Financial Results for the Fiscal Year Ended October 31, 2008
Date:

December 10, 2008

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:

Minoru Honma

Investor Relations Contacts: Koichi Karita, Director, General Manager of Accounting Division, Tel: (03) 5435-6512
Date of Annual Shareholders Meeting: January 29, 2009
Date f Dividend Payment:

January 30, 2009

Date of Financial Statement: January 30, 2009
1. Consolidated Financial Results for the year ending October 31, 2008
(1) Results of Operation (Consolidated)* Any fractional sums less than one million (or one thousand) yen are disregarded.
Sales
Years ended
October 31, 2008
Years ended
October 31, 2007

(Millions of yen)

(Percent)(Millions of yen)

(Percent)(Millions of yen)

(Percent)

47,542

(6.4)

2,456

0.5

2,613

2.3

50,795

7.3

2,444

15.8

2,554

14.9

Net income

Years ended
October 31, 2008
Years ended
October 31, 2007(%: Change from the previous year)
Recurring income

Operating income

Net income
per share

Diluted net
income per
share

Return on
equityReturn on
assetsReturn on
sales(Millions ofyen)(Percent)

(Yen)

(Yen)

(Percent)(Percent)(Percent)

1,365

0.6

136.80

-

8.1

8.5

5.2

1,357

7.1

136.00

-

8.4

8.4

4.8

(Reference)
Equity in earnings (loss) of unconsolidated subsidiaries and affiliates during fiscal years ended October 31, 2008 and2007 were 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)

29,15917,46558.8

1,719.15

32,338

16,95151.8

1,678.87

Years ended
October 31, 2008
Years ended
October 31, 2007
(Reference)

Net assets for the years ended October 31, 2008 and 2007 were 17,155 million yen and 16,753 million yen respectively.

1(3) Cash Flows (Consolidated)
Net cash provided(used) by operating
activities
Years ended
3,965
October 31, 2008
Years ended(578)
October 31, 2007

Net cash provided(used) by investing
activities

Net cash provided(used) by financing
activities(Millions of yen)
Consolidated cash
and cash equivalent,
October 31, 2008

(644)

(3,419)

1,711

(623)

1,844

1,873

2. Dividend Status
Dividend per share
Fiscal year
Annualend
Years ended
October 31, 2007
Years ended
October 31, 2008
Years ended
October 31, 2009
(Forecast)

Total dividend(Annual)Dividend payout
ratio(Consolidated)

Dividend on
equity ratio(Consolidated)

(Yen)

(Yen)

(Millions of yen)

(Percent)(Percent)

35.00

35.00

349

25.7

2.2

35.00

35.00

349

25.6

2.1

35.00

35.00

-

28.9

-

3. Forecast for the Year ending October 31, 2009(%: Change from the previous year for the full year and 6-month period)
Sales

Operating income

Recurring income(Millions of yen)

(Percent)(Millions of yen)

(Percent)(Millions of yen)

(Percent)

6-month Period

24,4001.6

1,420(10.2)

1,490

(9.9)

Full business year

46,400

(2.4)

2,190

(10.8)

2.300(12.0)Net income

Net income per share(Millions of yen)

(Percent)(Yen)

6-month Period

750(13.2)

75.15

Full business year

1,210

(11.4)

121.25

4. Others(1) Changes in important subsidiaries during the term (Changes in specific subsidiaries accompanied by changes inscope of consolidation): Yes[New: 1 company (Stella Tech Engineering Plastics (Shenzhen))(Note) For details, refer to “Tomoe Engineering and Companies” on page 11.](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 the Consolidated
Financial Statements”)
1) Change due to revision of accounting standard: None
2) Other changes: None
(3) Number of Outstanding Shares (Ordinary Shares)
1) Number of Outstanding Shares at Year-end (including treasury stocks)
At October 31, 2008: 10,533,200 shares

At October 31, 2007: 10,533,200 shares

2) Number of Treasury Stocks at Year-end

2

At October 31, 2008:

554,248 shares

At October 31, 2007:

554,083 shares(Reference)
1. Outline of Non-Consolidated Results of Operations for the year ending October 31, 2008
(1) Results of Operation (Non-consolidated)
Sales(%: Change from the previous year)
Operating income

Recurring income(Millions of yen)

(Percent)(Millions of yen)

(Percent)(Millions of yen)

(Percent)

43,297

(5.8)

1,947

(0.3)

2,241

5.9

45,941

11.2

1,953

21.4

2,117

18.2

Years ended
October 31, 2008
Years ended
October 31, 2007

Net income

Net income per share

Diluted net income per share(Millions of yen)

(Percent)

(Yen)

(Yen)

1,207

10.9

121.00

-

1,088

14.3

109.06-

Years ended
October 31, 2008
Years ended
October 31, 2007

(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)

25,34415.87462.6

1,590.75

28,311

15,63255.2

1,566.54

Years ended
October 31, 2008
Years ended
October 31, 2007
(Reference)
Net assets for the years ended October 31, 2008 and 2007 were 15,874 million yen and 15,632 million yen respectively.

