Brief Report on the Mid-term Financial Statements for the Period Ending March 2007 (Consolidated)
November 16, 2006
Name of listed company:
Code No.:(URL http://www.daidan.co.jp/)
Representative of Company:
Inquiries to be addressed to:

DAI-DAN Co., Ltd.
1980

Listed Stock Exchanges:
Location of Head Office:Tokyo and Osaka
Osaka Pref.

Toshikazu ANDO, President
Goh TAJIMA, Director & General Manager of General Administration Division
Tel. (06) 6441 - 8231
Date of Directors’ meeting on closing accounts:
November 16, 2006
Adoption of American Accounting Standards:
None

1. Consolidated performance for the mid-term period ended September, 2006 (From April 1, 2006 to September 30, 2006)(1) Consolidated management performance (Note: Amounts are indicated with figures less than 1 million yen discarded.)
Sales amountOperating profit

Ordinary profit

Million yen％

Million yen％

Million yen％

Mid-term period ended Sept.
2006

62,1793.9-1,131－-1,000－Mid-term period ended Sept.
2005

59,8649.5-1,398－-1,196－

Period ended March 2006

151,859-1,192-713

Current net profit(mid-term)

Current net earnings per
share (mid-term)

Current net earnings per
share after making
potential share adjustments(mid-term)

Million yen％

Mid-term period ended Sept.
2006

-882

－

-19.63－Mid-term period ended Sept.
2005

-997

－

-22.18－Period ended March 2006

-810

-18.06－

Yen SenYen SenNote: 1) Investment profit or loss on equity method Mid-term period ended September 2006: - million yen,
Mid-term period ended September 2005 : - million yen,
Period ended March 2006:- million yen
2) Interim average number of shares
Mid-term period ended September 2006: 44,944,333 shares Mid-term period ended September 2005: 44,984,195 shares(consolidated)
Period ended March 2006:
44,972,761 shares
3) Changes in accounting procedures: None
4) Percentage indications of sales amount, operating profit, ordinary profit, and mid-term (current) net profit show increase or decrease compared with previous
mid-term period.

(2) Consolidated financial condition
Total assets

Shareholder's capitalMillion yen

Shareholder's capital per
share

Shareholders capital rate

Million yen%

Yen SenMid-term period ended Sept.
2006

127,868

45,28135.3

1,007.57

Mid-term period ended Sept.
2005

131,449

45,63034.7

1,014.54

Period ended March 2006

130,362

47,40236.4

1,054.52

Note: Issued number of shares at the end of period (consolidated)

Mid-term period ended September 2006: 44,940,724 shares
Mid-term period ended September 2005: 44,976,550 shares
Period ended March 2006:
44,950,183 shares(3) Consolidated cash flow condition
Cash flow on sales activities

Cash flow on investment
activities

Million yen

Million yen

Cash flow on financial
activities

Period end balance of cash
and equivalent items

Million yen

Million yen

Mid-term period ended Sept.
2006

818

-14

-947

22,983Mid-term period ended Sept.
2005

1,511

455

-1,95022,771

Period ended March 2006

1,072

1,824

-2,53923,139(4) Consolidation scope and items relating to application of equity method
Number of consolidated subsidiaries: 11
Number of affiliated company with equity method applied: None

Number of non-consolidated subsidiaries with equity method applied: None

(5) Consolidation scope and situation on changes in equity method application
Consolidated (new): None

(Excluded): None

Equity method (new): None

(Excluded): None

2. Estimate of consolidated performance for the period ending March 2007 (From April 1, 2006 to March 31, 2007)
Sales amountMillion yen

Ordinary profit
Million yen

Current net profit
Million yen

Total period
145,000
1,450
780(Reference) • Estimated current net profit per share (for total period) 17.36 yen‚ Estimated amount of work order received
145,000 million yen* Since the consolidated performance is estimated based on the information available as of the announcing date, actual results can be different fromthe estimated ones due to various factors.
For the items of the above performance consolidated estimate, see information on page 5 in the attached material for consolidation.

1. Situation of the Corporate Group
Our corporate group consists of our company, 11 consolidated subsidiaries, and one non- consolidated
subsidiary, mainly engaged in the business of designing, supervising, and executing electrical, airconditioning, and plumbing/sanitation works.
The position of our corporate group relating to business and the systematic chart of our business are as
follows:(1) Position of our group relating to business
Facility construction works
Electrical, air-conditioning, and plumbing/sanitation work
Part of the work of orders received by us is relegated to DAI-DAN Service Kanto Co., Ltd.,DAI-DAN Service Kansai Co., Ltd., DAIDEN Koji Co., Ltd., DAIDEN Koji Corp., Okayama
DAIDEN Setsubi Co., Ltd., Kyushu DAIDEN Setsubi Co., Ltd., Kumamoto DAIDEN Setsubi
Co., Ltd., and DAI-DAN PHILIPPINES, INC. Furthermore, we sell facilities and equipment to
MERINO O.D.D. SDN. BHD. and provide technical assistance to THAI O.D.D.CO., LTD.
Gas piping work
Kyo Gas Co., Ltd. executes the gas piping work for orders placed by Osaka Gas Co., Ltd.

(2) Systematic chart of business

Customers(Designing, supervising, and executing facility construction works)
Sales ofElectrical,
facilities
air-conditioning,andplumbing/sanitation equipment
workElectrical,
DAI-DAN Co., Technical air-conditioning,assistance plumbing/sanitation
Ltd.

Construction
facility work

Consolidated
subsidiaries
MERINO O.D.D.

Maintenance control

work
Consolidated
subsidiaries
THAI O.D.D.

