Fiscal Year ending October 31, 2004

Interim Financial Statements Bulletin (Consolidated)
June 10, 2004
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

Inquiries

Nobuhito Utatsu

President

Director & Corporate Officer, 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

June 10, 2004

SEC Accounting Standards

The Company has not adopted SEC accounting standards

1. Consolidated Operating Results for the Interim Period ended April 30, 2004
(Nov. 1, 2003 – Apr. 30, 2004)(Numbers less than one million yen have been rounded down)(1) Consolidated Operating Results
Revenues

Operating Income

Millions of yen
Six months endedApril 30, 2004
Six months endedApril 30, 2003
Fiscal year ended
October 31, 2003％

Six months endedApril 30, 2002
Fiscal year ended
October 31, 2003％

Millions of yen

％

- 5.0

1,578

-17.1

1,527

-15.0

32,570

- 0.1

1,905

12.4

1,796

1.0

63,6862,307
Net Income per Share ofCommon StockMillions of yen
April 30, 2003

Millions of yen

30,955Net Income

Six months ended

Ordinary Income

2,279
Net income per share on a
fully diluted basis

％

1,097

40.6

36.75

−

780

-16.1

25. 88

23. 32

29. 96

27. 11

913

Notes 1. Investment profit or loss accounted for by the equity method
Six months ended April 30, 2004−
Six months ended April 30, 2003−
Fiscal year ended October 31, 2003−
2. Average number of shares (consolidated) outstanding during the period
Six months ended April 30, 2004
29,868,128 shares
Six months ended April 30, 2003
30,175,156 sharesFiscal year ended October 31, 2003
30,030,383 shares
3. Are there any changes in accounting method?
No
4. 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

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 1

(2) Consolidated Financial Position
Shareholders’EquityTotal Assets

Six months endedApril 30, 2004
Six months endedApril 30, 2003
Fiscal year ended
October 31, 2003

Shareholders’Equity Ratio

Shareholders’ Equity
per Share

Millions of yen

Millions of yen

87,60532,96437.6

1,103.77

97,916

31,59032.3

1,057.29

89,01031,90735.8

1,068.25

Yen％

Notes 1. Number of shares (consolidated) issued and outstanding at end of period
Six months ended April 30, 2004

29,865,040 shares

Six months ended April 30, 2003

29,879,020 sharesFiscal year ended October 31, 2003

29,868,824 shares(3) Consolidated Cash FlowsSix months endedApril 30, 2004
Six months endedApril 30, 2003
Fiscal year ended
October 31, 2003

Cash Flow fromOperating Activities

Cash Flow from
Investing Activities

Cash Flow from
Financing Activities

Balance of Cash andEquivalents at End of
PeriodMillions of yen

Millions of yen

Millions of yen

Millions of yen

4,955

119

- 1,896

15,141

6,346

- 312

- 2,951

18,515

10,359- 107-13,764

11,920(4) Companies to which consolidation accounting and equity method accounting apply
Number of consolidated subsidiaries: 4
Number of non-consolidated subsidiaries accounted for by the equity method: 0
Number of affiliated companies accounted for by the equity method: 0(5) Changes in scope of consolidation and application of equity method accounting

Consolidation (new companies)
Equity method accounting (new companies)

00(Excluded)(Excluded)00

2. Projected Consolidated Operating Results for the Fiscal Year Ending October 31, 2004
(November 1, 2003 - October 31, 2004)
Revenues

Full year

Operating Income

Millions of yen

Millions of yen

60,6102,140

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

Ordinary Income

Net Income

Millions of yen

Millions of yen

1,960

1,140

¥38.17*The above projections were prepared based upon information available to the Company at the time the projections
were announced as well as various assumptions concerning the future economic and business environment. Actual
operating results may differ from the projected figures depending upon various factors in the future. Please refer toPage 10 for details of the projections

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 2

I

Current Conditions of the Company GroupThe Kanamoto Company group is comprised of the parent company, six subsidiaries and two affiliatedcompanies. The business activities of the group are centered on the rental of construction equipment,
and the development of businesses involved in the rental and sale of a full line of construction-relatedmaterials. An explanation of each company’s position with regard to its relevant business is provided
below.

〔Businesses related to the Construction Equipment Rental Division〕
The Company’s rental division, together with Daiichi Machine Industries Co., Ltd. (a consolidated
subsidiary company), is engaged in the rental and sale of construction equipment and machines used forconstruction. The subsidiary company operates in designated marketing areas and borrows rental
equipment assets from the Company as needed in order to meet customer demand. Kanamoto Shikoku
Co., Ltd., a non-consolidated subsidiary company that was also engaged in this business, was merged
into Kanamoto in April 2004.
SRG Kanamoto Co., Ltd. (a consolidated subsidiary company) operates a rental business that provides
temporary materials for construction use. Assist Co., Ltd. (a consolidated subsidiary company) and Com
Supply Co., Ltd. (a non-consolidated subsidiary company) are engaged in the rental and sale offurniture and fixtures and safety products for the construction industry. The Company borrows rental
assets from these three companies as needed to rent to its own customers.
In addition to the above companies, Kanatech Co., Ltd. (a consolidated subsidiary company) develops,
manufactures and sells modular housing units for temporary use. Polyshield Services Co., Ltd. (a nonconsolidated subsidiary company), which was engaged in the sale and construction of specialized rustproof, water-proof shields, has halted all business operations at the present time.

〔Businesses related to the Steel Sales Division〕
The Company’s Steel Sales Division sells steel products and construction-related manufactured goods.
The Company has no subsidiaries or affiliated companies related to this division.

〔Businesses related to the Information Products Division and Other Businesses〕
As the Company’s information and telecommunications-related division, Kanamoto’s Information Products
Division is engaged in the rental and sale of computers, computer peripheral equipment and equipment
for the development of computer products. Active Technology Corporation (an affiliated company),
which is principally engaged in the sale of telecommunications-related equipment such as wireless LAN
devices, is affiliated with this division. As a supplemental business, Active Power Corporation (anaffiliated company) is engaged in the sale of microturbine generators manufactured by Capstone
Corporation, a U.S. company, and supplies these products to the Company, among others.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 3

〔Relationship of the Operating Businesses〕(Note) An asterisk indicates an affiliated company to which equity method is not applied

CustomersのConstruction-related businesses
Kanamoto Co., Ltd.

Rental of construction
equipment

Information
Products
Division-related
businesses,
Other

Rental of temporary
scaffolding
Construction

Businesses

Active Technology
Corporation

Equipment Rental
Sale of telecom

Divisiondevices・

Active Power
Corporation

Sale ofMicroturbine
generators

Steel Sales Division
・Daiichi Machine
Industries Co., Ltd.
SRG KanamotoCo., Ltd.

Supply ofmodularhousing

Rental of safety
products
Manufacture and sale ofmodular housing units
Rental of safety
products

Assist Co., Ltd.

Kanatech Co., Ltd.

Com Supply Co., Ltd.

Information

Polyshield Services
Co., Ltd.

Products Division(Operations suspended)Lines indicate:

Consolidated

Non-consolidated

Affiliatedsubsidiaries

subsidiaries

companies

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 4

II

Management Policies

1. Basic policies concerning business management
The Kanamoto Company group believes that adapting to changes in the business environment,
developing the group firms on a sustainable basis and maximizing earnings contributes to the best results
for all stakeholders. This is the reason Kanamoto has always made the centerpiece of its action agenda
the concept “constantly seek innovation and strive to energize the business.”
By offering each customer optimal solutions and services fine-tuned to its exact needs, based on rational
rental proposals that take maximum advantage of Kanamoto’s years of accumulated equipment rental
knowledge and experience, Kanamoto seeks to grow in a manner that will contribute fully to society.

2. Basic policies concerning distribution of earnings
To ensure the long-term, integrated expansion of shareholders’ profits, Kanamoto continues to focus
comprehensively on both capital investments and profitability based on its medium-term profit plan,
general dividend trends and a sound financial position. In particular, the Company remains committed toits policy of stable dividend growth.
At the same time, the Company utilizes its internal reserves by allocating funds for the introduction ofrental equipment assets that will serve as the source of future earnings.
To provide for a more flexible capital policy in the future, Kanamoto has established a program and policy
for the purchase of treasury stock.

