Financial Results for the Fiscal Year Ended October 31, 2010
Date:

December 10, 2010

Company:

Tomoe Engineering Co., Ltd. and Subsidiaries(Web Site: http://www.tomo-e.co.jp/index_e.html)

Stock exchange listing:

1st Section, Tokyo Stock Exchange

Head Office:2-2, Osaki 1-chome, Shinagawa-ku, Tokyo, Japan

President:

Noboru Shiono

Investor Relations Contacts: Natsuhiko Maeda, Director, General Manager of Accounting Division, Tel: (03) 5435-6512
Date of Annual Shareholders Meeting: January 28, 2011
Date of Dividend Payment:

January 31 2011

Date of Financial Statement: January 28, 2011
1. Consolidated Financial Results for the Year Ended October 31, 2010
(1) Results of Operation (Consolidated)(Percent: Change from the previous year)
Operating Income
Ordinary Income

Sales
Year Ended
October 31, 2010
Year Ended
October 31, 2009

(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)

38,816

6.9

2,173

37.1

2,179

29.2

36,304(23.6)

1,585(35.5)

1,686(35.5)Net Income

Net Income
per Share

Diluted Net
Income per
Share

Return on
EquityReturn on
AssetsReturn on
Sales(Millions of Yen)

(Percent)

(Yen)

(Yen)

(Percent)(Percent)(Percent)

1,354

36.4

135.77

-

7.5

7.8

5.6

993

(27.2)

99.53

-

5.7

6.1

4.4

Year Ended
October 31, 2010
Year Ended
October 31, 2009

(Reference) Equity in earnings (loss) of unconsolidated subsidiaries and affiliates
Fiscal year ended October 31, 2010: None
Fiscal year ended October 31, 2009: None
(2) Financial Condition (Consolidated)
Total Assets (A)Net Assets (B)Net Assets Ratio (B / A)

Net Assets per Share(Millions of Yen)

(Millions of Yen)

(Percent)(Yen)

29,79918,85262.4

1,862.30

26,412

17,92166.8

1,767.97

Year Ended
October 31, 2010
Year Ended
October 31, 2009
(Reference) Net assets

Fiscal year ended October 31, 2010: 18,583 million yen
Fiscal year ended October 31, 2009: 17,642 million yen

1(3) Cash Flows (Consolidated)
Net Cash Provided(Used) by Operating
Activities
Year Ended
2,182
October 31, 2010
Year Ended
3,644
October 31, 2009

Net Cash Provided(Used) by Investing
Activities

Net Cash Provided(Used) by Financing
Activities(Millions of yen)
Consolidated Cashand Cash Equivalent
as of Year-end

(51)

(394)

6,109

(88)

(750)

4,447

2. Dividend Status
First Quarter-

Year Ending October 31, 2009
Year Ending October 31, 2010
Year Ending October 31, 2011 (Prospect)

Dividend per Share (Yen)
SecondThird QuarterEnd ofQuarter
Fiscal Year
0.00
30.00
0.00
35.00
0.00
40.00

Total
30.00
35.00
40.00

Total Dividend

Dividend Payout Ratio(Consolidated)

Dividend on Equity Ratio(Consolidated)(Millions of Yen)

(Percent)(Percent)

299
349
-

30.1
25.8
30.2

1.7
1.9
-

Year Ending October 31, 2009
Year Ending October 31, 2010
Year Ending October 31, 2011 (Prospect)

3. Forecast for the Year Ending October 31, 2011 (Consolidated)(Percent: Change from the previous year for the full business year and 6-month period)
Sales

Operating Income

Ordinary income(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)

6-month Period

22,600

15.5

1.380

(16.2)

1,370(21.9)

Full Business Year

43,000

10.8

2,270

4.5

2,320

6.5

Net Income

Net Income per Share(Millions of Yen)

(Percent)(Yen)

6-month Period760(33.3)

76.16

Full Business Year

1,320

(2.6)

132.28

4. Others(1) Significant changes in subsidiaries during this quarter (changes in specific subsidiaries involving changes in thescope of consolidation): None
(2) Change of the principle, procedure, and representation of the accounting policies concerning the preparation of
consolidated financial statements (Changes to be described in “Change in the Basis of Presenting Consolidated
Quarterly Financial Statements”)
1) Change due to revision of accounting standard: Yes
2) Other changes: None
(Note) For details, refer to (6) [Changes of Important Items to be Basis for Making Consolidated Financial
Statements] of 4. [Consolidated Financial Statements], on page 21.

2(3) Number of outstanding shares (Common stock)1) Number of outstanding shares at year-end (including treasury stocks)
At October 31, 2010: 10,533,200 shares

At October 31, 2009: 10,533,200 shares

2) Number of treasury stocks at year-end
At October 31, 2010:

554,418 shares

At October 31, 2009:

554,298 shares(Note) For number of shares to be basis to calculate net income per share (consolidated), refer to (Per ShareInformation) on page 27.
(Reference)
1. Outline of Non-Consolidated Results of Operations for the Year Ended October 31, 2010
(1) Results of Operation (Non-consolidated)(Percent: Change from the previous year)

Sales

Operating Income

Ordinary income(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)

35,992

6.1

1,813

35.3

1,905

17.9

33,925(21.6)

1,340(31.2)

1,616(27.9)

Year Ended
October 31, 2010
Year Ended
October 31, 2009

Net Income

Net Income per Share

Diluted Net Income per Share(Millions of Yen)

(Percent)

(Yen)

(Yen)

1,177

21.2

117.98-971(19.5)

97.36-

Year Ended
October 31, 2010
Year Ended
October 31, 2009

(2) Financial Condition (Non-consolidated)
Total Assets (A)Net Assets (B)Net Assets Ratio (B) / (A)Net Assets per Share(Millions of Yen)

(Millions of Yen)

(Percent)(Yen)

26,68817,38465.1

1,742.15

23,597

16,53470.1

1,656.99

Year Ended
October 31, 2010
Year Ended
October 31, 2009
(Reference) Net assets
Fiscal year ended October 31, 2010: 17,384 million yen
Fiscal year ended October 31, 2009: 16,534 million yen*Explanations for appropriate use of the earnings forecast and other special instructions
The forward-looking statements such as a forecast of our financial results described herein are based on theinformation currently available to us and certain assumptions that we believe are reasonable. Actual results could differ
materially due to various factors. For assumptions of the forecasts and necessary precautions, refer to (1) [Analysis ofResults of Operation] of 1. [Operating Results and Financial Condition], on page 4.

