October 2001 Company Financial Statements Summary
December 13, 2001

Kanamoto Company, Ltd.
Head Office:

1-19, Odori Higashi 3-chome, Chuo-ku, Sapporo, Hokkaido Japan 060-0041

Stock Code:9678

Listing Exchanges :Contact:

Tokyo Stock Exchange(First Section), Sapporo Stock Exchange
Nobuhito Utatsu, Corporate Officer & Division Manager, Accounting Division

Phone:

81-11-209-1600

Please send inquiries in English to takayama@kanamoto.co.jp.
Date of Report to the Board of Directors :December 13, 2001
SEC (United States) Accounting Standards :The Company has not adopted SEC accounting standards

1. Operating results for the fiscal year ended October 31, 2001 (November 1, 2000 - October 31, 2001)(1) Operating results(Numbers less than one million yen have been rounded down)
Revenues

Operating Income¥ millions¥ millions%
Fiscal year ended
October 31, 2001
Fiscal year ended
October 31, 2000

Fiscal year ended
October 31, 2001
Fiscal year ended
October 31, 2000
(Notes)¥ millions%

64,295( 5.4)
61,030( 0.7)Net income pershare of common
stock
Yen

Yen

¥ millions

%

%

2,771
( - 10.7)
3,104( - 24.1)

Net income pershare of common
stock after
adjustment forpotential ordinary
sharesNet Income

Ordinary Income

3,294( 23.5)2,668( - 28.2)

Return on
shareholders’equity518( - 64.4)
1,455( - 15.7)

Return on total
assets%Ordinary income
margin

%

%

17.14

15.04

1.7

3.2

5.1

48.66

38.73

4.8

2.6

4.4

1. Average number of shares outstanding during the period
Fiscal year ended October 31, 2001: 30,245,585 sharesFiscal year ended October 31, 2000: 29,908,158 shares
2. Are there any changes in accounting method?

No

3. The percentages shown for revenues, operating income, ordinary income and fiscal year net income are
the percent increase or decrease compared to the prior fiscal year(2) Dividends
Annual dividend per share ofcommon stock
Yen
Fiscal year ended
October 31, 2001
Fiscal year ended
October 31, 2000

Yen

Yen

Total
dividends(Annual)Dividend
payout ratio

Dividends as apercentage ofshareholders’ equity%¥ millions

%

18.00

9.00

9.00

544

105.0

1.8

18.00

9.00

9.00

543

37.4

1.8

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.30

(3) Financial position
Total assets

Shareholders’ equity

Shareholders’ equity
ratio

Shareholders’ equity
per share¥ millions%

Yen¥ millions
Fiscal year ended
October 31, 2001
Fiscal year ended
October 31, 2000

105,423

31,03429.4

1,025.82

102,92030,92630.0

1,023.06(Note s)① Number of shares issued and outstanding at fiscal year-end
Fiscal year ended October 31, 2001: 30,252,259 shares② Number of shares of treasury stock at fiscal year-end

Fiscal year ended October 31, 2000: 30,229,241 sharesFiscal year ended October 31, 2001: 982 sharesFiscal year ended October 31, 2000: 277 shares

2. Projected operating results for the fiscal year ending October 31, 2002
(November 1, 2001 – October 31, 2002)
Revenues

Ordinary income

Net income

Annual dividend per share of common
stock¥ millions

Interim
Yen

Year-end
Yen

1,150

580

9.00

-

-

1,510

700

-

9.00

18.00

¥ millions¥ millions

Interim period

30,120

Full year

61,440

Total
Yen(Reference) Projected net income per share of common stock (Full year) ¥23.14

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.31

VIII

Company Financial Statements

1. Comparative Balance Sheets(Amounts less than ¥1,000 have been rounded down)
PeriodCategory

Amount of increase or
decrease％¥ thousands％¥ thousands

Current Assets
Cash and deposits

16,297,173

15,691,502

Notes receivable, trade

11,858,956

12,519,707

660,750

Accounts receivable, trade

11,486,658

12,586,858

1,100,200

746,051

114,440- 631,611

165

−

- 165

Negotiable securities
Treasury stock

II

Current fiscal year
(As of October 31, 2001)¥ thousands（Assets）
I

Prior fiscal year
(As of October 31, 2000)- 605,671

Merchandise inventory

740,621738,281- 2,340

Construction equipment

3,691,573

2,931,588- 759,984

Supplies

76,58767,865- 8,722

Prepaid expenses

270,305

252,944- 17,361

Deferred consumption and other taxes

24,844−- 24,844

Deferred tax assets

105,066

226,386

121,319

Other current assets

128,646

73,392- 55,253

Allowance for doubtful accounts? 173,025? 318,288- 145,263

Total Current Assets

45,253,626

44.0

44,884,678

42.6- 368,947

Fixed Assets(1)

