2015
Kurimoto, Manufacturing the Future

ANNUAL REPORT
Year ended March 31,2015

KURIMOTO, LTD.
In 1909 Kurimoto, Ltd. began operations as manufacturer of cast ironpipes for water and gas mains. With determination and foresight, thecompany soon began to diversify into other fields, serving the industrial
sector in a multitude of ways.
The major divisions of Kurimoto now provide ductile iron pipes, plant
equipment and engineering services, valves, and construction materials.
Involvement with and commitment to large-scale projects has enabled
Kurimoto to expand its areas of expertise, be it in land development,
industrial modernization, or urban renewal and construction. 12
factories located throughout Japan comprise the company’s industrial
base which, together with 17 subsidiary companies, make up the
Kurimoto group employing about 2,000 people. Today, Kurimoto plays avital role in supplying basic industrial products, machines, and services
domestically and abroad.

Contents
Financial Highlights
Message from the President
Business Operations
Consolidated Subsidiaries
Financial Section

1
2
3
4
5

Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of changes in net assets
Consolidated Statements of Cash Flows

Notes to Financial Statements
Report of Independent Auditors
Corporate Information

10
18
19

Financial Highlights

Years ended March 31
Net sales ……………………………………………………………………………………………………
Net income (loss) …………………………………………………………………………………
Per 1,000 shares of common stock
Net income (loss) …………………………………………………………………………………
Cash dividends ………………………………………………………………………………………
Total assets ………………………………………………………………………………………………
Total shareholders' equity ………………………………………………………………

Millions of yen (thousands of U.S. dollars) except per 1,000 share information
2015
2014
2013
2012
2011
¥98,394¥103,664¥98,175¥97,075¥94,973
1,598
3,747
2,898
2,206
1,478
12,3374,000
127,884¥49,144

28,3474,000
129,021¥44,921

21,9284,000
129,934¥45,586

16,6862,000
129,052¥41,842

11,1792,000
123,849¥40,017

Notes: The U.S. dollar amounts are calculated at the exchange rate of ¥120.17 to $1, the rate prevailing on March 31, 2015.

160,000

Net Sales (¥ million)

140,000
120,000
100,000

94,973

97,07598,175

'11

'12

'13

103,664

98,394'14'15

80,00005,000

Net Income (¥ million)
3,747

4,000

2,898
3,000

2,206
2,000

1,598

1,478

1,000
0

40

'11

'12

'13

'15

Net Income per Share of Common Stock (¥)
28.35

30
20

'14

21.93
16.69

12.34

11.18

10
0

52,000

'11

'12

'13

'14

'15

Shareholder’s Equity (¥ million)
49,14450,00048,00045,58646,00044,92144,00041,84242,00040,01740,000
0

'11

'12

'13



'14

'15

2015
$818,794
13,301102
33
1,064,199$408,959

Message from the President

I would like to outline our business activities in the 119th term.
I would like to outline here our businessactivities in the 118th term.

As previously noted, we did witness a
new business agenda that emerged in thisIn the fiscal year that ended on March 31, 2015fiscal(FY2014),
the Japanese
recoveredyear. Basedon these economy
new challenges,
weslowly. Corporate earnings and employment improved
measureswill striveastoeconomic
acceleratestimulus
our efforts
to grow asandmonetaryeasingweakened
the yen and fueled aa corporate
stock market
wereandconcerns
grouprally.
in theThere
next term
During thisconsolidated
accounting
about
ofeconomy
slowing growthin emergingbeyond.
countries and weakness in resourceperiod,thetheeffects
Japaneseshowed signs

producing
priceof crude oil fell. However, the global economy was generallyof recovery,countries
partly dueas
tothecertainmonetaryand financial
policies.
These
aboutrecoveryahealthybecauseof theU.S.brought
economic
and an economic rebound in Europe.
correction to the yen’s appreciation and an

Aims, Progress, and Strategies of the Three-upgradethesein stock
prices, as wellthe
as an
Under
circumstances,
Kurimoto Group's
in FY2014 failed to reach theYearperformance
Mid-Term Plan
improvement
in corporate
estimate
at thebeginningearnings.
of the fiscal year, with the consolidated sales at 98.3 billion yen
However, the outlook for the economy still
and the operating income at 2.9 billion yen.
remains unclear due to several negative
The primary target of the three-year
factors. These include a rise in raw material
mid-term plan that we have been actively
However,the market
environment
for the Groupis not unfavorable.
socialancosts, the impact
on consumer
spending
promotingsince 2012 is In“tothebecomeinfrastructure
market,theconsumption
viewpoint ofdisasterattractive
prevention
and reduction
is canrequiredmorethrough the increasein thetax,
corporategroup thatgeneratethanever in orderto downward
look aheadswing
to theJapan.
The needfor
forfurthera tougher
and concerns
over thein future ofnew
opportunities
operatingthe overseas economic
environment
causedwith betheableaim oftheproposals
sales
infrastructureis expected
to continue
growing. revenue,
We will also
toexceeding
make newbygrowing
decliningfields,
economiesof the100 expectedbillion yen population(971 million USinsuchinassome
stockemerging
management in target
view ofdecline incountries.
dollars) in three years.” In line with this, weJapan.
In the midst of these circumstances, thehave mainly focused on global businessgroup set targets of 99 billion yen (961
expansion, development of human resources,
In the meantime, in the other business field of industrial
equipment, our performancemillion US dollars) for sales and 4.5 billion
and reform of the profit-making structure for
substantiallydependsonpolicies
and
plans
for
capitalinvestment that our customers haveyen (43 million US dollars) for operatinga healthier financial standing and sustainableinvarious
motivation
forgrowth.
capital investment is recovering amongincomeforindustries.
this period, Fortunately,
and, as a result,wemanufacturers
Japan,
owing
to the recent favorable
economic
perceptions
foreignhave managed toinreachthesetargets.
Thankfully,
we canreport that andwe haveexchange
At thesame
time,weconstruction
demandremainsteadyDespiterate.
reaching
thesetargets,arebeen ableistoexpected
reach theto
sales
targetsof thisfor
not really
100 percent
satisfiedwith thethree-yearplan asof the end
severalyears
in the Tokyo
metropolitan
area andother urban
regionsdue oftothisthefinancial
Tokyo
result, dueGames,to the operational
performanceterm.
as mentioned
above,
we werefor
Olympics
etc. In foreigncountries as well,theHowever,Group hasan excellent
reputation
details
for eachmaintenance,business area. Sales
did maintenance,show
not andableotherto meetour profit
target despite
its
preventive
normaldetailed
after-sales
services on
an increaseproducts.
from the last term, but profit
remarkably exceeding the target in thedelivereddecreased, resulting in figures below theprevious term. Nevertheless, we will maketarget that was set at the time of thestrenuous efforts to forge ahead with the
Based
on
these
outlooksforthemarketenvironment,
we formulated the new three-year
formulation of the three-year mid-term planbusiness expansion of existing business areas
medium-termbusiness
plan.
The
key
goals
of
the
new
plan are and1) “customer
creation,”
we have been promoting since 2012.
in both domestic
overseas markets.
In
whereproactive
approaches
should area,
be taken toorderaccesscustomers
in foreigncountries
In termsof eachindividual businessto realize
this, we
will speed
up the andnewfields;2) “businesscreation,”shouldentailwe haveexperienced
a drastic
declinewherein salesour businessprocess operationsof our existing
researchandnot only thecomparedoftoproducts,that of thebut
previous
term in thedeliveryalso planning,
design, procurement,
construction
otherdevelopment projects,
conductand
thoughtful
Plant System aspects;
Engineering
This wasand precise
salesthoroughactivities, measuresand also makea beengineeringandDivision.
3) “recovery
of profitability,”
whereshouldbecausehadreduction
already posted
most of the improvement.
solid effort in cost-effective productivity
taken
forwe
cost
and productivity
sales related to one of our high profile
improvement.
projects, a large-scale plant in theSummary up to FY2014 and goals for the next three years
Philippines, in the previous term.
Although this did not actually affect thisThe
Group’s
previous
medium-term business plan was from FY2012 to FY2014.
term’sperformance,thethree-year
Plant EngineeringThisplan aimedDivisionat becoming
and Machinery
also sawana attractive company that while ensuring stable earnings,
steadilydevelops
newduesourcesof revenue to meet the target of achieving net sales of 100
deteriorationin orders
to weakening
interestyenfromin capitalbillionascustomers
a corporategroup. Toward this goal, we pursued the group management
investments,
especially fiscal
in thesoundness,
Chinesepoliciesof improving
reform of the earnings structure, global businessmarket, and thecancellingof orders
for resources.
deployment,
andcultivationof humanproducts related to forging presses.

We have been able to reduce interest-bearing liabilities as scheduled and steadily improvethe capital-to-asset ratio. On the other hand, net sales in FY2014 as the final year of the planfailed to reach the initial target of 100 billion yen. Earnings declined considerably. The
overseas sales ratio remained at the same level, not able to achieve a substantial
improvement.
The behavior of customers dramatically changed over these three years, and it was one of
the reasons for the failure in attaining our targets. But more importantly, we still have manyrequirements that need to be addressed. Under the new three-year medium-term businessplan, we are seeking to recover our profitability through cost reduction and productivity
improvement, and to rapidly launch new products and businesses supported by therecovered profitability for the successful attainment of our next target, net sales of 120
billion yen.



