Fiscal Year ended October 31, 2020

Financial Statements Bulletin (Japan GAAP)
Listed Company Name
Company Code Number
Listing Exchanges
URL
Representative
Inquiries

December 4, 2020
Kanamoto Co., Ltd.
9678
Tokyo Stock Exchange, Sapporo Stock Exchange
https://www.kanamoto.co.jp
Tetsuo Kanamoto
President and CEO
Hiroyuki Isono
Director and Corporate Officer, Division Manager,
Accounting Division
TEL 81-11-209-1600

Scheduled date for Regular General Meeting of the Shareholders
Scheduled date for commencement of dividend payments
Scheduled date for submission of Annual Securities Report
Preparation of Supplementary Explanatory Materials:
Earnings Briefings (For institutional investors and analysts):

January 28, 2021
January 29, 2021
January 28, 2021
Yes
Yes

(Numbers less than one million yen have been rounded down)

1. Consolidated Operating Results for the Fiscal Year ended October 31, 2020
(November 1, 2019 – October 31, 2020)(1) Consolidated Operating Results(Percentages show the change from the prior year)

Net Sales

Operating Profit

Millions of yen%

Millions of yen

Profit Attributable to
Owners of Parent

Ordinary Profit%

Millions of yen%

Millions of yen%

Fiscal year ended
October 31, 2020

179,053-0.9

14,250-20.1

14,268

-21.9

8,466

-25.9

Fiscal year ended
October 31, 2019180,694

7.4

17,842

1.4

18,2772.0

11,430-3.6(Note) Comprehensive income (millions of yen)
Fiscal year ended October 31, 2020
Fiscal year ended October 31, 2019

8,936 (-24.1%)
11,770(-3.6%)

Earnings per
Share on a Fully
Diluted Basis

Earnings per
Share

Ordinary Profit toTotal Assets

ROE

OperatingMargin

Yen

Yen

%

%

%

Fiscal year ended
October 31, 2020

221.45

–

7.2

5.0

8.0

Fiscal year ended
October 31, 2019295.30

–

10.8

7.2

9.9

(Reference) Investment profit or loss accounted for by the equity method (millions of yen)
Fiscal year ended October 31, 2020
Fiscal year ended October 31, 2019(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,
2020

300,362

126,18839.6

3,150.30

As of October 31,
2019268,182

121,77943.1

2,981.68

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, 2020

40,701-14,040-22,204

48,023Fiscal year ended
October 31, 201939,146-5,989-26,740

43,511(Reference) Equity (millions of yen)
As of October 31, 2020
As of October 31, 2019

119,091
115,507(3) Consolidated Cash Flows 12. Dividends
Annual Dividends per Share
End offirstquarter

End ofsecondquarterYen

End ofthird
quarter

Yen

Year-end

Yen

Full-year

Yen

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

Yen Millions of yen%%

Fiscal year ended
October 31, 2019

–

25.00

–

40.00

65.00

2,518

22.0

2.3

Fiscal year ended
October 31, 2020

–

25.00

–

40.00

65.00

2,468

29.4

2.1

Fiscal year ending
October 31, 2021
(projected)

–

25.00

–

45.00

70.00

29.7

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 31, 2021
(November 1, 2020 - October 31, 2021)(Percentages show the change from the prior year)
Net Sales
Millions of yen

Operating Profit% Millions of yen

Profit Attributable to
Owners of Parent

Ordinary Profit% Millions of yen% Millions of yen%

Earnings per
Share
Yen

Interim period

95,900

4.9

8,100

-12.3

8,200

-9.4

4,700

-12.1

122.93Full year

190,300

6.3

15,0005.3

15,200

6.5

9,000

6.3

235.40 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): Yes
Company newly included
1 company(Company name: KANAMOTO AUSTRALIA HOLDINGS PTY LTD)
Company newly excluded(Note) For details, please refer to “Changes to Material Subsidiaries during the Consolidated Fiscal Yearunder Review” on Page 21 of the Attachments.
(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: Yes(c) Changes in accounting estimates: Yes(d) Retrospective restatements: No(Note) The above matters fall under Article 14-7 of the Regulation on Terminology, Forms, and Preparation
Methods of Consolidated Financial Statements. For details, please refer to “3. Consolidated
Financial Statements and Significant Notes Thereto (5) Notes to the Consolidated Financial
Statements (Changes in Accounting Policies)” on Page 21 of the Attachments.
(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, 2020
38,742,241 shares
As of October 31, 2019
38,742,241 shares(b) Number of treasury shares of at the end of the period
As of October 31, 2020
939,142 shares
As of October 31, 2019
3,259 shares(c) Average number of shares outstanding during the period
Fiscal year ended October 31, 2020
38,232,825 sharesFiscal year ended October 31, 2019
38,706,149 shares 3(Reference) Summary of Non-Consolidated Operating Results
1. Non-Consolidated Operating Results for the Fiscal Year Ended October 31, 2020
(November 1, 2019 – October 31, 2020)(1) Non-Consolidated Operating Results
Net Sales(Percentages show the change from the prior year)
Operating Profit

