Toyota Industries Report

2 0 15

Financial Review for the Year Ended March 31, 2015

2-1, Toyoda-cho, Kariya-shi, Aichi 448-8671, Japan
Telephone: +81-(0)566-22-2511 Facsimile: +81-(0)566-27-5650
www.toyota-industries.com

Consolidated Eleven-Year Summary
Management’s Discussion and Analysis ofFinancial Condition and Results of Operations

P2−7

Consolidated Balance Sheets

P8−9

Consolidated Statements of Income

P 10

Consolidated Statements of Comprehensive Income

P 11

Consolidated Statements of Changes in Net Assets

P 12 − 13

Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors

This report is printed on FSC™-certified paper that contributes to forest conservation
with ink derived from vegetables using a waterless printing process.
Printed in Japan

P1

P 14
P 15 − 43
P 44

Consolidated Eleven-Year Summary

Toyota Industries Corporation
Years ended March 31

Millions of yen

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

¥2,166,661¥2,007,856¥1,615,244¥1,543,352¥1,479,839¥1,377,769¥1,584,252¥2,000,536¥1,878,398¥1,505,955¥1,241,538

For The YearNet sales
Operating income (loss)

117,574

107,691

77,09870,092

68,79822,002(6,621)

96,853

89,95464,04053,120Ordinary income

170,827

138,133

86,83680,86673,911

31,756

14,343

126,488

108,484

80,63570,912

Net income (loss)

115,263

91,705

53,11958,59447,205(26,273)(32,767)

80,46059,46847,07743,357¥ 126,395¥109,479¥89,459¥58,404

26,963¥ 104,495¥ 104,205¥ 129,023¥130,121¥111,321

Depreciation

70,78264,153

57,954

59,83062,372

73,23887,21983,74474,44964,423

51,277

Research and development expenses

47,78546,32639,05732,07027,78826,826

33,64636,75034,54831,16630,051367.06¥292.76¥170.36¥188.02(84.33)¥ (105.16)

366.99292.57170.35————257.43189.66146.02135.03

Total net assets per share

7,500.16

5,640.08

4,719.66

3,662.26

3,300.17

3,390.02

2,987.16

4,483.32

5,612.11

5,044.45

3,504.80

		Cash dividends per share

110.00

85.00

55.00

50.00

50.00

30.00

40.00

60.00

50.00

38.00

32.00

Total assets¥4,650,896¥3,799,010¥3,243,779¥2,656,984¥2,481,452¥2,589,246¥2,327,432¥2,965,585¥3,585,857¥3,245,341¥2,326,824

Investment in tangible assets¥

38,254¥Per share of common stock (yen):
		Net income (loss) per share—basic
		Net income per share—diluted
		

¥

¥

151.51¥¥

257.50¥

189.88¥

146.16¥

135.09At Year-End
Total net assets

2,425,929

1,829,326

1,524,933

1,197,841

1,075,939

1,104,929

977,670

1,453,996

1,810,483

1,611,227

1,115,747

Common stock

80,46280,46280,46280,46280,46280,46280,46280,46280,46280,46280,462

Number of shares outstanding (excluding treasury stock) (thousands)

314,155

313,730

312,207311,687

311,564

311,570

311,577

311,589

312,075

319,320

318,237¥ 182,191¥155,059¥151,299¥101,718¥ 153,661¥ 203,452

65,768¥ 188,805¥ 177,467¥ 131,784¥ 100,095(160,769)(118,483)(274,210)(9,403)(187,574)(36,855)(114,217)(138,789)(164,446)(205,013)(128,230)

Cash FlowsNet cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of year¥

(8,918)

6,183

7,050

10,279(85,728)(38,230)

120,971(33,992)(19,749)

85,17250,020248,706

226,406

179,359

296,811

195,566

317,590

188,011

121,284

108,569

112,596

100,535

5.6

5.7

4.1

5.4

4.5

(2.6)

(2.8)

5.1

3.5

3.5

4.1

Indices
Return on equity (ROE) (%)
Return on assets (ROA) (%)

2.7

2.6

1.8

2.3

1.9

(1.1)

(1.2)

2.5

1.7

1.7

2.0

Operating profit margin (%)

5.4

5.4

4.8

4.5

4.6

1.6

(0.4)

4.8

4.8

4.3

4.3

Equity ratio (%)

50.7

46.6

45.4

43.0

41.4

40.8

40.0

47.1

48.8

49.7

48.0

¥ 248,854¥216,175¥155,234¥161,876¥ 150,481

71,608¥ 222,125¥ 191,007¥ 150,674¥ 128,381

52,52349,33347,41243,51640,82539,91639,52836,09632,97730,990EBITDA (millions of yen)
Number of employees¥90,521
38,903¥

1. Investment in tangible assets and depreciation apply to property, plant and equipment. They do not, however, include materials handling equipment leased
under operating leases.
2. Net income (loss) per share is computed based on the average number of shares for each year.
3. ROE and ROA are computed based on the average total net assets and total assets, respectively, for each year.
Investment securities are stated at market value.
4. Operating profit margin = Operating income (loss) / Net sales
5. Equity ratio = (Total net assets – Subscription rights to shares – Minority interests) / Total assets
6. EBITDA = Income before income taxes + Interest expenses – Interest and dividends income + Depreciation and amortization

1

Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations are
based on information known to management as of June 2015.
This section contains projections and forward-looking statements that involve risks, uncertainties andassumptions. You should be aware that certain risks and uncertainties could cause the actual results ofToyota Industries Corporation and its consolidated subsidiaries to differ materially from any projections or
forward-looking statements. These risks and uncertainties include, but are not limited to, those listed under“Risk Information” and elsewhere in this annual report.
The fiscal year ended March 31, 2015 is referred to as fiscal 2015 and other fiscal years are referred toin a corresponding manner. All references to the “Company” herein are to Toyota Industries Corporation
and references to “Toyota Industries” herein are to the Company and its 214 consolidated subsidiaries.

Results of Operations
Operating Performance
In fiscal 2015, the global economy registered a mild recovery
overall due primarily to China’s slowing growth despite thesolid performance of the U.S. economy. The Japanese
economy also decelerated as the consumption tax hikepushed down consumer spending.
In this operating environment, Toyota Industries undertook
efforts to ensure customer trust through a dedication toquality as well as to expand sales by responding flexibly tomarket trends.
As a result, total consolidated net sales amounted to¥2,166.6 billion, an increase of ¥158.8 billion (8%) from fiscal
2014.

Operating Performance Highlights by Business
Segment
Operating results by business segment are as follows.
Net sales for each segment do not include inter-segment
transactions.
Automobile
The automobile market continued to expand overseas on theback of strong sales in the Chinese and North American
markets and an upturn in the European market despite adecline in sales in the Japanese market. Amid such operating
conditions, net sales of the Automobile Segment totaled¥1,050.7 billion, an increase of ¥44.1 billion (4%) from fiscal
2014. Operating income amounted to ¥35.9 billion, an
increase of ¥0.8 billion (2%) from fiscal 2014.
Within this segment, net sales of the Vehicle Businessamounted to ¥459.0 billion, a decrease of ¥8.0 billion (2%).
Despite an increase in sales of the RAV4, sales of the Vitz
(Yaris outside Japan) decreased.
Net sales of the Engine Business totaled ¥192.0 billion, adecrease of ¥10.5 billion (5%). This is attributable primarily todecreases in sales of KD diesel engines and AR gasoline
engines.
Net sales of the Car Air-Conditioning Compressor

2

Toyota Industries Report 2015

decreased. As a result, net sales of the Textile Machinery
Segment totaled ¥68.1 billion, a decrease of ¥5.0 billion (7%).
Operating income amounted to ¥2.6 billion, a decrease of¥2.9 billion (52%) from fiscal 2014.

Operating Income
Operating income for fiscal 2015 was ¥117.5 billion, an
increase of ¥9.9 billion (9%) from fiscal 2014. This was due toan increase in net sales, cost reduction efforts throughout the
Toyota Industries Group and exchange rate fluctuations
despite an increase in labor costs, depreciation costs and raw
material costs.

Ordinary Income

Toyota Industries continues to maintain its solid financial
condition. Through the use of such current assets as cash
and cash equivalents and short-term investments, as well as
free cash flows and funds procured from financial institutions,Toyota Industries believes that it will be able to provide
sufficient funds for the working capital necessary to expand
existing businesses and develop new projects, as well as for
future investments.
Regarding fund management, the Company undertakes
integrated fund management of its subsidiaries in Japan, while
Toyota Industries North America, Inc. (TINA) and Toyota
Industries Finance International AB (TIFI) centrally manage thefunds of subsidiaries in North America and Europe,
respectively.
Through close cooperation among the Company, TINA
and TIFI, we strive for efficient, unified fund management on a
global consolidated basis.

Business totaled ¥324.6 billion, an increase of ¥48.9 billion(18%). Sales in the North American and Chinese markets
increased while those in the Japanese market decreased.
Net sales of the Electronics Parts, Foundry and Others
Business totaled ¥74.9 billion, an increase of ¥13.7 billion(22%).

Ordinary income amounted to ¥170.8 billion, an increase of¥32.7 billion (24%) from fiscal 2014. This was due mainly to
dividends income of ¥52.9 billion, an increase of ¥14.3 billion(37%) from fiscal 2014.

Income before Income Taxes and Minority
Interests

Cash Flows

Materials Handling Equipment
The materials handling equipment market as a wholecontinued to expand globally, as the Japanese and global
markets in North America, Europe and China showed growth.
Amid this operating climate, Toyota Industries strengthened
production and sales structures and rolled out new products
matched to respective markets. In July 2014, Toyota
Industries commenced sales of 1.5- to 8.0-ton capacity
GENEO internal-combustion lift trucks in Japan. Equippedwith a new clean engine, the lift truck reduces environmentalloads and improves driver safety and operability. Under suchcircumstances, sales of lift trucks, a mainstay product of thissegment, increased in such regions as Japan, North America
and Europe. Toyota Industries also made efforts to expand its
business area through manufacturing and sales of lift truck
attachments. These activities led to an increase in net sales ofthe Materials Handling Equipment Segment of ¥115.7 billion(14%) to ¥924.9 billion. Operating income amounted to ¥68.8
billion, an increase of ¥10.8 billion (19%) from fiscal 2014.

Income before income taxes and minority interests amounted
to ¥170.8 billion, an increase of ¥32.7 billion (24%) from fiscal
2014. This was due mainly to ordinary income of ¥170.8
billion, an increase of ¥32.7 billion (24%) from fiscal 2014.

Cash flows from operating activities increased by ¥182.1
billion in fiscal 2015, due mainly to posting income before
income taxes and minority interests of ¥170.8 billion. Net cash
provided by operating activities increased by ¥27.1 billion
compared with an increase of ¥155.0 billion in fiscal 2014.
Cash flows from investing activities resulted in a decreasein cash of ¥160.7 billion in fiscal 2015, attributable primarily to
an increase in payments for purchases of property, plant andequipment amounting to ¥169.8 billion. Net cash used ininvesting activities increased by ¥42.3 billion compared with adecrease of ¥118.4 billion in fiscal 2014.
Cash flows from financing activities resulted in a decreasein cash of ¥8.9 billion in fiscal 2015, due mainly to repaymentsof long-term loans payable of ¥40.4 billion, despite proceedsfrom long-term loans payable of ¥119.0 billion.
After adding translation adjustments and cash and cash
equivalents at beginning of period, cash and cash equivalents
as of March 31, 2015 stood at ¥248.7 billion, an increase of¥22.3 billion (10%) over fiscal 2014.

Logistics
Net sales of the Logistics Segment amounted to ¥98.0 billion,
an increase of ¥2.7 billion (3%). This is attributable to anincrease in sales of the commissioned logistics business andthe cargo transport business of automotive-related parts.
Operating income amounted to ¥6.2 billion, an increase of¥1.1 billion (20%) from fiscal 2014.
Textile Machinery
The textile machinery market underperformed due mainly toan economic slowdown in China and other emerging
countries in Asia. Despite sales of yarn quality measurement
instruments increased, sales of weaving machinery

Net Income
Net income totaled ¥115.2 billion, an increase of ¥23.5 billion(26%) from fiscal 2014. Net income per share was ¥367.06
compared with ¥292.76 in fiscal 2014.

Consolidated Financial Condition
Total assets increased ¥851.8 billion from the end of theprevious fiscal year to ¥4,650.8 billion due mainly to anincrease in market value of investment securities. Liabilities
amounted to ¥2,224.9 billion, an increase of ¥255.3 billion
from the end of the previous fiscal year due mainly to anincrease in deferred tax liabilities. Net assets amounted to¥2,425.9 billion, an increase of ¥596.6 billion from the end of
the previous fiscal year.

Liquidity and Capital Resources
Toyota Industries’ financial policy is to ensure sufficientfinancing and liquidity for its business activities and to maintainstrong balance sheets. Currently, funds for capital investments
and other long-term capital needs are provided from retained
earnings and long-term debt, and working capital needs are
met through short-term loans. Long-term debt financing iscarried out mainly through issuance of corporate bonds andloans from financial institutions.

Investment in Property, Plant and Equipment
During fiscal 2015, Toyota Industries made a total investmentof ¥179.9 billion in property, plant and equipment (including
vehicles and materials handling equipment for lease) in orderto launch new products, streamline and upgrade production
equipment.
In the Automobile Segment, investment in property, plantand equipment totaled ¥88.8 billion. A primary breakdown of
this amount included ¥30.3 billion for the Company, ¥11.4
billion for Kirloskar Toyota Textile Machinery Pvt. Ltd., ¥10.2
billion for Toyota Industries Compressor Parts America, Co.,3

¥7.9 billion for P.T. TD Automotive Compressor Indonesia,¥6.7 billion for TD Automotive Compressor Kunshan Co., Ltd.,¥6.3 billion for Michigan Automotive Compressor, Inc., ¥3.7
billion for Tokaiseiki Co., Ltd., ¥2.9 billion for TD AutomotiveCompressor Georgia, LLC, ¥2.2 billion for Toyota Industry(Kunshan) Co., Ltd., ¥1.5 billion for Yantai Shougang TD
Automotive Compressor Co., Ltd., ¥1.4 billion for Tokyu Co.,
Ltd., ¥1.3 billion for TD Deutsche Klimakompressor GmbHand ¥1.0 billion for IZUMI MACHINE MFG. CO., LTD.
The Materials Handling Equipment Segment made aninvestment in property, plant and equipment in the total
amount of ¥76.0 billion. The primary breakdown comprised¥3.1 billion for the Company, ¥33.5 billion for Toyota Material
Handling Europe AB Group, ¥15.1 billion for The RaymondCorporation Group, ¥8.6 billion for Toyota Material HandlingAustralia Group, ¥2.3 billion for Cascade Corporation, ¥2.0
billion for Aichi Corporation, ¥1.7 billion for Toyota Material
Handling Mercosur Indústria e Comércio de Equipamentos
Ltda, ¥1.7 billion for Toyota Industrial Equipment Mfg., Inc.,¥1.3 billion for Atlas Toyota Material Handling and ¥1.0 billion
for TOYOTA L&F Tokyo Co., Ltd.
Investment in property, plant and equipment in the
Logistics Segment totaled ¥7.3 billion, including ¥4.5 billion for
Asahi Security Co., Ltd. and ¥1.7 billion for Taikoh
Transportation Co., Ltd.
The Textile Machinery Segment made an investment inproperty, plant and equipment in the total amount of ¥2.8
billion, including ¥1.1 billion for the Company.
The Others Segment made an investment in property,
plant and equipment in the total amount of ¥4.9 billion,
including ¥4.4 billion for the Company.
Necessary funds were provided by a portion of bonds aswell as cash on hand and bank loans.

