Fiscal Year ending October 31, 2001

Summary of Company Interim Financial Statements
June 14, 2001
Listed Company Name

Kanamoto Company, Ltd.

Listing Exchanges

Company Code Number

9678

Tokyo Stock Exchange

Head Office Address

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

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

Inquiries

Person to Contact

Corporate Officer and Division Manager, Accounting Division

Name

Nobuhito Utatsu

TEL (011)-209-1600

Please send inquiries in English to takayama@kanamoto.co.jp
Date of Report to the Board of Directors

June 14, 2001

Interim Dividend System

The Company has an interim dividend system

Interim Dividend Payment Date

July 23, 2001

1. Operating Results for the Interim Period ended April 30, 2001
(November 1, 2000 −April 30, 2001)(1) Operating Results(Numbers less than one million yen have been rounded down)
Revenues
Six months endedApril 30, 2001
Six months endedApril 30, 2000
Fiscal year ended
October 31, 2000

Operating Income

Ordinary Income

Millions of yen％

Millions of yen％

Millions of yen％

31,234

6.1

1,505

−26.1

1,991

14.6

29,452

0.4

2,036

−13.3

1,738

−19.7

61,0303,104

Net Income
Millions of yen

％

2,668

Net Income per Share ofCommon StockYen

Six months ended
509
−48.7
16.84
April 30, 2001
Six months ended
993
−2.8
33.56
April 30, 2000
Fiscal year ended
1,455
48.66
October 31, 2000
Notes 1. Average number of shares outstanding during the period
Six months ended April 30, 2001
30,241,666 shares
Six months ended April 30, 2000
29,607,447 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 net income are the percent
increase or decrease compared to the same period of the prior fiscal year

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .1

(2) Dividends
Interim Dividend per
Share of Common
Stock

Annual Dividend per
Share of Common
Stock

Yen

Yen

Six months endedApril 30, 2001
Six months endedApril 30, 2000
Fiscal year ended
October 31, 2000

9.00

---

9.00

---

---

18.00

(3) Financial Position
Total Assets
Millions of yen

Shareholders’EquityMillions of yen

Shareholders’Equity Ratio％

Six months ended
104,561
31,883
April 30, 2001
Six months ended
102,156
30,722
April 30, 2000
Fiscal year ended
102,92030,926
October 31, 2000
Notes. Number of shares issued and outstanding at end of period
Six months ended April 30, 2001
30,250,241 shares
Six months ended April 30, 2000
30,197,241sharesFiscal year ended October 31, 2000
30,229,241 shares

Shareholders’Equity per Share
Yen

30.5

1,053.99

30.1

1,017.39

30.0

1,023.06

2. Projected Operating Results for the Fiscal Year Ending October 31, 2001
(November 1, 2000 − October 31, 2001)
Revenues

Full year

Ordinary Income

Millions of yen

Millions of yen

62,0003,000

Net Income
Millions of yen
420

Annual Dividend per
Share of Common Stock
Year-end
Yen

Yen

9.00

18.00

Reference: Projected net income per share of common stock (Full year) ¥13.88

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .2

VIII
Company Financial Statements
1. Comparative Balance Sheets
PeriodCategory(Unit: Thousands of yen)

End of Current Fiscal
Year Interim Period

End of Prior Fiscal
Year Interim Period

Prior Fiscal Year
Summary Balance Sheet(As of April 30, 2001)(As of April 30, 2000)(As of October 31,2000)

AmountPercent

Amount％Percent％

Current Assets
Cash and deposits
Notes receivable, trade※6

Accounts receivable, trade
Inventory
Other current assets
Allowance for doubtful
accounts
Total Current Assets
II