Works execution

Maintenance control of air conditioning
equipment

Electrical facility work

Non-consolidated subsidiary company
PFI Kyoto School Amenity Co., Ltd.

Consolidated subsidiaries
DAIDEN Koji Co., Ltd.
DAIDEN Koji Corp

Works execution
Electrical, air-conditioning, plumbing/sanitation work
Consolidated subsidiaries
DAI-DAN Service Kanto Co., Ltd.
DAI-DAN Service Kansai Co., Ltd.
Okayama DAIDEN Setsubi Co., Ltd.
Kyushu DAIDEN Setsubi Co., Ltd.
Kumamoto DAIDEN Setsubi Co., Ltd.
DAI-DAN PHILIPPINES, INC..

Gas piping work
Consolidated subsidiaries
Kyo Gas Co., Ltd22. Management Policies(1) Basic policy on management
The Company, as an integrated facility work contractor, enforces a basic management policy of“challenging to create new values and contributing to the achievement of more favorable global
environment and the progress of society at all times” and provides customers with technologies andservices, which are ahead of their needs, thus working toward upgrading the corporate value.
Furthermore, the company has an on-target grasp of changes in the industrial structure and conducts
speedy and practical management with an eye toward becoming a vigorous company.

(2) Basic policy on distribution of profits
We make it a basic policy to consider returning our profits to our shareholders through profit sharing
as a top-priority management policy, thus working toward building a sound financial structure andfurther paying stable and continual dividends to them.

(3) Concept and policy on reductions of investment units
Regarding the reductions of investment units, after reviewing this subject from the standpoint ofshareholders’ benefits, we believe that we are in no situation to carry out these reductions at this timein terms of the level of stock price, number of shareholders, liquidity, cost-effectiveness, and others.
However, we will perform continued studies on the reductions of investment units.

(4) Medium- and long-term management strategy and challenges
In accordance with the medium-term management plan “DAIDAN Evolution 80” for the three years
from fiscal 2006 (the 78th Term) to fiscal 2008 (the 80th Term), we are making a company-wide
concerted effort with the aim of securing earnings that enable continued progress of the Company andalso establishing a structural basis for future growth.
To be more specific, we are working toward finding new customers and strengthening our ties withexisting customers, thus challenging the expansion of business. Particularly, we are focusing onmarketing operations to secure orders for renewal works through capitalizing on our total facility
engineering technologies for electrical, air conditioning, plumbing and sanitation works, and others.
Furthermore, we are stepping up efforts to expand business in plant projects and others with recent
boosts in private capital investments. To accomplish those challenges, we are pushing ahead withtechnical development through predicting the trends of customer needs as well as conducting
proposal-oriented marketing activities by the use of technologies owned by the Company.
As to construction works, we ensure steady implementation of construction review sessions andcompletion assessment sessions to enhance communications, thus not only achieving provision ofquality and safety but also accomplishing cost cutting.

3

As to challenges to environmental issues, we are working toward recycling resources, cutting inconstruction wastes, and others, and also providing technologies developed with consideration given
to reduction in environmental burdens such as resource saving and energy saving. Particularly, we
upgrade energy saving proposals capitalizing on our strength as a total facility construction work
contractor, thus pressing on with involvement in the ESCO business.
Furthermore, with the aim of further invigorating and upskilling human resources, we are proceedingwith the establishment of a continued education and training system directly linked to working
knowledge for engineers. Thus, we will rebuild the “DAI-DAN with Proud Technologies” as well as
be committed ourselves to enhancing customer satisfaction and strengthening cost competitiveness.
In addition, to accomplish this medium-term management plan, we will establish a scheme toperiodically check for the progress of a variety of measures taken, thus working for steadily achieving
the goal.
Furthermore, we have set the shareholder’s share operating income margin as our target management
benchmark.

(5) Issues relating to the parent company
Not applicable.

3. Management Record and Financial Standing(1) Overview of the current mid-term period
During the current mid-term period, economy in our country remained on an upturn, even though it ismild, regardless of the presence of causes for concerns such as steep rises of crude oil and raw
material prices, as corporate earnings turned up through steady personal consumption and capital
investment.
In the construction industry, even though private capital investment continued strong, public
investment remained on the decline. Furthermore, due to intensified price-cutting competition, theconstruction business continued to be in a severe situation.
Under these circumstances, our corporate group made maximum concerted efforts to secure orders
and profits. As a result, the consolidated record for the current mid-term was as shown below.

The consolidated amount of work orders received by our corporate group increased 15.6% (increasedby 10,508 million yen) compared with the previous mid-term period to 77,895 million yen. The
amount of work completed increased 3.9% (increased by 2,314 million yen) compared with theprevious mid-term period to 62,179 million yen.
As for the profits, since the works were completed with a concentration in the latter half of the period,

4

operating loss totaled 1,131 million yen (decrease of 266 million yen on the previous mid-term period),
ordinary loss totaled 1,000 million yen (decrease of 195 million yen on the previous mid-term period).
As a result, the net loss for the mid-term period totaled 882 million yen (decreased of 115 million yen
on the previous mid-term period).

(2) Financial standing
Status of cash flow
Cash and cash equivalent for the end of the current mid-term consolidated accounting period(hereinafter referred to as “the fund”) declined 155 million yen compared with the end of the previous
consolidated accounting year to 22,983 million yen.

