Fiscal Year ended October 31, 2002

Summary of Company Financial Statements
December 13, 2002
Listed Company Name

Kanamoto Company, Ltd.

Company Code Number

9678

Listing Exchanges

Tokyo Stock Exchange, Sapporo Stock Exchange

Head Office Address

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

http://www.kanamoto.co.jp)

Representative

Kanchu Kanamoto President

Inquiries

Nobuhito Utatsu Corporate Officer and Division Manager, Accounting Division
TEL 81-11-209-1600
Please send inquiries in English to takayama@kanamoto.co.jp.

Date of Report to the Board of Directors

December 13, 2002

Interim Dividend System

The Company has an interim dividend system

Regular General Meeting of the Shareholders

January 28, 2003

Has the Company adopted a Unit Stock System?

Yes (One unit equals 1,000 shares)

1. Operating results for the fiscal year ended October 31, 2002 (November 1, 2001 - October 31, 2002)(Numbers less than one million yen have been rounded down)(1) Operating results
Revenues

Operating Income¥ millions
Fiscal year ended%¥ millions

Ordinary Income%¥ millions%

60,606（ △5.7）2,255（ △18.6）

2,477（ △24.8）

64,295（2,771（ △10.7 ）

3,294

（

October 31, 2002
Fiscal year ended

5.4）

23.5 ）

October 31, 2001

Net Income¥ millions
Fiscal year ended%

Net income pershare of
Net income
Return on
Return oncommon stock
per share ofshareholders’after adjustment
total assets
common stock
equityfor potential
ordinary shares
％
％
Yen
Yen

Ordinary
incomemargin％1,134 ( 118.7)

37.49

28.85

3.6

2.5

4.1

518 (△64.4)

17.14

15.04

1.7

3.2

5.1

October 31, 2002
Fiscal year ended
October 31, 2001
(Notes) 1. Average number of shares outstanding during the fiscal year
FY ended October 31, 2002: 30,250,808 shares
2. Are there any changes in accounting method?

FY ended October 31, 2001: 30,245,585 shares
Yes

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

Company Financial Statements, FY ended October 31, 2002
P. 34

(2) Dividends
Annual dividend per share of common
stockInterimYen
Fiscal year ended

Total
dividends(Annual)Year-end

Yen

Yen

Dividend
payout ratio

Dividends as a % ofshareholders’ equity

Yen¥ millions

%

18.00

9.00

9.00

544

48.0

1.7

18.00

9.00

9.00

544

105.0

1.8

Shareholders’equity ratio

Shareholders’equity per share

October 31, 2002
Fiscal year ended
October 31, 2001

(3) Financial
Total assets

Shareholders’ equity¥ millions
Fiscal year ended¥ millions%

Yen

96,71731,35632.4

1,036.63

105,423

31,03429.4

1,025.82

October 31, 2002
Fiscal year ended
October 31, 2001

(Notes) 1. Number of shares issued and outstanding at fiscal year-end
FY ended October 31, 2002: 30,248,756 shares

FY ended October 31, 2001: 30,252,259 shares

2. Number of shares of treasury stock at fiscal year-end
FY ended October 31, 2002: 4,485 shares
FY ended October 31, 2001: 982 shares

2. Projected operating results for the fiscal year ending October 31, 2003
(November 1, 2002 – October 31, 2003)
Revenues

Ordinary
incomeNet income

Annual dividend per share of common
stockInterim
Yen

Year-end¥ millions¥ millions¥ millions

Interim period

31,300

1,250

630

9.00

? ? ? ?

Yen

? ? ? ?

Yen

Full year

62,0002,080

950? ? ? ?

9.00

18.00

(Reference) Projected net income per share of common stock (Full year) ¥31.41
Note: The above projection was created based on information and projections of the future economic environment available to theCompany’s management at the time this report was published. Actual operating results may differ from the projected figures,
as a result of various future factors.

