Consolidated and Non-Consolidated Financial Results
for the Second Quarter Ended April 30, 2010
Date:

June 4, 2010

Company Name and Code:

Tomoe Engineering Co., Ltd. and Subsidiaries - 6309
(Website: 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, Accounting and Management Planning Tel: (03) 5435-6512

Date to report Consolidated Quarterly Financial Statement: June 11, 2010
Date for Dividend Payment:* Any fractional sums less than one million (or one thousand) yen are disregarded.
1. Consolidated Financial Data for the Second Quarter Ended April 30, 2010
(1) Results of Operation (Consolidated)

Quarter Ended April 30, 2010
Quarter Ended April 30, 2009

(Percent: Change from the same quarter of the previous year)
Net Sales
Operating Income
Ordinary Income
Millions ofMillions ofMillions of
Yen
Percent
Yen
Percent
Yen
Percent
19,571
(1.2)
1,647
20.1
1,754
16.9
19,8181,371
1,500
Net Income

Quarter Ended April 30, 2010
Quarter Ended April 30, 2009

Millions of
Yen
1,139
837

Net Income per Share

Fully Diluted Quarterly
Net Income per ShareYen
114.21
83. 95

Yen-

Percent
36.0-(2) Financial Condition (Consolidated)
Total Assets (A)(Millions of Yen)
Quarter Ended April 30, 2010
28,711
Year Ended October 31, 2009
26,412

Net Assets (B)(Millions of Yen)
18,872
17,921Net Assets Ratio(B) / (A) (Percent)
64.7
66.8

Net Assets
per Share (Yen)
1,862.51
1,767.97(Reference) Net assets (not including minority interests):
Second Quarter ended April 30, 2010: 18,585 million yen
Year ended October 31, 2009: 17,642 million yen
2. Dividend Status(Record Date)
Year Ended October 31, 2009
Year Ending October 31, 2010
Year Ending October 31, 2010 (Prospect)

Dividend per Share (Yen)InterimThird
End ofTerm
Quarter
Fiscal Year
0.00
30.00
0.00
35.00

First
Quarter-(Note) Correction of the prospected dividend for this quarter: None

1

Annual30.00
35.00

3. Forecast for Earnings for the Year Ending October 31, 2010 (Consolidated)(Percent: Change from the previous quarter)
Net Sales
Operating Income
Ordinary Income(Millions of Yen) (Percent) (Millions of Yen) (Percent) (Millions of Yen) (Percent)
Full Business Year
39,100
7.7
2,030
28.1
2,100
24.5
Net Income
Net Income per Share(Millions of Yen) (Percent)
Yen
Full Business Year
1,300
30.9
130.28(Note) Correction of the prospected earnings for this quarter: None
4. Others(1) Significant changes in subsidiaries during this quarter (changes in specific subsidiaries involving changes in thescope of consolidation): None
(2) Adoption of simplified accounting method and the specific accounting method in preparing the consolidated
quarterly financial statements: Yes(Note) For details, refer to 4. Other Information, [Qualitative Information and Financial Statements, etc.] on p.4.
(3) Change of the principle, procedure, and representation of the accounting policies concerning the preparation of
consolidated quarterly 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 4. Other Information, [Qualitative Information and Financial Statements, etc.] on p.4.
(4) Number of outstanding shares (Ordinary shares)
1) Number of outstanding shares as of quarter-end and year-end (including treasury stocks)
At April 30, 2010: 10,533,200 shares

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

2) Number of treasury stocks as of quarter-end and year-end
At April 30, 2010: 554,418 shares

At October 31, 2009: 554,298 shares

3) Number of average shares during consolidated Second quarters
At April 30, 2010: 9,978,861 shares

At April 30, 2009: 9,978,940 shares*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.