(Cash flow from sales activities)
Cash flow relating to sales activities for the current mid-term consolidated accounting period
increased 818 million yen (declined 693 million yen compared with the previous mid-term
consolidated accounting period) in the fund, due to accounts receivable declined by 13,199 million
yen, incomplete work expenditures increased by 10,835 million yen, incomplete work accounts
receivable increased by 3,245 million yen, and other factors, even though the current mid-term
period net profit before tax adjustments, etc. amounted to minus 991 million yen.
(Cash flow from investing activities)
Cash flow relating to investing activities for the current mid-term consolidated accounting period
declined 14 million yen in the fund (declined 470 million yen compared with the previous
mid-term consolidated accounting period) due to making fixed deposits in banks and other factors.
(Cash flow from financing activities)
Cash flow relating to financing activities for the current mid-term consolidated accounting period
declined 947 million yen (declined 1,002 million yen compared with the previous mid-term
consolidated accounting period) in the fund due to paid amount of dividends of 494 million yen
and aggressive repayment of loans, which exceeded the earnings by new borrowing by 444 million
yen, and other factors.
Trend of cash flow index groupMid-term period
endingSeptember 2004

Period ending
March 2005

Shareholders’ equity ratio

35.2%

33.8%

Shareholders’ equity ratio at
market value

21.0%

Number of debt redemption years
Interest coverage ratio

Shareholders’ equity ratio:

Mid-term period
endingSeptember 2005

Period ending
March 2006

Mid-term period
endingSeptember 2006

34.7%

36.4%

35.3%

26.3%

27.3%

30.1%

23.2%

－

－

7.3 years

9.9 years

12.4 years－－

14.0 times

5.5 times

9.9 times

Shareholders’ equity/Total assets

Shareholders’ equity ratio at market value: Aggregate market value of shares/Total assets

5Number of debt redemption years:

Interest-bearing debt/Operating cash flow

Interest coverage ratio:

Operating cash flow/Interest paid

∗ Indexes are all calculated by financial values on a consolidated basis.
∗ The total market value of stocks is calculated by Closing stock price at the end of term × Issued
number of stocks at the end of term (after deduction of common stocks)∗ For the operating cash flow, the cash flow from sales activities (interest-paid and after corporatetax, etc.) recorded in the Statement of consolidated cash flow is used. The interest-bearing debt issubject to all debts, which bear interest, among those recorded in the Consolidated balance sheet.
Furthermore, for the interest paid, the amount of interest paid, which is recorded in the Statementof consolidated cash flow, is used.

(3) Outlook for the full-year period
In the construction industry, it is predicted that private capital investments will continuously show
steady transition, but that public investments will remain sluggish and order receiving environments
will still be in a severe situation due to intensified cost-cutting competition.

Regarding the outlook for the full-year period of our corporate group, we expect the consolidated
amount of work orders received of 145,000 million yen, completed work of 145,000 million yen,ordinary profits of 1,450 million yen, and current net profit of 780 million yen.

(4) Business risk, etc.
The following section describes risks that may have significant influence on the judgment of investors
regarding the business of our corporate group. In this connection, our corporate group will recognize
the potential for these risks to occur and then make efforts to prevent the risks from occurring anddeal with them if occurred.
1) Seasonal variation of performance
Our corporate group completes works with many concentrated in the second half of theaccounting year, while the selling expenses and general administrative expenses are almost
evenly spent in the first and second halves of the accounting year. Consequently, the groupperformance for the first half has a tendency to result in operating loss.
2) Unrecoverable sales credits
Depending on the rapid worsening of the earning or financial standing of customers, part of sales
credits owned by our corporate group can turn unrecoverable.
3) Steep rises of prices of materials and supplies
If it is hard to pass steeply risen prices of equipment and materials on to contract amounts, theseprices can have influence on our corporate group performance.
4) Underperforming work6

If any underperforming work results from an unexpected increase of construction cost or else
arising in the course of construction, it can have influence on our corporate group performance.
5) Decline in values of owned assets due to their declined market prices
For immovable properties or securities owned by the company, if they should be treated as
shrinkage loss due to decline in their market prices, that can have influence on our corporategroup performance.
6) Disasters and accidents
Our corporate group executes construction on the basis of safety-first and exerts its utmost effort
in quality control. However, if an unexpected disaster or accident occurs in the course of
construction, it can result in compensation for damage, defect liability, or else and further haveinfluence on the group performance.
7) Fluctuations in country risk and exchange rate
Our corporate group has been expanding its overseas business centering on Southeast Asianmarkets. The group performance can be influenced by the occurrence of terrorism or politicalinstability, unexpected legislative modifications/amendments, worsening of market conditions, or
exchange rate fluctuations.

74. Mid-term period Consolidated Financial Statements, etc.
(1) Mid-term period consolidated balance sheet(in millions of yen)
By period

Accounts(Assets)
Current assets
Cash on hand and in
banks
Note receivables,
completed work
accounts receivables
Securities
Incomplete work
expenditures
OthersAllowance for bad
debts
Total current assets
Fixed assets
Tangible fixed assets
Intangible fixed
assetsInvestments andother assets
Investment
securities
OthersAllowance for bad
debts
Total investments
and other assets
Total fixed assets
Total assets(Liabilities)
Current liabilities
Notes payable, work
accounts payable
Short-term loans
payableIncomplete work
accounts received
Completed work
compensation reserves
Work loss reserves
OthersTotal current liabilities
Fixed liabilities
Long-term loans
payableReserves for
retirement benefits
Reserves for directors’
retirement benefits
OthersTotal fixed liabilities
Total liabilities(Minority interest equity)
Minority interest equity

Outstanding at the end of thecurrent mid-term consolidated
accounting period(As of September 30, 2006)

Outstanding at the end of theprevious mid-term
consolidated accounting period(As of September 30, 2005)

Component
ratio％

AmountAmountComponent
ratio％

Summary consolidated balance
sheet of the previous
consolidated accounting year
(As of March 31, 2006)