3. Management indicators established as objectives
Because of the Company’s need to maintain a large inventory of assets, Kanamoto has always
emphasized ROI (return on investment) and cash flow, and seeks growth in EBITDA (earnings before
interest, taxes, depreciation and amortization) to meet its primary objective of establishing a solidmanagement foundation.
For the new long-range management plan Kanamoto will launch in the fiscal year ending October 2004,
the Company will seek to attain the following numerical objectives in the fiscal year ending October 2006
and in the fiscal year ending October 2008.
(Millions of yen, except net income per share)

Consolidated operating
results

Fiscal Year ending

Fiscal Year ending

October 2006

October 2008

Revenues

60,40063,340Ordinary income

3,350

5,370

57

93

Net income per share (yen)Non-consolidated

Revenues

58,00060,600operating results

Ordinary income

3,160

5,070

(Kanamoto Company)

EBITDA

18,02919,553

4. Medium to long-term corporate management strategy
In “Metamorphose,” the Company’s new long-range management plan, Kanamoto will focus on enhancing
operating systems in the Construction Equipment Rental Division, which is the core business of Kanamoto
and the Kanamoto group. Kanamoto will also launch wide-ranging efforts to reinvigorate the Company,
and create a stronger Kanamoto that is well-equipped to survive in the face of a changed businessenvironment, by the end of the fiscal year ending October 2008. To accomplish this plan we haveestablished the following objectives.
①Earnings-focused management
Kanamoto will shift its focus away from a revenues-first approach and emphasize gross profit. Moreover,
Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 5because the Company has already completed the replacement of its large-scale construction equipment
rental assets with the latest emissions-controlled models designed to reduce pollution, Kanamoto will
limit the introduction of new rental assets and work to reduce depreciation and amortization expense.
The Company will continue to aggressively introduce small-scale construction equipment and inexpensive
rental assets, however, which boast high profit margins.
②Execute a bold scrap and build program
In the prior fiscal year, Hokkaido accounted for 41% of Kanamoto’s total revenues by region, with Honshu
accounting for the remaining 59%. By making an aggressive effort to expand in Honshu, Kanamoto will
implement its flexible branch office location strategy to raise the percentage of revenues generated in
Honshu to 65-70%. In addition, by taking bolder measures to close or scale back the number of
unprofitable branches, when opening new branches the Company will concentrate on establishing lightlyequipped branches, particularly in the Tokyo metropolitan area.
③Build a powerful marketing organization where customers are always Number One
By taking maximum advantage of its information systems, Kanamoto will implement marketing programs
to thoroughly fulfill user needs. The Company will continue to reconfigure its asset composition to best
suit the regional characteristics of each branch office, independently and autonomously of other branches,to create a position in which Kanamoto’s presence is indispensable for its customers’ operations.
④Pursue Kanamoto’s alliance strategy
The Kanamoto group and its alliance firms currently have bases capable of providing products andservices with uniform quality throughout Japan, from Hokkaido to Okinawa. By expanding the number ofalliance firms and enhancing the alliance group’s capabilities, Kanamoto has strengthened its corporate
cooperation as the Kanamoto group and enhanced synergistic effects.
Even though business conditions will be extremely difficult during the initial two-year period of the newlong-range management plan, by pursuing the objectives mentioned above Kanamoto will continue to berecognized as the leading company in the construction equipment rental business. By maintaining its
efforts to improve and strengthen the Company’s financial position, Kanamoto will seek to create a firmthat is evaluated positively by the market.

5. Issues to be addressed by the Company
Over the past several years total construction investment has fallen sharply, as public works spending has
been curtailed under the government’s financial restoration policy. For firms involved in the constructionindustry, the change in the current business environment has been extremely severe and fosters little
hope for a turnaround in immediate conditions. This situation is reflected in the construction equipment
rental industry as well, as the decline in rental unit prices, user requests for discounts, and greater
competition among firms continue unabated. Regardless of a firm’s size, with each passing year operating
margins at construction equipment rental firms have continued to shrink.
Nevertheless, as the use of construction equipment rentals by construction firms continues to grow, thispresents opportunities in which the construction equipment rental industry will be enable to maintain oreven improve profitability through appropriate asset investments and timely operation.
As the Kanamoto group, we regard this deterioration of the business environment as an opportunity.
Kanamoto is working to expand revenues by cooperating closely with other Kanamoto group firms and its
alliance partners, from a business and asset management perspective. We are also focusing on increasing
operating income by cutting various costs and overhead. Together with reducing depreciation andamortization expense with strict controls on investments, mainly for large-scale construction equipment,
we are continually seeking to achieve lower-cost operations.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 6

Kanamoto is also taking steps to improve the value of its corporate brand. To achieve this goal the
Company will concentrate on appropriate user support and the level of quality satisfaction, by creating aknowledge management system and a maintenance standardization system that effectively utilize theonline system linking every Kanamoto branch office.
As the standard bearer for the construction equipment rental industry, Kanamoto has taken up its mission
and obligation with a strong sense of commitment and is working to develop the construction equipment
rental market and foster a sound industry in the face of a challenging environment.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 7

III

Operating Results and Financial Position

1. Operating results①Summary of the interim consolidated accounting period under review
During the interim consolidated accounting period under review, Japan’s economy was buoyed by arecovery in corporate consolidated earnings as major firms achieved record profits. Business sentiments
also showed a steadily improving trend, with bright spots evident even in certain personal consumption
segments. Nevertheless, a recessionary mood continued to hang over domestic non-manufacturingbusinesses, creating an extremely tough business environment in the construction industry in particular.
In local regions, the effects of the marked reduction in public works expenditures were heightened further
by a lack of momentum in private sector demand as well.
〔 Construction-related business 〕
Although construction demand is forecast to remain tight throughout the current year, and the downward
trend in public works spending outside major metropolitan areas remained unchanged in every region,
Kanamoto’s Construction Equipment Rental Division undertook many detailed efforts to boost operating
performance in line with “'Metamorphose,” the Company’s new long-range management plan.
As a result of efforts to steadily locate and win small-scale construction projects in the face of weak
demand, the Company was able to achieve a 0.2% increase overall in construction equipment rental
revenue compared to the same period one year earlier.
In both Hokkaido and the Tohoku area, the two regions where Kanamoto has a major share of the market,
the Company received orders related to disaster relief works. In Hokkaido, revenue rose 1.6% year-onyear, but in the Tohoku region revenue fell 1.5% compared to the same period one year earlier. In the
Kanto and Shinetsu region, revenue increased 2.1% over the first half of the prior fiscal year, as a resultof works related to a substantial number of large-scale, private sector projects in the Tokyo metropolitan
area and the effects of Kanamoto’s new branches in Tokyo. Revenue in the Kinki-Chubu region fell 2.8%
year-on-year. Although demand in Nagoya was steady, thanks to new airport construction and works for
an upcoming exhibition, the region as a whole was negatively affected by fewer public works in the Osaka
metropolitan area. Overall, the percentage of total construction equipment rental revenues accounted forby Hokkaido and Honshu was 36.2% and 63.8%, respectively.
With regard to sales revenue, the division’s sales of used construction equipment were also lower,
decreasing 4.2% year-on-year for the division as a whole. To a large extent this was the result of theCompany’s controls on sales of used construction equipment assets in overseas markets, which were
5.6% below the level in the first half of the prior fiscal year. Within Japan, buyers of used equipment were
not inclined to make purchases, despite the roll-out of Kanamoto’s 40th Anniversary Campaign, anddomestic sales decreased 2.5% year-on-year.
During the interim consolidated accounting period under review, the Company decreased the number ofbranches by three. This reflected four branches closed in Hokkaido, one new branch and one branchclosing in the Tohoku region, and one new branch in the Kinki-Chubu region. The new branch in the KinkiChubu region was the Takamatsu Branch, taken over by Kanamoto when the Company absorbed
Kanamoto Shikoku Co., Ltd. in April 2004.
Operating results at Kanamoto’s consolidated subsidiaries were mixed. Daiichi Machine Industries Co., Ltd.
continued to enjoy a favorable environment for new construction orders, increasing rental and sales
revenues 3.3% compared to the same period of the prior fiscal year. Operating income was basicallyunchanged, reflected higher new branch expenses. Although SRG Kanamoto Co., Ltd. was able to expand
revenue by 43.8% year-on-year, its operating loss deteriorated by 87.7% under the burden of
depreciation expenses resulting from new machine part purchases. Assist Co., Ltd. did not face downward
pressure on the value of its product line during the interim consolidated accounting period under review,
and was able to increase revenue 7.1% from the same period of the prior fiscal year while boosting
Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 8

operating income 59.7%. Kanatech Co., Ltd. saw its revenue drop 31.9% compared with the same periodof the prior fiscal year, and ended the first half with an operating loss as the volume of orders from within
and outside the Kanamoto group plunged sharply.
As a result of the above activities, consolidated revenues from construction-related business for theinterim consolidated accounting period under review declined by 3.3% to ¥28,265 million, and operating
income fell 17.9% to ¥1,511 million.
〔 Steel sales-related business 〕
The market for steel and related products enjoyed a resurgence, with steel material prices rising sharply
for the first time in 17 years since the collapse of Japan’s bubble economy. Demand for steel materials in
Hokkaido, however, remained weak throughout the winter months. Nevertheless, although Steel Sales
Division revenue fell 11.8% from the level of the same period of the prior fiscal year to ¥2,449 million,
the division decreased its operating loss by 98.5%, to ¥460,000.
〔 Information Products Business and Other Businesses 〕
Because demand shifted to low-priced versions of existing products, even for items such as engineering
workstations, Kanamoto’s Information Products Business Division saw its rental revenue shrink by 19.0%
compared to the same period of the prior consolidated fiscal year, despite a higher volume of equipment
rented. Equipment sales also fell substantially, declining 81.4% year-on-year as development and mass
production of new models was delayed. For the division as a whole, revenues were down 56.5%. As aresult, revenues for the Company’s Information Products Business and Other Businesses fell 56.5% fromthe first half of the prior consolidated fiscal year to ¥241 million, generating an operating loss of ¥8
million compared to positive operating income of ¥24 million one year earlier.
〔 Fiscal Year ending October 31, 2004
Revenues
Consolidated FYinterim period
Prior FY interim
periodInterim Consolidated Operating Results 〕(Million yen; % change from prior year)
Operating Income