Millions of yen%

Millions of yen

Ordinary Profit%

Millions of yen

Profit%Millions of yen%

Fiscal year ended
October 31, 2020

118,654

-2.7

8,170

-29.1

8,702

-30.1

5,856

-30.3

Fiscal year ended
October 31, 2019121,965

7.0

11,531-5.7

12,451

-4.0

8,400

-11.8

Earnings per Share

Earnings per Shareon a Fully Diluted Basis

Yen

Yen

Fiscal year ended
October 31, 2020

153.18–

Fiscal year ended
October 31, 2019

217.03–(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,
2020

232,009103,80244.7

2,745.86

As of October 31,
2019

214,065

102,82348.0

2,654.26(Reference) Equity (millions of yen)
As of October 31, 2020
As of October 31, 2019

103,802102,823

2. Projected Non-Consolidated Operating Results for the Fiscal Year Ending October 31, 2021
(November 1, 2020 - October 31, 2021)(Percentages show the change from prior year)
Net Sales

Ordinary Profit

ProfitEarnings per Share

Millions ofyen%Millions ofyen%Millions ofyen%Interim period

59,200

-2.6

4,400

-21.1

3,000

-17.8

78.47

Full year

119,100

0.4

8,800

1.1

5,900

0.7

154.32

Yen

Note: Financial results reports are not required to be audited by certified public accountants or an audit
corporation.
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. Please refer to “1. Overview of Operating
Results and Others (4) Future Outlook” on Page 8 of the Attachments for the conditions used asassumptions for the projected operating results and matters to note before using the projected
operating results.
(Methods of obtaining the supplementary materials and the content of the earnings briefings)
The Company plans to hold an online meeting for institutional investors and analysts on Monday,
December 7, 2020. Following the meeting, the Company will upload the meeting highlights anddiscussion (voice recording) on the Company’s website as quickly as possible, together with the
Earnings Briefings materials used that day.

 4○Attachments Table of Contents
1. Overview of Operating Results and Others ....................................................................... 6(1) Overview of Operating Results and Others for the Fiscal Year Ended October 31, 2020 ······ 6(2) Overview of Financial Position for the Fiscal Year Ended October 31, 2020 ······················· 7(3) Overview of Cash Flows for the Fiscal Year Ended October 31, 2020································ 7(4) Future Outlook ········································································································· 8
2. Basic Policy Regarding Selection of Accounting Standards .................................................. 9
3. Consolidated Financial Statements and Significant Notes Thereto ....................................... 10(1) Consolidated Balance Sheets····················································································· 10(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income ·················································································································· 12(Consolidated Statements of Income) ···································································· 12(Consolidated Statements of Comprehensive Income) ············································· 13(3) Consolidated Statements of Changes in Equity ···························································· 14(4) Consolidated Statements of Cash Flows ······································································ 18(5) Notes to the Consolidated Financial Statements··························································· 21(Notes Relating to the Going Concern Assumption) ······················································ 21(Note on Significant Changes to Shareholders’ Equity) ················································· 21(Changes to Material Subsidiaries during the Consolidated Fiscal Year under Review) ······· 21(Changes in Accounting Policies) ··············································································· 21(Supplemental Information) ······················································································ 21(Segment Information) ···························································································· 22(Business Combinations) ·························································································· 25(Per Share Information) ··························································································· 28(Material Events after the Close of the Consolidated Fiscal Year) ···································· 28

 51. Overview of Operating Results and Others(1) Overview of Operating Results and Others for the Fiscal Year Ended October 31, 2020
During the consolidated fiscal year under review, Japan’s economy continued to be unpredictable, withcorporate earnings and the employment environment on an improving trend, but with greatly restrictedeconomic activities due to the spread of the novel coronavirus disease (COVID-19).
Also, the outlook for the business conditions of the global economy remained unclear due to movement
restrictions and city lockdowns caused by COVID-19, in addition to the effects of the trade frictions between
the US and China.
In the construction industry where the Kanamoto Group belongs, public sector investments were firm,
mainly in construction related to restoration, recovery and prevention from natural disasters, and in the
promotion of the national resilience related to measures against the aging of infrastructure, while for theprivate sector construction investments there are concerns that capital investment is cooling due to a
decline in investment sentiment, and other conditions that demand close attention persist.
In such circumstances, the Group has worked to achieve its Medium-Term Corporate Management Plan
“Creative 60” (FY2020-2024) by promoting three key measures: expansion of domestic bases for
operations, overseas expansion, and optimization of internal operations. In addition, while implementing
measures against infections and reducing fixed costs, we also strove to further increase corporate value
by training personnel for the future, strengthening the foundation of the alliance group at in Japan andabroad, and implementing an asset strategy that pays close attention to the market environment.
Consequently, in the fiscal year ended October 31, 2020 net sales fell 0.9% from the prior consolidated
fiscal year level to ¥179,053 million. On the earnings front, operating profit decreased 20.1% year-onyear to ¥14,250 million, ordinary profit fell 21.9% to ¥14,268 million, and profit attributable to owners ofparent fell 25.9% to ¥8,466 million, due to such factors as the extension of the used construction
equipment operation period as planned at the beginning of the fiscal year, and the impact of increased
depreciation associated with additional capital investment for disaster recovery.
Results for each of the Company’s business segments were as follows.
< Business related to the Construction Equipment Rental Division >In the construction-related business, which is Kanamoto’s core business, public sector investments
were relatively steady due to the full-scale implementation of construction related to disaster recovery,
infrastructure and disaster prevention, but private sector construction investments did not reach afull-fledged recovery in rental demand for construction equipment, as construction was canceled or
postponed at some sites.
In addition, the Group has strengthened its operations bases by working on business alliances thatare expected to have high synergistic effects in Japan and abroad, and by expanding its product lineup
to immediately meet a wide variety of demands. As a result, sales by region in this business were up
3.1% in the Hokkaido Region, down 1.6% in the Tohoku Region, down 0.7% in the Kanto &Koushinetsu Region, up 4.8% in the Nishi-nihon Region, and up 1.7% in the Kyushu & Okinawa Region.
In addition, used construction equipment sales decreased 26.4% year-on-year, as Kanamoto carriedout the sale as planned at the beginning of the fiscal year.
Reflecting these factors, the Kanamoto Group posted net sales in the construction-related
businesses of ¥160,826 million, a decrease of 0.6% year-on-year, and operating profit of ¥12,852
million, a decrease of 22.1%.
< Other businesses >In the Company’s other businesses, sales performed well in the welfare and information-related
business, while the steel products-related business was affected by the fall in steel materials prices,
resulting in a 3.4% decrease year-on-year in net sales to ¥18,226 million and a 6.1% increase inoperating profit to ¥969 million.
 6

