Interim Financial Results
Six-Month Period Ended April 30, 2008
(November 1, 2007 - April 30, 2008)
Date:
Company:
Stock exchange listing:
Head Office:President:
Investor Relations Contacts:

June 11, 2008
Tomoe Engineering Co., Ltd. and Subsidiaries(Web Site: http://www.tomo-e.co.jp/index_e.html)
1st Section, Tokyo Stock Exchange
2-2, Osaki 1-chome, Shinagawa-ku, Tokyo, Japan
Minoru Honma
Koichi Karita, Director, Finance and Management Planning, Tel: (03) 5435-6512

1. Consolidated Financial Data for the 6-month Period Results ended April 30, 2008
(1) Results of Operation (Consolidated)
Sales
Operating income(Millions of yen)
(Millions of yen)
6-month period ended
24,022
1,581
Apr. 30, 2008
6-month period ended
Apr. 30, 2007
24,127
1,256
Year ended
Oct. 31, 2007
50,7952,444
Net income(Millions of yen)

Net income per share(Yen)

Recurring income(Millions of yen)
1,652
1,325
2,554
Fully diluted quarterly
earnings per share(Yen)

6-month period ended
864
86.61
0
Apr. 30, 2008
6-month period ended
673
67.52
0
Apr. 30, 2007
Year ended
Oct. 31, 2007
0
1,357
136.00Notes: The equity in net earnings of affiliated companies for the 6-month periods ended April 30, 2008 andApril 30, 2007 and the year ended October 31, 2007 were none.
(2) Assets and Shareholders’ Equity (Consolidated)
Total Assets (A)Net assets (B)Shareholders’ equity
Shareholders’ equity(Millions of yen) (Millions of yen)ratio (B) / (A) (Percent)per share (Yen)
6-month period
30,55817,15355.3
1,692.17
ended
Apr. 30, 2008
6-month period
31,84916,26850.5
1,612.99
ended
Apr. 30, 2007
Year ended
Oct. 31, 2007
32,338
16,95151.8
1,678.87
Note: Shareholders’ equity for the 6-month periods ended April 30, 2008, April 30, 2007 and the year ended
October 31, 2007 were 16,886 million yen, 16,096 million yen and 16,753 million yen, respectively.

1(3) Cash Flows (Consolidated)
Net cash provided(used) by operating
activities(Millions of yen)
6-month period
2,416
ended
Apr. 30, 2008
6-month period(1,708)
ended
Apr. 30, 2007
Year ended(578)
Oct. 31, 2007

Net cash provided(used) by investing
activities(Millions of yen)

Net cash provided(used) by financing
activities(Millions of yen)

Consolidated cash
and cash equivalent(period-end)(Millions of yen)(255)

(1,743)

2,219

(350)

1,997

1,206

(623)

1,844

1,873

2. Dividend Status(Record date)

Dividend per share
End ofFull year
the year
(Yen)
(Yen)
35.00
35.00

Year ended
Oct. 31, 2007
Year ended Oct. 31, 2008 35.00(Prospect)

3.

4.

35.00

Forecast for the Year ending October 31, 2008 (Consolidated)
Sales
OperatingRecurring income(Millions of yen)income(Millions of yen)
(Millions of yen)
49,5702,580
2,650
Full business year
Net income pershare (yen)Full business year
145.31

Net income(Millions of yen)
1,450

Others(1) Significant changes in subsidiaries during the semiannual year under review (changes in specificsubsidiaries involving changes in the scope of consolidation): Yes
One new subsidiary: Stella Tech Engineering Plastics (Shenzhen) Co., Ltd.
Note: For details, refer to the section Schematic diagram of Tomoe’s Operation.
(2) Changes in accounting principles, procedures, the method of presentation associated with preparation of the
6-month period of consolidated financial statements (matters to be included in the section, Basis ofConsolidated Financial Statements and Summary of Significant Accounting Policies)
1) Changes due to revisions of accounting standards etc.: None
2) Changes other than 1): None
(3) Number of shares outstanding (common stock)1) Number of shares outstanding at the end of the semiannual period (including treasury stock):
April 30, 2008: 10,533,200 shares April 30, 2007: 10,533,200 shares
October 31, 2007: 10,533,200 shares
2) Number of shares of treasury stock at the end of the semiannual period:
April 30, 2008: 554,248 shares April 30, 2007: 554,008 shares
October 31, 2007: 554,083 shares
Note: Please refer to the section Per share information for the number ofshares that forms the basis for calculating earnings per share.

2

(Reference)
1. Non-consolidated Financial Data for the 6-month Period Results ended Apr. 30, 2008
(1) Non-consolidated Financial Results
Sales
Operating income
Recurring income(Millions of yen)
(Millions of yen)
(Millions of yen)
6-month period ended
21,8381,264
1,407
Apr. 30, 2008
6-month period ended
21,913
1,029
1,154
Apr. 30, 2007
45,941
1,953
2,117
Yr. ended Oct. 31, 2007
Net income(Millions of yen)

Net income per share
(Yen)

759

76.14

583
1,088

58.46
109.06

6-month period ended
Apr. 30, 2008
6-month period ended
Apr. 30, 2007
Yr. ended Oct. 31, 2007

(2) Assets and Shareholders’ equity (Non-consolidated)

6-month period
ended
Apr, 30, 2008
6-month period
ended
Apr. 30, 2007
Yr. ended
Oct. 31, 2007

Total Assets (A)(Millions of yen)

Net assets (B)(Millions of yen)

Shareholders’ equity
ratio (B) / (A)(Percent)

Shareholders’ equity
per share(Yen)

26,877

15,73258.5

1,576.

28,58815,13853.0

1,516.

28,311

15,63255.2

1,566.54

60

98

2. Forecast for the Year ending October 31, 2008 (Non-Consolidated)
Sales(Millions of yen)
Full business year

Full business year

44,710Net income per
share
(Yen)
126.27

Operatingincome(Millions of yen)
2,070

Recurring income(Millions of yen)

Net income(Millions of yen)

2,300

1,260

Note:
With regard to the forecasts of consolidated and non-consolidated financial results, the business results forecast
issued on December 10, 2007 for the year ending October 31, 2008, has been revised as above in light of therecent business trend. Forward-looking statements contained in this material such as forecasts of consolidated
financial results are based on information currently available to us and certain assumptions that we believe arereasonable. Actual results could differ materially due to various factors. For assumptions of the forecasts andnecessary precautions, please refer to “1. Operating Results (1) Analysis of operating results.”3

1. Operating Results(1) Analysis of operating results
Operating Results during the interim period under review
During this interim period under review, fears of a slowdown in the Japanese economy have grown driven by
yen appreciation, higher energy and raw materials prices, slowing personal consumption, etc.
In this operating environment, the Machinery & Equipment Business had lower sales in the public sector thanthe previous interim period, affected by a cut in the spending on sewerage and low-price bidding by main
contractors due to the change in the bidding system, etc., but in the overseas sector saw solid performancehelped by increased revenues from abrasive grain recycle units for China and large parts for chemical plants in
the Asian region. As a result, the sales of the Machinery & Equipment Business increased 2.9% year on year
to 6,313 million yen and the operating income increased 29.0% year on year to 706 million yen.
In the Chemical Products Business, industrial materials related and electronic materials related businesses
performed well, but fine chemicals related business did not have the benefit of the one-off sale as in theprevious period that ensued following the suspension of production by the maker of the products, andadvanced materials related business saw weaker sales of semiconductor manufacturing equipment parts, etc.
As a result, the sales of the Chemical Products Business decreased 1.6% year on year to 17,709 million yen,and the operating income increased 23.5% year on year to 875 million yen due to the growth of relatively
higher-margin industrial materials and electronic materials related businesses.
Consequently, the sales in the consolidated interim period under review decreased by 0.4% year on year to
24,022 million yen, operating income increased by 25.9% year on year to 1,581 million yen, and recurringincome also increased by 24.7% year on year to 1,652 million yen. Net income increased by 28.3% year on
year to 864 million yen.
Looking at sales by geographic segment, domestic sales decreased by 0.7% year on year to 21,601 million
yen, but operating income increased by 39.2% year on year to 1,510 million yen due to the growth of relatively
higher-margin parts and repair business in the Machinery & Equipment Business and the benefit of yen
appreciation on imported products in the Chemical Products Business. In the Asian region, sales increased
4.6% year on year to 2,663 million yen, but operating income decreased by 54.9% year on year to 80 million
yen, partly because sales of certain low-return item in the Korean market were recorded.
Outlook for the full year
With respect to the outlook for the full year ending October 31, 2008, we expect that the sales in the Machinery& Equipment Business will be lower than the previous year, affected by a substantial decline in the equipment
and installation in the public sector, although the sales in the overseas sector are expected to increase
substantially from the previous year helped by abrasive grain recycle units for China, equipment for PVC, etc.
The operating income is expected to be higher than the previous year due to continued growth of relatively
higher-margin parts and repair business and improved profitability with the decrease in the number of lessprofitable low-margined projects such as equipment for India in the previous year.
In the Chemical Products Business, we expect that the full year sales will be lower than the previous year,
because there is no benefit of the one-off sale of items in the fine chemicals related business as in the previous
year and sales of ceramic parts for semiconductor manufacturing equipment, ceramic parts, etc. in advanced
materials related business are expected to be weaker. The operating income is expected to be the same level4

as the previous year helped by continued strength of relatively higher-margin industrial materials related
business and appreciation of yen, although domestic sales of imported products are expected to decrease.
Overall, we expect that the full year consolidated sales of the Company will decrease by 2.4% year on year to49,570 million yen and recurring income will increase 3.7% year on year to 2,650 million yen. Net profit will be
1,450 million yen, an increase of 6.8% year on year.

(2) Analysis of financial condition
Total assets at the end of this consolidated interim period decreased 1,779 million yen (5.5%) compared withthe previous consolidated fiscal year, due to a decrease in current assets of 1,300 million yen by a decrease inaccount receivables and a decrease in fixed assets of 479 million yen as a result of the revaluation of
investments in securities and financial derivatives. Total liabilities decreased 1,982 million yen (12.9%)
compared with the previous consolidated fiscal year due to a decrease in short-term debt, etc. Net assets
increased 202 million yen (1.2%) compared with the previous consolidated fiscal year due to an increase inretained earnings, etc. As a result, shareholders’ equity ratio at the end of this consolidated interim period
increased 3.5% to 55.3% compared with the previous consolidated fiscal year.
Cash and cash equivalent increased 345 million yen (18.4%) to 2,219 million yen at the end of this consolidated
interim period as a result of 1,660 million yen net income before income taxes and others and a decrease inaccount receivables, etc.
(Cash flow from business activities)
Net cash provided by operating activities was 2,416 million yen as a result of 1,660 million net income before
income taxes and others and a decrease in account receivables, etc., despite an increase in inventories. As aresult, cash flow from operating activities increased by 4,125 million yen compared with the previous
consolidated interim period.
(Cash flow from investment activities)
Net cash used in investing activities was 255 million yen due to acquisition of tangible fixed assets, etc. As aresult, cash flow from investing activities increased by 94 million yen compared with the previous consolidated
interim period.
(Cash flow from financing activities)
Net cash used in financing activities was 1,743 million yen due to a decrease in short-term debt, etc. As aresult, cash flow from financing activities decreased by 3,740 million yen compared with the previous
consolidated interim period.
Trends in cash flow indices are as follows:
Years ended Oct. 31

Equity ratio (%)
Equity ratio based on market value(%)
Debt-repayment period (years)
Interest coverage ratio (%)

2004

2005

2006

46.2
34.1

52.7
63.9

54.0
53.8

-

5.9
9.4

2.5
13.5

5

2007

6-months
ended
Apr 30, 2008
51.8
55.3
47.4
35.7
-

1.2
78

Notes:Equity ratio = Shareholders’ equity / Total assets
Equity ratio based on market value = Market capitalization of shares / Total assets
Debt-repayment period = Interest-bearing debt / Cash flow from operating activities
Interest coverage ratio = Cash flow from operating activities / Interest expense*All indices are calculated on the basis of consolidated financial figures.
*Market capitalization is calculated by multiplying the closing share price at the end of the interim period by the
number of outstanding shares at the end of the interim period (excluding treasury stock).
*Operating cash flow refers to the net cash provided by operating activities in the Statements of Consolidated
Cash Flows. Interest-bearing debt refers to all debts for which interest is payable declared in the Consolidated
Balance Sheet. Interest expense refers to the interest paid as shown in the Statements of Consolidated Cash
Flows.
*The debt-repayment period and interest coverage ratio are not recorded for the year ended October 31st, 2007
and the year ended October 31st, 2004, as operating cash flow was negative in those periods.
(3) Basic policy for profit distribution and dividends for Fiscal 2008
The Company considers the return of profits to shareholders as one of important management goals. To
publicly state the stance, our basic policy regarding dividends is changed to “maintain a stable level of dividends
with a target consolidated payout ratio of 25% or more, after considering earnings level, reinforcement of ourcorporate strength, etc. in a comprehensive manner.” This policy will be applied from the distribution of theretained earnings for this year (ending October 31st, 2008). Basically, retained earnings will be distributed oncea year in the form of a final dividend, and the general meeting of shareholders makes the decision.
Based on the above policy, we plan to pay out a final dividend of 35 yen per share this year as profit distribution
to the valued shareholders.
In addition, the Company intends to appropriate internal reserves to improve financial position and strengthen
the foundation of the Company for future business expansion.

(4) Risk factors in business
Outlined below are the key areas of business risks of our group that might have significant influence on
investors’ decision.
The following discussion contains forward-looking statements that represent the judgments of the Company asof the end of this interim period.
1)

Seasonal fluctuation of operating results
Currently there is a seasonal bias in our business toward the second quarter. Public sector sales, which
account for relatively a high percentage in the sales of the Machinery & Equipment Business, tend to beconcentrated in the second quarter due to public sector’s budget implementation, etc., although thistendency has become less marked following the change in public sector’s ordering process. As a result,a large portion of annual sales of Machinery & Equipment Business is concentrated in the second quarter.
However, since the sales of Chemical Products Business, which are relatively less affected by seasonal
factors, account for higher percentage of our total sales, seasonal factors do not have significant effect on
the total sales of our entire group.
On the other hand, the operating income of our entire group tends to be biased toward the second quarteras the fixed costs in selling, general and administrative costs are almost evenly borne through the year and6the Machinery & Equipment Business sales are concentrated in the second quarter.
2)

Influence of foreign exchange fluctuations
Exchange rate fluctuations may affect the value of our export and import transactions in foreign currencies
after translation into yen. Operating results and financial condition of our group might be affected by these
foreign currency transactions, although we make efforts to minimize exchange fluctuation risks by entering
into foreign currency swaps and forward exchange contracts. Our group has overseas subsidiarycompanies and prepares financial statements in foreign currencies. In preparing consolidated financial
statements, there is a risk associated with exchange fluctuations when converting into yen equivalent.