33. Forecast of the Year ending October 31, 2009(%: Change from the previous year for the full year and 6-month period.)
Sales(Millions ofOperating income

Recurring income(Percent)(Millions of yen)

(Percent)(Millions of yen)

(Percent)yen)

6-month Period

22,300

2.1

1,180

(6.7)

1,370

(2.6)

Full business year

42,400

(2.1)

1,710

(12.2)

1,950(13.0)Net income(Millions of

Net income per share(Percent)

(Yen)

yen)

6-month Period

710

(6.6)

71.14

Full business year

1,030

(14.7)

103.21

The forward-looking statements such as a forecast of our financial results described herein are based on information
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, please refer to “1. Operating Results andFinancial Condition (1) Analysis of Results of Operation” on page 5.

4

1. Operating Results and Financial Condition(1) Analysis of Results of Operation(General condition of the current consolidated fiscal year)
During the first half of the current consolidated fiscal year, fears of a slowdown in the Japanese economy havegrown driven by the strong yen, skyrocketing prices of the energy and raw materials, and the worldwide slowdown
of business has actualized starting from the subprime loan in the last half of the year. Our country has also seen
tendency of reduction in various aspects of the economy such as corporate performance, plant and equipment
investment, exports, and employment.
In this operating environment, the sales for the current fiscal year were 47,542 million yen, 6.4% down from theprevious year, and the recurring income was 2,613 million yen, 2.3% up from the previous year. The net income
for the current fiscal year was 1,365 million yen, 0.6% up from the previous year.
Machinery & Equipment Business
The sales for the current fiscal year were 12,547 million yen, 13.7% down from the previous year caused by theinactive performance of the public sector due to the reduction of budget for the sewage business and low bidding
prices and also caused by postponement of the Poland project whose export had been expected for this fiscal year.
The operating income was 973 million yen, 5.2% up from the previous year, because of the sales activities thinking
profitability as important in addition to the firm sales of parts and repairs whose profitability was comparatively high.
Chemical Products Business
The sales for the current fiscal year were 34,995 million yen, 3.5% down from the previous year and the operating
income was 1,482 million yen, 2.4% down from the previous year because of no one-off sale for fine chemicals
business we experienced in the previous year and the reduction of sales of the Hong Kong affiliate related to plastics
business affected by the foreign exchange rate while the industrial materials-related and electronic materials-related
businesses performed well.
All in all, Tomoe Engineering and its group companies had operating income of 2,456 million yen, 0.5% up from theprevious fiscal year. With a positive non-operating income due to foreign exchange gain, etc., and recurringincome of 2,613 million yen as described above. The net income for the current year was as described above
because we recorded unrealized loss on investment securities, etc. as extraordinary loss.
(Outlook for the next fiscal year (November 1, 2008~October 31, 2009))
Machinery & Equipment BusinessWe expect businesses for both public and private sectors in Japan will be weak, but the sales and operating income
will be higher than the previous year because sales of the Poland project that was carried over from the previous
year in addition to sales of the abrasive grain recycle unit for China will be appropriated.
Chemical Products BusinessWe expect lackluster performance in plastic-related business, fine chemicals business, electronic materials business,and industrial materials business affected by depression of automobile industry and semi-conductor manufacturers,
general price decline of the plastic resin materials, and reduction of demand due to the economic slump. We,

5therefore, expect both sales and operating income will be slightly lower than the previous year.
All in all, we expect our consolidated sales to decrease by 2.4% to 46,400 million yen, recurring income to decreaseby 12.0% to 2,300 million yen, and net income to decrease by 11.4% to 1,210 million yen from the previous year.