Company Financial Statements, FY ended October 31, 2002
P. 35

VIII

Company Financial Statements

1. Comparative Balance Sheets(Amounts less than ¥1,000 have been rounded down)
PeriodCategory(Assets)
Current Assets
Cash and deposits
Notes receivable, trade
Accounts receivable, trade
Negotiable securities
Merchandise inventory
Construction equipment
Supplies
Prepaid expenses
Deferred corporate and othertax receivables
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total Current Assets
Ⅱ Fixed Assets(1） Tangible Fixed Assets
Rental equipment
Buildings
Structures
Machinery and equipment
Vehicles and delivery
equipment
Tools, furnishings andfixtures
Land
Construction in progress
Total Tangible Fixed
Assets(2） Intangible Fixed Assets
Total Intangible Fixed
AssetsInvestments and Other）(3
AssetsInvestment securities
Stock of affiliatedcompanies
Advances
Long-term loans toaffiliated companies
Long-term prepaid
expensesInsurance reserve
Deferred tax assets
Other
Allowance for doubtful
accounts
Total Investments andOther Assets
Total Fixed Assets
Total Assets
Ⅰ

Current fiscal year
(As of October 31, 2002)
AmountPercent¥ thousands％

Prior fiscal year
(As of October 31, 2000)
AmountPercent¥ thousands％

Amount ofincrease or
decreaseAmount¥ thousands

14,578,410
10,422,798
11,796,391
75,075347,504
2,466,271
51,223242,097

15,691,502
12,519,707
12,586,858
114,440738,281
2,931,588
67,865
252,944△1,113,092△2,096,909△790,466△39,365△390,776△465,316△16,641△10,846

56,109−56,109151,957
133,976△462,026
39,859,790

226,386
73,392△318,288
44,884,678△74,428
60,583△143,737△5,024,888

41.2

42.6

16,609,158
6,082,853
1,373,252
1,062,271

19,820,554
6,446,603
1,581,594
1,294,670△3,211,395△363,750△208,341△232,398

2,033

2,078

△45

188,522230,596△42,073

24,227,409
104,184

24,258,223
58,896△30,81345,28749,649,685

51.3

53,693,217

50.9△4,043,531

93,3580.1

78,9840.1

14,374

3,467,694

3,581,437△113,743

805,435

561,699

243,735

144,875

187,468△42,593−

100,000△100,000

134,839

168,148△33,308

132,086
1,727,149
1,275,329

194,193
1,563,464
856,838△62,107
163,684
418,490△572,830△446,847△125,982

7,114,579

7.4

6,766,405

6.4

348,174

56,857,624
96,717,414

58.8
100.0

60,538,606
105,423,285

57.4
100.0

△3,680,982△8,705,870

Company Financial Statements, FY ended October 31, 2002
P. 36

(Amounts less than ¥1,000 have been rounded down)
PeriodCurrent fiscal year
(As of October 31, 2002)

Category

Amount(Liabilities)
Current Liabilities
Notes payable, trade
Accounts payable, trade
Short-term bank loans
Corporate bonds to beredeemed within one year
Convertible bonds to beredeemed within one year
Accounts payable, other
Corporate taxes payable
Consumption and other taxes
payableAccrued expenses
Accrued bonuses to employees
Equipment notes payable
Other current liabilities
Total Current Liabilities
Ⅱ Long-term Liabilities
Straight bonds
Convertible bonds
Long-term bank loans
Long-term accrued expenses
Retirement allowances toauditors and directors
Accrued employees retirement
benefit
Total Long-term Liabilities
Total Liabilities(Shareholders’ Equity)
Ⅰ Common stock
Ⅱ Additional paid-in capital
Ⅲ Legal earned surplus
Ⅳ Retained earnings(1） Voluntary reserves
General reserve
Unappropriated retained(2）
earnings
Total other reserves
Ⅴ Valuation difference on othernegotiable securities
Ⅵ Treasury stock
Shareholders’ Equity
Total Liabilities andShareholders’ Equity¥ thousands