Hideaki Fukui
President

June 2015

Hideaki Fukui
President

Business Operations

Corporate group sales by business area (in millions of yen)

Industrial materials business23.5 %

119th
accounting period
98,394
Pipe system business57.7 %

Machinery system business18.8 %

ࠉ

Pipe system business
As to thepipe pipe
systemsystembusiness,businesswhile sales
from powerby
and2,986
steel sectors
andyenfromSales
in thedecreased
millionoverseas
declinedin theValve
Division, million
the Ductile
IronAlthough
Pipe Division
fromtheprojects
previous
fiscalyear
to 56,751
yen.
delaysreceived a healthy level of orders due to the formulation of the supplementaryinordersuchplacingin theDuctileand
Iron
Pipe
Divisionwere
graduallybudget,as ordersfor medium
large
diameterpipes,and increased
improved
the determination
andhighpublication
ofproducts.
the unit
pipes and othervalue-added
shipments offollowing
new-type anti-seismic
As a result,
fromworks
this businessincreasedfrom thepreviouslaborcoststotal
forsalespubliceffective
February2014
by the Ministry
consolidated
fiscal year by 3,411
million yen,
59,737 million
yen.
ofLand, Infrastructure,
Transport
andtoTourism,shipments
had yet toOperating income, on the other hand, decreased from the previous consolidatedberecoveredandremainedslow.
fiscal year by 334 million yen, to 3,506

Industrial materials business
As to inthetheindustrial
materials
business,businesssales in Construction
Division
Sales
industrial
materials
increasedMaterials
by 1,954
millionincreased with growth in shipments of noise reduction products for expressways
yen
from
the
previous
fiscalyear
to23,127
millionyen.
Sales
in theand of civil engineering products, as well as with acquisition of Nihon Kaiser Co.,
Plastic
Division
wasin slow,
duequarterto a decline
in the shipments
Ltd. as aProducts
consolidated
subsidiary
the secondof the consolidated
period. Plastic
also increased
shipments
of industry,
toaccounting
the agriculturalandProducts
fishery Divisionindustries,
and to the
power
products
to agriculturaland fisheryindustries
and fiscal
maintainedlevelother
of
which
both
saw increases
in theprevious
year.a solid
On theproduct shipment to the power industry. As a result, sales from the business
hand,
even
thoughconstruction
works
were
delayedintheincreased from the previous consolidated fiscal year by 2,680 million yen, toConstruction
Materials Division, projects related to buildings and21,173 million yen.
Operating incomewere
increasedfromintheOsaka and in the Tokyo metropolitan
condominiums
steadyprevious
consolidated
fiscal year
by 82
area,
includingincreased
shipmentsof air-conditioning equipment.
million yen, to 819 million yen, as the rise inThe
numberofconsolidated
subsidiaries
increased in the second
the prices of steel, resin and other raw
quarterthepreviousyear,materialsofwas
offsetby profitfiscal
increase
as awhich also contributed to higher
result of increased revenue as well as by costsales.

million yen, due to rise in prices ofiron scrap andother rawmaterials, by 1,489 million yen from the previous
Operatingincomedecreased
which year
offset tothe2,016
profit increasea because even though the share of
fiscalmillionasyen,
result of an increase in revenue.
high value-added products in shipments increased, and efforts weretaken for cost reduction, the impact of decreased revenue wassubstantial.

reduction achieved through increase inproduction volume.
Operatingincome decreased by 177 million yen from the previous
fiscal year to 642 million yen, as the prices of steel, resin and otherraw materials remained higher than in the previous fiscal year,
combined with the decreased share of relatively profitable products
in shipments.

Machinery system businessIn the machinery system business, sales declined by 4,238 million yen
In the machinery system business, sales declined from the previous consolidated
fromthe byprevious
fiscalto 18,515
millionwasindue to a
fiscal year
602 million
yen, year
to 22,753
million yen,
due toyen.
salesThisdecreasedecreasein projectsprojects
involvinglarge
powdersystems inlarge-scale constructionin thePlantplants
System withEngineering
Division,
althoughEngineeringand
and Machinery
Divisionincreased
shipmentsof rollthePlantPlant
Engineering
Machinery
Division,
as wellas fewerforging machines.
shipmentsof large-sized forging machines and other causes, despite
Operating income dropped from the previous consolidated fiscal year by 219
the
sales
due tosome
Materials
millionyen,increase
to 1,008 million
yen,
due tolarge
lowerprojects
shipment in
ratetheof products
withandMachinery
Division.
higher profit margins
in addition to profit decrease as a result of decline inrevenue.

Operating income dropped by 518 million yen from the previous
fiscal year to 490 million yen, due to a substantial impact of
decreased revenue in the Plant Engineering and Machinery Division,even though profitability was improved in the Materials andMachinery Division and the Plant System Engineering Division.

Consolidated Subsidiaries

Kurimoto, Ltd. produces and sells various kinds of products, such as iron pipes, valves, machinery, steel structures, light steel
pipes, and stage pressure machines. Kurimoto’s business affiliates are run as an enterprise group and the related companies
are described below.
Kurimoto Trading Co., Ltd.

Ks-Tech Co., Ltd.

Operations:
Capital:Operations: Manufacture and sales of forging machinery
Capital:¥300 million (US$2,496,463)
Stockholder: 67% of stock is owned by Kurimoto,Ltd. and
33% by Sato Tekko Co., Ltd.
Established: April 2007 and became a subsidiary in 2007
Orders:¥1,659 million (US$13,812 thousand)(5.6% decrease)
Sales:¥1,388 million (US$11,558 thousand)(53.0% decrease)

Sales of cast iron pipes, valves, and synthetic resin products¥200 million (US$1,664,308)
Stockholder: All stock is owned by Kurimoto, Ltd.
Established: December 1952 as a subsidiary of Kurimoto, Ltd.
Orders:¥17,395 million (US$144,756 thousand)(5.9% decrease)
Sales:¥17,333 million (US$144,240 thousand)(8.3% decrease)

Kurimoto Logistics Corporation

Hokkaido Kanzai Co., Ltd.

Operations:Operations: Sales of cast iron pipes,valves, and synthetic resin products
Capital:¥30 million(US$249,646)
Stockholder: 80% of stock is owned by Kurimoto,Ltd. and
20% by Kuwazawa Trading Co., Ltd.
Established: April 1992 and became a subsidiary in 2007
Orders:¥7,185 million (US$59,791 thousand)(0.2% increase)
Sales:¥7,185 million (US$59,791 thousand)(0.2% increase)

Procurement and transportation of rawmaterials ductile
iron pipes and others
Capital:¥90 million (US$748,939)
Stockholder: All stock is owned by Kurimoto, Ltd.
Established: March 1960 and became a subsidiary in 2001
Orders:¥2,020 million (US$16,811 thousand)(2.4% decrease)
Sales:¥2,020 million (US$16,811 thousand)(2.4% decrease)

Sasebo Metal, Co., Ltd.

Yashima Chemical Engineering Co., Ltd.

Operations:Operations:

Production and sales of cast iron, cast iron products,
and other cast metal products
Capital:¥100 million (US$832,154)
Stockholder: All stock is owned by Kurimoto, Ltd.
Established: April 2000 as a subsidiary of Kurimoto, Ltd.
Orders:¥1,360 million (US$11,325 thousand)(3.7% decrease)
Sales:¥1,318 million (US$10,973 thousand)(4.1% decrease)

Manufacture and sales of chemical and pharmaceuticalequipment
Capital:¥45 million (US$374,469)
Stockholder: All stock is owned by Kurimoto, Ltd.
Established: July 1958 and became a subsidiary in 2004
Orders:¥541 million (US$4,504 thousand)(61.3% increase)
Sales:¥505 million (US$4,203 thousand)(41.1% increase)

Yamatogawa Co., Ltd.

Nihon Kaiser. Co., Ltd.

Operations: Sales of cast iron pipes, valves, and synthetic resin products
Capital:¥60 million (US$499,292)
Stockholder: 95% of stock is owned by Kurimoto, Ltd. and
5% by Marubeni-Itochu Steel Inc.
Established: December 1972 and became a subsidiary in 2004
Orders:¥21,203 million (US$176,441 thousand)(0.8% increase)
Sales:¥18,890 million (US$157,201 thousand)(12.7% decrease)

Operations: Manufacture and sales of half precast products
Capital:¥90 million (US$748,939)
Stockholder: All stock is owned by Kurimoto, Ltd.
Established: July 2013 and became a subsidiary in 2013
Orders:¥3,108 million (US$25,870 thousand)(12.1% increase)
Sales:¥3,079 million (US$25,629 thousand)(145.2% increase)

Motoyama Eng. Works, Ltd.

Kurimoto Business Associates Co., Ltd.