3) Potential Risk of Overseas Activities
Our group is engaged in marketing and manufacturing overseas, focusing on China and other Southeast
Asian countries. We will monitor the local situation at all times and take appropriate actions. However, ourgroup’s operating results and financial condition might be affected by unforeseen circumstances arising fromlocal legal restrictions, customs, etc.
4)

Risks Associated with Quality of Goods and Products
The products of our group are manufactured by paying due attention based on systematic quality control.
However, maintenance and repair or replacement costs might be required for products involving
development work or due to unforeseen troubles of relevant products. Also, since our group is not directly
involved in manufacturing of many of imported raw materials, defects that our group is not directly
associated with may occur and we might be obligated to cease sales and collect such materials. Although
we are prepared to take prompt and appropriate actions to cope with the risks involved in quality of
manufactured products and commercial goods, it may result in affecting our group’s operating results andfinancial condition.

5)

Risk of New Investments
We are trying to move deeper into higher added value business. To do this, we must take measures suchas aggressive investments, acquisitions of trade rights, etc. Since these measures may involve higher
potential risks than conventional business risks, it might affect operating results and financial condition of ourgroup.

7

2. Tomoe Engineering and Companies
Tomoe Group consists of Tomoe Engineering and its 9 subsidiaries. Its group is mainly engaged in
manufacture/distribution of centrifuges and trading of chemical products. Business activities of the group are divided
into the following three main categories. “Business Segments,” which will be discussed in a later section, are basedon the following business activity segments. Since “Other businesses” involve no consolidated subsidiary, “Business
Segments” do not include figures related to them.
Machinery & Equipment Business:
Tomoe Engineering manufactures and distributes centrifuges. Tomoe Machinery Service provides centrifuge
users with after-sales services as well as parts. Tomoe Machinery undertakes machining and sheet-metal
processing of centrifuge parts. Tomoe Engineering (Shanghai) manufactures centrifuges and also provides
after-sales services.
Chemical Products Business:
Interstella Plastics (Shenzhen) is engaged in coloring and compounding of plastic materials. Interstella is theinvesting company and also serves a contact for purchasing and sales. Tomoe Engineering (Hong Kong) Co.,
Ltd. functions as a hub in relation to marketing and sales activities in China for the Group. Tomoe Wine & Spirits
distributes wines and spirits imported by Tomoe Engineering. Stella Tech Engineering Plastics (Shenzhen)
established on March 26, 2008 is engaged in coloring and compounding of plastics (raw materials).
Other Businesses:
Tomoe Butsuryu subcontracts with Tomoe Engineering for transportation and warehousing.

Schematic diagram of Tomoe’s operation is on the next page.

8

(◎: Consolidated subsidiaries)

Purchase of material

Product sale

Purchase of material

Product
purchase

Tomoe Wine & Spirits(Subsidiary)
Sale of imported wines& Spirits

Product
sale

Product
purchase

Product sale

◎Tomoe (Hong Kong)(Subsidiary)
Purchase & sale of chemical industry products

Machinery & Equipment Business

Chemical Products BusinessTomoe Engineering Co., Ltd.

9

Tomoe Butsuryu(Subsidiary)
Logistics & warehousing

Product
sale◎Interstella (Subsidiary)
Purchase of materials & sale

Logistics & warehousing

Product sale

Product saleParts purchase

Manufacturing & Product sale

Consignment & parts sale

Maintenance of Products◎Tomoe Engineering (Shanghai)(Subsidiary)
Manufacturer & after-sale service of our
products
Parts sale

◎ Stella Tech Engineering Plastics(Shenzhen)(Subsidiary)
Plastic coloring & compounding◎Interstella Plastics (Shenzhen)(Subsidiary)
Plastic coloring & compounding◎Tomoe Machinery Service(Subsidiary)
After-sale services & parts sale of our
products

Maintenance of products

Product sale

Subcontractiing◎Tomoe Machinery(Subsidiary)
Sheet metal processing,machining

Product sale

After-sale services& parts sale

Customers

3. Management Policy(1) Basic management philosophy
Our basic management philosophy is to contribute to society and bring good life to all the people involved through growthand development of the Company with the spirit of creation and entrepreneurship and to provide our customers with highlevel of technologies and excellent products. Guided by this policy, we have been engaged in the manufacture andsale of machinery based primarily on solid-liquid separation technology and importation and sale of specialty
chemicals.
(2) Targeted management indices
There are two distinctive parts in our business: the Machinery & Equipment Business for manufacture and sale ofseparation devices centering on centrifuges and the Chemical Products Business as a specialized trading company
selling unique products, centering on imported raw materials. Instead of blindly seeking higher sales, we try to develop
and deal in unique value-added products requiring specific technology and expertise, even if the market size is limited.
Enhancement of profitability is our primary management goal. We give the highest priority to recurring income that
directly expresses the absolute value and change of profitability as the management indices for achieving this goal.
(3) Long- and medium- term strategy
Our basic long and medium-term strategy in the Machinery & Equipment Business is development of new products,
reduction of manufacturing cost, and cultivation of overseas markets; those in the Chemical Products Business are
introduction of unique new commercial products and expansion of Chinese business. To promote this strategy, thisFebruary we have formulated our Eighth Mid-term Management Plan “TIP10” (starting from the year ending October
31st, 2008 to the year ending October 31st, 2010). The main objectives of the plan are to steadily promote theabove-mentioned basic strategy, start-up new business to make a major leap in the future from a long-term perspective,and establish a system within the corporate group to achieve this strategy. We will do our best to enhance our
profitability and strengthen our management foundation through the steady realization of the plan.
(4) Challenges to be addressed
We will continue to seek to achieve improved profitability of the Machinery & Equipment Business and the Chemical
Products Business as if they are two wheels of a cart, and improved and strengthened corporate governance andcompliance.
In the Machinery & Equipment Business, we will continue to improve the performance and energy conservation ofcentrifuges, our core product, pursue development of new products including low-price models, and develop a demandin the environment, recycle, and energy areas. Regarding the overseas markets, we will make further efforts todevelop the US market as well as the Chinese and other Asian markets.
With respect to the development on a long-term perspective, we will be engaging in the establishment of technique forconverting sludge and industrial wastes into fuels for reducing CO2 emissions and manufacture of necessary equipment
as a new business.
In the Chemical Products Business, we will strengthen our core business, increase our exposure to high-tech area,
continue to develop high-value added products, and accelerate their penetration into markets to improve our financial
position. In the Southern China market, we will smoothly set up our newly-built compounding company and lay afoundation for increasing profitability.
With respect to the development on a long-term perspective, we will be engaging in the development of products utilizing10

or related to nanotechnology as a new business.
To improve compliance management and corporate ethics, we have made efforts to strengthen our corporate
governance and compliance, including the formation of the Corporate Ethics Committee. As regards internal control,
preparations are being made to ensure correct implementation of the system under a guideline. Also, as anenvironmental friendly company, we will continue to make further efforts for the operation and management of
ISO14001.

11

Consolidated Financial Statement
4-(1) Balance Sheets (Consolidated)(Thousands of yen)
6-month

6-monthIncrease &Year ended

period ended

period ended

decrease

Oct. 31, 2007

Apr. 30, 2007

Apr. 30, 2008

1. Cash and deposits

1,206,674

2,219,431

1,012,757

1,873,895

2. Trade receivables *3

17,270,738

16,653,286(617,451)

18,897,626

3. Inventories

6,473,793

5,079,399(1,394,393)

4,351,317

4. Deferred tax assets

449,562436,776(12,786)

582,629

5. Other current assets

451,150

508,834

57,683495,752

Allowance for doubtful accounts(42,422)(27,224)

15,197(30,276)

Total current assets

25,809,498

24,870,504(938,993)

26,170,945

2,334,101

2,499,944

Accumulated depreciation(1,335,461)(1,306,094)

Net

998,640

1,193,849

1,077,636

3,166,334

3,162,168

3,087,055

Accumulated depreciation(2,273,346)(2,286,704)

Net

892,988875,4633) Land975,451

970,2534) Other fixed assets

984,460

932,563

Accumulated depreciation(822,551)(814,013)

Net

161,909

118,549

Total tangible fixed assets

3,028,989

3,158,116

129,127

3,180,142

16,494

17,883

1,389

15,223

1,487,917

1,284,529(203,388)

1,580,268

2) Guarantee deposits

404,918

410,3315,413

409,7623) Deferred tax assets

22,152

29,191

7,038

21,8574) Financial derivatives

465,946

168,846(297,099)

314,6835) Other investments

794,412752,664(41,747)

782,159

Allowance for doubtful accounts(180,661)(133,609)

47,052(136,592)

Total investment and others

2,994,685

2,511,954(482,731)

2,972,140

Total fixed assets

6,040,169

5,687,954(352,215)

6,167,506

Total assets

31,849,667

30,558,459(1,291,208)

32,338,451

AssetsI. Current assets

II. Fixed assets
1. Tangible fixed assets
1) Buildings

2) Machinery, equipment & vehicles

2. Intangible fixed assets

2,332,224
195,209(17,525)(1,254,587)(2,238,012)
849,042(5,197)970,253
1,128,064(43,359)(844,855)
283,209

3. Investments and others
1) Investments in securities*112

(Thousands of yen)
6-month

6-monthIncrease &Year ended

period ended

period ended

decrease

Oct. 31, 2007

Apr. 30, 2007

Apr. 30, 2008

1. Trade-payables *1,3

8,108,171

7,403,443(704,728)

7,349,341

2. Short-term debt

4,281,381

2,760,189(1,521,191)

4,264,912

3. Account payable-others

568,730

591,374

22,644

743,189

4. Accrued income tax

390,747

534,278

143,531613,263

5. Advances from customers

270,428

263,951(6,477)

148,967

6. Accrued employees’ bonuses

796,688822,666

25,978

1,102,255

7. Accrued officers’ bonuses

28,02935,693

7,663

68,1008. Allowance for product warranty

139,136

165,266

26,130236,625

9. Other current liabilities

203,173

282,450

79,276

187,345

14,786,485

12,859,313(1,927,172)

14,714,001

1. Long-term debt

240,000

25,000(215,000)

90,0002. Accrued pension and severance liabilities

29,67332,9353,261

32,437

3. Officers’ retirement allowance

175,760

236,120

60,360214,460

4. Deferred tax liabilities

349,371

251,373(97,998)336,296

Total long-term liabilities

794,805

545,428(249,376)

673,194

Total liabilities

15,581,291

13,404,741(2,176,549)

15,387,196

1. Common stock

1,061,210

1,061,210

01,061,210

2. Capital surplus

1,483,410

1,483,410

01,483,410

3. Retained earnings

13,214,360

14,412,780

1,198,419

13,897,737

4. Issued shares reacquired(362,697)(363,003)(306)(362,815)

15,396,283

16,594,396

1,198,112

16,079,542

marketable securities and investments

389,148251,377(137,770)

436,288

2. Financial derivative gains and losses

276,315

93,442(182,873)

218,722

3. Foreign currency translation adjustment

34,628(53,165)(87,793)

19,084

Total revaluation and translation

700,092

291,654(408,438)

674,095

171,999

267,665

95,666

197,617

Total net assets

16,268,376

17,153,717

885,340

16,951,254

Total liabilities, minority interests and net

31,849,667

30,558,459(1,291,208)

32,338,451

Liabilities and Net Assets
Liabilities
I. Current liabilities

Total current liabilities
II. Long-term liabilities

Net assets
I. Shareholders’ capital

Total Shareholders’ capital
II. Revaluation and translation adjustments
1.Unrealized gains and losses on

adjustments
III. Minority interests

assets13

4-(2) Statements of Income (Consolidated)(Thousands of yen)
Increase &Year ended
decrease
Oct. 31, 2007

6-month

6-monthperiod ended

period ended

Apr. 30, 2007

Apr. 30, 2008

I. Sales24,127,323

24,022,695(104,627)

50,795,204

II. Cost of sales

19,573,555

19,172,959(400,595)

41,791,074

4,553,768

4,849,736

295,967

9,004,130

3,297,391

3,268,340(29,050)

6,559,190

1,256,377

1,581,395

325,018

2,444,939

1. Interests

3,930

10,416

6,110

2. Dividends

44,753

38,10861,301

3. Rents

9,206

12,457

21,101

4. Foreign exchange gains

42,81842,197106,272

5. Sundries

26,50833,617

71,232

127,217

136,798

1. Interests

41,13136,87085,4092. Discounts on bills of exchange

3,795

5,608

8,269

0

15,283

9,992

13,514

7,440

53,05458,44065,203

6,762

156,725

1,325,153

1,652,991

327,837

2,554,232

0

0

3,184

0

5,627

0

565

18,7878,226

565

24,414

0

0

6,726

15,7893,729

19,65450,000050,000013,5970

5. Impairment losses *5

0

0

5,197

6. Removal expenses *6

39410

0

39,410Extraordinary losses total

105,199

17,326(87,873)

120,989

Net income before income taxes and others

1,220,518

1,660,079

439,560

2,444,654

Gross profit
III. Selling, general and administrative *1
Operating income
IV. Other income

Other income total

9,581

266,018

V. Other expenses

3. Commitment fees
4. Sundries
Other expense total
Recurring income
VI. Extraordinary gains
1. Realized gains on property andequipment *2
2. Realized gains on investment securities
3. Reversal of allowance for doubtful
accounts
Extraordinary gains total

23,84911,411

VII. Extraordinary losses
1. Realized loss on property andequipment *3
2. Written-off losses on property andequipment *4
3. Unrealized losses on investment securities
4. Provision for allowance for doubtfulreceivables

14

(Thousands of yen)
Increase &Year ended
decrease
Oct. 31, 2007

6-month

6-monthperiod ended

period ended

Apr. 30, 2007

Apr. 30, 2008

Current

375,978

508,563

1,032,094

Deferred

157,170

265,023

13,783533,148

773,587

240,438

1,045,878

Gains on minority interests

13,61322,1808,566

41,643

Net income from consolidated operations

673,756

864,311

190,555

1,357,132

Income taxes

Income taxes total15

4-(3) Consolidated Statements of Changes in Shareholders’ Equity
6-month period ended Apr. 30, 2007

(Thousands of yen)
Shareholders’ equity
Capital surplus
Retained
Issued shares
Total
earnings
reacquired
Shareholders’equityCommonstock
Surplus as ofOct. 31, 2006
Changes during thisinterim period
Cash dividend paid(*Note)Net income
Total amountchangedBalance, end of interim
period ended
Apr. 30, 2007

1,061,210

1,483,410

12,839,980(362,697)

15,021,902

00(299,375)

0(299,375)

0
0

0
0

673,756
374,38000673,756
374,380

1,061,210

1,483,410

13,214,360(362,697)

15,396,283

6-month period ended Apr. 30, 2007
Revaluation and translation adjustments
Unrealized
Financial
Foreign
Total
gains andderivative
currency
revaluation
losses onloss or gaintranslation
andmarketableadjustment
translation
securities andadjustments
investments
Surplus as ofOct. 31, 2006
301,319
205,427
30,480537,226
Changes during thisinterim period
Cash dividend paid
0000Net income
0000
Total (net) amountchanged (except
87,82970,888
4,148
162,866
shareholders’equity)Total amount changed
87,82970,888
4,148
162,866
Balance, end of interim
period ended
Apr. 30, 2007
389,148276,315
34,628700,092(Thousands of yen)
Minority
Total net
interests
assets158,595

15,717,725

00(299,375)
673,756

13,404

176,270

13,404550,650

171,999

16,268,376(Note) This item is the appropriation of earnings approved at the annual shareholders’ meeting held in January 2007.