2

[Qualitative Information and Financial Statements, etc.]
1. Qualitative Information on Consolidated Operating Results:(1) General operating results
During the second quarter, Japan’s economy was supported by growth in exports, which were boosted by factors
such as the expansion of demand in newly developing countries, and the effect of economic stimulus measures.
Production levels continued to change briskly, and indications that raised hopes of an end to the slide in capital
investment, which had long been curtailed by the economic downturn, were also evident. On the other hand,
however, the stagnation of incomes and the number of individuals employed remained pronounced, as did the
deflationary trend, and the positive news did not extend to a broadening of activities that will result in an autonomous
economic recovery.
Under such circumstances, interim period consolidated net sales for the Tomoe Engineering Group as a wholeslipped to 19,571 million yen, 1.2% down from the same period last year; the Chemical Products Businessdemonstrated growth because of improvements in the supply and demand situation in the electronics materials
sector and plastics sector, but this was offset by a reactionary decline in the Machinery & Equipment Business
relating to large-scale projects for overseas customers. From an earnings perspective, on the other hand,consolidated operating income for both businesses was 1,647 million yen, 20.1% up from the same period lastyear as sales of relatively high margin parts and repairs increased, driven by factors such as a concentration of
repair projects, even in the Machinery & Equipment Business, that exceeded normal year levels. Ordinary
income was 1,754 million yen, 16.9% up from the same period last year, reflecting a decrease in the gain on
valuation of derivatives, and consolidated interim period net income, including the contribution from the gain on salesof investment securities, rose to 1,139 million yen, 36.0% up from the same period last year.

(2) Machinery & Equipment BusinessIn the Machinery & Equipment Business, consolidated net sales were 6,272 million yen, 17.0% down from thesame period last year when sales were boosted by the shipment of large-scale centrifuges for the chemical industry
in Poland, but consolidated operating income declined only slightly to 1,047 million yen, 3.3% down from thesame period one year earlier, because of steady sales of parts and repairs based on public sector demand.
While the increase in parts and repairs sales in response to public sector demand was based on net sales growthin the second quarter, a pattern seen in past years, this tendency appeared more strongly in the consolidated
interim period under review.
(3) Chemical Products BusinessIn the Chemical Products Business, the higher net sales trend compared with the same period last year wasquite clear for the Group as a whole including overseas group companies, particularly in the electronics materials
sector, plastics sector and fine chemicals sector, against the backdrop of general improvement in supply anddemand, and interim period consolidated net sales totaled 13,298 million yen, 8.4% up from the same period lastyear. Moreover, because of the increase in net sales of commercial products with relatively high added value
centered on the electronics materials and the industrial materials sectors, consolidated operating income for thisbusiness increased more rapidly than the growth in net sales and totaled 599 million yen, 108.6% up comparedwith the same period last year.
2. Qualitative Information on Consolidated Financial Position:(1) Assets, Liabilities, and Net Assets
Assets at the end of the consolidated second quarter under review were 28,711 million yen, 2,298 million yen or3

8.7% up from up the end of the previous consolidated fiscal year (October 31, 2009), mainly due to increases incurrent assets including cash and deposits and notes and accounts receivable-trade.
On the other hand, total liabilities were 9,838 million yen, 1,347 million yen or 15.9% up from the balance at theend of the previous consolidated fiscal year. This mainly reflected an increase in current liabilities such as notes
and accounts payable-trade and income taxes payable. Net assets rose 951 million yen (5.3%) compared with theend of the previous consolidated fiscal year to 18,872 million yen, mainly because of an increase in retained
earnings.
As a result, the net assets ratio at the end of the consolidated second quarter under review decreased by 2.1 points
to 64.7% from the end of the previous consolidated fiscal year.
(2) Cash Flow Status
Cash and cash equivalents as of the end of the consolidated second quarter under review decreased by 535 million
yen to 3,912 million yen from the end of the previous consolidated fiscal year. The status of each cash flow and theirfactors during the second quarter are as follows:(Net Cash Provided by (Used in) Operating Activities)
Net cash provided by operating activities was 2,076 million yen, mainly because of income before income taxes andminority interests of 1,933 million yen and an increase in notes and accounts payable-trade of 704 million yen.
(Net Cash Provided by (Used in) Investing Activities)
Cash used in investing activities was 2,260 million yen, mainly because purchases of time deposits of 2,378 million
yen and the purchase of plant, property and equipment totaling 77 million yen exceeded the proceeds from sales ofinvestment securities of 217 million yen.
(Net Cash Provided by (Used in) Financing Activities)
Net cash used in financing activities was 380 million yen. Uses of cash included cash dividends paid of 299 million
yen and the repayment of long-term loans payable totaling 60 million yen by group companies.
3. Qualitative Information on Consolidated Earnings Forecast:
In the Machinery & Equipment Business, net sales of parts and repairs with relatively high margins, and theweight of such sales as a percentage of total net sales, rose because the concentration of orders for repair projects
for the consolidated second quarter was greater than projected. In the Chemical Products Business as well, net
sales in the second quarter of commercial products with relatively high added value, particularly in the electronics
materials and industrial materials sectors, and the weight of these sales as a percentage of total net sales, increased
greater than in the Company’s plan.
Based on such changes in its circumstances, the Tomoe Engineering Group has revised the forecast of earnings
for the interim period and full year for the year ending October 31, 2010 announced on December 10, 2009, as
described in the “Notice Concerning Revision of Earnings Forecast and Dividend projection” released on May 28,
2010.
As already announced in this report, the consolidated net sales for the year ending October 31, 2010
are expected to be 39,100 million yen, decreasing 400 million yen below the initial forecast, and full year
operating income is projected to increase 300 million yen to 2,030 million yen, Moreover, ordinary income is
projected to increase 350 million yen to 2,100 million yen and net income is projected to be 200 million yen higher or
1,300 million yen.