Operations: Manufacture and sales of industrial valves
Capital:¥300 million (US$2,496,463)
Stockholder: All stock is owned by Kurimoto,Ltd.
Established: December 2006 and became a subsidiary in 2007
Orders:¥5,412 million (US$45,037 thousand)(6.7% increase)
Sales:¥5,053 million (US$42,051 thousand)(0.9% decrease)

Operations:Management and leasing of real estate, staffing
service, travel agency, insurance agency
Capital:¥100 million (US$832,154)
Stockholder: All stock is owned by Kurimoto, Ltd.
Established: September 1967 and became a subsidiary in 2014
Orders:¥894 million (US$7,446 thousand)(169.9% increase)
Sales:¥894 million (US$7,446 thousand)(169.9% increase)Financial Section

Consolidated Balance Sheets
Thousandsof U.S. dollars(Note 2)

March 31, 2015 and 2014
Millions of yen

AssetsCurrent assets
Cash and deposits …………………………………………………………………………………………………
Notes and accounts receivable-trade ………………………………………………………
Notes and accounts receivable-trade—— unconsolidated subsidiaries and affiliates ……………………………
Merchandise and finished goods …………………………………………………………………
Work in process ………………………………………………………………………………………………………
Raw materials and supplies ……………………………………………………………………………
Deferred tax assets (Note 8) ……………………………………………………………………………
Prepaid expenses and other current assets …………………………………………
Allowance for doubtful accounts …………………………………………………………………
Total current assets
Property, plant and equipment
Buildings and structures ……………………………………………………………………………………
Machinery, equipment and vehicles …………………………………………………………
Tools, furniture and fixtures ……………………………………………………………………………
Land …………………………………………………………………………………………………………………………………
Lease assets ………………………………………………………………………………………………………………
Construction in progress ……………………………………………………………………………………
Accumulated depreciation ………………………………………………………………………………
Total property, plant and equipment ………………………………………………………………
Investments and other assets
Investment securities —— other …………………………………………………………………
Investment securities—— unconsolidated subsidiaries and affiliates ……………………………
Long-term loans —— other ……………………………………………………………………………
Long-term loans—— unconsolidated subsidiaries and affiliates ……………………………
Other investments …………………………………………………………………………………………………
Allowance for doubtful accounts …………………………………………………………………
Long-term prepaid expenses and other …………………………………………………
Total investments and other assets …………………………………………………………………
Total assets



2015

2014

2015

¥18,776
38,489¥24,577
36,597$156,251
320,289

22
10,525
4,933
2,480
1,222
919
(47)
77,320

11
9,222
4,214
2,441
1,834
1,048
(70)
79,877

185
87,584
41,051
20,63910,172
7,651(396)
643,428

25,22850,1199,606
15,230433
1,072(68,629)
33,061

23,203
48,574
9,423
15,237420
2,351(66,200)
33,009209,944417,070
79,937
126,741
3,605
8,927(571,104)
275,123

14,45812,738120,321

448
18

628
12

3,733
155

100
1,934
(318)
859
17,502¥127,884

100
2,408
(512)
759
16,134¥129,021

832
16,098(2,648)7,155
145,647$1,064,199

Financial Section

Thousandsof U.S. dollars(Note 2)Millions of yen

Liabilities and Shareholders’ Equity
Current liabilities
Notes and accounts payable-trade ……………………………………………………………
Notes and accounts payable-trade—— unconsolidated subsidiaries and affiliates ……………………………
Short-term loans payable (Note 3) ……………………………………………………………
Current portion of long-term debt (Note 3) …………………………………………
Lease obligations ……………………………………………………………………………………………………
Income taxes payable …………………………………………………………………………………………
Accrued liabilities ……………………………………………………………………………………………………
Advances received …………………………………………………………………………………………………
Employees’ savings deposits …………………………………………………………………………
Other current liabilities ………………………………………………………………………………………
Total current liabilities
Long-term liabilities
Net defined benefit liability (Note 4) …………………………………………………………
Long-term debt (Note 3) ……………………………………………………………………………………
Lease obligations ……………………………………………………………………………………………………
Deferred tax liabilities (Note 8) ……………………………………………………………………
Asset retirement obligations …………………………………………………………………………
Other long-term liabilities …………………………………………………………………………………
Total long-term liabilities …………………………………………………………………………………………
Total liabilities …………………………………………………………………………………………………………………
Net assets
Shareholders’ equity
Capital stock …………………………………………………………………………………………………………
Authorized: 393,766,000 shares
133,984,908 shares in 2014
Issued:133,984,908 shares in 2015
Capital surplus ……………………………………………………………………………………………………
Retained earnings ……………………………………………………………………………………………
Treasury stock ……………………………………………………………………………………………………
Total shareholders’equity …………………………………………………………………………………
Accumulated other comprehensive income
Valuation difference on available-for-sale securities ………………
Deferred gains or losses on hedges ……………………………………………………
Remeasurements of defined benefit plans ……………………………………
Total accumulated other comprehensive income ……………………………
Minority interests ……………………………………………………………………………………………
Total net assets ………………………………………………………………………………………………………………
Total liabilities and net assets ………………………………………………………………………………
The accompanying notes are an integral part of these financial statements.



2015

2014

2015

¥26,529¥25,852$220,765

5
23,448
2,336
63
218
3,200
1,698
425
1,939
59,867

724,93913,342
71
223
3,768
829
404
3,300
72,74049
195,127
19,447530
1,815
26,637
14,131
3,542
16,140498,186

6,826
9,443
132
1,245
137
648
18,43378,300

8,662
480
161
836
137
694
10,972
83,71356,80578,584
1,100
10,365
1,143
5,392
153,392
651,579

31,186

31,186

259,516

6,959
12,563(1,092)
49,616

6,959
9,749
(392)
47,503

57,916
104,549(9,093)412,8883,949(5)(4,416)(472)
439
49,584¥127,884

2,630(5,211)(2,581)386
45,307¥129,021

32,864(44)(36,749)(3,928)3,660
412,620$1,064,199

Financial Section

Consolidated Statements of Income

2015¥98,394
76,21922,175
19,2502,925

2014¥103,664
79,26824,39518,993
5,402

Thousandsof U.S. dollars(Note 2)
2015
$818,794
634,262
184,531
160,190
24,341

335
(405)

327
(498)

2,792
(3,372)

(275)
2,579

(361)
(300)
(349)
0
(222)
3,997

(2,294)
21,467

285
641
927
1,652
54
¥1,598

320
(139)
180
3,816
69
¥3,747

2,373
5,341
7,714
13,752450$13,301

Years ended March 31, 2015 and 2014

Millions of yen

Net sales ………………………………………………………………………………………………………………………………
Cost of sales ………………………………………………………………………………………………………………………
Gross profit ………………………………………………………………………………………………………………………
Selling, general and administrative expenses ……………………………………………
Operating income …………………………………………………………………………………………………………
Other income and (expenses)
Interest and dividend income …………………………………………………………………………
Interest expense ………………………………………………………………………………………………………
Loss on valuation of investments in capital ofsubsidiaries and associates ………………………………………………………………………
Provision for loss on litigation ………………………………………………………………………
Loss on disposal of fixed assets ……………………………………………………………………
Gain on sales of investment securities ……………………………………………………
Others, net …………………………………………………………………………………………………………………
Income before income taxes and minority interests ……………………………
Income taxes (Note 8)
Current ……………………………………………………………………………………………………………………
Deferred …………………………………………………………………………………………………………………
Total …………………………………………………………………………………………………………………………
Income before minority interests ………………………………………………………………………
Income before minority interests ………………………………………………………………………
Net income ………………………………………………………………………………………………………………………

yen
2015
Net income per 1,000 shares:
Basic …………………………………………………………………………………………………………………………
Diluted ……………………………………………………………………………………………………………………
Cash dividends per 1,000 shares ………………………………………………………………………

2014¥12,337
12,337
4,000

U.S. dollars(Note 2)
2015

¥28,347
28,347
4,000

$102
102
33

2015
¥1,652

2014¥3,816

Thousandsof U.S. dollars(Note 2)
2015
$13,752

1,320
(5)
795
2,110
3,762
3,708
54

1,331
1,331
5,148
5,078
69

10,984(44)
6,618
17,55931,31130,857454

Consolidated Statements of Comprehensive Income
Years ended March 31, 2015 and 2014

Millions of yen

Income before minority interests ………………………………………………………………………
Other comprehensive income
Valuation difference on available-for-sale securities ……………………
Deferred gains or losses on hedges ……………………………………………………………
Remeasurements of defined benefit plans …………………………………………
Total other comprehensive income ……………………………………………………………
Comprehensive income ……………………………………………………………………………………………
Comprehensive income attributable to owners of the parent ……………………
Comprehensive income attributable to minority interests ……………………………

Financial Section

Consolidated statements of changes in net assets
Years ended March 31, 2015 and 2014
Millions of yen

Capitalstock

Capitalsurplus

Balance as of March 31, 2013
¥31,186
Dividends of surplus ………………………………………
Net income …………………………………………………………
Purchase of treasury shares ……………………

Balance as of March 31, 2014
Cumulative effects ofchanges in accounting policies ………
Restated balance ……………………………………………

¥6,959-Net changes of items
other than shareholders’ equity ……

¥31,186

Retainedearnings

Valuationdifference on
availableforsale
securities

TreasurysharesDeferred
gains orlosses onhedgesTotal net
assets¥319-(¥388)----¥45,905
528

