Financial Results for the Fiscal Year Ended October 31, 2013
[Japan GAAP] (Consolidated)
Date:

December 12, 2013

Company:

Tomoe Engineering Co., Ltd. and Subsidiaries(URL: http://www.tomo-e.co.jp/index_e.html)

Stock exchange listing:

1st Section, Tokyo Stock Exchange

Head Office:2-2, Osaki 1-chome, Shinagawa-ku, Tokyo, Japan

President:

Noboru Shiono

Investor Relations Contacts: Mitsuo Matsumoto, Director, General Manager of Accounting Division, Tel: (03) 5435-6512
Date of Annual Shareholders Meeting: January 30, 2014
Date of Dividend Payment:

January 31, 2014

Date of Financial Statement: January 30, 2014
Preparation of Supplementary Explanatory Materials for Annual Operating Results: Yes
Briefing Session for Annual Operating Results: Yes (for institutional investors)* Any fractional sums less than one million (or one thousand) yen are disregarded
1. Consolidated Financial Results for the Year Ended October 31, 2013
(1) Results of Operation (Consolidated)(Percent: change from the previous year)
Operating Income
Ordinary Income

Sales(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)(Millions of Yen)

Year Ended
38,176
-8.2
1,516
-38.1
October 31, 2013
Year Ended
41,575
-1.9
2,447
1.1
October 31, 2012
(Note) Comprehensive income
Fiscal year ended October 31, 2013: 1,439 million yen (-8.4%)
Fiscal year ended October 31, 2012: 1,572 million yen (-44.4%)
Net Income
Net Income
Return on
Diluted Net
per Share
EquityIncome per Share(Millions of Yen)

(Percent)

(Yen)

(Yen)

(Percent)

1,680

-35.5

2,605

0.4

Return on
AssetsReturn on
Sales(Percent)(Percent)(Percent)

3.7

5.0

4.0

7.4

7.8

5.9

Year Ended
841
-48.0
84.29
October 31, 2013
Year Ended
1,616
-44.6
161.98October 31, 2012
(Reference) Equity in earnings (loss) of unconsolidated subsidiaries and affiliates
Fiscal year ended October 31, 2013: None
Fiscal year ended October 31, 2012: None
(2) Financial Condition (Consolidated)
Total Assets (A)Net Assets (B)Net Assets Ratio (B / A)

Net Assets per Share(Millions of Yen)

(Millions of Yen)

(Percent)

(Yen)

69.8

2,340.34

66.0

2,235.59

Year Ended
33,477
23,575October 31, 2013
Year Ended
33,822
22,534
October 31, 2012
(Reference) Net assets
Fiscal year ended October 31, 2013: 23,353 million yen
Fiscal year ended October 31, 2012: 22,308 million yen

1(3) Cash Flows (Consolidated)
Net Cash Provided(Used) by Operating
Activities
Year Ended
498
October 31, 2013
Year Ended
1,005
October 31, 2012

Net Cash Provided(Used) by Investing
Activities

Net Cash Provided(Used) by Financing
Activities(Millions of Yen)
Consolidated Cashand Cash Equivalent
as of Year-end

(755)

(381)

7,171

(612)

(244)

7,463

2. Dividend Status
Dividend per Share (Yen)
SecondThird QuarterEnd ofQuarter
Fiscal Year
0.00
40.00
0.00
45.00
22.50
22.50

First Quarter-

Year Ending October 31, 2012
Year Ending October 31, 2013
Year Ending October 31, 2014 (Prospect)

Total
40.00
45.00
45.00

Total Dividend

Dividend Payout Ratio(Consolidated)

Dividend on Equity Ratio(Consolidated)(Millions of Yen)

(Percent)(Percent)

399
449
-

24.7
53.4
37.4

1.8
2.0
-

Year Ending October 31, 2012
Year Ending October 31, 2013
Year Ending October 31, 2014 (Prospect)

3. Forecast for the Year Ending October 31, 2013 (Consolidated)(Percent: Change from the previous year for the full business year and 6-month period)
Sales

Operating Income

Ordinary Income(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)

Six-month Period

20,700

6.9

1,050

5.2

1,160

7.8

Full Business Year

41,300

8.2

1,930

27.3

2,050

22.0

Net Income

Net Income per Share(Millions of Yen)

(Percent)(Yen)

Six-month Period

690

9.2

69.15

Full Business Year

1,200

42.7

120.26Notes(1) Significant changes in subsidiaries during this period (changes in specific subsidiaries involving changes in thescope of consolidation): None
(2) Changes of the principles, procedures, and representation of the accounting policies
1) Change due to revision of accounting standard: Existing2) Other changes than the above 1): Existing3) Change in accounting estimates: Existing4) Retrospective restatements: None
For details, please refer to (Changes in accounting policies), (changes in accounting policies that are difficult todistinguish from changes in accounting estimates) of (5) [Notes for Consolidated Financial Statements] of 4.
[Consolidated Financial Statements] on page 23.

2(3) Number of outstanding shares (Common stock)1) Number of outstanding shares at year-end (including treasury stocks)
At October 31, 2013: 10,533,200 shares

At October 31, 2012: 10,533,200 shares

2) Number of treasury stocks at year-end
At October 31, 2013:

554,592 shares

At October 31, 2012:

554,547 shares

At October 31, 2012:

9,978,668 shares

3) Number of average shares
At October 31, 2013:

9,978,612 shares(Reference)
1. Outline of Non-Consolidated Results of Operations for the Year Ended October 31, 2013
(1) Results of Operation (Non-consolidated)
Sales
Year Ended
October 31, 2013
Year Ended
October 31, 2012

(Percent: Change from the previous year)
Operating Income
Ordinary Income(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)

35,254

-9.0

1,578

-29.0

1,854

-25.4

38,754

-2.7

2,223

2.7

2,488

3.4

Net Income
Year Ended
October 31, 2013
Year Ended
October 31, 2012

Diluted Net Income per Share(Millions of Yen)

(Percent)

(Yen)

(Yen)

885

-43.6

88.78

-

1,571

-44.5

157.44-(2) Financial Condition (Non-consolidated)
Total Assets (A)Year Ended
October 31, 2013
Year Ended
October 31, 2012

Net Income per Share

Net Assets (B)Net Assets Ratio (B) / (A)Net Assets per Share(Millions of Yen)

(Millions of Yen)

(Percent)(Yen)

29,891

21,68672.6

2,173.33

30,22621,01269.5

2,105.70(Reference) Net assets
Fiscal year ended October 31, 2013: 21,686 million yen
Fiscal year ended October 31, 2012: 21,012 million yen*Presentation Concerning Implementation of Audit ProceduresThis financial report is exempt from audit procedures based on the Financial Instruments and Exchange Act. At the timeof disclosure of this financial report, the Company has not completed the audit procedures for financial statements based on
the Financial Instruments and Exchange Act.
*Explanations for appropriate use of the earnings forecast and other special instructions
The forward-looking statements such as a forecast of our financial results described herein are based on the information
currently available to us and certain assumptions that we believe are reasonable. Actual results could differ materially due tovarious factors. For assumptions of the forecasts and necessary precautions, refer to (1) [Analysis of Operating Results] of
1. [Operating Results and Financial Condition], on page 5.

