REPORT 2007

To Shareholders and Investors
Interim Business Report for the 75th TermApril 1, 2007 to September 30, 2007

100th Anniversary

Securities Code：6455

TOPICS

Morita Topics
The advent of the Miracle CAFS Car
enables new fire-fighting tactics
On July 19 this year, Morita held a press conference concerning thenew Miracle CAFS Car at the Osaka Head Office. The emergence of a
new technology which represents a revolution in fire-fighting methods
is an appropriate way of marking the 100th anniversary of the company'sestablishment.
The CAFS (Compressed AirFoam System) technology issaid to have been developedin America in the 1930s.
Water and fire-extinguishing
agent are mixed together,and pumping this mixture
with compressed air causes it to foam. This equipment maximises thesurface area of the water which enables fire-fighting with only small
amounts of water. The current Miracle CAFS Car carries 600 liters ofwater and 2 liters of fire-extinguishing agent which provides a firefighting capacity equivalent to some 10 tons of water.
When a fire breaks out in a block of flats or other multistorey building,the water damage to the flat where the fire started, as well as to the flats
below, is a serious problem in fire fighting. Normally, firefighters mustspray several thousand gallons of water to put out a fire. But with CAFS
equipment on board, fire engines need to use only a small amount ofwater which keeps water damage to the minimum.

Water tank

LLCapacity
fire engines :Discharge volume
Fireextinguishing
agentL01

REPORT 2007

TOPICS

The fire-extinguishing agent used by the Miracle
CAFS Car is environmentally-friendly soap-based
foam. It goes by the name Miracle Foam. It wasdeveloped

jointlyby

fivecompaniesledbyShabondama Soap Co. The foam disperses quickly
allowing the site to be inspected promptly.

The SUPER Kitchen Leo designedby Kansai Yamamoto now on sale
From August, Morita UG Ltd. began sales of the SUPER Kitchen Leo, astylish automatic fire extinguishing unit for household ovens with hoodfans. We invited Kansai Yamamoto, the world-renowned fashion
designer, to design the case of this new product.

The top cause of fires in buildings such as homes is stovetop fires fromcooking oil and the majority are due to forgetting to turn off the heat.
Installing an automatic fire extinguishing unit that detects outbreaks offire reliably and prevents it spreading is an important safety measure.
Features of the SUPER Kitchen Leo① Sprays fire extinguishing fluid to put out fire automatically② Stylish design③ Simple installation, maintenance and inspection④ Can be linked to an external alarm system⑤ Comes with the Residential Fire Protection
Equipment MarkREPORT 2007

02

TOPICSThe Sanda New Factory - coming on line next spring
The buildings of the Sanda New Factory, in Sanda, Hyogo Prefecture
are complete. This factory will be a major manufacturing centre for fireengines. By integrating the fire engine production facilities that are
currently dispersed throughout Osaka Prefecture, and incorporating
the manufacturing, repair and maintenance operations which until now
were conducted at separate locations, we will achieve greater
production efficiency and improved quality.
In addition, the Sanda New Factory will feature a systemised testing
ground that can automatically test the discharge capacity of fireengines. It will also have a test course with uneven terrain, gradientsand other challenging features, a foam spraying testing ground withenvironmental safeguards and many other facilities for comprehensive
testing of the whole range of fire engines. The Sanda New Factory will
not only be the largest fire engine factory in Japan, it will be one of thebest in the world. It is expected to be a base for Morita's rapid
expansion around the world.

03

REPORT 2007

TOP MESSAGE

Message from Top Management
We at Morita are pleased to provide you with this Interim Business
Report for the 75th Term and a report on the state of our business.