-

3,747

-

-

-

-

3,747

-

-

(3)

-

-

-

(3)

-

¥9,749-Minority
interests¥6,530(528)¥6,959¥1,298Remeasurements ofdefinedbenefit plans

-

1,331

-

(5,211)67(3,812)(¥392)¥2,630-(¥5,211)¥386¥45,307

-

-

1,700

-

-

-

-

-

1,700

31,186-

6,959-

11,449
(522)

(392)
-

2,630
-

-

(5,211)-386-

47,008(522)

Purchase of treasury shares ……………………

-

-

1,598
-

(700)

-

-

-

-

1,598
(700)

Change of scope of consolidation ………

-

-

38

-

-

-

-

-

38

-

(¥1,092)

1,319¥3,949

(5)
(¥5)

795
(¥4,416)

53
¥439

2,162
¥49,584

Remeasurements ofdefinedbenefit plans

Minority
interests

Total net
assetsDividends of surplus ………………………………………
Net income …………………………………………………………

Net changes of items
other than shareholders’ equity ……
Balance as of March 31, 2015

¥31,186¥6,959¥12,563

Thousands of U.S. dollars (Note 2)

CapitalsurplusRetainedearnings

TreasurysharesValuationdifference on
availableforsale
securities$57,916$81,128($3,262)$21,886- ($43,371)$3,217$377,031

57,91614,152
95,280(3,262)

21,886-(43,371)

3,217

14,152
391,183-(4,350)

-

-

-

-

-

(4,350)--13,301-(5,830)

-

-

-

-

13,301(5,830)

-

-

317

-

-

-

-

-

317

Capitalstock

Balance as of March 31, 2014
$259,516
Cumulative effects ofchanges in accounting policies ………
Restated balance …………………………………………… 259,516
Dividends of surplus ………………………………………
Net income …………………………………………………………
Purchase of treasury shares ……………………
Change of scope of consolidation ………
Net changes of items
other than shareholders’ equity ……
Balance as of March 31, 2015

$259,516$57,916$104,549

Deferred
gains orlosses onhedges-

10,978

(44)

6,621

443

17,999($9,093)$32,864($44) ($36,749)$3,660$412,620

Financial Section

Consolidated Statements of Cash Flows
Thousandsof U.S. dollars(Note 2)Years ended March 31, 2015 and 2014

Millions of yen

2015

2014

2015

Net cash provided by (used in) operating activities
Income before income taxes and minority interests ………………………………………………………………………
Depreciation and amortization ………………………………………………………………………………………………………………………
Decrease (increase) in notes and accounts receivable-trade ……………………………………………………
Increase (decrease) in notes and accounts payable-trade…………………………………………………………
Decrease (increase) in inventories ………………………………………………………………………………………………………………
Interest and dividends income ………………………………………………………………………………………………………………………
Interest expenses ……………………………………………………………………………………………………………………………………………………
Loss (gain) on sales of short-term and long-term investment securities …………………………
Loss (gain) on valuation of short-term and long-term investment securities ………………
Loss (gain) on sales of property, plant and equipment and intangible assets ………………
Loss on retirement of property, plant and equipment and intangible assets ………………
Increase (decrease) in allowance for doubtful accounts ………………………………………………………………
Increase (decrease) in provision for retirement benefits ……………………………………………………………
Other, net ……………………………………………………………………………………………………………………………………………………………………
Sub-total …………………………………………………………………………………………………………………………………………………………………………………
Interest and dividends income received …………………………………………………………………………………………
Interest expenses paid …………………………………………………………………………………………………………………………………
Income taxes paid ……………………………………………………………………………………………………………………………………………
Net cash provided by (used in) operating activities …………………………………………………………………………………

¥2,579
2,355
(734)
1,753
(2,059)
(335)
405
0
(26)
43
(216)
629
(609)
3,784
325
(416)
(255)
3,438

¥3,9972,199
2,470(3,974)
2,402
(327)
498
(0)
29
193
(6)
154
635
8,273
326
(498)
(667)
7,433

$21,467
19,601(6,109)14,591(17,139)(2,792)
3,372
0
(220)
363
(1,804)
5,237(5,073)31,4952,709(3,469)(2,124)
28,611

Net cash provided by (used in) investing activities
Decrease (increase) in time deposits …………………………………………………………………………………………………………
Purchase of short-term and long-term investment securities …………………………………………………
Proceeds from sales of short-term and long-term investment securities ………………………
Purchase of property, plant and equipment and intangible assets ………………………………………
Proceeds from sales of property, plant and equipment and intangible assets ……………
Payments of sales of property, plant and equipment ……………………………………………………………………
Payments for investments in capital of subsidiaries and associates ……………………………………
Purchase of shares of subsidiaries resulting in change in scope of consolidation ………
Payments of loans receivable …………………………………………………………………………………………………………………………
Collection of loans receivable …………………………………………………………………………………………………………………………
Payments for asset retirement obligations ……………………………………………………………………………………………
Other, net ……………………………………………………………………………………………………………………………………………………………………
Net cash provided by (used in) investing activities …………………………………………………………………………………

(50)
(19)
1
(4,201)
38
(648)
(7)
1
183
(4,701)22(6)
1(2,275)
5,710
(434)
(120)
(500)
(100)
2
(120)
184
2,365

(416)
(158)
10
(34,965)324(5,400)
(65)
16
1,530
(39,124)

Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable ……………………………………………………………………
Repayments of lease obligations …………………………………………………………………………………………………………………
Proceeds from long-term loans payable …………………………………………………………………………………………………
Repayment of long-term loans payable ……………………………………………………………………………………………………
Redemption of bonds ……………………………………………………………………………………………………………………………………………
Cash dividends paid ………………………………………………………………………………………………………………………………………………
Cash dividends paid to minority shareholders ……………………………………………………………………………………
Purchase of treasury stock ………………………………………………………………………………………………………………………………
Net cash provided by (used in) financing activities …………………………………………………………………………………

(1,490)(75)
11,300(13,342)
(523)
(1)
(700)
(4,834)(1,623)(71)
580(2,654)
(22)
(526)
(2)
(3)
(4,324)(12,406)(628)
94,033(111,029)(4,357)(11)(5,830)(40,230)

Effect of Exchange Rate Changes on Cash and Cash Equivalents ……………………………………………………
Net Increase (Decrease) in Cash and Cash Equivalents …………………………………………………………………………
Cash and Cash Equivalents at Beginning of Year ………………………………………………………………………………………
Increase in cash and cash equivalents from newly consolidated subsidiary …………………………
Cash and Cash Equivalents at End of Year …………………………………………………………………

72(6,025)24,577
175¥18,726

12
5,487
19,089¥24,577

599(50,143)
204,520
1,458$155,835¥24,577¥24,577$156,251(416)$155,835

Note: Relation between the year-end balance of cash and cash equivalents and the items on the consolidated balance sheet:

Cash and deposits …………………………………………………………………………………………………………………………………
Time deposits due over three months ……………………………………………………………………………………
Cash and cash equivalents ………………………………………………………………………………………………………………

¥18,776(50)¥18,726

Notes to Financial Statements

Those other securities that do not have market value have been
evaluated at book value.
For the cases in which the value of those other securities withmarket value fell sharply, the relevant securities have been placed in thebalance sheet according to their market value, and the difference
between the book value and the market value has been recognized as aloss for the business term. For the cases in which the virtual value of
those other securities without market value fell markedly, the relevant
securities have been depreciated down to the virtual value, and thecorresponding difference has been recognized as a loss.
Profit or loss in selling securities has been calculated based upon
the selling price by the moving average method, and included in
profit or loss.

Note 1. Significant Accounting Policies

Basis of Presenting Consolidated Financial Statements
Kurimoto, Ltd. (hereinafter referred to as “This Company”) and its
consolidated subsidiaries have presented their official accounting
records in the currency of yen and in accordance with theCommercial Code and the regulations of Securities & Exchange
Law, and in conformity with the generally accepted accounting
principles & practices of Japan (hereinafter called “Japan
Accounting Standard”).
Some part of the Japan Accounting Standard, in its method of
application and disclosure requirements, is different from theInternational Accounting Standard and some other countries’
accounting standards. Accordingly, the consolidated financial
statements attached hereto are prepared for readers who are wellacquainted with the Japan Accounting Standard.
The consolidated financial statements attached hereto have been
prepared in accordance with the Japan Accounting Standard
pursuant to the Securities & Exchange Law. Such consolidated
financial statements of This Company as were submitted to our
district’s Local Finance Bureau of the Ministry of Finance have been
re-edited and translated into English.

Inventories
Inventories are principally stated at the cost determined by theaverage method or the specific cost method.
Fixed Assets (excluding lease assets)
Fixed assets are indicated by book value. Method of depreciation ismainly the straight-line method by estimated useful life. Main
estimated useful lives are as follows.
Building and construction; 2 to 60 years.
Machinery and automotive equipment; 2 to 22 years.
The cost of repair or small amount reformation is charged in bookat their occurrences, but any large scale repair or reformation isclassified as assets.