6(2) Analysis of Financial Condition(Total assets, liabilities, and net assets)
Total assets at the end of the consolidated fiscal year under review decreased by 3,179 million yen (9.8%) from theprevious consolidated year as a result of a decrease in the current assets by 2,314 million yen (mainly due to adecrease in the accounts receivables) and a decrease in the fixed assets by 864 million yen (due to a decrease as aresult of valuation of investment securities). Total liabilities decreased by 3,693 million yen (24.0%) from theprevious consolidated fiscal year mainly due to a decrease in the short-term debt. Net assets increased by 514
million yen (3.0%) from the previous consolidated fiscal year due to an increase in the retained earnings, etc. As aresult, the net assets ratio as of the end of the consolidated fiscal year under review increased by 7.0 percentage
points to 58.8%.
(Cash flow status)
Although the cash flow from operating activities became positive mainly due to a decrease in the accounts
receivables, cash and cash equivalent as of the end of the consolidated fiscal year under review decreased by 162
million yen (8.7%) to 1,711 million yen from the previous consolidated fiscal year because of a decrease in the
short-term debt, etc.
(Cash flow from operating activities)
Net cash from operating activities were 3,965 million yen because net income before income taxes amounted to2,587 million yen and trade receivables in connection with a large overseas project in the Machinery & Equipment
Business decreased. As a result, it increased by 4,544 million yen from the previous consolidated fiscal year.
(Cash flow from investing activities)
Net cash from investing activities was 644 million yen decreased by 21 million yen from the previous consolidated
fiscal year as a result of acquisition of tangible fixed assets in connection with establishment of the affiliate, etc.
(Cash flow from financing activities)
Net cash from financing activities was 3,419 million yen decreased by 5,264 million yen from the previous
consolidated fiscal year due to an increase in short-term debt, etc.
Trends in cash flow indices are as follows:

Equity ratio (Percent)Years ended

Years ended

Years ended

Years ended

Years ended

October 31,

October 31,

October 31,

October 31,

October 31,

2004

2005

2006

2007

2008

46.2

52.7

54.0

51.8

58.8

34.1

63.9

53.8

47.4

30.9

-

5.9

2.5

-

0.3

-

9.4

13.5

-

86.9

Equity ratio based onmarket value (Percent)Debt-repayment period(years)Interest coverage ratio(Percent)

Equity ratio: Net assets / Total assets
Equity ratio based on market value: Market capitalization of shares / Total assets

7

Debt-repayment period：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 interim period by the
number of outstanding shares at the end of the interim period (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 the Consolidated
Balance Sheet. Interest expense refers to the interest paid as shown in the Statements of Consolidated Cash
Flows.

4.

The debt-repayment period and interest coverage ratio are not recorded for the year ended on October 31,
2004 and 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 2008 and 2009
The Company considers the return of profits to shareholders as one of important management goals. To publicly state
the stance, our basic policy regarding dividends is changed to "maintain a stable level of dividends with a target
consolidated payout ratio of 25% or more, after considering earnings level, reinforcement of our corporate strength, etc.
in a comprehensive manner." This policy will be applied from the distribution of the retained earnings for this year
(ending October 31st, 2008). Basically, retained earnings will be distributed once a year in the form of a final dividend,
and the general meeting of shareholders makes the decision.
Based on the above policy, we plan to pay out a final dividend of 35 yen per share for the fiscal year ended on October
31, 2008 as profit distribution to the valued shareholders, which will be submitted to the 79th General Meeting of
Shareholders to be held in January 2009.
The dividend for the fiscal year ending on October 31, 2009 will be the same in order to return our profit to theshareholders, though our forecast for the business for this year will be severe.
(4) Risk factors in business
Outlined below are the key areas of business risks of our group that might have significant influence on investors’decision. The following judgments are made at the end of the current consolidated fiscal year, although someforward-looking statements are contained.
[1] Seasonal fluctuation of operating results
Currently there is a seasonal bias in our business toward the second quarter. Public sector sales, which accountfor relatively a high percentage in the sales of Machinery & Equipment Business, tend to be concentrated in thesecond quarter due to public sector's budget implementation, etc., although this tendency has become lessmarked following the change in public sector's ordering process. As a result, a large portion of annual sales of
Machinery & Equipment Business is concentrated in the second quarter. However, since the sales of Chemical
Products Business, which are relatively less affected by seasonal factors, account for higher percentage of our
total sales, seasonal factors do not have significant effect on the total sales of our entire group.
On the other hand, the operating income of our entire group tends to be biased toward the second quarter as the8fixed costs in selling, general and administrative costs are almost evenly borne through the year and Machinery &Equipment Business sales are concentrated in the second quarter.

9

[2] Influence of Foreign Exchange Fluctuation
Exchange rate fluctuations may affect the value of our export and import transactions in foreign currencies after
translation into yen. Operating results and financial condition of our group might be affected by these foreign
currency transactions, although we make efforts to minimize exchange fluctuation risks by entering into foreign
currency swaps and forward exchange contracts. Our group has overseas subsidiary companies and prepares
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 situation at all times and take appropriate actions. However, ourgroup’s operating results and financial condition might be affected by unforeseen circumstances arising from local
legal restrictions, customs, etc.
[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
We are trying to move deeper into higher added value business. To do this, we must take measures such as
aggressive investment, acquisition of trade rights, etc. Since these measures may involve higher potential risks
than conventional business risks, it might affect operating results and financial condition of our group.