(2) Overview of Financial Position for the Fiscal Year Ended October 31, 2020
Total assets at the end of the consolidated fiscal year under review stood at ¥300,362 million, an increaseof ¥32,180 million compared with the end of the prior consolidated fiscal year. This was primarily due to a¥4,811 million increase in cash and deposits, a ¥1,877 million increase in notes and accounts receivable trade, a ¥2,350 million increase in construction equipment and materials in conjunction with operating
activities, and a ¥12,702 million increase in rental equipment.
Total liabilities were ¥174,174 million, an increase of ¥27,771 million compared with the end of the priorconsolidated fiscal year. This was primarily due to a ¥4,317 million increase in notes and accounts payable- trade, a ¥1,795 million increase in current portion of long-term borrowings, a ¥2,118 million increase inaccounts payable - other, a ¥12,875 million increase in long-term borrowings and a ¥4,203 million increasein long-term accounts payable - other, while income taxes payable decreased by ¥1,843 million.
Total net assets totaled ¥126,188 million, ¥4,409 million higher than at the end of the prior consolidated
fiscal year. This chiefly reflects profit attributable to owners of parent of ¥8,466 million. Meanwhile, theCompany posted ¥2,000 million in purchase of treasury shares and a decrease of ¥2,505 million due todividends of surplus.
(3) Overview of Cash Flows for the Fiscal Year Ended October 31, 2020
(Unit: Millions of yen)
FY Ended October 2019
(Prior consolidated fiscal
year)

FY Ended October 2020
(Consolidated fiscal year
under review)

Change from prior year

Net cash provided by (used in)operating activities

39,14640,701

1,555

Net cash provided by (used in) investing
activities-5,989-14,040-8,051

Net cash provided by (used in) financing
activities-26,740-22,204

4,536

Net increase (decrease) in cash andcash equivalents

6,388

4,473

-1,914

Cash and cash equivalents at beginningof period

36,73343,511

6,778

Cash and cash equivalents at end of
period43,511

48,023

4,511

The balance of cash and cash equivalents (“cash”) at the end of the consolidated fiscal year underreview was ¥48,023 million, an increase of ¥4,511 million compared with the end of the priorconsolidated fiscal year. Cash flows for the consolidated fiscal year under review are discussed below.
(Net cash provided by (used in) operating activities)
Cash generated from operating activities stood at ¥40,701 million, an increase of 4.0% from theprior consolidated fiscal year. This was primarily attributable to the following: profit before income
taxes of ¥13,731 million, depreciation of ¥28,896 million, increase in trade payables of ¥3,891 million,
increase in accounts payable - other of ¥3,679 million, as well as purchase of construction equipment
and materials of ¥1,743 million, purchase of rental equipment of ¥4,124 million, and income taxes
paid of ¥6,768 million.
(Net cash provided by (used in) investing activities)
Cash flow utilized in investing activities was ¥14,040 million, compared with ¥5,989 million in theprior consolidated fiscal year. This mainly reflected the posting of ¥9,821 million for purchase of sharesof subsidiaries resulting in change in scope of consolidation, and of ¥3,211 million for purchase ofproperty, plant and equipment.
(Net cash provided by (used in) financing activities)
Cash flow used for financing activities was ¥22,204 million, compared with cash flow used infinancing activities in the prior consolidated fiscal year of ¥26,740 million. This mainly reflected 7

proceeds from long-term borrowings of ¥23,270 million, repayments of long-term borrowings of¥12,425 million, repayments of installment payables of ¥27,294 million, purchase of treasury sharesof ¥2,000 million, and dividends paid of ¥2,504 million.
(Reference) Trends in Cash Flow Indicators
FY Ended October FY Ended October FY Ended October FY Ended October
2017
2018
2019
2020
Equity ratio (%)

