Fiscal Year ended October 31, 2015

Financial Statements Bulletin (Japan GAAP)
December 9, 2015
Kanamoto Co., Ltd.
9678
Tokyo Stock Exchange, Sapporo Stock Exchange
http://www.kanamoto.co.jp
Kanchu Kanamoto
President and CEO
Nobuhito Utatsu
Director and Senior Executive Corporate Officer, Division
Manager, Accounting Division
TEL 81-11-209-1600
Please send inquiries in English to takayama@kanamoto.co.jp
Scheduled date for Regular General Meeting of the Shareholders
January 28, 2016
Scheduled date for commencement of dividend payments
January 29, 2016
Scheduled date for submission of Annual Securities Report
January 28, 2016
Preparation of Supplementary Explanatory Materials:
Yes
Earnings Briefings (For institutional investors and analysts):
Yes
Listed Company Name
Company Code Number
Listing Exchanges
URL
Representative
Inquiries(Numbers less than one million yen have been rounded down)

1. Consolidated Operating Results for the Fiscal Year ended October 31, 2015
(November 1, 2014 – October 31, 2015)(1) Consolidated Operating Results(Percentages show the change from the prior year)
Net Sales

Operating Income

Millions of yen%

Millions of yen

Ordinary Income%

Millions of yen

Net Income%

Millions of yen%

Fiscal year ended
October 31, 2015

133,292

6.2

16,270‐1.1

16,164

0.5

9,557

2.8

Fiscal year ended
October 31, 2014

125,555

13.3

16,45444.4

16,078

45.2

9,299

60.1

(Note) Comprehensive income (millions of yen)
Fiscal year ended October 31, 2015
Fiscal year ended October 31, 2014

9,845
10,164(-3.1%)(36.3%)Net Income per
Share

Net Income per
Share on a Fully
Diluted Basis

Ordinary Income
to Total Assets

ROE

OperatingMargin

Yen

Yen

%

%

%

Fiscal year ended
October 31, 2015

266.27



14.4

8.3

12.2

Fiscal year ended
October 31, 2014

258.02



15.8

9.0

13.1

(Reference) Investment profit or loss accounted for by the equity method (millions of yen)
Fiscal year ended October 31, 2015

Fiscal year ended October 31, 2014
(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Net Assets per Share

Millions of yen

Millions of yen%

Yen

As of October 31,
2015

202,919

71,99834.3

1,969.16

As of October 31,
2014

188,491

65,51333.6

1,758.24

Net cash provided by(used in) operating
activities

Net cash provided by(used in) investing
activities

Net cash provided by(used in) financing
activities

Cash and Cash
Equivalents at End of
PeriodMillions of yen

Millions of yen

Millions of yen

Millions of yen

Fiscal year ended
October 31, 2015

33,509-4,488-24,857

36,150Fiscal year ended
October 31, 2014

24,782-3,374-22,405

31,980(Reference) Equity (millions of yen)
As of October 31, 2015
As of October 31, 2014

69,58863,365(3) Consolidated Cash Flows 1 

2. Dividends
Annual Dividends per Share
End ofsecondquarter

End offirstquarterYen

End ofthird
quarter

Yen

Year-end

Yen

Full-year

Yen

Dividend
Dividends in
Dividends on
Payout Ratio
Net Assets
Total(Full Year) (Consolidated) (Consolidated)

Yen Millions of yen%%

Fiscal year ended
October 31, 2014



15.00



20.00

35.00

1,261

13.6

2.1

Fiscal year ended
October 31, 2015



15.00



20.00

35.00

1,247

13.1

1.9

Fiscal year ending
October 31, 2016
(projected)



15.00



30.00

45.00

15.5

(Note) Breakdown of second quarter dividend for the fiscal year ended October 31, 2014
Ordinary dividend
10.00 yen
Commemorative dividend
5.00 yen
Breakdown of year-end dividend for the fiscal year ended October 31, 2014
Ordinary dividend
10.00 yen
Commemorative dividend
10.00 yen

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 31, 2016
(November 1, 2015 - October 31, 2016)(Percentages show the change from the prior year)
Net Sales
Millions of yen

Operating Income% Millions of yen

Profit Attributable to
Owners of Parent

Ordinary Income% Millions of yen% Millions of yen%

Net Income
per
Share
Yen

Interim period

68,000

‐0.5

9,280

‐12.9

9,230

‐13.4

5,750

‐12.0

162.71

Full year

133,900

0.5

16,3400.4

16,2700.7

10,2307.0

289.48 2 

Notes(1) Changes in material subsidiaries during the period under review (changes in specific subsidiaries in
conjunction with a change in the scope of consolidation): No
Company newly includedCompany newly excluded(2) Changes in accounting principles, changes in accounting estimates and retrospective restatements(a) Changes in accounting policy in conjunction with revision of accounting standards: No(b) Changes other than the above: No(c) Changes in accounting estimates: No(d) Retrospective restatements: No(3) Number of shares issued (common shares)(a) Number of shares outstanding at the end of the period (including treasury shares)
As of October 31, 2015
36,092,241 shares
As of October 31, 2014
36,092,241 shares(b) Number of treasury shares of at the end of the period
As of October 31, 2015
752,941 shares
As of October 31, 2014
52,930 shares(c) Average number of shares outstanding during the period
Fiscal year ended October 31, 2015
35,894,640 sharesFiscal year ended October 31, 2014
36,039,719 shares 3 

(Reference) Summary of Non-Consolidated Operating Results
1. Non-Consolidated Operating Results for the Fiscal Year Ended October 31, 2015
(November 1, 2014 – October 31, 2015)(1) Non-Consolidated Operating Results(Percentages show the change from the prior year)
Net Sales
Millions of yen

Operating Income%

Millions of yen

Ordinary Income%

Millions of yen

Net Income%

Millions of yen%

Fiscal year ended
October 31, 2015

102,029

8.2

14,1085.0

13,948

2.9

8,344

2.0

Fiscal year ended
October 31, 2014

94,301

15.9

13,433

50.5

13,550

52.9

8,181

66.4

Net Income per ShareNet Income per Shareon a Fully Diluted Basis

Yen

Yen

Fiscal year ended
October 31, 2015

232.47



Fiscal year ended
October 31, 2014

227.00(2) Non-Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Net Assets per Share

Millions of yen

Millions of yen%

Yen

As of October 31,
2015

170,894

65,94838.6

1,866.15

As of October 31,
2014

158,784

60,96838.4

1,691.72(Reference) Equity (millions of yen)
As of October 31, 2015
As of October 31, 2014

65,94860,968

2. Projected Non-Consolidated Operating Results for the Fiscal Year Ending October 31, 2016
(November 1, 2015 - October 31, 2016)(Percentages show the change from prior year)
Net Sales

Ordinary Income

Millions of yen%

Interim period

51,900

Full year

103,600

Net Income

Net Income per Share

Millions of yen%

Millions of yen

%

Yen

0.6

7,530

‐14.3

4,880

‐12.8

138.091.5

14,200

1.8

9,230

10.6

261.18

Note: Disclosure concerning implementation of audit proceduresThis financial report is exempt from audit procedures based on the Financial Instruments andExchange Act. At the time of disclosure of this financial report, the Company is in the process of
implementing the audit procedures for its consolidated financial statements.
Note: Explanation concerning appropriate use of the projected operating results and other items to note
(Note concerning forward-looking statements)
The forward-looking statements, including business results forecasts, contained in these materials are
based on information currently available to the Company and on certain assumptions deemed to bereasonable. The Company does not guarantee the achievement of the projections. Actual operating
results may differ substantially due to a number of factors.
(Methods of obtaining the supplementary materials and the content of the earnings briefings)
The Company plans to hold a meeting for institutional investors and analysts on December 10, 2015.
Presentation materials will be available on the Company’s website after the meeting.

 4 Attachments Table of Contents
1. Analysis of Operating Results and Financial Position .......................................................

6(1) Analysis of Operating Results .................................................................................

6(2) Analysis of Financial Position ..................................................................................

8(3) Basic Policy Concerning Distribution of Earnings and Dividends for the Consolidated
Fiscal Year under Review and Next Consolidated Fiscal Year ........................................ 10(4) Business Risks and Other Risks .............................................................................. 10
2. Current Conditions of the Company’s Group .................................................................. 11
3. Management Policies ................................................................................................. 13(1) Basic Management Policies ..................................................................................... 13(2) Management Indicators Established as Objectives ..................................................... 13(3) Medium- to Long-term Corporate Management Strategy ............................................ 13(4) Issues to be Addressed by the Company .................................................................. 13
4. Basic Policy Regarding Selection of Accounting Standards ............................................... 14
5. Consolidated Financial Statements .............................................................................. 15(1) Consolidated Balance Sheets .................................................................................. 15(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income ............................................................................................................... 17
Consolidated Statements of Income .................................................................... 17
Consolidated Statements of Comprehensive Income .............................................. 18(3) Consolidated Statements of Changes in Equity .......................................................... 19(4) Consolidated Statements of Cash Flows ................................................................... 21(5) Notes to the Consolidated Financial Statements ........................................................ 23(Notes Relating to the Going Concern Assumption) .................................................... 23(Important Matters Used as Basis for Preparation of the Consolidated Financial
Statements) ........................................................................................................ 23(Supplemental Information) ................................................................................... 26(Notes to the Consolidated Balance Sheets) ............................................................. 26(Notes to the Consolidated Statements of Income) .................................................... 28(Notes to the Consolidated Statements of Comprehensive Income) .............................. 30(Notes to the Consolidated Statements of Changes in Equity) ..................................... 30(Notes to the Consolidated Statements of Cash Flows) ............................................... 32(Notes to Leasing Transactions) .............................................................................. 33(Business Segment Information)............................................................................. 34(Per Share Information) ........................................................................................ 38(Material Events after the Close of the Consolidated Fiscal Year) .................................. 38
6. Non-Consolidated Financial Statements ........................................................................ 39(1) Balance Sheets .................................................................................................... 39(2) Statements of Income ........................................................................................... 42(3) Statements of Changes in Equity ............................................................................ 43

