financial statements balance sheet

Financial Statements Balance Sheet (In millions of yen)

Account

Increasesand

decreases

Fiscal termended

March 2007(As of Mar. 31, 2007)

Interim termending

September 2006(As of Sept.30, 2006)

Interim termending


(Assets)

1. Current Assets

Cash and Deposits

Marketable Securities

ShortTerm Loans to Affiliates

Other

Total Current Assets

2. Fixed Assets

Tangible Fixed Assets

Intangible Fixed Assets

Investments and Other Assets

Shares of Affiliates

Other

Total Investments and Other Assets

Total Fixed Assets

Total Assets

4,248

5,494

4,602

163

14,508

10

5

43,279

1,689

44,969

44,985

59,494

5,285

5,997

4,430

167

15,880

13

2

43,087

1,389

44,476

44,492

60,373

6,585

3,496

4,534

315

14,931

10

2

43,279

1,386

44,666

44,679

59,611

(-)2,337

1,998

68

(-)152

(-)422

(-)0

2

--

303

303

305

(-)117

(In millions of yen)

Account

Increasesand

decreases

Fiscal termended

March 2007(As of Mar. 31, 2007)

Interim termending


Interim termending


5,090

12,094

30

22

166

17,403

--

100

100

17,504

(Liabilities)

1.Current Liabilities

　　Short Term Borrowings

　　Deposits from Affiliates

　　Reserve for Bonuses

　　Reserve for director’s Bonuses

Other

　Total Current Liabilities

2.Fixed Liabilities

　　Reserve for Retirement Benefits

　　Reserve for Directors Retirement Bonuses

　Total Fixed Liabilities

　Total Liabilities

(Net Assets)

1.Shareholders' equity

　　Common stock

　　Capital Surplus

Capital Reserve

Other Capital Surplus

Total Capital Surplus

　　Retained earnings

Other Retained earnings

　　 Unappropriated retained earnings

　 Total retained earnings

Treasury Stocks

Total Shareholders' Equity

2.Valuation and translation gain and loss

　　Valuation gain and loss on other securities

Total valuation and translation gain and loss

Total Net assets

Total liabilities and Net Assets

(Notes) 1.The figures that are shown above have been rounded off to the rearest unit displayed. (The same applies to the pages that follow hereinafter.)2. Increases and decreases are indicated based on a comparison between this consolidated accounting Interim term and the previous Interim term.

3,000

750

38,892

39,642

2,049

2,049

(-)2,949

41,742

(-)0

(-)0

41,742

60,373

4,965

13,393

37

33

127

18,556

0

74

74

18,631

5,030

12,276

33

53

179

17,572

1

91

93

17,665

60

(-)182

(-)2

(-)31

(-)13

(-)169

(-)1

8

7

(-)161

3,000

750

38,892

39,642

2,299

2,299

(-)2,951

41,990

(-)0

(-)0

41,990

59,494

3,000

750

38,892

39,642

2,253

2,253

(-)2,950

41,945

(-)0

(-)0

41,945

59,611

--

--

(-)0

(-)0

46

46

(-)1

44

(-)0

(-)0

44

(-)117

Account

1. Operating Revenues

Dividend Income

Management Fees

Business Agency Fees

Total Operating Revenues

2. General Administrative Expenses

Operating Income

3. Non-Operating Income

4. Non-Operating Expenses

Ordinary Income

5. Extraordinary Income

6. Extraordinary Losses

Net Income before Taxes

Corporate Income Tax, InhabitantsTax

and Enterprise Tax

Deferred Tax

Net Income

658

436

87

1,182

512

669

86

79

676

3

0

679

62

(-)2

619

Statements of Income (In millions of yen)

Increasesand

decreases

718

471

90

1,280

547

733

54

55

732

0

2

730

65

(-)11

676

(-)59

(-)34

(-)3

(-)97

(-)34

(-)63

31

24

(-)56

3

(-)1

(-)50

(-)3

8

(-)56

(-)7.6％

(-)8.6％

(-)7.6％

(-)6.9％

(-)8.3％

1,517

876

180

2,573

1,027

1,546

126

122

1,549

0

2

1,547

109

(-)15

1,453

Increases and decreases are indicated based on a comparison between Interim term 2007 and the Interim term 2006. (Notes)

