
(Cash flow from investing activities)
Net cash used in investing activities decreased by 5,500 million yen reflecting an expense of 7,538
million yen for capital investment.
(Cash flow from financial activities)
Net cash used in financial activities decreased by 5,113 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 period under review decreased by
2,270 million yen from March 31, 2007, to 13,209 million yen.
Indicators of Financial Position are shown below:
March 31, March 31, March 31,
2008
2007
2006
(1) Shareholders’ equity ratio (%)

10.9

10.8

10.6

(2) Shareholders’ equity ratio based on market value (%)

15.1

23.8

31.4

(3) Interest-bearing debt to cash flow ratio (Years)

24.4

17.1

18.6

(4) Interest coverage ratio (Times)

2.0

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 / cash flows
Interest coverage ratio……………………… 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 all interest-paid debt among liabilities accounted for in the
consolidated balance sheet.

(3) Basic policy concerning distribution of profits and dividend for the fiscal year ended March 31,
2008 and the fiscal year ending March 31, 2009
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 yen per share for the fiscal year ended March
31, 2008, an amount equal to that of the last year, and we also intend to distribute a dividend of 2 yen per
share for the fiscal year ending March 31, 2009.
-6-

2. Status of Corporate GroupThe Unitika Group is made up of the company, 59 subsidiary companies and 4 affiliated companies.
The Unitika Group is engaged in business in the four fields of “Polymers,” “Environmental Business andAdvanced Materials,” “Fibers and Textiles,” and “Healthcare & Amenity and Others.” The major business
contents of the main companies that comprise the Unitika Group and the positioning of the said businesses
are roughly as follows.
[Polymers]
The company is mainly engaged in the manufacture and sales of plastic films, resins, resin products, andnonwoven fabrics.
In Japan, Terabo Co., Ltd., which is a consolidated subsidiary, processes and sells plastics and chemical
products, and Diabond Industry Co., Ltd. manufactures and sells adhesives for automotive, electrical andconstruction applications.
Overseas, Emblem Asia Co., Ltd. (Indonesia) and Unitika Emblem China Ltd. (China), which areconsolidated subsidiaries, manufacture and sell films. Tusco (Thailand), an equity method affiliate,
manufactures and sells nonwoven fabrics.
[Environmental Business and Advanced Materials]
In the environmental business, the company is engaged in the engineering business (water treatment facilities,
incinerator furnaces, air pollution prevention systems, etc.) as well as in the advanced materials business(glass fiber products, glass beads, active carbon fibers, amorphous metal fibers, phenol type thermosetting
resin “Univeks”, etc.).
Unitika Glass Fiber Co., Ltd., which is a consolidated subsidiary, manufactures glass fiber products, Unitika
Sparklite Ltd. manufactures and sells reflection materials, Unitika Environmental Technical Center Co., Ltd.
conducts environment analysis and measuring, and Union Co., Ltd. manufactures glass beads.
[Fibers and Textiles]
The company and its consolidated subsidiaries Unitika Fibers Ltd. and Unitika Textiles Ltd. manufacture andsell various textiles (yarn, cotton, woven and knitted materials, etc.), while Unitika Sakai Ltd. manufacturesand sells woven and knitted materials, etc. Unitika Fibers Ltd. receives supplies of materials from Unitika
Ltd. and its consolidated subsidiary Nippon Ester Co., Ltd., which makes ester yarn and cotton on the one
hand while consigning dyeing and finishing to the I-Tex Co., Ltd. on the other. Part of these products are soldthrough Unitika Sakai Ltd. and Unitika Tsusho Ltd., which are consolidated subsidiaries of Unitika Ltd.
Unitika Textiles Ltd. consigns dyeing and finishing of woven and knitted material to Osaka Dyeing Co., Ltd.,
which is a consolidated subsidiary of Unitika Ltd., and a part of these products are sold through Unitika
Tsusho Ltd., which is a consolidated subsidiary. The Unitika Berkshire Co., Ltd., a consolidated subsidiary,
manufactures men’s and ladies’ socks and stockings, etc.
[Healthcare & Amenity and Others]
In the medical business, the company manufactures and sells medical use materials, enzymes, diagnostic
drugs, while, in the healthcare and amenity business, they sell Hanabiratake Club®, ceramides, foddermaterial, etc.
Unitika Estate Co., Ltd., which is a consolidated subsidiary, plans and sells condominiums, Unitika Plant
Engineering Co., Ltd. designs, installs and maintains various plants for fireproof screens, etc., Unitika Realty
Co., Ltd. leases and manages shopping centers, and Unitika Akohkaihatsu Co., Ltd. operates the Akoh
Country Club.
The Unitika Tsusho Ltd. and other trading companies, which are consolidated subsidiaries, handle theproducts of the above various businesses.