Ordinary Income

Net Income

30,955−5 . 0 %1,578−1 7 . 1 %1,527−1 5 . 0

1,097

40.6%

32,570−0 . 1 %

1,905

12.4%

1,796

1.0%

780

−1 6 . 1 %Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 9

②Outlook for the full fiscal year ending October 31, 2004
The willingness of private sector firms to invest is expected to remain strong, and an economic recovery
driven mainly by large firms is projected to continue for the immediate future.
Nevertheless, the outlook for healthier domestic demand is less sanguine. Causes for concern include thefact that corporate profits, considered the primary engine driving the economic recovery, remain heavily
reliant on external demand from China and North America, and few companies have plans for substantial
new capital investment within Japan. Kanamoto expects Japan’s economic recovery to remain greatly
influenced by the external environment, including economic growth in the U.S. and China, injecting anelement of instability. The environment surrounding the construction industry therefore is anticipated toremain severe throughout the second half of the fiscal year as well.
Kanamoto has revised upward its outlook for the full fiscal year by incorporating its interim period
operating results, which exceeded the plan levels for set for earnings improvement in “Metamorphose,”
Kanamoto’s new long-range management plan. Compared with the prior consolidated fiscal year, however,conditions in terms of numerical figures will remain severe.
The Kanamoto Group is addressing these circumstances earnestly. Management will continue efforts tocreate the business structure and capabilities that will enable the Company to respond appropriately tothis challenging business environment, by steadily incorporating the measures designated in the
Company’s long-term plan “Metamorphose” and optimizing asset operations. By effectively utilizing a fullrange of state-of-the-art construction equipment and related products unavailable from other firms,
including its lineup of environmentally-friendly equipment and vehicles, Kanamoto will work to maintainearnings and fend off competition based on its alliance with superior firms that are dominant in selected
regions throughout Japan.
(Fiscal Year ending October 31, 2004
Revenues
Full year
projection

60,610

Projected Full-year Consolidated Operating Results)(Million yen; % change from prior year)
Operating Income−4 . 8 %2,140−7 . 3 %Ordinary Income
1,960−1 4 . 0 %Net Income
1,140

24.7%

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 10

2. Financial position
Interim consolidated accounting period
Cash flow from operating activities declined 21.9% year-on-year, to ¥4,955 million. This change
primarily reflected the increase in income before taxes and adjustments, a decrease in depreciation andamortization expense, a decrease in accrued employees retirement benefits accompanying the return ofthe entrusted portion of the corporate employees' welfare pension fund, and an increase in payments ofcorporate and other taxes. Cash flow from operating activities decreased ¥1,391 million from the same
period of the prior fiscal year.
Cash flow from investing activities was ¥119 million, ¥432 million higher than in the same period of
the prior fiscal year. This was mainly the result of an increase in funds provided from sale of investment
securities, and a decrease in funds used for the purchase of tangible fixed assets.
Cash flow from financing activities was ¥1,896 million, a 35.8% change year-on-year. Although funds
provided by long-term bank loans were less than in the same period of the prior fiscal year, the change
mainly reflected the absence of funds used for redemption of straight bonds and fewer funds used for
repayment of installment obligations.
As a result of the above, the balance of cash and equivalents at the end of the interim consolidated
accounting period under review was ¥15,141 million, ¥3,373 million less than at the end of the priorconsolidated fiscal year interim period.

Cash flow trend indicators for the Kanamoto GroupThe cash flow trend indicators for the Kanamoto group are provided below.
FY ended

FY ended

FY ended

October 31, 2001 October 31, 2002 October 31, 2003
Shareholders’ equity ratio (%)
Shareholders’ equity ratio on a market
capitalization basis (%)
Years to repay debt
Interest coverage ratio (times)

FY endingApril 30, 2004
Interim period

28.9

31.5

35.8

37.6

15.0

14.4

17.7

18.5

4.5

4.7

4.0

8.2

14.8

14.2

17.2

20.4

(Notes) Shareholders’ equity ratio: Shareholders’ equity ÷ Total assets
Shareholders’ equity ratio on a market capitalization basis: Shareholders’ equity on a market
capitalization basis ÷ Total assets
Years to repay debt: Interest-bearing liabilities ÷ Operating cash flow
Interest coverage ratio: Operating cash flow ÷ Interest payments*All indicators are calculated using financial values on a consolidated basis.
*Total market capitalization is calculated by multiplying the closing share price at the end of
the interim period by the number of shares outstanding (after deducting treasury stock) at
the end of the interim period.
*Cash flow from operating activities shown on the Consolidated Statements of Cash Flows isused as operating cash flow.
Interest-bearing liabilities include all liabilities on which the Company pays interest that are
accounted for on the Consolidated Balance Sheets.
The amounts shown as interest expense on the Consolidated Statements of Cash Flows areused as interest payments.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 11

〔 Fiscal Year ending October 31, 2004

Projected Cash Flows 〕

Cash flow from operating activities is projected to decrease compared to the prior consolidated fiscal
year because of lower revenues and earnings and a decrease in the amount of depreciation andamortization expense.
Cash flow from investing activities is projected to remain nearly unchanged from the level of the priorconsolidated fiscal year because the Company does not project any large changes in expenditures.
Cash flow used for financing activities is projected to decrease compared with the prior consolidated
fiscal year because the Company will not redeem straight bonds or convertible bonds.
As a result, the balance of cash and equivalents at the end of the consolidated fiscal year is projected toremain at nearly the same level as the balance at the end of the prior consolidated fiscal year.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 12

Interim Consolidated Financial Statements

Ⅳ
1.

Interim Consolidated Balance Sheets
Period(Amounts have been rounded down to the nearest thousand yen)

End of Prior Consolidated
Fiscal Year Interim Period(As of April 30, 2003)

Category

AmountPercent

End of Current

Prior Fiscal Year Summary

Consolidated Fiscal Year

Consolidated Balance

Interim Period

Sheet(As of April 30, 2004)(As of October 31, 2003)

AmountPercent

AmountPercent(Assets)
Current Assets
Cash and deposits

18,519,252

15,149,601

11,928,637

21,532,872

19,551,382

21,411,919

23,42519,03839,192

1,158,088

1,043,460

854,296

2,250,791

2,120,993

1,958,064

Deferred tax assets

249,378

283,583

261,196

Other current assets

366,533

298,436436,585-573,960-561,565-488,842

Notes and accounts
receivable, trade
Negotiable securities
Inventory
Construction
equipment

Allowance for
doubtful accounts
Total Current Assets

43,526,382

44.5

37,904,929

43.3

36,401,049

40.9

Fixed Assets
Tangible Fixed Assets*1

Rental equipment
Buildings andstructures*2

Machinery, equipment
and delivery equipment
Land

*2

Construction inprogress
Other tangible fixed
assetsTotal Tangible Fixed
Assets14,549,615

10,950,116

13,301,236

7,508,721

6,898,402

7,187,496

1,058,594

950,300

989,031

24,622,537

24,651,537

24,637,537

2,157

11,149

1,892

212,751

420,731437,874

47,954,378

49.0

43,882,237

50.1

46,555,069

52.3

107,630

0.1

113,4820.1

102,748

0.1

Intangible Fixed Assets
Total Intangible Fixed
AssetsInvestments and Other
AssetsInvestment securities

3,507,667

3,821,658

3,572,156

Deferred tax assets

1,753,682

917,206

1,383,397

Other assets

1,634,227

1,583,838

1,559,460-567,095-618,021-563,757

Allowance for doubtful
accounts
Total Investments and6,328,482

6.4

5,704,681

6.5

5,951,255

6.7

Total Fixed Assets

54,390,491

55.5

49,700,401

56.7

52,609,073

59.1

Total Assets

97,916,874

100.0

87,605,331

100.0

89,010,122

100.0

Other Assets

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 13

(Amounts have been rounded down to the nearest thousand yen)
PeriodEnd of Prior Consolidated
Fiscal Year Interim Period(As of April 30, 2003)

Category

AmountPercent

End of Current

Prior Fiscal Year Summary

Consolidated Fiscal Year

Consolidated Balance

Interim Period

Sheet(As of April 30, 2004)(As of October 31, 2003)

AmountPercent

AmountPercent(Liabilities)
Current Liabilities
Notes and accounts

10,819,119

10,539,732

11,048,285*2

853,157

934,845

713,358*2

9,961,839

10,445,875

9,672,816

4,098,000−−

789,641

682,306

648,231506,781464,132

442,868

Accounts payable, other

6,722,552

4,746,007

5,819,386

Other current liabilities

614,679

603,304

568,574

Total Current Liabilities

34,365,771

payable, trade
Short-term bank loans
Long-term bank loans
due within one year
Convertible bonds to beredeemed within one year
Corporate taxes payable
Accrued bonuses to
employees