3

1. Operating Results and Financial Condition(1) Analysis of Results of Operation[1] General condition of the current consolidated fiscal year
General operating results
During the current consolidated fiscal year, Japan’s economy was supported by several factors, including growth inexports and the effects of economic stimulus measures. Production levels generally improved steadily, and apositive trend in capital investment, which had long remained mired in a slump, was noted as well. Nevertheless,hampered by the fragile employment situation and slow improvement in the deflationary trend, however, as well as
by appreciation of the yen that was triggered by worries about fiscal and monetary policies in Europe and concernsof a US economic slowdown, the mixture of factors that would accelerate activity to produce a self-sustained
economic recovery failed to ignite.
Under this operating environment, lower sales were inevitable in the Machinery & Equipment Business becauseof stagnant domestic private sector demand and the reaction to large-scale projects for overseas customers in
the previous year. Net sales in the Chemical Products Business, on the other hand, showed positive growth
because of the improved supply and demand situation in both the electronic materials sector and plastics sector.
Because higher sales in the Chemical Products Business exceeded the net sales drop in the Machinery &Equipment Business, total net sales for the current consolidated fiscal year were 38,816 million yen, 6.9% up
compared with the previous year. Profits were higher, even in the Machinery & Equipment Business where
sales fell, as earnings rose because of an increase in sales of comparatively high margin parts and repairs in thesecond quarter, and consolidated operating income for both businesses expanded faster than the growth in net
sales to reach 2,173 million yen, 37.1% up over the previous year. Although the loss on valuation of derivatives
swelled somewhat, driven by the appreciation of the yen, consolidated ordinary income reached 2,179 million yen,
29.2% up compared with the previous year. With the addition of extraordinary income, including gains on salesof investment securities, net income for the current consolidated fiscal year was 1,354 million yen, 36.4% up
compared with the previous year.
Machinery & Equipment BusinessIn the Machinery & Equipment Business, consolidated net sales were 11,522 million yen, 3.6% down from theprevious year. Although net sales from domestic public sector demand were higher for equipment and systems
as well as for parts and repairs, net sales resulting from domestic private sector demand remained slack andwere lower than in the prior year, when sales were boosted by the shipment of large-scale centrifuges for thechemical industry in Poland. Consolidated operating income, however, exhibited growth 14.8% up from theprevious year to 960 million yen, boosted by a greater tendency than in most years for projects with relatively highprofit margins centered on net sales of parts and repairs to be concentrated in the second quarter, and the effectof lower costs.
While the decline in net sales from domestic private sector demand was centered on the postponement or loss ofsome business projects, compared with prior years such movement was somewhat more notable during thecurrent consolidated fiscal year.
Chemical Products BusinessWith regard to the Chemical Products Business, a rising sales trend primarily in the electronics materials sector,
plastics sector and fine chemicals sector and driven by a general improvement in supply and demand was clearly
evident, while overseas, sales at Tomoe Engineering (Hong Kong) Co., Ltd. expanded steadily. As a result,4

consolidated net sales for this business as a whole were 27,294 million yen, 12.1% up compared with the previous
year. In particular, the growth rate of the electronics materials sector against the backdrop of a recovery insemiconductor-related demand was conspicuous, and the increase in sales in a sector with such a highpercentage of value added helped boost profits. From an earnings perspective, the appreciation of the yen also
continued to affect all imported commercial products. Consolidated operating income for this business increased
more rapidly than the growth in net sales and totaled 1,212 million yen, 61.9% up compared with the previous year.
[2] Outlook for the next fiscal year (November 1, 2010 ~ October 31, 2011)
During the consolidated fiscal year ending October 2011, Japan’s economy is expected to continue being
supported by the expansion of exports, particularly to newly developing countries, and make a transition as it
gropes for the road to a sustained recovery. On the other hand, however, there are numerous causes for concern,
including the lack of growth in the number of individuals finding employment, the influence of the strong yen anddeflation and a falloff of policy effects, and the future remains unpredictable.
Given such conditions, in the Machinery & Equipment Business we will concentrate particularly on thedevelopment of foreign demand, and as the result of increasing machinery orders for oil wells and the chemicalindustry and projects to supply devices for the photovoltaic cell manufacturing process, we project fiscal year
consolidated net sales of 13,000 million yen (12.8% up compared with the previous year) and operating income of
1,090 million yen (13.5% up compared with the previous year). In the Chemical Products Business as well, we
will work to strengthen sales of new commercial products in the fine chemicals sector and imported products in theplastics sector, and take steps to bolster sales of our existing leading commercial products in the industrial
materials sector and electronics materials sectors, and we project fiscal year consolidated net sales of 30,000
million yen (9.9% up compared with the previous year) and operating income of 1,180 million yen (2.7% down
compared with the previous year).
As a result of these efforts, for the entire Tomoe Engineering Group in the consolidated fiscal year ending October
2011 we project net sales to increase by 10.8% to 43,000 million yen, operating income to increase by 4.5% to2,270 million yen and ordinary income, including the effects of cost controls, to increase by 6.5% to 2,320 million
yen.
Note that the above outlook for the next fiscal year is based on the business information at present; therefore, theactual performance may change because of unexpected changes of conditions such as both domestic and foreign
economic trends and balance of demand and supply.
(2) Analysis of Financial Condition[1] Total Assets, Liabilities, and Net Assets
Total assets at the end of the consolidated fiscal year were 29,779 million yen, 3,367 million yen (12.7%) up fromthe balance at the end of the previous consolidated fiscal year (October 31, 2009), reflecting the increase in current
assets in the form of cash and deposits, notes and accounts receivable-trade and inventories, which accompanied
the growth in net sales and greatly exceeded the decrease in fixed assets from depreciation and the asset
impairment write-off of investment securities.
On the other hand, liabilities totaled 10,926 million yen, 2,436 million yen (28.7%) up from the balance at the end of
the previous consolidated fiscal year. The main factor was the increase in current liabilities, including notes andaccounts payable-trade and income taxes payable, as the result of the increase in net sales and earnings. Net
assets increased by 931 million yen (5.2%) from the end of the previous consolidated fiscal year to 18,852 million
yen, mainly because of the increase in retained earnings.
As a result, the equity ratio at the end of the consolidated fiscal year fell by 4.4 percentage points from the end of5the previous consolidated fiscal year to 62.4%.
[2] Cash Flow Status
Balance of cash and cash equivalent as of the end of the current consolidated fiscal year increased by 1,661 million
yen to 6,109 million yen from the previous consolidated fiscal year. Status of each cash flow and their factors during
the current consolidated fiscal year are as follows:(Net Cash Provided by (Used in) Operating Activities)
Net Cash provided by operating activities was 2,182 million yen, mainly reflecting income before income taxes andminority interests of 2,225 million yen, an increase in notes and accounts payable-trade of 1,151 million yen andincreases in notes and accounts receivable-trade and inventories of 1,446 million yen and 619 million yen,respectively.
(Net Cash Provided by (Used in) Investing Activities)
Net cash used in investing activities was 51 million yen, mainly because funds used for the purchase of tangible andthe intangible fixed assets exceeded the proceeds from sale of investment securities.
(Net Cash Provided by (Used in) Financing Activities)
Net cash used in financing activities was 394 million yen. The main factors were cash dividends paid of 299
million yen and the repayment of long-term loans payable by group businesses of 60 million yen.
Trends in cash flow indices are as follows:

Equity Ratio (Percent)Year EndedYear EndedYear EndedYear EndedYear Ended

October 31,

October 31,

October 31,

October 31,

October 31,

2006

2007

2008

2009

2010

54.0

51.8

58.8

66.8

62.4

53.8

47.4

30.9

51.8

38.6

2.5

-

0.3

0.2

0.3

13.5

-

86.9

88.8

151.7

Equity Ratio Based on
Market Value (Percent)Debt-repayment Ratio(Years)Interest Coverage Ratio(Percent)

Equity ratio: Net assets / Total assets
Equity ratio based on market value: Market capitalization of shares / Total assets
Debt-repayment ratio：Interest-bearing debt / Cash flow from operating activities
Interest coverage ratio: Cash flow from operating activities / Interest payment(Note)
1. All indices are calculated on the basis of consolidated financial figures.
2. Market capitalization is calculated by multiplying the closing share price at the end of the fiscal year by the
number of outstanding shares at the end of the fiscal year (excluding treasury stock).
3. 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 debt for which interest is payable declared in the6Consolidated Balance Sheet. Interest expense refers to the interest paid as shown in the Statements ofConsolidated Cash Flows.
4. The debt-repayment ratio and interest coverage ratio are not recorded for the year ended on October 31,
2007, as operating cash flow was negative in those periods.