Amount％(Assets)
I

Percent

14,988,293

17,887,632

16,297,173

14,734,209

14,487,679

11,858,956

8,848,112

7,743,666

11,486,658

928,279

991,060

817,2094,607,567

5,762,929

4,966,653−197,615−166,584−173,025

43,908,848

42.0

46,706,384

45.7

45,253,626

44.0

Fixed Assets(1） Tangible Fixed Assets ※1
Rental equipment
Buildings& ※5
structures
Land
Other tangible fixed ※5
assetsTotal Tangible Fixed
Assets(2） Intangible Fixed
Assets(3） Investments and※2
Other Assets
Allowancefordoubtful accounts
Total
Investments
and Other Assets
Total Fixed Assets

20,336,493

16,626,408

18,825,760

6,435,630

6,281,962

6,344,520

24,042,995

24,042,786

24,042,995

3,276,704

3,812,620

3,610,721

54,091,823

50,763,777

52,823,998

66,96367,361

57,122

7,073,384

4,834,259

5,016,414−579,240−214,786−230,181

6,494,144

4,619,472

4,786,233

60,652,931

58.0

55,450,611

54.3

57,667,354

56.0

Total Assets

104,561,779

100.0

102,156,996

100.0

102,920,980

100.0

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .3

(Unit: Thousands of yen)
PeriodCategory

End of Current Fiscal
Year Interim Period

End of Prior Fiscal
Year Interim Period

Prior Fiscal Year
Summary Balance Sheet(As of April 30, 2001)(As of April 30, 2000)(As of October 31,2000)

AmountPercent

AmountPercent％％

Current Liabilities
Notes payable, trade

II

Amount％(Liabilities)
I

Percent

10,337,767

8,557,213

8,367,393

Accounts payable, trade

1,855,608

2,052,541

2,784,599

Short-term bank loans

7,851,000

14,090,200

12,135,000

Accounts payable, other

8,347,618

7,986,053

7,582,990

Corporate taxes payable
Accruedbonusestoemployees
Equipment notes payable

1,234,330

772,980

202,872

524,054477,625

491,873375,063

857,930

792,559

Other current liabilities

530,403496,487

402,965

Total Current Liabilities

31,055,845

※6

※6

29.7

35,291,031

34.5

32,760,254

31.9

Long-term Liabilities
Straight bonds

5,277,692

5,277,692

5,277,692

Convertible bonds

9,733,000

9,866,000

9,796,000

Long-term bank loans

13,076,000

11,993,000

12,865,000

Long-term accrued
expenses
Accrued employees
retirement benefits
Retirement allowances todirectors and auditors
Total Long-term Liabilities

12,247,643

8,719,457

11,008,272

1,014,536−−

273,522

287,454

287,454

41,622,394

39.8

36,143,603

35.4

39,234,418

38.1

Total Liabilities

72,678,240

69.5

71,434,635

69.9

71,994,672

70.0

※4

8,596,080

8.2

8,584,473

8.4

8,591,481

8.3※4

9,719,689

9.3

9,708,135

9.5

9,715,111

9.4

1,345,262

1.3

1,218,086

1.2

1,245,262

1.2(Shareholders’Equity)
I
II

Common stock
Additional paid-in
capital

III Legal earned surplus
IV Retained earnings
General reserve
Unappropriatedretained earnings(interim
Valuationperiod)
difference onother negotiablesecurities

10,350,000

9,550,000

9,550,000

1,145,184

1,661,665

1,824,461

727,323−−

Total other reserves

12,222,507

11.7

11,211,665

11.0

11,374,461

11.1

Shareholders’Equity

31,883,538

30.5

30,722,361

30.1

30,926,316

30.0

Total Liabilities andShareholders’Equity

104,561,779

100.0

102,156,996

100.0

102,920,989

100.0

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .4

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

Current Fiscal Year
Interim Period(From November 1, 2000 (From November 1, 1999
(From November 1, 1999
to April 30, 2001)
to April 30, 2000)
to October 31, 2000)