3

Table of Contents
1. Operating Results and Financial Condition………………………………………………………………………………..5(1) Analysis of Operating Results …………………………………………………………………………………………....5(2) Analysis of Financial Condition……………………………………………………………..……………………………...6(3) Basic Policy for Profit Sharing and Dividends for Fiscal 2013 and 2014…………………..…………………….......8(4) Risk Factors in Business………………………………….…………………………………..…………………………….8
2. Tomoe Engineering and Companies………………………………………………………..…………………………….10
3. Management Policy………………………..……………….…………………………………..……………………………12(1) Basic Management Philosophy………..…………..…….…………………………………..……………………………12(2) Target Management Indices………..…………..…….………..……………………………..……………………………12(3) Mid- and Long-term Management Strategy…..…….………..……………………………..……………………………12(4) Challenges to be Addressed…..…….………………….……..……………………………..……………………………12
4. Consolidated Financial Statements…………………………………..…………………………………………………....14(1) Balance Sheets……………………………………………………………………………………………………………...14(2) Consolidated Statements of Income and Statement of Comprehensive Income……………………………… ….16

(3) Consolidated Statements of Changes in Shareholders' Equity………..………………..……………………………18(4) Consolidated Statements of Cash Flows………………………………………………………………………………...21(5) Notes for Consolidated Financial Statements…………………………………………………………………………..23(Notes for premise of going concern) ……………………………………………………………………………………...23(Changes in accounting policies) ………………………………………………………………………………………...23(Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates)…………………………………………………………………………………………………………………….23(Segment information) ………………………………………………………………………………………………………...24(Per Share information) ………………………………………………………………….……………………………………27(Significant subsequent events) …………………………………………………………………………………………….27
5. Non-Consolidated Financial Statements……………………..…………………………………………………………...28(1) Balance Sheets……………………………………………………………………………………………………………...28(2) Statements of Income……………………………………………………………………………………………………....32(3) Statements of Changes in Shareholders' Equity………………………………………………………………………..34(4) Notes for Non-Consolidated Financial Statements…………………………..………………………………………...37(Notes for premise of going concern) ……………………………………………………………………………………...37(Changes in reporting methods) ………………………………………………………………………………………….37(Per Share information) ……………………………………………………………….……………………………………....37

4

1. Operating Results and Financial Condition(1) Analysis of Operating Results[1] General condition of the current consolidated fiscal year
General operating results
During the consolidated fiscal year, Japan’s economy showed signs of improvement in corporate operating
results and personal consumption, and spurred by various factors including the government’s economic andmonetary policy, and the business climate turned toward a gradual recovery. Overseas, the business remainedin a severe condition as a whole, even as the business environment in the U.S. maintained its upward trend, as
the economy in Europe remained to drift and economic growth in newly developing countries including China
lost momentum.
Given these circumstances, in the Machinery & Equipment Business domestic net sales of components andrepairs remained steady, but overseas sales of equipment as well as sales for the domestic public sector
declined. In the Chemical Products Business, net sales in the domestic fine chemicals sector remained robust,
but in addition to softer sales in the plastics, advanced materials and electronics materials sectors, net sales ofcommodity plastics in Hong Kong contracted as well. From an earnings perspective, the principal cause forlower profits was the decline in sales in both businesses, yet factors such as booking of impairment loss on the
fixed assets at the consolidated subsidiaries, and the reaction caused by the smaller adjustment for corporate
and other taxes in conjunction with the reduction of the effective tax rate in prior year also were assumed tohave played a role in pushing earnings lower.
As a result of the above, full-year consolidated net sales for the Tomoe Engineering Group were 38,176 million yen,
8.2% down from the previous consolidated fiscal year. Operating income was 1,516 million yen, 38.1% down fromthe prior consolidated fiscal year, ordinary income was 1,680 million yen, 35.5% down from the prior consolidated
fiscal year, and net income was 841 million yen, 48.0% down from the prior consolidated fiscal year.
[Summary by business segment](Machinery & Equipment Business)
In the Machinery & Equipment Business, domestic net sales of components and repairs remained steady, but salesof equipment for the domestic public sector turned flat, overseas sales of centrifuge equipment for oil well drilling inNorth America and abrasive grain slurry recycling equipment in China as well as components and repairs werelower. As a result of these factors, consolidated net sales ended at 9,316 million yen, 24.4% down compared withthe previous fiscal year. From an earnings perspective, operating income was 527 million yen, 59.1% down from theprevious fiscal year against the backdrop of the lower net sales for the business as a whole.
(Chemical Products Business)
In the Chemical Products Business, sales of UV curing resin in the fine chemicals sector and sales in theindustrial materials sector of products such as material for housing and construction remained steady. On theother hand, sales in the plastics sector of commodity plastics mainly for imported wood, sales in the advanced
materials sector of various ceramic and metallic materials for use in semiconductor manufacturing, sales inthe electronics materials sector of tools for use in semiconductor manufacturing all were slack. As a result of
these factors, full-year consolidated net sales were 28,859 million yen, 1.3% down from the previous fiscal
year.
From an earnings aspect, the decline in sales of commercial products with comparatively high margins in theadvanced materials sector, together with factors such as higher procurement costs for imported materials
because of the yen’s appreciation and slack sales for the resin plastic compounding business in Shenzhen,
China, put pressure on profits for the business as a whole, and operating income was 988million yen, 14.6%
down from the previous fiscal year.

5[2] Outlook for the next fiscal year (November 1, 2013- October 31, 2014)
During the fiscal year ending in October 2014, Japan’s economy is expected to continue the momentum carrying
it toward a sustainable recovery domestically, including an improvement in corporate operating performance, as
the result of various economic measures. Despite a temporary reactionary slump in demand that is likely to be
triggered by a consumption tax increase during the period, the move toward an expanding economy is also being
supported by external demand and increased spending on public works projects, and is not expected to change.
On the other hand, there are overseas risk factors as well, including the uncertainties surrounding U.S. fiscal andmonetary policy and the economic slowdown in newly developing countries, and the management environment
surrounding the Tomoe Engineering Group is projected to remain severe. Given such circumstances, in the
Machinery & Equipment Business we expect to expand our market not only for oil wells but in sectors such as
petrochemicals, particularly through our local subsidiaries in the North and South America regions, while
domestically we plan to increase revenues by expanding sales of our low-power, energy-saving centrifuge
models, and we project fiscal year consolidated net sales of 12,100 million yen (29.9% up compared with theprevious year) and operating income of 1,040 million yen (97.1% up compared with the previous year). In theChemical Products Business, domestically we will maintain our share of sales in our existing business by working
to further enhance our portfolio of commercial products to address market needs. We also project overseas sales
to expand as a result of the development of new markets and commercial products centered on Southeast Asia,
and we plan to rebuild our resin plastic compounding business in Shenzhen, China with the goal of revitalizing its
operating performance. As a result, we project fiscal year consolidated net sales of 29,200 million yen (1.2% up
compared with the previous year), and operating income of 890 million yen (10.0% down compared with theprevious year) that will reflect a rate of increase in expenses that outpaces the growth rate of net sales. As a resultof these efforts, for the entire Tomoe Engineering Group in the consolidated fiscal year ending October 2014, we
project net sales to grow by 8.2% to 41,300 million yen, operating income to increase by 27.3% to 1,930 million
yen, and ordinary income to increase by 22.0% to 2,050 million yen. Because we do not anticipate any special
factors, including extraordinary income or losses, we project net income to climb by 42.7% to 1,200 million yen.
The operating results forecasts for the next period described above are based on information available to theCompany at the time the forecasts were prepared and assumptions judged to be reasonable. Actual operating
results might differ from these forecasts depending upon changes in domestic and international financial andeconomic conditions, the supply and demand situation, various risk factors and other uncertainties.
(2) Analysis of Financial Condition[1] Assets, Liabilities, and Net Assets
Assets at the end of the current consolidated fiscal year were 33,477 million yen, down 344 million or 1.0% from thebalance at the end of the previous consolidated fiscal year, reflecting lower cash and deposits and notes andaccounts receivable-trade. Liabilities were 9,902 million yen, down 1,384 million yen or 12.3% from the end of theprevious consolidated fiscal year, mainly because of lower payables and income taxes payable. Net assets were
23,575 million yen, 1,040 million yen or 4.6% up from the end of the previous consolidated fiscal year. This
mainly reflected an increase of retained earnings reported at net income, and an increase in the translation
adjustments account, which was affected by the depreciation of the yen. As a result of the above changes,
the equity ratio at the end of the consolidated fiscal year rose by 3.8 points compared with the end of theprevious consolidated fiscal year to 69.8%.
[2] Cash Flow Status
Balance of cash and cash equivalent as of the end of the current consolidated fiscal year decreased by 291 million
yen to 7,171 million yen from the previous consolidated fiscal year. Status of each cash flow and their factors during
the current consolidated fiscal year are as follows:6