(3) Basic Policy for Profit Sharing and Dividends for Fiscal 2010 and 2011
Our 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 to "maintain stability in dividends payment with a target consolidated
payout ratio of 25% or more, by considering earnings, reinforcement of our corporate strength, etc. in a comprehensive
manner."Based on the above policy, we plan to submit to the 81st General Meeting of Shareholders to be held in January 2011 to
pay out dividends of 35 yen per share for the fiscal year ended on October 31, 2010, which is 5 yen increase from theprevious fiscal year.
Dividends for the fiscal year ending on October 31, 2011 will be 40 yen per share. The ordinary dividend per share will
be 35 yen, identical to the dividend for the fiscal year ended on October 31, 2010, considering the business outlook forthe entire fiscal year. In addition to the regular dividend, we plan to separately pay a commemorative dividend of 5 yen
per share in recognition of the 70th anniversary of the Company’s founding.
(4) Risk Factors in Business
The key areas of business risks of our group that might have significant influence on investors’ decision are as follows.
The following judgments are made based on the business information at the end of the current consolidated fiscal year,
although some forward-looking statements are contained.
[1] Seasonal Fluctuation of Operating Results
Currently there is a seasonal bias in sales and profits of our group toward the second quarter. This is because thatpublic sector sales account for relatively a high percentage in the sales of Machinery & Equipment Business andtend to be concentrated in the second quarter due to public sector's budget implementation.
[2] Influence of Foreign Exchange Fluctuation
Businesses of our group include exports and import in foreign currencies, and exchange rate fluctuations may affectthe values after translation into yen. Operating results and financial condition of our group might be affected bythese foreign currency transactions although we make efforts to minimize exchange fluctuation risks by entering into
forward exchange contracts. Since our group has overseas subsidiaries, we prepare financial statements in foreign
currencies. In preparing consolidated financial statements, there is a risk associated with exchange fluctuation
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. Our group will monitor the local situations with the greatest care and take appropriate actions on a timely
basis.

However, our group’s operating results and financial condition might be affected by unforeseen

circumstances arising from local political conditions, governments, legal restrictions, taxation systems, customs, etc.

7

[4] Risk 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 might be required 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 andcollect 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 and financial condition.
[5] Risks of New Investment
Our group is in a quest to pursue high-value-added business all the time. To do this, we must take measures suchas aggressive investment and acquisition of trade rights in some situations; however, these measures may involve
higher potential risks than conventional business risks, and therefore, we will appropriately take actions to such newrisks by sufficient preparations. Even though we take such sufficient preparations and measures, some unexpected
events might affect operating results and financial condition of our group as a result.

8

2. Tomoe Engineering and Companies
Tomoe Group consists of Tomoe Engineering and its nine subsidiaries. The group is mainly engaged in manufacture anddistribution 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 based on the following businessactivity 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. Its subsidiary Tomoe Machinery Service provides
centrifuge users with after-sales services as well as parts. Its subsidiary Tomoe Machinery undertakes machining
and sheet-metal processing of centrifuge. Tomoe Engineering consigns manufacture of the centrifuges and theafter-sales service to its subsidiary Tomoe Engineering (Shanghai).
Chemical Products Business:
Interstella Plastics (Shenzhen) and Stella Tech Engineering Plastics (Shenzhen) are engaged in coloring andcompounding of plastic materials. Our affiliate, Interstella is an investing company of Stella Tech Engineering Plastics(Shenzhen) and also serves as a contact for purchasing and sales. Tomoe (Hong Kong) is functioning as central
core for sales activity in China in Tomoe Group. Tomoe Wine & Spirits distributes wines and spirits imported by
Tomoe Engineering.
Other Businesses:
Tomoe Butsuryu subcontracts with our company for products’ transportation and warehousing.
Schematic diagram of Tomoe’s operation is on the next page.

9

(◎: Consolidated subsidiaries)

Products sale

Tomoe Butsuryu(Subsidiary)
Logistics & warehousingof our products

materials

Products sale◎Interstella Plastics(Shenzhen)(Subsidiary)
Plastic coloring and compounding

Chemical Products BusinessTomoe Engineering Co., Ltd.

Subcontracting

Purchase of

Machinery & Equipment Business

10

Logistics & warehousing

Products sale

Purchase of products◎Interstella (Subsidiary)
Purchase of plastic materials & sale

Products sale

Purchase of products

Tomoe Wine &Spirits(Subsidiary)
Sale of imported wines

Products sale

Products sale
Products sale

Purchase of parts

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

Products sale

Manufacturingconsignment & parts sale

Products sale

Purchase of products◎ Stella-Tech Engineering Plastics(Shenzhen)(Subsidiary)
Plastic coloring & compounding◎Tomoe Machinery(Subsidiary)
Sheet metal processing &machining◎Tomoe Engineering(Shanghai) (Subsidiary)
Manufacturing, sale &after-sale services of our
products
Maintenance of delivered
products

Parts sale

Maintenance of delivered products◎Tomoe Machinery
Service(Subsidiary)
After-sale services &parts sale of our products

After-sale services& products sale

After-sale services& parts sale

Customers

3. Management Policy(1) Basic Management Philosophy
Our basic management philosophy is to contribute to society and provide a good quality of life to people involved
through growth and development of our company with spirit of creation and entrepreneurship and to provide ourcustomers with high level of technologies and excellent products. Guided by this policy, we shall be engaged in
the manufacture and sale of machinery based primarily on solid-liquid separation techniques and importation ofunique and specialty raw materials for chemical industry.
(2) Target Management IndicesTomoe consists of two business divisions: Machinery & Equipment Business that manufactures and sells mainly
centrifuges and other separation equipment and Chemical Products Business that sells commercial products,
mainly imported raw materials. Rather than just aiming for a volume growth, we always try to develop and deal
in unique value-added products that require specialized technology and expertise, even if their market is not so big.
To achieve these, we regard improvement of profitability as our primary management goal. As a management
indicator for meeting this goal, we give highest priority to ordinary income, which directly expresses the nature andchange of profitability.
(3) Mid- and Long-term Management Strategy
The mid- and long-term management strategy of Machinery & Equipment Business is to develop new products,
reduce manufacturing cost, and develop overseas markets, and that of Chemical Products Business is to
discover unique new commercial products to expand business in China.
To achieve continuous progress on our basic strategy, in September 2010 we formulated the Ninth Mid-termManagement Plan “Tomoe 525” (from November 1, 2010 to October 31, 2013). The plan is devoted mainly
to implementing measures based on the following policies after newly identifying the ideal approach toallocating management resources and capturing market share. In the Machinery & Equipment Business, wewill increase sales of our low-power, energy-saving centrifuge models and expand our share of foreign sales
centered primarily on China and the United States, while in the Chemical Products Business we will launch
attractive new commercial products in cooperation with new, leading suppliers and strengthen our domestic andoverseas plastic business, including our compounds business in southern China. Through these combined
efforts we will seek to achieve consolidated net sales of 50,000 million yen and ordinary income of 2,500 million
yen in the fiscal year ending October 2013, the final fiscal year of our mid-term management planning period.
(4) Challenges to be Addressed
We shall continue to seek to improve stable profitability of Machinery & Equipment Business and Chemical
Products Business as two wheels of a cart and improve and strengthen the corporate governance andcompliance as a major issue.
Given factors such as the escalation of competition between countries and region as the newly developing
countries that are driving the global economy are transformed into advanced countries, eliminating the
supply-demand gap in Japan is expected to require an even longer time. Moreover, as industry-related
conditions we cannot afford to ignore the spread of the open bidding system pertaining to public demand in the
Machinery & Equipment Business, or the ongoing overseas shift of end users in our Chemical Products Business.
Therefore we have formulated our Ninth Mid-term Management Plan aimed at the development of new domestic

11

markets and the further strengthening of our market competitiveness in other countries. Our policy in the future
will remained focused on implementing management measures based on this plan, and achieving sustained
growth and increasing stable earning capacity in both of our businesses.
To enhance and strengthen corporate governance and compliance we have established a Corporate Ethics
Committee, and in the future this committee will take the lead in efforts to ensure management in full compliancewith the letter and spirit of the law and improve corporate ethics. Moreover, from the view point of corporate
governance, we plan to maintain our efforts to firmly establish wide-ranging risk management centered on our
Risk Management Committee, and to pursue the consolidation of our management environment from an IT
perspective by undertaking construction of our next-generation mission-critical systems.