16

6-month period ended Apr. 30, 2008
Commonstock
Surplus as of Oct. 31, 2007
Changes during this interim
periodCash dividend paid(*Note)Net income
Issued shares reacquired
Total amount changed
Balance, end of interim
period ended Apr. 30, 2008

1,061,210(Thousands of yen)
Shareholders’ equity
CapitalRetained
Issued shares
Total
surplusearnings
reacquired
Shareholders’equity1,483,410
13,897,737(362,815)
16,079,542

00(349,269)

0(349,269)

0
0
0

0
0
0

864,3110
515,042

0
(188)
(188)

864,311(188)
514,854

1,061,210

1,483,410

14,412,780(363,003)

16,594,396

6-month period ended Apr. 30, 2008
Revaluation and translation adjustments
Unrealized
Financial
Foreign
Total
gains andderivative
currency
revaluation
losses onloss or gaintranslation
andmarketableadjustment
translation
securities andadjustments
investments
Surplus as ofOct. 31, 2007
436,288
218,722
19,084
674,095
Changes during thisinterim period
Cash dividend
paid
0
0
0
0
Net income
0000Issued shares0000
reacquired
Total (net)amount changed(184,910)(125,279)(72,249)(382,440)(except
shareholders’equity)Total amountchanged(184,910)(125,279)(72,249)(382,440)
Balance, end ofinterim period ended
251,377
93,442(53,165)
291,654
Apr. 30, 2008

(Thousands of yen)
Minority
Total net
interests
assets197,617

16,951,254

000(349,269)
864,311(188)

70,048(312,392)

70,048202,462

267,665

17,153,717(Note) This item is the appropriation of earnings approved at the annual shareholders’ meeting held in January 2008.

17

Year ended Oct. 31, 2007

(Thousands of yen)
Shareholders’ equity
Capital surplus
Retained
Issued shares
Total
earnings
reacquired
Shareholders’equityCommonstock
Surplus as ofOct. 31, 2006
Changes during thisfiscal year
Cash dividend paid(*Note)Net income
Issued shares
reacquired
Total amountchangedBalance, end of fiscal
year ended
Oct. 31, 2007

1,061,210

1,483,410

12,839,980(362,697)

15,021,902

00(299,375)

0(299,375)

001,357,132

0

1,357,132

0
0

0
0

0
1,057,757

(118)
(118)

(118)
1,057,639

1,061,210

1,483,410

13,897,737(362,815)

16,079,542

Year ended Oct. 31, 2007
Revaluation and translation adjustments
Unrealized
Financial
Foreign
Total
gains andderivative
currency
revaluation
losses onloss or gaintranslation
andmarketableadjustment
translation
securities andadjustments
investments
Surplus as ofOct. 31, 2006
Changes during thisfiscal year
Cash dividend paid
Net income
Issued shares
reacquired
Total (net) amountchanged (except
shareholders’equity)Total amount changed
Balance, end of fiscal
year ended
Oct. 31, 2007

(Thousands of yen)
Minority
Total net
interests
assets301,319

205,427

30,480537,226

158,595

15,717,725

0
0

0
0

0
0

0
0

0
0

(299,375)
1,357,132

0

0

0

0

0

(118)

134,969

13,294(11,395)

136,868

39,021

175,890134,969

13,294(11,395)

136,868

39,021

1,233,529

436,288

218,722

19,084

674,095

197,617

16,951,254(Note) This item is the appropriation of earnings approved at the annual shareholders’ meeting held in January 2008.

18

4-(4) Statements of Cash Flows (Consolidated)(Thousands of yen)

6-month

6-monthIncrease &Year ended

period ended

period ended

decrease

Oct 31, 2007

Apr. 30, 2007

Apr. 30, 2008

1,220,518

1,660,079

439,560

2,444,654

I. Operating activities
1.

Net income before income taxes and others

2.

Depreciation and amortization

145,446

185,81340,367317,2593.

Accrued employees’ bonuses (increase /decrease)(300,546)(279,588)

20,957

5,021

4.

Accrued officers’ bonuses (increase/decrease)(22,759)(32,407)(9,647)

17,311

5.
6.

Allowance for product warranty (increase/decrease)
Accrued pension and severance
liabilities (increase)

19,436
4,499(71,359)497(90,795)(4,001)

116,925
7,263

7.

Officer's retirement allowance (increase/decrease)(53,880)

21,66075,540(15,180)

8.

Allowance for doubtful accounts (increase/decrease)99,539(6,034)(105,574)

43,3249.

Interest and dividend income(48,684)(48,525)

158(67,412)

10.

Interest expense

41,13136,870(4,260)85,40911.

Foreign exchange loss/profit(31,468)

14,56646,0352,232

12.

Unrealized losses/gains on investment securities

50,0000(50,000)

50,00013

Realized gains on investment securities

0(5,627)(5,627)0

14.

Realized losses on property and equipment

0

0

0

3,541

15.

Written-off losses on investment securities

15,7893,729(12,060)

19,65416.

Impairment losses

0

0

0

5,197

17.

Trade receivables (increase/decrease)(1,341,934)

1,897,747

18.

Inventories (increase/decrease)(1,459,080)(880,905)

578,175

662,10319.

Purchase liabilities (increase/decrease)493,207423,437(69,770)(226,369)

20.

Trade payables (increase/decrease)(80,042)(40,252)

39,78926,23721.

Advances from customers (increase/decrease)

231,902

114,983(116,918)

110,441

22.

Consumption tax, etc. (increase/decrease)(49,320)(21,636)

70,957(64,525)

23.

Others(82,258)(39,041)

43,216(165,820)(1,148,503)

2,977,280

4,125,784

359,182

Sub total

3,239,682 (3,018,088)

24.

Interests and dividends received

48,11841,968(6,149)67,101

25.

Interests paid

(39,336)(30,971)8,365(82,927)

26.

Income taxes paid

(569,197)(571,961)(2,764)(922,054)(1,708,919)

2,416,315

4,125,235(578,697)

Net cash provided (used) in operating activities

19

(Thousands of yen)
6-month

6-monthIncrease &Year ended

period ended

period ended

decrease

Oct. 31,

Apr. 30, 2007

Apr. 30, 2008

(244,205)(275,938)(31,732)(536,038)

0

0

0

8,412

2007

II. Investing activities
1.

Expenditures for properties and equipment

2.

Proceeds from sales of properties and equipment

3.

Acquisition of intangible assets(6,489)(4,096)2,392(6,491)

4.

Acquisition of investment securities(14,157)(7,995)

6,161(22,024)

5.

Collection of loans receivable

20,493

16,562(3,930)36,754

6.

Loans receivable (increase)(1,010)(1,760)(750)(4,153)

7.

Guarantee deposits (increase/decrease)(111,968)(3,599)108,368(117,117)

8.

Other investments (increase/decrease)

6,943

20,91913,975

17,271(350,392)(255,906)

94,485(623,386)

2,386,464(1,371,392)(3,757,857)

2,323,769

0

25,00025,0000(90,000)(90,000)

0(180,000)050,080(50,080)

0

0

(188)

(188)

(118)

(299,375)(349,269)(49,893)(299,375)

0(7,398)(7,398)0

1,997,088(1,743,168)(3,740,257)

1,844,275

33,361(71,703)(105,065)(3,831)(28,861)
1,235,536

345,536
1,873,895

374,397
638,359

638,359
1,235,536

1,206,674

2,219,431

1,012,757

1,873,895

Net cash provided (used) in investing activities
III. Financing activities
1.

Borrowing of short-term loan (increase/decrease)2.

Borrowing of long-term debt (increase)3.

Repayment of long-term debt

4.

Paid-in capital from investments from minority
shareholders

5.

Reacquisition of issued shares of stocks

6.

Cash dividends paid

7.

Dividends payments to minority shareholders
Net cash provided (used) in financing activities

IV.

Effect of exchange rate changes

V.
VI.

Cash and cash equivalents (increase/decrease)
Cash and cash equivalents at the beginning ofyear
Cash and cash equivalents at the end of fiscal
yr (Note)

VII.

20

Basis of Financial Statements and Summary of Significant Accounting Policies

1.

6-month period ended
Apr. 30, 2007
Scope of consolidation:

1.

6-month period ended
Apr. 30, 2008
Scope of consolidation:

1.

Year ended Oct. 31, 2007
Scope of consolidation:(1) Number of consolidated
subsidiaries: 6(1) Number of consolidated
subsidiaries: 7(1) Number of consolidated
subsidiaries: 6

Names of consolidated subsidiaries
are:Tomoe Machinery Co., Ltd.
Tomoe Machinery Service
Co., Ltd.
Interstella Co., Ltd.
Interstella Plastics (Shenzhen)Co., Ltd.
Tomoe Engineering (Hong Kong)
Co., Ltd.
Tomoe Engineering (Shanghai)Co., Ltd.

Names of consolidated subsidiaries
are:Tomoe Machinery Co., Ltd.
Tomoe Machinery Service
Co., Ltd.
Interstella Co., Ltd.
Interstella Plastics (Shenzhen)Co., Ltd.
Tomoe Engineering (Hong Kong)
Co., Ltd.
Tomoe Engineering (Shanghai)Co., Ltd.
Stella Tech Engineering Plastics(Shenzhen) Co., Ltd.
Stella Tech Engineering Plastics(Shenzhen) Co., Ltd. is the 80%
owned subsidiary founded during
the current interim period, and isthus included in the scope of
consolidation from the current
interim period.

Names of consolidated subsidiaries
are:Tomoe Machinery Co., Ltd.
Tomoe Machinery Service
Co., Ltd.
Interstella Co., Ltd.
Interstella Plastics (Shenzhen)Co., Ltd.
Tomoe Engineering (Hong Kong)
Co., Ltd.
Tomoe Engineering (Shanghai)Co., Ltd.

(2) Names of main unconsolidated
subsidiaries:
Tomoe Butsuryu Co., Ltd.
Tomoe Wine & Spirits Co., Ltd.

(2) Names of main unconsolidated (2) Names of main unconsolidated
subsidiaries:
subsidiaries:
Tomoe Butsuryu Co., Ltd.
Tomoe Butsuryu Co., Ltd.
Tomoe Wine & Spirits Co., Ltd.
Tomoe Wine & Spirits Co., Ltd.
Reason for excluding from scopeof consolidation:
Same as left.

Reason for excluding from scopeof consolidation:
The above two unconsolidated
subsidiaries are excluded fromscope of consolidation because
they are small-scale companies
and their total assets, sales, net
income and loss for thisconsolidated 6-month period (inamount appropriate for equity) andretained earnings (in amountappropriate for equity) have nosignificant effects on this 6-monthconsolidated financial statements.
2.

Matters related to applying
equity method:(1) Number of unconsolidated
subsidiaries equity method isapplied: None2.

Matters related to applying
equity method:(1) Number of unconsolidated
subsidiaries equity method isapplied: None21

Reason for excluding from scopeof consolidation:
The above two unconsolidated
subsidiaries are excluded fromscope of consolidation because
they are small-scale companies
and their total assets, sales, net
income and loss for the current
fiscal year (in amount appropriate
for equity) and retained earnings(in amount appropriate for equity)
have no significant effects on
consolidated financial statements.

2.

Matters related to applying
equity method:(1) Number of unconsolidated
subsidiaries equity method isapplied: None(2) Number of consolidated
subsidiaries equity method isapplied: None

(2) Number of consolidated
subsidiaries equity method isapplied: None

(3) Names of main unconsolidated
subsidiaries and affiliatedcompanies equity method is notapplied:Tomoe Butsuryu Co., Ltd.
Tomoe Wine & Spirits Co., Ltd.

(3) Names of main unconsolidated (3) Names of main unconsolidated
subsidiaries and affiliatedsubsidiaries and affiliatedcompanies equity method iscompanies equity method is
not applied:
not applied:
Tomoe Butsuryu Co., Ltd.
Tomoe Butsuryu Co., Ltd.
Tomoe Wine & Spirits Co.,
Tomoe Wine & Spirits
Ltd.
Co., Ltd.

Reason for not applying equity
method:Investments in the above two
unconsolidated subsidiaries
are appraised by cost method
instead of equity method asthey have no major effects on
net income or loss, retained
earnings, etc. for this 6-monthconsolidated period and are
not important in totality.
3.

Matters related to interim
accounting period of
consolidated subsidiaries:

Reason for not applying
equity method:Same as left.

3.

Accounting procedure
standard:(1) Appraisal standard andappraisal method for important
assets:1)

Appraisal standard andappraisal method for
securities:

Matters related to interim
accounting period of
consolidated subsidiaries:

Reason for not applying equity
method:Investments in the above two
unconsolidated subsidiaries
are appraised by cost method
instead of equity method asthey have no major effects on
consolidated net income orloss, consolidated retained
earnings, etc. and are notimportant in totality.
3.