35.1

28,416,203

32.4

28,913,520

32.5

Long-term Liabilities
Long-term bank loans
Retirement allowances
to directors and auditors
Accrued employees
retirement benefits
Long-term accrued
expenses
Consolidation
adjustment
Other long-term
liabilities
Total Long-term
Liabilities
Total Liabilities*2

23,203,396

21,202,424

20,734,299

195,005

94,979197,093

1,745,728

1,185,974

1,777,314

6,561,461

3,601,192

5,333,619

17,256

14,67914,63085,45044,15061,07631,808,298

32.5

26,143,401

29.9

28,118,033

31.6

66,174,069

67.6

54,559,604

62.3

57,031,554

64.1

152,057

0.1

81,5730.1

71,3030.1

8,596,737

8.8

8,596,737

9.8

8,596,737

9.7(Minority Interests)
Minority interests(Shareholders’ Equity)
Common stock
Additional paid-in capital

9,720,343

9.9

9,720,343

11.1

9,720,343

10.9

Earned surplus

13,536,009

13.8

14,182,462

16.2

13,400,060

15.0- 91,375-0.1

643,9020.7

367,4420.4

Valuation difference onother negotiable securities
Treasury stock
Total Shareholders’ Equity
Total Liabilities andShareholders’ Equity-170,967-0.1-179,292-0.2-177,318-0.2

31,590,747

32.3

32,964,152

37.6

31,907,265

35.8

97,916,874

100.0

87,605,331

100.0

89,010,122

100.0

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 14

2. Interim Consolidated Statements of Income
PeriodCategory(Amounts have been rounded down to the nearest thousand yen)
Prior Fiscal Year Summary
Prior Consolidated Fiscal
Current Consolidated
Consolidated Statement ofYear Interim Period
Fiscal Year Interim Period
Income(From November 1, 2002
(From November 1, 2003
(From November 1, 2002
to April 30, 2003)
to April 30, 2004)
to October 31, 2003)
AmountPercent
AmountPercent
AmountPercent

Revenues from operations
Rental revenues

21,043,659

20,831,504

40,724,552

Sales

11,526,719

10,124,280

22,961,732

Total revenues fromoperations
Cost of revenues fromoperations

32,570,378

100.0

30,955,785

100.0

63,686,284

100.0

Cost of rental revenues

15,513,402

15,241,041

30,928,308

Cost of goods sold

8,754,905

7,830,897

17,970,191

Total cost of revenues

24,268,308

74.5

23,071,938

74.5

48,898,499

76.8

Gross profit

8,302,070

25.5

7,883,846

25.5

14,787,785

23.2

6,396,919

19.7

6,305,263

20.4

12,480,119

19.6

1,905,150

5.8

1,578,582

5.1

2,307,665

3.6

Selling, general andadministrative expenses*1

Operating income
Non-operating revenues
Interest revenue

1,700

578

2,552

Dividend income

37,575

26,796

79,711−

34,466

134,900

Insurance benefits

2,857

16,89323,148Rents received

44,01044,30286,490890−−

Cash bonus received

16,265656

18,733

Consolidation adjustment
account write-off

2,625

2,922

−

Other

85,115102,282

182,479

Gain on sale ofinvestment securities

Gain on redemption of
corporate bonds bypurchase

Total non-operating
revenues

191,040

0.6

228,8990.7

528,0160.8

Non-operating expenses
Interest expense

211,578

172,513

398,080

Other

88,119107,076

158,298

Total non-operating expenses
Ordinary income

299,6970.9

279,5890.9

556,3780.8

1,796,493

5.5

1,527,892

4.9

2,279,303

3.6

Extraordinary profits
Adjustment of prior*2period profit or loss
Gain on sale or*3
retirement of fixed assets
Valuation gain on
investment partnership
Gain on return of
entrusted portion of
welfare pension fund
Other
Total extraordinary
Profits

2,160

−

−

324

442

365

−

53

23,408−606,420

−

1,667

5,260

13,162

4,151

0.0

612,176

2.0

36,936

0.1

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 15

(Amounts have been rounded down to the nearest thousand yen)
PeriodCategory

Prior Consolidated Fiscal
Year Interim Period(From November 1, 2002
to April 30, 2003)
AmountCurrent Consolidated
Fiscal Year Interim Period(From November 1, 2003
to April 30, 2004)

Percent

AmountPercent

Prior Fiscal Year Summary
Consolidated Statement of
Income(From November 1, 2002
to October 31, 2003)
AmountPercent

Extraordinary losses
Loss on sale orretirement of fixed
assetsValuation loss on
investment securities
Valuation loss on
investment partnership

*4

Other
Total extraordinary losses
Income before taxes andadjustments
Corporate, local andbusiness taxes
Adjustment for corporate
and other taxes
Minority interest inincome or loss
Net income

8,848

73,49988,863259,639

10,000259,639−

14,803−31,842−

92,420300,330

0.9

98,3020.3

440,9220.7

1,500,314

4.6

2,041,765

6.6

1,875,316

3.0

766,718

2.3

643,560

2.1

1,036,152

1.6-101,107-0.3

259,390

0.8- 55,071-0.0- 53,858-0.2- 41,267-0.1

19,6400.0

780,845

2.4

1,097,547

3.6

913,875

1.4

3. Interim Statements of Consolidated Retained Earnings
PeriodCategory(Amounts have been rounded down to the nearest thousand yen)
Prior Fiscal Year Summary
Current Consolidated Fiscal
Prior Consolidated Fiscal
Statement of Consolidated
Year Interim Period
Year Interim Period
Retained Earnings(From November 1, 2003 to(From November 1, 2002 to(From November 1, 2002 to
April 30, 2004)
April 30, 2003)
October 31, 2003)
AmountAmountAmount(Capital Surplus)
Balance of capitalsurplus at the beginningof the period
Balance of capitalsurplus at the end of theinterim period

9,720,343

9,720,343

9,720,343

9,720,343

9,720,343

9,720,343

13,044,002

13,400,060

13,044,002(Earned Surplus)
Balance of earned
surplus at the beginningof the period
Increase in earned
surplusInterim period net
incomeDecrease in earned
surplusDividends
Directors and auditors’
bonuses
Decrease in earned
surplus from merger of
non-consolidated
subsidiary
Balance of earned
surplus at the end of theinterim period

780,845

780,845

1,097,547

1,097,547

913,875

272,238

268,819541,217

16,60014,10016,600−288,838

13,536,009

32,226315,145

14,182,462−

913,875

557,817

13,400,060

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 16

4. Interim Consolidated Statements of Cash Flows
PeriodCategory(Amounts have been rounded down to the nearest thousand yen)
Prior Fiscal Year Summary
Current Consolidated
Prior Consolidated
Consolidated Statement of
Fiscal Year Interim
Fiscal Year Interim
Cash Flows
PeriodPeriod(From November 1, 2002
(From November 1, 2003
(From November 1,
to October 31, 2003)
to April 30, 2004)
2002 to April 30, 2003)
AmountAmountAmountCash flow from operating activities
Income before taxes andadjustments
Amortization of consolidation
adjustment accountDepreciation and amortization
expenseGain on sale or retirement of fixed
assetsLoss on sale or retirement of fixed
assetsInstallment purchases of assets
for small-value rentals
Reclassification of cost of sales
associated with disposal of
construction equipment
Reclassification of cost of sales
associated with disposal of rental
assetsExpenditures for acquisition ofrental assets
Valuation loss on investment
securities
Gain on sale of investment
securities
Loss on sale of investment
securities
Gain on redemption of corporate
bonds by purchase
Increase in allowance for doubtful
accounts
Increase (decrease) in accrued
bonuses to employees
Increase (decrease) in accrued
employees retirement benefits
Increase in retirement allowances
to directors and auditors
Interest revenue and dividend
incomeInterest expense on installment
purchases of rental assets

1,500,314

2,041,765

1,875,316-2,625-2,922

61,057

3,294,226

2,561,656

6,650,660

-324

-442

-365

8,848

73,49988,86365,714

8,663

113,174

4,278

17,09718,306

1,264,398

889,142

1,779,039-312,391-195,017-906,554

259,639

10,000259,639−- 34,466-134,900

11,229

−

−

-890

−

-890

66,239

121,894- 22,216- 34,398

21,264- 98,310

70,003-591,340

101,589-1,638-102,113449- 39,276- 27,375- 82,263

101,687

64,938

181,612211,578

172,513

398,080

1,587,544

1,915,433

1,708,497-348,622-188,614- 44,829-1,146,159-526,440-916,993

28,925- 81,952

206,893- 16,600- 14,100- 16,600

74,011-352,126

74,043

6,645,711

5,780,956

11,293,299

39,27627,37582,263

Interest expense-286,261-243,329-600,912

Payment of corporate and othertaxes- 52,495-609,674-415,364

6,346,231

4,955,327

10,359,286Interest expense(Increase) decrease in accounts
receivable, trade(Increase) decrease in inventory
assetsIncrease (decrease) in accounts
payable, trade
Increase (decrease) in accounts
payable, other
Directors and auditors’ bonuses
paid
Other, net
SubtotalInterest and dividends received