Ⅰ

Percent％

Prior fiscal year
(As of October 31, 2001)
AmountPercent¥ thousands％

Amount ofincrease or
decreaseAmount¥ thousands

8,091,133
2,856,865
8,289,000

9,151,177
2,646,364
7,755,000△1,060,044
210,500
534,000

5,277,692−

5,277,692

4,164,000−

4,164,000

7,887,580−

8,284,244
1,290,280△396,663△1,290,280

338,870319,204

19,665214,920
519,580
289,066
122,361
38,051,070

279,598575,298
421,631
122,830
30,845,629△64,677△55,718△132,565△468
7,205,440

39.4

29.3

−
−
16,858,000
8,614,241

5,277,692
9,281,000
14,305,000
12,399,361△5,277,692△9,281,000
2,553,000△3,785,120

177,723

282,426△104,703

1,659,509

1,997,795△338,286

27,309,473
65,360,543

28.2
67.6

43,543,275
74,388,904

41.3
70.6

△16,233,801△9,028,361

8,596,737
9,720,343
1,372,487

8.9
10.0
1.4

8,596,737
9,720,343
1,372,487

8.2
9.2
1.3

−
−
−

10,350,000−

10,350,000

1,427,837

854,814573,023

11,777,837△108,448

12.2
△0.1

11,204,814

10.6

140,5350.1

573,023△248,984△2,08631,356,871

△0.0
32.4

△537
31,034,380

△0.0
29.4

△1,548322,490

96,717,414

100.0

105,423,285

100.0△8,705,870

Company Financial Statements, FY ended October 31, 2002
P. 37

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

Operating revenues
Ⅱ Cost of revenues fromoperations
Gross profit
Ⅲ Selling and administrative
expenses
Operating income
Ⅳ Non-operating revenue
Interest and dividends
Gain on sale of investment
securities
Gain on redemption ofstraight bonds
Rents received
Cash bonus received
Other
Ⅴ Non- operating expenses
Interest expense
Bond interest expense
Other
Ordinary income
Ⅵ Extraordinary profit
Adjustment of prior period
profit or loss
Reimbursement of accrued
employees retirement
benefitOther
Ⅶ Extraordinary loss
Loss on sale or disposal of
fixed assets
Valuation loss on
investment securities
Loss on sale of investment
securities
Loss on advance provided
to affiliate
Loss on redemption of
convertible bonds
Money transferred to
accrued employees
retirement benefit
Other
Income before taxes andadjustments
Corporate, local and business
taxes
Adjustment for corporate andother taxes
Net income
Profit carry-forward from priorperiodCash dividends
Additions to legal reserve
Unappropriated retained
earnings

Current fiscal year
(From November 1, 2001 to
October 31, 2002)
AmountPercent

Prior fiscal year
(From November 1, 2000 to
October 31, 2001)
AmountPercent

Amount ofincrease ord e c r e a s eAmount¥ thousands
60,606,901

％
100.0

¥ thousands
64,295,468

％
100.0

¥ thousands△3,688,567

46,456,572

76.7

48,872,408

76.0△2,415,836

14,150,328

23.3

15,423,059

24.0△1,272,731

11,894,836

19.6

12,651,742

19.7△756,905

2,255,491
825,11655,8873.7
1.4

2,771,317
1,191,777
40,4924.3
1.8△515,825△366,660
15,395

157,293△213,557

370,851

46,4508,143

38,307150,222
168,536
246,726
603,011
334,493111,986
156,5312,477,597
413,449

316,635−
455,655
668,233
395,076
129,290
143,865
3,294,861
33,151△166,413
168,536△208,928△65,221△60,582△17,304
12,665△817,264
380,297