 5 

1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Resultsa) Summary of consolidated fiscal year operating results (From November 1, 2014 to October 31,
2015)
In the consolidated fiscal year under review, Japan’s economy trended toward recovery, fueled bybrisk corporate earnings and improvement in incomes and employment thanks to the government’s
continued implementation of aggressive economic and fiscal measures. Meanwhile, although there wasan uptick in consumer spending, the rebound was sluggish due to a weak outlook, including downsiderisk reflecting trends in economies overseas.
In the construction industry, within which the Kanamoto Group operates, public works investments
remained strong bolstered by reconstruction and disaster prevention/reduction projects. These projects
were spurred in part by a decline in some material prices and the leveling off of rising labor costs.
Although private-sector capital investments rebounded owing to improved corporate earnings, trends
remained weak due to an uncertain outlook and wary stance by market participants. Amid thisenvironment, earnings at construction companies, which are customers of the Kanamoto Group,
substantially improved overall, but this was particularly true for major construction companies.
In this environment, the Kanamoto Group moved forward with key initiatives which were based on
various measures in its Medium-term Management Plan (fiscal 2014 to fiscal 2016). In Japan, its mainmarket, the Company expanded branches in areas where it had weak coverage, including the Tokyo
metropolitan area, and adequately allocated assets. In addition, the Company actively moved forwardwith overseas strategies, anticipating changes in the domestic construction market going forward.
Consequently, in the fiscal year ended October 31, 2015 net sales rose 6.2% from the priorconsolidated fiscal year level to ¥133,292 million. Meanwhile in the profit front, operating income
decreased 1.1% from the prior consolidated fiscal year to ¥16,270 million and consolidated ordinary
income increased 0.5% year-on-year to ¥16,164 million. Net income rose 2.8% over the priorconsolidated fiscal year to ¥9,557 million.
[Operating Results for the Fiscal Year ended October 31, 2015](Percentages show the change from the prior year)
Net Sales
Millions of yen
Consolidated

Non-consolidated

Operating Income% Millions of yen

Ordinary Income% Millions of yen

Net Income% Millions of yen%

Year underreview

133,292

6.2

16,270-1.1

16,164

0.5

9,557

2.8

Prior year

125,555

13.3

16,45444.4

16,078

45.2

9,299

60.1

Year underreview

102,029

8.2

14,1085.0

13,948

2.9

8,344

2.0

Prior year

94,301

15.9

13,433

50.5

13,550

52.9

8,181

66.4

Results for each of the Group’s business segments were as follows: 6 b) Summary of consolidated operating results by business segment[Business related to the Construction Equipment Rental Division]
In the core construction-related business, construction equipment rental demand trended briskly.
This partly reflects a pickup in certain redevelopment projects in the Tokyo metropolitan area andprivate-sector capital investments. Also, demand is brisk for construction equipment rental owing tofull-fledged quake-reconstruction projects and decontamination-related work. However, the businessenvironment was weak as there was not construction work in some regions related to the government’s
supplementary budget, as was the case in the previous fiscal year.
By region, sales in this business fluctuated as follows: down 9.5% in the Hokkaido Region, up 19.7%
in the Tohoku Region, up 4.8% in the Kanto & Shinetsu Region, up 2.0% in the Kansai & Chubu Region,and down 1.5% in the Kyushu & Okinawa Region. The sales growth reflects the quake-restoration
demand in the Tohoku region and the substantial redevelopment in the Kanto & Shinetsu Region.
Sales of used construction equipment rose 26.6% versus the previous fiscal year, reflecting thesystematic sale of equipment that had been in service for a certain number of years to ensure areasonable asset composition.
Reflecting these factors, the Kanamoto Group posted net sales in the construction-related
businesses of ¥123,572 million, an increase of 6.0% year-on-year, and operating income of ¥15,592
million, a decrease of 2.0%.
[Other Businesses]
In Other Businesses, net sales increased 8.2% from the prior consolidated fiscal year to ¥9,719
million, while operating income also increased 39.4% year-on-year to ¥301 million, reflecting steadysales at businesses related to the Steel Sales Division and the Information Products Division.
< Change in number of branches >During the consolidated fiscal year under review, Kanamoto newly opened 8 branches and closed 1
branch.
New branches:
Sendai-Kita Branch (Kurokawa-gun, Miyagi Prefecture), Hitachi Branch(Hitachi, Ibaraki Prefecture), Tohoku Machinery Maintenance Center(Miyagino-ku, Sendai), Hokkaido Region National Sales Division (Chuo-ku,
Sapporo), Biratori Machinery Center (Saru-gun, Hokkaido), Tsuruga Branch(Tsuruga, Fukui Prefecture), Tokyo Small Machinery Center and Misato Branch(Misato, Saitama Prefecture)
Closed branches:
Oda Branch (Nyu-gun, Fukui Prefecture)c) Outlook for the Next Fiscal Year (Fiscal year ending October 2016)
In the fiscal year ending October 2016, Kanamoto anticipates firm construction demand in the
Tohoku and Tokyo metropolitan areas, including quake-restoration demand in three prefectures
hardest hit in Tohoku, the start of large-scale redevelopment projects in the Tokyo metropolitan area,
and acceleration of Olympic-related construction and refurbishment of infrastructures. However, public
works in some regions are likely to be weak, as they were in the previous fiscal year. In light of this, thebusiness environment is expected to remain harsh.
The Kanamoto Group aims to continue to assist in the quick restoration of disaster-stricken areas as
it moves forward. Concurrently, as the first step of the new Medium-term Management Plan, theCompany plans to accelerate branch openings in the metropolitan areas of Kanto and Kansai, and otheruncharted areas, and ultimately build a base for operations to achieve the goals in the final year of theMedium-term Management Plan two years from now. In addition, to continuing to build corporate value,
the Company plans to concentrate management resources in construction-related fields in which it canleverage the Group’s comprehensive capabilities. The Company aims to build a structure to facilitate
the fortification of its financial position and earnings strength.

 7 That said, regarding overseas business expansion, the Company aims to aggressively move forward
by developing partnerships with strong local companies, mainly in Asia where there is future growthpotential.
In light of the aforementioned measures, the Kanamoto Group aims for net sales of ¥133,900 million,a growth of 0.5% year-on-year, operating income of ¥16,340 million, an increase of 0.4%, ordinary
income of ¥16,270 million, a rise of 0.7%, and profit attributable to owners of parent of ¥10,230 million,
an improvement of 7.0%.
(2) Analysis of Financial Positiona) Financial position
Total assets at the end of the consolidated fiscal year under review stood at ¥202,919 million, an
increase of ¥14,428 million compared with the end of the prior consolidated fiscal year. The primarycatalysts were an increase in cash and deposits of ¥4,249 million and in notes and accounts receivable- trade of ¥3,600 million. In addition, rental equipment in conjunction with sales activities increased¥1,696 million, construction machine parts increased ¥1,648 million, buildings and structures
increased ¥1,536 million owing to an expansion in sales bases.
Total liabilities were ¥130,921 million, an increase of ¥7,943 million compared with the end of theprior consolidated fiscal year. This is primarily attributable to an increase of ¥4,640 million in notes andaccounts payable - trade, an increase of ¥2,772 million in accounts payable - other, and an increase of¥1,400 million in long-term accounts payable - other. Meanwhile, long-term loans payable decreased¥2,083 million.
Total net assets totaled ¥71,998 million, ¥6,484 million higher than at the end of the priorconsolidated fiscal year. This is chiefly reflects net income of ¥9,577 million. Meanwhile, the Company
posted ¥1,261 million in cash dividends and used ¥2,072 million for the share buybacks.
b) Consolidated cash flows(Unit: Millions of yen)
FY Ended October 2014
(Prior consolidated fiscal
year)

FY Ended October 2015
(Consolidated fiscal year
under review)

Change from prior year

Net cash provided by (used in) operating
activities

24,78233,5098,726

Net cash provided by (used in) investing
activities-3,374-4,488-1,113

Net cash provided by (used in) financing
activities-22,405-24,857-2,451

Net increase (decrease) in cash and cash
equivalents

-976

4,169

5,146

Cash and cash equivalents at beginningof period

32,95731,980-976

Cash and cash equivalents at end of
period31,98036,1504,169

The balance of cash and cash equivalents (“cash”) on a consolidated basis at the end of theconsolidated fiscal year under review was ¥36,150 million, an increase of ¥4,169 million compared withthe end of the prior consolidated fiscal year. Cash flows for the consolidated fiscal year under review are
discussed below.