Cash flow from operating activities

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 17

(Amounts have been rounded down to the nearest thousand yen)
PeriodCategory

Prior Consolidated
Fiscal Year Interim
Period(From November 1,
2002 to April 30, 2003)
AmountCurrent Consolidated
Fiscal Year Interim
Period(From November 1, 2003
to April 30, 2004)
AmountPrior Fiscal Year Summary
Consolidated Statement of
Cash Flows(From November 1, 2002
to October 31, 2003)
AmountCash flow from investing activities
Disbursements for investments interm deposits
Revenue from redemption ofterm deposits
Funds used for the purchase of
tangible fixed assets
Funds provided from the sale oftangible fixed assets
Funds used for the purchase ofintangible fixed assets
Funds used for the purchase ofinvestment securities
Funds provided from the sale ofinvestment securities
Funds used for payment of
capital contribution
Funds used for purchase of
consolidated subsidiary stock
Other
Cash flow used for investing
activities−−-5,000

−

−

1,218

-274,129- 86,540-638,435

2,185

2,801

11,331- 15,235- 20,540- 23,145-664,867-588,401- 1,361,608

653,040

888,970

1,988,385- 14,210- 10- 14,220−- 27,875-108,551

455- 48,581

42,998-312,762

119,823-107,027- 52,297

221,486-192,095

12,290,000

6,400,000

15,000,000- 4,910,952- 5,158,816-10,379,073- 65,110−- 65,110−−- 4,098,000- 5,277,692−- 5,277,692- 4,499,513- 3,088,038- 8,076,438-163,894-1,973-165,258-272,238-268,819-541,217−−

30,000−-150−- 2,951,699- 1,896,311-13,764,886

3,081,770

3,178,839- 3,512,627

15,433,247

11,920,620

15,433,247−

42,124−

18,515,018

15,141,584

11,920,620

Cash flow from financing activities
Increase (decrease) in shortterm bank loans
Funds provided by long-termbank loans
Funds used to repay long-termbank loans
Funds used for redemption ofstraight bonds by purchase
Funds used for redemption of
convertible bonds
Funds used for redemption ofstraight bonds
Funds used for repayment of
installment obligations
Funds used for the purchase oftreasury stock
Payment of dividends to parent
company
Funds provided from the issue ofstock to minority shareholders
Other
Cash flow used for financing
activities
Increase (decrease) in cash andequivalents
Balance of cash and equivalents at
beginning of period
Increase in cash and equivalents
accompanying merger with nonconsolidated subsidiary
Balance of cash and equivalents at
end of the interim period

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 18

5. Notes to the Interim Consolidated Financial Statements and Significant Accounting Policies
PeriodCategory
1. Companies included in
the consolidation

Prior Consolidated Fiscal Year
Interim Period(From November 1, 2002
to April 30, 2003)

Current Consolidated Fiscal
Year Interim Period(From November 1, 2003
to April 30, 2004)

Prior Consolidated Fiscal Year
(From November 1, 2002
to October 31, 2003)(1) Number of consolidated
companies: 5
Consolidated company
name:(1) Number of consolidated
companies: 4
Consolidated company
name:Assist Co., Ltd.
SRG Kanamoto Co., Ltd.
Kanatech Co., Ltd.
Daiichi Machine Industries(1) Number of consolidated
companies: 4
Consolidated company
name:Assist Co., Ltd.
SRG Kanamoto Co., Ltd.
Kanatech Co., Ltd.
Daiichi Machine Industries

Taniguchi Co., Ltd.
Assist Co., Ltd.
SRG Kanamoto Co., Ltd.
Kanatech Co., Ltd.
Daiichi Machine Industries
Co., Ltd.
Providence Brewery Co.,
Ltd., a consolidated
subsidiary during the priorconsolidated accounting
fiscal year, was liquidated
in April 2003. Providence
Brewery’s financial results
have been eliminated fromthe Consolidated
Statements of Income andthe Consolidated
Statements of Cash Flows,
and the company has
been removed from thescope of consolidation.

Co., Ltd.

Co., Ltd.
Providence Brewery Co.,
Ltd., a consolidated
subsidiary during the priorconsolidated accounting
fiscal year, was liquidated
in April 2003. Providence
Brewery’s financial results
have been eliminated fromthe Consolidated
Statements of Income andthe Consolidated
Statements of Cash Flows,
and the company has
been removed from thescope of consolidation.
Taniguchi Co., Ltd.
merged with KanamotoCo., Ltd. on August 1,
2003.

Taniguchi’sfinancial results have been
eliminated from theConsolidated Statementsof Income and theConsolidated Statementsof Cash Flows, and thecompany has been
removed from the scopeof consolidation.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 19

(2) Main non-consolidated(2) Main non-consolidated(2) Main non-consolidated
subsidiaries
subsidiaries
subsidiaries
Non-consolidated
Non-consolidated
Non-consolidated
subsidiary company name:subsidiary company name:subsidiary company name:Polyshield Services Co.,
Polyshield Services Co.,
Polyshield Services Co.,
Ltd.
Ltd.
Ltd.
Com Supply Co., Ltd.
Kanamoto Shikoku Co.,
Kanamoto Shikoku Co.,
Ltd.
Ltd.
(Reason for exclusion(Reason for exclusion(Reason for exclusionfrom consolidation)from consolidation)from consolidation)
The size of the nonThe size of the nonThe size of the non-

2. Matters pertaining toapplication of equity
method accounting

consolidated subsidiaries

consolidated subsidiaries

consolidated subsidiaries

is small and their net

is small and their net

is small and their net

assets, sales and fiscal

assets, sales and fiscal

assets, sales and fiscal

year profit or loss (amountyear profit or loss (amountyear profit or loss (amountcorresponding to equity)

corresponding to equity)

corresponding to equity)and retained earnings

and retained earnings

and retained earnings(amount corresponding to(amount corresponding to(amount corresponding toequity) are small in size

equity) are small in size

equity) are small in sizeand do not have aand do not have aand do not have amaterial effect on thematerial effect on thematerial effect on the

consolidated financial

consolidated financial

consolidated financial

statements.

statements.

statements.

Two unconsolidated

Two unconsolidated

Two unconsolidated

subsidiaries (Polyshieldsubsidiaries (Polyshieldsubsidiaries (Polyshield

Services Co., Ltd. andServices Co., Ltd. andServices Co., Ltd. andKanamoto Shikoku Co.,Com Supply Co., Ltd.) and

Kanamoto Shikoku Co.,

Ltd.) and two affiliated

two affiliated companiesLtd.) and two affiliatedcompanies (Active(Active Technology

companies (Active

Technology Corporation

Corporation and Active

Technology Corporation

and Active PowerPower Corporation) haveand Active Power

Corporation) have been

been omitted from items

Corporation) have been

omitted from items toto which equity method

omitted from items towhich equity method

accounting is applied

which equity method

accounting is applied

because their respective

accounting is applied

because their respective

effect on interim

because their respective

effect on interim

consolidated net income

effect on consolidated net

consolidated net income

or loss (amountincome or loss andor loss (amountcorresponding to equity)

consolidated capitalcorresponding to equity)and interim consolidated

surplus is immaterial andand interim consolidated

capital surplus (amountnone of the companies iscapital surplus (amountcorresponding to equity) is

important to thecorresponding to equity) is

immaterial and none ofcompany’s overall

immaterial and none of

the companies isoperations.

the companies isimportant to theimportant to thecompany’s overall

company’s overall

operations.

operations.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 20

3. Matters pertaining to
the interim periodend (fiscal year-end)
for consolidated
subsidiaries

4. Accounting principles
and standards used
for normal accounting
treatment(1) Appraisal standards
and appraisal
methods forprincipal assets

The fiscal year-end for

The interim period-end

The interim period-end

closing date for all of theclosing date for all of theall of the consolidated

consolidated subsidiaries

consolidated subsidiaries

subsidiaries is August 31.

is February 28.

is February 28.