10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) are engaged in coloring and compounding of plastic materials. Interstella is aninvesting company 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 Wines & Spirits distributes wines and spirits imported
by Tomoe Engineering. Stella Tech Engineering Plastics (Shenzhen), which were established on March 26, 2008 as
an affiliate, are engaged in coloring and compounding of plastic (raw materials).
Other Businesses:
Tomoe Butsuryu subcontracts with the Company for transportation and warehousing.
Schematic diagram of Tomoe’s operation is on the next page.

11

(◎: Consolidated subsidiaries)

Product sale

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

Machinery & Equipment Business

Purchase of material
Product sale◎Interstella (Shenzhen)(Subsidiary)
Plastic coloring and compounding

Chemical Products BusinessTomoe Engineering Co., Ltd.

12

Tomoe Butsuryu(Subsidiary)
Logistics & warehousing

Subcontractiing

Product sale

Tomoe Wines &Spirits(Subsidiary)
Sale of imported wines

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

Product sale

Product sale

Purchase of material

Purchase of productProduct sale

Product sale

Manufacturing & Product sale

Consignment & parts sale

Maintenance of Products

Parts sale

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

Purchase of parts◎Tomoe Machinery Service(Subsidiary)
After-sale services & parts sale ofour products

Maintenance of products◎ Stella Tech Engineering Plastics(Shenzhen)(Subsidiary)
Plastic coloring & compounding◎Tomoe Machinery(Subsidiary)
Sheet metal processing,machining

Purchase of product

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 all people
involved through growth and development of the Company with spirit of creation and entrepreneurship and toprovide our customers with high level of technologies and excellent products. Guided by this policy, we havebeen engaged in the manufacture and sale of machinery based primarily on solid-liquid separation techniques
and importation of unique and specialty raw materials for chemical industry.
(2) Target management indicators
Tomoe consists of two business divisions, each of which has its unique characteristics: 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, as a specialized trading company.
Rather than just aiming for a volume growth, we always try to develop and deal in unique value-added productsthat 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 recurring income, which directly expresses the absolute value and change of profitability.
(3) Mid- and long-term management strategy
The basic strategy of Machinery & Equipment Business is to develop new products and reduce manufacturing
cost and develop overseas markets; and that of Chemical Products Business is to introduce unique newcommercial products and expand Chinese business. To newly develop the basic strategies we formulated theEighth Mid-term Management Plan “TIP10” (from year ending October 31, 2008 to year ending October 31, 2010),
in which set the theme in two dimensions, “succession” aiming to further develop core business and “innovation”
aiming to build new businesses so that Tomoe Group can keep progressing, and officially announced in February
this year.

Under the current condition presenting the worldwide simultaneous recession, the economic

environment is worsening day by day, and therefore, it is unclear to see how the target figure for the final year
ending October 31, 2010 will be affected. If necessary, we will correct this plan when this aspect is settled down
to some extent.
(4) Challenges to be addressed
We will continue to seek to achieve improved profitability of Machinery & Equipment Business and Chemical
Products Business as if they are two wheels of a cart, and improved and strengthened corporate governance andcompliance.
Machinery & Equipment Business:
We will continue to improve the performance and energy conservation of our core product (centrifuges) andpursue the development of new products and their marketing at the same time. Regarding the overseas market,
we will continue to develop the Chinese and other Asian markets and US market. We will also concentrate on
the business to make fuel from sludge and industrial wastes for CO2 reduction, which is the theme for “Innovation”
of the Eighth Mid-term Management Plan.
Chemical Products Business:
We will strengthen our core business, increase our exposure to high-tech area, continue to develop high-value
added products, and accelerate their penetration into markets to improve our financial position. In the Southern13China Market, we will smoothly start up a compounding company to be newly set up and build up a foundation forincreasing the profitability. Also, we will smoothly set up a new local compounding maker (affiliate) and build afoundation to expand profit. We will concentrate on the nano-related business that is the theme for “Innovation”
of the Eighth Mid-term Management Plan.

To improve compliance management and corporate ethics, we have made efforts to strengthen our corporate
governance and compliance, including the formation of the Corporate Ethics Committee. We have built andfixed the internal control regarding financial report based on Financial Instruments and Exchange Law, we havebuilt and maintained its structure. In November this year we will start Internal Control Activities and make efforts
in operating and continuously improving the internal control system.