1.0

4.1
0.7

1.0

5.1
0.1

−

2,256

△2,256

395,091−

395,091

18,358
838,356

1.4

30,8952,255,508

3.5△12,536△1,417,152

197,038

100,597

96,440232,561

126,450

106,11070,085−70,085100,000−

100,000

96,085−96,085−

1,973,120△1,973,120

142,585

55,34087,2452,052,690

3.4

1,072,504

1.7

980,186

829,703

1.4

1,854,010

2.9△1,024,307

88,8340.1△1,299,994△2.0

1,388,828

1,134,153

1.9

518,4880.8

615,664

565,944635,801△69,857

272,259−

272,250
27,225

8△27,225

1,427,837

854,814573,023

Company Financial Statements, FY ended October 31, 2002
P. 38

3. Comparative Appropriation of Retained Earnings(Amounts less than ¥1,000 have been rounded down)
PeriodCategory
Unappropriated retained earnings
To be appropriated as follows
Amount of appropriated retained
earnings
Transfer to legal earned
surplus(Note) Cash dividends
Directors bonuses(Auditors bonuses)
Voluntary reserve
General reserve
Net income carried forward to thenext period(Notes)Current fiscal year
Prior fiscal year
(proposed)
General Meeting of theGeneral Meeting of the
Shareholders approval date
Shareholders approval date
(January 29, 2002)(January 28, 2003)¥ thousands¥ thousands
1,427,837
854,814Amount of increaseor decrease¥ thousands
573,023

838,838

288,870

549,968−−−

272,238(¥9 per share)
16,600(1,700)272,270(¥9 per share)
16,600(1,700)△ 31−

550,000

565,944

23,054550,000−( −)1. The Company paid an interim dividend of ¥272,259,000 (¥9 per share) on July 22, 2002.
2. The shareholder dividend is calculated excluding 4,485 shares of treasury stock.

Company Financial Statements, FY ended October 31, 2002
P. 39

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

2.

Appraisal
appraisal

standards

andmethodforconstruction equipment

Current fiscal year
From November 1, 2001
To October 31, 2002
Common stock of subs idiaries and affiliatedcompanies
The Company has adopted the cost
method based upon the moving averagemethod.
Other negotiable securities

Prior fiscal year
From November 1, 2000
To October 31, 2001
Common stock of subsidiaries and affiliatedcompanies
Same as at left

Negotiable securities with a market on asecurities exchange
The Company has adopted the market
value method (the full amount of the valuationdifference is charged to equity using thedirect transfer to capital method, with thedisposal cost determined by the moving
average method) based on the market priceon the accounting period closing date orsimilar prices

Negotiable securities with a market on asecurities exchange
Same as at left

Other negotiable securities
The Company has adopted the cost
method based upon the moving averagemethodAmount after deduction of depreciation
expense calculated according to thedeclining-balance method from the original
prices, by separate fiscal year of purchase

Other negotiable securities

Other negotiable securities
Same as at left
Amount after deduction of depreciation
expense calculated according to thedeclining-balance method from the original
prices, by separate fiscal year of purchase(Supplemental information)
The Company formerly used 7 years as thedepreciable life for floor plate and steel plate.
In consideration of the period over whichsuch products can be used physically andeconomically, however, based upon their
physical condition and customers’ intentions
to rent, respectively, beginning in the fiscal
year under review the Company changed the
durable life of such products to 10 years
based upon a projection of the period for their
possible use.
As a result, during the fiscal year underreview
depreciation
expensewas¥209,320,000 lower, and gross profit,
operating income, ordinary income andincome before taxes and adjustments were
¥209,320,000 higher, respectively, compared
to what they otherwise would have been had
the accounting standards used in previous
periods been applied.
3.

Appraisal standards andappraisal
methodformerchandise inventories andsupplies(1) Merchandise inventories
Lower of cost or market based on the Lastin, First-out method(2) Supplies
The Latest Purchase Cost method(1) Merchandise inventories
Same as at left

(2) Supplies
Same as at left

Company Financial Statements, FY ended October 31, 2002
P. 40

4. Depreciation method for fixed
assets(3) Long-term prepaid expenses
The Company has adopted straight-line
depreciation.
──────