12

4. Consolidated Financial Statements(1) Balance Sheets
Year Ended October 31, 2009

Year Ended October 31, 2010

Cash and Deposits

4,447,793

6,109,100

Notes and Accounts Receivable-Trade

11,995,465

13,324,042

Merchandise and Finished Goods

2,591,153

3,055,662

Work in Process

914,572

1,400,107

Raw Materials and Supplies

787,926

404,117

Deferred Tax Assets

398,437

618,454

Others356,812

164,937(34,896)
21,457,266(29,006)
25,047,414

2,522,652

2,527,155

Accumulated Depreciation(1,433,070)(1,505,179)

Buildings and Structures, Net

1,089,581

1,021,976

Machinery, Equipment and Vehicles

3,400,759

3,435,773(2,482,626)(2,623,977)

918,132

811,796Land

970,253

970,253

Lease Assets

88,451

76,962

Accumulated Depreciation(29,614)(39,169)

Lease Assets, Net

58,83737,793

956,862

986,860(869,884)(895,734)

86,97891,126

3,123,783

2,932,946

48,71380,245Investment Securities

903,416

697,362

Guarantee Deposits

410,359

412,798

Deferred Tax Assets

53,52287,043

Others506,668

602,102

Allowance for Doubtful Accounts(91,282)(80,377)

Total Investments and Other Assets

1,782,685

1,718,929

Total Noncurrent Assets

4,955,182

4,732,121

Total Assets

26,412,448

29,779,536

AssetsCurrent Assets

Allowance for Doubtful Accounts
Total Current Assets
Noncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, Net

Others
Accumulated Depreciation
Others, Net
Total Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

13Year Ended October 31, 2009

Year Ended October 31, 2010

5,430,683

6,477,307

Short-Term Loans Payable

692,481585,923

Lease Obligations

28,107

24,132

Accounts Payable-Others

427,104

551,681

Income Taxes Payable

53,760961,213

Advances Received

243,984

417,875

Provision for Bonuses

791,939

1,111,306

Provision for Directors' Bonuses

48,47085,555

Allowance for Product Warranty

154,997

186,442

Others294,512327,562

8,166,042

10,729,000

Noncurrent Liabilities
Lease Obligations

46,68622,553

Provision for Retirement Benefits

29,03432,538Provision for Directors' Retirement Benefits

142,760

142,760

Deferred Tax Liabilities

50,901108

Derivatives Liabilities

55,4780Total Noncurrent Liabilities

324,861

197,960

Total Liabilities

8,490,904

10,926,961

Capital Stock

1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

15,557,577

16,613,067

Treasury Stock(363,045)(363,194)

17,739,152

18,794,492

Valuation and Translation Adjustments
Valuation Difference on Available-for-Sale
Securities
Deferred Gains or Losses on Hedges

77,749(712)

53,585(7,411)

Foreign Currency Translation Adjustment(173,790)(257,190)

Total Valuation and Translation Adjustments(96,753)(211,016)

279,145

269,098

Total Net Assets

17,921,544

18,852,575

Total Liabilities and Net Assets

26,412,448

29,779,536

Liabilities and Net Assets
Liabilities
Current Liabilities
Notes and Accounts Payable-Trade

Total Current Liabilities

Net Assets
Shareholders’ Equity

Total Shareholders’ Equity

Minority Interests14(2) Statements of Consolidated Income(Thousands of yen)
Year Ended October 31, 2009

Year Ended October 31, 2010

Net Sales

36,304,727

38,816,975

Cost of Sales

28,790,924

30,479,260

Gross Profit

7,513,803

8,337,714

Selling, General and Administrative Expenses

5,928,589

6,164,689

Operating Income

1,585,213

2,173,024

Interest income

1,817

6,790

Dividends Income

47,221

15,148Rent Income

25,111

16,850Foreign Exchange Gains

58,05452,542Others65,292

42,234

197,497

133,566

Interest Expenses

20,618

7,911

Loss on Sales of Notes Payable

3,893

75

Commission Paid

9,975

10,008Loss on Valuation of Derivatives

43,901

93,496

Others

17,48815,976

Total Non-Operating Expenses

95,878

127,469

Ordinary Income

1,686,832

2,179,121

Gain on Sales of Investment Securities

3,225

159,344

Reversal of Allowance for Doubtful Accounts

51,707

13,207

Total Extraordinary Income

54,932

172,552

113

0

Loss on Retirement of Noncurrent Assets

4,709

5,229

Loss on Sales of Investment Securities

6,039

466

Loss on Valuation of Investment Securities

83,716

120,049

Loss on Valuation of Membership

2,598

0

Provision of Allowance for Doubtful Accounts

1,988

420

Total Extraordinary Losses

99,165

126,165

1,642,599

2,225,508

Income Taxes-Current

401,136

1,142,975

Income Taxes-Deferred

232,869(285,752)

634,005

857,222

15,34913,428993,244

1,354,856

Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses

Extraordinary Income

Extraordinary Losses
Loss on Sales of Noncurrent Assets

Income before Income Taxes and Minority
Interests

Total Income Taxes
Minority Interests Income
Net Income15(3) Consolidated Statements of Changes in Shareholders' Equity(Thousands of yen)
Year Ended October 31, 2009

Year Ended October 31, 2010

Shareholders' Equity
Common Stock
Surplus during Previous Fiscal Year

1,061,210

1,061,210

001,061,210

1,061,210

1,483,410

1,483,410

001,483,140

1,483,410

14,913,596

15,557,577

Cash Dividend Paid

(349,263)(299,367)

Net Income

993,244

1,354,856

Total Amount Changed

643,981

1,055,489

Surplus during This Fiscal Year

15,557,577

16,613,067(363,003)(363,045)

Issued Shares Reacquired

(42)

(148)

Total Amount Changed

(42)

(148)

(363,045)(363,194)

17,095,213

17,739,152

Cash Dividend Paid

(349,263)(299,367)

Net Income

993,244

1,354,856

(42)

(148)

Total Amount Changed

643,938

1,055,340

Surplus during This Fiscal Year

17,739,152

18,794,492

Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Capital Surplus
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Retained Earnings
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Issued Shares Reacquired
Surplus During Previous Fiscal Year
Changes During This Fiscal Year

Surplus during This Fiscal Year
Total Shareholders’ Equity
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Issued Shares Reacquired16

(Thousands of yen)
Year Ended October 31, 2009

Year Ended October 31, 2010

Revaluation and Translation Adjustments
Valuation Difference on Available-for-sale
Securities
Surplus during Previous Fiscal Year

12,18877,749(Except Shareholders' Equity)

65,561(24,164)

Changes during This Fiscal Year65,561(24,164)

77,74953,585

26,115(712)(Except Shareholders' Equity)(26,828)(6,699)Changes during This Fiscal Year

(26,828)(6,699)(712)(7,411)

21,748(173,790)(Except Shareholders' Equity)(195,539)(83,399)

Changes during This Fiscal Year

(195,539)(83,399)(173,790)(257,190)

60,052(96,753)(Except Shareholders' Equity)(156,806)(114,262)

Changes during This Fiscal Year

(156,806)(114,262)(96,753)(211,016)

310,478

279,145(Except Shareholders' Equity)(31,333)(10,046)

Changes during This Fiscal Year

(31,333)(10,046)

279,145

269,098

Changes during This Fiscal Year
Total (Net) Amount Changed

Surplus during This Fiscal Year
Deferred Gains or Losses on Hedges
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total (Net) Amount Changed

Surplus during This Fiscal Year
Foreign Currency Translation Adjustment
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total (Net) Amount Changed

Surplus during This Fiscal Year
Total Revaluation and Translation
Adjustments
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total (Net) Amount Changed

Surplus during This Fiscal Year
Minority Interests
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total (Net) Amount Changed