Category

AmountPercent

AmountPercent％
I

Prior Fiscal Year
Summary Statement of
IncomePrior Fiscal Year
Interim Period

Operating revenues

Amount％Percent％

31,234,972

100.0

29,452,753

100.0

61,030,048

100.0

II Cost of revenues

23,369,648

74.8

21,743,306

73.8

46,456,372

76.1

Gross profit
general and
III Selling,
administrative expenses
Operating income

7,865,323

25.2

7,709,447

26.2

14,573,675

23.9

6,360,009

20.4

5,673,123

19.3

11,468,912

18.8

1,505,314

4.8

2,036,324

6.9

3,104,762

5.1

IV Non-operating revenues※1

826,8212.7

373,316

1.3

815,807

1.3

V Non-operating expenses※2

340,9631.1

671,432

2.3

1,252,351

2.0

1,991,172

6.4

1,738,208

5.9

2,668,218

4.4

134,0480.5

175,433

0.3

Ordinary income
VI Extraordinary profits
VII Extraordinary losses
Income before taxes andadjustments
Corporate, local andbusiness taxes
Adjustment for corporate
and other taxes
Net income
Profit carry-forward fromprior period
Cash dividends−※3

1,043,013

3.3

97,0350.3

215,4150.4

948,158

3.1

1,775,220

6.0

2,628,236

4.3

1,201,529

3.9

735,9432.5

1,226,610

2.0−762,754−2.4

45,707

0.1−53,669−0.1

509,382

1.6

993,569

3.4

1,455,295

2.4

635,801

668,096

668,096−−

271,754

Additions to legal reserve−−

27,175

Unappropriated retained
earnings

1,145,184

1,661,665

1,824,461

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .5

3. Notes to the Interim Financial Statements and Significant Accounting Policies(1) Valuation standards and valuation methods for construction equipment
Amount after deduction of depreciation expense calculated according to the declining-balance methodfrom the original prices, by separate fiscal year of purchase(2) Appraisal standards and appraisal method for merchandise inventories and supplies
Merchandise Inventories・・・Lower of cost or market based on the last-in, first-out method
Supplies ・・・・・・・・・ The latest purchase cost method(3) Valuation standards and valuation methods for negotiable securities
Subsidiary companies and affiliated companies
Cost method based upon the moving average method
Other negotiable securities
Securities with a market priceMarket value method based on the market price or similar prices on the interim period closing date
(The full amount of the valuation difference is charged to equity using the direct transfer to capitalmethod, with the disposal cost determined by the moving average method)
Other negotiable securities
Cost method, cost being determined by the moving average method(4) Depreciation method for fixed assets
Tangible fixed assets・・・The Company has adopted the declining-balance method. Buildings on land thatis leased under a fixed-term land lease agreement, however, are depreciatedusing the straight-line method using the remaining period of the fixed-termlease as the depreciable life and zero residual value.
Intangible fixed assets・・Software for use within the Company is depreciated using the straight-line
method based on the assumed useful life for internal use (5 years).

(5) Accounting standards for allowances and reserves

Allowance 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 fornormal accounts, plus an amount for projected unrecoverable amounts basedon assessments of individual accounts.
Accrued bonuses to employees・・・・To fully provide for bonuses the Company will pay to employees, theCompany appropriates an amount to the reserve for the interim accounting
period liability based upon the estimated amounts of bonuses and salaries.
Accrued employees retirement benefits・・The Company provides for employees’accrued retirement
benefits based upon the projected amounts of the liability for accrued
employees retirement benefits and the value of pension assets at the end of the
fiscal year. At the end of each interim accounting period, the Company
appropriates an amount to the reserve to provide for the liability recognized
during the period.
The Company charged 1/2 of the difference for a one-time change in accounting
principles (¥1,973,120,000) to expenses at the end of the current fiscal year
interim accounting period.
Retirement allowances to directors and auditors・・・The Company provides for retirement allowances todirectors and auditors based upon pertinent rules and appropriated to theaccount at the end of the interim accounting period proportionately based upon
length of service.

(6) Lease transactions
For finance lease transactions except for leases that transfer ownership of the property to the lessee, rent
expenses are charged to income as payments are made.