38.0

39.6

43.1

39.6

Equity ratio on a market capitalizationbasis (%)

57.6

55.2

42.1

27.0

Ratio of interest-bearing liabilities tooperating cash flow (year)

2.5

2.7

2.5

3.0

Interest coverage ratio (times)

68.3

83.9

104.6

74.3

(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.
(4) Future Outlook
Regarding the outlook for the next fiscal year, the impact of COVID-19 on economic activity and thetiming of its settlement are unclear, and there are concerns about a decline in private construction
investment due to the decline in the physical economy. Meanwhile, although public sector investments willcontinue to be required for construction related to recovery and reconstruction from increasingly severe
natural disasters, disaster prevention and mitigation, and maintenance and renewal of aging social capital,
we do not expect an optimistic outlook for rental demand for construction equipment in this difficult
environment.
In such circumstances, to achieve the goals of its Medium-Term Corporate Management Plan “Creative60” (FY2020-2024), the Group aims to strengthen its profitability by assessing the medium- to long-term
demand outlook, securing optimal asset holdings and model mix, promoting innovation in response tochanges, and further improving operational efficiency and productivity, based on the promotion of three
key measures: expansion of domestic bases for operations, overseas expansion, and optimization ofinternal operations. The Company will also work to become a true general rental company by pursuingsynergies through M&As both in Japan and abroad to further enhance the Group’s strength and enhance
its efforts in low market share regions and areas.
Through the above measures, for the fiscal year ending October 31, 2021, the Kanamoto Group aims
for net sales of ¥190.3 billion, a growth of 6.3% year-on-year, operating profit of ¥15.0 billion, a growthof 5.3%, ordinary profit of ¥15.2 billion, a growth of 6.5%, and profit attributable to owners of parent of¥9.0 billion, a growth of 6.3%.

 8

2. 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 the international financial reporting standards
depending on conditions and trends in Japan and abroad.

 93. Consolidated Financial Statements and Significant Notes Thereto(1) Consolidated Balance Sheets(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2019)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims- operating
Merchandise and finished goods
Costs on construction contracts inprogress
Raw materials and supplies
Construction machine parts
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Rental equipment
Accumulated depreciation
Rental equipment, net
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment andvehicles, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

 10



Current consolidated
fiscal year
(As of October 31, 2020)

43,751
39,574

48,56341,451

6,347

6,166

1,017

1,205

33

148

800
17,5672,527-225
111,393

1,234
19,9182,495-230
120,952

220,812-134,957
85,85537,453-22,060
15,393
7,828-6,377

251,783-153,225
98,55739,804-23,293
16,5109,611-8,025

1,451

1,585

37,211
2,857-1,684
1,173
141,084

37,421
4,143-2,054
2,088
156,164

201
1,478
1,680

7,499
1,455
8,954

9,319
1,714
3,344
-353
14,024
156,789
268,182

8,974
2,377
3,557
-618
14,291
179,410300,362

(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2019)
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of bonds payable
Current portion of long-termborrowings
Lease obligations
Income taxes payable
Provision for bonuses
Accounts payable - other
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Lease obligations
Long-term accounts payable - other
Retirement benefit liability
Asset retirement obligations
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-forsale securities
Deferred gains or losses on hedges
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

 11



Current consolidated
fiscal year
(As of October 31, 2020)

33,657
1,120–

37,975
1,035
44

11,147

12,942

885
4,245
1,320
23,3702,772
78,519

1,342
2,401
1,462
25,4894,913
87,606–
17,2061,800
48,043285
492–
55
67,883
146,40324
30,082
2,857
52,246
498
545
221
91
86,567
174,174

17,82919,324
76,638-9113,783

17,82919,324
82,599-2,009117,744

1,918

1,522

0

–

-192

-126

-2

-49

1,723

1,346

6,272
121,779
268,182

7,097
126,188
300,362(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 profit
Non-operating income
Interest income
Dividend income
Rental income
Insurance claim income
Temporary transfer charges income
Reversal of allowance for doubtful
accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share issuance costs
Foreign exchange losses
Loss on cancellation of leases
Provision of allowance for doubtful
accounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of noncurrent assets
Loss on valuation of investment securities
Loss on valuation of shares of subsidiaries
and associates
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controllinginterests
Profit attributable to owners of parent

Prior consolidated
fiscal year
(From November 1, 2018
to October 31, 2019)180,694
127,766
52,92835,085
17,842 12



Current consolidated
fiscal year
(From November 1, 2019
to October 31, 2020)
179,053
127,925
51,12836,877
14,250

28
165
80
69
107

44
170
86
77
91

14

28

349
815

241
740

88
46
22
42

82
–
75
60

4

340

177
380
18,277163
722
14,268

38
15
19
74

17
–
12
30

189

206

–

171

438

188

627
17,723
6,214
-698
5,515
12,207567
13,731
4,785
-381
4,403
9,327

777

860

11,4308,466

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

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans,
net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests

Prior consolidated
fiscal year
(From November 1, 2018
to October 31, 2019)12,207 13

Current consolidated
fiscal year
(From November 1, 2019
to October 31, 2020)
9,327

-234

-397

0
-192

-0
66

-10

-60

-437
11,770-391
8,936

10,999

8,089

770

846

(3) Consolidated Statements of Changes in Equity
Prior consolidated fiscal year (From November 1, 2018 to October 31, 2019)(Unit: Millions of yen)
Shareholders’ equity
Share capital
Balance at beginningof period

Retainedearnings

Capital surplus

13,652

14,916

4,176

4,176

Treasury shares

67,086-2,129Total
shareholders’equity93,526

Changes during period
Issuance of newsharesDividends ofsurplus
Change in scope of
consolidation
Profit attributableto owners of parent
Change inownership interestof parent due totransactions with
non-controllinginterests
Purchase oftreasury shares
Disposal oftreasury shares
Net changes in
items other thanshareholders’equityTotal changes during
periodBalance at end of
period8,353-2,382-2,382504

504

11,43011,430

-13

-13

243

-0

-0

2,120

2,364

4,176

4,407

9,552

2,120

20,257

17,82919,324

76,638-9113,783 14

Accumulated other comprehensive income

Balance at beginningof period

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasure-ments ofdefinedbenefit
plans

Total
accumulated
othercomprehensive income

Noncontrollinginterests

2,148

0

–

5

2,153

6,351

Total net
assets102,031

Changes during period
Issuance of newsharesDividends ofsurplus
Change in scope of
consolidation
Profit attributableto owners of parent
Change inownership interestof parent due totransactions with
non-controllinginterests
Purchase oftreasury shares
Disposal oftreasury shares
Net changes in
items other thanshareholders’equityTotal changes during
periodBalance at end of
period

–

8,353

–

-2,382–504–

11,430

–

-13

–

-0

–

2,364

-229

0

-192

-8

-430

-78

-509

-229

0

-192

-8

-430

-78

19,748

1,918

0

-192

-2

1,723

6,272

121,779 15

Current consolidated fiscal year (From November 1, 2019 to October 31, 2020)(Unit: Millions of yen)
Shareholders’ equity
Share capital
Balance at beginningof period

Retainedearnings

Capital surplus

17,82919,324

76,638Treasury shares
-9

Total
shareholders’equity113,783

Changes during period
Issuance of newsharesDividends ofsurplus
Change in scope of
consolidation
Profit attributableto owners of parent
Change inownership interestof parent due totransactions with
non-controllinginterests
Purchase oftreasury shares
Disposal oftreasury shares
Net changes in
items other thanshareholders’equityTotal changes during
periodBalance at end of
period–-2,505-2,505
–

8,466

8,466

-0

-0

-2,000-2,000
–

–

-0

5,960

-2,0003,960

17,82919,324

82,599-2,009117,744 16

Accumulated other comprehensive income

Balance at beginningof period

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasure-ments ofdefinedbenefit
plans

Total
accumulated
othercomprehensive income

Noncontrollinginterests

1,918

0

-192

-2

1,723

6,272

Total net
assets121,779

Changes during period
Issuance of newsharesDividends ofsurplus
Change in scope of
consolidation
Profit attributableto owners of parent
Change inownership interestof parent due totransactions with
non-controllinginterests
Purchase oftreasury shares
Disposal oftreasury shares
Net changes in
items other thanshareholders’equityTotal changes during
periodBalance at end of
period–––-2,505

–

–

–

8,466

–

-0

–

-2,000

–

–

-395

-0

66

-46

-376

825

448

-395

-0

66

-46

-376

825

4,409

1,522

–

-126

-49

1,346

7,097

126,188 17



(4) Consolidated Statements of Cash Flows(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2018
to October 31, 2019)
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Loss (gain) on sales and retirement of
non-current assets
Cost transfer resulting from sale of rental
equipment
Purchase of construction equipment andmaterials
Purchase of rental equipment
Loss (gain) on valuation of investment
securities
Loss (gain) on sales of investment
securities
Loss on valuation of shares of subsidiaries
and associates
Increase (decrease) in allowance for
doubtful accounts
Increase (decrease) in provision forbonuses
Increase (decrease) in retirement benefit
liability
Interest and dividend income
Assets buy on the installment planpurchase payment interest for rentals
Interest expenses
Foreign exchange losses (gains)
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accounts payable other
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating
activities

 18



Current consolidated
fiscal year
(From November 1, 2019
to October 31, 2020)

17,72327,562
142

13,731
28,896
176

151

188

828

744

-1,200-1,743-3,847-4,124

–

171

-15

–

438

188

-10

227

172

88

9

8

-194

-215

293

472

88
-11
-3,505
-13
2,025

82
80
51
-558
3,891

2,516

3,679

92
43,245193-374-3,918

1,773
47,810207-548-6,76839,14640,701

(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2018
to October 31, 2019)
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time
deposits
Purchase of investment securities
Proceeds from sales of investment
securities
Purchase of property, plant andequipment
Proceeds from sales of property, plantand equipment
Purchase of intangible assets
Purchase of shares of subsidiaries
resulting in change in scope of
consolidation
Purchase of shares of subsidiaries
Purchase of shares of subsidiaries andassociates
Loan advances
Collection of loans receivableCollection of long-term accounts
receivable - other
Other, net
Net cash provided by (used in) investing
activities