Amount23,21022,79823,166

41,73343,35854,873300
33,191

100
36,039200
22,360

5,218
-158

7,741
-228

6,651
-188

103,495

80.9

109,81083.5

107,064

3,614
473

4,065
733

3,700
655

14,82813,546

16,371

6,016
-560

4,125
-831

3,140
-568

20,285

16,84018,942

24,373
127,868

19.1
100.0

21,639131,449

16.5
100.0

23,297130,362

47,98545,67449,353

7,684

7,601

7,721

15,567

19,115

12,322

152

94

92

1,173
5,075
77,639892
5,908
79,286

1,573
5,894
76,956

60.7

60.3

1,845

2,715

2,253

2,501

3,193

2,360

573

492

532

Component
ratio
％

82.1

17.9
100.0

59.0

27
4,948
82,587

3.9
64.6

4
6,406
85,693

4.9
65.2

697
5,843
82,800

4.5
63.5

–

–

125

0.1

158

0.1

8

(in millions of yen)
By period

Accounts(Net Assets)
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’equityEvaluation / Currencytranslation difference,etc.
Evaluation differenceof other securities
Deferred profits andlosses on hedges
Currency translation
adjustment accountTotal evaluation /currency translationdifference, etc.
Minority interest equity
Total net assets
Total liabilities and net
assets(Shareholders’ equity)
Capital stock
Capital surplus
Retained earnings
Evaluation differenceof other securities
Currency translation
adjustment accountTreasury stock
Total capital
Total liabilities,
minority interest
equity andshareholders’ equity

Outstanding at the end of thecurrent mid-term consolidated
accounting period(As of September 30, 2006)

Outstanding at the end of theprevious mid-term consolidated
accounting period(As of September 30, 2005)

Component
ratio％

AmountComponent
ratio％

AmountSummary consolidated balance
sheet of the previous
consolidated accounting year
(As of March 31, 2006)

Component
ratio％

Amount4,479
4,783
32,203-519
40,946

3.5
3.7
25.2
-0.4
32.0

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

4,247

3.3

–

–

–

–

-1

-0.0

–

–

–

–

-59

-0.0

–

–

–

–

4,186

3.3

–

–

–

–

148
45,281
127,868

0.1
35.4
100.0

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–
–

–
–
–
–

4,479
4,782
33,618
3,264

3.4
3.6
25.6
2.5

4,479
4,782
33,581
5,093

3.4
3.7
25.8
3.9

–

–

-25

-0.0

-23

-0.0

–

–

–
–

–
–

-488
45,630131,449

-0.4
34.7
100.0

-511
47,402
130,362

-0.4
36.4
100.0

9

(2) Mid-term period consolidated profit and loss statement(in millions of yen)
By period
Accounts

Completed work amountCompleted work costCompleted work grossprofitSelling expenses andgeneral administrative
expenses
Operating loss (−)

Non-operating revenue
Interests received
Dividends received
Insurance claim received
Currency translation profit
OthersNon-operating expenses
Interest payable
Payment guarantee charge
OthersOrdinary loss (−)

Special profits
Profit on sales of fixed
assetsProfit on sales ofinvestments in securities
Profit gained by returning
allowance for bad debts

Special losses
Loss on sales of fixed
assetsLoss on retirement of fixed
assetsLoss on sales ofinvestments in securities
Evaluation loss on
investments in securities
Shrinkage loss
Special loss on overseas
work
OthersMid-term (current)
period net loss before tax
adjustments, etc. (-)
Corporate tax, residence tax
and business tax.
Adjustment amounts such as
for corporate taxes
Profits or losses of minority
interests (−)

Mid-term (current)
period net loss (-)

The current mid-term
consolidated accounting
period(From April 1, 2006
to September 30, 2006)

The previous mid-term
consolidated accounting
period(From April 1, 2005
to September 30, 2005)

AmountAmountPercentage

62,179％100.0

58,5873,591

Percentage

Summary of consolidated profit
and loss statement of the previous
consolidated accounting year

（From April 1, 2005
to March 31, 2006）

AmountPercentage

59,864％100.0

151,859

％
100.0

94.2
5.8

56,190
3,674

93.9
6.1

143,639
8,220

94.6
5.4

4,723

7.6

5,072

8.4

9,412

6.2

-1,131-1.8-1,398-2.3-1,192

-0.8

(225)
11
99
46
53
14

0.4

(327)
6
72
116
120
10

0.5

(707)
16
109
254
298
28

0.5

(94)
85
4
5

0.2

(125)
107
16
0

0.2

(229)
195
23
9

0.2

-1,000-1.6-1,196

-2.0

-713

-0.5

(33)
16

0.0

(265)
237

0.4

(944)
647

0.6

–

10

261

17

17

35

(24)
6

0.0

(355)
196

0.6

(1,231)
247

10

5

43

–

–

0

6

18

139

–
–

135
–

135
658

0.8

–
-991

-1.6

–
-1,286-2.2

8-1,000

-0.7

77

0.1

100

0.2

176

0.1

-179

-0.3

-398

-0.7

-410

-0.3

-7

-0.0

9

0.0

43

0.0

-882

-1.4

-997

-1.7

-810

-0.5

10

(3) Statement of mid-term period consolidated surplus(in millions of yen)
By period

Accounts(Capital surplus)
Capital surplus balance at the
beginning of the period
Increased amount in capitalsurplus balance
Profits through disposal of treasury

The previous mid-term consolidated
accounting period(From April 1, 2005
to September 30, 2005)

The previous consolidated accounting
year(From April 1, 2005
to March 31, 2006)