Consolidation Policies
These consolidated financial statements include the accounting
records of This Company and the companies over which This
Company either holds majority voting power or for which certain
other conditions verify This Company’s control over them. The
investment account of This Company in non-consolidated
subsidiaries or affiliates which are largely influenced by This
Company in their operational and financial policies have been
computed on the basis of equity-method investment balance.
The important credit & liability, trade, and unrealized profit
between and among consolidated companies have been obliterated
on a consolidation basis.

Liability for Retirement Benefits
1. The Period Attribution Method for Projected Retirement Benefits
As for the calculation of retirement benefits, the benefit formula basis isapplied for the attribution of projected retirement benefits to the period
up to the end of the fiscal year under review.
2. Mathematical Calculation for the Amortization of Actuarial
Differences
Actuarial differences are amortized by the straight-line method over a
period within the average remaining service years for employees (mainly
10 years) at the time of recognition, and allocated proportionately fromthe fiscal year following the respective fiscal year of recognition.

Translation of Foreign Currencies
Monetary assets and liabilities denominated in foreign currencies havebeen translated into Japanese yen at the rate as of the date of eachbalance sheet presentation, and their resulting conversion profit or loss
has been appropriated as their profit or loss in the current businessterm.

Research and Development and Computer Software
Research & development expenses have been dealt with as expenses
upon their accrual.
Software expenses have been included mainly in long-term
prepaid expenses and other expenses, and depreciated by a straight-line
method chiefly for five-year service life.

A Range of Funds in a Statement of Consolidated Cash Flow
A fund in a statement of consolidated cash flow (cash and its
equivalent) consists of cash in hand, ordinary deposits, and shortterm
investments which have a term of redemption under threemonths, carry low risk for value fluctuation and can be withdrawn
easily.

Income Taxes
As to the temporary difference in the book value of assets andliabilities for the purpose of financial accounting and taxation, thenet worth method has been used to figure deferred tax assets andliabilities.

Marketable and Investment Securities
This Company & its consolidated subsidiaries have specified the
purposes of their respective securities holdings, and classified thosesecurities into securities for buying & selling, stocks of their affiliates,and other securities.
Securities for buying & selling have been evaluated at market value.
The stocks of their affiliates have been evaluated at book value.
Those other securities that have market value have been
evaluated at market value, and the unrealized profit or loss has beenreported as an independent item in Part of Capital after taxation.

Notes to Financial Statements

Per Share Information
The computation of basic net income per share is based on theweighted average number of shares of common stock outstanding
during each period. The average number of shares used in thecomputation was 129,562 thousand and 132,193 thousand for theyears ended March 31, 2015 and 2014, respectively.

Note 2. U.S. Dollar Amounts
The dollar amounts are included solely for convenience: they should
not be construed as exact translations of current yen figures, nor are
they the dollar amounts into which yen amounts have been or could
be converted.
The approximate exchange rate of US$1=¥120.17 as of March
31, 2015, has been used for the purpose of presenting the dollar
amounts in the accompanying consolidated financial statements.

Recognition of earning cost
For construction work that was initiated this consolidated
accounting period, we will still use the percentage-of-completion
method for those ongoing projects with assured revenue by the endof the period (the cost-to-cost method will be used to estimate theprogress rate of construction), and the complete job method toother projects.

Note 3. Short-term Bank Loans and Long-term Debt
The annual average interest rates applicable to short-term bankloans at March 31, 2015 and 2014 are 1.0% and 1.1%, respectively.
Short-term bank loans and long-term debt at March 31 wascomprised of the following:

Consolidated Taxation System
We have adopted a consolidated taxation system.
Marketable and Investments Securities
Other marketable securities as of March 31, 2015 are as follows.

Thousands
Millions of yen

Millions of yen

2015

2015

Other securities ……………………………………………………

2014

2015

Loans from financial institution,

Carrying

MarketUnrealized

due 2015 to 2020 withamounts

value

gain (loss)

interest rates between
0.84% and 3.85% ………………………………………………

11,78013,822

98,031

Sub-total ……………………………………………………………………

11,78013,822

98,031Less current portion of loans ………………………

2,336

13,342

19,447¥9,443¥480$78,584¥8,510¥14,079¥5,569Thousands of U.S. dollars
2015

Other securities ……………………………………………………

of U.S. dollars

Carrying

MarketUnrealized

amounts

value

gain (loss)$70,817$117,161

The aggregate annual maturities of long-term financial debt at March 31, 2015
and 2014 respectively are as follows:$46,343

Thousands
Millions of yen

2015(Changes in Accounting Policies)
This Company has the “Accounting Standard for Retirement Benefits(Accounting Standards Board of Japan (ASBJ) Statement No. 26, May 17,2012)” and the “Guidance on Accounting Standard for Retirement
Benefits (ASBJ Guidance No. 25, March 26, 2015)” from the fiscal year
ended March 31, 2015, for provisions set forth in the main clauses ofParagraph 35 of the Accounting Standard for Retirement Benefits, andParagraph 67 of the Guidance on Accounting Standard for Retirement
Benefits. Accordingly, we reviewed the methods for calculating
retirement benefit obligations and service costs, and revised the methodof attributing projected retirement benefits to periods from the straightline basis to the benefit formula basis, and revised the method ofdetermining the discount rate, for the period of bonds used for the basisof determining the discount rate, from the method using the approximate
number of years of expected average length of the remaining service
period of employees to the method using a plural discount rate reflecting
the estimated period.
For the application of this accounting standard, in accordance with thetransitional accounting treatments set forth in Paragraph 37 of the
Accounting Standard for Retirement Benefits, the adjustments associatedwith the change in calculation methods of retirement benefit obligations
and service costs are recorded in retained earnings at the beginning of
the fiscal year under review.
As a result, at the beginning of the fiscal year under review, the liabilities
for retirement benefit decreased 1,700 million yen (14,152 thousand US
dollars) and retained earnings increased 1,700 million yen (14,152
thousand US dollars). The effect of this change on operating income,ordinary income and net income before income taxes and minority
interests for the fiscal year under review is insignificant.

of U.S. dollars

2014

2015

2015 ………………………………………………………………………………

-

13,342-

2016 ………………………………………………………………………………

2,336

236

19,4472017 ………………………………………………………………………………

2,273

173

18,9202018 ………………………………………………………………………………

7,123

23

59,2782019 ………………………………………………………………………………

23

46

196

2020 and thereafter……………………………………………

22

-

189

¥11,780¥13,822$98,031

As is customary in Japan, short-term and long-term bank loans are
made under general agreements which provide that security andguarantees for future and present indebtedness will be given uponrequest of the bank, and that the bank shall have the right, as theobligations become due, or in the event of their default, to offset
cash deposits against such obligations due to the bank.
As of March 31, 2015, assets pledged as collateral for short-termbank loans, and long-term debt, including the current portion of
long-term debt, were as follows:
Thousands

Millions of yen

of U.S. dollars

2015

2015

Deposit ………………………………………………………………………………………………………………

¥310$2,586

Buildings and structures ………………………………………………………………………

4,224

35,152

Machinery, equipment …………………………………………………………………………

2,174

18,098Land ……………………………………………………………………………………………………………………

3,608

30,028¥10,318$85,865

Notes to Financial Statements(5) Retirement benefit costs

Note 4. Retirement Benefits

Thousands

The following are matters concerning the defined benefit plan as ofMarch 31, 2015 and 2014, respectively.

Millions of yen

2015(1) Movements in retirement benefit obligations except plan applied
simplified method
Thousands
Millions of yen
Balance at beginning of the year………………………………

of U.S. dollars

2014

2015

Service cost ……………………………………………………………………………

¥682

¥597

Interest cost …………………………………………………………………………

103

94

$5,680858

Expected return on plan assets ……………………………

(69)

(65)

(574)

Net actuarial loss amortization ………………………………

716

423

5,959

77

89

645

¥1,510¥1,139$12,569

Retirement benefit costsof U.S. dollars

calculated by the simplified method …………………

2015

2014

2015

Total retirement benefit¥13,313¥12,299$110,791

costs for the fiscal year ………………………………………………

Cumulative effects of changes
in accounting policies …………………………………………

(1,700)-(14,151)

Restated balance ……………………………………………………………

11,613

12,29996,639consolidated subsidiaries …………………………………

20

-

166

Service cost …………………………………………………………………………

684

597

5,698

Interest cost ………………………………………………………………………

103

94

858

Actuarial loss (gain) …………………………………………………………

(¥794)-($6,610)

Actuarial loss (gain) ………………………………………………………

525

738

4,376

Total ……………………………………………………………………………………………

(¥794)-($6,610)

Benefits paid ………………………………………………………………………

(365)

(416)

(3,038)

Balance at end of the year………………………………

¥12,581¥13,313$104,701(6) Remeasurements of defined benefit plans(before tax effect deductions)Thousands

Net increase from newly

Millions of yen

2015of U.S. dollars

2014

2015

(7) Accumulated adjustments for retirement benefit(before tax effect deductions)Thousands(2) Movements in plan assets except plan applied simplified method
Millions of yen