As the 6-month fiscal term ofInterstella Co., Ltd., Interstella
Plastics (Shenzhen) Co., Ltd.,
Tomoe Engineering (Shanghai)Co., Ltd. and Stella TechEngineering Plastics (Shenzhen)Co., Ltd. ends on June 30, theiraccounts are provisionally closed
on March 31 of the respective
fiscal term and Tomoe
Engineering (Hong Kong) Co.,
Ltd. ends on March 31.
Therefore, as for 5 companies
including Tomoe Hong Kong,
necessary adjustments requiredfor consolidation are made on
important transactions among
consolidated companies from
April 1 to the closing date.

As the 6-month fiscal term ofInterstella Co., Ltd., Interstella
Plastics (Shenzhen) Co., Ltd., andTomoe Engineering (Shanghai)Co., Ltd. ends on June 30, theiraccounts are provisionally closed
on March 31 of the respective
fiscal term and Tomoe
Engineering (Hong Kong) Co.,
Ltd. ends on March 31.
Therefore, as for 4 companies
including Tomoe Hong Kong,
necessary adjustments requiredfor consolidation are made on
important transactions among
consolidated companies from April
1 to the closing date.

4.

(2) Number of consolidated
subsidiaries equity method isapplied: None4.

Accounting procedure
standard:(1) Appraisal standard andappraisal method for important
assets:1)

Appraisal standard andappraisal method for
securities:

22

Matters related to accounting
period of consolidated
subsidiaries:
As fiscal year of Interstella Co.,
Ltd., Interstella Plastics(Shenzhen) Co., Ltd., andTomoe Engineering (Shanghai)Co., Ltd. end on December 31,
their accounts are provisionallyclosed on September 30 of therespective fiscal year and Tomoe
Engineering (Hong Kong) Co.,
Ltd. ends on September 30.
Therefore, as for 4 companies,
necessary adjustments requiredfor consolidation are made on
important transactions among
consolidated companies from
October 1 to the closing dates.

4.

Accounting procedure
standard:(1) Appraisal standard andappraisal method for important
assets:1)

Appraisal standard andappraisal method for
securities:

Other securities

Other securities
Other securities
Assets with market value:
Market value method based onmarket value, etc. on the interim
closing date (All of appraisal
differences are processed bycapital infusion method andcost of sales is calculated bymoving average method.)

Assets with market value:Same as left.
Assets without market value:Same as left.

Assets without market value:Same as left.

Assets without market value:
Cost method by moving
average method2)Appraisal standard andappraisal method forinventories:

Assets with market value:
Market value method based onmarket value, etc. on theclosing date (All of appraisal
differences are processed bycapital infusion method and costof sales is calculated by moving
average method.)2)

Appraisal standard andappraisal method forinventories:

2)

Appraisal standard andappraisal method forinventories:

Goods:
Cost method based on moving
average method (cost method
based on individual method forcertain specific goods)

Goods:
Same as left.

Goods:
Same as left.

Finished products and products
in process:Mainly cost method based on
individual method

Finished products and products
in process:Same as left.

Finished products and products
in process:Same as left.

Raw materials:
Mainly cost method based on
first-in first-out method

Raw materials:
Same as left.

Raw materials:
Same as left.

Supplies:
Last cost method(2) Depreciation method forimportant depreciation assets:

1)

Tangible fixed assets:
Decline balance method ismainly applied for
depreciation, while
straight-line method isapplied for the buildings
excluding accessory
equipment acquired on orafter April 1, 1998.
Meanwhile, service lives ofthe main assets are as
follows:
Buildings and structures: 5~47
years
Machinery and vehicles: 2~15
years

Supplies: Same as left.

(2) Depreciation method forimportant depreciation
assets:1)

Tangible fixed assets:
Same as left.

(Additional information)
According to the revision of the
Corporate Tax Law, tangible
fixed assets acquired prior to
March 31, 2007 fall under the
depreciation method based
upon the Corporate Tax Law
before revision. The
difference between 5%
equivalent of the acquired
value and the memorandum
value is equally depreciated forfive years, and is included in
the depreciation cost, startingfrom a consolidated fiscal year

23

Supplies: Same as left.

(2) Depreciation method forimportant depreciation assets:(1) Tangible fixed assets:
Same as left.

following a consolidated fiscal
year in which the value hasreached 5% of the acquired
value.
(Petty sum depreciable assets)
Assets with acquisition price of¥100,000 - less than ¥200,000 will
be accounted for as assets, andstraight-line method in three years
is adopted for depreciation.
2)

Intangible fixed assets:
Software: Straight-line
method based on
estimated utilizable period(5 years) is adopted.

(3) Allocation standard of importantreserves:(Petty sum depreciable assets)
Same as left.

(Petty sum depreciable assets)
Same as left.

2)2)

Intangible fixed assets:
Same s left.

(3) Allocation standard ofimportant reserves:

Intangible fixed assets:
Same as left.

(3) Allocation standard ofimportant reserves:

1)

Allowance for doubtful
accounts:
Mainly preparing for bad
debts, estimatednon-recoverable amount isaccounted for by loss ratio
for general debts andcollectability of specific debts
such as doubtful debt istaken into considerationindividually.

1)

Allowance for doubtful
accounts:
Same as left.

1)

Allowance for doubtful
accounts:
Same as left.

2)

Accrued employees’
bonuses:
Allowance is provided inprovisions for payment ofbonuses to employees in theamount of estimatedbonuses, which are
attributable to the current
consolidated interim period.

2)

Accrued employees’
bonuses:Same a left.

2)

Accrued employees’
bonuses:
Allowance is provided inprovisions for payment ofbonuses to employees in
the amount of estimatedbonuses, which are
attributable to the current
consolidated fiscal year.

3)

Accrued officers’ bonuses:
Allowance for the current
interim period is provided inprovisions for payment ofbonuses to officers in theamount of estimatedbonuses during the current
consolidated interim period.

3)

Accrued officers’ bonuses:
Same as left.

3)

Accrued officers’ bonuses:
Allowance is provided inprovisions for payment ofbonuses to officers in theamount of estimatedbonuses.

4)

Allowance for productwarranty:
In order to account for
product-related loss andwarranty expenses to be
incurred after delivery of

4)

Allowance for productwarranty:
Same as left.

4)

Allowance for productwarranty:
Same as left.

24

products, the possibility of
incurring such expenses isindividually estimated, andthe amount is provided for as
warranty provision.
5)

Accrued pension andseverance liabilities:
Preparing for employee’s
accrued pension, theamount acknowledged being
incurred as of the end of thethis consolidated interim
period is accounted forbased on estimated amountof accrued pension debts
and pension assets as of theend of the current
consolidated fiscal year.
Meanwhile, mathematical
calculation difference isprocessed proportionately as
cost in each consolidated
fiscal year of its occurrenceby equal installment method
based on certain number ofyears (10 years) within
employees’ averageremaining work period.

5)

Accrued pension andseverance liabilities:
Same as left.

5)

Accrued pension andseverance liabilities:
Preparing for employee’s
accrued pension, theamount acknowledged
being incurred as of the endof the current consolidated
fiscal year is accounted forbased on estimatedamount of accrued pension
debts and pension assets
as of the end of the current
consolidated fiscal year.
Meanwhile, mathematical
calculation difference isprocessed proportionately
as cost in eachconsolidated fiscal year of
its occurrence bystraight-line method basedon certain number of years(10 years) within
employees’ averageremaining work period.

6)

Officers’ retirement
allowance:
Interim term-end payableallowances based on the
bylaw are appropriated toprepare for payment ofofficers’ retirement
allowances.

6)

Officers’ retirement
allowance:
Same as left.

6)

Officers’ retirement
allowance:
Term-end payableallowances based on the
bylaw are appropriated toprepare for payment ofofficers’ retirement
allowances.

(4) Process method of important(4) Process method of important
lease transaction:lease transaction:
Same as left.
Finance lease transactions otherthan those in which ownership ofleased objects is acknowledged
being transferred to lessee areprocessed in accordance withthe method for ordinary rental
transactions.
(5) Method of important hedge
accounting:1)

Method of hedge
accounting:Deferred hedge accounting
is adopted.
For exchange contracts andcurrency swaps,(5) Method of important hedge
accounting:1)

Method of hedge
accounting:Same as left.

25(4) Process method of important
lease transaction:
Same as left.

(5) Method of important hedge
accounting:1)

Method of hedge
accounting:Same as left.

appropriated process is
adopted if requirements forappropriated process are
satisfied. Special process is
adopted for interest swaps if
requirements for special
process are satisfied.
2)

Means for hedging andobjects for hedging:
Objects for
Means forhedging
hedging
Interest swaps Interest rate
fluctuation on
borrowings
Exchange
Exchange rate
contracts and and fluctuation
currency
for debts andswaps
credits inforeigncurrencies

2)

Means for hedging andobjects for hedging:
Same as left.

2)

Means for hedging andobjects for hedging:
Same as left.

3)

Hedge policy:
We hedge risks against
fluctuation of exchange rate,interest rate, etc. In
principle, we hedge risks
based on actual demandand no derivativetransactions are made for
speculation purpose.

3)

Hedge policy:
Same as left.

3)

Hedge policy:
Same as left.

4)

Appraisal method of hedge
effectiveness:
We make our hedgetransactions in accordancewith our risk management
method and acknowledge
that the correlation between
means for hedging against
fluctuation of exchange rate,interest rate, etc. and objects
for hedging are completely
justified.

4)

Appraisal method of hedge
effectiveness:
Same as left.

4)

Appraisal method of hedge
effectiveness:
Same as left.

(6) Other important matters in
preparing consolidated interim
financial statement:
1)

Accounting procedure for
consumption tax, etc.:
Accounting procedure for
consumption tax and local
consumption tax is inaccordance with net of tax
method.

(6) Other important matters in
preparing consolidated
interim financial statement:
1)

Accounting procedure for
consumption tax, etc.:
Same as left.

26(6) Other important matters in
preparing consolidated financial
statements:
1) Accounting procedure for
consumption tax, etc:
Same as left

2)

5.

Handling of various
reserves, etc. forcalculation of tax amount,
etc.:
Income taxes such as
current and deferred forthis consolidated interim
period are calculated on
the premise ofaccumulation anddisposition of reserves
projected for thisconsolidated accounting
period in accordance withthe rules and regulationsof corporate tax law, etc.

2)

Handling of various
reserves, etc. for calculationof tax amount, etc.:
Same as left.

Range of funds in
5. Range of funds inconsolidated interim cash flow
consolidated interim cash
statement:
flow statement:
Funds (cash, cash equivalent, etc.)
in consolidated interim period cash
flow statement consist of cash on
hand, deposits derivable asneeded and easily convertible andyet short-term investments withmaturity date within 3 months fromacquisition date bearing small risks
only in price fluctuation.

2) Handling of various
reserves, etc. for calculationof tax amount, etc.:
N/A

5.

Range of funds inconsolidated cash flow
statement:
Funds (cash, cash equivalent,etc.) in consolidated cash flow
statement consist of cash on
hand, deposits derivable asneeded and easily convertible
and yet short-term investmentswith maturity date within 3months from acquisition datebearing small risks only in pricefluctuation.

Same as left.

27

Change in accounting procedure
6-month period ended
Apr. 30, 2007
(Change in depreciation method)

6-month period ended
Apr. 30, 2008
(Change in depreciation method)

Effective from the current interim N/Aperiod, under review, we havechanged the depreciation method interms of the tangible assets acquired
after April 1, 2007, in accordance withthe amendment of the corporate tax
law. The effect of this change on
operating income, recurring income,and net income before income taxes
was immaterial.

Year ended Oct. 31, 2007
(Change in depreciation method)

Effective from the current interim
period, under review, we havechanged the depreciation method interms of the tangible assets acquired
after April 1, 2007, in accordancewith the amendment of the corporate
tax law. The effect of this change
on operating income, recurringincome, and net income before
income taxes was immaterial. The
effect of this change on segment
information is mentioned in theapplicable note.

Additional Information
6-month period ended
Apr. 30, 2007
(Accounting standard forpresentation of net assets inbalance sheet)

6-month period ended
Apr. 30, 2008
(Accounting standard forpresentation of net assets inbalance sheet)

From the previous consolidated N/Afinancial year, the Company adoptedthe“AccountingStandardforPresentation of Net Assets in the
Balance Sheet” (Accounting Standards
Board Statement No. 5, December 9,2005 by ASBJ) and “Implementation
Guidance on Accounting Standards for
Presentation of Net Assets in the
Balance Sheet” (Accounting Standards
Board Implementation Guidance No. 8,
December 9, 2005 by ASBJ). Thereis no impact on profit and loss. The
total amount of "Stockholders’ Equity"in accordance with the old standard
would be 15,820,060 thousand yen.

Year ended Oct. 31, 2007
(Accounting standard forpresentation of net assets inbalance sheet)
N/A

Also, net assets in the balance sheet
for the current consolidated interim
financial period is presented according
to the revised rules for consolidated
interim financial statements.