AmountAmount
4,782

0

0

4,782

0

0

stocksCapital surplus balance at the end of

4,782

4,782

35,11235,112the mid-term period (the term period)(Retained earnings)
Retained earnings balance at the
beginning of the period
Retained earnings decreased
amountShareholders’ dividends
Directors’ bonuses

Mid-term (current) period net loss(-)
Retained earnings balance at theend of the mid-term period (theterm period)

494
1
997

1,493
33,618

11

719
1
810

1,531
33,581

(4) Statement of changes in mid-term consolidated shareholders’ equity, etc.
Current mid-term consolidated accounting period (from April 1, 2006 to September 30, 2006)(in millions of yen)
Shareholders’ equity
Total
Item
CapitalRetained
Treasury
Capital stock
shareholders’surplusearnings
stock
equityBalance as of March 31,
4,479
4,782
33,581-511
42,332
2006
Amount of changes madeduring mid-term
consolidated accounting
periodAcquisition of treasury
-9
-9
stock
Disposition of treasury
0
1
1
stock
Dividend of earned
-494
-494
surplus
Directors’ bonuses-1-1
Mid-term period net loss
-882
-882
Total amount of changes
made during mid-term–
0-1,378-7-1,385consolidated accounting
periodBalance as of September
4,479
4,783
32,203-519
40,94630, 2006

Item

Balance as of March 31,
2006
Amount of changes madeduring mid-term
consolidated accounting
periodAcquisition of treasury
stock
Disposition of treasury
stock
Dividend of earned
surplus
Directors’ bonuses
Mid-term period net loss
Amount (net amount) of
changes made in items
other than shareholders’equity during mid-term
consolidated accounting
periodTotal amount of changes
made during mid-term
consolidated accounting
periodBalance as of September
30, 2006

Evaluation / Currency translation difference, etc.
Total
Profit orevaluation
Currency
Evaluation
loss
ontranslationdifference/ currency
hedge
adjustment translationof othercarrieddifference,account
securities
forward
etc.
5,093

–

-23

5,070

Minority
interest
equityTotal net
assets158

47,561

-9
1
-494
-1
-882
-846

-1

-36

-883

-10

-894

-846

-1

-36

-883

-10

-2,280

4,247

-1

-59

4,186

148

45,281

12

(5) Statement of mid-term period consolidated cash flows
By period

Accounts(in millions of yen)

The current mid-term
consolidated accounting
period(From April 1, 2006
to September 30, 2006)

The previous mid-term
consolidated accounting
period(From April 1, 2005
to September 30, 2005)

The previous consolidated
accounting year

AmountAmountAmountCash flow on sales activities
Mid-term (current) period net loss before tax
adjustments, etc. (-)
Depreciation expenses
Consolidated adjustment accountdepreciation amount
Goodwill depreciation amount
Increased or decreased amount of allowancefor bad debts
Increased or decreased amount of reserves for
retirement benefits and reserves for directors’
retirement benefits
Earned interest and dividends received
Interest paid
Shrinkage loss
Evaluation loss on investments in securities
Profit or loss on sales of investments insecurities
Profit or loss on sales of fixed assets
Loss on retirement of fixed assets
Increased or decreased amount of sales
credits
Increased or decreased amount of incomplete
work expenditures
Increased or decreased amount ofprocurement credits
Increased or decreased amount of incomplete
work received amount
OthersSub-total
Received amount of interests and dividends
Paid interest amountPaid amount of corporate tax, etc
Cash flow on sales activities
II. Cash flow on investment activities
Expenditures by depositing of time deposits
Expenditures by acquiring of securities
Revenue by sales of securities
Expenditures by acquiring of tangible fixed
assets
Revenue by sales of tangible fixed assets
Expenditures by acquiring of investment
securities
Revenue by sales of investment securities
Expenditures by loans
Revenue by recovery of loans
Expenditures by acquiring of other fixed
assets
Revenue by sales of other fixed assets
Expenditures by decline in other fixedliabilities
Cash flow on investment activities
III. Cash flow on financial activities
Revenue by short-term loans
Expenditures by return of short-term loans
Revenue by long-term loans
Expenditures by return of long-term loans
Expenditures by acquiring of treasury stocks
Revenue by sales of treasury stocks
Paid amount of dividends
Paid dividend to minority interests
Cash flow on financial activities
IV. Translation difference relating to cash andcash equivalents
V. Increased or decreased amount of cash andcash equivalents
VI. Balance of cash and cash equivalents at the
beginning of period
VII. Balance of cash and cash equivalents at theend of mid-term period (term end)

(From April 1, 2005
to March 31, 2006)

I.