Overview of Operation
1. Overview of Interim Period
During this interim period, Japan's economy continued its gradual
recovery in spite of increasing cost of raw materials such as oil, withincreased capital investment thanks to a recovery in corporate
performance and an improved employment situation. Amidst suchconditions, the various divisions within the Morita Group resolutely
expanded operations and endeavoured to improve the collective
strength of the group and to strengthen earning capacities by reducing
costs and cutting operating expenses.
Sales during the interim period increased 254 million yen (1.7%) yearon-year to 15,500 million yen. In terms of profits, operating profits
decreased 27 million yen (38.1%) year-on-year to 44 million yen, andordinary profits decreased 13 million yen (7.6%) year-on-year to 169
million yen. Interim net profits decreased 123 million yen (96.1%) yearon-year to 5 million yen.

2. Overview of Interim Period by Segment

蚪Disaster Prevention Business
Sales for the Disaster Prevention Business increased 319 million
yen (3.8%) year-on-year to 8,817 million yen due to the increase in
the Fire Fighting Vehicle Division's sale of ladder trucks andmid-size vehicles. In terms of operating profits, operating lossesof 87 million yen marked an improvement of 91 million yen yearon-year from 179 million yen.

REPORT 200704

TOP MESSAGE

蚪Environmental Business
While sales of the Industrial Equipment Division products
including the Guillotine Press and Scrap Baling Press werestrong, sales for the Environmental Business decreased 82
million yen (1.2%) year-on-year to 6,909 million yen due to a
decline in sales of subsidiary company Morita Econos
Corporation's sanitary vehicles and garbage trucks. Operating
profits decreased 117 million yen year-on-year to 130 million yen.

Future Outlook
As can be seen from above, the business results for the Morita Groupduring the interim period reflect the harsh business conditions.
However, in the future we will work to improve our market sharethrough rigorous profit-focused management, cost reduction and new
product development, and by curbing the cost of sales management
including in back-office sections, we aim to raise our corporate value.
Specifically, the company will enhance the profitability of existing
businesses through relocation and concentration at the new Sanda
Plant, scheduled to start operations next spring. Furthermore, we will
expand sales by reinforcing our overseas businesses through expansionof production, sales, and after service centres abroad. We will makeevery effort to meet and overcome the issues we currently face byincreasing our market share through the development and launch ofhigh value-added products.
I would like to take this opportunity to ask our shareholders for yourcontinuing support and encouragement.

November, 2007

Masahiro Nakajima
President05

REPORT 2007

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Summary
Consolidated Balance Sheets
Morita Corporation and Consolidated Subsidiaries
Millions of yen

FY2006First half

FY2007First half

FY2006
Full Year¥ 21,981¥ 23,453¥ 24,294

26,642

27,84827,211

169

178

161

8,433

6,447

7,498

¥ 57,226¥ 57,928¥ 59,165

Current liabilities¥ 20,550¥ 17,114¥ 18,248

Long-term liabilities

6,832

12,496

10,947

Total liabilities

27,382

29,61029,195

Common stock

4,746

4,746

4,746

Additional paid-in capital

4,359

4,365

4,365

Retained earnings

20,135

20,255

21,127

Treasury stock, at cost

(1,982)(2,488)(2,321)

27,25826,87827,917

AssetsCurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total assets

Liabilities

Net assets
Shareholders' equity

Total shareholders' equity
Valuation and translation adjustments

2,331

1,086

1,734

Deferred gains (losses) on hedges

(12)

0(4)

Unrealized gains (losses) on revaluation of land

(4)

(4)

(4)

Foreign currency translation adjustments

(3)

7340

2,311

1,156

1,765

Unrealized gains on available-for-sale securities

Total valuation and translation adjustments
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets

274282286

29,84428,31829,969¥ 57,226¥ 57,928¥ 59,165

REPORT 200706

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Income
Morita Corporation and Consolidated Subsidiaries
Millions of yen

FY2006First half

FY2007First half

FY2006
Full Year¥ 15,246¥ 15,500¥ 41,592

Cost of sales
Gross profit

11,0794,167

11,361
4,138

31,054
10,537

Selling , general and administrative expenses
Operating income

4,095
71

4,094
44

8,441
2,096

Other income

319417

1,037

Other expenses

167234

632

Income before income taxes

223

226

2,500

96
−
96

221−
221

1,105
47
1,152(1)¥ 1280¥511¥ 1,336

Net sales

Income taxes
Current
Deferred

Minority interests in earnings of consolidated subsidiaries
Net income

Consolidated Statements of Cash Flows
Morita Corporation and Consolidated Subsidiaries
Millions of yen