-7-

3. Management Policies(1) Basic management policies
The management principle of the Unitika Group is the “linkage between human living andtechnologies” and the Group is aiming for “contribution to human living and environment, and acompany with a social presence.” While promoting the “expansion of its core businesses andconsolidated business performance,” “reinforcement of its businesses related to environment and dailyliving,” “strengthening of its corporate structure and shareholders’ equity,” the Group is confident thatthe contribution to the society 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. With the deduction of interest-bearing debt in mind, the Group will place thefocus on cash flows through its intensive management.
(3) Medium- to long-term 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 review of non-profitable business segments, manufacture, sales and distribution, and at thesame 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 centered by the polymers business and differentiation strategies in thefield of functional materials including functional resins, glass-related materials, and various segments ofindustrial materials, etc. Furthermore, with the growth of these businesses as a mainstay, we will tackle
the structuring of a corporate constitution by which the company will continue to prosper in the future.
Respective business strategies and issues to be addressed are as follows.
Polymers: In the film business, we will be working to strengthen and expand sales of “Emblem®” nylon
film to the Asian, Europe and the U.S. markets and make efforts to expand sales of high-barrier films,
such as “SEVIX®,” to strengthen our position in the industrial film field. In the resins business, we will
strengthen the presence of “U-Polymer®” in established fields and expand sales through thedevelopment of new applications. Further, we will vigorously develop automotive, cell phones andpersonal computer applications for nano-composite nylon resin and push sales of copolymerized
polyester resin for electrical and electronic fields.
In the nonwoven materials business, we will address sales expansion in overseas markets for spunbond
for carpet application and spunlace fabrics for hygienic goods and cosmetic applications. In addition, we
will promote the development of new applications in high added-value fields for filter applications.
With regard to our “TERRAMAC®” biomass plastic, we will promote its commercialization based on
the development of our unique technologies, and introduce “TERRAMAC®” extensively to theelectronic equipment, automotive and food container industries.
Environmental Business and Advanced Materials: In the environmental business, our operating basewill be strengthened by reinforcing our cost competitiveness, expanding business in the fiber filter field,
making the most of our originality, strengthening sales of drugs, and coping with civilian demands. In
the advanced materials business, we will strive to expand glass fibers, high added-value IC cloth andhigh grade glass beads for industrial applications in domestic and overseas markets, and try to increase
sales of applications of activated carbon fibers for various types of filters.
Fibers and Textiles: In the fibers and textiles business, reviews will be conducted of non-profitablebusinesses in the synthetic fiber business, and thorough cost reductions will be advanced, while efforts
will be made to shift their application toward industrial use and expand sales of differentiated products
to improve product mix. We will promote sales expansion of high strength vinylon fibers and, at thesame time, increase and bolster sales of vinylon fibers for cement reinforcement via export expansion,-8-

of which production is scheduled to be increased in 2008. Also, we will focus our efforts on improving
profits by means of new developments and strengthening of owned differentiated products in our natural
fiber business.
Healthcare & Amenity and Others: In the healthcare & amenity business, we will be working to create alineup of products that duly considers the needs of consumers in the healthcare foodstuff field, and,
together with a strengthening of sales channels, efforts will be made to promote sales of functional foodmaterials such as ceramide.
In the medical business, we will strengthen sales promotion of competitive anti-thrombotic catheters forthe circulatory system, and focus on developing new applications of enzyme and diagnostic products.
For overseas business development, operations for all Asian countries and business for the European
market will be promoted mainly for the resin business, nonwoven fabrics business, and advanced
materials business, in addition to a global expansion of nylon film.
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.