14

4. Consolidated Financial Statements(1) Balance Sheets(Thousands of yen)
AssetsYears ended

Years ended

Increase &October 31, 2007

October 31, 2008

Decrease

1.Cash and deposits

1,873,895

1,811,434(62,461)

2.Trade receivables

18,897,626

15,651,542(3,246,084)

3.Inventories

4,351,317

5,472,066

1,120,749

4.Deferred tax assets

582,629

628,526

45,897

5.Other current assets

495,752

426,276(69,475)(30,276)(133,061)(102,785)

26,170,945

23,856,785(2,314,159)

2,332,224

2,508,379(1,254,587)(1,355,419)

1,077,636

1,152,960

3,087,055

3,388,940(2,238,012)(2,331,611)

849,042

1,057,328

208,285

970,253

970,2530

1,128,064

1,015,170(844,855)(822,301)

283,209

192,869(90,340)

3,180,142

3,373,412

193,269

15,22322,0646,840

1,580,268

880,003(700,264)(2) Guarantee deposits

409,762476,639

66,876(3) Deferred tax assets

21,85734,023

12,166(4) Financial derivative

314,683

22,522(292,161)(5) Other investments

782,159

563,610(218,548)(136,592)(69,729)

66,863

Total investment and others

2,972,140

1,907,070(1,065,069)

Total fixed assets

6,167,506

5,302,547(864,958)

Total assets

32,338,451

29,159,333(3,179,118)

I. Current assets

Allowance for doubtful accounts
Total current assets
II. Fixed assets
1.Tangible fixed assets(1) Buildings
Accumulated depreciation
Net(2) Machinery, equipment & vehicles
Accumulated depreciation
Net(3) Land(4) Other fixed assets
Accumulated depreciationNet
Total tangible fixed assets
2.Intangible fixed assets

75,324

3.Investments and others(1) Investments in securities

Allowance for doubtful accounts

15

(Thousands of yen)
Years ended

Years ended

Increase &October 31, 2007

October 31, 2008

Decrease(Liabilities)
I. Current liabilities
1.Trade-payables

7,349,341

7,177,796(171,544)

2.Short-term debt

4,264,912

1,054,069(3,210,843)

3.Account payable-others

743,189

550,233(192,956)

4.Accrued income tax

613,263

647,878

34,6145.Advances from customers

148,967

291,376

142,409

6.Accrued employees’ bonuses

1,102,255

1,135,803

33,548

7.Accrued officers' bonuses

68,10064,806(3,293)8.Allowance for product warranty

236,625

175,261(61,364)

9.Other current liabilities

187,345

217,108

29,763

14,714,001

11,314,334(3,399,666)

1.Long-term debt

90,00085,000(5,000)2.Accrued pension and severance liabilities

32,437

31,958(479)

3.Officers' retirement allowance

214,460

257,780

43,3204.Deferred tax liabilities

336,296

4,514(331,782)

Total long-term liabilities

673,194379,253(293,941)

Total liabilities

15,387,196

11,693,588(3,693,608)

1.Common stock

1,061,210

1,061,21002.Capital surplus

1,483,410

1,483,410

03.Retained earnings

13,897,737

14,913,596

1,015,859

4.Issued shares reacquired(362,815)(363,003)(188)

16,079,542

17,095,213

1,015,671

436,288

12,188(424,100)

2.Financial derivative gains or losses

218,722

26,115(192,606)

3.Foreign currency translation adjustment

19,084

21,7482,664

674,095

60,052(614,042)

197,617

310,478

112,861

Total net assets

16,951,254

17,465,744

514,489

Total liabilities and net assets

32,338,451

29,159,333(3,179,118)

Total current liabilities
II. Long-term liabilities(Net assets)
I. Shareholders' equity

Total shareholders' equity
II. Revaluation and translation adjustments
1.Valuation difference on available-for-salesecurities

Total Revaluation and translation adjustments
III. Minority interests16(2) Statements of Consolidated Income(Thousands of yen)
Years ended

Years ended

Increase &October 31,

October 31, 2008

Decrease

2007
I. Sales

50,795,204

47,542,836(3,252,368)

II. Cost of sales

41,791,074

38,329,506(3,461,568)

9,004,130

9,213,330

209,200

6,559,190

6,757,121

197,9312,444,939

2,456,209

11,269

1.Interests

6,110

11,805

2.Dividends

61,301

55,114

3.Rents

21,101

25,311

4.Foreign exchange gains

106,272

78,8495.Sundry

71,232102,948

266,018

274,030

1.Interests

85,40963,9492.Discounts on bills of exchange

8,269

11,843

3.Commitment fee

9,992

23,0244.Sundry

53,054

17,886

Other expenses total

156,725

116,703(40,022)

Recurring income

2,554,232

2,613,535

59,302

3,184

0

0

5,627

8,226

32,254

11,41137,881

1.Realized losses on property and equipment

6,726

2,959

2.Written-off losses on property and equipment

19,654

9,768

3.Realized losses on investment securities

0116

4. Unrealized losses on investment securities

029,331

5. Unrealized losses on investments

50,0007,115

6. Impairment losses

5,197

0

7.Removal expense

39,41008.Unrealized losses on membership title

0

3,300

9.Provision for doubtful accounts

0

11,337Gross profit
III. Selling, general and administrative expenses
Operating income
IV. Other income