Surplus during This Fiscal Year17

(Thousands of yen)
Year Ended October 31, 2009

Year Ended October 31, 2010

Total Net Assets
Surplus during Previous Fiscal Year

17,465,744

17,921,544

Cash Dividend Paid

(349,263)(299,367)

Net Income

993,244

1,354,856

(42)

(148)

(Except Shareholders' Equity)(188,139)(124,309)

Total Amount Changed

455,799

931,030

Surplus during This Fiscal Year

17,921,544

18,852,575

Changes during This Fiscal Year

Issued Shares Reacquired
Total (Net) Amount Changed18

(4) Consolidated Statements of Cash Flows(Thousands of Yen)
Year EndedYear Ended

October 31, 2009

October 31, 2010

Net Cash Provided by (Used in) Operating Activities
Income before Income Taxes and Minority Interests

1,642,599

2,225,508

Depreciation and Amortization

507,424

396,574

Increase (Decrease) in Provision for Bonuses(341,878)

321,002

Increase (Decrease) in Provision for Directors' Bonuses(16,335)

37,084

Increase (Decrease) in Allowance for Product Warranty
Increase (Decrease) in Provision for Retirement Benefits(20,263)(2,924)

31,444
3,578

Increase (Decrease) in Provision for Directors' Retirement Benefits(115,020)

0

Increase (Decrease) in Allowance for Doubtful Accounts(76,611)(16,795)

Interests and Dividends Income(49,039)(21,939)

Interest Expenses

20,618

7,911

Foreign Exchange Losses (Gains)

9,361

18,307

Loss (Gain) on Valuation of Investment Securities

83,716

120,049

Loss (Gain) on Valuation of Derivatives

43,901

93,496

Loss (Gain) on Sales of Investment Securities

2,814(158,878)

Loss (Gain) on Sales of Noncurrent Assets

113

0

Loss on Retirement of Noncurrent Assets

4,709

5,229

Loss on Valuation of Membership

2,598

0

Receivable-Trade

3,368,580(1,446,405)

Decrease (Increase) in Inventories

1,014,662(619,322)

Increase (Decrease) in Notes and Accounts Payable-Trade(1,534,956)

1,151,232

Increase (Decrease) in Accounts Payable-Others(69,016)

104,518

Increase (Decrease) in Advances Received(43,463)

176,736

Increase (Decrease) in Accrued Consumption Taxes

117,215

93,512Others, Net

300,261

148,5074,849,071

2,187,314

Interests and Dividends Income Received

50,27321,920Interest Expenses Paid

(41,028)(14,383)(1,214,047)(12,590)3,644,268

2,182,261

Decrease (Increase) in Notes and Accounts

Sub total

Income Taxes Paid
Net Cash Provided by (Used in) Operating Activities

19

(Thousands of Yen)
Year EndedYear Ended

October 31, 2009

October 31, 2010

Net Cash Provided by (Used in) Investment Activities
Disbursement to Time Deposits

0(2,378,526)

Proceeds from Withdrawal of Time Deposits

100,000

2,378,526

Purchase of Property, Plant and Equipment(246,733)(203,405)

806

25

Purchase of Intangible Fixed Assets(15,323)(48,066)

Purchase of Investment Securities(14,170)(14,102)

Proceeds from Sales of Investment Securities

11,795

218,683

Collection of Loans Receivable

10,872

2,822

Payments of Loans Receivable(1,160)(3,925)

Guarantee Deposits (Increase)55,119(3,632)Others, Net

10,121(370)(88,671)(51,972)

Net Increase (Decrease) in Short-Term Loans Payable(239,857)

0

Repayments of Lease Obligations(38,659)(28,107)

Repayment of Long-Term Loans Payable(115,000)(60,000)

(42)

(148)

(349,263)(299,367)(7,315)(6,740)(750,137)(394,363)

Equivalents(69,100)(74,618)

Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period

2,736,358

1,661,307

1,711,434
4,447,793

4,447,793

Proceeds from Sales of Property, Plant and Equipment

Net Cash Provided by (Used in) Investment Activities
Net Cash Provided by (Used in) Financing Activities

Purchase of Treasury Stock
Cash Dividends Paid
Cash Dividends Paid to Minority Shareholders
Net Cash Provided by (Used in) Financing Activities
Cash and Cash Equivalents
Effect of Exchange Rate Change on Cash and Cash

Cash and Cash Equivalents at End of This Fiscal Year20

6,109,100

(5) Notes for Premise of Going Concern
None.
(6) Changes of Important Items to be Basis for Making Consolidated Financial Statements[Changes of Accounting Policy]
Current consolidated fiscal year
(Year Ended October 31, 2010)(1) Application of the Partial Amendments to Accounting Standard for Retirement Benefits (Part 3)
Beginning from the current consolidated fiscal year the Company will apply the Partial Amendments to AccountingStandard for Retirement Benefits (Part 3) (Accounting Standards Board of Japan Accounting Standard Statement
No. 19 dated July 31, 2008).
The affect of this change on earnings is not material.
(2) Change in reporting standard for completed contract revenues and cost of completed contracts
The Company traditionally reported revenues and costs of construction contracts by applying thecompleted-contract method. Beginning from the current consolidated fiscal year, the Company will apply the
Accounting Standard for Construction Contracts (Accounting Standards Board of Japan Statement No. 15,
December 27, 2007) and the Guidance on Accounting Standard for Construction Contracts (Accounting Standards
Board of Japan Implementation Guidance No. 18, December 27, 2007). Beginning from works contracts for whichconstruction activity was begun during the current consolidated fiscal year, the Company will apply the percentage
of completion method for works for which the outcome of the construction activity is deemed certain by the end of
the current consolidated fiscal year, and will apply the completed-contract method for all other works. For the current
consolidated fiscal year, there is no effect on profit and loss and segment information because the Company had no
construction contracts that fulfill the requirements for application of the percentage of completion method.

[Additional Information]
Current consolidated fiscal year
(Year Ended October 31, 2010)(Provision for Retirement Benefits)
In November 2009, the Company and certain of its domestic consolidated subsidiaries changed their retirement
allowance system and transferred from a tax qualified pension plan system to a defined-benefit pension plan. In
conjunction with this transfer the Company has adopted the Accounting for Transfers between Retirement Benefit Plans(Financial Accounting Standards Implementation Guidance No. 1, January 31, 2002). The effect of this transfer on profit
and loss is not material.

21

(7) Notes for Consolidated Financial Statements(Segment Information)
Year Ended October 31, 2009
Machinery &Equipment
Business
I. Sales and Operating Income:Sales(1) Sales to UnaffiliatedCustomers(2) Internal Sales Among
Segments or AmountTransferred
Total
Operating Costs
Operating Income
II. Assets, Depreciation Costs,
Impairment Loss and Capital
Expenditures
AssetsDepreciation Costs
Capital Expenditures(Thousands of yen)
Deletion or
Consolidated
Total
Company

Chemical
Products
Business

Total

11,950,908

24,353,818

36,304,727

0

36,304,727

0
11,950,908
11,114,614
836,2940
24,353,818
23,604,899
748,9190
36,304,727
34,719,513
1,585,213