(Net Cash Provided by (Used in) Operating Activities)
Net cash provided by operating activities was 498 million yen (1,005 million yen provided during the previous
consolidated fiscal year). Income before income taxes and minority interests was 1,502 million yen, and notes andaccounts receivable-trade fell by 828 million yen, inventory fell by 362 million yen, while notes and accounts
payable-trade decreased by 1,099 million yen, and income taxes paid were 1,105 million yen.
(Net Cash Provided by (Used in) Investing Activities)
Because purchases of plant, property and equipment were 408 million yen, and purchases of intangible fixed assets
were 251 million yen, the net amount of cash used in investing activities was 755 million yen (612 million yen usedduring the previous consolidated fiscal year).
(Net Cash Provided by (Used in) Financing Activities)
Net cash used in financing activities was 381 million yen (244 million yen used during the previous consolidated
fiscal year),mainly for the payment of cash dividends of 399 million yen.
Trends in cash flow indices are as follows:Year Ended
October 31,
2009
Equity Ratio (Percent)Year Ended
October 31,
2010

Year Ended
October 31,
2011

Year Ended
October 31,
2012

Year Ended
October 31,
2013

66.8

62.4

64.5

66.0

69.8

51.8

38.6

42.5

39.7

46.6

0.2

0.3

0.3

0.8

1.7

88.8

151.7

258.7

115.8

35.6

Equity Ratio Based on
Market Value (Percent)Debt-repayment to Cash
Flow Ratio (Years)
Interest Coverage Ratio(Percent)

Equity ratio: Net assets / Total assets
Equity ratio based on market value: Market capitalization of shares / Total assets
Debt-repayment to cash flow ratio: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest payment(Note)
1. All indices are calculated on the basis of consolidated financial figures.
2. Market capitalization is calculated based on the number of outstanding shares excluding treasury stock.
3. Cash flow refers to net cash provided by (used in) operating activities.
4. Interest-bearing debt refers to all debt reported on the consolidated balance sheet for which interest is being
paid.

7

(3) Basic Policy for Profit Sharing and Dividends for Fiscal 2013 and 2014
As its basic policy concerning the distribution of earnings beginning from the current period, the Tomoe EngineeringGroup will “implement appropriate, stable dividends by seeking to increase internal reserves to reinforce our financial
position and corporate strength, and by considering consolidated operating results, the group’s medium-term businessstrategy and other factors in a comprehensive manner.”
Based on the above policy, and considering operating results for the current period and the future outlook, for the
consolidated fiscal year ended October 2013 we plan to pay a dividend of 45 yen per share, an increase of 5 yen
compared with the prior consolidated fiscal year.
The dividend for the consolidated fiscal year ending on October 31, 2014 will be 45 yen per share (including aninterim dividend per share of 22.5 yen), based on consideration of the outlook for consolidated operating results andthe fact the Company will newly implement payment of an interim dividend.
(4) Risk Factors in Business
The key areas of business risks of our group that might have significant influence on investors’ decision are as follows.
The following judgments are made based on the business information at the end of the current consolidated fiscal year,
although some forward-looking statements are contained.
[1] Seasonal Fluctuation of Operating Results
Currently there is a seasonal bias in sales and profits of our group toward the second quarter. This is because thatpublic sector sales account for relatively a high percentage in the sales of Machinery & Equipment Business andtend to be concentrated in the second quarter due to public sector's budget implementation.
[2] Influence of Foreign Exchange Fluctuation
Businesses of our group include exports and import in foreign currencies, and exchange rate fluctuations may affectthe values after translation into yen. Operating results and financial condition of our group might be affected by therange of foreign exchange fluctuation although we make efforts to minimize exchange fluctuation risks by entering
into forward exchange contracts. Since our group has overseas subsidiaries, we prepare financial statements inforeign currencies. In preparing consolidated financial statements, there is a risk associated with exchange
fluctuation when converting into yen equivalent.
[3] Potential Risk of Overseas Activities
Our group is engaged in marketing and manufacturing overseas, focusing on China and other Southeast Asian
countries. Our group will monitor the local situations with the greatest care and take appropriate actions on a timely
basis. However, our group’s operating results and financial condition might be affected by unforeseen circumstances
arising from local political conditions, governments, legal restrictions, taxation systems, customs, etc.
[4] Risk Associated with Quality of Goods and Products
The products of our group are manufactured by paying due attention based on systematic quality control. The
products that require technical development might cause risk of having cost of repair and replacement. Also, since
our group is not directly involved in manufacturing of many of imported raw materials, defects that our group is notdirectly associated with may occur and we might be obligated to cease sales and collect such materials. Although
we are prepared to take prompt and appropriate actions to cope with the risks involved in quality of manufactured
products and commercial goods, it may affect our group’s operating results and financial condition to the extent of
the problem.

8[5] Risks of New Investment
Our group is in a quest to pursue high-value-added business all the time. To do this, we must take measures suchas aggressive investment in some situations; however, these measures may involve higher potential risks thanconventional business risks. Even though we take such sufficient preparations and measures, some unexpected
events may result in affecting operating results and financial condition of our group.
[6] Risks when a Natural Disaster Occurs
Our group is implementing various risk measures, including seismic performance improvements to buildings andstructures (including rental properties), preparation of emergency response procedures, data backup enhancements
and the introduction of a system to confirm executive and employee safety, and working to prepare a business
contingency plan (BCP). Although we are implementing such measures, however, there is a possibility our
production capacity or sales capabilities might be substantially reduced by the occurrence of a large-scale natural
disaster to which we cannot respond, and business opportunities could be lost and our operating results andfinancial position might be affected as a result.

92. Tomoe Engineering and Companies
Tomoe Group consists of Tomoe Engineering and its eleven subsidiaries. The group is mainly engaged in manufacture anddistribution of centrifuges and trading of chemical products. Business activities of the group are divided into the following
three main categories. “Business Segments,” which will be discussed in a later section, are based on the following businessactivity segments. Since “other businesses” involve no consolidated subsidiary, “Business Segments” do not include figures
related to them.
Machinery & Equipment Business:
Tomoe Engineering manufactures and distributes centrifuges. Its subsidiary Tomoe Machinery Service provides
centrifuge users with after-sales services as well as parts. Its subsidiary Tomoe Machinery undertakes machining andsheet-metal processing of centrifuge. Tomoe Engineering consigns manufacture of the centrifuges and the after-sales
service to its subsidiary Tomoe Engineering (Shanghai). Its subsidiary Tomoe Engineering USA, Inc. provides
centrifuges and parts with after-sales services.
Chemical Products Business:
Interstella Plastics (Shenzhen) and Stella Tech Engineering Plastics (Shenzhen) are engaged in coloring andcompounding of plastic materials. Our affiliate, Interstella is an investing company of Stella Tech Engineering Plastics(Shenzhen) and also serves as a contact for purchasing and sales. Tomoe (Hong Kong) and its subsidiary Tomoe
Trading (Shenzhen) are functioning as central core for sales activity in China in Tomoe Group. Tomoe Wine & Spirits
distributes wines and spirits imported by Tomoe Engineering.
Other Businesses:
Tomoe Butsuryu subcontracts with our company for products’ transportation and warehousing.
Schematic diagram of Tomoe’s subsidiaries operation is on the next page.