Tangible Fixed Assets
Rental equipment

18,825,760

19,820,554

994,793

Buildings

6,344,520

6,446,603

102,082

Structures

1,685,708

1,581,594- 104,114

Machinery and equipment

1,366,338

1,294,670- 71,668

2,112

2,078

- 33

Vehicles and delivery equipment
Tools, furnishings and fixtures

217,602230,596

12,99424,042,995

24,258,223

215,227

Construction in progress

338,959

58,896- 280,062

Total Tangible Fixed Assets）(2 Intangible Fixed Assets

52,823,998

51.3

53,693,217

50.9

869,218

57,122

0.1

78,9840.1

21,862Land

Total Intangible Fixed Assets(3） Investments and Other Assets
Investment securities

2,860,812

3,544,937

684,125

Stock of affiliated companies

224,199

588,199

364,000

Bonds of affiliated companies

10,00010,000−

Advances

158,435

187,468

29,032100,000

100,000−

Long-term prepaid expenses

173,119

168,148- 4,970

Insurance reserve

179,524

194,193

14,669Deferred tax assets

485,310

1,563,464

1,078,154

Other825,021856,838

Allowance for doubtful accounts- 230,181- 446,847

31,817- 216,665

Total Investments and Other Assets

4,786,242

Long-termcompanies

loans

to

affiliated

4.6

6,766,405

6.4

1,980,162

Total Fixed Assets

57,667,363

56.0

60,538,606

57.4

2,871,243

Total Assets

102,920,989

100.0

105,423,285

100.0

2,502,295

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.32

(Amounts less than ¥1,000 have been rounded down)
PeriodCategory

Current

Current fiscal year

Amount of increase or(As of October 31, 2000)(As of October 31, 2001)

decrease¥ thousands(Liabilities)
I

Prior fiscal year％

¥ thousands％¥ thousands

Liabilities

Notes payable, trade

8,367,393

9,151,177

783,784

Accounts payable, trade

2,784,599

2,646,364- 138,235

Short-term bank loans

12,135,000

7,755,000- 4,380,000

Accounts payable, other7,582,990

8,284,244

701,253

Corporate taxes payable

202,872

1,290,280

1,087,408−

319,204

319,204

Accrued expenses

244,309279,598

35,289Accrued bonuses to employees

491,873575,298

83,425Equipment notes payable

792,559

421,631- 370,928

Other current liabilities

158,656

122,830- 35,825

Total Current Liabilities

32,760,254

Consumption and other taxes payable

II

31.9

30,845,629

29.3- 1,914,624

Long-term Liabilities
Straight bonds

5,277,692

5,277,692−

Convertible bonds

9,796,000

9,281,000- 515,000

Long-term bank loans

12,865,000

14,305,000

1,440,000

Long-term accrued expenses

11,008,272

12,399,361

1,391,088

287,454

282,426- 5,028−

1,997,795

1,997,795

Retirement allowances to auditors anddirectors
Accrued employees retirement benefit
Total Long-term Liabilities

39,234,418

38.1

43,543,275

41.3

4,308,856

Total Liabilities

71,994,672

70.0

74,388,904

70.6

2,394,232(Shareholders’ Equity)
I

Common stock

8,591,481

8.3

8,596,737

8.2

5,256

II

Additional paid-in capital

9,715,111

9.4

9,720,343

9.2

5,232

III

Legal earned surplus

1,245,262

1.2

1,372,487

1.3

127,225

IV

Retained earnings(1） Voluntary reserves
General reserve

9,550,000

10,350,000

800,000(2） Unappropriated retained earnings

1,824,461

854,814- 969,647

Total other reserves

11,374,461

11.1

11,204,814

10.6- 169,647−−

140,5350.1

140,535

−

−

- 537

- 0.0

- 537

Shareholders’ Equity

30,926,316

30.0

31,034,380

29.4

108,063

Total Liabilities and Shareholders’ Equity

102,920,989

100.0

105,423,285

100.0

2,502,295

V

Valuationdifference
negotiable securities

VI

Treasury stock

on

other

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.33

2. Comparative Statements of Income(Amounts less than ¥1,000 have been rounded down)
PeriodPrior fiscal year

Current fiscal year

Amount of increase or(From November 1, 1999 to (From November 1, 2000 to％％¥ thousands¥ thousands