 19



Current consolidated
fiscal year
(From November 1, 2019
to October 31, 2020)

-450

-430

470

430

-9

-9

51

25

-3,853-3,211

42

20

-490

-341

–

-9,821-1,393

-532

–

-133

-588
112

-398
376

125

140

-5

-155

-5,989-14,040

(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2018
to October 31, 2019)
Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of installment payables
Repayments of lease obligations
Proceeds from issuance of shares
Proceeds from sales of treasury shares
Purchase of treasury shares
Dividends paid
Dividends paid to non-controllinginterests
Payments from changes in ownershipinterests in subsidiaries that do not resultin change in scope of consolidation
Other, net
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
periodIncrease in cash and cash equivalents
resulting from inclusion of subsidiaries in
consolidation
Increase in cash and cash equivalents
resulting from merger with unconsolidated
subsidiaries
Cash and cash equivalents at end of period

 20



Current consolidated
fiscal year
(From November 1, 2019
to October 31, 2020)

-256

-85

5,560
-13,133-25,358-1,027
8,353
2,364
-0
-2,37923,270-12,425-27,294-1,143––-2,000-2,504

-22

-20

-840

–

-0

-0

-26,740-22,204

-28

16

6,388

4,473

36,73343,511

390

–

–

38

43,511

48,023

(5) Notes to the Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Note on Significant Changes to Shareholders’ Equity)
The Company purchased 935,800 shares of treasury shares in accordance with the resolution of the Boardof Directors held on March 17, 2020.
As a result, the Company’s treasury shares increased by ¥2,000 million during the consolidated fiscal year
under review, and treasury shares at the end of the consolidated fiscal year under review totaled –¥2,009
million.
(Changes to Material Subsidiaries during the Consolidated Fiscal Year under Review)
In the consolidated fiscal year under review, the Company acquired the shares of PORTER GROUPNOMINEES PTY LTD, PORTER UTILITIES PTY LTD, and MADICA PTY LTD through KANAMOTO AUSTRALIAHOLDINGS PTY LTD, a specific subsidiary established by the Company, making these three companies theCompany’s consolidated subsidiaries including the two subsidiaries.
Although not a change corresponding to changes in specific subsidiaries, during the consolidated fiscal
year under review, the Company acquired the shares of SOOKI HOLDINGS Co., Ltd. and made it aconsolidated subsidiary including one of its subsidiaries.
(Changes in Accounting Policies)(Changes in accounting policies that are difficult to distinguish from changes in accounting estimates)
Certain domestic consolidated subsidiaries, which previously used the declining-balance method ofdepreciation for rental assets, changed to the straight-line method from the consolidated fiscal year underreview.
This change was made as a result of a review of the depreciation method in connection with theformulation of the new Medium-Term Corporate Management Plan “Creative 60,” one of the core elementsof which is “to strengthen cooperation among the Group and to align our goals to the strategic and tacticallevel,” and as a result, the Company judged that the straight-line method is a reasonable method that
more appropriately reflects the actual conditions of future use of rental assets, as it will achieve longterm, stable operation of rental assets through the “development of an environment that promotes group
circulation” and other means.
As a result, compared with the figures based on the previous method, operating profit, ordinary profit
and profit before income taxes for the consolidated fiscal year under review each increased by ¥1,052
million. The impact on segment information is stated in the relevant section.
(Supplemental Information)(Accounting estimates due to the spread of COVID-19)
COVID-19 is still having an economic impact and will include a minor impact on the consolidated resultsof the Group. Accounting estimates such as estimates for the recoverability of deferred tax assets are
based on assumptions regarding the future spread of the disease, the timing of its settlement and themarket trend afterwards, supposing that the spread of the disease will settle in the next fiscal year orlater and business activities will be largely normalized.
Please note that these assumptions are highly volatile and results based on actual values in the future
may differ from these estimates and assumptions.

 21



(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 ofeach reporting segment
Except for the Standard for Measurement of Inventories, the accounting standards and methods forthe reported business segment comply with accounting standards that have been adopted in preparing
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 profit 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, 2018 to October 31, 2019)(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

161,831

18,862

180,694–––

161,831

18,862

180,694

Net sales or transfers between related
segments
Total
Segment income

16,505913

17,419Segment assets

203,504

7,731

211,235

25,993

1,165

27,158

76

66

142

35,5591,186

36,745

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, welfare-related business and other businesses.