Strategies and Outlook
Outlook for Results for Fiscal 2016
With regard to the future economic outlook, Toyota Industries
expects an ongoing recovery of the global economy. In Japan,
a rise in wages is anticipated to push up consumer spending,but its overdependence on the U.S. economy requires closemonitoring. Moreover, uncertainties surrounding the businessclimate such as a further deceleration of the Chinese
economy, an unstable situation in the Middle East and a
deflationary trend in Europe preclude optimism.
Amid this challenging environment, Toyota Industries willcontinue to undertake concerted efforts to strengthen its
management platform and raise corporate value. As
immediate tasks, we will maintain and improve our solidmanagement platform so that we can respond quickly to thechanging market circumstances.
Specifically, Toyota Industries will work to incorporate
quality and cost from the design phase and shorten the4

Toyota Industries Report 2015

production lead time from development to sales, while
promoting cost improvement activities in manufacturing
operations. In addition, Toyota Industries will accelerate thedevelopment of technologies that overwhelm competitors
around the world and plan and develop competitive products
matched to the characteristics and needs of each market.
Toyota Industries will also strive to establish global production
and sales, and to enhance the value chain to provide a wide
range of customer services in each country and region.
Over the medium to long term, based on our quality first
approach, we regard our top priority tasks as responding toenvironmental and safety issues and enhancing global
competitiveness. In doing so, we will support industries andsocial foundations around the world by continuously supplying
products and services that anticipate customers’ needs inorder to contribute to a comfortable society and enriched
lifestyles. As Toyota Industries announced in Vision 2020 in
October 2011, we will pursue the development ofenvironmentally conscious, energy-saving products based on
the keywords of the 3Es, which Toyota Industries defines as“energy,” “environmental protection” and “ecological thinking,”
while incorporating functions and services demanded bycustomers (value chain) and delivering them to the global
market. Acting on these measures, we aim for growth in threebusiness units, namely, “solutions” in the areas of materials
handing equipment, logistics and textile machinery; “keycomponents” in the fields of car air-conditioning compressors
and car electronics; and “mobility” in the domains of vehicles
and engines.
With regards to the Medium-Term Management Plan, we
have formulated a specific activity plan for each business unit
until fiscal 2016. The entire Toyota Industries Group will makea concerted effort to realize Vision 2020.
To support such consolidated management on a global
scale, Toyota Industries will aim to create a workplace climatethat enables diverse human resources to share the Toyota
Industries Group’s values and fully demonstrate their abilities
while developing human resources who can play active roles
in countries around the world. In addition, Toyota Industries
will strive to mitigate an increasing range of risks as businessdomains expand and make a swift and accurate responsewhen such risks materialize.
In addition to placing top priority on safety, we willthoroughly enforce compliance, including observance of laws
and regulations, and actively participate in social contribution
activities. Through these and further measures, Toyota
Industries aims to meet the trust of society, raise corporate
value and grow in harmony with society.

Dividend Policy
Toyota Industries regards the benefits of shareholders as oneof its most important management policies. Based on thisstance, Toyota Industries will strive to strengthen its corporate
constitution, promote proactive business development andraise its corporate value.
Toyota Industries’ dividend policy is to meet the
expectations of shareholders for continuous dividends while
giving full consideration to business performance, funding
requirements, the dividend payout ratio and other factors.
Toyota Industries’ Ordinary General Meeting of Shareholders,
held on June 11, 2015, approved a year-end cash dividend of¥60.0 per share. Including the interim cash dividend of ¥50.0
per share, cash dividends for the year totaled ¥110.0 per
share.
Toyota Industries will use retained earnings to improve thecompetitiveness of its products, augment production capacity
in Japan and overseas, as well as to expand into new fields ofbusiness and strengthen its corporate constitution in securing
future profits for its shareholders.
The Company’s Articles of Incorporation stipulate that it
may pay interim cash dividends as prescribed in Article 454-5of the Corporation Law, and it is the Company’s basic policy
to pay dividends from retained earnings twice a year (interim
and year-end).
The Company’s Articles of Incorporation also stipulate thatwhat is prescribed in Article 459-1 of the Corporation Law canbe added to the Articles of Incorporation. As the Company’s
policy, discretion to pay interim cash dividends is determinedby the Board of Directors while payment of year-end cash
dividends is subject to approval at the Ordinary General
Meeting of Shareholders.

Risk Information
The following represent risks that could have a material impact
on Toyota Industries’ financial condition, business results andshare prices. Toyota Industries judged the following as futurerisks as of March 31, 2015.

Principal Customers
Toyota Industries’ automobile and engine products are soldprimarily to Toyota Motor Corporation (TMC). In fiscal 2015,
net sales to TMC accounted for 32.0% of consolidated net
sales. Therefore, TMC’s vehicle sales could have an impact on
Toyota Industries’ business results. As of March 31, 2015,
TMC holds 24.40% of the Company’s voting rights.

Product Development Capabilities
Based on the concept of “developing appealing new
products,” Toyota Industries proactively develops new
products by utilizing its leading-edge technologies, as it strives
to anticipate increasingly sophisticated and diversifying needsof the market and ensure the satisfaction of its customers.
R&D activities are focused mainly on developing andupgrading products in current business fields and peripheral

sectors. Toyota Industries expects that revenues derived fromthese fields will continue to account for a significant portion of
total revenues and anticipates that future growth will be
contingent on the development and sales of new products inthese fields. Toyota Industries believes that it can continue todevelop appealing new products. However, Toyota Industries
may not be able to forecast market needs and develop andintroduce appealing new products in a timely manner. This
could result in lower future growth and have an adverse
impact on Toyota Industries’ financial condition and businessresults.
Such a situation could result from risks that include noassurance Toyota Industries can allocate sufficient future
funds necessary for the development of appealing new
products; no assurance that product sales will be successful,as forecasts of products supported by the market may notalways be accurate; and no assurance that newly developed
products and technologies will always be protected as
intellectual property.

Intellectual Property Rights
In undertaking its business activities, Toyota Industries has
acquired numerous intellectual property rights, including thoseacquired overseas, such as patents related to its products,
product designs and manufacturing methods. However, not allpatents submitted will necessarily be registered as rights, andthese patents could thus be rejected by patent authorities orinvalidated by third parties. Also, a third party could
circumvent a patent of Toyota Industries and introduce acompeting product into the market. Moreover, Toyota
Industries’ products utilize a wide range of technologies.
Therefore, Toyota Industries could become a party subject tolitigation involving the intellectual property rights of a third party.

Product Defects
Guided by the basic philosophy of “offering products andservices that are clean, safe and of high quality,” Toyota
Industries makes its utmost efforts to enhance quality.
However, Toyota Industries cannot guarantee all its products
will be defect-free and that product recalls will not be made in
the future. Product defects that could lead to large-scale
recalls and product liability indemnities could result in large
cost burdens and have a significant negative impact on theevaluation of Toyota Industries. It could also have an adverse
effect on Toyota Industries’ financial condition and businessresults due to a decrease in sales, deterioration of profitability
and decrease in share prices of Toyota Industries.

Price Competition
Toyota Industries faces extremely harsh competition in each of
the industries in which it conducts business, including its
Automobile and Materials Handling Equipment businesses,
which are the core of Toyota Industries’ earnings foundation.
Toyota Industries believes it offers high value-added products

5that are unrivalled in terms of technology, quality and cost.
Amid an environment characterized by intensifying pricecompetition, however, Toyota Industries may be unable tomaintain or increase market share against low-costcompetitors or to maintain profitability. This could have an
adverse impact on Toyota Industries’ financial condition andbusiness results.

Reliance on Suppliers of Raw Materials andComponents
Toyota Industries’ products rely on various raw materials andcomponents from suppliers outside Toyota Industries. Toyota
Industries has concluded basic business contracts with theseexternal suppliers and assumes it can carry out stabletransactions for raw materials and components. However,Toyota Industries has no assurances against future shortagesof raw materials and components, which arise from a global
shortage due to tight supply or an unforeseen accident
involving a supplier. Such shortages could have a negative
effect on Toyota Industries’ production and cause an increasein costs, which could have an adverse impact on Toyota
Industries’ financial condition and business results.

Environmental Regulations
In view of its social responsibilities as a company, Toyota
Industries strives to reduce any burden on the environment
resulting from its production processes, as well as strictly
adheres to applicable environmental laws and regulations.
However, various environmental regulations could also be
revised and strengthened in the future. Accordingly, any
expenses necessary for continuous strict adherence to theseenvironmental regulations could result in increased businesscosts and have an adverse impact on Toyota Industries’
financial condition and business results.

Alliances with Other Companies
Aiming to expand its businesses, Toyota Industries engages injoint activities with other companies through alliances and joint
ventures. However, a wildly fluctuating market trend or adisagreement between Toyota Industries and its partners,
owing to business, financial or other reasons, could prevent
Toyota Industries from deriving the intended benefits of its
alliances.

Exchange Rate Fluctuations
Toyota Industries’ businesses encompass the production andsales of products and the provision of services worldwide.
Generally, the strengthening of the yen against othercurrencies (especially against the U.S. dollar and the euro,
which account for a significant portion of Toyota Industries’
sales) has an adverse impact on Toyota Industries’ business,while a weakening of the yen has a favorable impact. As such,in the businesses in which the Toyota Industries Group
manufactures products in Japan and exports them, the6

Toyota Industries Report 2015

strengthening of the yen could reduce Toyota Industries’
relative price competitiveness on a global basis and have an
adverse impact on Toyota Industries’ financial condition andbusiness results.

Share Price Fluctuations
Toyota Industries holds marketable securities, and therefore
bears the risk of price fluctuations of these shares. Based onfair market value of these shares at the end of the fiscal year
under review, Toyota Industries had unrealized gains.
However, unrealized gains on marketable securities could
worsen depending on future share price movements.
Additionally, a fall in share prices could reduce the value ofpension assets, leading to an increase in the pension shortfall.

Effects of Disasters, Power Blackouts and Other
Incidents
Toyota Industries carries out regular checks and inspections of
its production facilities to minimize the effect of production
breakdown. However, there is no assurance Toyota Industries
can completely prevent or lessen the impact of man-made or
natural disasters and power blackouts occurring at Toyota
Industries’ and its suppliers’ production facilities. Specifically,
the majority of Toyota Industries’ production facilities in Japanand most of its business partners are situated in the Chubu
region. Therefore, major disasters in this region could delay orstop production or shipment activities. Such prolonged delays
and stoppages could have an adverse impact on Toyota
Industries’ financial condition and business results.

Latent Risks Associated with International
Activities
Toyota Industries manufactures and sells products andprovides services in various countries. Such unforeseen
factors as social chaos, including political disruptions,terrorism and wars, as well as changes in economic
conditions, could have an adverse impact on Toyota
Industries’ financial condition and business results.

Retirement Benefit Liabilities
Toyota Industries’ employee retirement benefit expenses andliabilities are calculated based on expected rates of return on
pension assets as well as assumptions upon making actuarial
calculations that incorporate discount rates and other factors.
Therefore, differences between actual results andassumptions as well as changes in the assumptions could
have a significant impact on recognized expenses andcalculated liabilities in future accounting periods.

Significant Contract Agreements
Toyota Industries resolved at a meeting of the Board of
Directors held on October 31, 2014 that Toyota Industries
Commercial Finance, Inc. (TICF), a U.S. sales financesubsidiary of Toyota Industries, would acquire the businessand substantially all assets relating to the Commercial Finance
Division of Toyota Motor Credit Corporation (TMCC), a U.S.
finance subsidiary of Toyota Motor Corporation, andconcluded a contract agreement with TMCC to this effect on
December 2, 2014.
In order for TICF to acquire TMCC’s Commercial Finance
Division and commence operations, however, various
prerequisites must be satisfied, including the acquisition oflicenses from the appropriate U.S. authorities (respective U.S.
states).
1) Acquisition targets: Financial assets, goodwill, etc.
2) Acquisition value:	Approximately US$2.0 billion(estimated)Significant Accounting Policies andEstimates
Toyota Industries’ financial statements are prepared inconformity with accounting principles generally accepted inJapan. In preparing financial statements, management must
make estimates, judgments and assumptions that affectreported amounts of assets and liabilities at fiscal year-end as
well as revenues and expenses during each fiscal year. Among
Toyota Industries’ significant accounting policies, the following
categories require a considerable degree of judgment andestimation and are highly complex.

Allowance for Doubtful Accounts
To prepare for the risk of receivables becoming uncollectible,
Toyota Industries estimates its allowance for doubtful
accounts by utilizing the percentage of historical experiencesin credit losses for ordinary receivables and individually
examining the feasibility of collection for receivables that seemto be uncollectible. Evaluating the allowance for doubtful
accounts involves judgments made in accordance with thenature of the situation, and this allowance represents anessential and crucial estimate including future estimates ofcash flow amounts and timing that could change significantly.
Based on currently available information, Toyota Industries’
management believes its present allowance for doubtful
accounts is sufficient. However, the need to significantly
increase allowance for doubtful accounts in the future could
have an adverse impact on Toyota Industries’ businessresults.

Allowance for Retirement Benefits
Calculations differ for retirement benefits, retirement benefit
expenses and liabilities after employee retirement, as well as
benefits for employees on leave of absence, because different
assumptions are used at the time of calculation. Assumptions
include such factors as discount rates, amount of benefits,interest expenses, expected rates of return on pension assets
and mortality rates. The difference in amounts between theseassumptions and actual results is calculated cumulatively andamortized over future accounting periods, and thus becomes
an expense. Toyota Industries believes its assumptions arereasonable. However, differences between actual results orchanges in the assumptions could have an impact onretirement benefits and retirement benefit expenses andliabilities after employee retirement.

Toyota Industries’ Relationship to Toyota
Motor Corporation
Due to historical reasons, Toyota Industries maintains close
relationships with Toyota Motor Corporation (TMC) and Toyota
Group companies in terms of capital and business dealings.