 8 

(Net cash provided by (used in) operating activities)
Cash generated from operating activities stood at ¥33,509 million, an increase of 35.2% from theprior consolidated fiscal year.
This was primarily attributable to the following: income before income taxes and minority interestsof ¥16,266 million, depreciation of ¥20,273 million, an increase in notes and accounts payable - tradeof ¥4,486 million, and an increase in accounts payable - other of ¥2,101 million, as well as expenditureby the assets acquisition for rentals of ¥1,198 million, a decrease in notes and accounts receivable trade of ¥3,613 million and income taxes paid of ¥6,320 million.
(Net cash provided by (used in) investing activities)
Cash flow utilized in investing activities was ¥4,488 million, compared with ¥3,374 million in the priorconsolidated fiscal year.
This mainly reflected the purchase of property, plant and equipment of ¥4,113 million.
(Net cash provided by (used in) financing activities)
Cash flow used for financing activities was ¥24,857 million, compared with cash flow used infinancing activities in the prior consolidated fiscal year of ¥22,405 million.
This mainly reflected ¥18,913 million for repayments of installment payables, ¥1,188 million for
repayments of lease obligations, ¥2,072 million for the purchase of treasury shares, and ¥1,259 million
in cash dividends paid.
The following are cash flow indicator trends for the Kanamoto Group.
FY ended
October 2012

FY ended
October 2013

FY ended
October 2014

FY ended
October 2015

Equity ratio (%)

29.2

32.2

33.6

34.3

Equity ratio on a market capitalizationbasis (%)

23.3

56.4

76.3

42.7

Ratio of interest-bearing liabilities tooperating cash flow

4.9

3.9

3.5

2.7

Interest coverage ratio (times)

13.4

19.1

25.6

40.4

(Notes) Equity ratio:
Equity / Total assets
Equity ratio on a market capitalization basis:
Shareholders’ equity on a market capitalization basis / Total assets
Ratio of interest-bearing liabilities to operating cash flow:
Interest-bearing liabilities / Cash flows from operating activities
Interest coverage ratio: Cash flows from operating activities / Interest payments* All indicators are calculated using financial values on a consolidated basis.
* Total market capitalization is calculated by multiplying the closing share price at the end of the
fiscal year by the number of shares outstanding (after deducting treasury shares) at the end of the
fiscal year.
* Cash flows from operating activities in the consolidated statements of cash flows are used for
operating cash flow in the table above. Interest-bearing liabilities include all liabilities posted tothe consolidated balance sheets that incur interest. Interest expenses in the consolidated
statements of cash flows are used for interest payments in the table above.

 9 

(3) Basic Policy Concerning Distribution of Earnings and Dividends for the Consolidated Fiscal
Year under Review and Next Consolidated Fiscal Year
Distribution of earnings to shareholders is a key management issue.
The dividend policy of Kanamoto is to provide shareholders with a consistent and stable dividend
regardless of the business environment. Furthermore, the Company aims to implement additional profit
distribution in line with earnings performance. Moreover, it is the basic policy of Kanamoto to sufficiently
build up its retained earnings, which is essential for strengthening financial position and to implement
aggressive business expansion.
For the fiscal year ended October 2015, the Company plans an annual dividend of ¥35 per share(including an interim dividend of ¥15 per share). Meanwhile, the Company plans an annual dividend payout
for the fiscal year ending October 2016 of ¥45 per share (which includes an interim dividend of ¥15).
Furthermore, the Company aims to allocate retained earnings to capital investments, including facilities
investment for rental equipment and other assets. Note that the company is putting a share buyback
program into place to facilitate the flexible implementation of capital policies.
(4) Business Risks and Other Risks
This section has been omitted as there were no significant changes from the Business Risks and Other
Risks section of the annual securities report filed with the MOF on January 29, 2015.
The annual securities report can be viewed by visiting the following URL.
https://www.kanamoto.ne.jp/report/index.html

 10 

2. Current Conditions of the Company’s GroupThe Kanamoto Group is comprised of a total of 19 companies—Kanamoto, 8 consolidated subsidiaries, 7
non-consolidated subsidiaries, and 3 affiliates.
Explanation of main business activities and positioning of each group company is as follows.
< Business related to the Construction Equipment Rental Division >Kanamoto, Daiichi Kikaisangyo Co., Ltd., and Kanki Corporation are engaged in the rental and sales of
construction equipment. Assist Co., Ltd. and its affiliate Asahi Rentax Co., Ltd. deal in the rental and sales offurniture, fixtures and safety products. Kanatech Co., Ltd. engages in the design and sales of modular
housing units for temporary use. Kyushu Kensan Co., Ltd. deals in rental and sales of construction equipment
centered on foundation equipment. Toyo Industry Co., Ltd. handles the rental and sales of equipment related
to shield tunneling. Unite Co., Ltd. handles the rental and sales of road construction equipment and thecarries out road construction. KG Flowtechno Co., Ltd. engages in the rental, design, manufacturing, andsales of specialty equipment that is used mainly for ground improvement and the construction ofunderground structures. Eiwashoukai Co., Ltd. handles the rental of general-purpose small construction
machinery.
In China, Shanghai Jinheyuan Engineering Construction Co., Ltd., KANAMOTO (HK) CO., LTD., andShanghai KG Machinery Co., Ltd., a subsidiary of KG Flowtechno Co., Ltd., carry out construction equipment
rental and sales. Kanamoto & JP Nelson Equipment (S) PTE. Ltd. (Singapore; hereinafter “KNE”) also handles
construction equipment rental and sales. In addition, in the fiscal year under review, Kanamoto establishedseveral sites in Southeast Asia, including PT Kanamoto Indonesia (Indonesia), SIAM KANAMOTO CO., LTD.
(Thailand), KANAMOTO FECON HASSYU CONSTRUCTION EQUIPMENT RENTAL JSC (Vietnam; hereinafter“KANAMOTO FECON HASSYU JSC”), and KNK MACHINERY & EQUIPMENT CORPORATION (the Philippines).
These group companies also lease rental equipment from Kanamoto when necessary. In the same fashion,
Kanamoto leases rental equipment from these companies, which it in turns leases to other users in Japan andabroad. Kanamoto purchases modular housing units for temporary use from Kanatech Co., Ltd.
< Other businesses >This segment mainly consists of the Business related to the Steel Sales Division, and Business related to
the Information Products Division and Other Businesses.
In the Business related to the Steel Sales Division, Kanamoto sells construction materials, including steel
products. In addition, in the Business related to the Information Products Division and Other Businesses, theCompany handles the rental and sales of computers and peripherals, including workstations and servers.
Note that Kanamoto sold all of its shares in Kanamoto Engineering Co., Ltd. on October 1, 2015.

 11 

The following diagram outlines our operating companies and relationships.
Domestic, Overseas Customers

Business related to theConstruction Equipment
Rental Division /Other
businesses

Business related to theConstruction Equipment Rental Division◎Assist Co., Ltd.

○KG Flowtechno Co., Ltd.
○Shanghai KG Machinery Co., Ltd.

◎Kanatech Co., Ltd.
◎Kanki Corporation○KANAMOTO (HK) CO., LTD.

◎Kyushu Kensan Co., Ltd.

○KNE

◎Daiichi Kikaisangyo Co., Ltd.

●KNK MACHINERY & EQUIPMENT CORPORATION◎Toyo Industry Co., Ltd.

○PT Kanamoto Indonesia◎Unite Co., Ltd.

○KANAMOTO FECON HASSYU JSC◎Shanghai Jinheyuan○Eiwashoukai Co., Ltd.

Engineering Construction●Asahi Rentax Co., Ltd.

Co., Ltd.

●SIAM KANAMOTO CO., LTD.

Suppliers

Notes:(1)

The equity method is not applied to non-consolidated subsidiaries and affiliates.

(2)→ indicates the flow of rental services and products provided(3)◎ indicates consolidated subsidiaries, ○ indicates non-consolidated subsidiaries, ● indicates affiliates.

 12 

3. Management Policies(1) Basic Management Policies
The Kanamoto Group believes that seeking innovation, maintaining a dynamic corporate culture andcontinually pushing businesses forward, by regarding “customers’ interests as Kanamoto’s interests,” is thebest way to meet the expectations of shareholders and group stakeholders and ensure earnings growth.
Through this philosophy, Kanamoto practices group management with the objective of being a corporategroup that can make a valuable and tangible contribution to society.
(2) Management Indicators Established as Objectives
To improve the value of its shares in the medium and long term, the Group targets an ROE (return on
equity) of more than 10% by improving earnings in each business segment, and by enhancing its capitalefficiency. Moreover, in the mainstay construction equipment rental business, given the high weighting of
fixed assets, the Company aims to further improve its shareholders’ equity ratio by setting its target at 45%
and above.
The Company is also employing ROI (return on investment) and EBITDA+ (earnings before interest,
taxes, depreciation and administration) which is a key indicator Kanamoto has been employing for sometime to measure asset efficiency, as a key indicator to determine whether to make new capital investments,
including those for rental equipment.
Meanwhile, heavy emphasis is being placed on consolidated net sales and operating income, whichyardsticks for corporate size and earnings strength, as the smooth growth of net sales and operating income
is an indicator of corporate growth potential.
(3) Medium- to Long-term Corporate Management Strategy
The Company’s medium-term corporate management strategy is included in BULL 53, the medium-term
corporate management plan. In accordance with this plan, Kanamoto plans to aggressively expand its
operations base in the Kanto & Shinetsu region, the home to major projects such as infrastructuredevelopment and redevelopment projects related to the Tokyo 2020 Summer Olympic/Paralympic Games,
and also aims to build a structure that will enable the Company to bolster earnings in the Tokyo metropolitanarea, in line with medium- to long-term demand forecasts. In addition, as a long-term growth engine,
Kanamoto aims to strategically move forward with the development of an overseas base for operations,mainly in the ASEAN nations, where strong underlying demand is potential long-term growth engine.
Meanwhile, to enhance risk resilience to adapt to changes in the business environment, Kanamoto aims
to build a management system that will facilitate sustainable growth in the long term by improving its
earnings management and strengthening its corporate governance system.
(4) Issues to be Addressed by the Company
The core business of the Kanamoto Group is construction equipment rental. Accordingly, the Company
must build a strong earnings structure and a detailed operating structure by pursuing business domains,asset-ownership scale, and an asset portfolio structure, in which earnings are not substantially impacted by
the size of domestic construction investments.
a) Strengthen human resources training, the group, and its alliances
In the construction equipment rental industry, during the next few years, intensified competition
among companies in the industry is likely to reveal a clear distinction among companies and result inpoor performers falling to the wayside. Kanamoto plans to train its employees so that they will possess
the knowledge and skills suitable for people working at a leading company in the construction equipment
rental industry. The Company also plans to train human resources that can immediately respond tobusiness expansion in Japan and abroad. Moreover, to expand business domains and areas, it is essentialthat Kanamoto fortify Group company alliances and the relationships with alliance companies, based on
which Kanamoto will fully exert its comprehensive corporate vitality.