10

(◎: Consolidated subsidiaries)

Products sale

Purchase of products◎Interstella

Purchase of products

Purchase of plastic materials & sale

Tomoe Engineering
USA, Inc.
Sale & after-sale servicesof our products

Purchase ofmaterials

Products sale◎Interstella Plastics(Shenzhen)
Plastic coloring and compounding

Machinery & Equipment Business

Chemical Products BusinessTomoe Engineering Co., Ltd.

11

Products sale

Products sale

Purchase & sale of chemical industry products

Products sale

after-sale services

Products sale &Purchase of materials◎Tomoe (Hong Kong)

Products saleParts sale

After-sale services & parts
sale of our products

Purchase of parts◎Tomoe Machinery
Service

Maintenance of delivered products

Parts processing

Manufacturing consignment& parts sale

Sheet metal processing &machiningdelivered products

Products sale

Manufacturing, sale & after-saleservices of our products

Products sale

◎Tomoe Engineering(Shanghai)◎Tomoe Machinery

Maintenance of◎ Stella-Tech Engineering Plastics(Shenzhen)
Plastic coloring & compounding

Products sale

After-sale services& parts sale、

After-sale services& products sale

Purchase of products

Customers

Tomoe Trading (Shenzhen)
Sale of chemical industry products

3. Management Policy(1) Basic Management Philosophy
Our basic management philosophy is to contribute to society and provide a good quality of life to people involved
through growth and development of our company with spirit of creation and entrepreneurship and to provide ourcustomers with high level of technologies and excellent products. Guided by this policy, we shall be engaged in
the manufacture and sale of machinery based primarily on solid-liquid separation techniques and importation ofunique and specialty raw materials for chemical industry.
(2) Target Management Indices
Rather than just aiming for a volume growth, in our Machinery & Equipment Business we always try to develop
and sell products that require specialized technology, while in our Chemical Products Business we seek to handle
unique, high value-added products that demand expertise, even if their market is not so large. To pursue thesegoals, we regard improvement of profitability as our primary management goal. As a management indicator formeeting these goals, we give highest priority to ordinary income, which directly expresses the nature and changeof profitability.
(3) Mid- and Long-term Management Strategy
The long-term management strategy of Machinery & Equipment Business is to develop new products, reduce
manufacturing cost, and expand business overseas, and that of Chemical Products Business is to discoverunique new commercial products, to seek new customers and to deploy business aggressively for overseas
markets.
To achieve continuous progress on our basic strategy, in November 2013 we formulated the Tenth Mid-termManagement Plan “Target 2016” (from November 1, 2013 to October 31, 2016). The plan is devoted mainly
to implementing measures based on the following policies after newly identifying the ideal approach toallocating management resources and capturing market share. More specifically, in the Machinery &Equipment Business, we will expand foreign sales centered on North and South America, China and Southeast
Asia, while increasing domestic sales of our low-power, energy-saving centrifuge. In the Chemical Products
Business, we set key strategies to increase overseas sales by developing new markets and new commercial
products mainly in Southeast Asian market, and to maintain our market share of the existing business byimplementing measures to meet customer needs. As our objective, we will seek to achieve consolidated net salesof 47,500 million yen and ordinary income of 2,600 million yen in the fiscal year ending October 2016, the final yearof our mid-term management planning period.
(4) Challenges to be Addressed
Despite lingering instability affecting the global economy, including concerns of an economic contraction in
Europe and the weakening of growth in newly developing countries, some brighter indications can also be notedin the outlook for the operating environment. These include the U.S. economic recovery, which is being driven by
the shale gas revolution, as well as the recovery in corporate operating results and upturn in personal
consumption in Japan as a result of the government’s economic measures. In light of this environment, theTomoe Group recognizes that achieving overseas business expansion in both its businesses is a priority issue.
In the Machinery & Equipment Business, we will concentrate on development of the North and South America
markets based on our local subsidiaries, and on sales growth in the markets in China and Southeast Asia basedon a strengthened sales agent policy. In the Chemical Products Business, we will focus on expansion of our

12business territory through efforts to create new markets and commercial products mainly in Southeast Asia,
which is expected to grow. In Tomoe’s resin plastic compounding business at its subsidiary in Shenzhen, China,
the Company will undertake a rebuilding effort aimed at reinvigorating operating results by specializing in
products such as commodity plastics, and devoting efforts to retaining existing customers and acquiring newcustomers and broadening the market. The Company also will strive to further strengthen the operating base bysystematically training the human resources who support Tomoe’s overseas business and the individuals whowill be responsible for the future management of these operations. To steadily execute these issues, theCompany’s policy is to achieve sustained growth in both of the Company’s businesses, and bolster its capacity
to generate stable earnings, by promoting management policies based on Tomoe’s 10th Medium-Term
Management Plan.
To enhance and strengthen corporate governance and compliance we have established a Corporate Ethics
Committee, and in the future this committee will take the lead in efforts to ensure management in full compliancewith the letter and spirit of the law and improve corporate ethics. From the view point of corporate governance,
we will maintain our efforts to firmly establish wide-ranging risk management centered on our Risk Management
Committee, and to pursue the consolidation of our management environment from an IT perspective by
undertaking construction of our next-generation mission-critical systems. Moreover, the Company will also work
to strengthen its management organization to ensure business continuity, as a measure against the risk ofoccurrence of a major natural disaster like the Great East Japan Earthquake.

13

4. Consolidated Financial Statements(1) Balance Sheets(Thousands of Yen)
Year Ended October 31, 2012

Year Ended October 31, 2013

Cash and Deposits

7,463,174

7,171,846

Notes and Accounts Receivable-Trade

13,303,606

12,639,632

Merchandise and Finished Goods

3,392,880

3,231,590

Work in Process

866,726

888,624

Raw Materials and Supplies

943,399

988,780

Deferred Tax Assets

567,855

405,172

Others

243,152

249,739-11,236
26,769,560

25,568,332

2,350,890

2,434,925

Accumulated Depreciation-1,421,955-1,479,133

Buildings and Structures, Net

928,934

955,791

Machinery, Equipment and Vehicles

3,578,358

3,867,792-2,801,629-3,136,674

776,729

731,117Land

922,024

920,536

Lease Assets

40,902

9,867-34,864-9,5386,038

328

2,622,040

2,583,008

1,025,652

1,035,492-949,624-959,869

76,02775,6235,331,794

5,266,406

225,021511,391

Investment Securities

606,190

1,126,177

Guarantee Deposits

384,158

251,735

Deferred Tax Assets

29,57823,456

Others522,582771,667

Allowance for Doubtful Accounts-46,779-41,232

Total Investments and Other Assets

1,495,730

2,131,805

Total Noncurrent Assets

7,052,546

7,909,602

Total Assets

33,822,106

33,477,935

AssetsCurrent Assets

Allowance for Doubtful Accounts
Total Current Assets-7,053

Noncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, Net

Accumulated Depreciation
Lease Assets, Net
Construction in progress
Others
Accumulated Depreciation
Others, Net
Total Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

14

(Thousands of Yen)
Year Ended October 31, 2012

Year Ended October 31, 2013

6,956,704

6,096,703

630,376
7,216

731,535
775

Accounts Payable-Others

527,111614,544

Income Taxes Payable

590,898

32,292

Advances Received

73,78977,347

Provision for Bonuses

1,074,756

751,650

Provision for Directors' Bonuses

70,43135,713

Allowance for Product Warranty

194,363

180,198

Others234,504

278,980

10,360,153

8,799,742

41,750775

43,6680

Provision for Retirement Benefits

38,94247,538Provision for Directors' Retirement Benefits

29,60018,680

Deferred Tax Liabilities

815,962

992,832

Total Noncurrent Liabilities

927,031

1,102,719

Total Liabilities

11,287,185

9,902,461

1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

20,396,505

20,838,441-363,393-363,462

22,577,731

23,019,599

Valuation and Translation Adjustments
Valuation Difference on Available-for-Sale
Securities
Deferred Gains or Losses on Hedges