(7) Hedge transactions

1. Hedge transactions
The Company accounts for hedge transactions using allocations based on accounting standards for foreign
currency-denominated transactions, and special rule accounting based on accounting standards forfinancial products.
2. Hedge methods and hedged transactions

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .6

The Company uses currency swaps and forward transactions in order to avoid the currency fluctuation
risk related to the Company’s foreign currency-denominated straight bonds and liabilities for import
payments. The Company also uses interest swaps to avoid interest rate fluctuation risk related to intereston bank borrowing.
3. Hedging policies
The Company’s use of derivative transactions is limited to hedging risk within the scope of the Company’sassets and liabilities subject to market fluctuation risk.
4. Method for evaluating the effectiveness of hedges
The Company does not evaluate the effectiveness of its hedge transactions because it can assume that its
currency swap transactions and forward transactions will completely offset market fluctuations orchanges in cash flow from the time hedge begins until it is terminated. In addition, the Company’sinterest swap transactions fulfill the requirements for special rule accounting, and the Company has
elected to use this in place of an evaluation of effectiveness.

(8) Other significant matters for preparation of the interim 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. The net difference between consumption taxes received and consumption
taxes owed is small and does not have a material effect on the Company’s financial statements and isincluded in other current liabilities.

(Supplemental information)(Accounting for employees’retirement benefits)
The Company has adopted the accounting standards for post-employment benefits (Opinions on SettingStandards for Post-employment Benefits,”Business Accounting Council, June 16, 1998) from the current
fiscal year interim period.
As a result, the Company’s expense for accrued employees retirement benefit increased by ¥1,014,536,000,
and ordinary income decreased by ¥27,976,000 and income before taxes decreased by ¥1,014,536,000,
respectively, compared to what they would have been had the accounting standards used in the prior fiscal
year been used.
(Accounting for financial instruments)
The Company has adopted the accounting standards for financial instruments (“Opinions on SettingStandards for Financial Instruments,”Business Accounting Council, January 22, 1999) from the current
fiscal year interim accounting period, and changed its accounting standard for other negotiable securities
with a market price from the lower of cost or market method based on the moving average method (roundeddown) to the cost method, cost being based on the moving average method.
As a result, the Company’s ordinary income was not affected and income before taxes for the interim
accounting period increased by ¥45,174,000 compared to what it would have been had the accounting
standards used in the prior fiscal year been applied.
The Company also reviewed its holding objectives for negotiable securities held at the beginning of the fiscal
year, and has disclosed the securities included in other negotiable securities that mature within one year as
negotiable securities in current assets, and has disclosed all other securities as investment securities. As aresult, the Company’s negotiable securities accounted for as current assets were reduced by ¥746,051,000,
and its investment securities increased by ¥746,051,000, compared to what they would have been had theaccounting standards used in the prior fiscal year been applied.

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .7

(Notes to the Interim Period Balance Sheets)
Category

Period

※1. Total accumulated
depreciation for tangible
fixed assets

End of Current Fiscal
Year Interim Period(As of April 30, 2001)¥52,840,200,000

End of Prior Fiscal Year End of Prior Fiscal Year
Interim Period(As of April 30, 2000)(As of October 31, 2000)¥49,283,118,000※2. Foreign currency
denominated assets
Negotiable securities

US$90,000(¥10,053,000)
US$2,899,000(¥305,154,000)
US$1,000,000(¥108,914,000)─────
Investment securities
Advances※3. Contingent liabilities
Joint and several guaranteeof employee bank loans
Debt guarantee of affiliatedcompany (Active Power
Corporation) loan liability※4. Reasons for increase in
number of shares issued¥49,118,380,000

─────

¥26,243,000¥27,958,000¥25,398,000¥350,000,000

─────

¥280,000,000

Exercise of new stock Exercise of new stock Exercise of new stock
subscription rights
subscription rights
subscription rights(Stock options)(Stock options)(Stock options)Shares issued: 21,000