 13 

b) Reinforce Kanamoto’s financial strategy
Kanamoto is taking steps to ensure timely and optimal funds procurement, while giving consideration
to equipment plans including purchases of rental equipment assets and corporate facilities. At the sametime, the Company aims to focus on improving its financial position, and reducing interest-bearing debt
and improving capital efficiency as much as possible, by incorporating measures, including theliquidation of assets.
c) Continuous cost reductions
When introducing assets the Company utilizes a full-fledged benchmark system, and further strives tomaintain asset value by optimizing asset maintenance costs based on its rental assets operating policies.
d) Strengthen overseas branch management
In line with the promotion of its overseas development, Kanamoto aims to enhance its marketing andsales strategies and also plans to strengthen its management systems in areas such as asset
management and operations management. The Company also plans to quickly prepare a system for the
positioning and training of human resources.

4. Basic Policy Regarding Selection of Accounting Standards
The Kanamoto Group plans to prepare its consolidated financial statements in accordance with generally
accepted accounting practices in Japan, taking into account comparability of consolidated financial
statements between different accounting periods and against different companies.
Note that it is the policy of the Kanamoto Group to adopt IFRS standards depending on conditions andtrends in Japan and aboard.

 14 

5. Consolidated Financial Statements(1) Consolidated Balance Sheets(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2014)

Current consolidated
fiscal year
(As of October 31, 2015)

AssetsCurrent assets
Cash and deposits

31,650*4

Notes and accounts receivable - trade33,65135,900*4, *537,251

Securities

350

350

Merchandise and finished goods

595

672

Costs on uncompleted construction contracts

50

39

Raw materials and supplies

227

272

Construction machine parts

6,566

8,214

0



Income taxes receivable
Consumption taxes receivable

43

23

Deferred tax assets

656

610

Other

515

561

Allowance for doubtful accounts

-227

-701

74,08083,195

Total current assets
Non-current assets
Property, plant and equipment
Rental equipment

150,727

164,914

Accumulated depreciation-85,083‐97,573

Rental equipment, net

65,644

67,341

Buildings and structures

23,691

25,840-15,663‐16,275

Buildings and structures, net

8,027

9,564

Machinery, equipment and vehicles

5,541

5,714

-4,882‐4,965659

749

31,45932,354

Accumulated depreciation

Accumulated depreciation
Machinery, equipment and vehicles,
net
Land
Other
Accumulated depreciation

1,563

2,539

-1,013‐1,112Other, net

549

1,426

106,341

111,436

Goodwill

57



Other

208

316

Total intangible assets

266

316

Total property, plant and equipment
Intangible assets

Investments and other assets*1

Investment securities
Deferred tax assets

6,286

*1

6,317

265

285

Other

1,854

2,008

Allowance for doubtful accounts

-491

‐528

Allowance for investment loss

-110

‐110

Total investments and other assets
Total non-current assets
Total assets

 15 

7,804

7,972

114,411

119,724

188,491

202,919

(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2014)

Current consolidated
fiscal year
(As of October 31, 2015)

23,134

27,775612

727

11,883

12,550995

1,585

Income taxes payable

3,729

3,711

Provision for bonuses

850

856

Accounts payable - other

16,46019,233

Other

2,988

3,093

Total current liabilities

60,65569,534Long-term loans payable

21,698

19,614

Lease obligations

2,082

1,831

Long-term accounts payable - other37,85339,254

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations

Non-current liabilities

Net defined benefit liability

16Asset retirement obligations

231

317

Other

440

368

Total non-current liabilities

62,322

61,387

122,978

130,921

Capital stock

13,652

13,652

Capital surplus

14,916

14,916

Retained earnings

32,86041,156-56‐2,12861,37367,597

1,977

1,948

Total liabilities
Net assets
Shareholders' equity

Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities‐0

Foreign currency translation adjustment

14

43

Total accumulated other comprehensive
income

1,992

1,991

Minority interests

2,147

2,409

Total net assets

65,513

71,998

188,491

202,919

Deferred gains or losses on hedges

Total liabilities and net assets

 16 

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Unit: Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Rent income
A receipt bonus
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of notes payable
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Subsidy income
Gain on sales of investment securities
Gain on sales of shares of subsidiaries andassociates
Compensation income for damage
Other
Total extraordinary income
Extraordinary losses
Impairment loss
Loss on sales and retirement of non-current
assetsLoss on valuation of investment securities
Loss on revision of retirement benefit plan
Total extraordinary losses
Income before income taxes and minority interests
Income taxes - current
Income taxes - deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income

Prior consolidated
Current consolidated
fiscal year
fiscal year
(From November 1, 2013 (From November 1, 2014
to October 31, 2014)
to October 31, 2015)
125,555
133,292
85,33491,88640,22041,405*1*1
23,76625,134
16,454
16,270 17 

9
90
33
57
42
183
79
218
714

8
111
42
65
26
96
4
225
581

609
34
445
1,090
16,078

461
18
208
688
16,164

*2

*2

*3

37
12


12
12
307



68


0
49

118

519



*4

171

215

*3

157


43
258
15,869
5,849
284
6,134
9,734
435
9,299

87

416
16,266
6,318
98
6,416
9,850
292
9,557

(Consolidated Statements of Comprehensive Income)(Unit: Millions of yen)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Deferred gains or losses on hedges
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to minority
interests

Current consolidated
Prior consolidated
fiscal year
fiscal year
(From November 1, 2013 (From November 1, 2014
to October 31, 2014)
to October 31, 2015)
9,734
9,850

 18 

409

-29

19

* 429
10,164

25
-0
* -4
9,845

9,725

9,556

439

289

(3) Consolidated Statements of Changes in Equity
Prior consolidated fiscal year (From November 1, 2013 to October 31, 2014)(Unit: Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning ofcurrent period

Capital surplus

13,652Retained earnings

Treasury shares

Total shareholders'equity24,462-48

52,983

14,916

Changes of items during
periodDividends of surplus

-901

-901

Net income

9,299

9,299

Purchase of treasury
shares-8-8Net changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end of current
period





8,397

-8

8,389

13,652

14,91632,860-56

61,373

Minority
interests

Total net assets

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning ofcurrent period

1,567

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment



-1

Total
accumulated
othercomprehensive
income
1,566

1,643

56,192

Changes of items during
periodDividends of surplus-901

Net income

9,299

Purchase of treasury
shares-8

Net changes of items
other thanshareholders' equity

409

Total changes of items
during period

409
1,977

Balance at end of current
period

16

426

504

930



16

426

504

9,320



14

1,992

2,147

65,513

 19 

Current consolidated fiscal year (From November 1, 2014 to October 31, 2015)(Unit: Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning ofcurrent period

Capital surplus

13,652Retained earnings

Treasury shares

Total shareholders'equity32,860-56

61,373

14,916

Changes of items during
periodDividends of surplus-1,261-1,261

Net income

9,557

9,557

Purchase of treasury
shares-2,072-2,072

Net changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end of current
period





8,296

-2,072

6,223

13,652

14,916

41,156-2,12867,597

Accumulated other comprehensive income

Balance at beginning ofcurrent period

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedges1,977Foreigncurrencytranslation
adjustment
14

Total
accumulated
othercomprehensive
income1,992

Minority
interests

2,147

Total net
assets65,513

Changes of items during
periodDividends of surplus-1,261

Net income



9,557

Purchase of treasury
shares-2,072

Net changes of items
other thanshareholders' equity

-29

-0

28

-0

261

260

Total changes of items
during period

-29

-0

28

-0

261

6,484

1,948

-0

43

1,991

2,409

71,998

Balance at end of current
period 20 

(4) Consolidated Statements of Cash Flows(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2013
to October 31, 2014)

Current consolidated
fiscal year
(From November 1, 2014
to October 31, 2015)

15,86916,266

17,950
26

20,273
171
10

178

145

0



8

7

684

944

-124

-132

-2,633

-1,198
87
-307



-68

-183

498

42



26

17

-200



8

6

-99

-120

347

380

609
-138

43

461
-64
-118


-5,833-3,613

-6

-109

2,029

4,486

1,728
941
31,27599
-969-5,622

2,101
295
40,420120
118‐828‐6,32024,78233,509Cash flows from operating activities
Income before income taxes and minority
interests
Depreciation
Impairment loss
Amortization of goodwill
Loss (gain) on sales and retirement of
non-current assets
The amount of assets buy on the installment
plan purchase for small rentals
The amount of cost price transfer with theconstruction machine parts sale
The amount of cost price transfer with asset
sell-off for rentals
Expenditure by the construction equipment andsupplies
Expenditure by the assets acquisition for rentals
Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities
Loss (gain) on sales of shares of subsidiaries andassociates
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in allowance for investment
loss
Increase (decrease) in provision for bonuses
Increase (decrease) in allowance for losses on
employee pension fund withdrawal
Increase (decrease) in net defined benefit
liability
Interest and dividend income
Assets buy on the installment plan purchase
payment interest for rentals
Interest expenses
Foreign exchange losses (gains)
Compensation income for damage
Loss on revision of retirement benefit plan
Decrease (increase) in notes and accounts
receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts
payable - trade
Increase (decrease) in accounts payable - other
Other, net
SubtotalInterest and dividend income received
Compensation for damage income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating
activities