2015

Thousands
Millions of yen

2015
Balance at beginning of the year……………………

¥4,415¥5,209$36,7412015

Total ……………………………………………………………………………………………

¥4,415¥5,209$36,741$43,206

Expected return on plan assets …………………………

69

65

574

Actuarial gain (loss) ………………………………………………………

604

198

5,026

Contributions paid by the employer …………………

560

535

4,664

Benefits paid ………………………………………………………………………

(132)

(160)

(1,103)

Balance at end of the year………………………………

¥6,293¥5,192$52,368(8) Accumulated adjustments for retirement benefit
䐟Plan assets comprise:
2015
Bonds …………………………………………………………………………………………………………………
Equity securities …………………………………………………………………………………………
Cash and cash equivalents …………………………………………………………………

(3) Movements in net liability for retirement benefits based on thesimplified method

2015

2014

General account …………………………………………………………………………………………
Thousands

Other …………………………………………………………………………………………………………………

of U.S. dollars

Total …………………………………………………………………………………………………………………

¥541

¥646

$4,503Retirement benefit costs ……………………………………………

77

89

645

Benefits paid ………………………………………………………………………

(73)

(111)

(615)

Contributions paid by the employer …………………

(14)

(82)

(117)

Balance at end of the year………………………………

¥530

¥541

$4,416

2014

5%
65%
14%
14%
2%
100%

䐠Long-term expected rate of return
Current and target asset allocations, historical and expected
returns on various categories of plan assets have been considered(9) Accumulated adjustments for retirement benefit
The principal actuarial assumption (expressed as weighted averages)
are as follows:(4) Reconciliation from retirement benefit obligations and plan
assets to liability (asset) for retirement benefits including plan
applied simplified method
Millions of yen

2015

2014

0.8%

Thousands

Discount rate ………………………………………………………………………………………………… 0.0%䡚1.5%

of U.S. dollars

Long-term expected rate of return ……………………………………………… 1.4%䡚1.9% 0.9%䡚1.5%
Expected rate of salary increase …………………………………………………… 0.7%䡚4.4% 0.6%䡚4.3%

2015

2014

2015

Funded retirement benefit obligations ………………

¥13,054¥13,759$108,630

Plan assets ……………………………………………………………………………

(6,585)(5,461)(54,798)

6,468

8,298

53,831

350

364

2,917

retirement benefits at March 31 …………………………

6,819

8,662

56,748

Liability for retirement benefits ……………………………

6,819

8,662

56,748Asset for retirement benefits ……………………………………

-

-

-

¥6,819¥8,662$56,748

Defined contribution plans
The required contribution amount for consolidated subsidiaries forthe defined contribution plan was 35 million yen (294 thousand US
dollars) as of March 31, 2015.

Total net liability (asset) for

Total net liability (asset) for
retirement benefits at end of the year ……………

6%
64%
13%
14%
3%
100%

2015

Balance at beginning of the year……………………

Unfunded retirement benefit obligations …………

2015

Unrecognized actuarial differences ………………………

¥4,552Millions of yen

2014of U.S. dollars

2014¥5,192of U.S. dollars

Notes to Financial Statements

Thousands

Note 5. Contingent Liabilities
Millions of yen

At March 31, 2015 and 2014, the company was contingently liable
as follows:

Millions of yen

2015

2015

2014

2015

Deferred tax assets
Net defined benefit liability …………………………

¥3,657¥4,685$30,432

Thousands

Accrued bonus indemnities ……………………………

480

583

3,995

of U.S. dollars

Allowance for
doubtful accounts ………………………………………………

85

139

713

Allowance forloss on construction work ……………………………

28

54

240

Loss on revaluation of
investment securities ………………………………………

187

211

1,563

capital of subsidiaries and associates ………………

116

128

969

Amalgamated received property ………………

572

632

4,767

2014

2015

As guarantor of indebtedness of
unconsolidated subsidiaries
and others ………………………………………………………………

¥166

¥193

$1,384

Discount of notes and bills ……………………………

2,474

3,034

20,588Transfer of notes andbills endorsed for payment …………………………

of U.S. dollars

Loss on valuation of investments in

¥1

¥26

$10

Note 6. Derivatives and Hedging Activities
Some consolidated subsidiaries utilize derivatives of forward
exchange contract and interest-rate swap in order to hedge
exchange-rate fluctuation risk concerning foreign currency assets
and liabilities and hedge against interest-rate fluctuation risk
regarding securities and debts.
As they trade these with major financial institutions, we assume thatthe credit risks of these derivatives are low. The Accounting
Department implements and controls these forward exchange
contracts for our own company by way of in-house consultation anddecision.
As to the derivative trades by our consolidated subsidiaries, theirBusiness Management Department or General Affairs Department
implement and control them after their internal consultation anddecision and also notification to our company.

Impairment loss ……………………………………………………

2

3

23

Operating loss carry-forwards ……………………

14,448

16,577120,232

Elimination ofinter-company profits ……………………………………

10

2

87

Other ……………………………………………………………………………

799

1,063

6,656

Total gross deferred tax assets ……………………

20,39024,084

169,682

Less valuation allowance ………………………………

(18,746)(21,784)(155,998)

Net deferred tax assets …………………………………

¥1,644¥2,300$13,683
Thousands

Millions of yen

2015of U.S. dollars

2014

2015

Deferred tax liabilities

Note 7. Research and Development Expenses
Research and development expenditures charged to income were¥1,597 million ($13,295 thousand) for the year ended March 31, 2015.

Note 8. Income Taxes
The Company and its domestic subsidiaries are subject to several
taxes based on income, which in the aggregate resulted in statutory
tax rates of approximately 35.6% and 35.6% for the year ended
March 31, 2015 and 2014, respectively.
The effective rates of income taxes reflected in the consolidated
statements of income differed from the statutory tax rates referred toabove for the year ended March 31, 2015 due principally to expenses
not deductible for income tax purposes, and temporary differences
between the tax basis of assets and liabilities and their reported amounts
in the financial statements.
The difference between the burden rate of corporate tax after
application of tax effect accounting and the statutory tax rate is notlisted as it was recorded as a net loss for the period under review
before adjustments for taxes, etc.
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets as of March 31, 2015 and 2014
are presented below:



Evaluated difference ofother securities ……………………………………………………

(¥1,607)(¥1,225)($13,377)

Dividends receivable …………………………………………

(56)

(57)

(470)

Other………………………………………………………………………………

(3)

(19)

(29)

Total deferred tax liabilities …………………………

(1,667)(1,301)(13,877)

Net deferred tax assets ……………………………………

(¥23)

¥998

($193)

Notes to Financial Statements

As for marketable and investment securities, This Company
periodically seizes the trend of fair value and financial position of
the issuers (business partners) to continuously review the possession
situation, taking into account the market conditions and its
relationship with the business partners.
Derivative financial transactions are executed and managed bydepartments handling such transactions with approval of authorized
personnel, in accordance with the regulations specifying transaction
authority and transaction limit.
Similar management is conducted with its consolidated subsidiaries
pursuant to the regulations of This Company.

Note 9. Financial Instruments and Related Disclosures(1) Policy for Financial Instruments
This Group raises funds needed to implement financial and capital
investment plans (mainly through loans from banks). Its temporary
surpluses are mainly invested in highly liquid financial assets, while
short-term working capital is financed by loans from banks. This
Group employs derivative financial instruments for the purpose of
avoiding risks described later, and does not undertake speculativetransactions.
(2) Nature and Extent of Risks Arising from Financial Instruments
Notes and accounts receivable-trade, or operating receivables, involve
credit risk on the part of customers. Operating receivables generated
by overseas operations denominated in foreign currencies, which
involve exchange-rate fluctuation risk, are hedged using exchange
forward contract as the need arises.
Marketable and investment securities, which are mainly equity
securities of affiliates, involve market fluctuation risk.
For notes and accounts payable-trade, or operating payables, most ofwhich are due within five months: Part of operating payables
denominated in foreign currencies, which involve exchange-ratefluctuation risk, are hedged using exchange forward contract as theneed arises.
The primary purpose of loans is raising funds for capital investment
and business structure reform. Of these, syndicate loans and manyother loans involve interest-rate fluctuation risk. In addition, in order
to avoid interest-rate fluctuation risk for part of the long-term debt,
we employ derivative transactions (interest-rate swap transaction) for
hedging.
Derivative transactions are exchange forward contracts aimed at
hedging exchange-rate fluctuation risk related to operatingreceivables/payables denominated in foreign currencies, and interestrate
swaps aimed at hedging interest-rate fluctuation risk related to
debt.

Management of Liquidity Risk Related to Financing
Based on reports from each department, the financial department ofThis Company formulates and updates the financial plan in a timely
manner, and manages liquidity risk by way of maintaining short-term
liquidity. Financial plans of its consolidated subsidiaries are reported
to the financial department of This Company every month in atimely manner, thereby controlling liquidity risk across This Group.