4

The operating results forecasts described above are based on information available to the Company at the time
the forecasts were prepared and assumptions judged to be reasonable. Actual operating results might differ fromthese forecasts depending upon changes in the domestic and international economic trends, the balance of supply
and demand and various other factors.
4. Other Information(1) Changes in important subsidiaries during this quarter (Changes in specific subsidiaries involving changes in thescope of consolidation): None
(2) Adoption of simplified accounting method and the specific accounting method in presenting the consolidated
quarterly financial statements
Calculation method of depreciation of noncurrent assets:
For the assets adopting the declining-balance method, we adopt the method to calculate the amount of depreciation forthe consolidated fiscal year by dividing the period proportionally.
(3) Change of the principle, procedure, and representation of the accounting policies concerning the preparation of
consolidated financial statements
Change of accounting policy for reporting balance of completed contracts and cost of completed contracts
We have traditionally reported revenues and costs of construction contracts by applying the completed-contract method.
Beginning from the first quarter consolidated accounting period, we will apply the Accounting Standard for Construction
Contracts (Accounting Standards Board of Japan Statement No. 15, December 27, 2007) and the Guidance on AccountingStandard for Construction Contracts (Accounting Standards Board of Japan Implementation Guidance No. 18, December
27, 2007). Beginning from works contracts for which construction activity was begun during the consolidated first quarter
period under review, we 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 consolidated second quarter period, and will apply the completed-contract
method for all other works.
For the consolidated second quarter under review, this change did not have a material effect on our earning andbusiness segment information, because we did not have any contracts that fulfilled the requirements for application of thepercentage of completion method.

55. Consolidated Financial Statement(1) Consolidated Quarterly Balance Sheets(Thousands of Yen)
End of Second Quarter

Summarized Balance Sheet(April 30, 2010)

for End of Previous Year

Assets(October. 31, 2009)

Current Assets
Cash and Deposits

6,290,956

4,447,793

Notes and Accounts Receivable-Trade

12,366,647

11,995,465

Merchandise and Finished Goods

3,045,068

2,591,153

Work in Process

761,255

914,572

Raw Materials and Supplies

648,891

787,926

Deferred Tax Assets

430,438

398,437

Others

208,604

356,812

Allowance for Doubtful Accounts(21,884)(34,896)

23,729,977

21,457,266

2,526,503

2,522,652

Accumulated Depreciation(1,479,234)(1,433,070)

Buildings and Structures, Net

1,047,268

1,089,581

Machinery, Equipment and Vehicles

3,491,522

3,400,759

Accumulated Depreciation(2,588,815)(2,482,626)
918,132

Land

902,706
970,253

Lease Assets

79,115970,253
88,451

Accumulated Depreciation(30,907)(29,614)

Lease Assets, Net

48,207

58,837

974,916

956,862(888,805)(869,884)

86,111

86,9783,054,547

3,123,783

49,40548,713

Investment Securities

933,841

903,416

Guarantee Deposits

417,466

410,359

Deferred Tax Assets

55,68853,522Others542,629506,668

Allowance for Doubtful Accounts(72,348)(91,282)

