Fiscal Year ended October 31, 2014

Financial Statements Bulletin (Japan GAAP)
December 10, 2014
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 29, 2015
Scheduled date for commencement of dividend payments
January 30, 2015
Scheduled date for submission of Annual Securities Report
January 29, 2015
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, 2014
(November 1, 2013 – October 31, 2014)(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, 2014

125,555

13.3

16,45444.4

16,078

45.2

9,299

60.1

Fiscal year ended
October 31, 2013

110,83128.7

11,392

77.2

11,073

86.6

5,809

62.5

(Note) Comprehensive income (millions of yen)
Fiscal year ended October 31, 2014
Fiscal year ended October 31, 2013

10,164 (36.3%)
7,457 (110.0%)

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, 2014

258.02



15.8

9.0

13.1

Fiscal year ended
October 31, 2013175.50



12.3

7.2

10.3

(Reference) Investment profit or loss accounted for by the equity method (millions of yen)
Fiscal year ended October 31, 2014

Fiscal year ended October 31, 2013
(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,
2014

188,491

65,51333.6

1,758.24

As of October 31,
2013

169,250

56,19232.2

1,513.49

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, 2014

24,782-3,374-22,405

31,980Fiscal year ended
October 31, 2013

20,759-1,117-6,532

32,957(Reference) Equity (millions of yen)
As of October 31, 2014
As of October 31, 2013

63,36554,549(3) Consolidated Cash Flows 1 

2. Dividends
Annual Dividends per Share
End offirstquarter

End ofsecondquarter

Yen

Yen

End ofthird
quarterYear-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, 2013



10.00



10.00

20.00

688

11.4

1.5

Fiscal year ended
October 31, 2014



15.00



20.00

35.00

1,261

13.6

2.1

Fiscal year ending
October 31, 2015
(projected)



15.00



15.00

30.00

11.4

(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 (planned) 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, 2015
(November 1, 2014 - October 31, 2015)(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 per
Share

Net Income% Millions of yen%

Yen

Interim period

65,9002.6

10,2802.1

10,060

2.0

5,860

3.7

162.60

Full year

128,600

2.4

16,9603.1

16,610

3.3

9,520

2.4

264.15 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, 2014
36,092,241 shares
As of October 31, 201336,092,241 shares(b) Number of treasury shares of at the end of the period
As of October 31, 2014
52,930 shares
As of October 31, 2013
50,041 shares(c) Average number of shares outstanding during the period
Fiscal year ended October 31, 2014
36,039,719 sharesFiscal year ended October 31, 201333,101,017 shares 3 

(Reference) Summary of Non-Consolidated Operating Results
1. Non-Consolidated Operating Results for the Fiscal Year Ended October 31, 2014
(November 1, 2013 – October 31, 2014)(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, 2014

94,301

15.9

13,433

50.5

13,550

52.9

8,181

66.4

Fiscal year ended
October 31, 2013

81,360

17.8

8,926

57.3

8,861

83.6

4,916

91.8

Net Income per ShareNet Income per Shareon a Fully Diluted Basis

Yen

Yen

Fiscal year ended
October 31, 2014

227.00

Fiscal year ended
October 31, 2013148.53

(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,
2014

158,784

60,96838.4

1,691.72

As of October 31,
2013

141,21353,30737.7

1,479.02(Reference) Equity (millions of yen)
As of October 31, 2014
As of October 31, 2013

60,96853,307

2. Projected Non-Consolidated Operating Results for the Fiscal Year Ending October 31, 2015
(November 1, 2014 - October 31, 2015)(Percentages show the change from prior year)
Net Sales

Ordinary Income

Net Income

Net Income per Share

Millions of yen%

Millions of yen%

Millions of yen%

Yen

Interim period

48,400

3.3

7,830

1.5

4,880

1.5

135.41

Full year

96,3002.1

14,190

4.7

8,500

3.9

235.85

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.
(Change in unit used to state monetary figures)
Previously the consolidated financial statements and non-consolidated financial statements werestated in unit of thousands of yen. However, from the end of the fiscal year under review, unit will be
stated in millions of yen. For the convenience of comparison, the results for the prior consolidated fiscal
year and the prior fiscal year have been restated in million yen.

 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 ..................................................................................

7(3) Outlook for the Next Fiscal Year (Fiscal year ending October 2015) ..............................

9(4) Basic Policy Concerning Distribution of Earnings and Dividends for the Consolidated
Fiscal Year under Review and Next Consolidated Fiscal Year ........................................ 10(5) 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 .................................................................. 14
4. 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) .................................. 39
5. Non-Consolidated Financial Statements ........................................................................ 40(1) Balance Sheets .................................................................................................... 40(2) Statements of Income ........................................................................................... 43(3) Statements of Changes in Equity ............................................................................ 46