Shares issued: 69,000

Shares issued: 101,000

Issue price per share: ¥437

Issue price per share: ¥437

Issue price per share: ¥437

Amount credited to capital Amount credited to capital Amount credited to capitalsurplus:¥219

surplus:¥219

surplus:¥219(2) Conversion of
yen-denominatedconvertible bonds
maturing in 2003

(2) Conversion of
yen-denominatedconvertible bonds
maturing in 2003

Shares issued

Shares issued

651,222651,222

Conversion price per share Conversion price per share
¥777

¥777

Amount credited to capital Amount credited to capital※5. Reduction to book value

surplus ¥389

surplus ¥389

Amounts for assets

Amounts for assets

Amounts for assets

acquired in prior fiscal

acquired in prior fiscal

acquired in prior fiscal

years for which

years for which

years for whichaccumulated book values

accumulated book values

accumulated book values

were reduced bywere reduced bywere reduced bygovernment subsidies

government subsidies

government subsidies

Machinery &Machinery &Machinery &¥5,044,000

equipmentLand¥3,569,000
Total¥5,044,000

equipment¥8,613,000Land¥3,569,000
Total¥5,044,000

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

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .8

※ 6. Accounting treatment of The interim period-end
notes maturing at the end was a financialof the period
institution holiday inJapan. Notes receivableand payable thatmatured on that datewere settled on theimmediately following
business day, as iscustomary in Japan.
Notes outstanding forwhich settlement was
postponed and which
are included in theinterim balances wereas follows.
Notes¥2,100,807,000

receivable, tradeNotes

payable,The interim period-end
was a financial
institution holiday inJapan. Notes receivableand payable thatmatured on that datewere settled on theimmediately following
business day, as iscustomary in Japan.
Notes outstanding forwhich settlement was
postponed and which
are included in theinterim balances wereas follows.
Notes

─────

¥1,347,094,000

receivable, trade¥1,302,175,000

trade

Notes

payable,¥917,557,000¥

181,029,000

trade

Equipment
notes payable¥

40,181,000

Equipment
notes payable

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .9

(Notes to the Interim Period Statements of Income)
PeriodCategory※1. Principal items included in
non-operating revenues

Prior Fiscal Year
Current Fiscal Year
Prior Fiscal Year
SummaryStatement ofInterim Period
Interim Period
Income(From November 1, 2000 (From November 1, 1999 (From November 1, 1999
to April 30, 2001)
to April 30, 2000)
to October 31, 2000)

Interest received
Gain on sale ofinvestment securities
Rents received¥18,271,000¥7,069,000¥38,567,000¥355,569,000−−¥155,638,000¥106,490,000¥226,743,000

Insurance benefits¥127,103,000¥101,117,000¥224,685,000¥2,457,000¥25,024,000¥28,358,000Interest expense¥218,539,000¥234,517,000¥479,845,000Interest on corporate
bonds
New stock issuance
expense
Straight bondissuance expense※3. Principal items included in
extraordinary losses
Transfer to reserve fora c c r u e d employees
retirement benefits※ 4. Depreciation andamortization
Tangible fixed assets¥65,142,000¥66,255,000¥132,001,000¥63,000¥1,152,000¥1,182,000−￥147,500,000￥147,500,000¥986,560,000−−¥3,813,457,000¥3,388,128,000¥7,507,237,000

Intangible fixed assets¥5,950,000¥1,240,000¥2,656,000

Gain on redemptionof corporate bonds bypurchase※2. Principal items included in
non-operating expenses

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .1 0(Lease Transactions)Category

Year Interim
Period Current Fiscal
Period(From November 1, 2000
to April 30, 2001)

Prior Fiscal Year Interim
Period(From November 1, 1999
to April 30, 2000)

Prior Fiscal Year Summary
Statement of Income(From November 1, 1999
to October 31, 2000)

1. For finance lease

1. Amounts corresponding to

1. Amounts corresponding to

1. Amounts corresponding totransactions

lease property acquisitionlease property acquisitionlease property acquisition

except leases thatprices, accumulated

prices, accumulated

prices, accumulatedtransfer

depreciation anddepreciation anddepreciation andownership of theoutstanding balance at theoutstanding balance at theoutstanding balance at theproperty to theend of the fiscal year

end of the fiscal year

end of the fiscal year

lessee.

accounting period.

accounting period.

accounting period.