Total Investments and Other Assets

1,877,278

1,782,685

Total Noncurrent Assets

4,981,231

4,955,182

Total Assets

28,711,208

26,412,448

Total Current Assets
Noncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Machinery, Equipment and Vehicles, Net

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

6

(Thousands of Yen)
End of Second Quarter

Summarized Balance Sheet(April 30, 2010)

for End of Previous Year

Liabilities and Net Assets(October 31, 2009)

Liabilities
Current Liabilities
6,181,760

5,430,683

Short-Term Loans Payable

651,407692,481

Lease Obligations

27,27628,107

Accounts Payable-Others

407,604

427,104

Income Taxes Payable

794,546

53,760

Advances Received

288,287

243,984

Provision for Bonuses

706,799

791,939

Provision for Directors' Bonuses

32,24348,470Allowance for Product Warranty

138,431

154,997

Others249,495

294,5129,477,852

8,166,042

Lease Obligations

33,272

46,686

Provision for Retirement Benefits

34,421

29,034

Provision for Directors' Retirement Benefits

142,760

142,760

Deferred Tax Liabilities

120,379

50,901

Derivatives

29,58255,478

Total Noncurrent Liabilities

360,416

324,861

Total Liabilities

9,838,269

8,490,904

Capital Stock

1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

16,397,851

15,557,577

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

18,579,277

17,739,152

137,743

77,749

1,632

(712)

(133,050)(173,790)

6,326(96,753)

287,335

279,145

Total Net Assets

18,872,938

17,921,544

Total Liabilities and Net Assets

28,711,208

26,412,448

Notes and Accounts Payable-Trade

Total Current Liabilities
Noncurrent Liabilities

Net Assets
Shareholders’ Equity

Total Shareholders’ Equity
Valuation and Translation Adjustments
Valuation Difference on Available-for-Sale Securities
Deferred Gains or Losses on Hedges
Foreign Currency Translation Adjustment
Total Valuation and Translation Adjustments
Minority Interests7(2) Consolidated Quarterly Statements of Income (Second Quarter)(Thousands of Yen)

Second Quarter Ended

Second Quarter Ended

April 30, 2009

April 30, 2010

Net Sales

19,818,148

19,571,236

Cost of Sales

15,454,767

14,945,389

4,363,381

4,625,846

2,991,825

2,978,745

1,371,556

1,647,100

Interest income

1,194

2,182

Dividends Income

7,507

5,383

Rent Income

12,605

10,512Foreign Exchange Gains

43,24555,820Gain on Valuation of Derivatives

69,13831,534

Others29,42922,233

163,121

127,666

Interest Expenses

14,231

4,508

Loss on Sales of Notes Payable

3,848

40

Commission Fee

8,463

8,871

Others

7,493

6,812

Total Non-Operating Expenses

34,035

20,233

Ordinary Income

1,500,642

1,754,534-

159,21244,87830,335
189,548

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

Total Non-Operating Income
Non-Operating Expenses

Extraordinary Income
Gain on Sales of Investment Securities
Reversal of Allowance for Doubtful Accounts

44,878

Total Extraordinary Income
Extraordinary Losses

2,890
113

297
-

Loss on Valuation of Investments Securities

5,948
84,818

10,190

Provision of Allowance for Doubtful Accounts

304-

94,075

10,488

1,451,445

1,933,594

Income Taxes-Current

365,484

784,037

Income Taxes-Deferred

237,106

3,432

602,591

787,470

11,1006,482

837,753

1,139,640

Loss on Retirement of Noncurrent Assets
Loss on Sales of Noncurrent Assets
Loss on Sales of Investments Securities

Total Extraordinary Losses
Income before Income Taxes and Minority Interests

Total Income Taxes
Minority Interests in Losses
Net Income (Loss)8-

(3) Consolidated Quarterly Statements of Cash Flows(Thousands of Yen)

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

Second Quarter Ended

Second Quarter Ended

April 30, 2009

April 30, 2010

1,451,445

1,933,594

Depreciation and Amortization

264,793

189,053

Increase (Decrease) in Provision for Bonuses(522,633)(85,932)

Increase (Decrease) in Provision for Directors' Bonuses(44,865)(16,227)

Increase (Decrease) in Allowance for Product Warranty(40,430)(16,566)

Increase (Decrease) in Provision for Retirement Benefits

6,517

5,343

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

Increase (Decrease) in Allowance for Doubtful Accounts(64,294)(31,946)