Category

decrease¥ thousands

I

Operating revenues

61,030,048

100.0

64,295,468

100.0

3,265,420

II

Cost of revenues from operations

46,456,372

76.1

48,872,408

76.0

2,416,036

Gross profit

14,573,675

23.9

15,423,059

24.0

849,384

Selling and administrative expenses

11,468,912

18.8

12,651,742

19.7

1,182,829

Operating income

3,104,762

5.1

2,771,317

4.3- 333,445

Non-operating revenue

815,807

1.3

1,191,777

1.8

375,969

Interest and dividends

91,19640,492- 50,704

Gain on sale of negotiable securities

128,873−- 128,873

Gain on sale of investment securities−

370,851

370,851

Gain on redemption of straight bonds

28,3588,143- 20,215

Other

567,378

772,290

204,912668,233- 584,118

III

IV

V

Non-operating expenses

1,252,351

1.0Interest expense

479,845

395,076- 84,768

Bond interest expense

132,001

129,290- 2,711

Stock issue expense

1,182

68

- 1,114

Bond issue expense

147,500−- 147,500

Other

491,821

143,797- 348,023

Ordinary income
VI

2.0

2,668,218

4.4

626,6420.1- 142,281

175,433

Adjustment of prior period profit orloss

42,2042,256- 39,948

Other

133,228

30,895- 102,333

215,415

0.4

33,151

5.1

Extraordinary profit

VII Extraordinary loss

0.3

3,294,861

2,255,508

3.5

2,040,093

Loss on sale or disposal of fixed assets

199,063

100,597- 98,466

Valuation
securities

16,351

126,450

110,098

Money transferred to reserve for
accrued employees retirement benefit−

1,973,120

1,973,120

Other

−

55,34055,340loss

oninvestment

Income before taxes and adjustments

2,628,236

4.3

1,072,504

1.7- 1,555,731

Corporate, local and business taxes

1,226,610

2.0

1,854,010

2.9

627,399- 53,669- 0.1- 1,299,994- 2.0- 1,246,325

1,455,295

2.4

518,488

0.8- 936,806

Adjustment for corporate and other taxes
Net income
Profit carry-forward from prior period

668,096

635,801- 32,295

Cash dividends

271,754272,250496

Additions to legal reserve

27,17527,22549

1,824,461

854,814- 969,647

Unappropriated retained earnings

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.34

3. Comparative Appropriation of Retained Earnings (proposed)(Amounts less than ¥1,000 have been rounded down)
PeriodCategory

Current fiscal year
Prior fiscal year
(proposed)
General Meeting of theGeneral Meeting of the
Shareholders approval date
Shareholders approval date
(January 30, 2001)(January 29, 2002)

Amount of increase or
decrease¥ thousands¥ thousands¥ thousands

1,824,461

854,814- 969,647

1,188,660

288,870- 899,790

100,000−- 100,000

272,060(¥9 per share)

272,270(¥9 per share)209

Directors bonuses

16,60016,600−(Auditors bonuses)(1,700)(1,700)(800,000−- 800,000

635,801

565,944- 69,857

Unappropriatedearnings

retained

To be appropriated as follows
Amount of appropriated retained
earnings
Transfer
surplus(Note)

tolegalearnedCash dividends−)

Voluntary reserve
General reserve
Net income carried forward to thenext period(Notes) 1. The Company paid an interim dividend of ¥272,250,000 (¥9 per share) on July 23, 2001.
2. The shareholder dividend is calculated excluding 982 shares of treasury stock.

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.35

4. Notes to the financial statements(Significant accounting policies)
PeriodCategory
1. Valuation standards andvaluation methods fornegotiable securities

Prior fiscal year
From November 1, 1999
To October 31, 2000

Current fiscal year
From November 1, 2000
To October 31, 2001

Negotiable securities with a market on a Subsidiary companies and affiliated companies
securities exchange……Lower of cost or market method based
upon the moving average method
Other negotiable securities……Cost method based upon the moving
average method

The Company has adopted the cost method
based upon the moving average method
Other negotiable securities
Securities with a market price
The Company has adopted the market value
method (the full amount of the valuationdifference is charged to equity using the directtransfer to capital method, with the disposal
cost determined by the moving averagemethod) based on the market price on theaccounting period closing date or similar prices
Other negotiable securities
The Company has adopted the cost method,
cost being determined by the moving averagemethod