Other income total

8,011

V. Other expenses

VI. Extraordinary gains
1.Realized gains on property and equipment
2.Realized gains on investments
3.Reversal for allowance for doubtful accounts
Extraordinary gains total
VII. Extraordinary losses

17

26,470Extraordinary losses total

120,989

63,929(57,060)

Income before income taxes

2,444,654

2,587,487

142,833

1.Current

1,032,094

1,162,491

2.Deferred

13,783

11,2191,045,878

1,173,711

127,833

41,64348,647

7,004

1,357,132

1,365,128

7,995

Income taxes

Income taxes total
Gains on minority interests
Net income from consolidated operations18

(3) Consolidated Statements of Changes in Shareholders' Equity
Year ended October31, 2007

(Thousands of yen)
Shareholders' equity
Capital surplus
Retained
Issued shares Total
earnings
reacquired
shareholders'equityCommonstock
Surplus as of
October 31, 2006
Changes during thisfiscal year
Cash dividend paid
Net income
Issued shares reacquired
Total amount changed
Balance, end of fiscal
year ended October 31,
2007

1,061,210

1,483,410

12,839,980(362,697)

15,021,902

0
0
0
0

0
0
0
0

(299,375)
1,357,132
0
1,057,757

0
0
(118)
(118)

(299,375)
1,357,132(118)
1,057,639

1,061,210

1,483,410

13,897,737(362,815)

16,079,542

Year ended October 31, 2007
Revaluation and translation adjustments
Valuation
Financial
Foreign
Total
difference onderivative
currency
revaluation
available-for-sale loss or gaintranslation
andsecurities
adjustment
translation
adjustments
Surplus as of
October 31, 2006
Changes during thisfiscal year
Cash dividend paid
Net income
Issued shares
reacquired
Total (net) amountchanged (except
shareholders' equity)
Total amount changed
Balance, end of fiscal
year ended
October 31, 2007

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

205,427

30,480537,226

158,595

15,717,725

0
0

0
0

0
0

0
0

0
0

(299,375)
1,357,132

0

0

0

0

0

(118)

134,969

13,294(11,395)

136,868

39,021

175,890134,969

13,294(11,395)

136,868

39,021

1,233,529

436,288

218,722

19,084

674,095

197,617

16,951,254

19

Year ended October 31, 2008

(Thousands of yen)
Shareholders' equity
Capital surplus
Retained
Issued shares Total
earnings
reacquired
shareholders'equityCommonstock
Surplus as of
October 31, 2007
Changes during thisfiscal year
Cash dividend paid
Net income
Issued shares reacquired
Total amount changed
Balance, end of fiscal
year ended October 31,
2008

1,061,210

1,483,410

13,897,737(362,815)

16,079,542

0
0
0
0

0
0
0
0

(349,269)
1,365,128
01,015,859

0
0
(188)
(188)

(349,269)
1,365,128(188)
1,015,671

1,061,210

1,483,410

14,913,596(363,003)

17,095,213

Year ended October 31, 2008
Revaluation and translation adjustments
Valuation
Financial
Foreign
Total
difference onderivative
currency
revaluation
available-for-sale loss or gaintranslation
andsecurities
adjustment
translation
adjustments
Surplus as of
October 31, 2007
Changes during thisfiscal year
Cash dividend paid
Net income
Issued shares
reacquired
Total (net) amountchanged (except
shareholders' equity)
Total amount changed
Balance, end of fiscal
year ended
October 31, 2008

(Thousands of yen)
Minority
Total net
interests
assets436,288

218,722

19,084

674,095

197,617

16,951,254

0
0

0
0

0
0

0
0

0
0

(349,269)
1,365,128

0

0

0

0

0

(188)

(424,100)(192,606)

2,664(614,042)

112,861(501,181)(424,100)(192,606)

2,664(614,042)

112,861

514,489

12,188

26,115

21,74860,052

310,478

17,465,744

20

(4) Statements of Consolidated Cash Flows(Thousands of yen)
Years ended

Years ended

Increase &October 31,

October 31,

Decrease

2007

2008

1.Net income before income taxes

2,444,654

2,587,487

142,833

2.Depreciation and amortization

317,259385,220

67,9503.Accrued employees’ bonuses (increase/decrease)

5,021

33,54828,527

4.Accrued officers' bonuses (increase/decrease)

17,311(3,293)(20,604)

5.Allowance for product warranty (increase/decrease)

116,925(61,364)(178,289)

7,263

(479)

(7,742)