28

Notes to Consolidated Financial Statements(Consolidated balance sheets)(Thousands of yen)

6-month period ended Apr. 30, 2007

6-month period ended Apr. 30, 2008

Year ended Oct. 31, 2007

*1 (Collateral assets)
A portion of the assets is pledged ascollateral. Details are as follows:
Pledged assets amount
Investment securities:
349,281
Secured liabilities amountAccounts payable:
175,877*1 (Collateral assets)
A portion of the assets is pledged ascollateral. Details are as follows:
Pledged assets amount
Investment securities:
277,798
Secured liabilities amountAccounts payable:
155,016*1 (Collateral assets)
A portion of the assets is pledged ascollateral. Details are as follows:
Pledged assets amount
Investment securities:
420,890
Secured liabilities amountAccounts payable:
147,356

2 Contingent liabilities:*Liabilities for guarantee:
Liabilities for guarantee on bankborrowings for home ownership financingof employees:
Employees (home ownership
financing for employees):
11,907

2 Contingent liabilities:*Liabilities for guarantee:
Liabilities for guarantee on bankborrowings for home ownership
financing of employees:
Employees (home ownership
financing for employees): 9,035

2 Contingent liabilities:*Liabilities for guarantee:
Liabilities for guarantee on bankborrowings for home ownership
financing of employees:
Employees (home ownership
financing for employees): 10,290*3 Term-end maturing bills are cleared on billclearing date. Since the last day of thecurrent consolidated interim period was
holiday for banking institutions, bills
maturing on the last day of the succeeding
fiscal term are included in term-end
balance.
Bills receivable:
454,855
Bills payable:
191,359*3 N/A*3 N/A

4 Our group concluded overdraft contract andloan commitment contract with maincorrespondent financial institutions forenabling efficient operating funds raising.
Unrealized borrowing balance as of theend of the current consolidated interim
period based on the contract is as follows:

4 Same as left.

4 Our group concluded overdraft contract
and loan commitment contract with maincorrespondent financial institutions forenabling efficient operating funds raising.
Unrealized borrowing balance as of theend of the current consolidated fiscal
year based on the contract is as follows:

6,550,000

Limit of overdraft and amountof loan commitment in total: 6,500,000

Balance of executed borrowings:
3,305,000
Balance:
3,245,000

Balance of executed borrowings:
1,920,000
Balance:
4,580,000

Limit of overdraft and amountof loan commitment in total:

29

Limit of overdraft and amountof loan commitment in total: 6,550,000
Balance of executed borrowings:
3,022,000
Balance:
3,528,000

(Statements of consolidated income)6-month period ended Apr. 30, 2007

(Thousands of yen)
Year ended Oct. 31, 2007

6-month period ended Apr. 30, 2008

Main expense items and amount inselling, general and administrative costs
are as follows:*1

Main expense items and amount inselling, general and administrative costs
are as follows:*1

Packing and freight costs
Pension and severance costs
Provision for officers’
retirement allowance
Employee’s salary costs
Provision for accrued
employees’ bonuses
Provision for accrued officers’
bonuses
Welfare costs
Traveling and transportation
costs
Depreciation costs
Rent

Packing and freight costs
Pension and severance
costs
Provision for officers’
retirement allowance
Employee’s salary costs
Welfare costs
Provision for accrued
employees’ bonuses
Provision for accrued
officers’ bonuses
Traveling and transportation
costs
Depreciation costs
Rent

Packing and freight costs

969,968

Pension and severance
costs
Provision for officers’
retirement allowance
Employee’s salary costs
Welfare costs
Provision for accrued
employees’ bonuses
Provision for accrued
officers’ bonuses
Provision for doubtful
accounts
Traveling andtransportation costs
Depreciation costs
Rent

61,708*1

495,141
29,64623,170775,162
476,006
27,480188,375
164,464
36,687
194,610503,31325,615
21,660
838,503
208,533
482,819
33,822
175,793
46,975
217,118*2

Realized gains on property andequipment: N/A*2

Realized gains on property andequipment: N/A*2*3

Realized losses on property andequipment
N/A*3

Realized losses on property andequipment
N/A*3

Written-off losses on property andequipment:
Machinery and vehicle
9,879
Others5,909
Total
15,789*4

Written-off losses on property andequipment:
Machinery and vehicle
2,225
Others
1,503
Total
3,729

*4

*5

*5

*5

*4

Impairment losses
N/A

Impairment losses
N/A

Main expense items and amount inselling, general and administrative costs
are as follows:

61,8701,786,076
393,899
751,714
68,10054,284346,438
89,837403,784

Realized gains on property andequipment:
Machinery and vehicle
3,184
Realized losses on property andequipment
Machinery and vehicle
6,726
Written-off losses on property andequipment:
Machinery and vehicle
11,631Tools and equipment
6,495
Others
1,527
Total
19,654
Impairment losses

Place Purpose Type

AmountMinami Saku County,
Nagano Pref. & Other IdlingLand 5,197

We classify our assets into those for
Machinery & Equipment Business, those
for Chemical Products Business, and idle
assets. With respect to idle assets (land),as the land price has declined against its
book value, we have reduced the bookvalue to the recoverable amount, andrecognized the resulting impairment loss (inthe amount of 5,197 thousand yen) as an
extraordinary loss in this consolidated
financial year. Amount of unused land is30

measured by net sale value based on theassessed valuation of property tax withreasonable adjustment.

*6 Removal expenses
Restitution cost
Packing and freight
OthersTotal*631,0006,962
1,447
39,410

Removal expenses
N/A

31*6 Removal expenses
Restitution cost
Packing and freight
OthersTotal

31,0006,962
1,447
39,410(Statements of Changes in Consolidated Shareholders’ equity)
6-month period ended April 30, 2007
1. Matters concerning the types and total number of shares outstanding
Type of share
Number of shares as
Increase (shares)
Decrease (shares)of Apr. 30, 2007
Common stock
10,533,200-(Thousands of yen)
Number of shares asof Apr. 30, 2008
10,533,200

2. Matters concerning treasury stock
Type of share
Number of shares asof Apr. 30, 2007
Common stock
554,008(Thousands of yen)
Number of shares asof Apr. 30, 2008
554,008

Increase (shares)

Decrease (shares)--

3. Matters related stock acquisition rights
There are no relevant matters.
4. Matters concerning dividends(1) Dividend payment amountResolution
Type of stock
Annualshareholders’meeting on
Jan. 30, 2007

Common shares

Total amount ofdividends
299,375

Dividend pershare (yen)30

Record date(Thousands of yen)
Effective date

Oct. 31, 2006

Jan. 31, 2007

(2) Of the dividends whose record date belongs to this consolidated interims period, those dividends whose effective dates
belong to the subsequent consolidated financial period:
There are no relevant matters.

6-month period ended April 30, 2008
1. Matters concerning the types and total number of shares outstanding
Type of share
Number of shares as
Increase (shares)
Decrease (shares)of Apr. 30, 2007
Common stock
10,533,200-(Thousands of yen)
Number of shares asof Apr. 30, 2008
10,533,200

2. Matters concerning treasury stock(Thousands of yen)Type of share
Number of shares as
Increase (shares)
Decrease (shares) Number of shares asof Apr. 30, 2007
of Apr. 30, 2008
Common stock
554,083165
554,248
Note: The 165 shares increase in the number of common shares is due to the purchase of odd-lot shares.
3. Matters related stock acquisition rights
There are no relevant matters.
4. Matters concerning dividends(1) Dividend payment amountResolution
Type of stock
Annualshareholders’meeting on
Jan. 30, 2008

Common shares

Total amount ofdividends
349,269

Dividend pershare (yen)35

Record date(Thousands of yen)
Effective date

Oct. 31, 2007

Jan. 31, 2008

(2) Of the dividends whose record date belongs to this consolidated interims period, those dividends whose effective dates
belong to the subsequent consolidated financial period:
There are no relevant matters.

32

Year ended October 31, 2007
1. Matters concerning the types and total number of shares outstanding
Type of share
Number of shares as
Increase (shares)
Decrease (shares)of Apr. 30, 2007
Common stock
10,533,200-(Thousands of yen)
Number of shares asof Apr. 30, 2008
10,533,200

2. Matters concerning treasury stock(Thousands of yen)Type of share
Number of shares as
Increase (shares)
Decrease (shares) Number of shares asof Apr. 30, 2007
of Apr. 30, 2008
Common stock
554,00875
554,083
Note: The 75 shares increase in the number of common shares is due to the purchase of odd-lot shares.
3. Matters related stock acquisition rights
There are no relevant matters.
4. Matters concerning dividends(1) Dividend payment amountResolution
Type of stock
Annualshareholders’meeting on
Jan. 30, 2007

Common shares

Total amount ofdividends
299, 375

Dividend pershare (yen)30

Record date(Thousands of yen)
Effective date

Oct. 31, 2006

Jan. 31, 2007

(2) Of the dividends whose record date belongs to this consolidated fiscal term, those dividends whose effective dates
belong to the next consolidated financial period(Thousands of yen)
Resolution
Type of
Source of
Total
Dividend per Record date
Effective datestock
dividend
amount of share (yen)payment
dividends
Annualshareholders’meeting on
Jan. 30, 2008

CommonsharesRetainedearnings

349,269

33

35

Oct. 31, 2007

Jan. 31, 2008

(Consolidated cash flow statement)(Thousands of yen)

6-month period ended Apr. 30, 2007

6-month period ended Apr. 30, 2008

Year ended Oct. 31, 2007

Note: Interim term-end balance of cash
and cash equivalent and relation withthe amount of the accounts listed in
the consolidated balance sheet:

Note: Interim term-end balance of cash andcash equivalent and relation with the amountof the accounts listed in the consolidatedbalance sheet:

Note: Fiscal year-end balance of cash andcash equivalent and relation with theamount of the accounts listed in the
consolidated balance sheet:

Cash & deposit account

1,206,674

Cash & deposit account2,219,431

Cash & cash equivalent

1,206,674

Cash & cash equivalent

2,219,431

Cash & deposit accountCash & cash equivalent34

1,873,895
1,873,895

(Lease)(Thousands of yen)

6-month period ended Apr. 30, 2007

6-month period ended Apr. 30, 2008

Year ended Oct. 31, 2007

Finance lease transactions other than those of which
ownership of leased items is acknowledged to betransferred to lessee:

Finance lease transactions other than those ofwhich ownership of leased items is
acknowledged to be transferred to lessee:

Finance lease transactions other than those ofwhich ownership of leased items is
acknowledged to be transferred to lessee:

1. Acquisition price equivalent, accumulated
depreciation equivalent, accumulated impairment
loss equivalent of leased items and interim
term-end outstanding balance equivalent:

1. Acquisition price equivalent, accumulated
depreciation equivalent, accumulated
impairment loss equivalent of leased items &interim term-end outstanding balance
equivalent:

1. Acquisition price equivalent, accumulated
depreciation equivalent, accumulated
impairment loss equivalent of leased items& term-end outstanding balance equivalent:

Machinery& vehicles
Tools &
equipment
Total

(a)
21,500(b)
20,783(c)
716

219,396

120,601

98,795

240,896

141,384

Tools &
equipment
Total

(a)
214,106(b)
119,751(c)
94,354

214,106

119,751

94,354

99,511(a) Acquisition price equivalent(b) Accumulated depreciation equivalent(c) Interim term-end outstanding balance(a) Acquisition price equivalent(b) Accumulated depreciation equivalent(c) Interim term-end outstanding balance

Tools &
equipment
Total

(a)
227,206(b)
127,880(c)
99,326227,206

127,880

99,326(a) Acquisition price equivalent(b) Accumulated depreciation equivalent(c) Term-end outstanding balance

2. Interim term-end balance equivalent of unexpired
lease fee and outstanding balance of lease assets
impairment account:

2. Interim term-end balance equivalent of
unexpired lease fee and outstandingbalance of lease assets impairment account:

2. Term-end balance equivalent of unexpired
lease fee and outstanding balance of leaseassets impairment account:

Within 1 year
Exceeding 1 year
Total

Within 1 year
Exceeding 1 year
Total

Within 1 year
Exceeding 1 year
Total

43,80258,253102,055

38,791
57,46496,256

41,35060,196
101,547

3. Lease fee paid, amount withdrawn from leaseassets impairment account, depreciation costequivalent, interests paid equivalent andimpairment loss:

3. Lease fee paid, amount withdrawn fromlease assets impairment account,depreciation cost equivalent, interests paid
equivalent and impairment loss:

3. Lease fee paid, amount withdrawn fromlease assets impairment account,depreciation cost equivalent, interests paid
equivalent and impairment loss:

Lease fee paid
Depreciation cost equivalentInterests paid equivalent

Lease fee paid
Depreciation cost equivalentInterests paid equivalent

Lease fee paid
Depreciation cost equivalentInterests paid equivalent

25,35723,531849

4. Calculation method of depreciation costequivalent:
By straight-line method with service life being
lease period and residual value being zero.
5. Calculation method of interests equivalent:
Allocation for each term is by interest method withthe difference between the total amount of lease
fee and acquisition price equivalent of leased
items being interests equivalent.
(Impairment loss)
There is no impairment loss allocated to leaseassets.

24,29722,967798

4. Calculation method of depreciation costequivalent:Same as left.

47,36945,2001,686

4. Calculation method of depreciation costequivalent:Same as left.

5. Calculation method of interests equivalent:

5. Calculation method of interests equivalent:Same as left.
(Impairment loss)
Same as left.

Same as left.
(Impairment loss)
Same as left.

35

(Securities)
6-month period ended Apr. 30, 2007
1. Other securities with market value:
Classification
Acquisition cost(1) Stocks(2) Others
Total

403,005
11,368414,373

Interim consolidatedbalance sheet amount
1,012,807
11,7381,024,545

2. Main securities not being appraised on market price:
Classification
Other securities:(1) Unlisted stocks (excluding over-the-counter
stocks)(2) Others
Total
Stocks of subsidiary companies and affiliatedcompanies:

351,967
59,905
411,872
51,50051,5006-month period ended Apr. 30, 2008
1. Other securities with market value:
Classification
Acquisition cost

2.

609,802369
610,171(Thousands of yen)Interim consolidated balance sheet amountTotal(1) Stocks(2) Others
Total(Thousands of yen)
Difference

418,867
11,368430,236

Interim consolidatedbalance sheet amount
826,406
9,390
835,796

Main securities not being appraised on market price:
Classification(Thousands of yen)
Difference
407,538(1,978)405,559(Thousands of yen)Interim consolidated balance
sheet amount

Other securities:
Unlisted stocks (excluding over-the-counter stocks)
Total
Stocks of subsidiary companies and affiliated companies:

397,233
397,233
51,50051,500Total

36

Year ended Oct. 31, 2007
1. Other securities with market value:
Classification
Acquisition cost(1) Stocks(2) Others
Total
2.

410,872
11,368422,240

Consolidated balance
sheet amount
1,111,826
11,122
1,122,948

Main securities not being appraised on market price:
Classification
Other securities:(1) Unlisted stocks (excluding over-the-counter stocks)(2) Others
Total
Stocks of subsidiary companies and affiliated companies
Total(Thousands of yen)
Difference
700,953(246)
700,707(Thousands of yen)
Consolidated balance sheet amount
348,425
57,395405,820
51,50051,500(Derivative transactions)
6-month period ended Apr. 30, 2007
There are no relevant matters.
Although exchange contract transactions and currency swaps are executed, they are excluded from the “Notes” since hedge
accounting is adopted.
6-month period ended Apr. 30, 2008
There are no relevant matters.
Although exchange contract transactions and currency swaps are executed, they are excluded from the “Notes” since hedge
accounting is adopted.
Year ended Oct. 31, 2007
There are no relevant matters.
Although exchange contract transactions and currency swaps are executed, they are excluded from the “Notes” since hedge
accounting is adopted.

(Stock option plan)
6-month period ended Apr. 30, 2007
There are no relevant matters.
6-month period ended Apr. 30, 2008
There are no relevant matters.
Year ended Oct. 31, 2007
There are no relevant matters.