Loss (Gain) on Valuation of Investment Securities

84,818

10,190Interest and Dividends Income(8,701)(7,566)

Interest Expenses

14,231

4,508

Foreign Exchange Losses (Gains)

1,657(6,395)

Loss (Gain) on Retirement of Noncurrent Assets

2,890

297

113

-

Loss (Gain) on Sales of Noncurrent Assets

5,948(159,212)

Loss (Gain) on Valuation of Derivatives

Loss (Gain) on Sales of Investment Securities(69,138)(31,534)

Decrease (Increase) in Notes and Accounts Receivable-Trade

3,342,750(316,695)

716,080(133,281)(1,259,372)

704,622(107,782)(47,096)

Increase (Decrease) in Advances Received

14,90942,544

Increase (Decrease) in Accrued Consumption Taxes

117,546(18,918)

Others, Net

201,697(97,639)

3,993,161

1,921,141

Interests and Dividends Income Received
Interest Expenses Paid

8,535
(36,605)

5,823(11,647)

Income Taxes Paid (-) or Returned(647,761)

161,378

3,317,330

2,076,695-(2,378,526)

Proceeds from Withdrawal of Time Deposits

100,000-

Proceeds from Sales of Property, Plant and Equipment

238(202,877)-(77,511)(6,050)5,339(7,937)217,345(7,566)

Payments of Loans Receivable

7,862
(800)

1,514
(1,875)

Guarantee Deposits (Increase)63,251(6,589)Others, Net

12,290(1,438)(22,633)(2,260,698)

Decrease (Increase) in Inventories
Increase (Decrease) in Notes and Accounts Payable-Trade
Increase (Decrease) in Accounts Payable-Others

Sub total

Net Cash Provided by (Used in) Operating Activities
Net Cash Provided by (Used in) Investing Activities
Deposit of Time Deposits

Purchase of Property, Plant and Equipment
Purchase of Intangible Assets
Proceeds from Sales of Investment Securities
Purchase of Investment Securities
Collection of Loans Receivable

Net Cash Provided by (Used in) Investment Activities

9(Thousands of Yen)
Second Quarter

Second Quarter

Ended

Ended

April 30, 2009

April 30, 2010

Net Cash Provided by (Used in) Financing Activities
Net Increase (Decrease) in Short-Term Loans Payable(239,533)-

Repayments of Lease Obligations(21,518)(14,244)

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

(42)

(148)

(349,263)(299,367)(7,315)(6,740)(732,672)(380,500)

Effect of Exchange Rate Change on Cash and Cash Equivalents(25,623)

29,140Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period

2,536,400(535,363)

1,711,434
4,247,835

4,447,793
3,912,430

Purchase of Treasury Stock
Cash Dividends Paid
Net Cash Provided by (Used in) Financing Activities
Cash and Cash Equivalents

Cash and Cash Equivalents at End of Period10(4) Note on Going Concern Assumption
None.
(5) Segment Information(Segment by type of business)
Second Quarter Ended April 30, 2009

(Thousands of Yen)

Machinery &ChemicalEquipment

Products

Business

Business

7,544,233

12,263,915

19,818,148-

19,818,148

-

-

-

-

-

Total

7,544,233

12,263,915

19,818,148-

19,818,148

Operating Income

1,084,294

287,262

1,371,556-

1,371,556

Deletion or
Total

Total

Consolidated

Company

Net Sales(1) Net Sales to UnaffiliatedCustomers(2) Internal Net Sales among
Segments or Amount Transferred(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. Changes for Accounting Standards(1) Application of Accounting Standard for Measurement of Inventories
From the consolidated first quarter we have applied “Accounting Standard for Measurement of Inventories” (ASBJ
Statement No. 9) and changed to a cost accounting method (book price devaluation based on decrease inprofitability). The effects that this change gives to the gain and loss for the first quarter are minor.
(2) Application of Accounting Standard for Lease Transactions
We used to adopt the accounting processing for the lease transaction for the non-transfer-ownership financelease; however, we have early adopted “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13)
and “Guidance on Accounting Standard for Lease Transactions” (ASBJ Guidance No. 16) from the consolidated
first quarter, whose accounting processing for sales transaction. The effects that this change gives to the gain
and loss for the first quarter are minor.
(3) Application of Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements
From the consolidated first quarter, we have applied “Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ PITF No. 18) and made thenecessary adjustments in consolidated financial statements. The effects that this change gives to the gain andloss for the first quarter are minor.
4. We have changed durable years of the machinery and equipment as a result of our review on usage of the assets
etc. at the time of the income tax modification. The effects that this change gives to the gain and loss for the first quarterare minor.