 21 

(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2013
to October 31, 2014)

Current consolidated
fiscal year
(From November 1, 2014
to October 31, 2015)

-340
340
-3,102-80

-4,113

40

34

-84
-311
0
-27

-160
-72
330
-213

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Proceeds from sales of shares of subsidiaries
resulting in change in scope of consolidation
Purchase of shares of subsidiaries andassociates
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Net increase (decrease) in short-term loans
payableProceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of installment payables
Repayments of lease obligations
Purchase of treasury shares
Purchase of treasury shares of subsidiaries
Cash dividends paid
Proceeds from share issuance to minority
shareholders
Cash dividends paid to minority shareholders
Net cash provided by (used in) financing
activities
Effect of exchange rate change on 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 22 

*2



51

-66

-54

-5
165
17

-98
4
-115

-3,374-4,488

3

102

8,700
-13,726-15,132-1,347-8-0-899

11,462-12,984-18,913-1,188-2,072-0-1,259

8



-3

-3

-22,405-24,857

21

5

-976

4,169

*1

32,95731,980*1

31,98036,150(5) Notes to the Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Important Matters Used as Basis for Preparation of the Consolidated Financial Statements)
1. Companies included in the consolidation(1) Number of consolidated subsidiaries: 8 companies
Name of consolidated subsidiaries
Assist Co., Ltd.
Kanatech Co., Ltd.
Kanki Corporation
Kyushu Kensan Co., Ltd.
Shanghai Jinheyuan Engineering Construction Co., Ltd.
Daiichi Kikaisangyo Co., Ltd.
Toyo Industry Co., Ltd.
Unite Co., Ltd.
Note: Kanamoto sold all of its shareholdings in Kanamoto Engineering Co., Ltd. on October 1, 2015
and was removed from the scope of consolidation.
(2) Names of non-consolidated subsidiaries
KG Flowtechno Co., Ltd.
KANAMOTO (HK) CO., LTD.
Kanamoto & JP Nelson Equipment (S) PTE. Ltd.
Shanghai KG Machinery Co., Ltd.
PT Kanamoto Indonesia
KANAMOTO FECON HASSYU CONSTRUCTION EQUIPMENT RENTAL JSC
Eiwashoukai Co., Ltd.
(Reason for exclusion from consolidation)
The size of each of the non-consolidated subsidiaries is small, and each company’s total assets, net
sales and net income or loss (amount corresponding to equity) and retained earnings (amountcorresponding to equity) do not have a material effect on the consolidated financial statements.
2. Matters pertaining to application of equity method accounting(1) Equity-method affiliates
There are no equity-method affiliates(2) Non-consolidated subsidiaries and affiliates not accounted for under the equity method
Number of affiliates: 3 companies
Names of affiliates
Asahi Rentax Co., Ltd.
SIAM KANAMOTO CO., LTD.
KNK MACHINERY & EQUIPMENT CORPORATION(Reasons for not accounting for the companies under the equity method)
Given the level of net income (commensurate with equity) and retained earnings (commensuratewith equity), the equity method was not applied to these 7 non-consolidated subsidiaries and 3
affiliates given the minimal degree of impact to consolidated financial statements. In addition, thesecompanies were excluded from the scope of equity-method accounting given their lack of overallsignificance.

 23 

3. Matters pertaining to the fiscal years for consolidated subsidiaries
The closing date for Shanghai Jinheyuan Engineering Construction Co., Ltd. is December 31, and theclosing date for all other consolidated subsidiaries matches the closing date for consolidated accounts
settlement.
When preparing the consolidated financial statements, the Company uses financial statements for
Shanghai Jinheyuan Engineering Construction Co., Ltd. that are based on a provisional accounts settlement
as of September 30. The data is adjusted to reflect significant transactions that occurred between thesubsidiary’s fiscal year-end and the consolidated accounts settlement date that are believed to have asignificant effect on consolidated financial results.
4. Accounting principles and standards used for normal accounting treatment(1) Appraisal standards and appraisal methods for principal assets
a. Securities
Other securities
Securities with a market price
The Company adopted the market value method (the full amount of the valuationdifference is charged to net assets using the direct transfer to capital method, with thedisposal cost determined by the moving average method) based on the market price on the
consolidated fiscal year closing date or similar prices.
Securities without market prices
The Company adopted the cost method, cost being determined by the moving averagemethod.
b. Construction machine parts
The Company calculates the amount after deduction of depreciation expense according to thestraight-line method from the original prices starting from year of purchase.
c. Inventories(i) Merchandise and finished goods
The Company adopted the cost method, cost being determined based on the periodic averagemethod (amounts shown on the balance sheet are calculated by determining write-downs of bookvalue based on the decline in profitability)(ii) Costs on uncompleted construction contracts
The Company adopted the cost method, cost being determined by the specific identification
method(iii) Raw materials and supplies
The Last Purchase Cost method (amounts shown on the balance sheet are calculated bydetermining write-downs of book value based on the decline in profitability)(2) Depreciation methods for principal depreciable assets
a. Property, plant and equipment (excluding leased assets)
The Company adopted the straight-line method for rental equipment (for certain consolidated
subsidiaries, the declining-balance method) and the declining-balance method for other assets.
Buildings on land that is leased under a fixed-term land lease agreement, however, aredepreciated using the straight-line method using the remaining period of the fixed-term lease as
the depreciable life and zero residual value. For certain consolidated subsidiaries the Company
adopted the straight-line method for buildings and structures acquired on or after April 1, 1998,
but excluding fixtures and equipment.
The depreciable lives mainly used by the Company are as follows.
Rental equipment:
2-15 years
Buildings and structures:
2-60 years
b. Intangible assets (excluding leased assets)
The Company adopted the straight-line method.
Software for use within the Company is depreciated using the straight-line method based on theassumed useful life for internal use (5 years).

 24 

c. Leased assets
The Company adopted straight-line depreciation using the lease term as the depreciable life andzero residual value.
The Company accounts for finance lease transactions except for leases that transfer ownershipof the property for which the lease start date is before October 31, 2008 by applying accounting
treatment based on the method applied for ordinary rental transactions.
(3) Accounting standards for principal allowances and reserves
a. Allowance for doubtful accounts
To provide for losses on doubtful accounts such as accounts receivable, the Company charges toincome an amount based on actual loss experience for normal accounts, plus an amount for
projected unrecoverable amounts based on separate assessments of the probability of collection
from specific credits such as credits at risk of bankruptcy.
b. Provision for bonuses
To fully provide for expenditures of bonuses the Company will pay to employees, an amount isappropriated to the reserve during the fiscal year based upon a salary estimate amount.
c. Allowance for investment loss
The Company builds up provisions to cover losses from declines in real prices of assets such as
the stock of subsidiary companies that are not subject to asset impairment accounting by applying
internally established standards that take into consideration subsidiary operating results andasset quality.
(4) Accounting standards for principal income and expenses
Accounting standards for amount of completed works and cost of completed construction works
a. Construction works for which the portion of the works completed by the end of the year can bereliably determined (cost-to-cost method is used to estimate the rate of progress for construction)
Percentage-of-completion method (progress in construction work is estimated using thecost-to-cost method)b. Other construction works
Completed-contract method(5) Standard for conversion of main foreign currency-denominated assets or liabilities into Japanese yen
The Company converts monetary claims and liabilities that are denominated in foreign currencies
into Japanese yen based on the spot rate for the consolidated fiscal year settlement date, and posts thetranslation difference to income as a gain or loss. The assets and liabilities of controlled foreign
corporations are converted into Japanese yen based on the spot rate for the foreign corporation’s fiscal
year closing date, and the earnings and costs are converted into Japanese yen using to the average
market price during the period, and the translation adjustments are accounted for by including theamounts in the foreign currency translation adjustment and minority interests in net assets.
(6) Hedge accounting for principal hedging methods
a. Hedge accounting method
The Company employs the deferral accounting method of hedges. Also, allocation treatment isapplied when foreign exchange rate risk hedging meets necessary requirements. Also, special
accounting treatment is employed for interest rate swap transactions that meet special ruleaccounting.
b. Hedge methods and hedged transactions
Hedge accounting is applied to the following hedge methods and hedged transactions.
(i) Hedge method:
foreign exchange forward contracts
Hedged transactions: foreign currency denominated financial obligations and scheduledtransactions owing to the import of raw materials(ii) Hedge method:
Interest rate swaps
Hedged transactions: Debt
c. Hedging policies
The Company’s use of derivative transactions is limited to hedging risk within the scope of theCompany’s assets and liabilities subject to market fluctuation risk.