-991

-1,286-1,000

200

–

186
0

377
1

1
-36

–

–

-1

-148

182

-1

-793

-110
85

–

-79
107
135
18
-10

-126
195
135
139
-261

-9
10
13,199-40
515,239

-400
43
3,822

-10,835-10,723

2,957-1,368-10,851-7,172

3,245

6,798

5

-2,664
914
111
-82
-125
818

2,887
2,384
79
-107
-844
1,511

4,290
2,064
126
-196
-921
1,072

-200
-49
49
-31

–
-49
49
-26

-0
-200
99
-413

45
-2

786
-466

1,796
-746

2
-25
54
-13

15
-7
28
-137

701
-115
56
-257

158
-3

263

902

-14

455

1,824

8,530
-8,330800-1,444
-9
2
-494
-1
-947
-11

9,743
-10,156
750-1,779
-10
0
-494
-2
-1,95041

20,313-20,626
1,962-3,434
-34
1
-719
-2
-2,539
69

-155

59

426

23,13922,712

22,712

22,983

22,771

23,139

–
6

13

–

–

Basic important items for producing mid-term period consolidated financial statements
1. Items relating to scope of consolidation(1) Eleven (11) subsidiaries are included in the consolidated financial statements.
Names of major consolidated subsidiaries are described in “Section 1. Situation of the
Corporate Group”.
(2) Number of non-consolidated subsidiaries: One (1)The name of non-consolidated subsidiary is as described below.
PFI Kyoto School Amenity Co., Ltd.
(3) Reason to exclude the non-consolidated subsidiary from the scope of consolidated
accounting
The total assets, completed work amount, mid-term net profit/loss (worth the amount of theequity method), earned surplus (worth the amount of the equity method), and other factors
all have no significant influence on the mid-term consolidated financial statements so thatthe company aforementioned is excluded from the scope of consolidation.
2. Items relating to application of the equity method(1) We have no non-consolidated subsidiaries or affiliates to which the equity method wasapplied.
(2) The following section shows non-consolidated subsidiaries or affiliates to which the equity
method is not applied.
PFI Kyoto School Amenity Co., Ltd.
(3) Reason not to apply the equity method
Since the company aforementioned has minor influence on the mid-term net profit/loss,
earned surplus, and other factors and further is of no importance in terms of the overall
performance, it is excluded from the scope of application of the equity method.
3. Items relating to the accounting year, etc. of consolidated subsidiaries
Out of the consolidated subsidiaries, the following three subsidiaries close their account for the
mid-term period on June 30.
MERINO O.D.D.SDN.BHD.
THAI O.D.D.CO.,LTD.
DAI-DAN PHILIPPINES, INC.
In order to produce consolidated financial statements for the mid-term period, we use mid-term
financial statements as of the mid-term account closing date. As for important transactions
arising between June 30 and the consolidated account closing date for the mid-term period, we
make adjustments required for the consolidated account.
4. Items relating to accounting procedure basis(1) Valuation basis and method applied to important assets
1) Securities
Held-to-maturity bonds:
Depreciable cost method (Straight-line method)
Other securities
With market valueMarket price method based on the market priceas of the mid-term consolidated accounting
period closing date(Valuation differences are treated according to
14

With no market value2) Derivative:

full capital direct accounting method and sales
cost is calculated according to the moving
average method.)
Cost method based on the moving averagemethodMarket price method

3) Inventories
Incomplete work expenditures

Cost method based on the specific identification
methodMaterials and supplies
Cost method based on the moving averagemethod(2) Depreciation and amortization method applied to important depreciable assets① Tangible fixed assets
Our company and domestic
consolidated subsidiarycompanies
Buildings (excluding accessory Straight-line method
equipment)
OthersDeclining balance method
Overseas consolidated subsidiary Straight-line method
companies
Furthermore, the following section shows the depreciation periods of major assets.
Buildings and structures
15 to 50 years② Intangible fixed assets
Straight line method
Furthermore, as to software of the company’s own use, the straight(3) Recording basis applied to important allowances and reserves
1) Allowance for bad debts
In order to provide against bad debts due to failure in recovery of completed work accounts
due, loans receivable, and others, we review the recoverability of general credits based on thepast actual percentage of credit losses and particular credits such as those having bad debts
risk based on individual cases, thus recording anticipated unrecoverable amount.
2) Allowance for completed work compensation
This is provided for the purpose of defect compensation for completed works. We record anamount for works to be compensated based on past results plus possibility of futurecompensation.
3) Work loss reserves
In order to provide against future loss caused by work orders received in hand, we record an
estimated amount of loss for works, which are highly likely to cause loss and the amount of
which can be reasonably estimated.
4) Reserves for employees’ retirement benefits
In order to prepare for the payment of employees’ retirement benefits, we record an amountthat is deemed to have incurred as of the end of the current mid-term consolidated accounting
period in accordance with the estimates of debt obligations for retirement benefits andpension assets at the end of current consolidated accounting year. As for differences on themathematical calculation, we shall treat the differences aforementioned using an amount15

proportioned by the straight-line method with a specified number of years (i.e., 10 years)
within the employees’ average remaining length of service at the time of occurrence of thedifferences during each consolidated accounting year, from the account settled for next
consolidated accounting year. In contrast, we process past service obligation as a single unit
within the year of occurrence.
Furthermore, as of April 1, 2006, we shifted to the defined contribution pension system forpart of the future service portion of the termination allowance plan.
5) Reserves for directors’ retirement benefits
In order to prepare for the payment of directors’ retirement benefits, we reserved andrecorded an amount required to pay at the end of the mid-term consolidated accounting
period in accordance with the bylaws of the company.
(4) Important leases treating method
Financing leases other than those by which ownership rights of the leased property can be transferredto the lessee are treated in accordance with a method relating to ordinary leases.
(5) Important hedge accounting method
1) Hedge accounting method:

Preferential treatment has been adopted.