5. Deferred charges
6.

Accounting standards
allow ances and reserves(1) Tangible fixed assets(1) Tangible fixed assets
The Company has adopted the decliningThe Company has adopted the decliningbalance method. Buildings on land that is balance method. Buildings on land that isleased under a fixed-term land lease leased under a fixed-term land leaseagreement, however, are depreciated using agreement, however, are depreciated using
the straight-line method using the remaining the straight-line method using the remaining
period of the fixed-term lease as the period of the fixed-term lease as thedepreciable life and zero residual value.
depreciable life and zero residual value.
The depreciable lives mainly used by the
The depreciable lives mainly used by theCompany are as follows.
Company are as follows.
Rental assets
5-10 years
Rental assets
5-10 years
Buildings
31-34 years
Buildings
31-34 years(Supplemental information)
The Company formerly used 7 years as thedepreciable life for temporary rental
structures . In consideration of the period overwhich such products can be used physicallyand economically, however, based upon
improved product quality and customers’
intentions to rent, respectively, beginning in
the fiscal year under review the Company
changed the durable life of such products to
10 years based upon a projection of theperiod for their possible use.
As a result, during the fiscal year underreview
depreciation
expensewas¥232,276,000 lower, and gross profit,
operating income, ordinary income andincome before taxes and adjustments were¥232,276,000 higher, respectively, compared
to what they otherwise would have been had
the accounting standards used in previous
periods been applied.
(2) Intangible fixed assets(2) Intangible fixed assets
Software for use within the Company isSame as at leftdepreciated using the straight-line method
based on the assumed useful life for internaluse (5 years).

for(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 an amount for projected unrecoverable
amounts based on assessments of individual
accounts.
(2) Accrued bonuses to employees
To fully provide for expenditures ofbonuses the Company will pay to employees,
an amount is appropriated to the reserve
during the year based upon a salary estimate
amount.

(3) Long-term prepaid expenses
Straight-line depreciation based upon
provisions in the Corporate Income Tax Law.
New share issue expenses are charged toincome as incurred.
(1) Reserve for doubtful accounts
Same as at left

(2) Accrued bonuses to employees
Same as at left

Company Financial Statements, FY ended October 31, 2002
P. 41

PeriodCategory

7. Lease transactions

8. Hedge transactions

Current fiscal year
From November 1, 2001
To October 31, 2002
(3) Accrued employees retirement benefit
The Company provides for employees’
accrued retirement benefits based upon the
projected amounts of the liability for accrued
employees retirement benefits and the valueof pension assets at the end of the fiscal
year. At the end of each fiscal year, theCompany appropriates an amount to thereserve to provide for the liability recognized
during the period. Past years’ service
liabilities are fully written off in the year
incurred.
The difference based on an actuarial
calculation is charged to income beginning in
the fiscal year following the year in which
incurred, with the amounts allocatedproportionately
using the straight-line
method, based on a specified number ofyears (10 years) that is less than the averageremaining period of employment for
employees at the time the difference arises.
(4) Retirement allowances to directors andauditors
The Company provides for retirement
allowances to directors and auditors based
upon pertinent rules and appropriated to theaccount proportionately based upon length ofservice.
For finance lease transactions except forleases that transfer ownership of the property
to the lessee, rent expenses are charged toincome as payments are made.
(1) Hedge transactions
The Company accounts for hedgetransactions using allocations based on
accounting standards for foreign currencydenominated transactions, and special ruleaccounting based on accounting standards
for financial 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 avoid interest rate fluctuation risk
related to interest on bank borrowing.
(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 evaluation of effectiveness.

Prior fiscal year
From November 1, 2000
To October 31, 2001
(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. The full amount of the
one-time difference for change in accounting
standards (¥1,973,120,000) was charged toincome at the end of the current consolidated
accounting year.
The difference based on an actuarial
calculation is charged to income beginning in
the following fiscal year using the straight-line
method, based on a specified number ofyears (10 years) that is less than the averageremaining period of employment for
employees at the time the difference arises.

(4) Retirement allowances to directors andauditors
Same as at left

Same as at left

(1) Hedge transactions
Same as at left

(2) Hedge methods and hedged transactions
Same as at left

(3) Hedging policies
Same as at left

(4) Method for evaluating the effectiveness ofhedgesSame as at left

Company Financial Statements, FY ended October 31, 2002
P. 42

9. Other significant matters for
preparation of the fiscal year
financial statements

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.