Interim termending

September 2007(Apr. 1, 2007 –Sept. 30, 2007)

Interim termending

September 2006(Apr. 1, 2006 –Sept. 30, 2006)

Fiscal year endedMarch 2007(Apr. 1, 2006 –Mar. 31, 2007)

Unconsolidated Statement of Changes in Shareholders’ equity


Balance as of March 31, 2006

Changes during the interim period

Cash dividends paid*

Bonuses to directors*

Net income

Treasury stock purchased

Others

Total change during the interim period

Balance at September 30, 2006

Capital surplus

Shareholders' Equity

Retained earnings

Treasurystock

TotalShareholders'

Equity





Net income


Others



Valuationdifferences and

other marketablesecurities

Valuation and translation differences

Totalnet assets

*Appropriation approved at the annual meeting of shareholders held in June 2006.

Totalvaluation and

translationdifferences

41,698

(-)573

(-)58

676

(-)0

43

41,742

(-)2,949

(-)0

(-)0

(-)2,949

2,004

(-)573

(-)58

676

44

2,049

3,000

ー3,000

41,698

(-)573

(-)58

676

(-)0

(-)0

43

41,742

ー

(-)0

(-)0

(-)0

Interim term ending September 2006 (Apr.1, 2006 - Sept.30, 2006)

Commonstock

Capitalreserve

Othercapitalsurplus

Totalcapitalsurplus

Otherretainedearnings

Unappropriatedretainedearnings

Totalretainedearnings

750

ー750

38,892

ー38,892

39,642

ー39,642

2,004

(-)573

(-)58

676

44

2,049

ー

(-)0

(-)0

(-)0




Cash dividends paid

Net income


Disposal of treasury stock

Others



Capital surplus


Retained earnings

Treasurystock

TotalShareholders'

Equity



Cash dividends paid

Net income



Others






Totalnet assets

Totalvaluation and


41,945

(-)573

619

(-)1

(-)0

44

41,990

(-)2,950

(-)1

(-)1

(-)2,951

2,253

(-)573

619

46

2,299

3,000

ー3,000

41,945

(-)573

619

(-)1

(-)0

(-)0

44

41,990

(-)0

(-)0

(-)0

(-)0


Commonstock

Capitalreserve

Othercapitalsurplus

Totalcapitalsurplus




750

ー750

38,892

(-)0

(-)0

38,892

39,642

(-)0

(-)0

39,642

2,253

(-)573

619

46

2,299

(-)0

(-)0

(-)0

(-)0



Changes during the period


Cash dividends paid


Net income

Purchases of treasury stock


Net changes of items other than shareholders’ equity

Total change during the period

Balance at March 31, 2007

Capital surplus


Retained earnings

Treasurystock

TotalShareholders'

Equity




Totalnet assets

*Appropriation approved at the annual meeting of shareholders held in June 2006.

Totalvaluation and


41,698

(-)573

(-)573

(-)58

1,453

(-)1

0

246

41,945

(-)2,949

(-)1

0

(-)1

(-)2,950

2,004

(-)573

(-)573

(-)58

1,453

248

2,253

3,000

ー3,000

41,698

(-)573

(-)573

(-)58

1,453

(-)1

0

(-)0

246

41,945

ー

(-)0

(-)0

(-)0

Commonstock

Capitalreserve

Othercapitalsurplus

Totalcapitalsurplus




750

ー750

38,892

(-)0

(-)0

38,892

39,642

(-)0

(-)0

39,642

2,004

(-)573

(-)573

(-)58

1,453

248

2,253

ー

(-)0

(-)0

(-)0

Fiscal year ended March 2007 (Apr. 1, 2006 – Mar. 31, 2007)


Changes during the period


Cash dividends paid


Net income

Purchases of treasury stock


Net changes of items other than shareholders’ equity

Total change during the period

Balance at March 31, 2007

Basis of Presenting Interim Financial Statements

1. Valuation Basis and Method for Securities(1)Shares of Subsidiaries

Same as left

(2) Other marketable Securities Assets with market value

2. Depreciation Method for Fixed Assets (1)Tangible Fixed Assets

1. Valuation Basis and Method for Securities(1) Shares of Subsidiaries Stated at cost using the moving average method

(2) Other marketable Securities Assets with market value We use the mark-to-market method based on the market value, etc. on the date of interim closing (Unrealized gains and losses are processed entirely by the direct capitalization method, and cost of products sold are calculated based on the moving average method)