Acquisition Accumulated Outstanding
depreciation
balanceprice¥ ‘000¥ ‘
000

Rentalassets13,230,516

5,871,914

Otherassets712,165

Total

13,942,682

2.

Acquisition Accumulated Outstanding
price
depreciation
balance

¥ ‘
000

¥ ‘
000

¥ ‘000

¥ ‘
000

¥ ‘
000

8,986,843

16,688,293

8,788,906

7,899,386

234,860

302,994

Other
assets653,650

308,993344,656

7,905,000

9,289,838

Total

17,341,943

9,097,900

8,244,043

7,358,602

16,656,984

7,670,140

328,640

383,525

Other
assets537,854

6,200,554

7,742,127

Total

17,194,839

Outstandingbalance

of

2.

¥‘
000
RentalassetsRentalassetsfuture lease payments at the

Outstandingbalanceof2.

future lease payments at the

Outstandingbalanceoffuture lease payments at

end of the interim period

end of the interim period

the end of the interim period

Within one year

¥2,468,167,000

Within one year

¥2,814,451,000

Within one year ¥2,638,858,000

After one year

¥5,419,681,000

After one year

¥6,199,145,000

After one year

¥5,402,652,000

Total¥7,887,849,000

Total¥9,013,596,000

Total¥8,041,510,000

3. Amount of lease payments,

3. Amount of lease payments,

3. Amount of lease payments,

anddepreciation

Lease payments¥1,618,672,000

Lease payments¥3,080,428,000

Depreciation expense ¥1,233,926,000

Depreciation expense¥1,531,426,000

Depreciation expense¥2,820,125,000Interest expense¥123,314,000Interest expense¥153,393,000Interest expense¥291,429,000

methodfor4.

methodfor4.

methodforequivalenttoequivalenttoequivalent

to

and

depreciation

Lease payments ¥1,350,791,000

depreciation

expenseAccounting
amountAccounting
amountdepreciation expense
Straight-line

expenseexpenseAccounting
amountdepreciation expensedepreciation expense

Same as at left

Same as at leftdepreciation

andinterest expenseinterest expenseinterest expense

4.

¥‘
000

Acquisition Accumulated Outstanding
price
depreciation
balanceusing the lease term as thedepreciable life and zero
residual value.
5.

Accounting

methodforamountequivalent

tointerest expense

5.

Accounting

methodforamountequivalent

tointerest expense

betweenAccounting

methodforamountequivalent

tointerest expense

Same as at left

Same as at left

Future lease payments

Future lease payments

Interest method using thedifference

5.

total

lease payments and theacquisition price of thelease property, allocatedequally to each year.

2. Operating leases

Future lease payments
Within one year

¥1,427,854,000

Within one year

¥1,036,303,000

Within one year ¥1,422,400,000

After one year

¥3,386,803,000

After one year

¥1,908,879,000

After one year

¥2,704,382,000

Total¥4,814,658,000

Total¥2,945,182,000

Total¥4,126,782,000

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .1 1

(Negotiable Securities)
The notes concerning negotiable securities for the consolidated fiscal year interim period under review and themarket price of negotiable securities for the prior consolidated fiscal year are part of the notes to the interim
period consolidated financial statements.
(Prior fiscal year interim accounting period) (As of April 30, 2000)

Category

Market value of negotiable securities
Amount reported
Market valueon the interim
balance sheet(Unit: Yen thousands)
Difference(1) Assets classified as current assets
Stocks417,810434,286