Accounting treatment of consumption tax
Same as at left

(Changes in accounting treatment)
PeriodCategory
Change in revenue and expenseclassifications
when
accountingfor
accidents
involving equipment underlease contract

Change in accounting treatment
for revenue and expenses for
employee housing rents

Current fiscal year
From November 1, 2001
To October 31, 2002
In prior years the Company accounted forrevenue from insurance benefits as insurance
benefits in non-operating revenues wheneverit suffered damages to rental assets andequipment utilized under leases as the resultof an accident, and accounted for the asset
book value as a loss on abandonment of
fixed assets in extraordinary losses and thelease equipment contract cancellation charge
as a miscellaneous loss in non-operating
expenses, respectively . Beginning in thefiscal year under review, the Company
changed its accounting treatment to accountfor insurance benefits as operating revenues
and account for the rental asset book value
and lease equipment contract cancellation
charge as cost of revenues from operations.
The Company made this change because
the Company seeks to recover the fullamount of capital invested in the equipment
rental business through rental charges as
equipment is leased and the insurance
benefits received following an accident canalso be considered as recovery of invested
capital, and because the amount of revenue
from insurance benefits has been increasing.
As a result, operating revenue increasedby ¥204,754,000, gross profit and operating
income increased by ¥75,843,000, andordinary income decreased by ¥61,017,000,
compared to what they otherwise would havebeen had the accounting standards used inprevious periods been applied. The change
had no effect on inc ome before taxes andadjustments.
In prior years, the Company accounted for
payments of employee housing rents inselling, general and administrative expenses,
and accounted for the employee portion ofsuch expenses in non-operating revenues.
Beginning in the fiscal year under review, theCompany changed its accounting method to
exclude the employee portion of employee
housing rent expense from selling andadministrative expenses.
The Company adopted this change inorder to disclose the actual amount of theCompany’s housing rental burden, because
the materiality of the amounts in question has
been increasing as the Company increases
the number of its employees.
As a result, operating income increased by¥165,232,000 compared to what it otherwise
would have been had the accounting
standards used in previous periods been
applied. The change had no effect on
ordinary income and income before taxes
and adjustments.

Prior fiscal year
From November 1, 2000
To October 31, 2001──────

──────

Company Financial Statements, FY ended October 31, 2002
P. 43

(Change in disclosure method)
Current fiscal year
From November 1, 2001
To October 31, 2002
The amount of “cash bonus received” that was included inother non-operating income has increased and now accounts
for more than ten percent of non-operating income.
Accordingly, the Company reclassified this item into a separate
reporting category. The amount of the “cash bonus received” inthe prior fiscal year was ¥86,487,000.

Prior fiscal year
From November 1, 2000
To October 31, 2001──────

(Supplemental information)
PeriodCategory
AccountingforaccruedCurrent fiscal year
From November 1, 2001
To October 31, 2002
──────

employees retirement benefit

Accounting
instruments

forfinancial──────

Prior fiscal year
From November 1, 2000
To October 31, 2001
The Company has adopted the accounting
standards for retirement benefits (“Opinions
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, and ordinary income
decreased by ¥24,675,000 and income
before taxes and adjustments decreased by¥1,997,795,000, compared to what theywould have been had the accounting
standards used in the prior fiscal year been
applied.
The Company has adopted the accounting
standards for financial instruments (“Opinionson
Setting Standards for Financial
Instruments,”
Business
Accounting
Committee, January 22, 1999) from thecurrent fiscal year. As a result, theCompany’s ordinary income increased by¥79,351,000 and income before taxes andadjustments 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
held at the beginning of the fiscal year, andhas disclosed the securities included in othernegotiable securities that mature within one
year as negotiable securities in current
assets, and has disclosed all other securities
as investment 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 towhat they would have been had theaccounting standards used in the prior fiscal
year been applied.

Company Financial Statements, FY ended October 31, 2002
P. 44

(Notes to the Balance Sheets)
PeriodCategory1.
Total
accumulated
depreciation for tangible fixed
assets2.