2. Depreciation Method for Fixed Assets(1)Tangible Fixed Assets

Interim term ending September 2006(Six Months)


Fiscal year ended March 2007(One Year)

Declining balance method is applied. However, the straight line method is used for buildings (excluding improvements) acquired after April 1, 1998. Useful life is as follows:Buildings 5~13 yearsVehicles and transport equipment 6 yearsTools, furniture and furnishing 2~18 years

1. Valuation Basis and Method for Securities(1) Shares of Subsidiaries

Same as left

(2) Other marketable Securities Assets with market value

Same as left

2. Depreciation Method for Fixed Assets(1)Tangible Fixed Assets

Straight-line method is applied.

Buildings 5~13 yearsVehicles and transport equipment 6 yearsTools, furniture and furnishing 2~18 years

The market value method based on market prices, etc. on the closing date (all appraisal gains and losses are processed using the method of direct entry into net assets, and the cost of sales is calculated based on the moving average cost method.)

Declining balance method is applied. However, the straight line method is used for buildings (excluding improvements) acquired after April 1, 1998. Useful life is as follows:Buildings 5~13 yearsVehicles and transport equipment 6 yearsTools, furniture and furnishing 2~18 years

(Changes in Accounting Policy)The declining-balance was previously adopted as a method of depreciation of tangible fixed assets. (The straight-line method was adopted for depreciation of buildings (excluding building fixtures) acquired after April 1, 1998. From the interim fiscal year under review, the method was changed to the straight-line method. The Group has examined its recent aggressive capital spending on showrooms and nursing care stores to change its business to one that focuses on markets, in an effort to achieve the medium-term business plan developed during the interim consolidated fiscal year under review. The Group has also examined the use of other tangible fixed assets. The above examinations showed that, generally speaking, the rate of use was likely to remain steady for a long period, and that the impact of capital spending and its contribution to earnings were likely to remain similarly unchanged over the long term. As a result of these examinations, the depreciation methods have changed as described above to achieve a more appropriate balance between expenses and income and to reflect the management status more accurately, by evenly depreciating acquisition costs over the estimated useful life. In line with the above changes, from the interim fiscal year under review, the depreciation method for tangible fixed assets acquired after April 1, 2007 has changed to the depreciation method (straight-line method) based on the revised Corporation Tax Law. The impact of this change on the Group’s earnings was limited.

Basis of Presenting Interim Financial Statements

(2) Intangible Fixed Assets

3. Accounting for Reserves(1)Reserve for Bonuses To provide for bonuses to be paid to employees, the amount expected to be paid has been provided.

(2)Reserve for director’s Bonuses To prepare for the payment of bonuses to directors and corporate auditors, we recorded the amount of expected payment for the current business term to be incurred in the first half under review.

(3)Reserve for Retirement Benefits To prepare for retirement benefits to employees, we recorded the amount that is considered to have arisen at the end of this first half of the business term, based on the expected amount of retirement benefit liabilities at the end of the current business year. The retirement benefit liabilities are calculated based on a simplified method.

(4)Reserve for Directors' Retirement Bonuses




Straight-line method is applied.With respect to software for internal use, it is being depreciated using a straight line method over its internally useful life (5 years).

(Additional Information)In line with the revision of the Corporation Tax Law, assets acquired before March 31, 2007 are included in depreciation by evenly depreciating the difference between the amount equivalent to 5% of the acquisition costs and memorandum value over five years, from the consolidated fiscal year following the consolidated fiscal year when depreciation reached 5% of acquisition costs, in accordance with a depreciation method based on the Corporation Tax Law before the revision.This processing does not affect the Group’s earnings.