2) Hedging means and targets• Hedging means:• Hedging targets:Interest swap transactions
Interest expenses for long-term loans3) Hedging policy
In order to hedge risks associated with interest rate fluctuations, we have been using
derivatives to prepare for interest expenses for long-term loans.
Furthermore, we do not hold derivatives for speculation purpose.
4) Evaluation method of hedging availability
Since the preferential treatment for interest swap transactions is adopted, the reference relating
to the evaluation of hedging availability is omitted.
(6) Other important items for the mid-term period consolidated financial statements
1) Completed works amount recording basis
Work completion basis is adopted. For some works, however, we adopt deferred payment
standards under Corporation Tax Law, thus counting the amount equivalent to profits
corresponding to uncollected amount in the completed work costs to reschedule the profits
and to return it at the time of collection. Furthermore, our overseas consolidated-subsidiaries
record the completed works amount on the work progressing basis.
Unearned profit returned amount
4 million yen
Unearned profit deducted amount– million yen
Total42) Accounting of consumption tax and others
They are treated in accordance with a method exclusive of tax.
5. Scope of funds in the mid-term period consolidated cash flow statement
Funds (cash and cash equivalents) listed in the mid-term period consolidated cash flow statement
include currency on hand, bank money, time deposits that mature within three months after theacquisition date, and short-term investments that have no fixed maturity or redemption date, facilitate
cash-out, and take a slight risk of price fluctuations.
16

Changes of basic important items for producing mid-term period consolidated financial statements(Accounting Standards for Presentation of Net Assets in Balance Sheet, etc.)
Since the current mid-term consolidated accounting period, we have applied the “AccountingStandards for Presentation of Net Assets in Balance Sheet” (Corporate Accounting Standard No. 5
published on December 9, 2005) and the “Implementation Guidance on Accounting Standards for
Presentation of Net Assets in Balance Sheet, etc.” (Implementation Guidance No. 8 on Corporate
Accounting Standards published on December 9, 2005). This application has no influence on profit andloss.
Furthermore, the amount corresponding to the sum of the section on “Shareholders’ equity” under theprevious standards is 45,134 million yen.
Due to revision to the Rules for Presenting the Mid-term Consolidated Financial Statements, we have
prepared the section on “Net assets” in the mid-term consolidated financial statements for the current
mid-term consolidated accounting period in accordance with the revised “Rules for Presenting the
Mid-term Consolidated Financial Statements”.
Notes[Relating to mid-term period consolidated balance sheet]
Outstanding at the endof current mid-term
consolidated accounting
period

1. Accumulated amount ofdepreciation of tangible fixed
assets
2. Amount of transfer ofendorsed notes receivable
3. Pledged assets and secured
liabilities(1) Assets given as security
Time deposit
Investment securities(2) Liabilities for the above
Long-term loans
expecting to return within
1 year.
Long-term loans
Liabilities of investing
companies(Amount equivalent toinvestment ratio of ourcompany)(in millions of yen)
Outstanding at the endof previous mid-term
consolidated
accounting period

Outstanding at the endof previous
consolidated
accounting year

3,481

4,205

3,561

16

30

28

27
535

27
1,096

27
603

347

329

339

75
33,692

322
9,732

140
15,462(3,966)

(442)

(536)

4. Accounting for notes that mature on the closing date of the term is processed on the clearing date of
the notes. Consequently, since the closing date of the current mid-term consolidated accounting
period falls on holiday of financial institutions, the following notes that mature on the closing date of
the term are included in the balance as of the closing date of the current mid-term consolidated
accounting period.
Notes receivable
306 million yen
Notes payable903

17

[Relating to mid-term period consolidated profit and loss statement](in millions of yen)
1. The following section describes important expense items and amount out of the selling and generaladministrative expenses.
Outstanding at the endof current mid-term
consolidated accounting
periodOutstanding at theend of previous
mid-term
consolidated
accounting period

Outstanding at the endof previous
consolidated
accounting year

Salaries and allowances to
1,651
1,639
2,956
employees
Reserves for retirement benefits
-8
223
233
Amounts transferred from reserves
41
39
79
for directors’ retirement benefits
Amount of computers
516
607
1,136
Communication and transportation
432
443
881
expenses–
Amounts transferred from21
16
allowance for bad debts
Depreciation expenses
198
185
373
2. Seasonal variations of the amount of completed works
As for amount of completed works with our corporate group, since works to be completed during thesecond half of the accounting year absorb a larger percentage compared to those to be completed
during the first half as normal business pattern of the company, there is a substantial difference in theamount of completed works between the first and second halves of the consolidated accounting year,
thus resulting in seasonal variations of the performance between the first and second halves of theaccounting year.
The following section shows the amount of completed works for one year through the end of thecurrent mid-term consolidated accounting period.
Second half of the previous consolidated accounting year
91,995 million yen
Current mid-term consolidated accounting period
62,179 million yen
Total
154,174 million yen
3. Paid amount of taxes and adjustment amount such as corporate taxes, etc. for the current mid-term
consolidated accounting period were accounted by the amount for the current mid-term consolidated
accounting period presuming that reserves for reduction on fixed assets be reversed by the disposal ofpredetermined profits in the current consolidated accounting year.
(Relating to statement of changes in mid-term consolidated shareholders’ equity)
Current mid-term consolidated accounting period (from April 1, 2006 to September 30, 2006)
1. Items relating to the type and number of issued stocks
Type of stock

End of the previous
consolidated
accounting year

Common stock (inthousands of stocks)

45,963

Increase

End of the current
mid-term consolidated
accounting period

Decrease－－

45,963

2. Items relating to the type and number of treasury stocks
Type of stock

End of the previous
consolidated
accounting year

Common stock (inthousands of stocks)

1,013

Increase

End of the current
mid-term consolidated
accounting period

Decrease

122(Note) 1 “Increase” results from the purchase of odd-lot stocks.
2 “Decrease” results from the delivery of odd-lot stocks at the request for additionalpurchase.
18

1,023

3. Items relating to share warrant
Not applicable.
4. Items relating to dividend(1) Paid amount of dividend
Resolution

Type ofstock

Total dividends(in millions ofyen)

Dividend perstock (in yen)