Balanceguaranteesofliabilityfor

Current fiscal year
As of October 31, 2002

Prior fiscal year
As of October 31, 2001

¥42,840,623,000
Joint and several guarantees of
employee bank loans¥49,491,403,000
Joint and several guarantees of
employee bank loans¥22,334,000¥26,839,000

Guarantee of debt for long-term bank

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

loan to affiliated company (Active

Power Co., Ltd.)Power Co., Ltd.)(Mizuho Bank, Ltd.)(Mizuho Bank, Ltd.)¥350,000,000¥350,000,000

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

Exercise of subscription rights(Stock option)

Number of shares issued

24,000 shares

Share issue price¥437

Capitalization amount¥219

4. Reduction to book value
Amountsforassetsacquiredfor
whichaccumulated book values
were reduced by government
subsidies
Machinery & equipment¥5,044,000¥5,044,000

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

Total

Company Financial Statements, FY ended October 31, 2002
P. 45

(Notes to the Statements of Income)
PeriodCurrent fiscal year
As of October 31, 2002

Prior fiscal year
As of October 31, 2001

1. Reimbursement of accrued
employees retirement benefit

Decrease in liability for retirement benefits
as a result of raising the age at which thewelfare pension system will begin paying
pension annuities from April 2002.

──────

2. Principal items included insale and disposal of fixed
assets(Loss on sale of fixed assets)(Loss on sale of fixed assets)

Buildings

Buildings¥1,668,000

Structures¥2,178,000

Category¥17,492,000

Machinery and equipment ¥243,000
Other¥123,000

Machinery and equipment ¥818,000(Loss on disposal of fixed assets)(Loss on disposal of fixed assets)

Rental equipment¥22,174,000

Rental equipment

Buildings¥18,858,000

Buildings¥4,300,000

Structures¥13,751,000

Structures¥3,536,000

Machinery and equipment¥104,118,000¥85,707,000

Machinery and equipment¥1,551,000

Tools, furnishings and fixtures¥385,000

Tools, furnishings and fixtures¥11,346,000
Other
3. Loss on advance provided toaffiliated company¥8,929,000

The Company wrote off the amount of loan
it projects it will be unable to recover as aresult of liquidating Providence Brewery Co.,
Ltd., a subsidiary company.

──────

(Lease Transactions)
Current fiscal year
From November 1, 2001
To October 31, 2002
1. For finance lease transactions except leases that transfer
ownership of the property to the lessee.

Prior fiscal year
From November 1, 2000
To October 31, 2001
1. For finance lease transactions except leases that transfer
ownership of the property to the lessee.

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

price, accumulated depreciation and outstanding balance

price, accumulated depreciation and outstanding balanceat the end of the fiscal year

at the end of the fiscal year

Acquisition
price

Rental assets

OutstandingbalanceAcquisition
price¥ ‘000¥ ‘000¥ ‘00024,072,116

7,532,570

16,539,546

Rental assets

562,620

339,044

223,576

Other assets

24,634,737

7,871,615

16,763,122

Total

Other assets
Total

Accumulated
depreciation

2. Outstanding balance of future lease payments at theend of the fiscal year

Accumulated
depreciation

Outstandingbalance¥ ‘000¥ ‘000¥ ‘00014,030,856

6,820,861

7,209.995

623,113306,423

316,689

14,653,970

7,127,285

7,526,684

2. Outstanding balance of future lease payments at theend of the fiscal year

Within one year

4,258,886,000

Within one year

2,893,595,000

After one year

12,899,776,000

After one year

4,787,601,000

Total

17,158,662,000

Total

7,681,197,000

3. Amount of lease payments, depreciation expense andinterest expense

3. Amount of lease payments, depreciation expense andinterest expense

Lease payments

3,838,017,000

Lease payments

2,717,322,000

Depreciation expense

3,272,184,000

Depreciation expense

2,471,800,000

Interest expense

333,786,000Interest expense

252,179,000

Company Financial Statements, FY ended October 31, 2002
P. 46

4.

Accounting

methodforamountequivalent

to4.