When preparing the

When preparing the

When preparing theconsolidated financial

interim consolidated

interim consolidated

financial statements, thefinancial statements, theCompany uses theCompany uses thesubsidiaries’ financial

subsidiaries’ financial

statements as of February

statements as of February

28, and makes

28, and makes

adjustments for significant

adjustments for significant

transactions that occurredtransactions that occurred

between March 1, 2002

between March 1, 2002

end and the consolidationand the interim

and the interim

date that have a material

consolidated accounting

consolidated accounting

effect on the consolidated

date on April 30, 2002

date on April 30, 2002

financial results.

that were deemed to havethat were deemed to havea material effect on thea material effect on theinterim consolidated

interim consolidated

financial results.

financial results.

a. Negotiable securities
Other negotiable securities
Securities with a market
price
The Company has

a. Negotiable securities
Other negotiable securities
Securities with a market
priceSame as at leftstatements the Company
used the subsidiaries’
financial statements as ofAugust 31, adjusted forsignificant transactions
that occurred between thesubsidiaries’ fiscal year-

a. Negotiable securities
Other negotiable securities
Securities with a market
price
The Company has

adopted the market

adopted the market

value method (the fullvalue method (the fullamount of the valuation

amount of the valuationdifference is charged todifference is charged toequity using the direct

equity using the directtransfer to capitaltransfer to capitalmethod, with themethod, with thedisposal cost determined

disposal cost determinedby the moving averageby the moving averagemethod) based on themethod) based on themarket price or similarmarket price on theprices on the interim

consolidated accounting

consolidated accounting

fiscal year closing date

date or similar prices
Securities without market
pricesCost method, cost being
determined by themoving average method
b. Construction equipment
Amount after deduction

Securities without market
pricesSame as at leftor similar prices
Securities without market
pricesSame as at leftb. Construction equipment
Same as at leftb. Construction equipment
Same as at leftof depreciation expense
calculated according to
the declining-balancemethod from the original
prices, by separate fiscal
year of purchase

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 21

(2) Depreciation
methods forprincipal depreciable
assetsc. Merchandise inventories
and supplies(i) Merchandise
inventories
Lower
of
cost
or
market based on thelast-in,first-out
method(ii) Supplies
The latest purchasecost method

c. Merchandise inventories
and supplies(i) Merchandise
inventories
Same as at left

c. Merchandise inventories
and supplies(i) Merchandise
inventories
Same as at left(ii) Supplies
Same as at left(ii) Supplies
Same as at left

a. Tangible fixed assets
The Company has

a. Tangible fixed assets

a. Tangible fixed assets

Same as at left

Same as at left

adopted the decliningbalance method. Buildings
on land that is leased
under a fixed-term landlease agreement,
however, are depreciatedusing the straight-line
method using theremaining period of the
fixed-term lease as thedepreciable life and zero
residual value.
For certain consolidated
subsidiaries, the Company
has adopted the straightline method for buildings
and structures acquired on
or after April 1, 2000 but
excluding fixtures andequipment. The
depreciable lives mainly
used by the Company are
as follows.
Rental assets:
5-10 years
Buildings:
31-34 years
b. Intangible fixed assets
Software for use withinb. Intangible fixed assets
Same as at left

b. Intangible fixed assets
Same as at left

a. Allowance for doubtful
accounts
Same as at left

a. Allowance for doubtful
accounts
Same as at left

the Company isdepreciated using thestraight-line method
based on the assumed
useful life for internal use(3) Accounting
standards forprincipal allowancesand reserves(5 years).
a. Allowance for doubtful
accounts
To provide for losses on
doubtful accounts such asaccounts receivable, theCompany charges toincome an amount basedon actual loss experience
for normal accounts, plus
an amount for projected
unrecoverable amounts
based on assessments ofindividual accounts.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 22

b. Accrued bonuses to
employees
To fully provide forb. Accrued bonuses to
employees
Same as at leftb. Accrued bonuses to
employees
Same as at leftc. Accrued employees
retirement benefit
Same as at leftc. Accrued employees
retirement benefit
The Company provides

bonuses the Company will
pay to employees, theCompany appropriates anamount to the reserve forthe accounting period
liability based upon theestimated amounts ofbonuses and salaries.
c. Accrued employees
retirement benefit
The Company provides
for employees’ accrued

for employees’ accrued

retirement benefits based

retirement benefits based

upon the projected

upon the projectedamounts of the liability for

amounts of the liability for

accrued employees

accrued employees

retirement benefits andretirement benefits and thethe value of pension

value of pension assets at

assets at the end of thethe end of the consolidated

consolidated fiscal year. At

fiscal year. At the end of

the end of each interim

each consolidated

consolidated accounting

accounting fiscal year, theperiod, the Company

Company appropriates anappropriates an amount toamount to the reserve tothe reserve to provide forprovide for the liability

the liability recognizedrecognized during theduring the period.

period. Past years’ service

The difference based on

liabilities are fully

an actuarial calculation isamortized in the year

charged to income

incurred.

beginning in the

The difference based on

consolidated accounting

an actuarial calculation is

fiscal year following thecharged to income

year in which incurred,

beginning in thewith the amounts

consolidated accounting

allocated proportionately

fiscal year following theusing the straight-line

year in which incurred,

method, based on awith the amounts allocatedspecified number of years

proportionately using the(10 years) that is lessstraight-line method,

than the averagebased on a specified

remaining period of

number of years (10employment for

years) that is less than theemployees at the time theaverage remaining period

difference arises.

of employment for
employees at the time thedifference arises.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 23

(Supplemental information)

On January 1, 2004 theCompany received
approval from the Ministerof Health, Labour andWelfare for exemption
from the obligation to
make future payments forthe entrusted portion of
the Employee Welfare
Pension Fund,
accompanying
enforcement of theDefined Benefit Corporate
Pension Law.
The Company has
adopted the interim
measures prescribed in
Paragraph 47-2 of theBusiness Guidelines
Concerning Retirement
Benefit Accounting(Interim Report)
concerning return of theentrusted portion of thecorporate Employee
Welfare Pension Fund (TheJapanese Institute ofCertified Public
Accountants, Accounting
System Committee Report
No. 13), and on the day
authorization was received
the Company accounted
for the retirement benefit
liability related to theentrusted portion and thepension assets equivalent
to the return amount as
being extinguished.
The Company accounted
for the affects
accompanying thistreatment by booking
extraordinary profits of¥606 million as of the endof the interim consolidated
accounting period.
The returned equivalentamount (minimum
actuarial liability)
measured as of the end of
the interim consolidated
accounting period underreview was ¥1,316 million.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 24

d. Retirement allowances todirectors and auditors
The Company provides

d. Retirement allowances todirectors and auditors
Same as at left

for retirement allowances

for retirement allowances

to directors and auditors

to directors and auditors

based upon pertinent rules

based upon pertinent rules

and appropriated to theand appropriated to theaccount proportionately at

account proportionately atthe end of the interim

the end of theconsolidated accounting

consolidated fiscal year

period based upon length

based upon length ofof service.
(4) Lease transactions

d. Retirement allowances todirectors and auditors
The Company provides

service.

For finance lease

Same as at left

Same as at left

a. Hedge transactions

a. Hedge transactions

Same as at left

Same as at left

b. Hedge methods andhedged transactions

b. Hedge methods andhedged transactions

Same as at left

Same as at lefttransactions except forleases that transfer
ownership of the property
to the lessee, rent
expenses are charged toincome as payments aremade.
(5) Hedge accounting
for principal hedging
methodsa. Hedge transactions
The Company accounts
for hedge transactions
using allocations based on
accounting standards forforeign currencydenominated transactions,and special rule accounting
based on accounting
standards for financial
products.
b. Hedge methods andhedged transactions
The Company uses
currency swaps andforward transactions inorder to avoid the currency
fluctuation risk related to
the Company’s foreign
currency-denominatedstraight bonds andliabilities for import
payments. The Company
also uses interest swaps to
avoid interest rate
fluctuation risk related tointerest on bankborrowing.
c. Hedging policies
The Company’s use ofc. Hedging policies
Same as at left

c. Hedging policies
Same as at leftderivative transactions islimited to hedging risk
within the scope of theCompany’s assets andliabilities subject to market
fluctuation risk.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 25

d. Method for evaluating theeffectiveness of hedges
The Company does not

d. Method for evaluating theeffectiveness of hedges

d. Method for evaluating theeffectiveness of hedges

Same as at left

Same as at left

evaluate the effectivenessof its hedge transactions
because it can assume thatits currency swap
transactions and forward
transactions willcompletely offset market
fluctuations or changes incash flow from the timehedge begins until it isterminated. In addition,
the Company’s interest
swap transactions fulfill
the requirements for
special rule accounting,and the Company has
elected to use this in placeof an evaluation ofeffectiveness.
(6)Other material
matters pertaining topreparation of theinterim consolidated
financial statements(consolidated
financial statements)

Accounting treatment ofconsumption tax
Consumption tax is

Accounting treatment ofconsumption tax
Same as at left

Accounting treatment ofconsumption tax
Same as at lefttaken out of all Statementof Income items andBalance Sheet items,
except mainly forreceivables and payables.

5.