Record date

Effective dateOrdinary general
CommonMarch 31,
meeting of
11.00
494
June 30, 2006
shareholders on
stock
2006
June 29, 2006
(2) Dividends having effective date after the end of the current mid-term consolidated accounting period,out of dividends having record date within the current mid-term consolidated accounting period
Total
Dividend
Type ofResource for
RecordEffective
dividends
Resolution
per stockstock
dividend(in millions
date
date
(in yen)of yen)Board ofCommonSurplus
September December
directors on
224
5.00
November 16,
stock
earnings
30, 2006
4, 2006
2006[Relating to mid-term consolidated cash flow statement]
The following table shows the relationship between the balance of cash and cash equivalents at theend of the mid-term period (at the end of full-year period) and the amounts of accounts listed in the
mid-term period consolidated balance sheet (full-year consolidated balance sheet)(in millions of yen)
Current mid-term

Previous mid-term

Previous

consolidated

consolidated

consolidated

accounting period

accounting period

accounting year

Cash and deposit accounts
Securities accountTotal
Time deposits with time period of morethan three months
Securities other than add-on type bondinvestment trusts
Cash and cash equivalent objects

23,210300
23,510-227

22,798100
22,899-27

23,166200
23,366
-27

-300

-100

-200

22,983

22,771

23,139[Relating to leases]
Since we disclose the Mid-term Financial Report via EDINET, no description of this item isprovided.

19

5. Relating to Securities
The following section describes securities at the end of the mid-term consolidated accounting period (asof September 30, 2006).
1. Securities with market value(in millions of yen)
Recording amount in
the mid-term
Category
Market value
Balanceconsolidated balance
sheet(1) Held-to-maturity bonds
Corporate bonds
200
200
0
Total
200
200
0
Recording amount in
the mid-term
Category
Acquisition cost
Balanceconsolidated balance
sheet(2) Other securities
Stocks4,911
12,110
7,198
Total
4,911
12,1107,198(Note) The values listed in the “Acquisition cost” column all represent book values after shrinkage loss istreated.
2. Main securities with no valuation at the market value(in million of yen)Amount in the mid-term
Category
consolidated balance sheet(1) Held-to-maturity bonds
j Discount bank debentures99
k Unlisted foreign bonds
0
Total
100
(2) Other securities
Unlisted stocks
2,700
Total
2,700
(Note) For the other securities with no valuation at the market price, 6 million yen was treated as shrinkage
loss.

20

The following section describes securities at the end of the previous mid-term consolidated accounting
period (as of September 30, 2005).
1. Securities with market value(in millions of yen)
Recording amount in
the mid-term
Category
Market value
Balanceconsolidated balance
sheet(1) Held-to-maturity bonds
Corporate bonds
200
201
1
Total
200
201
1
Recording amount in
the mid-term
Category
Acquisition cost
Balanceconsolidated balance
sheet(2) Other securities
4,781
10,314
5,532
j Stocksk Bonds2
3
1
Corporate bonds
Total
4,784
10,3185,534(Note) The values listed in the “Acquisition cost” column all represent book values after shrinkage loss istreated.
2. Main securities with no valuation at the market value(in millions of yen)Amount in the mid-term
Category
consolidated balance sheet(1) Held-to-maturity bonds
j Discount bank debentures99
k Unlisted foreign bonds
0
Total
100
(2) Other securities
Unlisted stocks
3,028
Total
3,028
(Note) For the other securities with no valuation at the market price, 18 million yen was treated as
shrinkage loss.

21

The following section describes securities at the end of the previous fully-year consolidated accounting
period (as of March 31, 2006).
1. Securities with market value(in millions of yen)
Recording amount in
the mid-term
Category
Market value
Balanceconsolidated balance
sheet(1) Held-to-maturity bonds
Corporate bonds
200
200
0
Total
200
200
0
Recording amount in
the mid-term
Category
Acquisition cost
Balanceconsolidated balance
sheet(2) Other securities
j Stocks
4,909
13,541
8,632
k Bonds
Corporate bonds
2
4
1
Total
4,912
13,545
8,633(Note) The values listed in the “Acquisition cost” column all represent book values after shrinkage loss istreated.
2. Contents of main securities with no valuation at the market value(in millions of yen)Amount in the mid-term
Category
consolidated balance sheet(1) Held-to-maturity bonds
j Discount bank debentures99
k Unlisted foreign bonds
0
Total
100
(2) Other securities
Unlisted stocks
2,707
Total
2,707
(Note) For the other securities with no valuation at the market price, 139 million yen was treated as
shrinkage loss.

22

6. Relating to Derivatives
Since we disclose the Mid-term Financial Report via EDINET, no description of this item is provided.

7. Segment Information
1. Business segments information
For the current mid-term consolidated accounting period (April 1, 2006 to September 30, 2006), theprevious mid-term consolidated accounting period (April 1, 2005 to September 30, 2005) and theprevious full-year consolidated accounting period (April 1, 2005 to March 31, 2006),
Since our corporate group is engaged in facility construction works, there are no business types otherthan those. Accordingly, segment information by business type is not described.
2. Geographic segments information
For the current mid-term consolidated accounting period (April 1, 2006 to September 30, 2006), theprevious mid-term consolidated accounting period (April 1, 2005 to September 30, 2005), and theprevious full-year consolidated accounting period (April 1, 2005 to March 31, 2006),
Since the total sales amount of all segments of "Japan" exceeds 90%, the reference to geographic
segments information is omitted.
3. Overseas sales
For the current mid-term consolidated accounting period (April 1, 2006 to September 30, 2006), theprevious mid-term consolidated accounting period (April 1, 2005 to September 30, 2005), and theprevious full-year consolidated accounting period (April 1, 2005 to March 31, 2006)
Since overseas sales amount is less than 10% of the total consolidated sales, the reference tooverseas sales is omitted.

23