Accounting

methodforamountequivalenttodepreciation expensedepreciation expense

Same as at left

Straight-line depreciation using the lease term as thedepreciable life and zero residual value.
5. Accounting method for amount equivalent to interest

5. Accounting method for amount equivalent to interest

expenseexpenseInterest 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

1,543,331,000

Within one year

1,680,658,000

After one year

2,642,701,000

After one year

2,837,561,000

Total

4,186,032,000

Total

4,518,220,000(Negotiable securities)
The notes concerning the market price of negotiable securities included in the prior consolidated accounting fiscal year financial
statements and negotiable securities including in the current consolidated accounting fiscal year financial statements (excluding thestock of subsidiary companies and affiliated companies that has a market price) are part of the notes to the financial statements forthe consolidated balance sheets. For the prior consolidated accounting fiscal year (as of October 31, 2001) and the current
consolidated accounting fiscal year (as of October 31, 2002), the stock of the Company’s subsidiary companies and affiliatedcompanies did not have a market price.

(Tax effect accounting)Current fiscal year
From November 1, 2001
To October 31, 2002
1. Major factors creating deferred tax assets and deferred tax
liabilities

Prior fiscal year
From November 1, 2000
To October 31, 2001
1. Major factors creating deferred tax assets and deferred tax
liabilities

Deferred tax assets

Deferred tax assets

Amount in excess of limit for inclusion in
expenses for allowance for doubtful
accounts

223,215,000

Amount in excess of limit for inclusion in
expenses for allowance for doubtful
accounts

139,048,000

Disallowance of deferred business taxes−

Disallowance of deferred business taxes

105,214,000

Excess accrued employees retirement
benefit

692,015,000

Excess accrued employees retirement
benefit

833,080,000

Amount in excess of limit for retirement
allowances to directors and auditors

74,110,000

Amount in excess of limit for retirement
allowances to directors and auditors

117,771,000

Amount in excess of limit for accrued
bonuses to employees

144,443,000

Amount in excess of limit for accrued
bonuses to employees

119,949,000

Disallowance of excess depreciation

387,404,000

Disallowance of excess depreciation

476,600,000

Other

280,350,000

Other

98,708,000

Total deferred tax assets

1,801,537,000

Deferred tax liabilities
Valuation
securities

difference

Total deferred tax assets

1,890,370,000

Deferred tax liabilitiesonnegotiable

Net accrued tax assets

77,569,000
1,879,106,000

Disclosure classifications:

Valuation
securities

differenceonnegotiable

Net accrued tax assets△100,520,000
1,789,850,000

Disclosure classifications:

Current assets

151,957,000

Current assets

226,386,000

Fixed assets

1,727,149,000

Fixed assets

1,563,464,000

Company Financial Statements, FY ended October 31, 2002
P. 47

2. Causes of principal significant differences between the

2. Causes of principal significant differences between thestatutory corporate tax rate and the tax burden for corporate

statutory corporate tax rate and the tax burden for corporate

and other taxes following application of tax effect accounting,and other taxes following application of tax effect accounting,by major category.

by major category.
41.7％

Statutory corporate tax rate
(Adjustments)

41.7％

Statutory corporate tax rate
(Adjustments)

Local tax equalization

3.8％

Local tax equalization

7.2％

Items not permanently included in expenses
such as expense accounts

1.1％

Items not permanently included in expenses
such as expense accounts

2.4％

Other

△0.4％

Other

0.4％

Burden ratio for corporate and other taxes after
application of tax effect accounting

46.2％

Burden ratio for corporate and other taxes after
application of tax effect accounting

51.7％

IX Changes to directors and auditors
1. Changes to representative directors
There were no changes to the Company’s representative directors.
2. Changes to other directors and auditors
Candidates for new appointments as directors
Director Eichu Kanamoto(Currently Corporate
Director

Nobuhito Utatsu

Officer,

DivisionManager,

CreditManagement Division and Manager, Auditing Section)(Currently Corporate Officer, Division Manager, Accounting

Division)
Director (not full-time)
Tadao Saiga(District Sales Headquarters, ORIX Corporation)

Retiring directors
Director (not full-time)Masahiro Matano

Company Financial Statements, FY ended October 31, 2002
P. 48