-9-Consolidated Financial Statements(1) Consolidated Statements of Income
Unit:Millions of yen
Year ended
March 31,2007

Year ended
March 31,2008

220,572
178,21142,360234,744
191,942
42,801

14,172
13,731441

31,18931,24758

11,171

11,553

382

252
146
225
578

246
136
133
-

(6)
(9)
(92)
(578)

975

498

(476)

274

562

288

1,295
3,748

1,604
3,182

309
(565)

3,875
1,368

4,082
1,266

207
(101)

1,217
6,461

1,373
6,723

156
261

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

8,458

8,013

(445)

41

825

783

-

512

512

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

41

1,338

1,296

974

926

(47)

674
2,477
1,003
5,129

2,419
743
913
1,559
6,562

2,419
68
(1,564)
556
1,432

3,369

2,788

(581)

1,303
(355)
(140)

1,064
182
(9)

(238)
538
130

2,562

1,550

(1,011)

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

Increse(Decrease)

IV. Non-operating incomesInterest income
Dividend income
Rent
Gain on sale of investment
securities
Retirement benefits for employees
for prior period
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- 10 -

(2) Consolidated Balance Sheet
Mar 31,2007

Mar 31,2008

Unit:Millions of yen
Increase(Decrease)

ASSETS
I.Current assets
Cash and cash equivalents
Notes and accounts receivable
Inventories
Deferred income taxes
Other current assets
Allowance for doubtful receivables
Total current assets

16,50149,73465,266
1,639
7,016
(93)
140,065

13,04550,03962,222
1,449
7,087
(65)
133,779(3,455)305(3,043)(190)
71
27(6,285)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

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

25,161
27,600
1,332
107,382
2,535
164,012(1,505)
(366)
41
372
1,355
(103)

(2) Intangible fixed assets
Goodwill
OthersTotal intangible fixed assets

704
947
1,651

554
944
1,498

(149)
(3)
(152)

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

11,517
37
1,917
6,937
2,505
(365)
22,550

7,053
35
528
431
2,531
(826)
9,753

(4,464)(2)(1,389)(6,505)26(461)(12,797)

Total fixed assets

188,317

175,264(13,053)

Total assets

328,382309,043(19,338)- 11 -

Mar 31,2007

Mar 31,2008

Unit:Millions of yen
Increase(Decrease)

LIABILITIESI.Current liabilities
Notes and accounts payable

41,99938,385(3,613)

Short-term debt

66,391

72,273

5,881

Long-term debt due within one year

39,96856,48916,520

400

400

-

Bonds due within one year
Accrued income taxes

1,063

952

(110)

Accrued bonuses
Reserve for compensation for

2,390

2,265

(125)

36

116

80

completed works
16,74915,290(1,458)

168,999

186,172

17,173

Bonds

1,200

800

(400)

Long-term debt
Deferred income taxes on

88,99862,823(26,175)

2,874

2,851

(23)

18,59911,278(7,321)

3,926

3,483

(442)

494

408

(86)

Other current liabilities
Total current liabilities
II.Long-term liabilities

land revaluation
Deferred income taxes
負債、少数株主持分及びAllowance for retirement benefits
Allowance for directors' retirement
bonuses
Other long-term liabilities
Total long-term liabilities

3,329

2,847

(482)

119,423

84,492(34,931)

Total liabilities

288,423

270,665(17,757)

I.Shareholders' equity
Common stock

23,79823,798-

Capital surplus

1,661

1,661

-

Retained earnings

6,660

7,196

536

(37)

(43)

(6)

32,082

32,612

530

1,039

(120)

(1,160)

2

(11)

(13)

NET ASSETSTreasury stock
Total shareholders' equity
II.Valuation and translation adjustments
Unrealized gain (loss) on other securities
Deferred gain (loss) on derivatives
under hedges accounting
Land revaluation excess