Historical BackgroundIn 1933, Kiichiro Toyoda, the eldest son of founder Sakichi
Toyoda and then Managing Director of Toyota Industries (thenToyoda Automatic Loom Works, Ltd.), established theAutomobile Department within the Company based on his
resolve to manufacture Japanese-made automobiles. In 1937,
the Automobile Department was spun off and became an
independent company, Toyota Motor Co., Ltd. (the present
Toyota Motor Corporation).

Capital RelationshipIn light of this historical background, Toyota Industries and
TMC have maintained a close capital relationship. As of March
31, 2015, Toyota Industries holds 7.13% (224,515 thousand
shares) of TMC’s total shares in issue. Likewise, as of thesame date, TMC holds 24.40% of Toyota Industries’ total
voting rights. Toyota Industries is a TMC affiliate accounted forby the equity method.

Business RelationshipToyota Industries assembles certain cars and produces
automobile engines under consignment from TMC.
Additionally, Toyota Industries sells a portion of its othercomponents and products directly or indirectly to other Toyota
Group companies. In fiscal 2015, our net sales to TMC
accounted for 32.0% of our consolidated net sales.

Contributions to the Toyota GroupAs a member of the Toyota Group, Toyota Industries aims
to contribute to strengthening the competitiveness of TMC
and other Toyota Group companies in such areas asquality, cost, delivery and technologies. Toyota Industries
is confident that raising the Toyota Group’s competitivenesswill lead to increases in sales to and profits from the Toyota
Group, thereby contributing to raising Toyota Industries’
corporate value.

7

Consolidated Balance Sheets

Toyota Industries Corporation
As of March 31, 2015 and 2014
Millions of yen

2015

Millions of yen

AssetsCurrent assets:
		 Cash and deposits (Note 9)
		 Cash deposits for cash collection and deposit services
		 Trade notes and accounts receivable (Note 9)
		 Lease investment assets (Note 22)
		Short-term investments
		 Merchandise and finished goods (Note 9)
		 Work in process
		 Raw materials and supplies (Note 9)
		 Deferred tax assets (Note 21)
		 Other current assets
		 Allowance for doubtful accounts¥226,383
50,765
246,676
50,12246,012
77,98938,78253,47025,961
59,727(3,832)

944,901

872,058

423,670(250,488)
173,181
1,068,628(747,732)
320,895
159,660(120,309)
39,351
120,652
53,451

395,692(238,697)
156,995
976,511(703,217)
273,294
149,580(114,281)
35,298
119,10741,418

			Total property, plant and equipment

707,532

626,114

		Intangible assets:
			Goodwill
			Other intangible assets

95,98596,716

100,81490,068

			Total intangible assets

192,702

190,882

		Investments and other assets:
			 Investment securities (Notes 8 and 9)
			 Deferred tax assets (Note 21)
			 Lease investment assets (Note 22)
			 Net defined benefit assets
			 Other investments and other assets (Note 8)
			 Allowance for doubtful accounts

2,593,522
18,228135,958
28,28930,622(860)

1,926,353
15,285
118,849
21,501
28,291(328)

			Total investments and other assets
		Total fixed assets
Total assets

2,805,760
3,705,995¥4,650,896

2,109,954
2,926,951¥3,799,010

Fixed assets:
		Property, plant and equipment:
			 Buildings and structures (Notes 6 and 9)
				Accumulated depreciation
				Buildings and structures, net
			 Machinery, equipment and vehicles (Notes 6 and 9)
				Accumulated depreciation				 Machinery, equipment and vehicles, net
			 Tools, furniture and fixtures (Note 6)
				Accumulated depreciation				 Tools, furniture and fixtures, net
			Land (Note 9)			Construction in progress2014¥ 205,816
99,736—47,05345,66529,245
13,686
636
626
210,721¥196,904
120,058
20,524
29,13947,644
29,13825,962
1,458
619
191,903

		Total current liabilities

653,187

663,353

Long-term liabilities:
		 Bonds payable (Note 7)
		 Long-term loans payable (Notes 7 and 9)
		 Lease obligations (Notes 7 and 22)
		 Deferred tax liabilities (Note 21)
		 Net defined benefit liabilities (Notes 10 and 19)
		 Other long-term liabilities (Note 11)

185,998
421,154
117,185
737,268
86,766
23,404

212,128
323,400
122,151
567,859
63,854
16,936

1,571,779
2,224,967

1,306,330
1,969,684

80,46280,462

105,592
644,165(41,509)

105,654
563,957(43,012)788,711707,062

Accumulated other comprehensive income:		 Valuation difference on available-for-sale securities
		 Deferred gains or losses on hedges
		 Foreign currency translation adjustment
		 Defined benefit plan adjustments (Note 19)

1,523,393(19)
55,598(11,463)

1,022,525(139)
44,649(4,629)		Total accumulated other comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

1,567,509
72
69,6362,425,929¥4,650,896

1,062,404
330
59,528
1,829,326¥3,799,010

Liabilities¥ 247,273
58,250265,504
55,86834,08586,86543,32064,651
24,23468,603(3,756)

		Total current assets

2015

2014

Current liabilities:
		 Trade notes and accounts payable
		 Short-term loans payable (Note 9)
		Commercial paper
		 Current portion of bonds (Note 7)
		 Lease obligations (Notes 7 and 22)
		Accounts payable—other		 Accrued income taxes
		 Deferred tax liabilities (Note 21)
		 Allowance for bonuses to directors
		 Other current obligations (Notes 9 and 11)

		Total long-term liabilities
Total liabilities

Net Assets
Shareholders’ equity (Note 13):
		Capital stock			Authorized — 1,100,000,000 shares
			 Issued— 325,840,640 shares as of March 31, 2015					 325,840,640 shares as of March 31, 2014
		Capital surplus
		Retained earnings
		Treasury stock			 11,684,749 shares as of March 31, 2015
			 12,109,864 shares as of March 31, 2014
		Total shareholders’ equity

The accompanying notes are an integral part of these financial statements.

8

Toyota Industries Report 20159

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Toyota Industries Corporation
For the years ended March 31, 2015 and 2014

Toyota Industries Corporation
For the years ended March 31, 2015 and 2014
Millions of yen

Millions of yen

2015

2014

Net sales¥2,166,661¥2,007,856

Income before minority interests

Cost of sales (Note 14)

1,765,861

1,651,573

Other comprehensive income:

400,799356,282

Gross profit
Selling, general and administrative expenses (Notes 14 and 19):

Valuation difference on available-for-sale securities (Note 15)
Deferred gains or losses on hedges (Note 15)

2015

2014

¥121,674¥94,198

501,084

192,795

120

97

Sales commissions

16,291

13,832Foreign currency translation adjustment (Note 15)

13,36233,588

Salaries and allowances

97,03885,831Retirement benefit expenses

4,176

3,788

Defined benefit plan adjustments (Note 19)(6,725)—

Depreciation

13,968

11,125

Research and development expenses

41,93039,363

Others109,819

94,647

Total selling, general and administrative expenses

283,224

248,590

117,574

107,691

Interest income

12,357

11,205

Dividends income

52,95538,602735

1,106

Equity in net earnings of affiliated companies

1,790

Other non-operating income

10,878

Total non-operating income

78,7172,294
7,319
60,527

Interest expenses

15,876

16,023

Loss on disposal of fixed assets

1,665

1,345

Other non-operating expenses

7,922

12,71825,465
170,827
170,827
41,181
7,971
49,153
121,6746,410¥ 115,263

30,086138,133
138,133
40,6703,263
43,934
94,1982,493¥ 91,705

Operating income
Non-operating income:Gain on sales of marketable securities

Share of other comprehensive income of associates accounted for using equity method (Note 15)
Total other comprehensive income
Comprehensive income

109

526

507,952

227,007629,626

321,206

620,368

315,759

9,258

5,447

Profit attributable to:
Owners of the parent
Minority interests
The accompanying notes are an integral part of these financial statements.

Non-operating expenses:

Total non-operating expenses
Ordinary income
Income before income taxes and minority interests
Income taxes—current (Note 21)
Income taxes—deferred (Note 21)
Total income taxes
Income before minority interests
Minority interests in income
Net income

Yen

Net income per share­—basic (Note 27)¥  367.06¥  292.76

Net income per share­—diluted (Note 27)366.99292.577,500.16

5,640.08

110.0085.00

Net assets per share (Note 28)
Cash dividends per share
The accompanying notes are an integral part of these financial statements.

10

Toyota Industries Report 201511

Consolidated Statements of Changes in Net Assets

Toyota Industries Corporation
For the year ended March 31, 2015

Toyota Industries Corporation
For the year ended March 31, 2014
Millions of yen

Millions of yen

Shareholders’ equity

Balance at March 31, 2014

Capital stock

Capital surplus

Retainedearnings¥80,462¥105,654¥563,957

Cumulative effects of changes inaccounting policies
Restated balance

Treasury stock

Total
shareholders’equity¥(43,012)¥707,062(3,668)80,462

105,654560,288

Shareholders’ equity

Balance at March 31, 2013

703,393

Changes of items during theperiodDividends from surplus(31,386)(31,386)

Net income

115,263

115,263

Repurchase of treasury stock(61)

Disposal of treasury stock

(20)

(20)

1,523

1,461

Balance at March 31, 2015

(61)

83,876

1,502

85,317¥80,462¥105,592¥644,165¥(41,509)¥788,711¥80,462¥105,898¥492,578

Balance at March 31, 2014

¥1,022,525

Deferred gains
or losses onhedgesDefinedbenefit planadjustments¥(139)¥44,649¥ (4,629)

1,022,525(139)

44,649(4,629)91,70591,705

Total changes of items during theperiodTotal
Subscription
accumulated
rights toothersharescomprehensive
income(244)¥1,062,404¥ 330

1,062,404

330

Minority
interests

Total net
assets¥59,528¥1,829,326

256(3,412)

59,784

1,825,914

Net income

115,263

Repurchase of treasury stock(20)

Disposal of treasury stock

1,461

Total changes of items during theperiodBalance at March 31, 2015

10,949(6,833)

5,489

5,245

—

(244)

71,378

5,393

76,527¥80,462¥105,654¥563,957¥(43,012)¥707,062

Accumulated other comprehensive income(31,386)

120

(96)

Millions of yen

Dividends from surplus

500,868(96)

Net changes of items other thanshareholders’ equity

Changes of items during theperiodNet changes of items other thanshareholders’ equity¥630,534

Net income

Disposal of treasury stock

Cumulative effects of changes inaccounting policies
Restated balance¥(48,405)(20,326)

Millions of yen

Foreigncurrencytranslation
adjustment

Total
shareholders’equity(20,326)

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities

Treasury stock

Dividends from surplus

Balance at March 31, 2014—

Retainedearnings

Repurchase of treasury stock

Net changes of items other thanshareholders’ equity
Total changes of items during theperiodCapital surplus

Changes of items during theperiod(3,668)(43,012)

Capital stock

505,105

(258)

9,852

514,698

Balance at March 31, 2013120

10,949(6,833)505,105

(258)

9,852

600,015¥1,523,393¥ (19)¥55,598¥(11,463)¥1,567,509¥ 72¥69,636¥2,425,929

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment¥ 830,054¥(237)¥13,163

Definedbenefit planadjustments
¥  

—

Total
Subscription
accumulated
rights toothersharescomprehensive
income¥ 842,980¥ 1,478

Minority
interests

Total net
assets¥49,939¥1,524,933

Changes of items during theperiodDividends from surplus(20,326)

Net income

91,705

Repurchase of treasury stock(96)

Disposal of treasury stock

5,245

Net changes of items other thanshareholders’ equity

192,470

97

31,485(4,629)219,423(1,147)

9,588

227,865

Total changes of items during theperiod192,470

97

31,485(4,629)219,423(1,147)

9,588

304,392¥1,022,525¥(139)¥44,649¥(4,629)¥1,062,404

330¥59,528¥1,829,326

Balance at March 31, 2014
500,868

Valuationdifference on
available-forsale securities¥

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements.

12

Toyota Industries Report 201513

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

1. Basis of presenting consolidated financial statements:

Toyota Industries Corporation
For the years ended March 31, 2015 and 2014
Millions of yen

Cash flows from operating activities:
Income before income taxes and minority interests
		Depreciation and amortization
		Increase (decrease) in allowance for doubtful accounts
		Interest and dividends income
		Interest expenses
		Equity in net (earnings) losses of affiliates
		(Increase) decrease in receivables—trade		(Increase) decrease in inventories
		Increase (decrease) in payables—trade		Others, net
		Subtotal
		 Interest and dividends income received
		 Interest expenses paid
		 Income taxes (paid) refunded
Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for acquisition of subsidiaries’ stock resulting in change in scope of consolidation
Proceeds from acquisition of subsidiaries’ stock resulting in change in scope of consolidation
Payments for loans madeProceeds from collections of loans
Net (increase) decrease in time deposits
Others, net
Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Repayments of bonds
Payments for repurchase of treasury stocks
Cash dividends paid
Cash dividends paid to minority shareholders
Proceeds from payment by minority shareholders
Others, net
Net cash provided by (used in) financing activities
Translation adjustments of cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

2015

2014

¥170,827
127,463663(65,312)
15,876(1,790)(16,129)(20,142)
5,100(30,048)
186,507
65,077(15,622)(53,770)
182,191¥138,133
111,826504(49,807)
16,023(2,294)(13,469)(15,459)(169,842)
11,244(6,713)
1,158
(947)
—
(783)
711
12,896(8,495)(160,769)(131,672)
12,879(32,015)(24,861)
119,053(40,478)
20,000(29,284)(20)(31,386)(516)
36(21,460)(8,918)9,797
22,300226,406¥248,706(59,236)
128,203(60,721)6,305(32,107)
159,655
49,782(15,517)(38,861)
155,059

2,211(1,137)
265
(867)
640
38,390(7,177)(118,483)

26,660(4,505)(96)(20,326)(454)
270(3,609)6,183
4,286
47,046
179,359¥226,406

The accompanying consolidated financial statements have been
prepared based on the accounts maintained by Toyota Industries
Corporation (the “Company”) and its consolidated subsidiaries(together, hereinafter referred to as “Toyota Industries”) in accordancewith the provisions set forth in the Corporation Law of Japan and the

Financial Instruments and Exchange Law, and in conformity withaccounting principles generally accepted in Japan, which are different
in certain respects from the application and disclosure requirements ofInternational Financial Reporting Standards.