(2) Intangible Fixed Assets Same as left

3. Accounting for Reserves(1)Reserve for Bonuses

(2)Reserve for director’s Bonuses Same as left

(3)

(4)Reserve for Directors' Retirement Bonuses Same as left

(2) Intangible Fixed Assets Same as left

3. Accounting for Reserves(1)Reserve for Bonuses

(2)Reserve for director’s Bonuses

(3)Reserve for Retirement Benefits

(4)Reserve for Directors' Retirement Bonuses

The expected amount for the fiscal year under review is recorded to provide for the payment of bonuses to employees.

The expected amount for the interim fiscal year under review is recorded to provide for the payment of bonuses to employees.

The expected amount for the fiscal year under review is recorded to provide for the payment of bonuses to directors and officers.

To prepare for payment of employee’s retirement benefits, based on the expected amount of retirement payment obligations at the end of the business year under review, the Company recorded an amount that is recognized to have been incurred at the end of the business year under review. Further, we calculate retirement pay obligations by the facile method

To provide for the payment of retirement bonuses to directors, the amount expected to be paid on the balance sheet date based on internal regulations has been provided.

To provide for the payment of retirement bonuses to directors, the amount expected to be paid on the balance sheet date based on internal regulations has been provided.

4. Accounting for Leases

Same as left

5. Other Material in Preparing the Financial Statements(1) Accounting for Consumption Tax

Same as left


Same as left

5. Other Material Items in Preparing the Financial Statements(1) Accounting for Consumption Tax

Same as left


5. Other Material Items in Preparing the Financial Statements(1) Accounting for Consumption Tax

Finance leases other than those in which the title is not deemed to transfer to the lessee are accounted for as ordinary rental transactions.




The Consumption Tax and Municipal Tax are accounted for net of taxation.

-------------------------------------------

(Accounting Changes)




(Accounting standard for bonuses to directors and corporate auditors)The Accounting Standard for Directors’ Bonus (Accounting Standards Board of Japan Statement No. 4 on November 29, 2005) was applied from this first half of the consolidated business term. As a result of this application, operating profit, ordinary profit, and income before income taxes decreased by 33 million yen.

(Accounting standard for presentation of net assets in the balance sheet)The “Accounting Standard for Presentation of Net Assets in the Balance Sheet” (Accounting Standards Board of Japan Statement No. 5 on December 9, 2005) and the “Guidance on Accounting Standard for Presentation of Net Assets in the Balance Sheet” (Accounting Standards Board of Japan Guidance No. 8 on December 9, 2005) were applied from this first half of the consolidated business term. The amount that corresponds to the traditional Shareholders’ Equity was 41,742 million yen. Net Assets in the consolidated interim balance sheet for this first half of the consolidated business term were prepared in accordance with the revised Consolidated Interim Financial Statements Regulations along with the amendment of Consolidated Interim Financial Statements Regulations.

-------------------------------------------

(Accounting standard for bonuses to directors and corporate auditors)We have applied the Accounting Standard for Directors' Bonuses (ASB Accounting Standard No.4,, November 29, 2005) beginning the fiscal year under review. As a result, operating income, recurring income and net income before tax declined 53 million yen.

(Accounting standard for presentation of net assets in the balance sheet)We have applied the Accounting Standard for Presentation of Net Assets on the Balance Sheet (ASB Accounting Standard No. 5, December 9, 2005) and the Guidance on Accounting Standard for Presentation of Net Assets on the Balance Sheet (ASB Guidance No.8, December 9, 2005) beginning the fiscal year under review.An amount equivalent to the total of past shareholdersﾕ equity is the same as the amount of net assets.The net assets on the balance sheet for the fiscal year under review were prepared based on the revised financial statements regulation following the revision of the financial statements regulation.

Notes(Related to the Balance Sheet)

1.Accumulated Depreciation of Tangible Fixed Assets ¥ 5 million

2.Contingent Liabilities The Company has made debt guarantees (includes guarantee-like activities) for the borrowings, etc. of the following companies, etc. France bed International (Thailand) Co., Ltd. ¥217 million (69 million Thai baht) France bed Korea Co., Ltd. ¥12 million (100 million Won)

3.The Company has implemented France Bed Holdings Group Cash Management Service (CMS) to enable efficient funds investment and financing for the overall group. “Deposits from Affiliates” represents funds deposited under such cash management programs.