(3) Risk Management for Financial Instruments
Credit Risk Management
For operating receivables and long-term debt, the operations
department of respective business segment of This Company
employs credit management regulations in order to periodicallymonitor the status of its major business partners, manage due dates
and balances of each business partner, and furthermore, identify
business partners with doubtful collectability and mitigate risks
arising from their deteriorated financial position at an early date.
Similar credit management is conducted with its consolidated
subsidiaries pursuant to the credit management regulations of This
Company.
As This Company’s transaction partners on derivative financial
instruments are highly reliable Japanese financial institutions, credit
risk is judged to be immaterial.
Market Risk Management
This company has entered into an exchange forward contract tohedge part of the risks arising from exchange-rate fluctuations for
operating receivables/payables denominated in foreign currencies.
With regard to floating rate debt, we closely monitor economic andinterest-rate outlooks and conduct fund raising suited to eachsituation, and employ interest-rate swap transaction in order tocontrol fluctuation risks in the interest rate for part of the debt.

Notes to Financial Statements

Note 1. Method of calculating the fair value of financial instruments and matters related to marketablesecurities and derivatives
AssetsCash and deposits, and notes and accounts receivable-trade
As these instruments are settled within a short term and their fair values and book values are nearly identical,
their book values are taken to be their fair values.
Investment securities
The fair values of investment securities are determined by their prices on stock exchanges.
Liabilities
Notes and accounts payable-trade, and short-term loans payable
As these instruments are settled within a short term and their fair values and book values are nearly identical,
their book values are taken to be their fair values.
Long-term debt and current portion of long-term debt.
The fair value of long-term debt is determined by discounting the total amount of principal and interest
with the assumed interest rate on new loans of the same type. With respect to part of long-term debts withfloating-rate interest, special treatment of the interest-rate swap is adopted. The value of that long-term debt
is calculated from principal and interests, which is handled together with the interest-rate swap, with interest
rates reasonably estimated to be applied to similar debts.
Derivative financial instruments
The fair value of derivatives are based on quoted price offered by counterparty financial institutions. However,interest-rate swaps that are accounted for under the special method are combined with the long-term debts thatare hedged by these swaps. As a result, the fair value of these interest-rate swaps is included in the fair value ofthe corresponding long-term debts.

(4) Fair Values of Financial Instruments
With regard to the fair value of financial instruments, in addition tobasing fair value on market value, the fair value of financial
instruments that have no available market value is determined byusing a rational method of calculation. However, as variables are
inherent in these value calculations, the resulting values may differ if
different assumptions are used.
Millions of yen
2015
Carrying

Fair

Unrecognizedamounts

value

gain (loss)

Cash and deposits…………………………………………………

¥18,776¥18,776¥-\-

Notes and accounts
receivable-trade …………………………………………………

38,511

38,511-

Investment securities …………………………………………

14,07914,079-Total ………………………………………………………………………………

71,36771,367-

Notes and accounts payable-trade …………………

26,53526,535-

Short-term loans payable ………………………………

23,44823,448-Current portion of long-term debt …………………

2,336

Long-term debt ………………………………………………………

9,443

11,80019

Total ………………………………………………………………………………

¥61,764¥61,784¥19

Derivative financial instruments…………………

(5)

(5)

-

Note 2. Financial instruments whose fair values are not readily determinable

Unlisted equity securities

Millions

Thousandsof yenof U.S. dollars¥379$3,159Unlisted equity securities
These instruments are not included in investment securities as they
have no market value and their fair values are not readily
determinable.

Millions of yen

Note 10. Segment Information

2014
Carrying

Fair

Unrecognizedamounts

value

gain (loss)

Cash and deposits…………………………………………………

¥24,577¥24,577¥-\-

Notes and accounts
receivable-trade ………………………………………………

36,60936,609-Investment securities …………………………………………

12,37012,370-Total ………………………………………………………………………………

73,55673,556-

Notes and accounts payable-trade …………………

25,86025,860-

Short-term loans payable ………………………………

24,93924,939-Current portion of long-term debt …………………

13,342Long-term debt ………………………………………………………

480

13,8252

Total ………………………………………………………………………………

¥64,622¥64,625¥2

Derivative financial instruments…………………

-

-

-

(1) Outline of Reportable Segments
The Company’s reportable segments are the components of ourbusiness (separate financial information for which is available), on
which periodical review is made for allocation of management
resources and appraisal of achievements by the board of directors.
Each product-based division at our headquarters compiles
comprehensive product strategies for domestic and overseas business
operations.
In other words, the Company consists of division-based reportablesegments; the Pipe System Consolidated Division, the Machinery
System Consolidated Division and the Industrial Materials
Consolidated Division.
The Pipe System Consolidated Division specializes in the
manufacture of ductile iron pipes and accessories, various types ofadjusting valves, and other incidental works.
The Machinery System Consolidated Division specializes in the
manufacture of industrial equipment (various types of powder
processing equipment and press machines, etc.), steel casting andspecial steel casting, other incidental works and various types ofplant engineering.
The Industrial Materials Consolidated Division specializes in the
manufacture of ducts, polycon FRP pipes, various types of synthetic
resin products, and other incidental works.

Thousands of U. S. dollars
2015
Carrying

Fair

Unrecognizedamounts

value

gain (loss)

Cash and deposits…………………………………………………

$156,251$156,251$-

Notes and accounts
receivable-trade …………………………………………………

320,475

320,475-

Investment securities …………………………………………

117,161

117,161-

Total ………………………………………………………………………………

593,888593,888-

Notes and accounts payable-trade …………………

220,815

220,815-

Short-term loans payable ………………………………

195,127

195,127-

Current portion of long-term debt …………………

19,447Long-term debt ………………………………………………………

78,584

98,196

164

Total ………………………………………………………………………………

$513,974$514,138$164

Derivative financial instruments…………………

(44)

(44)

-

(2) Calculation method of: sales, profits/losses, assets, liabilities andother items for each reportable segment
The accounting procedures of the reportable segments are basicallythe same as the description in the “Important Items Concerning the
Presentation of Consolidated Financial Statements,” and any intersegmentinternal revenue/transfers etc., are represented based on
actual market prices.

Notes to Financial Statements(3) Information on sales, profits/losses, assets, liabilities and other items for each reportable segment
Segment information for the fiscal years ended March 2014 and 2015 is as follows:
Millions of yen
2015
Pipe systembusiness
Net sales
Sales to customers …………………………………………………………………………………………

Reportable segment
Machinery system Industrial materials
businessbusiness¥18,515

Segment assets ……………………………………………………………………………………………………

¥56,751278
57,0292,016
57,601Other items
Depreciation ………………………………………………………………………………………………………
Increase in property, plant andequipment, and intangible assets …………………………………………………

Intersegment ………………………………………………………………………………………………………
Total sales ………………………………………………………………………………………………………
Segment income …………………………………………………………………………………………………

Total

Adjustment *1

Consolidated *2¥98,394
1,104
99,4983,148
94,009\¥(1,104)(1,104)(223)
33,875¥98,394

18,515490
15,095¥23,127826
23,954642
21,312

1,466

278

468

2,213

142

2,355

¥1,864¥170¥241¥2,276¥145¥2,421-

98,394
2,925
127,884

1. The minus 223 million yen segment income adjustment includes; 35 million yen resulting from the elimination of inter-segment transactions, minus 148 million yen resulting from allocation differences of selling & generaladministrative expenses and experiment & research expenses to be borne by each reportable segment, as well as minus 110 million yen resulting from inventory asset adjustment.
The 33,875 million yen segment asset adjustment includes; minus 1,929 million yen resulting from the elimination of inter-segment transactions, and 35,804 million yen due to a working capital surplus, investment
securities and land, etc., which are company-wide assets and not attributable to any specific reportable segment.
The 142 million yen depreciation adjustment and 145 million yen adjustment for increases in tangible and intangible fixed assets are basic research-related assets that are not attributable to any specific reportable segment, and assetsthat belong to headquarters, etc.
2. Adjustment is made between segment income and Operating Income in the Consolidated Statement of Income.

Millions of yen
2014
Pipe systembusiness
Net sales
Sales to customers …………………………………………………………………………………………

Reportable segment
Machinery system Industrial materials
businessbusiness¥22,753

Segment assets ……………………………………………………………………………………………………

¥59,737
283
60,021
3,506
56,710

Other items
Depreciation ………………………………………………………………………………………………………
Increase in property, plant andequipment, and intangible assets …………………………………………………

Intersegment ………………………………………………………………………………………………………
Total sales ………………………………………………………………………………………………………
Segment income …………………………………………………………………………………………………

Total

Adjustment *1

Consolidated *2¥103,664
2,051
105,716
5,334
91,556\¥(2,051)(2,051)
68
37,464¥103,664

22,753
1,008
14,993¥21,173
1,768
22,941819
19,852

1,382

245

432

2,060

139

2,199

¥2,044¥1,139¥388¥3,572¥308¥3,880-103,664
5,402
129,021

1. Adjustment of segment income (68 million yen) includes intersegment eliminations (38 million yen), distribution differences for each segment's sales management cost, general management cost and experimental and researchcost (158 million yen) and the adjusted amount of inventory assets (-129 million yen).
Adjustment of segment assets (37,464 million yen) include intersegment eliminations (-2,091 million yen), and company-wide items which do not belong to a specific segment, that are surplus operating fund, investments insecurities and land value (39,556 million yen).
Adjustment of depreciation expense (139 million yen) and adjustment for increases in tangible and intangible fixed assets (308 million yen) are items which do not belong to a specific segment, including assets related tofundamental study and assets managed by headquarters.
2. Adjustment is made between segment income and Operating Income in the Consolidated Statement of Income.