2. Summary of significant accounting policies:(1) Consolidation(2) Equity method

The consolidated financial statements include the accounts of theCompany and its 214 subsidiaries (38 subsidiaries in Japan and 176
subsidiaries outside Japan) as of March 31, 2015.
For the year ended March 31, 2015, seven subsidiaries were
newly added to the scope of consolidation and eight companies were
excluded from the scope of consolidation because of liquidation andmergers as a result of reorganization. Changes in the number ofconsolidated subsidiaries for the year ended March 31, 2015 arelisted below.

Investments in 12 major affiliates in 2015 are accounted for by theequity method of accounting.
Some of the affiliates are not accounted for under the equity
method since their net income/losses, retained earnings and otherfinancial amounts are immaterial.
The fiscal years of certain affiliates are different from theCompany. The Company is using those affiliates’ statements for
those fiscal years.

(increase)
Takeuchi Industrial Equipment Manufacturing Co., Ltd.
Toyota Industries Global Commercial Finance, Inc.
Toyota Industries Commercial Finance, Inc.
Toyota Material Handling Marketing Asia Pacific Pte, Ltd.
Cascade Corporation Group (1 company)
Toyota Industries Europe AB Group (1 company)
The Raymond Corporation Group (1 company)

Foreign currency denominated receivables and payables aretranslated into Japanese yen at the year-end exchange rates and theresulting transaction gains or losses are included in the consolidated
statements of income.
All asset and liability accounts of foreign subsidiaries and affiliates
are translated into Japanese yen at year-end exchange rates and allrevenue and expense accounts are translated at prevailing fiscal
average rates.

(decrease)
Elett Corporation
Aichi Corporation Group (2 companies)
Uster Technologies AG Group (1 company)
Cascade Corporation Group (1 company)
Toyota Industries Europe AB Group (2 companies)
The Raymond Corporation Group (1 company)(4) Cash and cash equivalents

Industrial Components and Attachments, Inc. and 28 groupcompanies of the Cascade Corporation Group, which are subsidiaries
outside Japan, have changed their fiscal year-end from January 31 toMarch 31 in fiscal 2015, and consequently, their accounting period is
14 months. In addition, 13 group companies of the Uster
Technologies AG Group, which are subsidiaries outside Japan, havechanged their fiscal year-end from December 31 to March 31 in fiscal
2015, and consequently, their accounting period is 15 months. Toyota
Industry (Kunshan) Co., Ltd., Toyota Material Handling (Shanghai) Co.,
Ltd., TD Automotive Compressor Kunshan Co., Ltd., Toyota
Industries Management (China) Co., Ltd., Toyota Textile Machinery(Shanghai) Co., Ltd., Wanbishi Archives (Kunshan), Co., Ltd., Zhejiang
Aichi Industrial Machinery, Co., Ltd. and Yantai Shougan Toyota
Industries Co., Ltd., which are subsidiaries outside Japan, have been
consolidated after the provisional settlement of accounts on the
Company’s fiscal year-end of March 31. The impact from changes in
the fiscal year-end or from consolidation based on the provisional
settlement of accounts at March 31 has been adjusted on the
consolidated statements of income.
All significant inter-company transactions, balances and unrealized
profits within Toyota Industries have been eliminated.

(3) Translation of foreign currencies

Cash and cash equivalents are cash on hand, readily available
deposits and short-term highly liquid and low risk investments withmaturities not exceeding three months at the time of purchase.

(5) Short-term investments and investment securities
Toyota Industries classifies securities into four categories by purposeof holding: trading securities, held-to-maturity securities, othersecurities and investments in affiliates. Toyota Industries did not havetrading securities or held-to-maturity securities as of March 31, 2015.
Other securities with readily determinable fair values are stated atfair value based on market prices at the end of the year. Unrealized
gains and losses are included in “Valuation difference on available-forsale securities” as a separate line item of net assets. Cost of sales ofsuch securities is determined by the moving-average method.
Other securities without readily determinable fair values are statedat cost, as determined by the moving-average method.
Investments in affiliates are accounted for by the equity method(see Note 2 (2)).
Investments in affiliates not accounted for by the equity method
are stated at cost due to their insignificant effect on the consolidated
financial statements.

(6) Inventories
Inventories are stated mainly at cost determined by the movingaverage method (the values on the consolidated balance sheets arecalculated through the write-down method based on the deteriorationof profitability).

The accompanying notes are an integral part of these financial statements.

14

Toyota Industries Report 201515

(7) Property, plant and equipment, and depreciation(Except for lease assets)(15) Accounting standards for finance leasetransactions

Property, plant and equipment are stated at cost. Depreciation
expenses of property, plant and equipment are computed mainly by
the declining-balance method for the Company and subsidiaries.
Significant renewals and additions are capitalized at cost. Repairs
and maintenance are charged to income as incurred.

As for the accounting standards for finance lease transactions, net
sales and cost of sales are recognized when the lease payments arereceived or when the lease transactions are started.

Toyota Industries adopted the policy of providing an allowance for
doubtful accounts in an amount sufficient to cover possible losses oncollection by estimating individually uncollectible amounts andapplying to the remaining accounts a percentage determined bycertain factors such as historical collection experiences.

(a) Method of hedge accounting	Mainly the deferral method of hedge accounting is applied. In thecase of foreign currency forward contracts, foreign currency option
contracts and foreign currency swaps, the hedged items aretranslated at contracted forward rates if certain conditions are met.
		 As for the interest rate swap contracts, which meet therequirements of the preferential accounting method, thepreferential accounting method is applied.
(b) Hedging instruments and hedged items
Hedging instruments: 	Derivative instruments (foreign currency
forward contracts, foreign currency option
contracts, foreign currency swaps andinterest rate swaps)
Hedged items:	Risk of change in interest rate on
borrowings, receivables and payables, andrisk of change in forward exchange rates ontransactions denominated in foreign
currencies (borrowings, receivables andpayables, and forecasted transactions)(c) Hedging policy	Hedging transactions are executed and controlled based on
Toyota Industries’ internal policy and Toyota Industries is hedging
interest rate risks and foreign currency risks. Toyota Industries’
hedging activities are reported periodically to a director responsible
for accounting.
(d) Method used to measure hedge effectiveness	Hedge effectiveness is measured by comparing accumulatedchanges in market prices of hedged items and hedging
instruments or accumulated changes in estimated cash flows fromthe inception of the hedge to the date of measurements
performed. Currently it is considered that there are highcorrelations between them.

(12) Allowance for bonuses to directors(17) Goodwill and amortization

Bonuses to directors and managing officers are recorded on theaccrual basis.

Goodwill, if material, is amortized principally over less than 20 years
on a straight-line basis, while immaterial goodwill is charged to gain orloss as incurred.

(8) Intangible assets and amortization (Except for leaseassets)Amortization of intangible assets is computed using the straight-line
method.

(9) Lease assets
The depreciation method of leased properties on finance leases thatare deemed to transfer the ownership of the leased properties tolessees is the same as those applied to properties owned by
Toyota Industries.
The depreciation method of leased properties on finance leases
other than those deemed to transfer the ownership of leased
properties to lessees is computed mainly by the straight-line method,which assumes zero residual value and the leasing term to be for theuseful life of the asset.
As for the finance leases other than finance leases deemed totransfer the ownership of leased properties to lessees, those thatcame into effect before March 31, 2008 (inclusive) will continue to beaccounted for by the former method (similar to the method applicableto ordinary operating leases).

(10) Method of accounting for deferred assets
As for bond issuance cost, the full amount is treated as expenses at
the time of payout.

(11) Allowances for doubtful accounts(13) Allowance for retirement benefits for directors,
managing officers and audit & supervisory board
members

16(16) Hedge accounting(18) Consumption tax

To provide for the retirement benefits for directors, managing officers
and audit & supervisory board members, an amount which is
calculated at the end of the year as required by an internal policy
describing the retirement benefits for directors, managing officers andaudit & supervisory board members is accrued.

The consumption tax under the Japanese Consumption Tax Law
withheld by Toyota Industries on sales of goods is not included in theamount of net sales in the accompanying consolidated statements ofincome, and the consumption tax paid by Toyota Industries under thelaw on purchases of goods and services and expenses is not includedin the related amount.

(14) Accounting treatment of retirement benefits(19) Income taxes(a) Method of attributing expected benefit to periods
	Retirement benefit obligations are measured by actuarial
calculations based on the benefit formula as the attribution
method.
(b) Treatment of actuarial gains and losses and past service costs	Unrecognized past service costs are amortized by the straight-line
method over the remaining average service period of employees.
Unrecognized actuarial gain or loss at the end of the prior year isamortized by the straight-line method over the remaining average
service period of employees.

The provision for income taxes is computed based on the pretax
income included in the consolidated statements of income. The asset
and liability approach is used to recognize deferred tax liabilities andassets for the expected future tax consequences of temporary
differences between the carrying amounts and the tax bases of assets
and liabilities.

Toyota Industries Report 2015(20) Net income per share
The computation of basic net income per share is based on theweighted-average number of outstanding shares of common stock.
The calculation of diluted net income per share is similar to thecalculation of basic net income per share, except that the weighted-

average number of shares outstanding includes the additional dilution
from potential common stock equivalents such as subscription rights
to shares. Cash dividends per share shown in the statements ofincome are the amounts applicable to the respective years.

3. Accounting changes:
Changes in accounting policies resulting from changes
in accounting standards
Effective from fiscal 2015, Toyota Industries Corporation and its
consolidated subsidiaries in Japan adopted the provisions prescribedin Paragraph 35 of the Accounting Standards Board of Japan’s new
Accounting Standard for Retirement Benefits (ASBJ Statement No.
26, May 17, 2012) and the provisions prescribed in Paragraph 67 of
the Guidance on Accounting Standard for Retirement Benefits (ASBJ
Guidance No. 25, March 26, 2015). Consequently, Toyota Industries
Corporation and its consolidated subsidiaries in Japan changed theattribution method in calculating retirement benefit obligations fromstraight-line attribution to the benefit formula, and changed thecalculation method of discount rates. Changes in the attribution
method and calculation of discount rates had been adjusted inretained earnings at the beginning of fiscal 2015 in accordance withtransitional measures per Paragraph 37 of ASBJ Statement No. 26.
As a result, net defined benefit assets decreased by ¥4,026
million, net defined benefit liabilities increased by ¥1,180 million andretained earnings decreased by ¥3,668 million at the beginning offiscal 2015.
Refer to Note 28 “Net assets per share” for the impact on per
share information.

4. Accounting standards issued but not yet effective:
Toyota Industries Corporation and its consolidated subsidiaries inJapan have not yet adopted the following accounting standards as ofMarch 31, 2015.
·A ccounting Standard for Business Combinations (ASBJ Statement
No. 21, September 13, 2013)·A
 ccounting Standard for Consolidated Financial Statements (ASBJ
Statement No. 22, September 13, 2013)·A
 ccounting Standard for Business Divestitures (ASBJ Statement No.
7, September 13, 2013)·A
 ccounting Standard for Earnings Per Share (ASBJ Statement No.
2, September 13, 2013)·G
 uidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures (ASBJ Guidance No.
10, September 13, 2013)·G
 uidance on Accounting Standard for Earnings Per Share (ASBJ
Guidance No. 4, September 13, 2013)(1) Overview
These changes in accounting standards mainly have an impact on1) accounting for changes in a parent’s ownership interest which do
not result in a loss of control, 2) accounting for acquisition-related
costs, 3) presentation of net income and non-controlling interest(former “minority interest”) and 4) handling of provisional accounting
for business combinations.

(2) Date of adoption
The amended accounting standards and guidance are effective fromthe beginning of the fiscal year ending March 31, 2016. The
provisional accounting is effective for business combinations on andafter the beginning of the fiscal year ending March 31, 2016.

(3) Impact of adopting the accounting standards and its
guidance
The Company and its consolidated subsidiaries in Japan are currently
in the process of determining the effects of these new standards onthe consolidated financial statements.

5. Changes in presentation:(Consolidated Balance Sheets)“Net defined benefit assets,” which was included in “Other
investments and other assets” under “Investments and other assets”
in the prior consolidated balance sheets, was reclassified andpresented as a separate line item in the current consolidated balance
sheets due to its materiality.

(Retirement benefits)
Due to the amendment of “Guidance on Accounting Standard for
Retirement Benefits” (ASBJ Guidance No. 25, March 26, 2015), prioryear presentation of multi-employer plans in Note 19 “Retirement
benefits” has been changed and reclassified to conform with thecurrent year presentation. Refer to Note 19 for this change.

6. Property, plant and equipment:
Accumulated impairment losses are included in accumulated depreciation on the consolidated balance sheets.

177. Long-term debt:(4) Annual maturities of other debts as of March 31, 2015 are as follows:
Millions of yen(1) Bonds payable as of March 31, 2015 and 2014 consist of the following:
Millions of yen

2015
¥—
30,000
7,053
19,99826,00050,00030,00010,00010,00010,00010,00010,00010,00010,000¥233,051(47,053)

1.46% bonds due 2014 without collateral
1.66% bonds due 2015 without collateral
0.45–0.74% medium-term notes due 2015 without collateral
1.95% bonds due 2016 without collateral
1.72% bonds due 2018 without collateral
2.109% bonds due 2019 without collateral
1.109% bonds due 2021 without collateral
0.181% bonds due 2015 without collateral
0.265% bonds due 2017 without collateral
0.821% bonds due 2022 without collateral
0.554% bonds due 2020 without collateral
0.797% bonds due 2023 without collateral
0.234% bonds due 2019 without collateral
0.361% bonds due 2021 without collateral
Total

2014
¥20,000
30,00015,271
19,99726,00050,00030,00010,00010,00010,00010,00010,000——¥241,268

The amount shown in parentheses in total for 2015 is that redeemed within one year.

Year ending March 31
2017
2018
2019
2020
2021 and thereafter
Total

Long-termloans payableLease
obligations

Total¥52,678
109,667
156,954
39,85462,000¥421,154¥42,828
34,264
23,673
12,475
3,943¥117,185¥95,506
143,931
180,628
52,32965,943¥538,340

8. Investments in affiliated companies:
Investments in affiliated companies as of March 31, 2015 and 2014 are as follows:
Millions of yen

Investment securities (stock)
Other investments and other assets (others)

2014¥7,901
4,636

9. Assets pledged as collateral:(2) Annual maturities of bonds payable as of March 31, 2015 are as follows:(1) Assets pledged as collateral as of March 31, 2015 and 2014 are as follows:
Millions of yen

Year ending March 31
2016
2017
2018
2019
2020
2021 and thereafter
Total

Millions of yen

Total¥47,053
19,99810,00076,00010,00070,000¥233,051(3) Other debts as of March 31, 2015 and 2014 consist of the following:
Millions of yen

Short-term loans payable
Long-term loans payable:
Current portion
Non-current portion
Lease obligations:
Current portion
Non-current portion
Commercial paper
Total

2015
¥8,7855,526

Weighted-averageinterest rate (%)

2015¥ 55,369

2014¥76,648

44,367421,154

43,409323,400

1.40
1.01

45,665
117,185—¥ 683,742

47,644
122,151
20,524¥633,778

—
—
—
—

1.23

Investment securities
Merchandise and finished goods
Trade notes and accounts receivable
Machinery, equipment and vehicles
Buildings and structures
Land
Cash and deposits
Raw materials and supplies
Other assets
Total

2015
¥143,192
1,591
1,566
1,112
118
17
—
—
—
¥147,596

2014¥122,264
3,187
9,681
4,569
2,956
726
6,194
6,112
475
¥156,167(2) Secured liabilities as of March 31, 2015 and 2014 are as follows:
Millions of yen

The interest rate is the weighted-average interest rate for the ending balances of those debts. The interest rate of lease obligations is omitted since the amount shown on the
consolidated balance sheets does not exclude interest receivable, which is included in total lease payment receivable.