0
0
0
0

0
36,304,727
34,719,513
1,585,213

7,804,364

13,256,874

21,061,238

5,351,209

26,412,448

329,649
254,102

177,774
91,473

507,424
345,57500507,424
345,575(Notes)1. Business classification is by aggregate sales classification.
2. Main products and goods in each business:(1) Machinery & equipment business: Various types of centrifuges, other machinery(2) Chemical products business: Synthetic resin, inorganic materials, and other chemical products(3) Of the assets in the current consolidated fiscal year, the amount of the total company assets included indeletion or total company items is 5,351,209 thousand yen. The main items are surplus funds applied(deposits) and long-term investment funds (investment securities) of the parent company.
3. Changes for Accounting Standards(1) Application of Accounting Standards for Inventory Valuation
From the current consolidated fiscal year we have applied “Accounting Standards for Inventory Valuation”(ASBJ Statement No. 9) and changed to historical-cost method (book value devaluation based on decreasein profitability). The effects that this change gives to the gain and loss for the segment information are minor.
(2) Application of Accounting Standards for Lease Transactions
With regard to non-transfer-ownership finance lease, it was treated as lease transaction before; however, inconformity with “Accounting Standards for Lease Transactions” (ASBJ Statement No. 13) and “Guidance on
Accounting Standards for Lease Transactions” (ASBJ Guidance No. 16), it is treated as ordinary purchaseand sale transaction from the current consolidated fiscal year. The effects that this change gives to the gain
and loss for the current consolidated fiscal year are minor. The effects to the segment information are written
in the pertinent sections.
(3) Application of Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements
From the current consolidated fiscal year, we have applied “Practical Solution on Unification of Accounting

22

Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ PITF No. 18) andmade the necessary adjustments in consolidated financial statements. The effects that this change gives to
the gain and loss for the segment information are minor.
4. The durable period of machinery and equipment was changed as a result of our review on usage of theassets etc. to comply with modification of Corporate Tax Act. The effects that this change gives to the gain
and loss for the segment information are minor.
Year Ended October 31, 2010
Machinery &Equipment
Business
I. Sales and Operating Income:Sales(1) Sales to UnaffiliatedCustomers(2) Internal Sales Among
Segments or AmountTransferred
Total
Operating Costs
Operating Income
II. Assets, Depreciation Costs,
Impairment Loss and Capital
Expenditures
AssetsDepreciation Costs
Capital Expenditures(Thousands of yen)
Deletion or
Consolidated
Total
Company

Chemical
Products
Business

Total

11,522,802

27,294,172

38,816,975

0

38,816,975

0
11,522,802
10,562,394
960,4070
27,294,172
26,081,556
1,212,616

038,816,975
36,643,950
2,173,024

0
0
0
0

0
38,816,975
36,643,950
2,173,024

8,321,670

14,651,402

22,973,072

6,806,463

29,779,536

271,867
191,759

124,707
81,508396,574
273,26700396,574
273,267(Notes)1. Business classification is by aggregate sales classification.
2. Main products and goods in each business:(1) Machinery & Equipment Business: Various types of centrifuge and other machinery(2) Chemical Products Business: Synthetic resin, industrial materials and other chemical products(3) Of the assets in the current consolidated fiscal year, the amount of the total company assets included indeletion or total company items is 6,806,463 thousand yen. The main items are surplus funds applied(deposits) and long-term investment funds (investment securities) of the parent company.

23

(Segment by Location)
Year Ended October 31, 2009

(Thousands of yen)
Japan

Asia

Total

Deletion or

Consolidated

EntireCompany
I. Sales and Operating Income:Sales(1) Sales to Unaffiliated Customers

33,547,196

2,757,530

36,304,727

0

36,304,727

362,241

151,072

513,313(513,313)

0

33,909,437

2,908,603

36,818,041(513,313)

36,304,727

Operating Costs

32,312,927

2,916,644

35,229,571(510,057)

34,719,513

Operating Income or loss ( )1,596,510(8,040)1,588,469(3,256)

1,585,213

19,034,683

2,238,833

21,273,516

5,138,932

26,412,448(2) Internal Sales Among Segments
or Amount Transferred
Total

II. Assets(Notes)1.

Included in Asia are three countries, China, Korea, and Indonesia.

2.

Of the assets in the current consolidated fiscal year, the amount of the total company assets included in deletionor entire company items is 5,351,209 thousand yen. Main items are surplus funds applied (deposits) andlong-term investment funds (investment securities) of the parent company.

3.

Changes for Accounting Standards(1) Application of Accounting Standards for Inventory Valuation
From the current consolidated fiscal year we have applied “Accounting Standards for Inventory Valuation”(ASBJ Statement No. 9) and changed to historical-cost method (book value devaluation based on decreasein profitability). The effects that this change gives to the gain and loss for the segment information are minor.
(2) Application of Accounting Standards for Lease Transactions
With regard to non-transfer-ownership finance lease, it was treated as lease transaction before; however, inconformity with “Accounting Standards for Lease Transactions” (ASBJ Statement No. 13) and “Guidance on
Accounting Standards for Lease Transactions” (ASBJ Guidance No. 16), it is treated as ordinary purchaseand sale transaction from the current consolidated fiscal year. The effects that this change gives to the gain
and loss for the current consolidated fiscal year are minor. The effects that this change gives to the gain andloss for the segment information are minor.
(3) Application of Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements
From the current consolidated fiscal year, we have applied “Practical Solution on Unification of Accounting
Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ PITF No. 18) andmade the necessary adjustments in consolidated financial statements. The effects that this change gives to
the gain and loss for the segment information are minor.

4. The durable period of machinery and equipment was changed as a result of our review on usage of the assets
etc. to comply with modification of Corporate Tax Act. The effects that this change gives to the gain and loss
for the segment information are minor.

24

Year Ended October 31, 2010

(Thousands of yen)
Japan

Asia

Total

Deletion or

Consolidated

EntireCompany
I. Sales and Operating Income:Sales(1) Sales to Unaffiliated Customers

35,431,281

3,385,693

38,816,975

0

38,816,975

352,789

232,275

585,065(585,065)

035,784,071

3,617,969

39,402,040(585,065)

38,816,975

Operating Costs

33,707,673

3,521,023

37,228,696(584,746)

36,643,950

Operating Income

2,076,397

96,9462,173,343(319)

2,173,024

20,808,368

2,353,186

23,161,555

6,617,981

29,779,536(2) Internal Sales Among Segments
or Amount Transferred
Total

II. Assets(Notes)1. Main countries or regions included in the areas other than Japan:
Asia: China, Korea, and Indonesia (Total 3 countries)
2. Of the assets in the current consolidated fiscal year, the amount of the total company assets included in deletion or
total company items is 6,806,463 thousand yen. The main items are surplus funds applied (deposits) andlong-term investment funds (investment securities) of the parent company.

25

(Overseas Sales)Year Ended October 31, 2009

(Thousands of yen)Asia

I. Overseas Sales

Other Regions

Total

6,965,307

1,994,390

8,959,6980036,304,727

19.2

5.5

24.7

II. Consolidated Sales
III. Percentage of Overseas Sales for Consolidated Sales(Percent)(Notes)1. Areas including countries or regions are determined based on their degree of geographical proximity.
2. Main countries or regions included in the areas other than Japan:(1) Asia: China, Korea, Taiwan, and Indonesia (Total 4 countries)(2) Other regions: America and Europe
3. Overseas net sales are sales of our company and subsidiaries made in countries and regions other than Japan.
Year Ended October 31, 2010

(Thousands of yen)Asia

I. Overseas Sales

Other Regions

Total

8,171,648

691,9078,863,555

0038,816,975

21.1

1.8

22.8

II. Consolidated Sales
III. Percentage of Overseas Sales for Consolidated Sales(Percent)(Notes)1. Areas including countries or regions are determined based on their degree of geographical proximity.
2. Main countries or regions included in the areas other than Japan:(1) Asia: China, Korea, Taiwan, and Indonesia (Total 4 countries)(2) Other regions: America and Europe
3. Overseas net sales are sales of our company and subsidiaries made in countries and regions other than Japan.

26

(Per Share Information)
Year Ended October 31, 2009
Net asset per share:97¥1,767.

Net income per share:¥99.53

Year Ended October 31, 2010
Net asset per share:¥1,862.30

Net income per share:¥135.77

Income per share for this fiscal year after adjustment of the

Income per share for this fiscal year after adjustment of theresidual securities is not presented as there are no residual

residual securities is not presented as there are no residual

securities.

securities.