 25 

d. Method for evaluating the effectiveness of hedging
The effectiveness of hedging is measured from the time a transaction is first hedged to the point
effectiveness can be determined. Effectiveness is determined based on a comparison of the
cumulative market fluctuations for hedged transaction based on a single hedge method. In
addition, the Company’s interest swap transactions fulfill the requirements for special ruleaccounting. The results of this are used to evaluate the effectiveness of interest swap hedges.
(7) Amortization method and amortization period for goodwill
Goodwill amortization is done using the straight-line method over a five-year period. However,extremely small amounts are written off completely in the year in which they occur.
(8) Scope of capital in the consolidated statements of cash flows
Capital includes cash on hand, deposits that can be withdrawn on demand and highly liquidable
short-term investments that mature within three months from the date of acquisition and have a low
risk of a fluctuation in value.
(9) Other important matters for preparing consolidated financial statements
Accounting standards for consumption taxes
The tax-exclusion method is employed as the accounting standard for national and local
consumption taxes. Non-deductible national and local consumption taxes are treated as an expense in
the fiscal year under review.
(Supplemental Information)
Impact from change to corporate tax rate
The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No.9 of 2015) and the “Act for Partial
Revision of Local Tax Act, etc.” (Act No. 2 of 2015) were enacted on March 31, 2015. Accordingly, theincome tax rate was reduced for consolidated fiscal years in and after April 1, 2015. Henceforth theeffective income tax rate applied to the calculation of deferred tax assets and liabilities will be lowered to32.8%, from the previous 35.3%. Meanwhile, an income tax rate of 32.8% is to be applied to one-off items
expected to be written off in the consolidated fiscal year beginning November 1, 2015. Ultimately bothincome tax rates will be lowered to 32.0% for one-off and other items expected to be written off in the fiscal
years in and after the consolidated fiscal year beginning November 1, 2016.
In light of this revision, deferred tax assets at the end of the fiscal year under review declined ¥9 million
while income taxes - deferred rose ¥101 million and the valuation difference on available-for-sale securities
increased ¥92 million.
(Notes to the Consolidated Balance Sheets)*1 Matters related to non-consolidated subsidiaries and affiliated companies are as follows.
(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2014)
Investment securities (shares)360 26 

Current consolidated fiscal year
(As of October 31, 2015)617

2 Guarantees(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2014)

Current consolidated fiscal year
(As of October 31, 2015)

Joint and several guarantees of
employee bank loans (North PacificBank, Ltd., others)

30

29

Guarantee of borrowing liabilities of KG
Flowtechno Co., Ltd., a non-consolidated
subsidiary company

160

150

Guarantee of borrowing liabilities of
KANAMOTO (HK) CO., LTD., a
non-consolidated subsidiary company

HK$13,930 thousand(196)

HK$16,695 thousand(260)

Guarantee of borrowing liabilities of
KANAMOTO (HK) CO., LTD., a
non-consolidated subsidiary company

US$53 thousand(5)

US$18 thousand
(2)


()

HK$6,067 thousand(94)

Guarantee of installment payment
liabilities of Kanamoto & JP Nelson, a
non-consolidated subsidiary company

SG$2,434 thousand(208)

SG$1,887 thousand(163)

Guarantee of financing and leasing
liabilities of Kanamoto & JP Nelson, a
non-consolidated subsidiary company

()

SG$38 thousand(3)

Guarantee of borrowing liabilities of
SIAM KANAMOTO CO., LTD., an affiliate()

THB70,000 thousand(238)

Guarantee of borrowing liabilities of PT
KANAMOTO INDONESIA, a
non-consolidated subsidiary company

()

IDR7,000,000 thousand(62)

Guarantee of borrowing liabilities of PT
KANAMOTO INDONESIA, a
non-consolidated subsidiary company

()

US$250 thousand(30)

Guarantee of borrowing liabilities of
KANAMOTO FECON HASSYU JSC, a
non-consolidated subsidiary company

()

US$1,650 thousand
(199)

Total

601

1,233

Guarantee of financing and leasing
liabilities of KANAMOTO (HK) CO., LTD.,a non-consolidated subsidiary company(HKD: Hong Kong dollars, USD: US dollars, SGD: Singapore dollars, THB: Thai baths, and IDR: Indonesia
rupiah)3 Discount on notes receivable - trade and notes receivable - trade transferred by endorsement(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2014)

Current consolidated fiscal year
(As of October 31, 2015)

Discount on notes receivable - trade

83

149

Notes receivable - trade transferred byendorsement5*4 Liquidation of receivables based on receivables transfer facility(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2014)
Notes receivable - trade

3,906

 27 

Current consolidated fiscal year
(As of October 31, 2015)
3,628

Liquidated claims bearing a right of recourse to the Company and included in the balance of notes
receivable - trade transferred are as follows.
(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2014)
Notes receivable - trade707

Current consolidated fiscal year
(As of October 31, 2015)
927*5 Notes set to mature at the end of the fiscal year
Regarding the accounting for notes that are set to mature at the end of the fiscal year, settlement ofthese notes are carried out on the clearance date. Note that when the last day of the consolidated fiscal
year is on a weekend or holiday when the banks are not open, the notes set to mature at the end of the
fiscal year are included in the outstanding balance for the said consolidated fiscal year.
(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2014)

Current consolidated fiscal year
(As of October 31, 2015)

Notes receivable - trade

412

Notes payable - trade



2,900

Current liabilities - other

32(Notes to the Consolidated Statements of Income)*1 The main expense items included in selling, general and administrative expenses are as follows.
(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2013
to October 31, 2014)
Employees' salaries and allowances

Current consolidated fiscal year
(From November 1, 2014
to October 31, 2015)

9,580

10,179Depreciation

932

1,046

Rent expenses

2,604

2,744

Provision of allowance for doubtful
accounts

23

537

Provision for bonuses

824

854

Retirement benefit expenses

389

393

Amortization of goodwill

26

10*2 The breakdown of gain on sales of non-current assets is as follows.
(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2013
to October 31, 2014)

Current consolidated fiscal year
(From November 1, 2014
to October 31, 2015)

Buildings and structures2

3

Machinery, equipment and vehicles

5

9

Land

18

0

Other

11



37

12

Total

 28 

*3 The breakdown of loss on sales and retirement of non-current assets is as follows.
(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2013
to October 31, 2014)

Current consolidated fiscal year
(From November 1, 2014
to October 31, 2015)(Loss on sales of non-current assets)
Machinery, equipment and vehicles



0

Land

0



Other

0



Rental equipment

42

40

Buildings and structures

44

107

Machinery, equipment and vehicles

4

3

Land

0

0

Other (property, plant and equipment)

4

2

118

2



0

215

157

(Loss on retirement of non-current
assets)Other (software)
Other (Intangible fixed assets)
Total*4 Impairment loss
During the consolidated fiscal year the Kanamoto Group recorded impairment losses on the following
asset groups.
Prior consolidated fiscal year (From November 1, 2013 to October 31, 2014)
The Company had no material items to report.
Current consolidated fiscal year (From November 1, 2014 to October 31, 2015)
Location

Use

Asset

Business assets

Rentalequipment

Goodwill

Shanghai, China

Groupings used by the Kanamoto Group to apply asset impairment accounting are based on the blockclassified by the segment and operating area for which profitability can be determined regularly. Dormant
assets are grouped as units that generate independent cash flow.
In the consolidated fiscal year under review, the asset value of assets pledged for business undershot
their book value. In light of this, the book value was lowered to the recoverable amount of the assets andthe decrease in value was posted as an impairment loss (¥129 million) under extraordinary losses. Rental
equipment accounts for the total ¥129 million.
The recoverable value for rental equipment is measured according to net sales price, and calculated
based on the estimated appraised value.
The Kanamoto Group judges whether to recognize impairment losses by grouping assets for eachcompany or business. The goodwill, total book value of ¥42 million, incurred owing to the investment in
the consolidated subsidiary Shanghai Jinheyuan Engineering Construction Co., Ltd. was recorded as an
impairment loss, given that the Company does not expect to see the earnings it forecast at the time ofinvestment.

 29 

(Notes to the Consolidated Statements of Comprehensive Income)* Reclassification adjustments and the related tax effects concerning other comprehensive income(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2013
to October 31, 2014)

Current consolidated fiscal year
(From November 1, 2014
to October 31, 2015)

633

59



-248

Before adjustment for tax effects

633

-188

Tax effects

-223

158

Valuation difference on
available-for-sale securities

409

-29

Amount occurring during the current
period-0

Reclassification adjustments

Before adjustment for tax effects-0

Tax effectsDeferred gains/losses on hedges

-0Amount occurring during the current
period19

25

Total other comprehensive income

429

-4

Valuation difference on
available-for-sale securities:
Amount occurring during the current
periodReclassification adjustments

Deferred gains/losses on hedges:

Amount occurring during the current
period:(Notes to the Consolidated Statements of Changes in Equity)
Prior consolidated fiscal year (From November 1, 2013 to October 31, 2014)
1. Class of shares issued and number of shares, treasury shares and number of shares
Number of shares at Increase in number Decrease in number
Number of shares atof shares duringof shares during
beginning of
end of consolidated
consolidated
consolidated
consolidated
fiscal year
fiscal year
fiscal year
fiscal year
(thousands of shares)(thousands of shares) (thousands of shares) (thousands of shares)
Outstanding shares
Common shares

36,092

36,092

Total

36,092

36,092

Common shares(Note)

50

2



52

Total

50

2



52

Treasury shares(Note) The number of treasury shares of common shares increased by 2,000 shares through purchases ofshares comprising less than one investment unit.