Other current obligations
Short-term loans payable
Long-term loans payable
Total

2015
¥27,284
3,554
715¥31,5542014¥25,751
951
205¥26,909

10. Allowance for retirement benefits to directors, managing officers and audit & supervisoryboard members:
Net defined benefit liabilities including the allowance for retirement benefits to directors, managing officers and audit & supervisory board members
for the years ended March 31, 2015 and 2014 is as follows:
Millions of yen

Allowance for retirement benefits to directors, managing officers and audit & supervisory board members

18

Toyota Industries Report 20152015
¥1,6052014¥1,78719

11. Asset retirement obligations:

16. Financial instruments:

The amount of asset retirement obligations as of March 31, 2015 and 2014, which is less than 1% of total liabilities and net assets, is omitted
pursuant to Article 92, paragraph (2) of the Regulation for Terminology, Forms and Preparation of Consolidated Financial Statements.

(1) Matters concerning financial instruments:

12. Export discount bills:
Export discount bills as of March 31, 2015 and 2014 are as follows:
Millions of yen

Export discount bills

2015
¥233

2014
¥271

13. Net assets:
Under the Corporation Law of Japan, amounts equal to at least 10% of the sum of the cash dividends and other external appropriations paid by theCompany and its subsidiaries in Japan must be set aside as a legal reserve until it equals 25% of capital stock. The legal reserve may be used toreduce a deficit or may be transferred to capital stock taking appropriate corporate action. In consolidation, the legal reserves of the Company andits subsidiaries in Japan are accounted for as retained earnings. The year-end cash dividend is approved at the Ordinary General Meeting of
Shareholders of the Company held after the close of the fiscal year to which the dividend is applicable. In addition, interim cash dividends may be
paid upon resolution of the Board of Directors, subject to limitations imposed by the Corporation Law of Japan.

14. Research and development expenses:
Research and development expenses, which are included in selling, general and administrative expenses and manufacturing costs, amounted to¥47,785 million and ¥46,326 million for the years ended March 31, 2015 and 2014, respectively.

15. Comprehensive income:
Recycling and tax effect relating to other comprehensive income for the years ended March 31, 2015 and 2014 are as follows:
Millions of yen

Valuation difference on available-for-sale securities
Amount arising during the period
Recycling		 Before tax effect adjustment
		Tax effect		 Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Amount arising during the period
Recycling		 Before tax effect adjustment
		Tax effect		 Deferred gains or losses on hedges
Foreign currency translation adjustment
Amount arising during the period
Recycling		 Foreign currency translation adjustment
Defined benefit plan adjustments
Amount arising during the period
Recycling		 Before tax effect adjustment
		Tax effect		 Defined benefit plan adjustments
Share of other comprehensive income of associates accounted for using equity method
Amount arising during the period
		 Other comprehensive income

20

Toyota Industries Report 2015

2015

2014

¥ 660,681(734)
659,946(158,862)
501,084¥ 296,228(0)296,228(103,432)
192,795(2,835)
3,010
175
(54)
120

147
91
239
(141)
97

13,431(68)
13,36233,586
1
33,588(8,565)398(8,166)
1,441(6,725)

—
—
—
—
—

109
507,952526
227,007(A) Policy for financial instruments	Toyota Industries borrows funds from financial institutions and issues corporate bonds to procure funds to meet its needs for long-term funding.
Toyota Industries also borrows funds from financial institutions and issues commercial paper to procure funds to meet its needs for short-termworking capital. Toyota Industries manages its cash reserves as highly safe financial assets. The purpose of using derivative instruments is to
reduce risk, not to obtain earnings from exchanges or for speculative purposes.
(B) Contents and risk of financial instruments
	Cash and deposits are subject to credit risk of financial institutions and foreign currency risk. Cash deposits for cash collection and deposit
services are subject to credit risk of financial institutions. Trade notes and accounts receivable are subject to counterparty credit risk and foreign
currency risk. Lease investment assets are subject to counterparty credit risk, foreign currency risk and interest rate risk.
		 Short-term investments and investment securities are subject to market risk and foreign currency risk.
		 Trade notes and accounts payable include those denominated in foreign currencies and are thus subject to foreign currency risk. All of them
are due within one year. Loans payable, bonds payable and lease obligations are subject to foreign currency risk and interest rate risk.
		 Toyota Industries uses derivative instruments (foreign currency forward contracts, foreign currency option contracts, foreign currency swaps
and interest rate swaps) to cover such kinds of risks, and these transactions are subject to credit risk of financial institutions.
		 With regard to foreign currency risk, Toyota Industries uses derivative instruments (foreign currency forward contracts and foreign currency
option contracts) for the amount of foreign currency trade assets (trade notes and accounts receivable) offset by foreign currency trade liabilities(trade notes and accounts payable). Foreign currency swaps and interest rate swaps are used for hedging the foreign currency risk and interest
rate risk of loans, bonds and others.
		 As for hedge accounting, the method, items, policy and evaluation method of measuring effectiveness are referred to in Note 2 “(16) Hedge
accounting.”(C) Risk management of financial instrumentsa) Management of credit risk (risk of non-execution of contract by counterparty)		In accordance with its treasury policy, Toyota Industries carries out regular monitoring of principal counterparties and strives to quickly
ascertain and minimize concerns about collecting credits due to worsening financial and other conditions of counterparties. In using
derivatives, to reduce credit risk of financial institutions, Toyota Industries engages in transactions only with those financial institutions thathave high credit ratings.
b) Management of market risk (foreign currency risk, interest rate risk, others)		In accordance with its treasury policy, in principle, Toyota Industries uses foreign currency forward contracts, foreign currency option contracts
and foreign currency swaps to hedge foreign currency risk for each currency for its monetary credits and liabilities denominated in foreign
currencies. Toyota Industries uses interest rate swaps to hedge interest rate risk on monetary liabilities. Toyota Industries monitors the financial
condition and reviews the valuations of short-term investments and investment securities.
c) Management of financing-related liquidity risk (risk that payments cannot be made on due date)		 In accordance with its treasury policy, Toyota Industries manages liquidity risk with cash reserves and commitment lines.
(D) Supplemental explanation of financial instruments
	The fair value of financial instruments includes values based on market values as well as rationally calculated values when market values cannot
be determined. These calculated values could also conceivably change along with the adoption of different premises.

21

(2) Matters concerning the fair value of financial instruments:
For the year ended March 31, 2015
The amounts in the consolidated balance sheets, fair values and the differences between those as of March 31, 2015 are as follows. Financial
instruments for which ascertaining fair value is extremely difficult are not included in the following chart. Refer to Note 2 regarding these financial
instruments.
Millions of yen(1) Cash and deposits(2) Cash deposits for cash collection and deposit services(3) Trade notes and accounts receivable(4) Lease investment assets (current assets)(5) Short-term investments and investment securities
Other securities(6) Lease investment assets (fixed assets)
Total assets(1) Trade notes and accounts payable(2) Short-term loans payable(3) Current portion of bonds(4) Lease obligations (current liabilities)(5) Bonds payable(6) Long-term loans payable(7) Lease obligations (long-term liabilities)
Total liabilities
Derivative transactions*3
Derivative instruments for which hedge accounting is not applied
Derivative instruments for which hedge accounting is applied
Total derivative transactions

Carrying
amount*1,*2

Fair value

Difference¥247,273
58,250261,757
55,868¥247,273
58,250261,756
55,868

¥—
—
(0)
—

2,588,295
135,958¥3,347,404¥ (205,816)(99,736)(47,053)(45,665)(185,998)(421,154)(117,185)¥(1,122,610)

2,588,295
133,231¥3,344,677¥ (205,816)(99,736)(47,053)(45,665)(194,364)(427,974)(118,201)¥(1,138,812)—(2,726)¥(2,727)¥0———(8,366)(6,819)(1,015)¥(16,201)¥(1,757)41¥(1,716)¥(1,757)41¥(1,716)

¥—
—
¥—

*1: Allowance for doubtful accounts is excluded from total assets.
*2: The figures for liabilities are indicated in parentheses.
*3: Stated values are the net amounts of assets and liabilities arising from derivative transactions. Net liabilities are represented in parentheses.

1. Methods for calculating fair value of financial instruments and matters concerning marketable securities and derivatives(Assets)(1) Cash and deposits, (2) Cash deposits for cash collection and deposit services
		All deposits are short term and fair value approximates the carrying amount. Therefore, fair value for deposits is calculated at the carrying
amount.
(3) Trade notes and accounts receivable		These items are categorized into a specified time period, and are stated at present value calculated by the discount rate, which takes into
account the respective period.
(4) Lease investment assets (current assets)		Lease investment assets (current assets) are short term and fair value approximates the carrying amount. Therefore, fair value for these items
is calculated at the carrying amount.
(5) Short-term investments and investment securities		Other securities refer to stocks, money management funds and negotiable certificates of deposit. Fair value of stocks is calculated based on
prices listed on stock exchanges. Fair value of money management funds and negotiable certificates of deposit is calculated at the carrying
amount since fair value of these assets approximates the carrying amount. Details regarding other securities are referred to in Note 17“Marketable securities.”(6) Lease investment assets (fixed assets)		Fair value is calculated by discounting to net present value the total amount of lease receipts using an expected interest rate when newly
undertaking the same lease transaction.

22

Toyota Industries Report 2015

(Liabilities)(1) Trade notes and accounts payable		All notes and accounts payable are short term and fair value approximates the carrying amount. Therefore, fair value for notes and accounts
payable is calculated at the carrying amount.
(2) Short-term loans payable, (3) Current portion of bonds, (4) Lease obligations (current liabilities)		These items payable are short term and fair value approximates the carrying amount. Therefore, fair value for these items is calculated at thecarrying amount.
(5) Bonds payable		Fair value is calculated by discounting to net present value the total of principal and interest using expected interest rates when newly
borrowing the same amount.
(6) Long-term loans payable		Fair value is calculated by discounting future cash outflow from repayment of principal and interest to net present value using the current
interest rate.
			 Fair value of long-term loans payable with which the interest rate swap transactions are accounted under the preferential accounting
method and with which the interest rate and currency swap transactions are accounted under the integral accounting method is calculated bydiscounting future cash outflow from repayment of principal and interest paid under the interest rate swap transactions to net present value
using the current interest rate.
(7) Lease obligations (long-term liabilities)
		Fair value is calculated by discounting to net present value the total amount of lease payments using an expected interest rate when newly
undertaking the same lease transaction.
(Derivative transactions)
Details regarding derivative transactions are referred to in Note 18 “Derivative instruments.”
2. Financial instruments for which ascertaining fair value is extremely difficult
Millions of yen
Carrying
amountNon-listed stocks¥8,785
30,527¥39,312

Investments in affiliated companies
Other securities
Total

Non-listed stocks are not included in “Short-term investments and investment securities” because there are no market prices and ascertaining fair value is extremely difficult.

3. Amounts of projected future redemptions after March 31, 2015 for monetary credits and liabilities as well as marketable securities with maturities
Millions of yen
Year ending March 31

Cash and deposits
Cash deposits for cash collection and deposit services
Trade notes and accounts receivable
Lease investment assets (fixed assets)
Total

2016

2017-20202021-2025

2026 and
thereafter¥247,273
58,250261,391—¥566,915

¥—
—
365
131,994¥132,360

¥—
—
—
3,964
¥3,964

¥—
—
—
—
¥—

4. Scheduled repayments of bonds payable, long-term loans payable and lease obligations (long-term liabilities) after the consolidated settlement dateMillions of yen
Year ending March 31

Bonds payable
Long-term loans payable
Lease obligations (long-term liabilities)
Total

2016

2017

2018

2019

2020

2021-2025

2026 and
thereafter

¥—
—
—
¥—

¥19,998
52,67842,828¥115,505¥10,000
109,667
34,264¥153,931¥76,000
156,954
23,673¥256,628¥10,000
39,854
12,475¥62,329¥70,000
62,0003,813¥135,813

¥—
—
130
¥130

23

For the year ended March 31, 2014
The amounts in the consolidated balance sheets, fair values and the differences between those as of March 31, 2014 are as follows. Financial
instruments for which ascertaining fair value is extremely difficult are not included in the following chart. Refer to Note 2 regarding these financial
instruments.
Millions of yen(1) Cash and deposits(2) Cash deposits for cash collection and deposit services(3) Trade notes and accounts receivable(4) Lease investment assets (current assets)(5) Short-term investments and investment securities
Other securities(6) Lease investment assets (fixed assets)
Total assets(1) Trade notes and accounts payable(2) Short-term loans payable(3) Commercial paper(4) Current portion of bonds(5) Lease obligations (current liabilities)(6) Bonds payable(7) Long-term loans payable(8) Lease obligations (long-term liabilities)
Total liabilities
Derivative transactions*3
Derivative instruments for which hedge accounting is not applied
Derivative instruments for which hedge accounting is applied
Total derivative transactions

Carrying
amount*1,*2

Fair value

Difference¥226,383
50,765
242,847
50,122¥226,383
50,765
242,846
50,122

¥—
—
(1)
—

1,933,925
118,849¥2,622,893¥(196,904)(120,058)(20,524)(29,139)(47,644)(212,128)(323,400)(122,151)¥(1,071,951)

1,933,925
113,574¥2,617,616¥(196,904)(120,058)(20,524)(29,139)(47,644)(218,425)(326,476)(122,957)¥(1,082,129)—(5,275)¥(5,277)¥—————(6,296)(3,076)(805)¥(10,178)¥(464)(12)¥(476)¥(464)(12)¥(476)¥——¥—*1: Allowance for doubtful accounts is excluded from total assets.
*2: The figures for liabilities are indicated in parentheses.
*3: Stated values are the net amounts of assets and liabilities arising from derivative transactions. Net liabilities are represented in parentheses.