7.Officers' retirement allowance (increase/decrease)(15,180)

43,32058,5008.Allowance for doubtful accounts (increase/decrease)

43,32435,922(7,401)

9.Interest and dividend income(67,412)(66,920)491

10.Interest expense

85,40963,949(21,459)

11.Foreign exchanges (gains/losses)

2,232

23,634

21,401

029,331

29,33150,0007,115(42,884)

14.Realized gains on investments

0(5,627)(5,627)

15. Realized losses on Investment securities

0

116

116

16.Property and equipment (gains/losses)

3,541

2,959

(582)

17.Written-off losses on property and equipment

19,654

9,768(9,886)

18. Impairment losses

5,197

0

(5,197)

19.Unrealized losses on membership title

0

3,300

3,300

20.Trade receivables (increase/decrease)(3,018,088)

3,018,751

6,036,839

21.Inventories (increase/decrease)662,103(1,237,525)(1,899,629)

22. Purchase liabilities (increase/decrease)(222,369)

125,327

351,696

23. Trade payables (increase/decrease)

26,237(116,925)(143,163)

24.Advances from customers (increase)

110,441

142,409

31,967

25.Consumption tax (decrease)(64,525)(8,827)55,69826.Others(165,820)

31,991

197,812Sub total

359,182

5,043,191

4,684,009

27.Interests and dividends received

67,101

59,310(7,790)28.Interests paid

(82,927)(45,661)

37,26629.Income taxes paid

(922,054)(1,091,032)(168,978)(578,697)

3,965,808

4,544,506

I. Operating activities

6.Accrued pension and severance liabilities (increase/decrease)

12.Unrealized losses on investment securities
13.Unrealized losses on investments

Net cash provided (used) by operating activities

21

(Thousands of yen)
Years ended

Years ended

Increase &October 31,

October 31,

Decrease

2007

2008

(536,038)(644,223)(108,184)

2.Proceeds from sales of properties and equipment

8,412

1,580

(6,832)

3.Acquisition of intangible assets(6,491)(9,796)(3,304)

4.Acquisition of investment securities(22,024)(16,531)

5,492

0

283

283

6.Collection of loans receivable

36,75430,201(6,552)

7.Increase in loans receivable(4,153)(3,680)473

8.Guarantee deposits (increase)(117,117)(69,201)

47,916

9.Other investments (decrease)

17,271

66,67749,405(623,386)(644,689)(21,302)2,323,769(2,957,753)(5,281,522)

0

85,00085,000(180,000)(240,000)(60,000)

(118)

(188)

(70)

0

50,08050,080(299,375)(349,269)(49,893)

0(7,781)(7,781)

1,844,275(3,419,911)(5,264,187)

IV. Effect of exchange rate changes(3,831)(63,668)(59,837)

V. Cash and cash equivalents (increase/decrease)638,359(162,461)(800,820)

VI. Cash and cash equivalents at the beginning of year

1,235,536

1,873,895

638,359

VII. Cash and cash equivalents at the end of year

1,873,895

1,711,434(162,461)

II. Investing activities
1.Expenditures for properties and equipment

5. Proceeds from sales of investment securities

Net cash provided (used) by investing activities
III. Financing activities
1.Short-term debt (increase/decrease)
2.Long-term debt (increase)
3.Repayment of long-term debt
4.Reacquisition of issued shares of stocks
5.Proceeds from payment in investment of minority
shareholders
6.Cash dividends paid
7.Dividends payments to minority shareholders
Net cash provided (used) by financing activities

22

(Segment information)
1. Segment by type of business:
Year ended October 31, 2007

I. Sales and operating income:Sales(1) Sales to unaffiliated customers(2) Internal sales among segments
or amount transferred
Total
Operating costs
Operating income
II. Assets, depreciation costs, impairment
loss and capital expenditures
AssetsDepreciation costs
Impairment losses
Capital expenditures(Thousands of yen)
Consolidated
Deletion or
total
company

Machinery &Equipment
Business

Chemical
Products
Business

Total

14,547,785

36,247,419

50,795,204

050,795,204

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

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

0
0
0
0

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

11,223,455
221,704
0471,162

17,712,332
95,5540
143,651

28,935,787
317,2590614,813

3,402,663
0
5,197
0

32,338,451
317,259
5,197
614,813(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 3,402,663 thousand yen. The main items are surplus funds applied(deposits) and long-term investment funds (investment securities) of the parent company.
3. Effective from the fiscal year under review, we have changed the depreciation method in terms of the tangible
assets acquired after April 1, 2007, in accordance with the amendment of the Corporation Tax Law. The effect of
this change on segment information is insignificant.