FY2006First half

FY2007First half

FY2006
Full Year

Cash flows from operating activities(¥ 493)(¥ 1,940)¥ 3,597

Cash flows from investing activities

(506)

(825)

(1,038)Cash flows from financing activities1,813

1,487

(69)

Net increase (decrease) in cash and cash equivalents

814(1,278)

2,489

Cash and cash equivalents at beginning of year

2,366

4,856

2,366

Cash and cash equivalents of newly consolidated subsidiaries,
net excluded subsidiaries from consolidation−23−¥ 3,181¥ 3,600¥ 4,856

Cash and cash equivalents at end of year07

REPORT 2007

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Changes in Net Assets (in millions of yen)
Morita Corporation and Consolidated Subsidiaries
Shareholders' equity

Balance at March 31, 2007

CommonstockAdditional
paid-in
capitalRetainedearnings

Treasury stock,at costTotal
shareholders'equity¥ 4,746¥ 4,365¥ 21,127(¥ 2,321)¥ 27,917

Amount of change ininterim period
Cash dividends
Net income

(639)

(639)

55

Acquisition of treasury stock
Disposal of treasury stock0

Decrease due to changes
in scope of consolidation
Net changes other thanshareholders' equity

(168)

(168)

00(237)(237)

Total change in interim period−0(871)(167)(1,039)Balance at September 30, 2007

¥ 4,746¥ 4,365¥ 20,255(¥ 2,488)¥ 26,878

Valuation and translation adjustments
Minority
Unrealized
Unrealized
Foreign
Total
Deferred gains(losses) currency interests ingains onconsolidated net assets
available-for-sale gains(losses) on revaluation translation subsidiaries
onhedgessecuritiesof landadjustments

Balance at March 31, 2007

¥ 1,734

(¥ 4)

(¥ 4)

¥ 40

¥ 286 ¥ 29,969

Amount of change ininterim period
Cash dividends(639)

Net income

5

Acquisition of treasury stock(168)

Disposal of treasury stock0

Decrease due to changes
in scope of consolidation
Net changes other thanshareholders' equity

(237)
(648)

5−33(3)(612)

Total change in interim period(648)

5−33(3)(1,651)

Balance at September 30, 2007

¥ 1,086¥0(¥ 4)¥ 73¥ 282 ¥ 28,318

REPORT 2007

08

NON-CONSOLIDATED FINANCIAL STATEMENTS

Nonconsolidated Summary
Nonconsolidated Balance Sheets
Millions of yen

AssetsCurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total assets
Liabilities
Current liabilities
Long-term liabilities
Total liabilities
Net assets
Shareholders' equity
Common stock
Additional paid-in capital
Retained earnings
Treasury stock, at cost
Total shareholders' equity
Valuation and translation adjustments
Unrealized gains on available-for-sale securities
Deferred gains (losses) on hedges
Unrealized gains (losses) on revaluation of land
Total valuation and translation adjustments
Total net assets

Total liabilities and net assets

FY2006First half

FY2007First half

FY2006
Full Year¥ 14,349¥ 16,083¥ 16,651

25,21826,20625,775

144

105

129

10,210

8,294

9,288

¥ 49,922¥ 50,689¥ 51,843¥ 15,925¥ 12,356¥ 13,644

6,101

11,686

10,20522,02724,04323,850

4,746

4,746

4,746

4,359

4,365

4,365

18,50818,96019,512(1,982)(2,488)(2,321)

25,63225,583

26,303

2,280

1,065

1,699

(12)

1

(4)

(4)

(4)

(4)