 30 

2. Matters pertaining to subscription rights to shares and treasury subscription rights to shares
The Company had no material items to report.
3. Dividends(1) Dividends paid
Class of shares

Total dividend(Millions of yen)

Dividend pershare (yen)December 27, 2013
Common shares
Board of Directors

360

10.00

June 6, 2014
Board of Directors(Note)

540

15.00

Resolution

Common shares

Date of record

Payment date

October 31, 2013 January 30, 2014
April 30, 2014

July 7, 2014

(Note) The dividend per share includes a commemorative dividend of ¥5.00 to celebrate the 50th anniversaryof the company’s founding.
(2) Dividends for which the date of record falls in the current consolidated fiscal year and the dividend
payment date is in the following consolidated fiscal year
Resolution

Class of shares

Total dividend(Millions of yen)

Source offunds fordividend

December 26, 2014
Board of Directors

Common shares

720

Retainedearnings

Dividend per
Date of record Payment dateshare (yen)20.00

October 31,
2014

January 30,
2015(Note) The dividend per share includes a commemorative dividend of ¥10.00 to celebrate the 50th
anniversary of the company’s founding.
Current consolidated fiscal year (From November 1, 2014 to October 31, 2015)
1. Class of shares issued and number of shares, treasury shares and number of shares
Number of shares at Increase in number of Decrease in number
Number of shares at
beginning ofshares duringof shares during
end of consolidated
consolidated
consolidated
consolidated
fiscal year
fiscal year
fiscal year
fiscal year
(thousands of shares)(thousands of shares) (thousands of shares) (thousands of shares)
Outstanding shares
Common shares

36,092

36,092

Total

36,092

36,092

Common shares(Note)

52

700



752

Total

52

700



752

Treasury shares(Note) The increase in treasury stock (common shares) of 700,000 reflects the buyback of shares inaccordance with a resolution passed by the Board of Directors. Repurchase of shares less than the set
trading unit is indicated an increase of 0 shares.
2. Matters pertaining to subscription rights to shares and treasury subscription rights to shares
The Company had no material items to report.

 31 

3. Dividends(1) Dividends paid
Class of shares

Total dividend(Millions of yen)

Dividend pershare (yen)December 26, 2014
Board of Directors
Common shares(Note)

720

20.00

June 5, 2015
Board of Directors

540

15.00

Resolution

Common shares

Date of record

Payment date

October 31, 2014 January 30, 2015
April 30, 2015

July 7, 2015

(Note) The dividend per share includes a commemorative dividend of ¥10.00 to celebrate the 50th
anniversary of the company’s founding.
(2) Dividends for which the date of record falls in the current consolidated fiscal year and the dividend
payment date is in the following consolidated fiscal year
Resolution

Class of shares

Total dividend(Millions of yen)

Source offunds fordividend

December 25, 2015
Board of Directors(Planned)

Common shares

706

Retainedearnings

Dividend per
Date of record Payment dateshare (yen)20.00

October 31,
2015

January 29,
2016(Notes to the Consolidated Statements of Cash Flows)*1. Relationship between cash and equivalents at end of period and amounts for items shown on the
consolidated balance sheets(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2013
to October 31, 2014)
Cash and deposits accountCurrent consolidated fiscal year
(From November 1, 2014
to October 31, 2015)

31,65035,900Time deposits with a maturity longer
than 3 months

-20

-100

Securities

350

350

31,98036,150Cash and cash equivalents*2. Breakdown of assets and liabilities belonging to a former consolidated subsidiary
The following is a breakdown of assets and liabilities belonging to Kanamoto Engineering Co., Ltd at thetime of its sale. The company is no longer a consolidated subsidiary as Kanamoto sold all of the shares itheld in this former consolidated subsidiary. The table also shows the income from the sale of Kanamoto
Engineering and the sale price.
(Unit: Millions of yen)
Current assets
Non-current assets
Current liabilities

228
22
-94

Non-current liabilities
Minority interests
Gain on sales of shares

-22
-13
68

Sales price of Kanamoto Engineering shares
Cash and cash equivalents belonging to Kanamoto Engineering
Deduction: proceeds from sales of shares of subsidiaries resulting in change inscope of consolidation

189
-137
51

3. Details of major non-cash transactions(1) Amount of assets and liabilities related to installment transactions and amount of assets andliabilities related to lease transactions that are newly accounted for 32 

(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2013
to October 31, 2014)
Amount of assets and liabilities
related to installment transactions
Amount of assets and liabilities
related to lease transactions

Current consolidated fiscal year
(From November 1, 2014
to October 31, 2015)

25,58821,1464741,408(2) Amount related to asset retirement obligations that are newly accounted for(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2013
to October 31, 2014)
Amount related to asset
retirement obligations

Current consolidated fiscal year
(From November 1, 2014
to October 31, 2015)30

86(Notes to Leasing Transactions)(Lessee)
1. Finance lease transactions
Finance lease transactions except for leases that transfer ownership of the property(1) Leased assets
Property, plant and equipment
Construction-related business rental equipment and other property, plant and equipment.
(2) Method of depreciation for leased assets
Leased assets are depreciated according to the method described in “4. Accounting principles andstandards used for normal accounting treatment (2) Depreciation methods for principal depreciable
assets” in important matters used as basis for preparation of the consolidated financial statements.
It should be noted for those finance lease transactions except for leases that transfer ownershipof the property that have a start date prior to October 31, 2008 the Company uses accounting
methods that conform to methods used for ordinary rental transactions.
2. Operating lease transactions
Prepaid lease payments pertaining to non-cancellable operating lease transactions(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2014)

Current consolidated fiscal year
(As of October 31, 2015)

Within one year

2,750

2,686

After one year

7,658

6,895

10,408

9,581

Total

 33 (Business Segment Information)[Segment information]
1. Summary of reporting segments
The Company’s reporting segments are those units of the Company’s for which discrete financial
information is available and for which the Board of Directors regularly conducts a review for the
purpose of making decisions about resources to be allocated to the segments and assess the segments’performance.
The Company conducts business operations by product and service. The “business related to theConstruction Equipment Rental Division” is the reporting segment.
The Company’s “business related to the Construction Equipment Rental Division” rents and sells
construction equipment and temporary materials for construction use.
2. Method of calculating the amount of net sales, income or loss, assets, liabilities and other items of eachreporting segment
Except for the Standard for Measurement of Inventories, the accounting standards and methods forthe reported business segment are generally identical to the description in “Important Matters Used as
Basis for Preparation of the Consolidated Financial Statements.”
The Company values inventory assets using prices before write-downs of book value based on
decline in profitability.
Reporting segment earnings are the values on an operating income basis.
3. Information concerning the amount of net sales, income or loss, assets, liabilities and other items ofeach reporting segment
Prior consolidated fiscal year (From November 1, 2013 to October 31, 2014)(Unit: Millions of yen)
Reporting segment
Business related to
the Construction
Equipment Rental
Division

Other businesses(Note)Total

Net sales
Net sales to outside customers

116,572

8,982

125,555



1

1

Net sales or transfers between related
segments

116,572

8,983

125,556

Segment income

Total

15,910216

16,126

Segment assets

143,420

3,404

146,825

17,713

4

17,71726

2628,937

16

28,954

Other items
Depreciation
Amortization of goodwill
Amount of increase of property, plantand equipment and intangible assets(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division and business related to the
Information Products Division and other businesses.

 34 

Current consolidated fiscal year (From November 1, 2014 to October 31, 2015)(Unit: Millions of yen)
Reporting segment
Business related to
the Construction
Equipment Rental
Division

Other businesses(Note)Total

Net sales
Net sales to outside customers

123,572

9,719

133,292Net sales or transfers between related
segments

123,572

9,719

133,292

Segment income

Total

15,592301

15,894

Segment assets

153,908

3,034

156,943

20,044

4

20,04810

1025,9973

26,001Other items
Depreciation
Amortization of goodwill
Amount of increase of property, plantand equipment and intangible assets(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division and business related to the
Information Products Division and other businesses.
4. Difference between total reporting segment amount and the amount reported on the consolidated
financial statements, and the main reasons for the difference (Matters Pertaining to Reconciliation ofDifference)(Unit: Millions of yen)
Prior consolidated
fiscal year

Net sales
Reporting segment total
Net sales for “Other businesses” classification
Intersegment eliminations
Net sales reported in the consolidated financial statements

Current consolidated
fiscal year

116,572

123,572

8,983

9,719

-1



125,555

133,292(Unit: Millions of yen)

Prior consolidated
fiscal year

IncomeReporting segment total

Current consolidated
fiscal year

15,91015,592

Income for “Other businesses” classification

216

301

Other adjustments

327

375

16,454

16,270Operating income reported in the consolidated financial
statements(Unit: Millions of yen)
Prior consolidated
fiscal year

AssetsReporting segment total

Current consolidated
fiscal year

143,420

153,908

Assets of “Other businesses” classification

3,404

3,034

Company assets (Note)

41,66645,976

Total assets reported in the consolidated financial statements

188,491

202,919(Note) Company assets are mainly assets used in administrative divisions at the parent company that are
not attributable to the reporting segment.
 35 

(Unit: Millions of yen)
Other items

Reporting segment total

Other businesses

Amount of adjustment

Amount reported in the
consolidated financial
statements

Current
Prior
Current
Current
Prior
Current
Prior
Prior
consolidated consolidated consolidated consolidated consolidated consolidated consolidated consolidated
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
Depreciation

17,71320,044

4

4

233

225

17,95020,273

Amount of increase ofproperty, plant andequipment andintangible assets

28,93725,997

16

3

170

202

29,125

26,203(Note) The adjustments to the increases in property, plant and equipment and intangible assets are capital
investments related to administrative divisions.
[Related information]
Prior consolidated fiscal year (From November 1, 2013 to October 31, 2014)
1. Information by product and service
The Company has omitted a description of information by product and service because this same
information is disclosed in segment information.
2. Information by region(1) Net sales
The Company has omitted a description of information by region because net sales to outside
customers in Japan account for more than 90% of total net sales reported in the consolidated
statements of income.
(2) Property, plant and equipment
The Company has omitted a description of property, plant and equipment because the amount ofproperty, plant and equipment located in Japan account for more than 90% of the total for property,
plant and equipment reported in the consolidated balance sheets.
3. Main customers
The Company has omitted a description of net sales to outside customers because there are no
specific customers to which net sales account for more than 10% of the net sales reported in the
consolidated statements of income.
Current consolidated fiscal year (From November 1, 2014 to October 31, 2015)
1. Information by product and service
The Company has omitted a description of information by product and service because this same
information is disclosed in segment information.
2. Information by region(1) Net sales
The Company has omitted a description of information by region because net sales to outside
customers in Japan account for more than 90% of total net sales reported in the consolidated
statements of income.
(2) Property, plant and equipment
The Company has omitted a description of property, plant and equipment because the amount ofproperty, plant and equipment located in Japan account for more than 90% of the total for property,
plant and equipment reported in the consolidated balance sheets.