1. Methods for calculating fair value of financial instruments and matters concerning marketable securities and derivatives(Assets)(1) Cash and deposits, (2) Cash deposits for cash collection and deposit services
		All deposits are short term and fair value approximates the carrying amount. Therefore, fair value for deposits is calculated at the carrying
amount.
(3) Trade notes and accounts receivable		These items are categorized into a specified time period, and are stated at present value calculated by the discount rate, which takes into
account the respective period.
(4) Lease investment assets (current assets)		Lease investment assets (current assets) are short term and fair value approximates the carrying amount. Therefore, fair value for these items
is calculated at the carrying amount.
(5) Short-term investments and investment securities		Other securities refer to stocks, money management funds and negotiable certificates of deposit. Fair value of stocks is calculated based on
prices listed on stock exchanges. Fair value of money management funds and negotiable certificates of deposit is calculated at the carrying
amount since fair value of these assets approximates the carrying amount. Details regarding other securities are referred to in Note 17“Marketable securities.”(6) Lease investment assets (fixed assets)		Fair value is calculated by discounting to net present value the total amount of lease receipts using an expected interest rate when newly
undertaking the same lease transaction.

24

Toyota Industries Report 2015

(Liabilities)(1) Trade notes and accounts payable		All notes and accounts payable are short term and fair value approximates the carrying amount. Therefore, fair value for notes and accounts
payable is calculated at the carrying amount.
	(2) Short-term loans payable, (3) Commercial paper, (4) Current portion of bonds, (5) Lease obligations (current liabilities)		These items payable are short term and fair value approximates the carrying amount. Therefore, fair value for these items is calculated at thecarrying amount.
(6) Bonds payable		Fair value is calculated by discounting to net present value the total of principal and interest using expected interest rates when newly
borrowing the same amount.
(7) Long-term loans payable		Fair value is calculated by discounting future cash outflow from repayment of principal and interest to net present value using the current
interest rate.
			 Fair value of long-term loans payable with which the interest rate swap transactions are accounted under the preferential accounting
method and with which the interest rate and currency swap transactions are accounted under the integral accounting method is calculated bydiscounting future cash outflow from repayment of principal and interest paid under the interest rate swap transactions to net present value
using the current interest rate.
(8) Lease obligations (long-term liabilities)
		Fair value is calculated by discounting to net present value the total amount of lease payments using an expected interest rate when newly
undertaking the same lease transaction.
(Derivative transactions)
Details regarding derivative transactions are referred to in Note 18 “Derivative instruments.”
2. Financial instruments for which ascertaining fair value is extremely difficult
Millions of yen
Carrying
amountNon-listed stocks
Investments in affiliated companies
Other securities
Total¥7,901
30,539¥38,441

Non-listed stocks are not included in “Short-term investments and investment securities” because there are no market prices and ascertaining fair value is extremely difficult.

3. Amounts of projected future redemptions after March 31, 2014 for monetary credits and liabilities as well as marketable securities with maturities
Millions of yen
Year ending March 31

Cash and deposits
Cash deposits for cash collection and deposit services
Trade notes and accounts receivable
Lease investment assets (fixed assets)
Total

2015

2016-20192020-2024

2025 and
thereafter¥226,383
50,765242,328—¥519,476

¥—
—
518
115,743¥116,262

¥—
—
—
3,106
¥3,106

¥—
—
—
—
¥—

4. Scheduled repayments of bonds payable, long-term loans payable and lease obligations (long-term liabilities) after the consolidated settlement dateMillions of yen
Year ending March 31

Bonds payable
Long-term loans payable
Lease obligations (long-term liabilities)
Total

2015

2016

2017

2018

2019

2020-2024

2025 and
thereafter

¥—
—
—
¥—

¥ 46,131
41,112
41,702¥128,946¥ 19,997
36,01535,170¥91,182¥10,000
76,42625,885¥112,311¥76,000
112,856
14,838¥203,695¥60,000
56,9894,403¥121,393

¥—
—
150
¥150

25

17. Marketable securities:

18. Derivative instruments:(1) Other securities with readily determinable fair value(1) Quantitative disclosure about derivatives for the year ended March 31, 2015
1) Derivative instruments for which hedge accounting is not applied(a) Foreign currency transactions as of March 31, 2015 are as follows:

As of and for the year ended March 31, 2015
Millions of yen
Acquisition
cost

Carrying
amountDifference

Securities with carrying amount exceeding acquisition cost:
StocksOthersSubtotal
Securities with carrying amount not exceeding acquisition cost:¥321,770
310
322,081¥2,553,750
346
2,554,097¥2,231,979
35
2,232,015

StocksOthersSubtotal
Total

117
34,08534,202¥356,284

113
34,08534,198¥2,588,295

(4)
—
(4)
¥2,232,011

Millions of yen

Category

Non-listed stocks (total amount is ¥30,527 million in the consolidated balance sheets) are not included in “Other securities” because there are no market prices and ascertaining fairvalue is extremely difficult. “Others” above are mainly money management funds and negotiable certificates of deposit.

Transactions other thanmarket transactions

As of and for the year ended March 31, 2014
Millions of yen
Acquisition
cost

Carrying
amountDifference

StocksOthersSubtotal
Securities with carrying amount not exceeding acquisition cost:¥310,626
195
310,821¥1,882,659
232
1,882,892¥1,572,033
37
1,572,070

StocksOthersSubtotal
Total

5,156
46,012
51,168¥361,990

(136)
—
(136)
¥1,571,934

Non-listed stocks (total amount is ¥30,539 million in the consolidated balance sheets) are not included in “Other securities” because there are no market prices and ascertaining fairvalue is extremely difficult. “Others” above are mainly money management funds and negotiable certificates of deposit.

Foreign currency forward contracts transactions
Buy JPY / Sell USD
Buy JPY / Sell EUR
Buy JPY / Sell AUD
Buy JPY / Sell other foreign currencies
Buy EUR / Sell JPY
Buy EUR / Sell other foreign currencies
Buy SEK / Sell EUR
Buy SEK / Sell GBP
Buy SEK / Sell other foreign currencies
Sell SEK / Buy EUR
Sell SEK / Buy GBP
Sell SEK / Buy other foreign currencies
Buy other foreign currencies
Sell other foreign currencies
Foreign currency option contracts transactions*1
Buy

Securities with carrying amount exceeding acquisition cost:

5,019
46,012
51,032¥1,933,925

Type

Sell
Foreign currency swap transactions
Payment JPY / Receipt USD
Total

Notional amount
Maturity
Totalover 1 year

¥191
250
120
642
570
1,640
35,195
3,054
34,478
5,835
2,013
6,459
9,871
2,611

Net unrealized
gain/loss

¥—
—
—
—
—
—
—
—
—
—
—
—
—
—

¥(11)
1
0
58
(6)
(18)
139
(164)
(867)
(17)
(2)
11
(213)
14

¥(11)
1
0
58
(6)
(18)
139
(164)
(867)
(17)
(2)
11
(213)
14

2,735
<35>
2,735
<35>

—

13

(21)

—

80

(44)

1,007
¥109,413

—
¥—

(318)
¥(1,301)(318)¥(1,462)*1: The amounts indicated in brackets for foreign currency option contracts transactions refer to the option fee, and the related figures for fair value and net unrealized gain/loss arealso shown.
*2: The fair value calculation method is based on the index price as of March 31, 2015.

(b) Interest rate transactions as of March 31, 2015 are as follows:(2) Other securities sold during the year
As of and for the years ended March 31, 2015 and 2014
Other securities sold are omitted due to their quantitative immateriality.

Fair value*2

Millions of yen

Category
Transactions other thanmarket transactions

Type
Interest rate swap transactions
Fixed rate payment / Floating rate receipt
Total

Notional amount
Maturity
Totalover 1 year¥
57,049¥57,049¥
35,897¥35,897

Fair value

Net unrealized
gain/loss¥(294)¥(294)¥(294)¥(294)

The fair value calculation method is based on the index price as of March 31, 2015.

26

Toyota Industries Report 201527

(2) Quantitative disclosure about derivatives for the year ended March 31, 2014

2) Derivative instruments for which hedge accounting is applied

1) Derivative instruments for which hedge accounting is not applied(a) Foreign currency transactions as of March 31, 2014 are as follows:

Millions of yen

Category

Deferred hedge
methodType
Foreign currency forward contracts transactions
Buy JPY / Sell USD
Buy JPY / Sell EUR
Buy JPY / Sell AUD
Buy SEK / Sell EUR
Buy SEK / Sell GBP
Buy SEK / Sell other foreign currencies
Sell JPY / Buy other foreign currencies
Sell SEK / Buy EUR
Sell SEK / Buy other foreign currencies
Buy other foreign currencies
Sell other foreign currencies
Foreign currency option contracts transactions*1
Buy
Sell

Contentsof hedge

Notional amount
Maturity
Totalover 1 year¥54,636
1,968
305
5,509
4,016
Accounts
receivable
5,701
50
423
208
25
47

Accounts
receivable

5,736
<72>
5,736
<72>
84,367

Subtotal
Foreign currency forward contracts transactions
Net valuation method
Buy JPY / Sell USD
3,180
Accounts
using forward foreign
receivable
Buy JPY / Sell EUR
1,712
exchange contracts
Buy JPY / Sell AUD
122
Subtotal
5,015
Preferential accounting Interest rate swap transactions
Longmethod of interest rate 	
term loans 60,445
Fixed rate payment /swap transactions
payableFloating rate receipt
Subtotal
60,445Integral accounting method Interest rate and currency swap transactions
Longof interest rate and currency 	Fixed rate payment /term loans 85,747
swap transactions
payableFloating rate receipt
Subtotal
85,747
Total¥235,575

¥—
—
—
—
—
—
—
—
—
—
—

Fair value

¥461
39
3
(23)
(169)
(265)
0
(1)
0
0
(2)

Net
unrealized
gain/loss

¥461
39
3
(23)
(169)
(265)
0
(1)
0
0
(2)

—

50

(22)

—
—

54
150

17
41

—
—
—
—

*2

*2

—

—

60,445*2*260,445——85,747*2*285,747¥146,192

—
150

—
41

¥

¥

Evaluation method

Millions of yen

Category

By theexchange rate
on foreign
currency
marketBy the price on
currency option
marketTransactions other thanmarket transactions

By the rate oninterest swap
market*1: The amounts indicated in brackets for foreign currency option contracts transactions refer to the option fee, and the related figures for fair value and net unrealized gain/loss arealso shown.
*2: Fair value and net unrealized gain/loss of derivative instruments for which these accounting methods are applied are inclusively reported as a portion of fair value of their hedge
instruments such as accounts receivable and long-term loans payable (see Note 16).

Foreign currency forward contracts transactions
Buy JPY / Sell USD
Buy JPY / Sell EUR
Buy JPY / Sell AUD
Buy EUR / Sell JPY
Buy EUR / Sell other foreign currencies
Buy SEK / Sell EUR
Buy SEK / Sell GBP
Buy SEK / Sell other foreign currencies
Sell SEK / Buy EUR
Sell SEK / Buy GBP
Sell SEK / Buy other foreign currencies
Buy other foreign currencies
Sell other foreign currencies
Foreign currency option contracts transactions*1
Buy

By the exchange
rate on foreign
currency
marketBy the rate oninterest swap
marketType

Sell
Foreign currency swap transactions
Payment JPY / Receipt USD
Total

Notional amount
Maturity
Totalover 1 year

¥232
99
63
1,009
1,317
30,114
4,026
27,162
9,743
4,020
8,349
1,690
8,327

Fair value*2

Net unrealized
gain/loss

¥—
—
—
—
—
—
—
—
—
—
—
—
—

¥(10)
1
(3)
5
(5)
(281)
(105)
(107)
68
41
90
(10)
76

¥(10)
1
(3)
5
(5)
(281)
(105)
(107)
68
41
90
(10)
76

2,832
<45>
2,832
<45>

—

4

(40)

—

46

(1)

995
¥102,819

995
¥995

(135)
¥(325)(135)¥(418)*1: The amounts indicated in brackets for foreign currency option contracts transactions refer to the option fee, and the related figures for fair value and net unrealized gain/loss arealso shown.
*2: The fair value calculation method is based on the index price as of March 31, 2014.

(b) Interest rate transactions as of March 31, 2014 are as follows:
Millions of yen

Category
Transactions other thanmarket transactions

Type
Interest rate swap transactions
Fixed rate payment / Floating rate receipt
Total

Notional amount
Maturity
Totalover 1 year¥66,540¥66,540¥43,705¥43,705

Fair value

Net unrealized
gain/loss¥(45)¥(45)¥(45)¥(45)

The fair value calculation method is based on the index price as of March 31, 2014.

28

Toyota Industries Report 201529

19. Retirement benefits:

2) Derivative instruments for which hedge accounting is applied
Millions of yen

Category

Deferred hedge
methodType
Foreign currency forward contracts transactions
Buy JPY / Sell USD
Buy JPY / Sell EUR
Buy JPY / Sell AUD
Buy SEK / Sell EUR
Buy SEK / Sell GBP
Buy SEK / Sell other foreign currencies
Sell JPY / Buy USD
Sell JPY / Buy EUR
Sell JPY / Buy other foreign currencies
Sell SEK / Buy EUR
Sell SEK / Buy GBP
Sell SEK / Buy other foreign currencies
Buy other foreign currencies
Foreign currency option contracts transactions*1
Buy
Sell

Contentsof hedge

Notional amount
Maturity
over 1 yearTotal

¥9,946
3,985
794
5,637
3,254
35,615
Accounts
receivable
36,310
355
6,686
1,190
50
80
102

Accounts
receivable

12,112<195>
12,112<195>

Interest rate and currency swap transactions
LongFixed rate payment /term loans
5,000
payableFloating rate receipt
Subtotal
133,236
Foreign currency forward contracts transactions
Buy JPY / Sell EUR
2,084
Net valuation method
Accounts
Buy JPY / Sell USD
1,804
using forward foreign
receivableexchange contracts
Buy JPY / Sell AUD
275
Sell JPY / Buy EUR
623
Subtotal
4,787
Preferential accounting Interest rate swap transactions
Longmethod of interest rate 	
term loans 41,184
Fixed rate payment /swap transactions
payableFloating rate receipt
Subtotal
41,184Integral accounting method Interest rate and currency swap transactions
Longof interest rate and currency 	Fixed rate payment /term loans 65,747
swap transactions
payableFloating rate receipt
Subtotal
65,747
Total¥244,956

¥—
—
—
—
—
—
—
—
—
—
—
—
—

Fair value¥Net
unrealized
gain/loss

(59)
(33)
(26)
17
(32)
(267)
237
11
166
17
1
(0)
3

¥(59)
(33)
(26)
17
(32)
(267)
237
11
166
17
1
(0)
3

—

98

(96)

—

145

49

5,000

0

0

5,000

279

(12)

*2

*2

—

—

31,184*2*2

31,184——65,747*2*2

65,747¥101,932

—
279

—
(12)

—
—
—
—
—

¥

¥

Evaluation method

By theexchange rate
on foreign
currency
marketBy the price on
currency option
marketBy the rate oninterest swap
marketBy the exchange
rate on foreign
currency
marketBy the rate oninterest swap
marketBy the rate oninterest swap
market*1: The amounts indicated in brackets for foreign currency option contracts transactions refer to the option fee, and the related figures for fair value and net unrealized gain/loss arealso shown.
*2: Fair value and net unrealized gain/loss of derivative instruments for which these accounting methods are applied are inclusively reported as a portion of fair value of their hedge
instruments such as accounts receivable and long-term loans payable (see Note 16).