23,172

211,320525

578

Foreign Currency Translation Adjustment-293,239

121,844

Total Valuation and Translation Adjustments-269,541

333,743

226,731

222,130

Total Net Assets

22,534,921

23,575,473

Total Liabilities and Net Assets

33,822,106

33,477,935

Liabilities and Net Assets
Liabilities
Current Liabilities
Notes and Accounts Payable-Trade
Short-Term Loans Payable
Lease Obligations

Total Current Liabilities
Noncurrent Liabilities
Long-Term Loans Payable
Lease Obligations

Net Assets
Shareholders’ Equity
Capital Stock

Treasury Stock
Total Shareholders’ Equity

Minority Interests15(2) Consolidated Statements of Income(Thousands of Yen)
Year Ended October 31, 2012

Year Ended October 31, 2013

Net Sales

41,575,659

38,176,654

Cost of Sales

32,855,392

30,498,986

Gross Profit

8,720,267

7,677,668

Selling, General and Administrative Expenses

6,272,275

6,161,160

Operating Income

2,447,991

1,516,507

Interest income

14,96018,952

Dividends Income

18,503

19,075

Rent Income

11,7609,584

Foreign Exchange Gains

92,39698,091Others54,424

59,691

192,044

205,394

9,776

13,314

69

68

Commission Paid

9,508

9,500

Sales Discount

4,771

6,489

Others

10,36912,066

Total Non-Operating Expenses

34,49541,439Ordinary Income

2,605,539

1,680,463

Gain on Sales of Noncurrent Assets

11,3890Gain on Sales of Investment Securities

28,541

19,218Gain on Change in Equity Interest

6,780

0

46,711

19,218

6,092

11,1800

186,005

Loss on Valuation of Investment Securities

4,906

0

Loss on Valuation of Memberships

1,400

0

Total Extraordinary Losses

12,399197,186

Income before Income Taxes and Minority Interests

2,639,851

1,502,495

Income Taxes-Current

1,132,475

485,344

Income Taxes-Deferred-64,273

254,853

1,068,202

740,198

1,571,648

762,297-44,739-78,785

1,616,388

841,082

Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses
Interest Expenses
Loss on Sales of Notes Payable

Extraordinary Income

Total Extraordinary Income
Extraordinary Losses
Loss on Retirement of Noncurrent Assets
Loss on Impairment

Total Income Taxes
Income before Minority Interests
Minority Interests Income
Net Income

16Consolidated Statements of Comprehensive Income(Thousands of Yen)

Income before Minority Interests

Year Ended October 31,

Year Ended October 31,

2012

2013
1,571,648

762,297-28,453

188,147

Deferred Gains or Losses on Hedges

295

53

Foreign Currency Translation Adjustment

28,711

489,269553

677,469

1,572,202

1,439,767

1,616,812

1,444,367-44,610-4,600

Other Comprehensive Income
Valuation Difference on Available-for-sale Securities

Total Other Comprehensive Income
Comprehensive Income(Breakdown)Comprehensive Income attributable to Owners of the
ParentComprehensive Income attributable to Minority
Interests17

(3) Consolidated Statements of Changes in Shareholders' Equity(Thousands of Yen)
Year Ended October 31, 2012

Year Ended October 31, 2013

1,061,210

1,061,210

001,061,210

1,061,210

1,483,410

1,483,410

001,483,410

1,483,410

19,179,264

20,396,505

Cash Dividend Paid

-399,147-399,146

Net Income

1,616,388

841,082

Total Amount Changed

1,217,240

441,936

Surplus during This Fiscal Year

20,396,505

20,838,441-363,319-363,393

Issued Shares Reacquired

-73

-68

Total Amount Changed

-73

-68

-363,393-363,462

21,360,564

25,577,731

Cash Dividend Paid

-399,147-399,146

Net Income

1,616,388

841,082-73-68

Total Amount Changed

1,217,166

441,867

Surplus during This Fiscal Year

22,577,731

23,019,599

Shareholders' Equity
Common Stock
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Capital Surplus
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Retained Earnings
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Issued Shares Reacquired
Surplus During Previous Fiscal Year
Changes During This Fiscal Year

Surplus during This Fiscal Year
Total Shareholders’ Equity
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Issued Shares Reacquired18

(Thousands of Yen)
Year Ended October 31, 2012

Year Ended October 31, 2013

51,62623,172

Total (Net) Amount Changed(Except Shareholders' Equity)-28,453

188,147

Changes during This Fiscal Year

-28,453

188,147

23,172

211,320230

525

Total (Net) Amount Changed(Except Shareholders' Equity)

295

53

Changes during This Fiscal Year

295

53

525

578

Surplus during Previous Fiscal Year

-321,821-293,239

Changes during This Fiscal Year
Total (Net) Amount Changed(Except Shareholders' Equity)

28,581

415,084

28,581

415,084-293,239

121,844-269,965-269,541

Total (Net) Amount Changed(Except Shareholders' Equity)423

603,284

Changes during This Fiscal Year

423

603,284-269,541

333,743

239,227

226,731

Total (Net) Amount Changed(Except Shareholders' Equity)-12,496-4,600Changes during This Fiscal Year

-12,496-4,600226,731

222,130

Revaluation and Translation Adjustments
Valuation Difference on Available-for-sale
Securities
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Surplus during This Fiscal Year
Deferred Gains or Losses on Hedges
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Surplus during This Fiscal Year
Foreign Currency Translation Adjustment

Changes during This Fiscal Year
Surplus during This Fiscal Year
Total Revaluation and Translation Adjustments
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Surplus during This Fiscal Year
Minority Interests
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Surplus during This Fiscal Year19

(Thousands of Yen)
Year Ended October 31, 2012

Year Ended October 31, 2013

21,329,827

22,534,921

Cash Dividend Paid

-399,147-399,146

Net Income

1,616,388

841,082-73-68-12,072598,684

Total Amount Changed

1,205,094

1,040,552

Surplus during This Fiscal Year

22,534,921

23,575,473

Total Net Assets
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Issued Shares Reacquired
Total (Net) Amount Changed(Except Shareholders' Equity)20

(4) Consolidated Statements of Cash Flows(Thousands of Yen)
Year EndedYear Ended

October 31, 2012

October 31, 2013

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

2,639,851

1,502,495

Depreciation and Amortization

382,304

397,696

Increase (Decrease) in Provision for Bonuses(10,283)(329,666)

Increase (Decrease) in Provision for Directors' Bonuses

8,654(34,717)

Increase (Decrease) in Allowance for Product Warranty
Increase (Decrease) in Provision for Retirement Benefits(87,182)2,141(14,165)
7,615

Increase (Decrease) in Provision for Directors' Retirement Benefits(2,160)(10,920)

Increase (Decrease) in Allowance for Doubtful Accounts(41,712)(9,730)Interests and Dividends Income(33,463)(38,027)

Interest Expenses

9,776

13,314Foreign Exchange Losses (Gains)(2,313)(65,278)

Loss (Gain) on Valuation of Investment Securities

4,906

0

Loss on Valuation of Memberships

1,400

0

Loss (Gain) on Sales of Investment Securities(28,541)(19,218)

Loss (Gain) on Change in Equity Interest(6,780)0

0186,005

Loss (Gain) on Sales of Noncurrent Assets(11,389)0

Loss on Retirement of Noncurrent Assets

6,092

11,180Receivable-Trade(806,209)

828,347

Decrease (Increase) in Inventories(22,010)362,893

Increase (Decrease) in Notes and Accounts Payable-Trade

449,811-1,099,851

Increase (Decrease) in Accounts Payable-Others(21,161)

17,748

Increase (Decrease) in Advances Received(388,828)

366

Increase (Decrease) in Accrued Consumption Taxes(65,364)

112,889

Others, Net

98,803-235,544

2,076,340

1,583,430

Interests and Dividends Income Received

33,90634,988Interest Expenses Paid

(8,685)(13,988)(1,096,045)(1,105,807)