37

(Segment information)
1. Segment by type of business:
6-month period ended Apr. 30, 2007

Sales
(1) Sales to unaffiliated customers(2) Internal sales among segments
or amount transferred
Total
Operating costs
Operating income(Thousands of yen)
Consolidated

Machinery
mfg & sales

Chemicalproducts
sales

Total

6,137,810

17,989,513

24,127,323

0

24,127,323

0
6,137,810
5,590,290
547,5190
17,989,513
17,280,656
708,857

0
24,127,323
22,870,946
1,256,377

0
0
0
0

0
24,127,323
22,870,946
1,256,377

Deletion or
total
company(Notes)1. Business classification is by aggregate sales classification.
2. Main products and goods in each business:(1) Machinery manufacturing & sales: Various types of centrifuges and other machinery(2) Chemical products sales: Synthetic resin, inorganic materials and other chemical products

6-month period ended Apr. 30, 2008
Machinery
mfg & sales
Sales(1) Sales to unaffiliated customers(2) Internal sales among segments
or amount transferred
Total
Operating costs
Operating income(Thousands of yen)
Deletion or
Consolidated
total
company

Chemicalproducts
sales

Total

6,313,113

17,709,582

24,022,695

0

24,022,695

0
6,313,113
5,606,875
706,237017,709,582
16,834,424
875,157

0
24,022,695
22,441,300
1,581,395

0
0
0
0

0
24,022,695
22,441,300
1,581,395(Notes)1. Business classification is by aggregate sales classification.
2. Main products and goods in each business:(1) Machinery manufacturing & sales: Various types of centrifuges and other machinery(2) Chemical products sales: Synthetic resin, inorganic materials and other chemical products

Year ended Oct. 31, 2007

(Thousands of yen)
Deletion or
Consolidated
total
company

Machinery
mfg & sales

Chemicalproducts
sales

Total

14,547,785

36,247,419

50,795,204

050,795,204

0
14,547,785
13,622,448
925,3360
36,247,419
34,727,816
1,519,602

050,795,204
48,350,264
2,444,939

0
0
0
0

0
50,795,204
48,350,264
2,444,939

Sales(1) Sales to unaffiliated customers(2) Internal sales among segments
or amount transferred
Total
Operating costs
Operating income(Notes)1. Business classification is by aggregate sales classification.
2. Main products and goods in each business:(1) Machinery manufacturing & sales: Various types of centrifuges and other machinery(2) Chemical products sales: Synthetic resin, inorganic materials and other chemical products
3. As stated in the “Changes to the Basis of Financial Statements and Summary of Significant Accounting Policies” (changes to the depreciation method forimportant depreciation assets), the depreciation cost for tangible fixed assets acquired after April 1, 2007 has been recorded in compliance with thedepreciation method specified by the revised Corporate Tax Law along with the revision to the Corporate Tax Law effective the current consolidated fiscal
year.
The change will have only a slight effect on the segment information.

38

2.

Segment by location:

6-month period ended Apr. 30, 2007

Sales
(1) Sales to unaffiliated customers(2) Internal sales among segments
or amount transferred
Total
Operating costs
Operating income(Thousands of yen)
Deletion or
Consolidated
total
company

Japan

Asia

Total

21,582,119

2,545,204

24,127,323

0

24,127,323

176,337
21,758,456
20,673,279
1,085,176

191
2,545,395
3,367,823
177,571

176,528
24,303,852
23,041,103
1,262,748(176,528)(176,528)(170,157)(6,371)

0
24,127,323
22,870,946
1,256,377(Notes)1. Classification of countries and regions is based on geographical proximity.
2. Main countries or regions included in each classification except Japan:
Asia: China, Korea, Taiwan, and Indonesia

6-month period ended Apr. 30, 2008

Sales
(1) Sales to unaffiliated customers(2) Internal sales among segments oramount transferred
Total
Operating costs
Operating income(Thousands of yen)
Deletion or
Consolidated
total
company

Japan

Asia

Total

21,412,810

2,609,885

24,022,695

0

24,022,695

188,648
21,601,459
20,090,923
1,510,536

53,241
2,663,127
2,583,086
80,040241,890
24,264,586
22,674,009
1,590,577(241,890)(241,890)(232,709)(9,181)0
24,022,695
22,441,300
1,581,395

Japan

Asia

Total

45,012,413

5,782,791

50,795,204

050,795,204

338,135
45,350,549
43,256,299
2,094,249

44,4805,827,272
5,467,317
359,954382,616
51,177,821
48,723,617
2,454,203(382,616)(382,616)(373,352)(9,263)050,795,204
48,350,264
2,444,939(Notes)1. Classification of countries and regions is based on geographical proximity.
2. Main countries or regions included in each classification except Japan:
Asia: China, Korea, and Indonesia

Year ended Oct. 31, 2007

Sales
(1) Sales to unaffiliated customers(2) Internal sales among segments
or amount transferred
Total
Operating costs
Operating income(Thousands of yen)
Deletion or
Consolidated
total
company(Notes)1. Classification of countries and regions is based on geographical proximity.
2. Main countries or regions included in each classification except Japan:
Asia: China, Korea, and Indonesia
3. As stated in the “Changes to the Basis of Financial Statements and Summary of Significant Accounting Policies” (changes to the depreciation method forimportant depreciation assets), the depreciation cost for tangible fixed assets acquired after April 1, 2007 has been recorded in compliance with thedepreciation method specified by the revised Corporate Tax Law along with the revision to the Corporate Tax Law effective the current consolidated fiscal
year.
The change will have only a slight effect on the segment information.

39

3.

Overseas sales:

6-month period ended Apr. 30, 2008
I. Overseas sales
II. Consolidated sales
III. Percentage of overseas sales for consolidated sales

Asia
3,795,906
0
15.8%

Other regions
515,0770
2.1%(Thousands of yen)Total
4,310,983
24,022,695
17.9%

Asia
3,313,610
0
13.7%

Other regions
535,8910
2.3%(Thousands of yen)Total
3,849,501
24,127,323
16.0%

Asia
10,290,809
020.2%(Thousands of yen)
Other regions
Total
990,835
11,281,645
050,795,204
2.0%
22.2%

6-month period ended Apr. 30, 2007
I. Overseas sales
II. Consolidated sales
III. Percentage of overseas sales for consolidated sales
Year ended Oct. 31, 2007
I. Overseas sales
II. Consolidated sales
III. Percentage of overseas sales for consolidated sales(Notes)1. Classification of countries and regions is based on geographical proximity.
2. Main countries or regions included in each classification:(1) Asia:
China, Korea, Taiwan, and Indonesia(2) Other regions: USA and Europe
3. Overseas sales are the sales for countries or regions other than Japan by our company or consolidated subsidiarycompanies.

40

(Per share information)
6-month period ended Apr. 30, 2007

6-month period ended Apr. 30, 2008

Year ended Oct. 31, 2007

Net assets per share¥1,612.99

Net assets per share¥1,692.17

Net assets per share¥1,678.87

Interim net income pershare¥67.52

Interim net income pershare¥86.61

Net income per share¥136.00

Diluted net income per share of theprevious interim period is not presented
because there are currently no
potentially dilutive rights to acquire ourcommon shares outstanding.

Diluted net income per share of this interim
period is not presented because there are
currently no potentially dilutive rights toacquire our common shares outstanding.

Diluted net income per share of theprevious fiscal term is not presented
because there are currently no potentiallydilutive rights to acquire our commonshares outstanding.

Note: The basis for calculating net assets amount per share is as follows:(Thousands of yen)
Item
Total amount of net assets
Amount deducted from total
amount of net assets(Minority shareholders’interest)
Net assets amount as of endof interim period regarding
common shares
No. of common shares as ofend of interim period used for
calculation of net assets
amount per share

6-month period ended
Apr. 30, 2007
16,268,376
171,999

6-month period ended
Apr. 30, 2008
17,153,717
267,665

Year ended
Oct. 31, 2007
16,951,254
197,617(171,999)(267,665)(197,617)

16,096,376

16,886,051

16,753,637

9,979,192 shares

9,978,952 shares

9,979,171 shares

Note: The basis for calculating diluted net (interim) income per share is as follows:
Item
Net (interim) income
Net income not attributed tocommon stocks
Net (interim) income attributed
to common stocks
Average number of commonshares out-standing

6-month period ended
Apr. 30, 2007
673,756
06-month period ended
Apr. 30, 2008
864,311
0(Thousands of yen)
Year ended
Oct. 31, 2007
1,357,132
0673,756

864,311

1,357,132

9,979,192 shares

9,979,050 shares

9,979,171 shares(Important post-balance sheet events)
There are no relevant matters.

41

5. Non-consolidated Financial Statement
5-(1) Balance Sheets (Non-consolidated)(Thousands of yen)
Increase &Year ended
decrease
Oct. 31, 2007

6-month period
ended
Apr. 30, 2007

6-month period
ended
Apr. 30, 2008

746,317

1,129,384

383,067

962,875

2. Trade notes receivable*4

4,883,440

4,100,586(782,853)

4,174,246

3. Trade receivables

10,937,632

10,970,527

32,894

12,795,872

4. Inventories

5,115,211

3,745,703(1,369,508)

3,141,118

5. Deferred tax assets

394,681414,853

20,171

525,664

6. Other current assets

482,559

570,093

87,533533,685

Allowance for doubtful accounts(42,310)(27,214)

15,096(30,497)

Total current assets

22,517,532

20,903,933(1,613,598)

22,102,965

1) Buildings

873,654

1,075,554

201,899

952,4562) Machinery, equipment & vehicles

531,304

546,134

14,829488,0173) Land931,080925,882(5,197)925,8824) Other fixed assets

154,697

125,277(29,420)

280,5492,490,737

2,672,848

182,1112,646,906

15,471

16,993

1,521

14,252

1,436,417

1,233,029(203,388)

1,528,768

0483,765

483,765

483,765

171,075

371,395

200,320

171,075

4) Guarantee deposits

384,025

385,545

1,519

384,4125) Financial derivatives

465,946

168,846(297,099)

314,6836) Other investments

1,287,775

774,343(513,431)

801,384

Allowance for doubtful accounts(180,661)(133,609)

47,052(136,592)

Total investments and others

3,564,578

3,283,316(281,262)

3,547,497

Total fixed assets

6,070,787

5,973,158(97,629)

6,208,656

Total assets

28,588,320

26,877,092(1,711,227)

28,311,621

AssetsI. Current assets
1. Cash and deposits

II. Fixed assets
1. Tangible fixed assets

Total tangible fixed assets *1
2. Intangible fixed assets
3. Investments and others
1) Investments in securities *22) Affiliated companies’ stock3) Investments in capital of affiliatedcompanies42

6-month
period ended
Apr. 30, 2007

6-monthperiod ended
Apr. 30, 2008

Increase &decrease(Thousands of yen)
Year ended
Oct. 31, 2007

1. Notes-payable *4

1,467,953

816,113(651,840)

910,097

2. Trade-payables *2

5,623,254

5,342,161(281,093)

5,215,015

3. Short-term loans

3,300,000

1,920,000 (1,380,000)

3,020,000

Liabilities and Net Assets
Liabilities
I. Current liabilities

4. Long-term debts to be repaid within 1 year

180,000

180,0000

180,000

5. Accrued expenses

516,892

574,862

57,969622,921

6. Accrued income tax

341,918

422,539

80,621

536,690

7. Advances from customers

252,898

264,462

11,563106,056

8. Accrued employees’ bonuses

708,685

733,210

24,524

979,406

9. Accrued officers’ bonuses

28,02934,6206,590

65,985

10. Allowance for product warranty

139,136

165,266

26,130236,625

11. Other current liabilities

174,392

199,223

24,831

151,836

10,652,458 (2,080,703)

12,024,634

Total current liabilities

12,733,161

II. Long-term liabilities
1. Long-term debts

180,000

0(180,000)

90,0002. Accrued pension and severance liabilities

12,201

4,524(7,677)

13,836

3. Officers’ retirement allowance

175,760

236,120

60,360214,460

4. Deferred tax liabilities

348,934

251,157(97,776)

335,977

716,896

491,802(225,094)

654,274

13,450,058

11,144,260 (2,305,797)

12,678,908

1,061,210

1,061,210

01,061,210

1,483,410

1,483,410

01,483,410

1,483,410

1,483,410

01,483,410

230,000

230,0000

230,000

Dividend preparation reserve

250,000

250,0000

250,000

Reserve for deferred fixed assets

30,54528,949(1,596)29,722

11,200,000

11,500,000

300,000

11,200,000

580,328

1,197,446

617,117

1,086,175

12,290,874

13,206,395

915,520

12,795,898(362,697)(363,003)(306)(362,815)

14,472,797

15,388,011

915,214

14,977,702

Total long-term liabilities
Total liabilities
Net assets
I. Shareholders’ capital
1. Common stock
2. Capital surplus(1) Capital reserve
Total Capital surplus
3. Retained earnings(1) Earned reserve(2) Other retained earnings

General reserve
Surplus carried overTotal retained earnings
4. Issued shares reacquired
Total Shareholders’ capital

43

(Thousands of yen)
Year ended
Increase &Oct. 31, 2007
decrease

6-monthperiod ended
Apr. 30, 2007

6-monthperiod ended
Apr. 30, 2008

389,148251,377(137,770)

436,288276,315

93,442(182,873)

218,722

Total revaluation and translation adjustments

665,464

344,820(320,644)

655,010

Total net assets

15,138,261

15,732,832

594,570

15,632,713

Total liabilities and net assets

28,588,320

26,877,092(1,711,227)

28,311,621

Liabilities and Net Assets
II. Revaluation and translation adjustments
1. Unrealized gains and losses on marketablesecurities and investments
2. Financial derivative gains and losses445-(2) Statements of Income (Non-consolidated)(Thousands of yen)
Year ended
Increase &Oct. 31, 2007
decrease

6-monthperiod ended
Apr. 30, 2007

6-monthperiod ended
Apr. 30, 2008

I. Sales

21,913,793

21,838,083(75,709)45,941,146

II. Cost of sales

17,837,867

17,607,254(230,612)

37,923,512

4,075,925

4,230,829

154,9038,017,634

3,046,780

2,966,522(80,257)

6,064,409

1,029,145

1,264,307

235,161

1,953,225

167,980

197,669

29,688282,016

43,102

54,927

11,825

117,952

1,154,023

1,407,048

253,024

2,117,289

VI. Extraordinary gains *3

565

24,64624,0817,600

VII. Extraordinary losses *4

95,683

17,326(78,357)

109,551

1,058,905

1,414,369

355,4632,015,338

Current

332,060

416,230

84,170924,918

Deferred

143,506

238,372

94,865

2,057

Income taxes total

475,566

654,602

Net income from non-consolidated

583,338

759,766

Gross profit
III. Selling, general and administrative
Operating income
IV. Other income
V.