3,444

3,484

40

Foreign currency(1,258)(2,354)(1,096)

3,227

998

(2,229)

III.Minority interests inconsolidated subsidiaries

4,649

4,767

118

Total net assets

39,95938,378(1,580)328,382309,043(19,338)translation adjustments
Total valuation and translation adjustments

Total liabilities and net assets- 12 -

(3) Consolidated Statements of Changes in Net Assets
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

Total
shareholders'equity(30)

30,195

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 other thanshareholders' equity
Total
Balance as of March 31, 2007

(6)

(6)

-

-

1,893

(6)

1,886

23,798

1,661

6,660

(37)

32,082

Valuation and translation adjustments
Deferred gain
Unrealized(loss) on
Land
gain (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

2,562

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

- 13 -

Year ended March 31, 2008

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

1,550

1,550

(63)

(63)

Reversal adjustment of land
revaluation excess
Treasury stock purchased/disposed
Net change of items other thanshareholders' equity
Total
Balance as of March 31, 2008

23,798

1,661

(6)

(6)

536

(6)

530

7,196

(43)

32,612

Valuation and translation adjustments
Deferred gain
Unrealized(loss) on
Land
gain (loss) onhedges under revaluation
otherhedgesexcesssecurities
accounting

Balance as of March 31, 2007

1,039

2

3,444

Foreigncurrencytranslation
adjustments(1,258)

Minority
interests in
Total
valuation and consolidated
subsidiaries
translation
adjustments

3,227

4,649

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

(951)

Net income

1,550

Reversal adjustment of land
revaluation excess
Treasury stock purchased/disposed
Net change of items other thanshareholders' equity
Total
Balance as of March 31, 2008

63

63

(6)

(1,160)

(13)

(22)

(1,096)(2,292)118(2,174)(1,160)(13)

40(1,096)(2,229)118(1,580)

(120)

(11)

3,484

(2,354)

998

4,767

38,378- 14 -

(4) Consolidated Statements of Cash Flow
Year ended
March 31,2007
I.Cash flow from operating activities
Income before income taxes
Depreciation and amortization

Year ended
March 31,2008

Unit:Millions of yen
Increase(Decrease)

3,369
6,897
(18)
(2,041)
(78)
3,875
974
(41)
(578)
3,309
(4,268)
5,733(608)
16,525453(3,839)(1,235)
11,903

2,788
6,704
463
(659)
(143)
4,082
926
(825)
(512)
2,419
64
1,221
(3,765)238
13,005409(4,071)(1,213)
8,129

(581)
(192)
482
1,382
(65)
207
(47)
(783)
578
(512)
2,419
(3,244)5,490(9,499)847(3,519)
(44)
(232)
22
(3,774)

43
(30)
2,144
(5,170)
147

176
(200)
1,856
(7,538)
1,068

133
(170)
(287)
(2,368)921(4,231)(7,097)(862)(5,500)

3,369
1,596

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

3,837
31,547(37,670)
(550)
(939)
(4)
(3,779)5,771
31,995(41,539)
(400)
(940)
(5,113)

1,934
447(3,869)150(0)4(1,333)

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

124
1,150
14,32815,479215(2,270)15,47913,20990(3,420)1,150(2,270)