4.The Company has implemented France Bed Holdings Group Cash Management Service to enable efficient funds investment and financing for the overall group (hereinafter the “CMS”). The Company has entered into a Basic Agreement for CMS Investment Agency with the 6 group companies and has established the maximum loan limits under the CMS. The undisbursed loans for the interim accounting term under review under the agreement are as follows.

Gross Loan Limit under CMS ¥17,100 million Loans Disbursed ¥ 4,400 million

Net Undisbursed Amount ¥ 12,700 million

In the above Basic Agreement for CMS Investment Agency, there are some with restrictions on the use of funds, thus, not all amount is necessarily available to be lent.


2.Contingent Liabilities We provided a guarantee for the following debts from financial institutions. France bed Korea Co., Ltd. ¥18 million (150 million Won)

3. Same as the left

4. Same as the left


2.Contingent Liabilities We provided a guarantee for the following debts from financial institutions. France bed International (Thailand) Co., Ltd. ¥47 million (12 million Thai baht) France bed Korea Co., Ltd. ¥31 million (250 million Won)

3. Same as the left

4.The Company has implemented France Bed Holdings Group Cash Management Service to enable efficient funds investment and financing for the overall group (hereinafter the “CMS”). The Company has entered into a Basic Agreement for CMS Investment Agency with the 6 group companies and has established the maximum loan limits under the CMS. The undisbursed loans for the business year under review under the agreement are as follows.

Gross Loan Limit under CMS ¥17,100 million Loans Disbursed ¥ 4,400 million

Net Undisbursed Amount ¥ 12,700 million

In the above Basic Agreement for CMS Investment Agency, there are some with restrictions on the use of funds, thus, not all amount is necessarily available to be lent.

Interim term ending September 2006(As of Sept.30, 2006)


Fiscal year ended March 2007(As of Mar. 31, 2007)

5. Same as left

6. Consumption Tax

Same as left

5.The Company, to enhance the funding efficiency through dynamic and stable financing and to strengthen the financial position through reduction of interest-bearing debt, has entered into a commitment line agreement with syndicate of banks comprising of 11 relationship banks. As of this interim accounting term under review, the undrawn commitments under the facility are as follows.

Gross Commitment Amount ¥5,000 million Amount Drawn ¥ 0 million

Net Amount ¥ 5,000 million

6. Consumption Tax Suspense consumption tax payment and consumption tax receipt are netted and the balance is presented as "Other current liabilities."

5.The Company, to enhance the funding efficiency through dynamic and stable financing and to strengthen the financial position through reduction of interest-bearing debt, has entered into a commitment line agreement with syndicate of banks comprising of 11 relationship banks. As of the end of the business year under review, the undrawn commitments underthe facility are as follows.

Gross Commitment Amount ¥5,000 million Amount Drawn ¥ 0 million

Net Amount ¥ 5,000 million

6. -------------------------------------------




(Relating to the Statement of Income)

1. Principal Items in the Non-Operating Income Interest Income ¥32 million2. Principal Items in the Non-Operating Expenses Interest Expense ¥36 million3. Depreciation expense Tangible Fixed Assets ¥2 million Intangible Fixed Assets ¥0 million






Statement of Changes in Net AssetsInterim term ending September 2006 (Apr.1, 2006 - Sept.30, 2006)

Type of treasury stock and common shares issued (thousand shares)

Common shares(note)

Total

Increase of sharesduring Interim term ending

September 2006

Number of sharesas of Fiscal term ended

March 2006

Decrease of sharesduring Interim term ending

September 2006

Number of sharesas of Interim term ended

September 2006

10,027

10,027

2

2

ーー

10,030

10,030

(Note) An increase of 2,000 common shares in treasury shares was due to the purchase of shares constituting less than one unit.



Common shares(note)

Total

Increase of sharesduring Interim term ending

September 2007


March 2007

Decrease of sharesduring Interim term ending

September 2007

Number of sharesas of Interim term ended

September 2007

10,033

10,033

5

5

0

0

10,038

10,038


Common shares(note)

Total

Increase of sharesFiscal year ended

March 2007


March 2006

Decrease of sharesFiscal year ended

March 2007


March 2007

10,027

10,027

6

6

ーー

10,033

10,033

(Note) 1.The increase in the number of treasury stocks of 6,000 shares reflects requests for the purchase of shares, the number of which is less than one stock trade unit. 2.The decrease in the number of treasury common shares of 0 shares reflects requests for the purchase of additional shares, the number of which is less than one stock trade unit.