*1

Other expenses *2
Recurring income

Net income before income taxes
Income taxes

operations

45

926,976
176,427

1,088,362

5-(3) Non-Consolidated Statement of Changes in Shareholders’ Equity
6-month period ended Apr. 30, 2007

(Thousands of yen)
Shareholders’ equity
Capital surplus
Retained earnings

Commonstock

Capital reserve

Surplus as ofOct. 31, 2006
Changes during thisinterim term
Cash dividend paid
Net income
Transfer of reserve fordeferred fixed assets
Provision of generalreserve
Total amountchangedBalance, end of the
6-month period ended
Apr. 30, 2007

Other retained earnings
Dividend
Reserve forpreparation
deferred fixedreserveassetsLegal reserve

1,061,210

1,483,410

230,000

250,000

31,368

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

(822)
0

0

0

0

0

(822)

1,061,210

1,483,410

230,000

250,000

30,5456-month period ended Apr. 30, 2007

Surplus as ofOct. 31, 2006
Changes during thisinterim term
Cash dividend
paid (Note)
Net income
Transfer of reservefor deferred fixed
assetsProvision of generalreserve
Total amountchangedBalance, end of the
6-month period ended
Apr. 30, 2007

(Thousands of yen)
Shareholders’ equity
Retained earnings
Issued shares Total
reacquired
Shareholders’
Other retained earnings
Total retained
capitalGeneralSurplus carried earnings
reserveover
10,300,000
1,195,543
12,006,911(362,697)
14,188,834

0(299,375)(299,375)

0(299,375)

00583,338822

583,338000583,3380

900,000(900,000)000900,000(615,214)

283,9620283,962

11,200,000

580,328

12,290,874(362,697)

14,472,79746

6-month period ended Apr. 30, 2007

Surplus as of Oct. 31, 2006
Changes during this interim
term
Cash dividend paid
Net income
Transfer of reserve fordeferred fixed assets
Provision of generalreserve
Total (net) amountchanged (except
shareholders’ equity)
Total amount changed
Balance, end of the 6-month
period ended Apr. 30, 2007

(Thousands of yen)
Revaluation and translation adjustments
Unrealized gains andFinancial
Total revaluation andTotal netlosses on marketable
derivative loss ortranslation
assetssecurities andgain
adjustments
investments
301,319
205,427
506,746
14,695,581

0
0
0

0
0
0

0
0
0

(299,375)
583,338
0

0

0

0

0

87,82970,888

158,717

158,71787,82970,888

158,717442,680

389,148276,315

665,464

15,138,261(Note) This item is the appropriation of earnings approved at the annual shareholders’ meeting held inJanuary 2007.

47

6-month period ended Apr. 30, 2008

(Thousands of yen)
Shareholders’ equity
Capital surplus
Retained earnings

Commonstock

Capital reserve

Surplus as ofOct. 31, 2007
Changes during thisinterim term
Cash dividend paid
Net income
Issued sharereacquired
Transfer of reserve fordeferred fixed assets
Provision of generalreserve
Total amountchangedBalance, end of the
6-month period ended
Apr. 30, 2008

Other retained earnings
Dividend
Reserve forpreparation
deferred fixedreserveassetsLegal reserve

1,061,210

1,483,410

230,000

250,000

29,722

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0

0
0

0
0

0
0

(773)
0

0

0

0

0

(773)

1,061,210

1,483,410

230,000

250,000

28,9496-month period ended Apr. 30, 2008

Surplus as ofOct. 31, 2007
Changes during thisinterim term
Cash dividend
paid (Note)
Net income
Issued sharereacquired
Transfer of reservefor deferred fixed
assetsProvision of generalreserve
Total amountchangedBalance, end of the
6-month period ended
Apr. 30, 2008

(Thousands of yen)
Shareholders’ equity
Retained earnings
Issued shares
Total
reacquired
shareholders’
Other retained earnings
Total retained
capitalearnings
GeneralSurplus carried
reserveover
11,200,000
1,086,175
12,795,898(362,815)
14,977,702

0(349,269)(349,269)

0(349,269)00759,766
0759,76600(188)

759,766
(188)

0

773

0

0

0

300,000(300,000)000300,000

111,270

410,497(188)

410,308

11,500,000

1,197,446

13,206,395(363,003)

15,388,011

48

6-month period ended Apr. 30, 2008

Surplus as of Oct. 31, 2007
Changes during this interim
term
Cash dividend paid
Net income
Issued sharereacquired
Transfer of reserve fordeferred fixed assets
Provision of general reserve
Total (net) amount changed(except shareholders’equity)Total amount changed
Balance, end of the 6-month
period ended Apr. 30, 2008

(Thousands of yen)

Revaluation and translation adjustments
Unrealized gains andFinancial
Total revaluation
losses on marketable
derivative loss
and translation
securities andor gainadjustments
investments
436,288
218,722655,010

Total net assets

15,632,713

0
0
0

0
0
0

0
0
0

(349,269)
759,766
(188)

0

0

0

0

0

0

0

0

(184,910)(125,279)(310,190)(310,190)(184,910)(125,279)(310,190)

100,118

251,377

93,442

344,820

15,732,832(Note) This item is the appropriation of earnings approved at the annual shareholders’ meeting held inJanuary 2008.

49

Year ended Oct. 31, 2007

(Thousands of yen)
Shareholders’ equity
Capital surplus
Retained earnings

Commonstock

Capital reserve

Surplus as ofOct. 31, 2006
Changes during thisyear
Cash dividend paid
Net income
Issued sharereacquired
Transfer of reserve fordeferred fixed assets
Provision of generalreserve
Total amountchangedBalance, end of fiscal
year ended
Oct. 31, 2007

1,061,210

1,483,410

230,000

250,000

31,368

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0

0
0

0
0

0
0

(1,645)
0

0

0

0

0

(1,645)

1,061,210

1,483,410

230,000

250,000

29,722

Year ended Oct. 31, 2007

Surplus as ofOct. 31, 2006
Changes during thisyear
Cash dividend
paid (Note)
Net income
Issued sharereacquired
Transfer of reservefor deferred fixed
assetsProvision of generalreserve
Total amountchangedBalance, end of fiscal
year ended
Oct. 31, 2007

Other retained earnings
Dividend
Reserve forpreparation
deferred fixedreserveassetsLegal reserve(Thousands of yen)
Shareholders’ equity
Retained earnings
Issued shares
reacquired
Other retained earnings
Total retained
earnings
GeneralSurplus carried
reserveover
10,300,000
1,195,543
12,006,911(362,697)

Total
shareholders’capital14,188,834

0(299,375)(299,375)

0(299,375)

001,088,362
0

1,088,362
0

0
(118)

1,088,362
(118)

0

1,645

0

0

0

900,000(900,000)000900,000(109,367)

788,986(118)

788,868

11,200,000

1,086,175

12,795,898(362,815)

14,977,702

50

Year ended Oct. 31, 2007

Surplus as of Oct. 31, 2006
Changes during this year
Cash dividend paid
Net income
Issued sharereacquired
Transfer of reserve fordeferred fixed assets
Provision of generalreserve
Total (net) amountchanged (except
shareholders’ equity)
Total amount changed
Balance, end of fiscal year
ended Oct. 31, 2007

(Thousands of yen)
Revaluation and translation adjustments
Unrealized gains andFinancial
Total revaluation Total net assets
losses on marketable
derivative loss or and translation
securities andgain
adjustments
investments
301,319
205,427
506,746
14,695,581
0
0
0

0
0
0

0
0
0

(299,375)
1,088,362
(118)

0

0

0

0

0

0

0

0

134,969

13,294

148,264

148,264

134,969

13,294

148,264

937,132

436,288

218,722655,010

15,632,713(Note) This item is the appropriation of earnings approved at the annual shareholders’ meeting held inJanuary 2007.

51

Significant Accounting Policies
6-month period ended
Apr. 30, 2007

6-month period ended
Apr. 30, 2008

Year ended Oct. 31, 2007

1. Valuation standard and method(1) Securities:
Stock of subsidiary and affiliates:
Stated at cost determined by themoving-average method.

1.Valuation standard and method(1) Securities:
Stock of subsidiary and affiliates: Sameas left.

1.Valuation standard and method(1) Securities:
Stock of subsidiary and affiliates: Sameas left.

Other securities:
Securities with fair market value:
Stated at fair market value basedon the quoted market price, etc. asof the end of the interim term underreview. (All of the valuationdifferences are directly included in
Shareholders’ equity, and the costof sales is computed by themoving-average method.)
Securities without fair market value:
Stated at cost determined by themoving-average method.

Other securities:
Securities with fair market value:Same as left.

(2) Inventories:
1) Goods: Cost method based on
moving-average method (costmethod based on individual
method for certain specific goods)
2) Finished products and products
in process:Mainly cost method based on
individual method
3) Raw materials:
Mainly cost method based on
first-in first-out method
4) Supplies: Last cost method(2) Inventories:
1) Goods: Same as left.

2. Depreciation method of fixed
assets:(1) Tangible fixed assets:
Depreciatedbydecliningbalance method. However,buildings acquired on and after
April 1, 1998 are depreciated bystraight-line method, except forbuilding attachments.
Meanwhile, service lives of themain assets are as follows:
Buildings: 5-47 years
Machinery: 2-15 years
Others: 2-22 years

Securities without fair market value:Same as left.

Other securities:
Securities with fair market value:
Stated at fair market value based on
the quoted market price, etc. as of theclosing date of the year under review.
(All of the valuation differences are
directly included in Shareholders’equity, and the cost of sales iscomputed by the moving-averagemethod.)Securities without fair market value:Same as left.

(2) Inventories:
1) Goods: Same as left.

2) Finished products and products
in process: Same as left.

2) Finished products and products
in process: Same as left.

3) Raw materials: Same as left.

3) Raw materials: Same as left.

4) Supplies: Same as left.

4) Supplies: Same as left.

2. Depreciation method of fixed assets:(1) Tangible fixed assets:
Same as left.

(Additional information)
According to the revision of the
Corporate Tax Law, tangible fixed
assets acquired prior to March 31,
2007 fall under the depreciation
method based upon the
Corporate Tax Law before
revision. The difference between
5% equivalent of the acquired
value and the memorandum
value is equally depreciated forfive years, and is included in the
depreciation cost, starting from a
consolidated fiscal year following a
consolidated fiscal year in which
the value has reached 5% of theacquired value.

52

2. Depreciation method of fixed assets:(1) Tangible fixed assets:
Same as left.

There is only a minor impact on
operating income, current profit,
and interim net profit before
taxes and other adjustments.
The effect of this change on
segment information is
mentioned in the applicable
note.
(Petty sum depreciable assets)
Same as left.

(Petty sum depreciable assets)
Same as left.

(2) Intangible fixed assets:
SoftwareDepreciated by Straight-line
method based on estimatedutilizable period (5 years).

(2) Intangible fixed assets:
Same as left.

(2) Intangible fixed assets:
Same as left.

3. Allocation standard of reserves:(1) Allowance of doubtful accounts:
Mainly preparing for bad debts,
estimated non-recoverable
amount is accounted for by loss
ratio for general debts andcollectability of specific debts suchas doubtful debt, claim inbankruptcy, and claim in
reorganization is taken into
consideration individually.

3. Allocation standard of reserves:(1) Allowance of doubtful accounts:
Same as left.

(2) Accrued employees’ bonuses:
Allowance is provided in provisions
for payment of bonuses to
employees in the amount of
estimated bonuses, which are
attributable to the current interim
term.

(2) Accrued employees’ bonuses:
Same as left.

(2) Accrued employees’ bonuses:
Allowance is provided in provisions
for payment of bonuses to
employees in the amount of
estimated bonuses, which are
attributable to the current fiscal year.

(3) Accrued officers’ bonuses:
Allowance appropriate to thecurrent interim period is provided for
payment of bonuses to officers in
the amount of estimated bonuses
for the current fiscal year.

(3) Accrued officers’ bonuses:
Same as left.

(3) Accrued officers’ bonuses:
Allowance is provided in provisions
for payment of bonuses to officers in
the amount of estimated bonuses.

(4) Accrued pension and severance
liabilities:
Preparing for employee’s accrued
pension,theamountacknowledged being incurred as ofthe end of the current interim termis accounted for based on
estimated amount of accrued
pension debts and pension assets
as of the end of the current fiscal
term.
Meanwhile,mathematical
calculation difference is processed
proportionately as cost in each(4) Accrued pension and severance
liabilities: Same as left.

(4) Accrued pension and severance
liabilities:
Preparing for employee’s accrued
pension, the amount acknowledged
being incurred as of the end of thecurrent fiscal term is accounted forbased on estimated amount of
accrued pension debts and pension
assets as of the end of the current
fiscal term.
Meanwhile, mathematical calculationdifference
isprocessed
proportionately as cost in eachconsolidated fiscal term of its(Petty sum depreciable assets)
Assets acquired at 100,000 yen
or more and below 200,000 are
depreciated equally for three
years as lump sum each year.

53

3. Allocation standard of reserves:(1) Allowance of doubtful accounts:
Same as left.

occurrence by straight-line method
based on certain number of years (10years) within employees’ averageremaining work period.

proportionately as cost in eachconsolidated fiscal term of its
occurrence by straight-line method
based on certain number of years(10 years) within employees’
average remaining work period.

(5) Officers’ retirement allowance:
Fiscal year-end payable allowances
based on the bylaw are appropriatedto prepare for payment of officers’
retirement allowances.

(5) Officers’ retirement allowance:
Interim term-end payableallowances based on the bylaw
are appropriated to prepare forpayment of officers’ retirement
allowances.

(5) Officers’ retirement allowance:
Same as left.

(6) Allowance for product warranty:
In order to account for
product-related loss and warranty
expenses to be incurred after
delivery of products, the possibilityof incurring such expenses isindividually estimated, and theamount is provided for as
warranty provision.

(6) Allowance for product warranty:
Same as left.

(6) Allowance for product warranty:
Same as left.