Increase (decrease) in allowance for doubtful receivables

Decrease in allowance for retirement benefits
Decrease in other allowanceInterest expense
Loss on sale of property, plant and equipment
Gain on sale of property, plant and equipment
Gain on sale of investment securities
Gain on sale of affiliate securities
Write-down of inventories
Decrease in accounts receivable
Increase (decrease) 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 financial statements
1. Scope of consolidation
52 subsidiaries are consolidated as of the end of the current period 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, current period net income/loss (corresponding toequity) 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 financial statements. Changes in consolidated subsidiaries consisted of anincrease of 1 company by additional acquisition of its stocks, a decrease of 3 companies by merger with
Unitika Ltd., a decrease of 1 company by merger between consolidated subsidiaries, and a decrease of 2
companies by liquidation of consolidated subsidiaries.
2. Adoption of equity method
The equity method is adopted on 7 non-consolidated subsidiaries and 4 affiliated companies (major
company: Ador Co., Ltd.). Changes in affiliated companies include a decrease of 1 company bybecoming a consolidated subsidiary by additional acquisition of its stocks, and a decrease of 2
companies by sales of held stocks.
3. 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 December 31, and Unitika Hong
Kong Ltd. on February 29. For the purpose of preparing the consolidated financial statements, thefinancial statements on respective dates are used, and a necessary adjustment is made with regard tomaterial transactions conducted during the period between the above-mentioned closing date and thedate of the current consolidated 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 (the balance sheet value
was calculated by the book value devaluation method, based on lowering of profitability.)(Change of accounting policy)
In accordance with the application of the “Accounting Standard Relating to the Evaluation of
Inventories” (Corporate Accounting Standards No. 9 Issue, dated July 5, 2006) to consolidated
financial statements relating to a consolidated accounting year starting before March 31, 2008, thesaid accounting standard is applied from the current consolidated accounting year.
By this, income before income taxes decreased 2,419 million yen.
The reason why the change in the said accounting policy was made in the second half year was
because adjustment of the acceptance preparations relating to the Accounting Standard Relating to
the Evaluation of Inventories was made in the said second half year.

(2) Depreciation method for important depreciable assets
Tangible fixed assets- 16 -

Computed using the declining balance method. However, depreciation of a part ofconsolidated subsidiaries is by the straight-line method.
Intangible fixed assets
Straight –line 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
an expense when paid out.
Allowance for retirement benefits
The amount for payment of retirement benefits to employees under review based on the estimatedamount of the trust estate and pension assets related to retirement benefit obligations (in regard to apart of consolidated subsidiaries, the retirement benefit obligations and plan assets) at the end of the
fiscal year ended 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 (mainly 9 years) 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 the
average years of remaining service (mainly 10 years) by employees when the difference is incurred.
Allowance for directors’ retirement bonuses
In the past, the amount payable at the end of the subject term 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 to retiring
directors for the company and its consolidated subsidiaries in June of 2006 and suspended thetransfer of such amount to allowance for directors’ retirement bonuses.
(4)Standard for translating important foreign currency based assets or liabilities to Japanesecurrency
Foreign currency-based currency credit obligations and liabilities are converted into yen currency at
the spot exchange rate of the consolidated closing account date and translation difference to betreated as profit or loss.
Furthermore, the assets and liabilities of overseas subsidiaries are converted into yen currency by
the spot exchange rate of the year-end closing date, and profits and expenses are converted into yen
currency at the average market rate during the period with the translation difference included in theforeign currency translation adjustments account and minority interest share.
(5)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.
(6)Interest relating to property for sale (inventories)
Of the property for sale of the consolidated subsidiaries, part of the interest cost relating to theproperty for sale in progress is accounted for in the acquisition amount of the said property.
- 17 -

(7)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.
(8)Settlement of consumption tax, etc.
Settled based on the net of tax method
5. Items relating to evaluation of assets and liabilities of consolidated subsidiaries
The full market value evaluation method will be adopted in regard to the evaluation of assets andliabilities of consolidated subsidiaries.
6. Items relating to depreciation of goodwill
Goodwill is depreciated over 5 years by the straight-line method.
7. Scope of funds in statement of consolidated cash flows
Funds (cash and cash equivalents) stated in the consolidated 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.

Change of basic matters for preparation of consolidated financial statements
Change of indication method(Consolidated Statements of Income)The “Gain on sale of investment securities” (8 million yen for the current period) was statedseparately up until the previous period. However, since it became less than 10/100 of the
non-operating incomes, it is included and indicated in the “Other incomes” of the non-operating
incomes.
(Consolidated Statements of Cash Flow)
The “Gain on sale of investment securities” of the cash flow from operating activities is included in“Other net” since the amount for the period lacked monetary importance. The “Gain on sale ofinvestment securities” included in “Other net” of the current period was minus 8 million yen.