2. Appraisal standards andappraisal

Amount after deduction of depreciation

method for

expense calculated according to the declining-

construction equipment

balance method from the original prices, byseparate fiscal year of purchase

3. Appraisal standards andappraisal method for(1) Merchandise inventories
Lower of cost or market based on the Last-merchandise inventories
and supplies(1) Merchandise inventories
Same as at left

in, First-out method(2) Supplies
The Latest Purchase Cost method

4. Depreciation method for
fixed assets

Same as at left

(1) Tangible fixed assets
The Company has adopted the declining -(2) Supplies
Same as at left）
(1 Tangible fixed assets
The Company has adopted the declining-balance method based upon provisions in thebalance method. Buildings on land that is

Corporate Income Tax Law. Buildings on landthat is leased under a fixed-term land lease

leased under a fixed-term land leaseagreement, however, are depreciated using theagreement, however, are depreciated using thestraight-line method using the remaining

straight-line method using the remaining
period of the fixed-term lease as theperiod of the fixed-term lease as
depreciable life and zero residual value.

depreciable life and zero residual value.

theThe depreciable lives mainly used by theCompany are as follows.
Rental assets 5-10 years
Buildings(2) Intangible fixed assets
Software for use within the Company is31-34 years(2) Intangible fixed assets
Same as at leftdepreciated using the straight-line method
based on the assumed useful life for internaluse (5 years).

5. Deferred charges(3) Long-term prepaid expenses(3) Long-term prepaid expenses

Straight-line depreciation based upon
provisions in the Corporate Income Tax Law.

The Company has adopted the straight-line
method.

New share issue expenses and bond issue

New share issue expenses are charged to

expenses are charged to income as incurred.

income as incurred.

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.36

PeriodCategory
6. Accounting standards forallowances and reserves

Prior fiscal year
From November 1, 1999
To October 31, 2000

Current fiscal year
From November 1, 2000
To October 31, 2001

(1) Reserve for doubtful accounts
To provide for losses from doubtful accounts
held at the end of the fiscal year, the Company
charges to income the maximum amount thatcan be charged based on the provisions of the
Corporate Income Tax Law, plus an amountfor projected unrecoverable amounts based on
assessments of individual accounts.
(2) Accrued bonuses to employees
To fully provide for expenditures of bonuses
the Company will pay to employees, anamount is appropriated to the reserve based
upon a salary estimate amount.
(3) Accrued employees retirement be nefit------(1) Reserve for doubtful accounts
To provide for losses on doubtful accounts
such as accounts receivable, the Company
charges to income an amount based on actual
loss experience for normal accounts, plus anamount for projected unrecoverable amounts
based on assessments of individual accounts.

( 4 ) Retirement allowances to directors andauditors
The Company provides for retirement
allowances to directors and auditors based
upon pertinent rules and appropriated tothe account proportionately based upon
length of service.
7. Lease transactions

８．Hedge transactions

For finance lease transactions except forleases that transfer ownership of the property
to the lessee, rent expenses are charged toincome as payments are made.
------(2) Accrued bonuses to employees
To fully provide for expenditures of bonuses
the Company will pay to employees, an amountis appropriated to the reserve based upon asalary estimate amount.
(3) Accrued employees retirement benefit
The Company provides for employees’
accrued retirement benefits based upon the
projected amounts of the accrued retirement
benefit liability and pension assets at the endof the accounting year. Furthe rmore, the fullamount of the one-time difference for change inaccounting standards (¥1,973,120,000) was
charged to income at the end of the current
consolidated accounting year.
The difference based on an actuarial
calculation is charged to income beginning in
the following consolidated accounting fiscal
year using the straight-line method, based on a
specified number of years (10 years) that is lessthan the average remaining period of
employment for employees at the time thedifference arises.
(4) Retirement allowances to directors andauditors
Same as at left

Same as at left

(1) Hedge transactions
The Company accounts for hedgetransactions using allocations based on
accounting standards for foreign currency
denominated transactions, and special ruleaccounting based on accounting standards forfinancial products.
(2) Hedge methods and hedged transactions
The Company uses currency swaps andforward transactions in order to avoid thecurrency fluctuation risk related to theCompany’s foreign
currency-denominatedstraight bonds and liabilities for import
payments. The Company also uses interest
swaps to avo id interest rate fluctuation risk
related to interest on bank borrowing.