 22



Current consolidated fiscal year (From November 1, 2019 to October 31, 2020)(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

160,826

18,226

179,053–––

Net sales or transfers between related
segments

160,826

18,226

179,053

Segment income

Total

12,852969

13,822

Segment assets

235,7198,169

243,888

27,222

1,255

28,478

110

66

176

48,275

1,594

49,869Other 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, welfare-related business 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

Current consolidated
fiscal year

Reporting segment total

161,831

160,826

Net sales for “Other businesses” classification

18,862

18,226––

180,694

179,053

Intersegment eliminations
Net sales reported in the consolidated financial statements(Unit: Millions of yen)
Prior consolidated
fiscal year

IncomeReporting segment total

Current consolidated
fiscal year

16,505

12,852

Income for “Other businesses” classification

913

969

Other adjustments

423

428

17,842

14,250Operating profit reported in the consolidated financial
statements(Unit: Millions of yen)
Prior consolidated
fiscal year

AssetsReporting segment total

Current consolidated
fiscal year

203,504

235,719

Assets of “Other businesses” classification

7,731

8,169

Company assets (Note)

56,94756,474

Total assets reported in the consolidated financial
statements

268,182

300,362 23(Note) Company assets are mainly assets used in administrative divisions at the parent company that are
not attributable to the reporting segment.
(Unit: Millions of yen)
Reporting segment total
Other items

Other businesses

Amount of adjustment

Amount reported in the
consolidated financial
statements

Prior
Current
Prior
Current
Prior
Current
Prior
Current
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

25,99327,222

1,165

1,255

404

418

27,562

28,896

Amount of increase ofproperty, plant andequipment andintangible assets

35,55948,275

1,186

1,594

580

404

37,32550,274(Note) The adjustments to the increases in property, plant and equipment and intangible assets are capital
investments related to administrative divisions.

5. Matters concerning changes to reporting segments(Change in the depreciation method of property, plant and equipment)
As described in “Changes in Accounting Policies,” beginning from the consolidated fiscal year underreview, certain consolidated subsidiaries have changed their depreciation method for rental equipmentfrom the declining-balance method to the straight-line method.
As a result of this change, compared with the figure based on the previous method, segment income
for the business related to the Construction Equipment Rental Division for the consolidated fiscal year
under review increased by ¥1,052 million.

 24



(Business Combinations)
Business combination through acquisition(SOOKI HOLDINGS Co., Ltd.)
1. Outline of the business combination(1) Name and business of the acquired company
Name of the acquired company: SOOKI HOLDINGS Co., Ltd.
Description of business: Owner of shares in the company (subsidiary SOOKI Co., Ltd.)
specializing in the measuring instrument business, business of thedevelopment, rental and on-site introduction support of automatic
measurement systems, etc. In addition, controls, manages, guides,
develops, etc. the business activities of that company.
(2) Main reasons for business combination
Strengthen the measuring instrument business and pursue improved service quality,
management efficiency and other synergies through the sharing of management resources, suchas providing technical know-how and utilizing the customer base, to further increase corporate
value.
(3) Date of business combination
September 30, 2020
(4) Legal form of business combination
Acquisition of shares paid for in cash(5) Name of resulting entity
There is no change in the company name.
(6) Ownership ratio after acquisition of voting rights
100%(7) Main grounds for determining the acquirer
As the Company has acquired a voting right ratio of 100% following an acquisition of shares of
SOOKI HOLDINGS Co., Ltd. paid for in cash, the Company is considered to be the acquirer.
2. Period of operating results of acquired entity included in consolidated financial statements
The consolidated operating results of SOOKI HOLDINGS Co., Ltd. are not included in the consolidated
statements of income for the consolidated fiscal year under review.
3. Acquisition cost of the acquired company and acquisition cost breakdown(Unit: Millions of yen)
Cash and deposits delivered on date of business
5,582
combination
Acquisition cost

5,582

4. Details and amounts of main acquisition-related costs(Unit: Millions of yen)
8

Advisory fees and others

5. Amount of goodwill recognized, reason for recognition of goodwill, and method and period foramortization of goodwill(1) Amount of goodwill recognized¥4,325 million(2) Reason for recognition of goodwill
As the net assets at fair value at the time of combination were below the acquisition price, thedifference was recorded as goodwill.
(3) Method and period for amortization of goodwill
Goodwill is amortized by the straight-line method over eight years.
6. Acquisition cost allocation
Because the process of specifying identifiable assets and liabilities on the date of businesscombination and calculating their fair value was incomplete and the acquisition cost allocation was 25not completed at the end of the consolidated fiscal year under review, a provisional accounting
treatment was performed based on the reasonable information available at that time.
7. Amounts and main breakdown of assets acquired and liabilities assumed as of date of businesscombination(Unit: Millions of yen)
Current assets
2,310
Non-current assets
1,251
Total assets
3,562
Current liabilities
Non-current liabilities