Fiscal year ended March 2007 (Commenced Apr. 1,2006 and ended Mar.31, 2007)

(Note) 1.The increase in the number of treasury stocks of 5,000 shares reflects requests for the purchase of shares, the number of which is less than one stock trade unit. 2.The decrease in the number of treasury common shares of 0 shares reflects requests for the purchase of additional shares, the number of which is less than one stock trade unit.

(Leases)

1.Finance leases in which the right of ownership is not transferred to the lessee(1) Purchase cost, accumulated depreciation, impairment losses and balance at end of period

(2) Amount equivalent to the closing balance of the unearned lease fees Within one year ¥0 million More than one year ¥2 million Total ¥3 million

(3) Lease payments,impairment loss account write-off,depreciation expenses, interest expenses and impairment losses Lease payments ¥0 million Depreciation expenses ¥0 million Interest expenses ¥0 million

(4) Method of calculating depreciation expenses Same as the left

(5) Method of calculating interest expense Same as the left

(Impairment losses) Same as the left

Purchasecost


Accumulateddepreciation

balance atend of period

4 2 2




Purchasecost




4 1 2




(4) Method of calculating depreciation expenses Same as the left

(5) Method of calculating interest expense Same as the left

(Impairment losses) Same as the left




(4) Method of calculating depreciation expenses Depreciation expenses is calculated by the straight-line method over the lease term of the lease asset assuming no residual value.

(5) Method of calculating interest expense Interest expense calculated by the interest method, whereby the difference between total lease payment and purchase cost is distributed in equal installments over the term of the lease. (Impairment losses) No asset impairment loss is allocated to assets for lease.

Purchasecost




4 1 3 Cars and Vehicles

Cars and Vehicles

Cars and Vehicles

(Relating to Securities)

There are no shares of subsidiaries with readily determinable market values.

(Per Share Information) As preparation of interim consolidated financial statements, this item has been omitted.

(Material Subsequent Events) No corresponding items.




Same as the left Same as the left

Home Furnishings

Acute and Long Term Care

Other

Total

5,613

968

--

6,581


Name of Business Segment

(Note) 1. Values are according to the manufacturing cost. 2. Above figures do not include consumption tax.

(Note) 1. Inter-segmental transactions have been offset and eliminated. 2. Above figures do not include consumption tax.

Production, Orders and Sales


(Note) 1. Values are based on procurement price and inter-segment transactions have been offset and eliminated.2. Above figures do not include Consumption Tax.

(Note)

2. Orders

3. Sales

Given that products of the Group are manufactured in a relatively short period in general and that it is difficult to calculate the mark-to-stock production and the built-to-order manufacturing separately as we apply both to the same products, we have omitted the separate description.

1. Production (a) Production Production breakdown by business segment during the this interim consolidated accounting period under review is as follows.

(b) Subcontracting Subcontracting record by each business segment during the this interim consolidated accounting period under review is as follows.

(c) Procurement Procurement record for each business segment during the this interim consolidated accounting period under review is as follows.

Sales by business segment during the this interim consolidated accounting period under review are as follows.

(-)8.8%

(-)10.2%

--

(-)9.0%

Interim term ending September 2007 (Commenced Apr. 1,2007and ended Sept.31, 2007)

Corresponding ratioto the previous year


Home Furnishings


Other

Total

864

217

580

1,661


(-)16.5%

(-)35.5%

--

21.0%


Home Furnishings


Other

Total

3,006

2,407

1,160

6,573


(-)14.3%

(-)0.7%

(-)19.6%

(-)10.9%



Home Furnishings


Other

Total

15,748

11,288

3,264

30,302


(-)6.2%

(-)13.4%

(-)6.8%

(-)9.1%


1. Inter-segmental transactions have been offset and eliminated. 2. Above figures do not include consumption tax.




financial statements balance sheet

Business

france bed international

maximum loan limits

france bed korea

stock trade unit

include consumption tax

interim term ending

intangible fixed assets

accounting standards board