Items included in
cash and equivalentson the Interim
Consolidated
Statements of Cash
Flows (Consolidated
Statements of Cash
Flows)

Funds included in cash

Same as at left

Funds included in cash

(cash and equivalents) on(cash and equivalents) on

the Interim Consolidated

the Consolidated

Statements of Cash Flows

Statement of Cash Flows

include cash on hand,include cash on hand,deposits that can bedeposits that can bewithdrawn on demand andwithdrawn on demand andhighly liquid short-term

highly liquid short-term

investments that matureinvestments that mature

within three months of thewithin three months of thedate of acquisition anddate of acquisition andwhich can be easily

which can be easily

converted into cash andconverted into cash andthat have minimal risk of athat have minimal risk ofchange in price.

a change in price.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 26

6. Notes to the Interim Financial Statements(Notes to the Interim Consolidated Balance Sheets)
PeriodCategory

Prior Consolidated Fiscal
Year Interim Period(As of April 30, 2003)

Current Consolidated
Prior Consolidated Fiscal
Year
Fiscal Year Interim Period(As of October 31, 2003)(As of April 30, 2004)*1. Total accumulated
42,059,083,000

depreciation for tangible

39,597,140,000

42,361,092,000

fixed assets*2. Assets offered as collateral
security

Buildings andstructures
Land

36,327,000──────

197,434,000
Total

Liabilities secured by the

Short-term

above assetsbank loans

182,000,000

loans dueLand──────

232,534,000

Short-term

170,000,000

bank loans
Long-term bankloans due within

within one year
Long-term bank

35,100,000
197,434,000

Total

129,600,000

Total

structures

233,761,000

Long-term bankloans

Buildings and65,316,000

one yearLong-term bank240,880,000

loans

552,480,000

Total

70,000,000
305,316,000

3. Guarantees
Joint and several
guarantees of employee

23,030,000

26,097,000

20,902,000

300,000,000

269,500,000

269,500,000

129,210,000

64,045,000−

247,360,000−

56,508,000

bank loans
Guarantee of debt for
long-term bank loan toaffiliated company(Active Power Co., Ltd.)
4. Discount on notes
receivable, trade
5. Balance of notes receivabletrade endorsed

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 27

(Notes to the Interim Consolidated Statements of Income)Prior Consolidated Fiscal Year
Interim Period(From November 1, 2002
to April 30, 2003)*1. Major expense categories andamounts included in selling,
general and administrative
expenses
Employee salaries
and wages
Depreciation expense
Rents
Transfer toallowance for
doubtful accounts
Transfer to accrued
bonuses to
employees

2,410,644,000
464,731,000
722,275,000
262,913,000

503,752,000

Current Consolidated Fiscal Year
Interim Period(From November 1, 2003
to April 30, 2004)*1. Major expense categories andamounts included in selling,
general and administrative
expenses
Employee salaries andwages
Depreciation expense
Rents
Transfer to allowancefor doubtful accounts
Transfer to accrued
bonuses to
employees*2. Details of gain from adjustment
to prior period profit or loss
Recovery of bad
debts formerly
written off

324,000*4. Loss on sale or retirement of
fixed assets.
(Loss on sale of fixed
assets)
Telephone subscription
rights(Loss on retirement of
fixed assets)
Rental equipment
Buildings andstructures
Other
Total

404,853,000
699,432,000
217,265,000
450,967,000──────

*1. Major expense categories andamounts included in selling,
general and administrative
expenses
Employee salaries andwages
Depreciation expense
Rents
Transfer to allowancefor doubtful accounts
Transfer to accrued
bonuses to employees
Employees retirement
benefit expense
Transfer to retirement
allowances todirectors and auditors
Amortization of
consolidation
adjustment account4,801,138,000
925,979,000
1,435,256,000
332,086,000
440,369,000
544,652,000

1,962,000

61,057,000──────

2,160,000*3. Gain on sale or retirement of
fixed assets
Land

2,374,471,000

Prior Consolidated Fiscal Year
(From November 1, 2002
to October 31, 2003)

60,0005,816,000
274,000
2,696,000
8,848,000*3. Gain on sale or retirement of
fixed assets
Land

442,000*4. Loss on sale or retirement of
fixed assets.
(Loss on retirement of
fixed assets)
Rental equipment
Buildings andstructures
Machinery,equipment anddelivery equipment
Other
Total

14,250,000
55,024,000
3,489,000

735,000
73,499,000*3. Gain on sale or retirement of
fixed assets
Machinery, equipment
and delivery
equipment
Land
Total

41,000324,000
365,000*4. Loss on sale or retirement of
fixed assets.
(Loss on sale of fixed
assets)Buildings andstructures
Telephonesubscription rights(Loss on retirement of
fixed assets)
Rental equipment
Buildings andstructures
Machinery,equipment anddelivery equipment
Other
Total

172,000
2,195,000

18,215,000
44,936,000
2,913,000
20,429,000
88,863,000

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 28

(Notes to the Interim Consolidated Statements of Cash Flows)
Prior Consolidated Fiscal Year
Interim Period(From November 1, 2002
to April 30, 2003)

Current Consolidated Fiscal Year
Interim Period(From November 1, 2003
to April 30, 2004)

Prior Consolidated Fiscal Year
(From November 1, 2002
to October 31, 2003)

Relationships between interim

Relationships between interim

period ending balance for cash andperiod ending balance for cash andending balance for cash andequivalents and amounts for items

equivalents and amounts for items

equivalents and amounts for items

shown on the interim consolidated

shown on the interim consolidated

shown on the fiscal year

balance sheet

balance sheet

consolidated balance sheet(As of April 30, 2003)
Cash and

18,519,252,000

equivalentsa maturity longer

Term deposits with

−4,234,000

than 3 months
Items considered to(As of April 30, 2004)
Cash andequivalents

Term deposits witha maturity longer
than 3 months

18,515,018,000

Relationships between fiscal year

Items considered to(As of October 31, 2003)

15,149,601,000 Cash andequivalents

11,928,637,000

Term deposits with
−8,017,000 a maturity longer−8,017,000

than 3 months

15,141,584,000 Items considered tobe cash andbe cash andbe cash andequivalents

equivalents

equivalents−11,920,620,000

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 29

V Business Segment Information(Segment Information by Type of Business)
Prior interim consolidated accounting period (From November 1, 2002 to April 30, 2003)(Unit: Yen thousands)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses(1) Sales to outside customers

29,238,852

2,777,018

554,507

32,570,378(2) Sales or transfers between
related segments

−

−

−

−

Eliminations
or entire Consolidated
company

Total

Revenues− 32,570,378
−

−

Total

29,238,852

2,777,018

554,507

32,570,378− 32,570,378

Operating expenses

27,397,620

2,808,938

531,460

30,738,018−72,790 30,665,228

Operating income

1,841,232−31,919

23,047

1,832,360

72,7901,905,150(Notes) 1. Method of business classification
Businesses are classified based on consideration of similarities such as the type of labor and products, thenature of the business and the business markets.
2. Principal products, by businessBusiness

Principal products

Construction equipment
rentals

Construction equipment such as hydraulic shovels, generators, temporary
construction materials, construction safety equipment, temporary
modular housing units, special rustproof and waterproof shields

Steel sales

Steel bar, sheet steel, steel products such as round bar, steel scrap

Information products
and other businesses

Computers and peripheral devices, telecommunications-related
equipment, microturbine generators

Interim consolidated accounting period under review (From November 1, 2003 to April 30, 2004)(Unit: Yen thousands)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses(1) Sales to outside customers

28,265,167

2,449,561

241,056

30,955,785−

30,955,785(2) Sales or transfers between
related segments

−

−

−

−

−

−

Total

28,265,167

2,449,561

241,056

30,955,785−

30,955,785

Operating expenses

26,754,031

2,450,027

249,939

29,453,998−76,796

29,377,202

Operating income

1,511,135−465−8,883

1,501,786

76,796

1,578,582

Eliminations
or entire Consolidated
company

Total

Revenues(Notes) 1. Method of business classification
Businesses are classified based on consideration of similarities such as the type of labor and products, thenature of the business and the business markets.
2. Principal products, by businessBusiness

Principal products

Construction equipment
rentals

Construction equipment such as hydraulic shovels, generators, temporary
construction materials, construction safety equipment, temporary
modular housing units, special rustproof and waterproof shields

Steel sales

Steel bar, sheet steel, steel products such as round bar, steel scrap

Information products
and other businesses

Computers and peripheral devices, telecommunications-related
equipment, microturbine generators

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 30

Prior consolidated fiscal year (From November 1, 2002 to October 31, 2003)(Unit: Yen thousands)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses(1) Sales to outside customers

56,395,818

6,373,971

916,494

63,686,284−

63,686,284(2) Sales or transfers between
related segments

−

−

−

−

−

−

Total

56,395,818

6,373,971

916,494

63,686,284−

63,686,284

Operating expenses

54,190,370

6,379,114

891,738

61,461,223−82,603

61,378,619

Operating income

2,205,447−5,14224,7552,225,061

82,6032,307,665

Eliminations
or entire Consolidated
company

Total

Revenues(Notes) 1. Method of business classification
Businesses are classified based on consideration of similarities such as the type of labor and products, thenature of the business and the business markets.
2. Principal products, by businessBusiness

Principal products

Construction equipment
rentals

Construction equipment such as hydraulic shovels, generators, temporary
construction materials, construction safety equipment, temporary modular
housing units, special rustproof and waterproof shields

Steel sales

Steel bar, sheet steel, steel products such as round bar, steel scrap

Information products
and other businesses

Computers and peripheral devices, telecommunications-related
equipment, microturbine generators(Segment information by location)
The Company does not report segment information by location because the Company did not have any
consolidated subsidiaries or important offices located in countries or regions outside of Japan during the priorinterim consolidated accounting period, the interim consolidated accounting period under review and the priorconsolidated fiscal year.