(1) Outline of retirement benefit plans:
The Company and its subsidiaries in Japan maintain defined benefit pension plans, lump-sum indemnities plans, welfare pension fund plans anddefined contribution pension plans, all of which are retirement benefit plans. Certain foreign subsidiaries maintain defined benefit pension plans. In
addition, employee retirement benefits trusts are used for defined benefit plans as plan assets.
The simplified method is used for calculating retirement benefit obligations of certain subsidiaries. Some subsidiaries in Japan apply multiemployer plans.

(2) Defined benefit plan:
1) Reconciliation of defined benefit obligation for the years ended March 31, 2015 and 2014 is as follows:
Millions of yen

Benefit obligation at beginning of period
Cumulative effects of changes in accounting policies
Restated balance
Service cost
Interest cost
Actuarial gain (loss)
Benefit payments
Prior service cost
OthersBenefit obligation at end of period2015¥210,753
5,207
215,960
10,1305,140
23,294(5,844)(527)
1,832¥249,987

2014¥192,990—
192,990
9,456
4,412
(587)
(5,109)29
9,560¥210,753

2) Reconciliation of plan assets for the years ended March 31, 2015 and 2014 is as follows:
Millions of yen

Plan assets at beginning of period
Expected return on plan assets
Actuarial gain (loss)
Employer contributions
Benefit payments
OthersPlan assets at end of period

2015¥170,188
3,833
14,1605,700(4,185)3,418¥193,115

2014¥138,547
3,089
12,441
12,873(3,315)6,551¥170,1883) R econciliation of defined benefit obligation, plan assets at end of period and amounts recognized on the consolidated balance
sheets is as follows:
Millions of yen(a) Benefit obligation [funded](b) Plan assets(c) Funded status [ (a) + (b) ](d) Benefit obligation [unfunded](e) Net amount recognized on the consolidated balance sheets [ (c) + (d) ](f) Net defined benefit liabilities(g) Net defined benefit assets(h) Net amount recognized on the consolidated balance sheets [ (f) + (g) ]2015¥231,935(193,115)
38,82018,05156,871
85,161(28,289)¥56,871

2014¥193,504(170,188)
23,315
17,24940,56562,066(21,501)¥40,565

The simplified method is included in the above.

30

Toyota Industries Report 201531

(4) Multi-employer plans:4) Components of retirement benefit expenses for the years ended March 31, 2015 and 2014 are as follows:
Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial (gain) loss
Amortization of prior service cost
OthersDefined benefit expenses

2015¥10,1305,140(3,833)
1,115
(716)
28
¥11,8642014¥9,456
4,412(3,089)
1,651
(180)
123
¥12,374

Millions of yen

2015¥(209)(7,956)¥(8,166)

2014
¥—
—
¥—

6) Amounts recognized in accumulated other comprehensive income (pre-tax) as of March 31, 2015 and 2014 are as follows:2015¥3,027(17,005)¥(13,977)

2014¥3,237(9,048)¥(5,811)

The Japan Society of Industrial Machinery
Manufacturers’ welfare pension fund

Other welfare pension funds¥ 74,916 million¥ 100,891 million¥ (25,975 million)¥ 247,259 million¥ 346,901 million¥ (99,641 million)

7.39%

3.96%

The Japan Society of Industrial Machinery
Manufacturers’ welfare pension fund

Other welfare pension funds¥ 69,155 million¥ 98,620 million¥ (29,465 million)¥ 233,891 million¥ 303,115 million¥ (69,223 million)

7.39%

3.90%

As of March 31, 2015

As of March 31, 2014
As of March 31, 2013
Plan assets
The total of actuarial obligation and minimum actuarial reserve*
Variance

Toyota Industries Group contribution to welfare pension plan*“The total of actuarial obligation and minimum actuarial reserve” is equivalent to “Estimated benefit obligation” presented in the previous consolidated financial statements as of March
31, 2014.

20. Stock options:(1) The amount recorded as a profit because of forfeitures of stock option rights

7) Plan assets:(a) Components of plan assets:
Bond
Stock
Cash and deposits
Other assets
Total

As of March 31, 2014
Plan assets
The total of actuarial obligation and minimum actuarial reserve*
Variance

As of March 31, 2014

Millions of yen

Prior service cost
Actuarial gain (loss)
Total

As of March 31, 2015

Toyota Industries Group contribution to welfare pension plan5) Amounts recognized in other comprehensive income (pre-tax) as of March 31, 2015 and 2014 are as follows:

Prior service cost
Actuarial gain (loss)
Total

Multi-employer plans are accounted for as if they were defined contribution plans. The amount recognized as expenses for multi-employer plans was¥789 million for the year ended March 31, 2015 and ¥769 million for the year ended March 31, 2014.

Millions of yen

2015
37%
47%
4%
12%
100%

2014
36%
46%
4%
14%
100%

2015
¥28

2014
¥289

Plan assets include 22% of employee retirement benefits trust for the years ended March 31, 2015 and 2014, respectively.

(b) Long-term expected rate of return on plan assets:
In determining the expected long-term rate of return on plan assets, Toyota Industries considers the current and projected asset allocations as well
as expected long-term investment returns for each category of the plan assets.
8) Assumptions used for calculation of retirement benefits:
Discount rateLong-term expected rate of return on plan assets

2015
1.5%
2.0%

2014
1.4%
2.0%

(3) Defined contribution plan:
The amount recognized as expenses for defined contribution plan was ¥5,684 million for the year ended March 31, 2015 and ¥3,725 million for theyear ended March 31, 2014.

32

Toyota Industries Report 201533

21. Income taxes:(2) Stock option details, number of stock options and state of fluctuation
1) Stock option details
2011

Fiscal year

2010(1) The significant components of deferred tax assets and liabilities as of March 31, 2015 and 2014 are as follows:2009

Company name

The Company

The Company

The Company

Position and number ofgrantees

Directors: 16
Managing officers and employees: 146

Directors: 14
Managing officers and employees: 153

Directors: 17
Managing officers and employees: 159

Class and number of shares*

1,262,000 shares of common stock

1,157,000 shares of common stock

1,360,000 shares of common stock

Date of issue

August 2, 2010

August 3, 2009

August 1, 2008

1. Grantee must be employed as a director,
managing officer or regular employee of theCompany at the time of exercise. However, thisdoes not apply if no more than 18 months haveelapsed after retirement or resignation from theCompany.

Same as left

Same as left

2. Other conditions of exercise shall be decided
as prescribed by the Contract for Allotment of
Subscription Rights to Shares concluded by theCompany and grantee in accordance withresolutions at the General Meeting of
Shareholders and resolutions on the issue ofsubscription rights to shares by the Board of
Directors.

Same as left

Same as left

Condition of settlement ofrightsMillions of yen

3. In the case where grantee becomes no longer Same as left
applicable to the conditions of exercise, thegrantee immediately loses subscription rights toshares and must return the rights to theCompany without consideration.

Same as left

Periods that grantees must
provide service in return forstock options

From August 2, 2010 to July 31, 2012

From August 3, 2009 to July 31, 2011

From August 1, 2008 to July 31, 2010

Periods that stock
subscription rights are to be
exercised

From August 1, 2012 to July 31, 2016

From August 1, 2011 to July 31, 2015

From August 1, 2010 to July 31, 2014

Deferred tax assets:
Net defined benefit liabilities
Depreciation
Net operating loss carry-forwards for tax purposes
Accrued expenses
Securities
Trade receivables
Other
Subtotal
Less: valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Other securities
Depreciation
Land
Reserve for advanced depreciation of non-current assets
Reserve for special depreciation
Other
Total deferred tax liabilities
Net deferred tax liabilities¥20,317
9,718
8,808
7,581
5,219
2,904
23,083
77,632(13,861)
63,771¥17,713
10,825
9,381
7,647
7,057
4,167
18,121
74,913(15,583)
59,330704,563
30,145562
261
40
23,639759,213¥695,442

548,202
19,576562
371
59
18,628587,400¥528,070

Millions of yen

Current assets—deferred tax assets
Investments and other assets—deferred tax assets
Current liabilities—deferred tax liabilities
Long-term liabilities—deferred tax liabilities

2) Number of stock options and state of fluctuation
Stock options are those outstanding in the fiscal year and are listed as the number of shares.
(a) Number of stock options
Non-exercisable stock options2015¥24,234
18,228636
737,2682014¥25,961
15,285
1,458
567,859(shares)

2011

2010

2009

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

2011
149,500—
67,100—82,4002010
225,300—
198,300—
27,0002009
231,300—
163,300
68,000—Exercisable stock options
Stock options outstanding at the end of the previous fiscal year
Conversion from non-exercisable stock options
Stock options exercised
Forfeitures
Stock options outstanding at the end of the fiscal year2014

Net deferred tax liabilities consist of the following components on the consolidated balance sheets.

* Number of options granted by class are listed as number of shares.

Stock options outstanding at the end of the previous fiscal year
Stock options granted
Forfeitures
Conversion to exercisable stock options
Stock options outstanding at the end of the fiscal year

2015

(shares)(2) Reconciliations of differences between the statutory rate of income taxes and the effective rate of income taxes forthe years ended March 31, 2015 and 2014 are as follows:
Statutory rate of income taxes
Addition (reduction) in taxes resulting from:
Dividends income and others permanently not recognized as taxable income
Valuation allowance
Other
Effective rate of income taxes

2015
34.9%

2014
37.3%

(5.1%)(0.2%)(0.9%)
28.8%(5.1%)(1.6%)
1.2%
31.8%(3) Impact on changes in the statutory tax rate
The “Act on Partial Revision of the Income Tax Act, etc.” (Act No. 9 of 2015) and the “Act on Partial Revision of the Local Tax Act, etc.” (Act No. 2 of2015) were promulgated on March 31, 2015, resulting in lowering the corporate tax rate from the fiscal year beginning April 1, 2015. As a result of
this change in the tax rates, deferred tax assets decreased by ¥1,337 million, deferred tax liabilities decreased by ¥70,225 million, valuationdifference on available-for-sale securities increased by ¥71,377 million and income taxes—deferred increased by ¥2,538 million.

(b) Price of options
Exact yen amounts

Paid-in value
Average market price of the stock at the time of exercise
Fair value of options on grant date2011
¥2,449
6,029
686

2010
¥2,570
5,544
581

2009
¥3,4104,731
421(3) Method for estimating the number of confirmed stock option rights
Specifically, because of the difficulty in rationally estimating the number of expired rights in the future, a method has been adopted that reflects actual
past expirations.

34

Toyota Industries Report 201535

22. Leases:(b) Amounts of projected future recovery after March 31, 2015 and 2014 for the portion of lease payment receivables in lease investment assets are
as follows:(1) Finance leases
1) Finance leases (as a lessee)
Lease assets are mainly materials handling equipment which is leased under operating leases.
The depreciation method of leased assets is referred to in Note 2 (9).
As for finance leases other than finance leases deemed to transfer the ownership of leased properties to lessees, those that came into effectbefore March 31, 2008 (inclusive) will continue to be accounted for by the former method (similar to the method applicable to ordinary operatingleases) and the related pro forma information as of and for the year ended March 31, 2014 is as follows. The pro forma information as of and for theyear ended March 31, 2015 is immaterial.
(a) Pro forma information regarding the leased properties such as acquisition cost and accumulated depreciation, which are not reflected in theaccompanying consolidated balance sheets under finance leases as of March 31, 2014, is as follows:
Millions of yen

2014
Buildings and structures:
Acquisition cost equivalents
Accumulated depreciation equivalents
Buildings and structures net balance equivalents
Machinery, equipment and vehicles:
Acquisition cost equivalents
Accumulated depreciation equivalents
Machinery, equipment and vehicles net balance equivalents
Tools, furniture and fixtures:
Acquisition cost equivalents
Accumulated depreciation equivalents
Tools, furniture and fixtures net balance equivalents
Total net leased properties

¥88
81
6
¥5,092
4,794
297
¥398
319
79
¥
383

Millions of yen

Due within one year
Due after one year and within two years
Due after two years and within three years
Due after three years and within four years
Due after four years and within five years
Due after five years
Total

2015
¥59,641
47,66534,79021,3938,880
2,643¥175,014

As for finance leases other than finance leases deemed to transfer the ownership of leased properties to lessees, those that came into effect before
March 31, 2008 (inclusive) will continue to be accounted for by the former method (similar to the method applicable to ordinary operating leases) andthe related pro forma information as of and for the year ended March 31, 2014 is as follows. The pro forma information as of and for the year ended
March 31, 2015 is immaterial.
(c) Information regarding leased properties such as acquisition cost and accumulated depreciation under finance leases as of March 31, 2014 is asfollows:
Millions of yen

2014
Machinery, equipment and vehicles:
Acquisition cost
Accumulated depreciation
Total net leased property

¥130
118
¥11

(d) Pro forma information regarding future minimum lease income as of March 31, 2014 is as follows:

Acquisition cost equivalents include the imputed interest expense portion because the percentage which is computed by dividing future minimum lease payments by the total balanceof property, plant and equipment at year-end is immaterial.

(b) Pro forma information regarding future minimum lease payments as of March 31, 2014 is as follows:
Millions of yen

2014
¥324
346
¥670

Due within one year
Due after one year
Total

The amount equivalent to future minimum lease payments as of the end of the year includes the imputed interest expense portion because the percentage which is computed by
dividing future minimum lease payments by the total balance of property, plant and equipment at year-end is immaterial.

2014¥51,527
41,44430,416
18,813
7,497
2,114¥151,813

Millions of yen

2014
¥15
4
¥19

Due within one year
Due after one year
Total

Future minimum lease income under finance leases include the imputed interest income portion because the percentage which is computed by dividing the total of future minimum
lease income and estimated residual value by the total of future minimum lease income and estimated residual value and the balance of operating receivables at the year-end isimmaterial.