- 18 -

Segment Information
1. Business Segment Information
Fiscal year ended March 31, 2007

Unit: Millions of yen

Polymers

Environmental
Business andAdvanced
Materials(1) Outside customers

66,198(2) Inter-segment net
sales and transfers

FibersandTextilesHealthcare& Amenity
and Others

Total

EliminationorCorporate

Consolidated
total

28,947103,236

22,190220,572-

220,572

3,832

703

561

3,372

8,470

(8,470)-Total

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
11,171

2. Assets, depreciation andamortization and capital
expenditures
Assets85,56928,995112,31372,884

299,763

28,619328,382

3,347

474

1,651

901

6,374

522

6,897

1. Net sales and operating income
I. Net sales

Depreciation and amortization

Capital expenditures
2,545
1,119
1,472
349
5,486
516
6,002
(Note)
1. Unallocated operating expenses disclosed in “Elimination or Corporate” amounted to 3,088 million yen.
2. Of the “Assets”, the total company assets disclosed in “Elimination or Corporate” amounted to 38,001 million yen with themain ones comprising surplus working funds (cash and deposits) of the parent company, long-term investment funds(investment in securities), as well as assets, etc. relating to administration and the Research and Development Division.
The land revaluation excess for business of the parent company is not included in the respective business segments.

Fiscal year ended March 31, 2008

Unit: Millions of yen

Polymers

Environmental
Business andAdvanced
Materials(1) Outside customers

70,919(2) Inter-segment net
sales and transfers

3,960

Total

FibersandTextilesHealthcare& Amenity
and Others

Total

EliminationorCorporate

Consolidated
total

35,195

104,577

24,051

586

673

3,512

234,744-234,744

8,732(8,732)-

74,88035,781

105,250

27,564

243,477(8,732)

234,744

II. Operating expenses

67,80232,562

103,540

24,701

228,607(5,416)

223,190

Operating income

7,078

2. Assets, depreciation andamortization and capital
expenditures
Assets

3,218

1,710

2,862

14,870(3,316)

11,55380,70931,727

106,30278,363

297,102

11,940309,043

3,276

682

1,466

804

6,230

474

6,704

1. Net sales and operating income
I. Net sales

Depreciation and amortization

Capital expenditures
1,950
2,039
1,545
979
6,515
831
7,346
(Note)
1. Unallocated operating expenses disclosed in “Elimination or Corporate” amounted to 3,454 million yen.
2. Of the “Assets”, the total company assets disclosed in “Elimination or Corporate” amounted to 29,005 million yen with themain ones comprising surplus working funds (cash and deposits) of the parent company, long-term investment funds(investment in securities), as well as assets, etc. relating to administration and the Research and Development Division.
The land revaluation excess for business of the parent company is not included in the respective business segments.
- 19 -

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

Year ended
March 31, 2007

Year ended
March 31, 2008

I Overseas sales

30,06334,884

II Consolidated sales

220,572

234,744

III Percentage of overseas sales tototal consolidated sales

13.6%

14.9%

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

Per Share Data
As of March 31, 2007

As of March 31, 2008

Net assets per share
74.24 yen
Net income per share 5.39 yen
Diluted net income per share- yen

Net assets per share
70.67 yen
Net income per share 3.26 yen
Diluted net income per share- yen(Note) Basis for the calculation of net income per share for the current term are as follows:Year ended
March 31, 2007

Year ended
March 31, 2008

2,562

1,550

Net income not attributable to common stock（Million yen）--

Net income on common stocks（Million yen）

2,562

1,550

Average number of common stock(Thousand share）

475,641475,595

Net income (Million yen)(Material subsequent events)
None(Other notes, etc.)
Notes regarding matters relating to lease transactions, transactions with related parties, items relating to tax
effect accounting, items relating to marketable securities, items relating to derivative transactions, items
relating to retirement benefits, items relating to stock options, etc. and items relating to corporate
combining have been excluded because it considered less necessary to disclose such information in the
consolidated financial results.

- 20 -