1,386
919

Total liabilities

2,305

8. Estimated amounts of the impact on consolidated statements of income for the consolidated fiscal
year under review assuming the business combination was completed at the beginning of theconsolidated fiscal year, and the calculation method thereof(Unit: Millions of yen)
Net sales
4,885Operating profit
574
Ordinary profit
578
Profit before income taxes
441
Profit attributable to owners of parent
223(Calculation method of estimated amounts)
The estimated amounts of the impact indicate the differences between the net sales and the profit
and loss information calculated by assuming the business combination was completed at the
beginning of the consolidated fiscal year and the net sales and the profit and loss information on the
consolidated statements of income of the acquiring company.
The note has not received audit certification.
(KANAMOTO AUSTRALIA HOLDINGS PTY LTD)
1. Outline of the business combination(1) Name and business of the acquired company
Name of the acquired company: KANAMOTO AUSTRALIA HOLDINGS PTY LTD
Description of business: Asset management (holding company), and management ofsubsidiaries (the following five companies)(i) PORTER EXCAVATIONS PTY. LTD.: Rental of construction equipment(ii) PORTER UTILITIES PTY LTD: Laying of gas pipes(iii) MADICA PTY LTD: Civil engineering and public works projects, anddispatching of professional operators(iv) PORTER GROUP NOMINEES PTY LTD: Holding company (100%ownership of (i))(v) PORTER UTILITIES HOLDINGS PTY LTD: Holding company (100%ownership of (ii))(2) Main reasons for business combination
The Company believes the business combination will help strengthen overseas expansion, which
is one of the key measures of the Company’s new Medium-Term Corporate Management Plan
“Creative 60.”
(3) Date of business combination
October 15, 2020
(4) Legal form of business combination
Acquisition of shares paid for in cash(5) Name of resulting entity
There is no change in the company name.
(6) Ownership ratio after acquisition of voting rights
100%
 26



(7) Main grounds for determining the acquirer
As the Company has acquired a voting right ratio of 100% following an acquisition of shares of
KANAMOTO AUSTRALIA HOLDINGS PTY LTD paid for in cash, the Company is considered to be
the acquirer.
2. Period of operating results of acquired entity included in consolidated financial statements
The consolidated operating results of KANAMOTO AUSTRALIA HOLDINGS PTY LTD are not includedin the consolidated statements of income for the consolidated fiscal year under review.
3. Acquisition cost of the acquired company and acquisition cost breakdown(Unit: Millions of yen)
Cash and deposits delivered on date of business
5,687
combination
Acquisition cost

5,687

4. Details and amounts of main acquisition-related costs(Unit: Millions of yen)324

Advisory fees and others

5. Amount of goodwill recognized, reason for recognition of goodwill, and method and period foramortization of goodwill(1) Amount of goodwill recognized¥3,114 million(2) Reason for recognition of goodwill
As the net assets at fair value at the time of combination were below the acquisition price, thedifference was recorded as goodwill.
(3) Method and period for amortization of goodwill
Goodwill is amortized by the straight-line method over eight years.
6. Acquisition cost allocation
Because the process of specifying identifiable assets and liabilities on the date of businesscombination and calculating their fair value was incomplete and the acquisition cost allocation was
not completed at the end of the consolidated fiscal year under review, a provisional accounting
treatment was performed based on the reasonable information available at that time.
7. Amounts and main breakdown of assets acquired and liabilities assumed as of date of businesscombination(Unit: Millions of yen)
Current assets
1,567
Non-current assets
8,141
Total assets
9,708
Current liabilities
Non-current liabilities
Total liabilities

1,485
2,484
3,970

8. Estimated amounts of the impact on consolidated statements of income for the consolidated fiscal
year under review assuming the business combination was completed at the beginning of theconsolidated fiscal year, and the calculation method thereof(Unit: Millions of yen)
Net sales
4,188
Operating profit
692
Ordinary profit
760
Profit before income taxes
842
Profit attributable to owners of parent
577

 27



(Calculation method of estimated amounts)
The estimated amounts of the impact indicate the differences between the net sales and the profit
and loss information calculated by assuming the business combination was completed at the
beginning of the consolidated fiscal year and the net sales and the profit and loss information on the
consolidated statements of income of the acquiring company.
In addition, because the business combination was before the establishment of the holding company
KANAMOTO AUSTRALIA HOLDINGS PTY LTD, the figures shown are the consolidated financial resultsof the operating company that became a subsidiary as a result of acquiring the shares.
The note has not received audit certification.
(Per Share Information)
Prior consolidated fiscal year
(From November 1, 2018 to October 31, 2019)

Current consolidated fiscal year
(From November 1, 2019 to October 31, 2020)

Net assets per share¥2,981.68 Net assets per share¥3,150.30

Earnings per share¥295.30 Earnings per share¥221.45

Earnings per share on a fully diluted
basis

–

Earnings per share on a fully diluted
basis

The Company has not reported earnings per shareon a fully diluted basis because it does not have any
potential shares that would have a dilution effect.

–

Same as at left

(Note) The basis for calculating earnings per share is as follows.
(Unit: Millions of yen, unless otherwise noted)
Prior consolidated fiscal year
(From November 1, 2018 to
October 31, 2019)
Profit attributable to owners of parent
Amount not attributed to commonshare shareholders
Profit attributable to owners of parent
related to common shares
Average number of shares
outstanding during the fiscal year
(Shares)

11,430

8,466

–

–

11,4308,466

38,706,149

38,232,825(Material Events after the Close of the Consolidated Fiscal Year)
The Company had no material items to report.

 28



Current consolidated fiscal
year(From November 1, 2019 to
October 31, 2020)