16,476

Corporate bonds

269,130

268,447

−682

−

−

−

686,940

702,734

15,793

1,036,833

2,081,287

1,044,453

118,863

119,190326

1,000,578

779,380−221,198

2,156,274

2,979,857

823,582

2,843,215

3,682,591

839,375

Other
Total
(2) Assets classified as fixed assets
StocksCorporate bonds
Other
Total
Total

Notes: 1. Method used to calculate market value(1）Listed negotiable securities: Valued mainly on the basis of the final closing prices on the Tokyo
Stock Exchange(2）Over-the-counter negotiable securities: Valued on the basis of trading prices such as thosepublished by the Japan Association of Securities Dealers(3) Beneficiary certificates for unlisted security investment trusts are valued on the basis of eachtrust’
s standard valuation
2. Treasury stock included in stocks classified as current assets
Valuation profit or loss
Stocks classified as current assets−¥11,000
3. Consolidated balance sheet valuation of negotiable securities that are excluded from disclosure
requirements
Assets classified as current assets
Beneficiary certificates for security investment
trusts in their closed period¥135,919,000
Unlisted foreign government bonds¥109,853,000
Assets classified as current assets
Unlisted stocks (excluding over-the-counter stocks)¥509,510,000
Unlisted foreign government bonds¥305,156,000
Corporate bonds with attached warrants¥10,000,000

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .1 2

(Notes related to Derivative Transactions)
The notes concerning derivative transactions for the consolidated fiscal year interim period under review andthe prior consolidated fiscal year are included in the notes to the interim consolidated financial sheets.

Prior consolidated fiscal year interim period (November 1, 1999 – April 30, 2000)
1. Circumstances of transaction① Details and purpose of derivative transactions
From time to time, the Company uses forward exchange contracts and currency swap transactions in order toavoid the risk of future foreign exchange market exchange rate fluctuations for specific foreign
currency-denominated assets and liabilities.
In addition, the Company uses interest rate caps and swaps to limit the effect that a future rise in market
interest rates will have on the interest paid by the Company.

② Transaction policy
The Company has adopted a policy of using derivatives transactions only for purposes of avoiding risks toassets and liabilities that are exposed to market price fluctuation risk. The Company does not engage in the useof derivatives transactions for the purpose of obtaining short-term trading gains (trading objectives) or for
speculative purposes.

③ Transaction-related risks
Derivative transactions are accompanied by market risk created by fluctuation of the market prices of theitems covered by the transactions, and credit risk related to the possibility that counterparties may not performtheir obligations in accordance with the transaction contract.
Forward exchange contracts related to currencies used by the Company contain an element of risk created byfluctuations in foreign exchange market currency rates, and interest rate cap and interest rate swap
transactions contain an element of risk created by fluctuations in market interest rates.
The Company believes it faces minimal credit risk because the counterparties for its derivative transactions
are domestic banks and securities firms with strong credit ratings.

④ Transaction risk management system
The Company’s basic policies concerning derivative transactions are decided by the board of directors, andexecuted and managed by the Treasury and Securities Section Manager in the Accounting Division based on the
Company’s internal management regulations. The corporate officer in charge of accounting reports on financial
matters, including these derivative transactions, at the Company’s regular meetings of the board of directors.

⑤ Supplemental information concerning transaction market prices and other matters
Forward exchange contracts and currency swaps allocated to foreign currency-denominated assets andliabilities at the end of the interim period and accounted for on the interim financial statements throughconversion into monetary assets and liabilities denominated in the relevant foreign currency are excluded fromdisclosure at market prices.

2. Transaction market value
The amounts of the Company’s currency and interest rate derivative transactions and the amounts equivalent
to the valuation profit and loss were small. Details of the transactions have been omitted because the amounts are
deemed to be immaterial to the Company’s financial position.

Summary of Company Interim Financial Statements, FY ending October 31, 2001
P .1 3