Pipe systembusiness
Net sales
Sales to customers …………………………………………………………………………………………

Thousands of U. S. dollars
2015
Reportable segment
Machinery system Industrial materials
Totalbusinessbusiness$154,075

Segment assets ……………………………………………………………………………………………………

$472,260
2,313
474,573
16,779479,332

Other items
Depreciation ………………………………………………………………………………………………………
Increase in property, plant andequipment, and intangible assets …………………………………………………

Intersegment ………………………………………………………………………………………………………
Total sales ………………………………………………………………………………………………………
Segment income …………………………………………………………………………………………………

Adjustment *1

Consolidated *2

154,075
4,077
125,615$192,459
6,877
199,336
5,343
177,354$818,794
9,190
827,985
26,200782,302$(9,190)(9,190)(1,858)281,897

818,794
24,341
1,064,199

12,202

2,318

3,897

18,4181,183

19,601$15,514$1,416$2,009$18,939$1,214$20,154-$818,794-

1. The minus 1,858 thousand US dollars segment income adjustment includes; 296 thousand US dollars resulting from the elimination of inter-segment transactions, minus 1,237 thousand US dollars resulting from allocationdifferences of selling & general administrative expenses and experiment & research expenses to be borne by each reportable segment, as well as minus 918 thousand US dollars resulting from inventory asset adjustment.
The 281,897 thousand US dollars segment asset adjustment includes; minus 16,052 thousand US dollars resulting from the elimination of inter-segment transactions, and 297,950 thousand US dollars due to aworking capital surplus, investment securities and land, etc., which are company-wide assets and not attributable to any specific reportable segment.
The 1,183 thousand US dollars depreciation adjustment and 1,214 thousand US dollars adjustment for increases in tangible and intangible fixed assets are basic research-related assets that are not attributable
to any specific reportable segment, and assets that belong to headquarters, etc.
2. Adjustment is made between segment income and Operating Income in the Consolidated Statement of Income.

Notes to Financial Statements(4) Geographic Segments
Geographic segment information has been omitted, as thepercentage of “national” exceeded 90% in both sales and assets in all
segments.

Note 11. Subsequent Events
Cash Dividends
Cash dividends of the Company’s retained earnings for the year
ended March 31, 2015 were proposed by the Board of Directors andapproved by the shareholders at the annual general meeting held on
June 26, 2015, as follows:(5) Sales to Foreign Customers
Foreign sales have been omitted, as they did not reach 10% ofconsolidated sales.

Cash dividends (¥2.0 per share)Millions

Thousandsof yenof U.S. dollars¥258$2,150Report of Independent Auditors

Report of Independent Auditors
PKF Hibiki AUDIT CORPORATION
3-6, Kitahama 2-chome, Chuo-ku,
Osaka, JapanTo the Board of Directors of Kurimoto, Ltd.

We have audited the accompanying consolidated balance sheets of Kurimoto, Ltd. and consolidated subsidiaries as ofMarch 31, 2015, and the related consolidated statements of income, comprehensive income, changes in net assets,
and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory
information, all expressed in Japanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements inconformity with accounting principles generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in conformity with auditing standards generally accepted in Japan. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparationand fair presentation of the consolidated financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of Kurimoto, Ltd. and consolidated subsidiaries as of March 31, 2015, and theconsolidated results of their operations and their cash flows for the year then ended in conformity with accounting
principles generally accepted in Japan.
Convenience Translation
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and in our opinion,

Osaka, Japan
November 24, 2015



Corporate Information

Kurimoto, Ltd.

(as of June 26, 2015)

OutlineFoundedIncorporated
Common stock
Total assets
Employees

OfficesHead Office12-19, Kitahorie 1-chome, Nishi-ku, Osaka 550-8580, Japan
Telephone: (06) 6538-7603
Fax: (06) 6538-7758

1909
1934
¥31,186 million*¥110,951 million*
1,349*

Tokyo Office16-2, Konan 2-chome, Minato-ku, Tokyo 108-0075, Japan
Telephone: (03) 3450-8611
Fax: (03) 3450-8504*as of March 31, 2015

Board of Directors
President

Hideaki Fukui

Senior Managing Director

Moriyoshi Kushida

Managing Director

Motohito Sawai
Hirobumi Okada

Tohoku Office12-30, 1-chome Honcho, Aoba-ku, Sendai 980-0014, Japan
Telephone: (022) 227-1872
Fax: (022) 227-8417
Nagoya Office27-2, Meiekiminami, 1-chome, Nakamura-ku, Nagoya
450-0003, Japan
Telephone: (052) 551-6930
Fax: (052) 551-6940

Director

Yoshiaki Shingu
Mikio Yaji

Outside Director

Shigehiro Shibakawa

Audit & Supervisory
Board Member

Toshitsugu Emura
Minoru Murata
Hideyo Akamatsu
Tomonori Kobayashi

Managing Executive Officer

Mitsuo Amagaya

Executive Officer

Naofumi Saito
Kazutaka Kikumoto
Kazuharu Kondo
Shinya Kojima
Shin Ikuta
Takehisa Fukui
Hisato Sato
Yukitaka Fujimoto

Stock

Hokkaido Office3, Nishi 3-chome, Kitaichijo, Chuo-ku, Sapporo 060-0001, Japan
Telephone: (011) 281-3301
Fax: (011) 281-3369(as of June 26, 2015)

Chugoku Office
7-19, Hondori, Naka-ku, Hiroshima 730-0035, Japan
Telephone: (082) 247-4132
Fax: (082) 247-4004
Kyushu Office
3-11, Hakataeki-minami 1-chome, Hakata-ku, Fukuoka
812-0016, Japan
Telephone: (092) 451-6622
Fax: (092) 471-7696
Europe Office
Address: Berliner Allee 40 40212 Dusseldorf, Germany
Telephone: +49-211-550-46411
Fax: +49-211-550-46420

Banking References
Head OfficeMizuho Bank, Ltd. (Osaka Branch)Resona Bank, Limited. (Osaka Banking Department)
Sumitomo Mitsui Banking Corporation (Midosuji Branch)
The Bank of Tokyo–Mitsubishi UFJ, Ltd. (Osaka Main Office)(as of March 31, 2015)

Common Stock
Number of authorized shares …………………………………………… 393,766,000
Number of issued shares ……………………………………………………… 133,984,908
Number of shareholders ……………………………………………………………………… 9,623

Principal Shareholders

Tokyo OfficeMizuho Bank, Ltd. (Utisaiwai-cho Branch)
The Bank of Tokyo-Mitsubishi UFJ, Ltd. (Shimbashi Branch)Resona Bank, Limited. (Shimbashi Branch)
Sumitomo Mitsui Banking Corporation (Hibiya Branch)(as of March 31, 2015)
Number ofJapan Trustee Services Bank, Ltd.
Taiyo Life Insurance Company
Nippon Life Insurance Company
Resona Bank, Limited
Mizuho Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.

shares held

Ratio of(in thousands)

shareholding

12,912
12,090
6,786
4,440
3,623
3,200

9.9%
9.3%
5.2%
3.4%
2.8%
2.4%



Corporate Information

Kurimoto Group(as of June 26, 2015)

Kurimoto Group consists of Kurimoto, Ltd. and 17 subsidiaries, including the following.

Kurimoto Trading Co., Ltd.

Nihon Kaiser Co.,Ltd.

Operations: Sales of ductile iron pipes, valves, and synthetic resin
products

Operations: Manufacture and sales of half precast products

Kurimoto Logistics Corporation

Kurimoto Business Associates Co., Ltd.

Operations: Procurement and transport of rawmaterials, cast ironpipes, etc

Operations: Management and leasing of real estate, staffing
service, travel agency, insurance agency

Sasebo Metal, Co., Ltd.

Riko, Ltd.

Operations: Manufacture and sales of castings

Operations: Production of valves

Yamatogawa Co., Ltd.

Kurimoto USA, Inc.

Operations: Sales of ductile iron pipes, valves, and synthetic resin
products

Operations: Holding company

Motoyama Eng. Works, Ltd.

Readco Kurimoto, LLC

Operations: Manufacture and sales of industrial valves

Operations: Manufacture and sales of industrial machinery

Ks-Tech Co., Ltd.

Kuritetsu (Shanghai) Trading Co., Ltd.

Operations: Manufacture, sales and construction of forging
machinery, forming machinery and related products

Operations: Wholesale of machinery equipment, steel, andnonmetallic products

Hokkaido Kanzai Co., Ltd.

Kurimoto (Philippines) Corporation

Operations: Sales of ductile iron pipes, valves, and synthetic resin
products

Operations: Construction, installation works, electric works,
piping works, repairs and maintenance and staff
service of various kinds of plants

Yashima Chemical Engineering Co., Ltd.
Operations: Design, manufacture, sales, and maintenance ofchemical and pharmaceutical equipment

12-19, Kitahorie 1-chome, Nishi-ku, Osaka 550-8580, Japan
Telephone (06)6538-7603
Facsimile (06)6538-7758
URL http://www.kurimoto.co.jp/english/