 36 

3. Main customers
The Company has omitted a description of net sales to outside customers because there are no
specific customers to which net sales account for more than 10% of the net sales reported in the
consolidated statements of income.
[Information concerning impairment loss on property, plant and equipment by reporting
segment]
Prior consolidated fiscal year (From November 1, 2013 to October 31, 2014)
The Company had no material items to report.
Current consolidated fiscal year (From November 1, 2014 to October 31, 2015)(Unit: Millions of yen)

Impairment loss

Business related
to theConstruction
Equipment
Rental Division

Other businesses

Corporate andeliminations

171





Total

171

[Information concerning amortization of goodwill and unamortized balances by reporting
segment]
Prior consolidated fiscal year (From November 1, 2013 to October 31, 2014)(Unit: Millions of yen)
Business related
to theConstruction
Equipment
Rental Division

Other businesses

Corporate andeliminations

Amortization in thecurrent period (Goodwill)

26





26

Balance at the end of theperiod

57





57

Total

Current consolidated fiscal year (From November 1, 2014 to October 31, 2015)(Unit: Millions of yen)
Business related
to theConstruction
Equipment
Rental Division

Other businesses

Corporate andeliminations

Amortization in thecurrent period (Goodwill)

10





10

Balance at the end of theperiod









Total

(Note) In the fiscal year under review, the Company posted a loss on goodwill impairment of ¥42
million.
[Information regarding gain on negative goodwill by reporting segment]
Prior consolidated fiscal year (From November 1, 2013 to October 31, 2014)
The Company had no material items to report.
Current consolidated fiscal year (From November 1, 2014 to October 31, 2015)
In the other businesses segment, gain on bargain purchase of ¥0 million was posted. This reflects the
additional purchase of shares in former consolidated subsidiary Kanamoto Engineering Co., Ltd. However,all shares in this consolidated subsidiary were sold during the fiscal year under review.
 37 (Per Share Information)
Prior consolidated fiscal year
(From November 1, 2013 to October 31, 2014)

Current consolidated fiscal year
(From November 1, 2014 to October 31, 2015)

Net assets per share¥1,758.24 Net assets per share¥1,969.16

Net income per share¥258.02 Net income per share¥266.27

Net income per share on a fully
diluted basis

Net income per share on a fully
diluted basis

The Company has not reported net income pershare on a fully diluted basis because it does not haveany potential shares that would have a dilution effect.

Same as at left

(Note) The basis for calculating net income per share is as follows.
(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2013 to
October 31, 2014)
Net Income amountAmount not attributed to commonshare shareholders
Net income related to commonsharesAverage number of shares outstanding
during the fiscal year

9,299

9,557





9,299

9,557

36,039,719

35,894,640(Material Events after the Close of the Consolidated Fiscal Year)
The Company had no material items to report.

 38 

Current consolidated fiscal year
(From November 1, 2014 to
October 31, 2015)

6. Non-Consolidated Financial Statements(1) Balance Sheets(Unit: Millions of yen)
Prior fiscal year
(As of October 31, 2014)

Current fiscal year
(As of October 31, 2015)

25,752
6,401
18,329
350
327
50
6,566
130
258
469
240
240
-124
58,992

29,2508,274
19,522
350
279
39
8,214
139
301
472
242
98
‐101

49,391
5,594
1,134
576
8
227
30,534254
87,71951,165
6,504
1,577
666
10
246
31,423
1,081
92,676

77
0
52


63

52
108

129

224

AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Securities
Merchandise and finished goods
Costs on uncompleted construction contracts
Construction machine parts
Raw materials and supplies
Prepaid expenses
Deferred tax assets
Short-term loans receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Rental equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Goodwill
Telephone subscription right
Software in progress
Total intangible assets

 39 

67,084

(Unit: Millions of yen)
Prior fiscal year
(As of October 31, 2014)

Current fiscal year
(As of October 31, 2015)

5,766
4,864
12

5,507
4,221
12

2,401

2,267

45

44

25
25
869
57
-1,094-1,031
11,941
99,791
158,784

26
32
865
60
‐1,691‐438
10,908103,809170,894

14,114
4,443
10,103
13,265
474
3,244
616
223
544
748
128
47,906

17,522
4,866
10,814
15,643
467
3,347
1,026
195
576
605
149
55,213

17,684
31,672407
145
49,90997,816

16,551
32,637341
202
49,732
104,946

Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital
Long-term loans receivable fromsubsidiaries and associates
Claims provable in bankruptcy, claims
provable in rehabilitation and other
Long-term prepaid expenses
Insurance funds
Guarantee deposits
Other
Allowance for doubtful accounts
Allowance for investment loss
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes payable - trade
Accounts payable - trade
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Deposits received
Provision for bonuses
Notes payable - facilities
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Long-term accounts payable - other
Deferred tax liabilities
Asset retirement obligations
Total non-current liabilities
Total liabilities

 40 

(Unit: Millions of yen)
Prior fiscal year
(As of October 31, 2014)

Current fiscal year
(As of October 31, 2015)

13,652

13,652

14,773143
14,916

14,773143
14,916

1,375

1,375

19

22

19,731
9,399
30,526-56
59,03926,731
9,479
37,609‐2,128

1,928

1,897

1,928
60,968
158,784

1,897
65,948170,894

Net assets
Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for advanced depreciation of
non-current assets
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

 41 

64,050(2) Statements of Income(Unit: Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Interest on securities
Dividend income
Rent income
Insurance income
A receipt bonus
Temporary transfer charges income
Reversal of allowance for investment loss
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of notes payable
Provision of allowance for doubtful accounts
Provision of allowance for investment loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Subsidy income
Gain on sales of investment securities
Gain on sales of shares of subsidiaries andassociates
Compensation income for damage
Other
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current
assetsLoss on valuation of investment securities
Loss on valuation of shares of subsidiaries andassociates
Bad debts written off of subsidiaries andassociates
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income

Current fiscal year
Prior fiscal year
(From November 1, 2013 (From November 1, 2014
to October 31, 2014)
to October 31, 2015)
94,301102,029
64,11770,51030,18331,51816,74917,41013,433
14,108

 42 

42
0
97
288
32
41
93
65
528
212
1,403

18
2
118
292
29
25
170

103
159
919

264
32
5
634
349
1,286
13,550

191
15
706

166
1,079
13,948

4
0


8

307



99


0
4

118


187

144



87



228



104

187
13,368
4,859
327
5,187
8,181

565
13,915
5,482
88
5,571
8,344

532

(3) Statements of Changes in Equity
Prior fiscal year (From November 1, 2013 to October 31, 2014)(Unit: Millions of yen)
Shareholders' equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at beginning ofcurrent period

13,652Legalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

Reserve foradvanceddepreciationof
non-current
assets

14,773143

14,9161,375

19

Retainedearnings
brought
forwardGeneralreserve

Total
retainedearnings

15,731

6,119

23,2464,000-4,000Changes of items
during period
Provision of generalreserve

Dividends of surplus



-901

-901

Net income



8,181

8,181

Purchase of treasury
sharesAdjustment toreserve due tochange in tax rate

Net changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period













4,000

3,280

7,280

13,652

14,773143

14,9161,375

19

19,731

9,399

30,526

Shareholders' equity
Treasury shares
Balance at beginning ofcurrent period-48

Valuation and translation adjustments

Total shareholders'equityValuation difference
on available-for-salesecurities

Total valuation andtranslation
adjustments

51,767

1,539

1,539

Total net assets

53,307

Changes of items
during period
Provision of generalreserve

Dividends of surplus

-901

-901

Net income

8,181

8,181

-8

-8





Purchase of treasury
shares-8

Adjustment toreserve due tochange in tax rate
Net changes of items
other thanshareholders' equity

389

389

389

Total changes of items
during period

-8

7,272

389

389

7,661

Balance at end ofcurrent period-56

59,039

1,928

1,928

60,968

 43 

Current fiscal year (From November 1, 2014 to October 31, 2015)(Unit: Millions of yen)
Shareholders' equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at beginning ofcurrent period

13,652Legalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

Reserve foradvanceddepreciationof
non-current
assets

14,773143

14,9161,375

19

Retainedearnings
brought
forwardGeneralreserve

Total
retainedearnings

19,731

9,399

30,5267,000-7,000Changes of items
during period
Provision of generalreserve

Dividends of surplus-1,261-1,261

Net income



8,344

8,344

Purchase of treasury
shares

Adjustment toreserve due tochange in tax rate




2

-2



Net changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period












2

7,000

80

7,082

13,652

14,773143

14,9161,375

22

26,731

9,479

37,609

Shareholders' equity
Treasury shares
Balance at beginning ofcurrent period-56

Valuation and translation adjustments

Total shareholders'equityValuation difference
on available-for-salesecurities

Total valuation andtranslation
adjustments

59,039

1,928

1,928

Total net assets

60,968Changes of items
during period
Provision of generalreserve

Dividends of surplus-1,261-1,261

Net income

8,344

8,344

-2,072-2,072Adjustment toreserve due tochange in tax rate

Net changes of items
other thanshareholders' equity



-30

-30

-30

Purchase of treasury
shares-2,072

Total changes of items
during period-2,072

5,010

-30

-30

4,980

Balance at end ofcurrent period-2,12864,050

1,897

1,897

65,948

 44 