2,263

1,062

1,690

27,89526,64627,993¥ 49,922¥ 50,689¥ 51,843

Nonconsolidated Statements of Income
Millions of yen

Net sales

FY2007First half

FY2006
Full Year¥ 7,531¥ 8,336¥ 25,996

Cost of sales
Gross profit

5,790
1,741

6,332
2,003

20,226
5,770

Selling, general and administrative expenses
Operating income

2,354(613)

2,409(405)

5,016753

Other income

512

819

1,720

Other expenses
Income before income taxes

251(352)

253
161

788
1,685(134)−(¥ 217)

73−

670
13

¥ 87

¥ 1,002

Income taxes
Current
Deferred
Net income

09

FY2006First half

REPORT 2007

CORPORATE DATACORPORATE DATA
(current as of September 30, 2007)

Overview
Founded : April 23, 1907
Established : July 23, 1932
Paid-in capital : JPY4, 746mil
Osaka Head Office : 5-20, 5-Chome, Shojihigashi, Ikuno-ku,Osaka City, Osaka, 544-8585
Tokyo Head Office : 25-31, 3-Chome, Nishishinbashi,
Minato-ku, Tokyo, 105-0003
Primary Products
Pump Division
Manufacture and sale of fire engines with ladders,chemical trucks, ordinary fire engines, other fire fighting
vehicles and specialty vehicles.
Disaster Prevention Division
Manufacture and sale of disaster prevention equipment
including dry chemical fire extinguishers and design,conservation and inspection of disaster prevention
facilities.
Environment Business Division
Design of waste recycling facilities and other waste
disposal facilities and manufacture and sale of large
hydraulic equipment.

Group Companies
Morita Econos Corporation

Morita Technos Corporation

Morita Sogo Service Ltd.

Ueno Morita Ltd.

Morita UG Ltd.

Morita Engineering Corporation

ALUVO.CO.,LTD.

Ento.CO.,ltd.

Hokkaido Morita Corporation

Kagoshima Morita Pump Ltd.

Morita Toyo Corporation
Sichuan Morita Fire Safety Appliances Limited Company
Nanjing Chenguang Morita Environment Protection Science& Technology Co., Ltd
MORITA HOLDRICH (HONGKONG) COMPANY LIMITEDREPORT 200710

Shareholder's Memo
Operating Year : April 1st to March 31st
Annual General Meeting of Shareholders : June
Schedule : Ordinary General Meeting of Shareholders−March 31stYear-end Dividend−March 31stInterim Dividend−September 30th
Other dates publicised in advance as necessary
Method of Publicity : Posted on company website.
http://www.morita119.com/kohkoku/index.html
Shareholder Register Administrator :The Sumitomo Trust & Banking Co.,Ltd.
5-33, 4-Chome, Kitahama, Chuo-ku, Osaka
Administrator's Office : The Sumitomo Trust & Banking Co.,Ltd.
Stock Transfer Agency Department
5-33, 4-Chome, Kitahama, Chuo-ku, Osaka(Postal Address)

The Sumitomo Trust & Banking Co.,Ltd.
Stock Transfer Agency Department
1-10 Nikko-cho, Fuchu City, Tokyo 183-8701(Telephone Enquiries)(Requests for change of address forms) +81-120-175-417(Other enquiries) +81-120-176-417(Internet Website URL)
http://www.sumitomotrust.co.jp/STA/retail/service/daiko/index.html
Agent : The Sumitomo Trust & Banking Co.,Ltd.
All branches throughout Japan
Stock Listing : Tokyo Stock Exchange,
Osaka Securities Exchange

Please visit our website
for the latest investor relations information.

http://www.morita119.com

Osaka Head Office: 5-20, 5-Chome, Shojihigashi, Ikuno-ku,Osaka City,
Osaka, 544-8585
蕁 +81-6-6756-0100
Tokyo Head Office: 25-31, 3-Chome, Nishishinbashi, Minato-ku,
Tokyo, 105-0003
蕁 +81-3-5777-5777

http://www.morita119.com

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