(Note 1) Calculation basis for net asset per share are as follows:Year Ended October 31,

Year Ended October 31,

2009

2010

Total for net asset in consolidated balance sheet

17,921,544

18,852,575

17,642,398

18,583,476

279,145

269,098

10,553,200

10,533,200

554,298

554,418

9,978,902

9,978,782(thousands of yen)
Net asset for common stock (thousands of yen)
Breakdown of main difference (thousands of yen)
Quotient of minority shareholders
Number of outstanding common stock (share)
Number of treasury stock (share)
Number of common stock used for calculation of net assets
per share (share)(Note 2) Calculation basis for net income per share are as follows:Year EndedYear Ended

October 31, 2009

October 31, 2010

Net income for this fiscal year (Thousands of yen)993,244

1,354,856

Net income for common stock (Thousands of yen)993,244

1,354,856

9,978,921

9,978,821

Average number of common stock during the fiscal year
(Significant subsequent events)
None.
(Omission of disclosure)We omit disclosure of the notes for the consolidated balance sheets, statements of consolidated income, consolidated
statements of changes in shareholders’ equity, and consolidated statements of cash flows and notes for businesscombinations related to lease transactions, transactions with related parties, deferred tax accounting, securities, derivativetransactions, retirement benefits, stock options, merger and acquisition, leases and real estate etc. are omitted, as we do
not consider they are in significant need for disclosing in the financial results.

27

5. Non-Consolidated Financial Statements(1) Balance Sheets(Thousands of yen)thAssets80 Period

81st Period(October 31, 2009)(October 31, 2010)

Current Assets
Cash and Deposits

3,236,812

4,767,726

Notes Receivable-Trade

3,105,418

3,476,336

Accounts Receivable-Trade8,149,647

8,953,004

Merchandise and Finished Goods

1,722,880

2,138,637

Work in Process

828,102

1,303,267

Raw Materials and Supplies

732,453

348,167

Advance Payment

53,504

52,812

Prepaid Expense

75,06872,307

Accrued Revenue

201,813

8,905

Short-Term Loans Receivable

29,62154,813

Deferred Tax Assets

380,761

591,193

Others19,192

8,750

Allowance for Doubtful Accounts(35,093)(28,793)

Total Current Assets

18,500,184

21,747,128

2,081,019

2,081,553(1,107,512)(1,158,021)

973,506

923,531

146,549

146,549(119,605)(124,365)

Structures, Net

26,944

22,183

Machinery and Equipment

2,328,842

2,369,370(1,880,437)(1,947,782)

448,405

421,587

39,43739,437(38,254)(38,648)

1,183

788

Tools, Instrument and Equipment

832,858

860,362

Accumulated Depreciation(775,530)(797,918)

57,32862,443

Land

925,882

925,882

Lease Assets

85,46373,974

Accumulated Depreciation(28,717)(37,376)

Lease Assets, Net

56,74636,598

Noncurrent Assets
Property, Plant and Equipment
Buildings
Accumulated Depreciation
Buildings, Net
Structures
Accumulated Depreciation

Accumulated Depreciation
Machinery and Equipment, Net
VehiclesAccumulated Depreciation
Vehicles, Net

Tools, Instrument and Equipment, Net28

(Thousands of yen)th

80 Period

81st Period(October 31, 2009)(October 31, 2010)

Construction in Progress

6,518

0

2,496,514

2,393,015

Software10,38363,717

Lease Asset

14,6307,612

Software in Progress

14,7180

Telephone Rights

8,165

8,165

Total Intangible Assets

47,89879,495Investment Securities

851,916

645,862

Stocks of Affiliated Companies

483,765

483,765

Investments – Affiliated Companies

371,395

371,395

Employees

4,489

4,848

Claims in Bankruptcy

42,17533,046

Prepaid Pension Expense

419,892

521,499

Guarantee Deposits

391,156

394,830

Deferred Tax Assets

0

17,675

Others

79,58976,515

Allowance for Doubtful Accounts(91,282)(80,377)

Total Investments and Other Assets

2,553,098

2,469,060

Total Noncurrent Assets

5,097,511

4,941,572

Total Assets

23,597,696

26,688,700

Total Property, Plant and Equipment
Intangible Assets

Investments and Other Assets

Long-Term Loans Receivable to29

(Thousands of yen)thLiabilities and Net Assets

80 Period

81st Period(October 31, 2009)(October 31, 2010)

Liabilities
Current Liabilities
Notes Payable-Trade714,942

1,133,947

Accounts Payable-Trade

4,194,574

4,630,191

Lease Obligations

27,21023,236

Accounts Payable-Others

379,869

491,309

Income Taxes Payable

25,542880,921

Accrued Business Tax

8,083

8,748

Accrued Consumption Tax

102,063

5,792

Provision for Bonuses

707,034

1,025,034

Provision for Directors' Bonuses

46,091

84,627

Allowance for Product Warranty

154,997

186,442

Accrued Expenses

15

15

Advances Received

240,936

379,427

Deposit Payable

82,79881,936

Guarantee Deposit

78,38857,082Derivatives Liabilities

0145,378

6,762,549

9,134,091

Lease Obligations

45,491

22,254

Provision for Retirement Benefits

5,743

5,050

Provision for Directors' Retirement Benefits

142,760

142,760

Deferred Tax Liabilities

50,6990

Derivative Liabilities

55,4780Total Noncurrent Liabilities

300,172

170,065

Total Liabilities

7,062,721

9,304,157

1,061,210

1,061,210

1,483,410

1,483,410

1,483,410

1,483,410

230,000

230,000

Provision for Dividend Reserve

250,000

250,000

Reserve for Deferred Gains on Fixed Assets

26,72025,426

12,400,000

13,150,000

Total Current Liabilities
Noncurrent Liabilities

Net Assets
Shareholders’ Equity
Capital Stock
Capital Surplus
Capital Reserve
Total Capital Surplus
Retained Earnings
Legal Reserve of Retained Earnings
Other Retained Surplus

Other Reserve30

(Thousands of yen)

Earned Surplus Carried Forward

80th Period

81st Period(October 31, 2009)(October 31, 2010)

1,369,642

1,498,838

14,276,362

15,154,264(363,045)(363,194)

16,457,936

17,335,690

Securities

77,74953,585

Deferred Gains or Losses on Hedges(712)(4,731)

Total Valuation and Translation Adjustments

77,03748,853

Total Net Assets

16,534,974

17,384,543

Total Liabilities and Net Assets

23,597,696

26,688,700

Total Retained Earnings
Treasury Stock
Total Shareholders’ Equity
Valuation and Translation Adjustments
Valuation Difference on Available-for-Sale31

(2) Statements of Consolidated Income(Thousands of yen)th

80 Period

81st Period(October 31, 2009)(October 31, 2010)

Net Sales
Sales of Finished Goods

11,382,924

10,876,403

Merchandise Sale

22,542,689

25,116,175

33,925,613

35,992,578

Beginning Inventory

149,442

18,363

Cost of Manufacture

7,997,336

7,767,214

8,146,778

7,785,578

18,363

253,755

8,128,415

7,531,822

Beginning Inventory

1,927,885

1,704,516

Purchase Amount

18,859,776

21,159,705

20,787,662

22,864,221

Ending Inventory

1,704,516

1,884,881

Cost of Sales

19,083,145

20,979,340

Total Cost of Sales

27,211,560

28,511,162

Gross Profit

6,714,052

7,481,415

5,373,448

5,667,795

1,340,604

1,813,620

Interest income

1,583

3,655

Dividends Income

167,382

75,446

Rent Income

78,074

69,766

Foreign Exchange Gains

87,02358,052Others44,77730,854

378,841

237,775

Interest Expenses

2,805

1,475

Loss on Sales of Notes Payable

3,893

75

Rental Cost

27,782

26,937

Commission Paid

9,975

10,008Loss on Valuation of Derivatives

43,901

93,496

Others

15,045

14,119Total Non-Operating Expenses

103,404

146,113

Ordinary Income

1,616,041

1,905,282

Total Cost of Sales
Cost of Sales
Cost of Finished Goods Sold

Total
Ending Inventory
Cost of Sales
Cost of Merchandise Sold

Total

Selling, General and Administrative Expenses
Operating Income
Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses