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.37

9. Other significant mattersfor preparation of thefinancial statements(1) Qualified pension plan
1. The Company adopted a fully qualified
pension plan (Kanamoto Pension Fund)for its retirement benefit system on July
1, 1990.
2. Past service costs are being funded over a
period of 7 years.
3. The liability for past service cost as ofMarch 31, 2000 was ¥505,081,000.
(2) Accounting treatment of consumption tax
Consumption tax is taken out of all
Statement of Income items and Balance
Sheet items, except mainly for receivables
and payables.

(3) Hedging policies
The Company’s use of derivativetransactions is limited to hedging risk within
the scope of the Company’s assets andliabilities subject to market fluctuation risk.
(4) Method for evaluating the effectiveness ofhedgesThe Company does not evaluate theeffectiveness of its hedge transactions because
it can assume that its currency swap
transactions and forward transactions willcompletely offset market fluctuations orchanges in cash flow from the time hedge
begins until it is terminated. In addition, theCompany’s interest swap transactions fulfill
the requirements for special rule accounting,and the Company has elected to use this inplace of an evaluatio n of effectiveness.
(1) Qualified pension plan------(2) Accounting treatment of consumption tax
Same as at left

(Supplemental information)
PeriodCategory
Accounting for employees
retirement benefits

Prior fiscal year
From November 1, 1999
To October 31, 2000

Current fiscal year
From November 1, 2000
To October 31, 2001------The Company has adopted the accounting
standards for retirement benefits (“Opinion s
on Setting Standards for Post-employment
Benefits,” Business Accounting Council, June
16, 1998) from the current fiscal year. As aresult, the Company’s expense for accrued
employees retirement benefit increased by¥1,997,795,000,
andordinary
incomedecreased by ¥24,675,000 and income before
taxes decreased by ¥1,997,795,000, compared
to what they would have been had theaccounting standards used in the prior fiscal
year been applied.

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.38

Accountingfor

instruments

financial------The Company has adopted the accounting
standards for financial instruments (“Opinionson
SettingStandards
forFinancial
Instruments,”
Business
Accounting
Committee, January 22, 1999) from thecurrent fiscal year. As a result, the Company’s
ordinary income increased by ¥79,351,000 andincome before taxes increased by ¥14,153,000
compared to what they would have been had
the accounting standards used in the priorfiscal year been applied.
In addition, the Company reviewed its
holding objectives for negotiable securities heldat the beginning of the fiscal year, and has
disclosed the securities included in othernegotiable securities that mature within one
year as negotiable securities in current assets,
and has disclosed all other securities asinvestment securities. As a result, theCompany’s negotiable securities accounted for
as current assets were reduced by¥278,026,000 and its investment securities
increased by ¥278,026,000 compared to what
they would have been had the accounting
standards used in the prior fiscal year been
applied.

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.39

(Notes to the Balance Sheets)
PeriodPrior fiscal year
(As of October 31, 2000)

Category

Current fiscal year
(As of October 31, 2001)

1. Total accumulated
depreciation for tangible¥49,118,380,000¥49,491,403,000

fixed assets
2. Balance of liability for
guarantees

Joint

and

severalguaranteesofemployee bank loans

Joint and several guarantees of
employee bank loans¥25,398,000¥26,839,000

Guarantee of debt for long-term bank

Guarantee of debt for long-term bankloan to affiliated company (Active Powerloan to affiliated company (Active Power

Co., Ltd.)

Co., Ltd.)(Daiichi Kangyo Bank)(Daiichi Kangyo Bank)¥280,000,000¥350,000,000

3. Common stock issued
during the fiscal year
Form of issue

Conversion of convertible

Exercise ofbonds

subscription rights

Exercise of subscription rights(Yen-denominatedconvertible bonds(Stock option)(Stock option)

maturing in 2003)
Number of sharesissuedShare issue price
Capitalization
amount651,000 shares

101,000 shares

24,000 shares

¥777

¥437

¥437

¥388

¥219

¥219

4. Reduction to book value
Amounts for assets
acquired for whichaccumulated book values
were reduced bygovernment subsidies
Machinery & equipment¥5,044,000¥5,044,000

Land¥3,569,000¥3,569,000¥8,613,000¥8,613,000

Total

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.40

(Lease transactions)
Prior fiscal year
From November 1, 1999
To October 31, 2000

Current fiscal year
From November 1, 2000
To October 31, 2001

1. For finance lease transactions except for leases that

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

transfer ownership of the property to the lessee.