11

Second Quarter Ended April 30, 2010

(Thousands of Yen)

Machinery &ChemicalDeletion or

Equipment

Products

Business

Business

6,272,573

13,298,663

19,571,236-

19,571,236

-

-

-

-

-

6,272,573

13,298,663

19,571,236-

19,571,236

1,047,988

599,112

1,647,100-

1,647,100

Total

Total

Consolidated

Company

Net Sales(1) Net Sales to UnaffiliatedCustomers(2) Internal Net Sales among
Segments or Amount Transferred
Total
Operating Income (Loss)(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

12

(Segment by Location)
Second Quarter Ended April 30, 2009

(Thousands of Yen)
Deletion or
Japan

Asia

Total

Total

Consolidated

Company
Net Sales(1) Net Sales to Unaffiliated Customers

18,131,515

1,686,632

19,818,148-

19,818,148

Amount Transferred

173,058

59,427

232,485(232,485)

-

Total

18,304,574

1,746,060

20,050,634(232,485)

19,818,148

Operating Income (Loss)

1,386,720(14,136)

1,372,584(1,028)

1,371,556(2) Internal Net Sales among Segments or(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:
Asia: China, Korea and Indonesia
3. Changes for Accounting Standards(1) Application of Accounting Standard for Measurement of Inventories
From the consolidated first quarter we have applied “Accounting Standard for Measurement of Inventories” (ASBJ
Statement No. 9) and changed to a cost accounting method (book price devaluation based on decrease inprofitability). The effects that this change gives to the gain and loss for the first quarter are minor.
(2) Application of Accounting Standard for Lease Transactions
We used to adopt the accounting processing for the lease transaction for the non-transfer-ownership financelease; however, we have early adopted “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13)
and “Guidance on Accounting Standard for Lease Transactions” (ASBJ Guidance No. 16) from the consolidated
first quarter, whose accounting processing for sales transaction. The effects that this change gives to the gain
and loss for the first quarter are minor.
(3) Application of Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements
From this consolidated first quarter, we have applied “Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ PITF No. 18) and made thenecessary adjustments in consolidated financial statements. The effects that this change gives to the gain andloss for the first quarter are minor.
4. We have changed durable years of the machinery and equipment as a result of our review on usage of the assets
etc. at the time of the income tax modification. The effects that this change gives to the gain and loss for the firstquarter are minor.

13

Second Quarter Ended April 30, 2010

(Thousands of Yen)
Deletion or
Japan

Asia

Total

Total

Consolidated

Company
Net Sales(1) Net Sales to Unaffiliated Customers

18,024,984

1,546,251

19,571,236-

19,571,236

Amount Transferred

200,345

88,388288,734(288,734)

-

Total

18,225,330

1,634,639

19,859,970(288,734)

19,571,236

1,632,071

15,426

1,647,498(397)

1,647,100(2) Internal Net Sales among Segments or

Operating Income(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:
Asia: China, Korea and Indonesia

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(Overseas Net Sales)
Second Quarter Ended April 30, 2009

(Thousands of Yen)
Asia

I. Overseas Net Sales

Total

4,119,685

1,432,434

5,552,119--

19,818,148

20.8

7.2

28.0

II. Consolidated Net Sales
III. Ratio of Overseas Net Sales to Consolidated Net Sales (%)

Other Regions(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:(1) Asia: China, Korea, Taiwan and Indonesia(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.
Second Quarter Ended April 30, 2010

(Thousands of Yen)
Asia

I. Overseas Net Sales
II. Consolidated Net Sales
III. Ratio of Overseas Net Sales to Consolidated Net Sales (%)

Other Regions

Total

3,205,719

295,046

3,500,765--

19,571,236

16.4

1.5

17,9

(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:(1) Asia: China, Korea, Taiwan and Indonesia(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.
(6) Notes for significant changes in shareholders’ equity
None.

15