1,005,516

498,622

Loss on Impairment

Decrease (Increase) in Notes and Accounts

Sub total

Income Taxes Paid
Net Cash Provided by (Used in) Operating Activities(Thousands of Yen)

21

Year EndedYear Ended

October 31, 2012

October 31, 2013

Net Cash Provided by (Used in) Investment Activities
Disbursement to Time Deposits(6,700,000)(7,400,000)

Proceeds from Withdrawal of Time Deposits

6,700,000

7,400,000

Purchase of Property, Plant and Equipment(445,937)(408,202)

14,787

3,294

Purchase of Intangible Fixed Assets(185,421)(251,694)

Purchase of Investment Securities(16,966)(247,497)

Proceeds from Sales of Investment Securities

52,83225,603

Payments of Loans Receivable(5,190)(3,870)

Collection of Loans Receivable

2,719

2,844

Guarantee Deposits (Increase)(27,524)

126,122

Others, Net(1,563)(2,528)(612,265)(755,927)

Net Increase (Decrease) in Short-Term Loans Payable

79,061

34,110

Proceeds from Long-Term Loans

51,5180

Repayments of Lease Obligations(14,556)(9,063)(73)(7,216)38,893(68)(399,147)(399,146)(244,304)(381,384)

Equivalents

17,672Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period

166,619

347,361(291,328)

7,296,554

7,463,174

Cash and Cash Equivalents at End of This Fiscal Year7,463,174

7,171,846

Proceeds from Sales of Property, Plant and Equipment

Net Cash Provided by (Used in) Investment Activities
Net Cash Provided by (Used in) Financing Activities

Purchase of Treasury StockFunds Provided by Payment from Minority Shareholders
Cash Dividends Paid
Net Cash Provided by (Used in) Financing Activities
Cash and Cash Equivalents
Effect of Exchange Rate Change on Cash and Cash22

(5) Notes for Consolidated Financial Statements(Notes for premise of going concern)
There are no pertinent matters to report.

(Changes in accounting principles)
Traditionally, the company and its consolidated subsidiaries measured the value of raw materials mainly using thevaluation at cost method, costs being based on the first-in-first-out method (for amounts reported on the balance
sheet, write-downs of book values based on the decline in profitability). Beginning from the consolidated
accounting period, the Company has changed to the moving average method (for amounts reported on thebalance sheet, write-downs of book values based on the decline in profitability). The Company adopted thischange in conjunction with the restructuring of its systems for the purpose of smoothing the effects of changes in raw
materials prices in the market, and reporting more appropriate evaluations of raw materials and periodic accountingof profit and loss.
The effect of this change is not material, and the Company will not apply the change retrospectively.
(Changes in accounting policies that are difficult to distinguish from changes in accounting estimates)
In conjunction with the amendment of the Corporation Tax Law, beginning from the consolidated accounting period,
for tangible fixed assets acquired on or after November 1, 2012 the Company and its domestic consolidated
subsidiaries will change to a depreciation method based on the amended Corporation Tax Law.
The effect of this change on the consolidated income is not material.

23

(Segment information)
1. Summary of reporting segments
TOMOE Engineering Co., Ltd. has established two operational headquarters. These operational headquarters aredeveloping their business activities by planning comprehensive domestic and overseas strategies for the respective
manufactured and commercial products they handle.
We therefore have assumed these two businesses, referred to as the “Machinery & Equipment Business” and the“Chemical Products Business”, as our company reporting segments. The Machinery & Equipment Business mainly
manufactures and sells centrifuge decanters, and the Chemical Products Business mainly manufactures, stocks
and sells chemical industry products.
The Company’s reporting segments are those units of the Company’s for which discrete financial information isavailable and for which the Board of Directors regularly conducts a review for the purpose of making decisions about
resources to be allocated to the segments and assess the segments' performance.
2. Method for calculating amounts of net sales, income or loss, assets, liabilities and other items for each reporting
segment
The accounting methods for reporting segments are identical to the accounting methods adopted for preparation of
the consolidated financial statements.

3. Information concerning the amount of net sales, income or loss, assets, liabilities and other items for each reporting
segment
Previous Consolidated Fiscal Year (Year Ended October 31, 2012)
Reporting segment
Machinery &Equipment
Business
Sales
Sales to Unaffiliated Customers
Internal Sales Among
Segments or AmountTransferred
Total
Segment Income
Segment Assets
Other Items
Depreciation & Amortization
Increase in Property, Plant &Equipment and Intangible
Assets(Thousands of Yen)
Amount ofConsolidated
Adjustment
Financial
Note 1
Statements
Reported
AmountNote 2

Chemical
Products
Business

Total

12,330,809

29,244,850

41,575,659

0

41,575,659

0
12,330,809
1,289,600
8,331,961

029,244,850
1,158,390
14,906,841

0
41,575,659
2,447,991
23,238,802

000
10,583,303

041,575,659
2,447,991
33,822,106

251,760

130,543

382,304

0382,304

449,684

151,012600,6970600,697(Notes)1. The adjustment amount for segment assets is the assets of the entire company that cannot be allocated to eachreporting segment, and is mainly idle operating funds (cash on hand and in banks), long-term investments(investment securities) and assets acquired in relation to a district redevelopment project.
2. The total amount for segment income agrees with the operating income reported on the Consolidated Statement of
Income.

24Current Consolidated Fiscal Year (Year Ended October 31, 2013)(Thousands of Yen)
Consolidated
Amount of
Financial
Adjustment
Statements
Note 1
Reported
AmountNote 2

Reporting segment
Machinery &Equipment
Business
Sales
Sales to Unaffiliated Customers
Internal Sales Among
Segments or AmountTransferred
Total
Segment Income
Segment Assets
Other Items
Depreciation & Amortization
Increase in Property, Plant &Equipment and Intangible
AssetsChemical
Products
Business

Total

9,316,923

28,859,730

38,176,654

0
9,316,923
527,594
8,456,726

0
28,859,730
988,913
14,209,246

262,384

577,0870038,176,654
0

38,176,654
1,516,507
22,665,973

000
10,811,962

38,176,654
1,516,507
33,477,935

135,311397,696

0397,696

149,308

726,3960726,396(Notes)1. The adjustment amount for segment assets is the assets of the entire company that cannot be allocated to eachreporting segment, and is mainly idle operating funds (cash on hand and in banks), long-term investments(investment securities) and assets acquired in relation to a district redevelopment project.
2. The total amount for segment income agrees with the operating income reported on the Consolidated Statement of
Income.
(Related information)

Previous Consolidated Fiscal Year (Year Ended October 31, 2012)
1. Information by product and service
The Company has omitted a description of information by product and service because this same information isdisclosed in segment information.
2. Regional Information
1. Net Sales(Thousands of Yen)

Japan

Asia

OthersTotal

31,860,194

6,544,120

3,171,343

41,575,659(Note) Net sales are classified by country or region based on the customer’s location.
2. Property, Plant and Equipment
Japan4,987,397(Thousands of Yen)
Asia

Total
344,397

5,331,794

3. Main Customer Information
The Company has omitted a description of sales to outside customers because there are no customers to which sales
account for more than 10% of the net sales reported in the Consolidated Statements of Income.

25

Current Consolidated Fiscal Year (Year Ended October 31, 2013)
1. Information by product and service
The Company has omitted a description of information by product and service because this same information isdisclosed in segment information.
2. Regional Information
1. Net Sales(Thousands of Yen)

Japan

Asia

Others31,554,864

5,906,489

Total

715,300

38,176,654(Note) Net sales are classified by country or region based on the customer’s location.
2. Property, Plant and Equipment
Japan
5,054,309(Thousands of Yen)

Asia

Others

189,405

Total

22,691

5,266,406

3. Main Customer Information
The Company has omitted a description of sales to outside customers because there are no customers to which sales
account for more than 10% of the net sales reported in the Consolidated Statements of Income.
(Information concerning impairment losses on fixed assets by reporting segment)
There are no pertinent matters to report.
(Thousands of Yen)
Reported segments
Machinery &Equipment
Business
Impairment loss

5,423

Chemical
Products
Business

Subtotal

180,582

186,005

Elimination at
the Company
0(Information concerning amortization of goodwill and unamortized balances by reporting segment)
There are no pertinent matters to report.
(Information concerning gain on negative goodwill by reporting segment)
There are no pertinent matters to report.