4. Process method of important leasetransaction:
Same as left.

4. Process method of important leasetransaction:
Same as left.

5. Method of important hedge
accounting:(1) Method of hedge accounting:Same as left.

5. Method of important hedge
accounting:(1) Method of hedge accounting:Same as left.

4. Process method of important
lease transaction:
Finance lease transactions otherthan those in which ownership ofleased objects is acknowledged
being transferred to lessee areprocessed in accordance with themethod for ordinary rental
transactions.
5. Method of important hedge
accounting:(1) Method of hedge accounting:Deferred hedge accounting is
adopted.
For exchange contracts andcurrency swaps, appropriatedprocess is adopted if requirements
for appropriated process are
satisfied. Special process is
adopted for interest swaps if
requirements for special process
are satisfied.
(2) Means for hedging and objects forhedging:
Means forObjects forhedging
hedging
Interest swaps: Interest rate
fluctuation
on borrowings
Exchange contracts& currency swaps: Exchange rate
fluctuation for
debts and credits
in foreign(2) Means for hedging and objects forhedging:
Same as left.

54(2) Means for hedging and objects forhedging:
Same as left.

currencies(3) Hedge policy:
We hedge risks against fluctuationof exchange rate, interest rate, etc.
In principle, we hedge risks basedon actual demand and no
derivative transactions are made for
speculation purpose.
(4) Appraisal method of hedge
effectiveness:
We make our hedge transactionsin accordance with our risk
management
methodandacknowledge that the correlation
between means for hedging
against fluctuation of exchange
rate, interest rate, etc. and objects
for hedging are completely justified.
6. Other important matters in
preparing the current interim
financial statements:(1) Accounting treatment ofconsumption tax:
Consumption tax is excluded.
The balance of consumption tax
after offsetting suspense receipt of
the tax by suspense payment of
the tax offset by the partial tax
payment by interim tax return is
included in “Others” under current
liabilities.
(2) Handling of various reserves, etc. forcalculation of tax amount, etc.:
The amount of current anddeferred income taxes for the six
months is calculated based on theestimated provision for or reversalof reserves for advanced
depreciation of fixed assets
planned for the current interim
term.

(3) Hedge policy:
Same as left

(3) Hedge policy:
Same as left

(4) Appraisal method of hedge
effectiveness:
Same as left.

(4) Appraisal method of hedge
effectiveness:
Same as left.

6. Other important matters in preparing
the current interim financial
statements:(1) Accounting treatment ofconsumption tax: Same as left.

(2) Handling of various reserves, etc. forcalculation of tax amount, etc.:
Same as left.

55

6. Other important matters in
preparing the current fiscal
financial statements:(1) Accounting treatment ofconsumption tax: Consumption
tax is excluded.

(2) Handling of various reserves, etc. forcalculation of tax amount, etc.:
N/AChanges in Accounting Procedure
6-month period ended
Apr. 30, 2007
(Change in depreciation method)

6-month period ended
Apr. 30, 2008

Year ended Oct. 31, 2007

(Change in depreciation method)(Change in depreciation method)

Effective from the current interim
N/A
term under review, we havechanged the depreciation method interms of the tangible assets
acquired after April 1, 2007, in
accordance with the amendment of
the corporate tax law. The effect of
this change on operating income,recurring income, and net income
before taxes was immaterial.
Additional Information
6-month period ended
Apr. 30, 2007
(Accounting standard forpresentation of net assets in thebalance sheet)
From the previous financial year, theCompany adopted the “AccountingStandard for Presentation of Net Assets
in the Balance Sheet” (AccountingStandards Board Statement No. 5,
December 9, 2005 by ASBJ) and“Implementation Guidance on
Accounting Standards for Presentationof Net Assets in the Balance Sheet”(Accounting Standards Board
Implementation Guidance No. 8,
December 9, 2005 by ASBJ). The
effect of this change on Statements ofIncomes is insignificant. The total
amount of "Stockholders’ Equity" inaccordance with the old standard would
be 14,861,945 thousand yen. Also, net
assets in the balance sheet for thisinterim financial period is presented
according to the revised rules for
non-consolidated financial statements.

Effective from the fiscal term underreview, we have changed thedepreciation method in terms of thetangible assets acquired after April 1,
2007, in accordance with theamendment of the corporate tax law.
The effect of this change on operating
income, recurring income, and net
income before taxes was immaterial.

6-month period ended
Apr. 30, 2008
(Accounting standard for presentationof net assets in the balance sheet)

N/A

56

Year ended Oct. 31, 2007
(Accounting standard for presentationof net assets in the balance sheet)
N/ANotes to Non-Consolidated Financial Statements(Balance Sheet)(Thousands of yen)

6-month period ended Apr. 30, 2007

6-month period ended Apr. 30, 2008

Year ended Oct. 31, 2007

*1 Accumulated depreciation of tangible
fixed assets:
3,661,900*1 Accumulated depreciation of tangible
fixed assets:
3,706,765*1 Accumulated depreciation of tangible
fixed assets:
3,664,882*2 Details of pledged asset amount andsecured liability amount:*2 Details of pledged asset amount andsecured liability amount:*2 Details of pledged asset amount andsecured liability amount:(1) Pledged asset amount:
Investment and securities(1) Pledged asset amount:
Investment and securities(1) Pledged asset amount:
Investment and securities

349,281(2) Secured liability amount:(2) Secured liability amount:
Trade payables

277,798

175,877

Trade payables

420,890(2) Secured liability amount:
155,016

Trade payables

147,356

3 Contingent liabilities:(1) Guarantee on bank borrowings ofaffiliated companies:
Thousands of yen
Thousands of US dollar
Tomoe¥5,000Machinery¥35,943[US$300]
Interstella
Plastics(Shenzhen)
Interstella¥119,810 [US$1,000]
Tomoe¥682,917 [US$5,700]
Eng. (HK)3 Contingent liabilities:(1) Guarantee on bank borrowings ofaffiliated companies:
Thousands of yen
Thousands of US dollar¥312,420 [US$3,000]
Interstella
Plastics(Shenzhen)
Interstella¥312,420 [US$3,000]

3 Contingent liabilities:(1) Guarantee on bank borrowings ofaffiliated companies:
Thousands of yen
Thousands of US dollar
Tomoe¥2,000MachineryInterstella¥344,370 [US$3,000]
Tomoe¥229,580 [US$2,000]
Eng. (HK)(2) Guarantee on home ownership
financing of employees:
11,907(2) Guarantee on home ownership
financing of employees:(2) Guarantee on home ownership
financing of employees:
10,290*4 With regard to the accounting of notes
maturing at the end of the first-halfperiod, settlement is made as of thedate of note clearing.
Since the end of the current first-halfperiod fell on a holiday of financial
institutions, the following notes maturing
at the end of the first-half period areincluded in the half-year end balance:
Bills receivable
454,855
Bills payable
191,359

9,035*4 N/A*4 N/A

57

5 We have an overdraft agreement and acommitment line agreement withfinancial institutions for working capital
purpose. The balance of unexecutedborrowings as of the end of this interim
term under these agreements is asfollows:
Limit of overdraft andtotal amount of loan
commitment
Balance of executedborrowings
Balance

6,500,000

3,300,000
3,200,000

5 Same as left.

5 We have an overdraft agreement and acommitment line agreement withfinancial institutions for working capital
purpose. The balance of unexecutedborrowings as of the end of this fiscal
term under these agreements is asfollows:

Limit of overdraft andtotal amount of loan
commitment
Balance of executedborrowings
Balance58

6,500,000

1,920,000
4,580,000

Limit of overdraft andtotal amount of loan
commitment
Balance of executedborrowings
Balance

6,500,000

3,020,000
3,480,000

(Statements of Non-consolidated Income)6-month period ended Apr. 30, 2007

(Thousands of yen)

6-month period ended Apr. 30, 2008

Year ended Oct. 31, 2007

*1 Main items among other income:*1 Main items among other income:*1 Main items among other income:Interests
Dividends
Foreign exchange gains
Rents

Interests
Dividends
Foreign exchange gains
Rents

Interests
Dividends
Foreign exchange gains
Rents

2,292
69,75337,19643,895

8,747
98,02730,00340,6093,563
86,301
71,65784,889*2 Main items among other expenses:*2 Main items among other expenses:*2 Main items among other expenses:

Interests
Discounts on bills of
exchange
Cost of rents
Commitment fee

Interests
Discounts on bills of
exchange
Cost of rents
Commitment fee

Interests
Discounts on bills of
exchange
Cost of rents
Commitment fee

16,557
3,795
10,106
4,944

17,317
5,608
10,11015,28337,7898,269
30,3659,992*3 Main items among extraordinary
gains:*3 Main items among extraordinary
gains:*3 Main items among extraordinary gains:

Reversal of allowance for
doubtful accounts

Reversal of allowance for
doubtful accounts
Gain on sales ofinvestment securities

Reversal of allowance for
doubtful accounts

565

19,019

7,600

5,627

*4 Main items among extraordinary
losses:*4 Main items among extraordinary losses:*4 Main items among extraordinary losses:

Unrealized losses oninvestment securities
Relocation expense (headoffice)Written-off losses onproperty and equipment

Written-off losses onproperty and equipment
Provision for doubtful
accounts

Unrealized losses oninvestment securities
Removal expense (headoffice)Written-off losses onproperty and equipment
Realized losses onproperty and equipment
Impairment loss on land

50,00039,41013,597

6,273

5 Depreciation expenses:

5 Depreciation expenses:
Tangible fixed assets
Intangible fixed assets

3,729

97,937
1,213

Tangible fixed assets
Intangible fixed assets

59

50,00039,41012,541
2,400
5,197

5 Depreciation expenses:
131,546
1,355

Tangible fixed assets
Intangible fixed assets

216,108
2,432

(Statements of Changes in Non-consolidated Shareholders’ equity, etc.)
6-month period ended Apr. 30, 2007
Matters concerning the types and number of shares of treasury stock:
No. of shares as of
Increase (shares)
Decrease (shares)
Oct. 31, 2006
Common stock
554,00800No. of shares as ofApr. 30, 2007
554,008

6-month period ended Apr. 30, 2008
Matters concerning the types and number of shares of treasury stock:
No. of shares as of
Increase (shares)
Decrease (shares)
Oct. 31, 2006
Common stock
554,083165
0(*Note)(Reason for Change)
The breakdown of the increase is as follows:
Acquisition of odd-lot stocks: 165 shares

No. of shares as ofApr. 30, 2007
554,248

Year ended Oct. 31, 2007
Matters concerning the types and number of shares of treasury stock:
No. of shares as of Increase (shares)
Decrease (shares)
Oct. 31, 2005
Common stock
554,00875
0(*Note)(Reason for Change)
The breakdown of the increase is as follows:
Acquisition of odd-lot stocks: 75 shares

60

No. of shares as ofOct. 31, 2006
554,083

(Lease)(Thousands of yen)

6-month period ended Apr. 30, 2007

6-month period ended Apr. 30, 2008

Year ended Oct. 31, 2007

Finance lease transactions other than those of which
ownership of leased items is acknowledged to betransferred to lessee (on the lessee’s side):

Finance lease transactions other than those ofwhich ownership of leased items is
acknowledged to be transferred to lessee (onthe lessee’s side):

Finance lease transactions other than those ofwhich ownership of leased items is
acknowledged to be transferred to lessee:

1. Acquisition price equivalent, accumulated
depreciation equivalent, accumulated impairment
loss equivalent of leased items and interim
outstanding balance equivalent:

Machinery& vehicles
Tools &
equipment
Total

(a)
21,500(b)
20,783

1. Acquisition price equivalent,
1. Acquisition price equivalent, accumulated
accumulated depreciation equivalent,depreciation equivalent, accumulated
accumulated impairment loss equivalent
impairment loss equivalent of leased itemsof leased items and interim outstanding
and term-end outstanding balancebalance equivalent:
equivalent:

(c)
716

219,396

120,601

98,795

240,896

141,384

99,511Tools &
equipment
Total

(a)
214,106(b)
119,751(c)
94,354

214,106

119,751

94,354Tools &
equipment
Total

(a)
227,206(b)
127,880(c)
99,326227,206

127,880

99,326(a) Acquisition price equivalent(b) Accumulated depreciation equivalent(c) Interim outstanding balance(a) Acquisition price equivalent(b) Accumulated depreciation equivalent(c) Term-end outstanding balance

2. Interim balance equivalent of unexpired lease fee
and outstanding balance of lease assets
impairment account:

2. Interim balance equivalent of unexpired
lease fee and outstanding balance of leaseassets impairment account:

2.Term-end balance equivalent of unexpired
lease fee and outstanding balance oflease assets impairment account:

Within 1 year
Exceeding 1 year
Total

Within 1 year
Exceeding 1 year
Total

Within 1 year
Exceeding 1 year
Total(a) Acquisition price equivalent(b) Accumulated depreciation equivalent(c) Interim outstanding balance

43,80258,253102,055

3. Lease fee paid, amount withdrawn from leaseassets impairment account, depreciation costequivalent, interests paid equivalent and impairment
loss:

Lease fee paid
Depreciation cost equivalentInterests paid equivalent

25,35723,531849

4. Calculation method of depreciation cost equivalent:
By straight-line method with service life being lease
period and residual value being zero.
5. Calculation method of interest equivalent:
Allocation for each term is by interest method withthe difference between the total amount of lease
fee and acquisition price equivalent of leased
terms being interests equivalent.
(Impairment loss)
There is no impairment loss allocated to lease assets.

38,791
57,46496,256

3. Lease fee paid, amount withdrawn fromlease assets impairment account,depreciation cost equivalent, interests paid
equivalent and impairment loss:

Lease fee paid
Depreciation cost equivalentInterests paid equivalent

24,29722,967798

4. Calculation method of depreciation costequivalent: Same as left.
5. Calculation method of interest equivalent:Same as left.

3. Lease fee paid, amount withdrawn fromlease assets impairment account,depreciation cost equivalent, interests paid
equivalent and impairment loss:

Lease fee paid
Depreciation cost equivalentInterests paid equivalent61

47,36945,2001,686

4. Calculation method of depreciation costequivalent: Same as left.
5. Calculation method of interest equivalent:Same as left.

(Impairment loss)
Same as left.

(Impairment loss)
Same as left.

41,35060,196
101,547

(Securities)
During the previous interim period, the current interim period, and the previous fiscal year, there were no securities ofsubsidiaries or affiliates with market value.

(Important post-balance sheet events)
There are no relevant matters.

62