32

(Thousands of yen)80th Period

81st Period(October 31, 2009)(October 31, 2010)

Extraordinary Income
Gain on Sales of Investment Securities

3,225

159,344

Reversal of Allowance for Doubtful Accounts

52,22013,61755,446

172,962

113

0

Loss on Retirement of Noncurrent Assets

3,053

4,545

Loss on Sales of Investment Securities

6,039

466

Loss on Valuation of Investment Securities

83,716

120,049

Loss on Valuation of Membership

2,598

0

Bad and Doubtful Debt

1,988

420

Total Extraordinary Losses

97,509125,481

Income before Income Taxes and Minority Interests

1,573,9781,952,762

Income Taxes-Current

348,400

1,035,404

Income Taxes-Deferred

254,037(259,910)

Total Income Taxes

602,437

775,493

Net Income

971,541

1,177,269

Total Extraordinary Income
Extraordinary Losses
Loss on Sales of Noncurrent Assets

33

(3) Statements of Changes in Shareholders' Equity(Thousands of yen)
Year Ended October 31, 2009

Year Ended October 31, 2010

Shareholders' Equity
Capital Stock
Surplus during Previous Fiscal Year

1,061,210

1,061,210

001,061,210

1,061,210

1,483,410

1,483,410

001,483,410

1,483,410

230,000

230,00000

230,000

230,000

250,000

250,00000

250,000

250,000

28,17526,720(1,455)(1,293)

Total Amount Changed(1,455)(1,293)

Surplus during This Fiscal Year

26,72025,426

11,500,000

12,400,000

Accumulation of Other Reserve

900,000

750,000

Total Amount Changed

900,000

750,000

Surplus during This Fiscal Year

12,400,000

13,150,000

1,645,908

1,369,642

Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Capital Surplus
Capital Reserve
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Retained Earnings
Earned Reserve
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Other Retained Earnings
Reserve for dividend allowance
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Reserve for Deferred Gains on Fixed Assets
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Reversal of Reserve for Deferred Gains
on Fixed Assets

Other Reserve
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Earned Surplus Carried Forward
Surplus during Previous Fiscal Year
Changes during This Fiscal Year34

(Thousands of yen)
Year Ended October 31, 2009

Year Ended October 31, 2010

Reversal of Reserve for Deferred
Gains on Fixed Assets

1,455

1,293

Accumulation of Other Reserve(900,000)(750,000)

Cash Dividend Paid

(349,263)(299,367)

Net Income

971,541

1,177,269

Total Amount Changed(276,266)

129,195

Surplus during This Fiscal Year

1,369,642

1,498,838

13,654,084

14,276,362

0

0

0

0

Cash Dividend Paid

(349,263)(299,367)

Net Income

971,541

1,177,269

Total Amount Changed

622,277

877,901

14,276,362

15,154,264(363,003)(363,045)

Issued Shares Reacquired

(42)

(148)

Total Amount Changed

(42)

(148)

(363,045)(363,194)

15,835,700

16,457,936

Cash Dividend Paid

(349,263)(299,367)

Net Income

971,541

1,177,269

(42)

(148)

Total Amount Changed

622,235

877,753

Surplus during This Fiscal Year

16,457,936

17,335,690

12,18877,74965,561(24,164)

65,561(24,164)

77,74953,585

26,115(712)

Total Retained Earnings
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Reversal of Reserve for Deferred
Gains on Fixed Asset
Accumulation of Other Reserve

Surplus during This Fiscal Year
Treasury Stock
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Surplus during This Fiscal Year
Total Shareholders’ Equity
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Issued Shares Reacquired

Valuation and Translation Adjustments
Valuation Difference on Available-for-sale
Securities
Surplus During Previous Fiscal Year
Changes During This Fiscal Year
Total (Net) Amount Changed(Except Shareholders' Equity)
Changes during This Fiscal Year
Surplus during This Fiscal Year
Deferred Gains or Losses on Hedges
Surplus during Previous Fiscal Year
Changes during This Fiscal Year35

(Thousands of yen)
Year Ended October 31, 2009

Year Ended October 31, 2010

Total (Net) Amount Changed(Except Shareholders' Equity)(26,828)(4,019)Changes during This Fiscal Year

(26,828)(4,019)(712)(4,731)38,304

77,037(Except Shareholders' Equity)

38,733(28,184)

Changes during This Fiscal Year38,733(28,184)

77,03748,853

15,874,005

16,534,974

Cash Dividend Paid

(349,263)(299,367)

Net Income

971,541

1,177,269

(42)

(148)

(Except Shareholders' Equity)

38,733(28,184)

Total Amount Changed

660,969

849,568

Surplus during This Fiscal Year

16,534,974

17,384,543

Surplus during This Fiscal Year
Total Valuation and Translation Adjustments
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total (Net) Amount Changed

Surplus during This Fiscal Year
Total Net Assets
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Issued Shares Reacquired
Total (Net) Amount Changed36

(4) Notes for Premise of Going Concern
None.

(5) Notes for Non-Consolidated Financial Statements(Per Share Information)
80th Period

81st Period

Year Ended October 31, 2009

Year Ended October 31, 201099

Net asset per share:¥1656.

Net asset per share:¥1742.15

Net income per share:¥97.36

Net income per share:¥117.98

Income per share for this fiscal year after adjustment of the

Income per share for this fiscal year after adjustment of theresidual securities is not presented as there are no residual

residual securities is not presented as there are no residual

securities.

securities.

(Note) Calculation basis
1. Net assets per share
80th Period

81st Period(Year Ended(Year Ended

October 31, 2009)

October 31, 2010)

Total for net assets in balance sheets (Thousands of yen)

16,534,974

17,384,543

Net assets for common stock (Thousands of yen)

16,534,974

17,384,543

Number of outstanding common stock (Share)

10,533,200

10,533,200

Number of treasury common stock (Share)

554,298

554,418

9,978,902

9,978,782

Number of common stock as of the end of the current consolidated
fiscal year used for calculation of net assets per share (Shares)
2. Net income per share
80th Period

81st Period(Year Ended October 31, 2009)(Year Ended October 31, 2010)

Net income for this fiscal year

971,541

1,177,269

971,541

1,177,269

9,978,921

9,978,821(Thousands of yen)
Net income for common stock(Thousands of yen)
Average number of common stock during
the fiscal year (Shares)376. Other Notes(1) Appointment of Officers
1) Representative Director: No change2) Other Directors: (to be appointed as of January 28, 2011)
1. Candidates for newly appointed Directors
Director of General Affairs Division (General Affairs Division and Business Coordination Division):
Masayoshi Fukazawa (currently General Manager of General Affairs Div.)
Director and General Manager of Chemical Products Division:
Akitomo Tamai (currently Manager of Industrial Materials Dept., Chemical Products Div.) in charge of
Plastics Dept., Industrial Materials Dept. and Fine Chemicals Dept.

2. Retiring Directors
Chairman of the Board

Hideaki Fukuma(to be appointed as Senior Corporate Advisor)

Director

Kensuke Ikezaki(to be appointed as Corporate Advisor)

Director

Keishu Hatakeyama(to be appointed as Corporate Advisor)

3. Candidate for newly appointed Corporate Auditor
Auditor

Makoto Nakamura(currently Attorney at Law)

4. Retiring Auditor
AuditorToshiyuki Shibata

Mr. Makoto Nakamura, a candidate for Corporate Auditor qualifies as an outside auditor.

38