(e) Total lease payments to be received and depreciation expenses for the year ended March 31, 2014 are as follows:
Millions of yen(c) Total lease payments and pro forma depreciation expenses for the year ended March 31, 2014 are as follows:
Millions of yen

2014
¥588
588

Lease payments
Pro forma depreciation expenses

Pro forma depreciation expenses, which are not reflected in the accompanying consolidated statements of income, are computed mainly by the straight-line method, whichassumes zero residual value and the leasing term to be the useful life of assets for the year ended March 31, 2014, and are equivalent to the amount of total lease
payments of the above.

2014
¥31
¥8

Total lease payments to be received
Depreciation expenses(2) Operating leases
1) Operating leases (as a lessee)
Pro forma future lease payments under operating leases as of March 31, 2015 and 2014 are as follows:
Millions of yen

2) Finance leases (as a lessor)(a) Lease investment assets listed on the consolidated balance sheets as of March 31, 2015 and 2014 are as follows:
Millions of yen

Lease receivables
Residual value
Unearned interest income
Total

2015
¥175,014
42,273(25,460)¥191,827

2014¥151,813
37,501(20,343)¥168,972

Due within one year
Due after one year
Total

Toyota Industries Report 20152014
¥11,733
43,188¥54,921

2) Operating leases (as a lessor)
Pro forma information regarding future minimum rentals under operating leases as of March 31, 2015 and 2014 is as follows:
Millions of yen

Due within one year
Due after one year
Total

36

2015
¥9,978
36,600¥46,5782015¥32,160
63,716¥95,8762014¥35,214
62,784¥97,99937

24. Subsequent events:

23. Changes in net assets:

There were no subsequent events for the year ended March 31, 2015.

(1) Common stock outstanding for the years ended March 31, 2015 and 2014:
sharesBalance at March 31, 2013
Increase
Decrease
Balance at March 31, 2014
Increase
Decrease
Balance at March 31, 2015

325,840,640——
325,840,640——
325,840,640(2) Treasury stock outstanding for the years ended March 31, 2015 and 2014:
sharesBalance at March 31, 2013
Increase due to purchase of odd stock
Decrease due to exercise of stock options
Decrease due to sale of odd stock
Balance at March 31, 2014
Increase due to purchase of odd stock
Decrease due to exercise of stock options
Decrease due to sale of odd stock
Balance at March 31, 2015

13,632,854
22,7381,545,400
328
12,109,864
3,654
428,70069
11,684,749(3) Subscription rights to shares outstanding for the years ended March 31, 2015 and 2014:
Millions of yen

2015
¥72

The Company

2014
¥330

25. Segment information:(1) Outline of reporting segments
The operating segments reported below are the segments of Toyota Industries for which separate financial information is available and for which
operating income/loss amounts are evaluated regularly by executive management in deciding how to allocate resources and in assessing
performance.
The reporting segments of Toyota Industries consist of Automobile, Materials Handling Equipment, Logistics and Textile Machinery.
The similarity of products and services are taken into account for the separation. Within the Automobile Segment, vehicles, engines, car airconditioning compressors and others are included due to the similarity of their business environments. The main products and services of eachsegment are as follows.
Automobile 	�������������������������������������������������������� Vehicles, diesel and gasoline engines, car air-conditioning compressors, electronic components forautomobiles, foundry parts for engines
Materials Handling Equipment 	���������������������������� Lift trucks, warehouse trucks, automated storage and retrieval systems, aerial work platforms
Logistics 	������������������������������������������������������������ Land transportation services, cash collection and delivery and cash proceeds management
services, data storage, management, collection and delivery services
Textile Machinery 	������������������������������������������������ Weaving machinery, spinning machinery, instruments for yarn testing and cotton classing(2) Calculation method of reporting segment information
The accounting method of reporting segment information is based on “Summary of significant accounting policies.”
Segment income is based on operating income.
Inter-segment sales and transactions are based on arm’s-length price.

(3) Business segments
As of and for the years ended March 31, 2015 and 2014:(4) Dividends

Millions of yen(a) Dividends paid for the year ended March 31, 2015
Resolutions

Ordinary General Meeting of Shareholders held on June 13, 2014
Board of Directors meeting held on October 31, 2014

Class ofsharesCommonstock
Commonstock

Total
dividends
Millions ofyen

Dividends
per share¥15,686¥50

15,70050

Yen

Resolutions

Ordinary General Meeting of Shareholders held on June 11, 2015

Source ofdividends

Commonstock¥18,849

Retainedearnings

Class ofsharesTotal
dividends
Millions ofyen

Dividends
per share¥9,366¥30

10,96035Class ofsharesDividends
per share
Yen¥60

Recorddate

Effective
date

March 31,2014
September
30, 2014

June 16,2014
November26, 2014

Automobile
Outside customer sales
Inter-segment transactions
Materials Handling Equipment
Outside customer sales
Inter-segment transactions

Recorddate

Effective
date

March 31,2015

June 12,2015

Logistics
Outside customer sales
Inter-segment transactions
Textile Machinery
Outside customer sales
Inter-segment transactions(c) Dividends paid for the year ended March 31, 2014
Resolutions

Ordinary General Meeting of Shareholders held on June 13, 2013
Board of Directors meeting held on October 31, 2013

Commonstock
Common
stock

Yen

2014

¥1,050,713
29,103
1,079,816¥1,006,678
26,5391,033,217

924,995
1,888
926,884

809,276647
809,923

98,00015,366113,367

95,304
11,110106,414

68,188230
68,41873,102
185
73,287

24,762
15,67040,4332,228,920(62,259)¥2,166,661

23,494
13,88637,3812,060,225(52,369)¥2,007,856

Sales:(b) Dividends with a record date in the fiscal year ended March 31, 2015 for which the effective date falls in the following fiscal year
Total
dividends
Millions of
yen

2015

Recorddate

Effective
date

March 31,2013
September
30, 2013

June 14,2013
November26, 2013

Others
Outside customer sales
Inter-segment transactions
Subtotal
Elimination of inter-segment transactions
Total(d) Dividends with a record date in the fiscal year ended March 31, 2014 for which the effective date falls in the following fiscal year
Resolutions

Ordinary General Meeting of Shareholders held on June 13, 201438

Toyota Industries Report 2015

Class ofsharesTotal
dividends
Millions ofyen

Source ofdividends

Commonstock¥15,686

Retainedearnings

Dividends
per share
Yen¥50

Recorddate

Effective
date

March 31,2014

June 16,2014

39

Millions of yen

Segment income:Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersElimination of inter-segment transactions
Total
Assets:Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total
Depreciation:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total
Amortization of goodwill:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total
Investment in equity method company:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total
Increase in tangible assets and intangible assets:
Automobile
Materials Handling Equipment
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total

2015

2014

¥35,957
68,843
6,224
2,699
3,778
70
¥117,574¥35,175
58,006
5,194
5,597
3,422
295
¥107,691¥558,479
951,230
188,467
62,823203,383
2,686,512¥4,650,896¥471,833
844,345
185,179
68,175
135,764
2,093,710¥3,799,010¥48,498
55,699
8,145
3,595
683
—
¥116,621¥42,147
48,848
8,005
2,543
682
—
¥102,227

¥—
4,840
3,310
2,690
—
—
¥10,841

¥2
4,133
3,309
2,153
—
—
¥9,599¥3,979
7,462
—
—
—
—
¥11,441¥3,291
6,363
—
—
—
—
¥9,655¥94,665
80,088
8,341
3,111
1,547
—
¥187,754¥78,100
76,887
9,115
2,431
810
—
¥167,344(4) Related information
Geographical segments
As of and for the years ended March 31, 2015 and 2014:
Millions of yen

Sales:Japan
U.S.A.
OthersTotal
Tangible assets:
Japan
U.S.A.
Others
Total
Major customer:
Sales (Automobile Segment)
		 Toyota Motor Corporation
Total
Unamortized goodwill by business segment:
Automobile
Materials Handling Equipment*
Logistics
Textile Machinery
OthersCorporate or elimination of inter-segment transactions
Total
Negative goodwill: Negative goodwill is omitted due to its quantitative immateriality.

2015

2014

¥1,081,347
433,581
651,732¥2,166,661¥1,075,008
351,095
581,751¥2,007,856¥343,396
158,758
205,378¥707,532¥328,657
121,732
175,723¥626,114¥692,725¥692,725¥713,437¥713,437¥—42,22038,304
15,460——¥95,985¥—41,84841,614
17,351——¥100,814* Unamortized goodwill in the Materials Handling Equipment Segment at March 31, 2013 includes provisional goodwill in the amount of ¥45,183 million recognized for the acquisitionof U.S. subsidiary Cascade Corporation that was calculated using the provisional method permitted under the accounting principles generally accepted in Japan since the acquisition
had been completed right before the fiscal year-end and the purchase price allocation had not been completed. This amount in the Materials Handling Equipment Segment at March
31, 2014 decreased by ¥17,813 million compared with the provisional amount at March 31, 2013 due to the adjustment of goodwill after the completion of the purchase priceallocation related to the acquisition of the U.S. subsidiary.

26. Related party transactions (non-consolidated basis):(1) The following transactions were carried out with related parties (entity only):(a) Sales of goods and services for the years ended March 31, 2015 and 2014 are as follows:
Millions of yen

Toyota Motor Corporation

2015¥691,715

2014¥712,705

Toyota Motor Corporation held 24.40% of the Company’s voting rights as of March 31, 2015. As for the sales of automobiles and engines, etc.,
the Company offers prices on such products based on their overall costs and negotiates conditions for each fiscal year, as per conditions on
arm’s-length transactions. The above transactions are carried out based on commercial terms and conditions. Transaction amounts exclude
consumption taxes.
(b) Purchase of goods for the years ended March 31, 2015 and 2014 are as follows:
Purchase of goods:
Millions of yen

Toyota Motor Corporation2015¥504,373

2014¥520,829

As for the purchase of parts of automobiles and engines, etc., the Company negotiates conditions for each fiscal year based on offered prices onsuch products, as per conditions on arm’s-length transactions. The above transactions are carried out based on commercial terms and conditions.
Transaction amounts exclude consumption taxes.

40

Toyota Industries Report 201541

27. Net income per share (EPS):(c) Outstanding balances arising from sale/purchase of goods/services as of March 31, 2015 and 2014 are as follows:
Receivables from a related party:
Millions of yen

2015
Toyota Motor Corporation
Accounts receivable
Trade notes receivable¥20,806
7,749¥22,223
7,876

Payables to a related party:
Millions of yen

Toyota Motor Corporation2015¥48,093

The basis of calculation for net income per share basic and net income per share diluted is as follows:

2014

2014
¥45,224

Millions of yen

Net income per share—basic:
Net income
Net income not attributable to common shareholders
		 (bonuses for directors and statutory audit & supervisory board members that are paid through appropriation)
Net income attributable to common shareholders
Weighted-average shares (thousands)
Net income per share—basic (exact yen amounts)
Net income per share—diluted

2015

2014

¥ 115,263—¥91,705—

115,263314,021¥ 367.06¥ 366.99

91,705313,244¥292.76¥292.57

The balance as of March 31, 2015 and 2014 includes consumption taxes.

(2) The following transactions were carried out with related parties (person only):

28. Net assets per share:(a) Exercise of stock options for the year ended March 31, 2015 is as follows:
Millions of yen

Tetsuro Toyoda (Chairman of the Company)
Akira Onishi (President of the Company)
Shinya Furukawa (Senior Managing Director of the Company)
Masaharu Suzuki (Senior Managing Director of the Company)
Norio Sasaki (Senior Managing Director of the Company)
Toshifumi Ogawa (Senior Managing Director of the Company)
Masafumi Kato (Director of the Company)
Kan Otsuka (Director of the Company)
Taku Yamamoto (Director of the Company)
Kohei Nozaki (Full-time Audit & Supervisory Board Member of the Company)

2015
¥102
51
68
17
21
23
102
119
39
11

The basis of calculation for net assets per share is as follows:
Millions of yen

Net assets per share:
Total net assets
Amounts deducted from total net assets
		 (Subscription rights to shares)		 (Minority interests in consolidated subsidiaries)
		 Net assets applicable to common stock at end of year
		 Outstanding shares of common stock at end of year used for the computation
			 of net assets per share (thousands)
Net assets per share (exact yen amounts)

2015

2014

¥2,425,929¥1,829,326(72)(69,636)
2,356,220
314,155(330)(59,528)
1,769,466
313,730¥7,500.16¥ 5,640.08

This transaction refers to the exercise of the subscription rights to shares as stipulated in Articles 236, 238 and 239 of the Corporation Law of Japan.
The exercise of the subscription rights to shares has been issued following approval of a special resolution at the Ordinary General Meeting of
Shareholders held on June 20, 2008, June 19, 2009 and June 23, 2010.

As mentioned in Note 3 “Accounting changes,” Toyota Industries adopted the revised accounting standard for retirement benefits and undertooktransitional measures as stipulated in Paragraph 37. As a result, net assets per share decreased by ¥10.87.

Exercise of stock options for the year ended March 31, 2014 is as follows:

29. Cash and cash flows:
Millions of yen

Tetsuro Toyoda (Chairman of the Company)
Kazunori Yoshida (Vice Chairman of the Company)
Akira Onishi (President of the Company)
Kazue Sasaki (Executive Vice President of the Company)
Hirotaka Morishita (Executive Vice President of the Company)
Shinya Furukawa (Senior Managing Director of the Company)
Masaharu Suzuki (Senior Managing Director of the Company)
Toshifumi Ogawa (Senior Managing Director of the Company)
Masafumi Kato (Director of the Company)
Toshifumi Onishi (Director of the Company)
Takaki Ogawa (Director of the Company)

2014
¥97
102
129
119
141
51
102
93
150
119
68

Cash and cash equivalents
The relationship between the accounts in the consolidated balance sheets and the remaining balance of cash and cash equivalents as of March 31,
2015 and 2014 is as follows:
Millions of yen

Cash and deposits
Deposits which have a maturity of over three months to one year
Short-term investments (securities) which have an original maturity within three months
Cash and cash equivalents2015¥ 247,273(32,652)
34,085¥ 248,706

2014¥ 226,383(45,989)
46,012¥ 226,406

This transaction refers to the exercise of the subscription rights to shares as stipulated in Articles 236, 238 and 239 of the Corporation Law of Japan.
The exercise of the subscription rights to shares has been issued following approval of a special resolution at the Ordinary General Meeting of
Shareholders held on June 20, 2008, June 19, 2009 and June 23, 2010.

42

Toyota Industries Report 2015

43

Report of Independent Auditors

44

Toyota Industries Report 2015

Toyota Industries Report

2 0 15

Financial Review for the Year Ended March 31, 2015

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Consolidated Eleven-Year Summary
Management’s Discussion and Analysis ofFinancial Condition and Results of Operations

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Consolidated Balance Sheets

P8−9

Consolidated Statements of Income

P 10

Consolidated Statements of Comprehensive Income

P 11

Consolidated Statements of Changes in Net Assets

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Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors

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