26

Total

186,005

(Per Share Information)
Year EndedYear Ended

October 31, 2012

October 31, 2013

Net Asset per Share

59¥2,235.

¥2,340.34

Net Income per Share¥161.98¥84.29(Note 1) Income per share for this fiscal year after adjustment of the residual securities is not presented as there are noresidual securities.
(Note 2) Calculation basis for net income per share are as follows:Year EndedYear Ended

October 31, 2012

October 31, 2013

Net Income for this Fiscal Year (thousands of yen)

1,616,388

841,082

Net Income for Common Stock (thousands of yen)

1,616,388

841,082

Average number of Common Stock during the Fiscal Year9,978,668

9,978,612(Note 3) Calculation basis for net asset per share are as follows:

Total for Net Asset in Consolidated Balance SheetYear EndedYear Ended

October 31, 2012

October 31, 2013

22,534,921

23,575,473

Amount deducted from the total for Net Assets (thousands of yen)

226,731

222,130(Minority Interests) (thousands of yen)

(226,731)(222,130)

Net Asset for Common Stock (thousands of yen)

22,308,190

23,353,342

9,978,653

9,978,608(thousands of yen)

Number of Common Stock used for calculation of Net Assets
per Share (share)(Significant subsequent events)
None
.

27

5. Non-Consolidated Financial Statements(1) Balance Sheets(Thousands of Yen)ndAssets83 Period

84rd Period(October 31, 2012)(October 31, 2013)

Current Assets
Cash and Deposits

5,835,545

5,219,048

Notes Receivable-Trade

2,926,364

2,806,701

Accounts Receivable-Trade

9,549,871

9,033,522

Merchandise and Finished Goods

2,315,299

2,490,026

Work in Process

740,522757,861

Raw Materials and Supplies

869,108

909,794

Advance Payment

5,730

2,773

Prepaid Expense

97,25598,644

Accrued Revenue

65,07890,764

Short-Term Loans Receivable

53,36164,927

Deferred Tax Assets

521,654353,914

6,445

6,648

Others-11,306-7,15922,974,931

21,827,470

1,893,593

1,958,464-1,068,497-1,099,244

825,096859,219

142,515

125,242-125,983-114,825

Structures, Net

16,531

10,416

Machinery and Equipment

2,265,612

2,352,035-1,935,577-1,987,386

330,034

364,649

39,43735,972-39,437-35,9720Allowance for Doubtful Accounts
Total Current Assets
Noncurrent Assets
Property, Plant and Equipment
Buildings
Accumulated Depreciation
Buildings, Net
Structures
Accumulated Depreciation

Accumulated Depreciation
Machinery and Equipment, Net
VehiclesAccumulated Depreciation
Vehicles, Net
Tools, Instrument and Equipment

908,4970885,909

Accumulated Depreciation-848,042-836,536

60,45449,372

Land

877,653

876,165

Lease Assets

40,902

9,867-34,864-9,5386,038

328

2,618,535

2,583,008

4,734,344

4,743,160

Tools, Instrument and Equipment, Net

Accumulated Depreciation
Lease Assets, Net
Construction in Progress
Total Property, Plant and Equipment

28

(Thousands of Yen)nd

83 Period

84rd Period(October 31, 2012)(October 31, 2013)

Intangible Assets
Telephone Rights

8,165

8,165

Software123,625

92,494

Software Suspense Account

91,042406,598

Lease Asset

1,513

378

224,346

507,636

Investment Securities

572,190

1,092,177

Stocks of Affiliated Companies

466,265

566,115

Investments – Affiliated Companies

371,395

171,075

Employees

4,897

Claims in Bankruptcy

1,395

6,415
2,049

Prepaid Pension Expense

483,147

708,892

Guarantee Deposits

368,971

234,647

Others

71,64473,015

Allowance for Doubtful Accounts-46,779-41,232

Total Investments and Other Assets

2,293,127

2,813,155

Total Noncurrent Assets

7,251,818

8,063,953

Total Assets

30,226,750

29,891,423

Total Intangible Assets
Investments and Other Assets

Long-Term Loans Receivable to29

(Thousands of Yen)nd

Liabilities and Net Assets

83 Period

84rd Period(October 31, 2012)(October 31, 2013)

Liabilities
Current Liabilities
Notes Payable-Trade822,060

742,348

Accounts Payable-Trade

5,025,308

4,573,094

7,216

775

Accounts Payable-Others

482,777

579,840

Income Taxes Payable522,219570

Accrued Business Tax

7,001

7,005

0

75,821

Provision for Bonuses

971,425

659,467

Provision for Directors' Bonuses

63,60932,886

Allowance for Product Warranty

194,363

180,198

Accrued Expenses

15

15

Advances Received

62,85665,525

Deposit Payable

121,138

90,040

Guarantee Deposit

81,27583,251

8,361,267

7,090,842

775

Lease Obligations

Accrued Consumption Tax

Total Current Liabilities
Noncurrent Liabilities
Lease Obligations
Provision for Retirement Benefits

7,134

0
11,220

Provision for Directors' Retirement Benefits

29,60018,680091,000815,962

992,832

Total Noncurrent Liabilities

853,472

1,113,733

Total Liabilities

9,214,740

8,204,576

Provision for loss on guarantees
Deferred Tax Liabilities

30

(Thousands of Yen)
83nd Period

84rd Period(October 31, 2012)(October 31, 2013)

Net Assets
Shareholders’ Equity
Capital Stock

1,061,210

1,061,210

1,483,410

1,483,410

1,483,410

1,483,410

230,000

230,000

Provision for Dividend Reserve

250,000

250,000

Reserve for Deferred Gains on Fixed Assets

24,572

23,271Other Reserve

16,330,000

17,430,000

Earned Surplus Carried Forward

1,972,512

1,360,519

18,807,085

19,293,791-363,393-363,462

20,988,311

21,474,948

23,172

211,320525

578

23,698211,899

Total Net Assets

21,012,009

21,686,847

Total Liabilities and Net Assets

30,226,750

29,891,423

Capital Surplus
Capital Reserve
Total Capital Surplus
Retained Earnings
Legal Reserve of Retained Earnings
Other Retained Surplus

Total Retained Earnings
Treasury Stock
Total Shareholders’ Equity
Valuation and Translation Adjustments
Valuation Difference on Available-for-Sale
Securities
Deferred Gains or Losses on Hedges
Total Valuation and Translation Adjustments31

(2) Statements of Income(Thousands of Yen)nd

83 Period

84rd Period(October 31, 2012)(October 31, 2013)

Net Sales
Sales of Finished Goods

11,735,989

8,741,282

Merchandise Sale

27,018,606

26,513,247

38,754,595

35,254,529

Beginning Inventory

61,193

69,845

Cost of Manufacture

8,346,009

6,370,220

8,407,203

6,440,065

0

8,495

69,845468,997

8,337,357

5,962,572

Beginning Inventory

2,394,485

2,245,453

Purchase Amount

22,287,814

22,016,772

24,682,300

24,262,226

Ending Inventory

2,245,453

2,021,029

Cost of Sales

22,436,846

22,241,197

Total Cost of Sales

30,774,204

28,203,769

Gross Profit

7,980,391

7,050,759

5,756,441

5,472,353

2,223,949

1,578,406

Interest income

5,099

4,490

Dividends Income

96,577

78,148Rent Income

64,67662,513Foreign Exchange Gains

97,014

127,662

Others49,051

49,845

312,418

322,659

Interest Expenses

875

703

Loss on Sales of Notes Payable

69

68

Rental Cost

22,357

21,834

Commission Paid

9,508

9,500

Sales Discount

4,771

6,489

Others

10,773

7,549

Total Non-Operating Expenses

48,356

46,145

Ordinary Income

2,488,011

1,854,920

Total Cost of Sales
Cost of Sales
Cost of Finished Goods Sold

Total
Account Transfer for non-Products
Ending Inventory
Cost of Sales
Cost of Merchandise Sold