23

Year ended October 31, 2008

I. Sales and operating income:Sales(1) Sales to unaffiliated customers(2) Internal sales among segments oramount transferred
Total
Operating costs
Operating income
II. Assets, depreciation costs, impairment
loss and capital expenditures
AssetsDepreciation costs
Capital expenditures(Thousands of yen)
Consolidated
Deletion or
total
company

Machinery &Equipment
Business

Chemical
Products
Business

Total

12,547,664

34,995,172

47,542,836

047,542,836

0

0

0

0

0

12,547,664
11,574,200
973,464

34,995,172
33,512,427
1,482,745

47,542,836
45,086,627
2,456,209

00047,542,836
45,086,627
2,456,209

10,145,637
297,403
275,064

16,322,257
87,816
325,348

26,467,984
385,220
600,4122,691,438
0029,159,333
385,220
600,412(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 2,691,438 thousand yen. The main items are surplus funds applied(deposits) and long-term investment funds (investment securities) of the parent company.
3. From this consolidated fiscal year in accordance with the change of Corporation Tax Law, we appreciated thetangible fixed assets acquired before March 31, 2007 by equally depreciating the difference between the amount
5% equivalent to the acquisition price and the memorandum price for five years from the next consolidated fiscal
year of the consolidated fiscal year which reaches 5% of the acquisition price, and included in the depreciation
allowance. The effect of this change on segment information is insignificant.

24

2. Segment by location:
Year ended October 31, 2007

(Thousands of yen)
Japan

Asia

Total

Deletion or entire company

Consolidated

45,012,413

5,782,791

50,795,204

050,795,204

338,135

44,480382,616(382,616)

045,350,549

5,827,272

51,177,821(382,616)

50,795,204

Operating costs

43,256,299

5,467,317

48,723,617(373,352)

48,350,264

Operating income

2,094,249

359,9542,454,203(9,263)2,444,939

24,095,932

4,934,260

29,030,192

3,308,258

32,338,451

I. Sales and operating income:Sales(1) Sales to unaffiliated customers(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 3,402,663 thousand yen. Main items are surplus funds applied (deposits) andlong-term investment funds (investment securities) of the parent company.

3.

Effective from the fiscal year under review, we have changed the depreciation method in terms of the tangible
assets acquired after April 1, 2007, in accordance with the amendment of the Corporation Tax Law. The effectof this change on segment information is insignificant.

Year ended October 31, 2008

(Thousandsof yen)
Japan

Asia

Total

Deletion or entire

Consolidated

company
I. Sales and operating income:Sales(1) Sales to unaffiliated customers

42,465,516

5,077,319 47,542,836

047,542,836

514,153(514,153)

042,863,730

5,193,259 48,056,990(514,153)

47,542,836

Operating costs

40,577,370

5,025,452 45,602,822(516,194)

45,086,627

Operating income

2,286,360

2,454,167

2,041

2,456,209

3,606,426 26,801,023

2,358,309

29,159,333(2) Internal sales among
segments or amount

398,213

115,939transferred
Total

II. Assets

23,194,597

167,807(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 2,691,438 thousand yen. Main items are surplus funds applied (deposits) andlong-term investment funds (investment securities) of the parent company.

3.

From this consolidated fiscal year in accordance with the change of Corporation Tax Law, we appreciated thetangible fixed assets acquired before March 31, 2007 by equally depreciating the difference between the amount
5% equivalent to the acquisition price and the memorandum price for five years from the next consolidated fiscal
year of the consolidated fiscal year which reaches 5% of the acquisition price, and included in the depreciation25

allowance. The effect of this change on segment information is insignificant.

3. Overseas sales:Year ended October 31, 2007

(Thousands of yen)Asia

I. Overseas sales

Other regions

Total

10,290,809

990,835

11,281,645

0050,795,204

20.2

2.0

22.2

II. Consolidated sales
III. Percentage of overseas sales for consolidated sales (%)(Notes)1.

Classification of countries and regions is based on geographical proximity.

2.

Main countries or regions included in each classification:(1) Asia…China, Korea, Taiwan, Indonesia(2) Other regions…USA, Europe

3.

Overseas sales are the sales for countries or regions other than Japan by our company or consolidated
subsidiary companies.

Year ended October 31, 2008

(Thousands of yen)Asia

I. Overseas sales

Other regions

9,091,954

1,325,226

10,417,181

0047,542,836

19.1

2.8

21.9

II. Consolidated sales
III. Percentage of overseas sales for consolidated sales (%)

Total(Notes)1.

Classification of countries and regions is based on geographical proximity.

2.

Main countries or regions included in each classification:(1) Asia…China, Korea, Taiwan, Indonesia(2) Other regions…USA, Europe

3.

Overseas sales are the sales for countries or regions other than Japan by our company or consolidated
subsidiary companies.

26