(Foreign sales)
The Company did not have any foreign sales during the prior interim consolidated accounting period, the interim
consolidated accounting period under review and the prior consolidated fiscal year.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 31

VI Notes for leasing transactions
Prior Consolidated Fiscal Year
Interim Period(From November 1, 2002
to April 30, 2003)
1. Finance lease transactions except
for leases that transfer ownershipof the property to the lessee.
(1) Amounts corresponding tolease property acquisition
price, accumulated
depreciation and outstandingbalances at the end of the
fiscal year accounting period.

Current Consolidated Fiscal Year
Interim Period(From November 1, 2003
to April 30, 2004)
1. Finance lease transactions except
for leases that transfer ownershipof the property to the lessee.
(1) Amounts corresponding tolease property acquisition price,
accumulated depreciation andoutstanding balances at the endof the fiscal year accounting
period.

1. Finance lease transactions except
for leases that transfer ownershipof the property to the lessee.
(1) Amounts corresponding tolease property acquisition
price, accumulated
depreciation and outstandingbalances at the end of the
fiscal year accounting period.

Please refer to Annex A

Please refer to Annex B

Please refer to Annex C(2) Outstanding balance of futurelease payments at the end of
the interim period(2) Outstanding balance of futurelease payments at the end of
the interim period(2) Outstanding balance of futurelease payments at the end of
the fiscal year

Within one year 5,850,363,000
After one year
17,100,732,000
Total
22,951,096,000

Within one year 4,927,999,000
After one year
16,287,547,000
Total
21,215,546,000

Within one year 5,147,197,000
After one year
15,531,164,000
Total
20,678,362,000(3) Amount of lease payments,
depreciation expense andinterest expense
Lease payments
Depreciation
expenseInterest expense

2,900,961,000
2,500,307,000
344,756,000(4) Accounting method for amountequivalent to depreciation
expense
Straight-line depreciation
using the lease term as thedepreciable life and zero
residual value.
(5) Accounting method for amountequivalent to interest expense
Interest method using thedifference between total lease
payments and the acquisition
price of the lease property,
allocated to each year.
2. Operating leases
Future lease payments
Within one year
After one year
Total

1,897,034,000
3,290,904,000
5,187,939,000(3) Amount of lease payments,
depreciation expense andinterest expense
Lease payments
Depreciation
expenseInterest expense

3,037,511,000
2,881,672,000
435,287,000

Prior Consolidated Fiscal Year
(From November 1, 2002
to October 31, 2003)(3) Amount of lease payments,
depreciation expense andinterest expense
Lease payments
Depreciation
expenseInterest expense

5,625,507,000
5,034,577,000
687,650,000(4) Accounting method for amountequivalent to depreciation
expenseSame as at left

(4) Accounting method for amountequivalent to depreciation
expenseSame as at left

(5) Accounting method for amountequivalent to interest expense
Same as at left

(5) Accounting method for amountequivalent to interest expense
Same as at left

2. Operating leases
Future lease payments

2. Operating leases
Future lease payments

Within one year
After one year
Total

Within one year
After one year
Total

1,614,250,000
2,266,430,000
3,880,680,000

1,793,079,000
3,238,604,000
5,031,683,000

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 32

Annex A
Acquisition
price（¥’000）

Accumulated
depreciation（¥’000）

Outstandingbalance（¥’000）Rental assets

28,813,194

9,031,772

19,781,422

Other assets

646,303298,238

348,064

29,459,497

9,330,011

20,129,486

Total

Annex B
Acquisition
price（¥’000）

Accumulated
depreciation（¥’000）

Outstandingbalance（¥’000）Rental assets

32,550,957

9,080,934

23,470,022

Other assets

419,727

184,038

235,688

32,970,684

9,264,973

23,705,711

Total

Annex C
Acquisition
price（¥’000）

Accumulated
depreciation（¥’000）

Outstandingbalance（¥’000）Rental assets

28,088,694

7,343,977

20,744,717

Other assets

555,869

255,092

300,777

28,644,564

7,599,069

21,045,494

Total

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 33

VII

Notes related to negotiable securities）
Prior interim consolidated accounting period (As of April 30, 2003)
Negotiable securities
1. Other negotiable securities with market prices(Unit: Yen thousands)
Prior interim consolidated accounting period (As of April 30, 2003)
Acquisition price(¥’000)(1) Stock

Amount reported on theinterim consolidatedbalance sheet (¥’000)

Valuation profit or loss(¥’000)1,853,447

1,838,480−14,967−−−

61,94559,205−2,740−−−(3) Other negotiable securities

1,191,513

1,055,907−135,606

Subtotal

3,106,907

2,953,592−153,314(2) Bonds
a. Government bonds
b. Corporate bondsc. Other

2. Details of other negotiable securities that do not have a market value(Unit: Yen thousands)
Prior interim consolidated accounting period(As of April 30, 2003)
Amount shown on the interim consolidated balance sheet
Other negotiable securities
Unlisted stocks (excluding over-the-counter stocks)

378,500

Interim consolidated accounting period under review (As of April 30, 2004)
Negotiable securities
1. Other negotiable securities with market prices(Unit: Yen thousands)
Interim consolidated accounting period under review (As of April 30, 2004)
Acquisition price(¥’000)(1) Stock

Amount reported on theinterim consolidatedbalance sheet (¥’000)

Valuation profit or loss(¥’000)1,254,727

2,401,043

1,146,315

a. Government bonds

−

−

−

b. Corporate bonds

−

−

−

c. Other−−−(3) Other negotiable securities

1,075,448

1,009,505−65,943

Subtotal

2,330,175

3,410,548

1,080,372(2) Bonds

2. Details of other negotiable securities that do not have a market value(Unit: Yen thousands)
Interim consolidated accounting period under review(As of April 30, 2004)
Amount shown on the interim consolidated balance sheet
Other negotiable securities
Unlisted stocks (excluding over-the-counter stocks)

369,500

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 34

Prior consolidated accounting fiscal year (As of October 31, 2003)
Negotiable securities
1. Other negotiable securities with market prices(Unit: Yen thousands)
Prior consolidated accounting fiscal year (As of October 31, 2003)
Acquisition price(¥’000)(1) Stock

Amount reported on the
consolidated balance sheet(¥’000)

Valuation profit or loss(¥’000)1,276,232

1,969,058

692,826−−−

56,94555,093−1,852−−−(3) Other negotiable securities

1,114,308

1,039,849−74,459

Subtotal

2,447,485

3,064,000

616,514(2) Bonds
a. Government bonds
b. Corporate bondsc. Other

2. Details of other negotiable securities that do not have a market value(Unit: Yen thousands)
Prior consolidated accounting fiscal year
(As of October 31, 2003)
Amount shown on the consolidated balance sheet
Other negotiable securities
Unlisted stocks (excluding over-the-counter stocks)

VIII

383,700

Notes related to Derivative Transactions
Prior consolidated fiscal year interim period (As of April 30, 2003)
Because it applies hedge accounting, the Company had no material items to report.

Consolidated fiscal year interim period under review (As of April 30, 2004)
Because it applies hedge accounting, the Company had no material items to report.

Prior consolidated fiscal year (As of October 31, 2003)
Because it applies hedge accounting, the Company had no material items to report.

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 35

(Per share information)
PeriodCategory

Prior Consolidated Fiscal
Year Interim Period(From November 1, 2002
to April 30, 2003)

Net assets per share

Current Consolidated
Fiscal Year Interim Period(From November 1, 2003
to April 30, 2004)

Prior Consolidated Fiscal
Year(From November 1, 2002
to October 31, 2003)

1,057.29

1,103.77

1,068.25

25.88

36.75

29.96

23.32

−

27.11

Net income per share ofcommon stock
Net income per share ofcommon stock after
adjustment for potential
ordinary shares(Note) The basis for calculating consolidated fiscal year earnings per share is as follows.
PeriodCategory

Prior Consolidated Fiscal
Year Interim Period(From November 1, 2002
to April 30, 2003)

Net income（¥,000）

Current Consolidated
Fiscal Year Interim Period(From November 1, 2003
to April 30, 2004)

Prior Consolidated Fiscal
Year(From November 1, 2002
to October 31, 2003)

780,845

1,097,547

913,875−−

14,100780,845

1,097,547

899,775

30,175,156

29,868,128

30,030,383

Amount not attributed tocommon stock shareholders(¥ ‘000)
Net income related tocommon stock (¥ ‘000)
Average number ofoutstanding shares during
the fiscal year
Summary of latent stock notincluded in the calculation ofinterim period (fiscal year)
earnings per share on a fully
diluted basis because it does
not have a dilution effectNew stock warrants (stock
options)

based

on

Same as at left

Same as at lefttheprovisions of Article 28019 of the old Commercial
Code

Fiscal Year Ending October 2004 Interim Accounting Bulletin (Consolidated)

P. 36