(1) Amounts corresponding to lease property acquisition(1) Amounts corresponding to lease property acquisition

prices, accumulated depreciation and outstanding

prices, accumulated depreciation and outstandingbalances at the end of the fiscal year accounting period.

balances at the end of the fiscal year accounting period.

Acquisition Accumulated Outstanding
price
depreciation
balanceAcquisition Accumulated Outstanding
price
depreciation
balance

Rental assets¥ ‘000¥ ‘000¥ ‘00016,688,293

8,788,906

7,899,386

Tools, furnishings
and fixtures
Total

653,650

308,993344,656

17,341,943

9,097,900

8,244,043(2) Outstanding balance of future lease payments at theend of the fiscal year

¥ ‘000¥ ‘000Rental assets

14,030,856

6,820,861

7,209.995

Tools, furnishings
and fixtures

623,113306,423

316,689

14,653,970

7,127,285

7,526,684

Total(2) Outstanding balance of future lease payments at theend of the fiscal year

Within one year

¥2,638,858,000

Within one year

¥2,893,595,000

After one year

¥5,402,652,000

After one year

¥4,787,601,000

Total¥8,041,510,000(3) Amount of lease payments, depreciation expense andinterest expense

Total¥7,681,197,000(3) Amount of lease payments, depreciation expense andinterest expense

Lease payments¥3,080,428,000

Lease payments¥2,717,322,000

Depreciation expense¥2,820,125,000

Depreciation expense¥2,471,800,000

Interest expense(4)¥ ‘000¥291,429,000

Accounting method for amount equivalent todepreciation expense

Interest expense(4)¥252,179,000

Accounting method for amount equivalent todepreciation expense

Straight-line depreciation using the lease term as

Same as at left

the depreciable life and zero residual value.
(5) Accounting method for amount equivalent to interest
expense(5) Accounting method for amount equivalent to interest
expenseInterest method using the difference between total

Same as at left

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

2. Operating leases

Future lease payments

Future lease payments

Within one year

¥1,422,400,000

Within one year

¥1,680,658,000

After one year

¥2,704,382,000

After one year

¥2,837,561,000

Total¥4,126,782,000

Total¥4,518,220,000(Negotiable securities)
The notes concerning the market price of the negotiable securities included in the prior consolidated accounting fiscal year
financial statements and the negotiable securities including in the current consolidated accounting fiscal year financial
statements (excluding securities of subsidiary companies and affiliated companies that have a market price) are part of thenotes to the financial statements for the consolidated balance sheets. For the current consolidated accounting fiscal year (fromNovember 1, 2000 to October 31, 2001), the Company ’s subsidiary companies and affiliated companies did not have any
securities that have a market price.

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.41

(Tax effect accounting)
1. Major factors creating deferred tax assets
Prior fiscal year
Deferred tax asset

Current fiscal year

(As of October 31, 2000) (As of October 31, 2001)

Amount in excess of limit for inclusion in
expenses for allowance for doubtful accounts
Disallowance of deferred business taxes¥5,128,000¥139,048,000-

105,214,000-

833,080,000

119,868,000

117,771,000

Other68,370,000

119,949,000

Total deferred tax assets

315,974,000

476,600,000

Excess accrued employees retirement benefit
Amount in excess of limit for retirement
allowances to directors and auditors
Amount in excess of limit for accrued bonuses to
employees
Disallowance of excess depreciation

Deferred tax liability
Valuation difference on negotiable securities

81,035,000

98,708,000¥590,376,000¥1,890,370,000-- 100,520,000-- 100,520,000¥590,376,000¥1,789,850,000

Total accrued tax liability
Net accrued tax assets

2. Causes of principal significant differences between the statutory tax rate and the tax burden for corporate and othertaxes following application of tax effect accounting, by major category.
Prior fiscal year

Current fiscal year

(As of October 31, 2000) (As of October 31, 2001)
Legally effective tax rate

41.7%

41.7%

2.7%

7.2%

1.0%

2.4%

- 0.8%

0.4%

44.6%

51.7%

(Adjustments)
Local tax equalization
Items not permanently included in expenses
such as expense accounts
Other
Burden ratio for corporate and other taxe s after
application of tax effect accounting

IX Changes to directors and auditors
1. Changes to representative directors
There were no changes to the Company’s representative directors.

2. Changes to other directors and auditors
Director (not full-time)

Koujirou Satsuma (General Manager, Hokkaido Block, ORIX Corporation)

Retiring directors
Advisor

Saburo Kanamoto

Director (not full-time)

Norio Uemura

Fiscal Year Ended October 31, 2001
Company Financial Statements
P.42