Total

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

Total Non-Operating Income
Non-Operating Expenses

32

(Thousands of Yen)nd

83 Period

84rd Period(October 31, 2012)(October 31, 2013)

Extraordinary Income
Gain on Sales of Property, Plant and Equipment

10,9600Gain on Sales of Investment Securities

6,141

19,218Gain on Sale of Affiliated Company Stock

22,400039,501

19,218Loss on Retirement of Noncurrent Assets

0

6,305

Loss on Impairment

012,382

4,906

0

0

200,320

Loss on Valuation of Membership

1,400

0

Loss on Provision of Guarantees

091,0006,306

310,007

Income before Income Taxes and Minority Interests

2,521,206

1,564,131

Income Taxes-Current

1,013,704

424,428

Income Taxes-Deferred-63,571

253,851

Total Income Taxes

950,133

678,279

Net Income

1,571,072

885,851

Total Extraordinary Income
Extraordinary Losses

Loss on Valuation of Investment Securities
Loss on Valuation of Affiliated Company Stock

Total Extraordinary Losses

33

(3) Statements of Changes in Shareholders' Equity(Thousands of Yen)
Year Ended October 31, 2012

Year Ended October 31, 2013

Shareholders' Equity
Capital Stock
Surplus during Previous Fiscal Year

1,061,210

1,061,210

001,061,210

1,061,210

1,483,410

1,483,410

001,483,410

1,483,410

230,000

230,00000

230,000

230,000

250,000

250,00000

250,000

250,000

24,071

24,572-1,298-1,301

1,799

0Total Amount Changed

501-1,301

Surplus during This Fiscal Year

24,572

23,271

13,900,000

16,330,000

Accumulation of Other Reserve2,430,000

1,100,000

Total Amount Changed

2,430,000

1,100,000

Surplus during This Fiscal Year

16,330,000

17,430,000

Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Capital Surplus
Capital Reserve
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Retained Earnings
Earned Reserve
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Other Retained Earnings
Reserve for dividend allowance
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total Amount Changed
Surplus during This Fiscal Year
Reserve for Deferred Gains on Fixed Assets
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Reversal of Reserve for Deferred Gains
on Fixed Assets
Increase in Reserve for Advanced
Depreciation of Fixed Assets due tochange of effective tax rate

Other Reserve
Surplus during Previous Fiscal Year
Changes during This Fiscal Year34

(Thousands of Yen)
Year Ended October 31, 2012

Year Ended October 31, 2013

Earned Surplus Carried Forward
Surplus during Previous Fiscal Year3,231,089

1,972,512

1,298

1,301

-1,7990-2,430,000-1,100,000

Cash Dividend Paid

-399,147-399,146

Net Income

1,571,072

885,851

Total Amount Changed-1,258,576-611,993

Surplus during This Fiscal Year

1,972,512

1,360,519

17,635,160

18,807,085

0

0

0

0

0

0

Cash Dividend Paid

-399,147-399,146

Net Income

1,571,072

885,851

Total Amount Changed

1,171,924

486,705

Surplus during This Fiscal Year

18,807,085

19,293,791-363,319-363,393

Issued Shares Reacquired

-73

-68

Total Amount Changed

-73

-68

-363,393-363,462

19,816,460

20,988,311

Cash Dividend Paid

-399,147-399,146

Net Income

1,571,072

885,851-73-68

Total Amount Changed

1,171,851

486,637

Surplus during This Fiscal Year

20,988,311

21,474,948

Changes during This Fiscal Year
Reversal of Reserve for Deferred
Gains on Fixed Assets
Increase in Reserve for Advanced
Depreciation of Fixed Assets due tochange of effective tax rate
Accumulation of Other Reserve

Total Retained Earnings
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Reversal of Reserve for Deferred
Gains on Fixed Asset
Increase in Reserve for Advanced
Depreciation of Fixed Assets due tochange of effective tax rate
Accumulation of Other Reserve

Treasury Stock
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Surplus during This Fiscal Year
Total Shareholders’ Equity
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Issued Shares Reacquired35

(Thousands of Yen)
Year Ended October 31, 2012

Year Ended October 31, 2013

Valuation and Translation Adjustments
Valuation Difference on Available-for-sale
Securities
51,62623,172-28,453

188,147-28,453

188,147

23,172

211,320230

525(Except Shareholders' Equity)

295

53

Changes during This Fiscal Year

295

53

525

578

51,856

23,698(Except Shareholders' Equity)-28,158

188,200

Changes during This Fiscal Year

-28,158

188,200

23,698211,899

19,868,317

21,012,009

Cash Dividend Paid

-399,147-399,146

Net Income

1,571,072

885,851-73-68-28,158

188,200

Total Amount Changed

1,143,692

674,837

Surplus during This Fiscal Year

21,012,009

21,686,847

Surplus During Previous Fiscal Year
Changes During This Fiscal Year
Total (Net) Amount Changed(Except Shareholders' Equity)
Changes during This Fiscal Year
Surplus during This Fiscal Year
Deferred Gains or Losses on Hedges
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total (Net) Amount Changed

Surplus during This Fiscal Year
Total Valuation and Translation Adjustments
Surplus during Previous Fiscal Year
Changes during This Fiscal Year
Total (Net) Amount Changed

Surplus during This Fiscal Year
Total Net Assets
Surplus during Previous Fiscal Year
Changes during This Fiscal Year

Issued Shares Reacquired
Total (Net) Amount Changed(Except Shareholders' Equity)36

(4) Notes for Non-Consolidated Financial Statements(Notes for premise of going concern)
There are no pertinent matters to report.
(Changes in reporting methods)
The “sales discounts” included in the “Others” category of non-operating expenses in the previous consolidated fiscal
year has been stated as a separate item from the current consolidated fiscal year because the amount of the item has
increased in importance. To reflect this change in reporting method, the amount of 15,545,000 yen reported for “Others” in
the Consolidated Statement of Income in the previous consolidated fiscal year has been reclassified as “Sales discounts”
of 4,771,000 yen and “Others” of 10,773,000 yen.
(Per Share Information)
83rd Period

84th Period(Year Ended October 31, 2012)(Year Ended October 31, 2013)

Net Asset per Share70¥2,105.

¥2,173.33

Net Income per Share¥157.44¥88.78(Note 1) Income per share for this fiscal year after adjustment of the residual securities is not presented as there are noresidual securities.
(Note 2) Calculation basis for net income per share are as follows:
83rd Period

84th Period(Year Ended October 31, 2012)(Year Ended October 31, 2013)

Net Income for this Fiscal Year

1,571,072

885,851

1,571,072

885,851

9,978,668

9,978,612(thousands of yen)
Net Income for Common Stock(thousands of yen)
Average number of Common Stock during
the Fiscal Year (shares)(Note 3) Calculation basis for net asset per share are as follows:
83rd Period

84th Period(Year Ended(Year Ended

October 31, 2012)

October 31, 2013)

Total for Net Assets (thousands of yen)

21,012,009

21,686,847

Net Assets for Common Stock (thousands of yen)

21,012,009

21,686,847

Number of Common Stock as of the end of the Current Consolidated

9,978,653

9,978,608

Fiscal Year used for calculation of Net Assets per Share (shares)37