 5 

1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Resultsa) Summary of consolidated fiscal year operating results (From November 2013 to October 2014)
In the consolidated fiscal year under review, the economy in Japan, underpinned by government
economic and financial policies, posted modest recovery trends, including an improvement in corporate
earnings and an increase in capital investments. However, the economic outlook remains unclear due inpart to the impact the consumption tax hike has had on private consumption and concerns of a downturnin economies overseas.
In the construction-related business that is the Kanamoto Group’s main business, public works
demand continued to increase owing to budget allocated for reconstruction work in quake-damaged
regions, building national resilience, and for disaster prevention. In addition, construction equipment
rental demand also continued to rise owing to positive trends in private-sector construction investments.
Meanwhile, there were still concerns going forward, in part due to the postponed startup of constructionand extended construction periods reflecting still high material and equipment prices, and a lack ofskilled labor.
Amidst such conditions, the Kanamoto Group drew up a long-term vision dubbed BULL 55. As an
action plan, the company released BULL 53, a medium-term corporate management plan that covers the
fiscal year ending October 31, 2015 to the fiscal year ending October 31, 2017. The goal of thismedium-term corporate management plan is to maximize Group strengths to build a management
infrastructure that is stable and with sustainable earnings in the future. To this end, Kanamoto aims tofurther improve its corporate value by (1) expanding the reach of Kanamoto’s domestic base ofoperations, (2) improving the Group’s overall operational structure by building a new system that willserve as the Group’s infrastructure, and (3) expanding its businesses overseas.
Consequently, in the fiscal year ended October 31, 2014, net sales rose 13.3% from the priorconsolidated fiscal year level to ¥125,555 million. Meanwhile in the profit front, operating income
expanded 44.4% from the prior consolidated fiscal year to ¥16,454 million and consolidated ordinary
income increased 45.2% year-on-year to ¥16,078 million. Net income rose 60.1% over the priorconsolidated fiscal year to ¥9,299 million.
[Operating Results for the Fiscal Year ended October 31, 2014](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

125,555

13.3

16,45444.4

16,078

45.2

9,299

60.1

Prior year

110,83128.7

11,392

77.2

11,073

86.6

5,809

62.5

Year underreview

94,301

15.9

13,433

50.5

13,550

52.9

8,181

66.4

Prior year

81,360

17.8

8,926

57.3

8,861

83.6

4,916

91.8

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 construction-related business that is the main business of Kanamoto, demand from public
works projects trended at a high level owing to the full-fledged startup of reconstruction projects inquake-damaged regions and the government’s execution of a 15-month budget for seamless fiscal
stimulus. Moreover, nationwide construction equipment rental demand remained steady owing tostable construction to fix deteriorating infrastructures in regions throughout Japan and to prevent or
alleviate natural disasters, and also owing to the private-sector civil engineering work, including
railway, communications, gas, and harbor/port projects.
The Kanamoto Group is aggressively invested in facilities to maximize its response to theaforementioned demand. Consequently, sales rose year-on-year thanks to accurate asset allocationand fortification of operations. That said, sales sharply increased in all regions. Sales performance byregion for this segment is as follows: sales rose 11.4% in the Hokkaido Region; 19.5% in the Tohoku
Region; 6.3% in the Kanto & Shinetsu Region; 15.2% in the Kansai & Chubu Region; and 9.0% in the
Kyushu & Okinawa Region compared with the prior consolidated fiscal year.
Sales of used construction equipment rose 63.6% 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.
As a result of these factors, net sales for Kanamoto’s construction-related businesses for the
consolidated fiscal year under review increased 13.9% from the prior consolidated fiscal year to¥116,572 million, and operating income climbed 45.7% year-on-year to ¥15,910 million.
[Other Businesses]
In Other Businesses, net sales increased 6.0% from the prior consolidated fiscal year to ¥8,983
million, while operating income also increased 5.9% year-on-year to ¥216 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 2 branches and closed 2
branches.
New branches:
Rikuzentakata Branch (Rikuzentakata, Iwate Prefecture), Osaka-Kita Branch(Takatsuki, Osaka Prefecture)
Closed branches:
Sendai-Nishi Branch (Aoba, Sendai, Miyagi Prefecture), Mikasa Machinery
Center (Mikasa, Hokkaido Prefecture)(2) Analysis of Financial Positiona) Financial position
Compared with the end of the prior consolidated fiscal year, total assets at the end of the consolidated
fiscal year under review increased by ¥19,240 million to ¥188,491 million. The primary catalysts were an
increase of ¥5,919 million in notes and accounts receivable - trade, reflecting a growth in net sales, anincrease of ¥8,744 million in rental equipment in conjunction with sales activities, an increase of ¥2,611
million in construction machine parts, and an increase of ¥1,660 million in land, owing in part to the
expansion of sales bases.
Total liabilities were ¥122,978 million, an increase of ¥9,920 million compared with the end of the priorconsolidated fiscal year. This mainly reflects an increase of ¥3,731 million in accounts payable - otherdue to the acquisition of rental equipment and an increase of ¥8,523 million in long-term accounts
payable-other. Meanwhile, in contrast current portion of long-term loans payable and long-term loans
payable decreased by a combined ¥4,887 million.
Total net assets were ¥65,513 million, ¥9,320 million higher than at the end of the prior consolidated
fiscal year. This is chiefly due to the posted of ¥9,299 million in net income.

 7 b) Consolidated cash flows(Unit: Millions of yen)
FY Ended October 2013
(Prior consolidated fiscal
year)

FY Ended October 2014
(Consolidated fiscal year
under review)

Change from prior year

Net cash provided by (used in) operating
activities

20,75924,782

4,023

Net cash provided by (used in) investing
activities-1,117-3,374-2,257

Net cash provided by (used in) financing
activities-6,532-22,405-15,873

Net increase (decrease) in cash and cash
equivalents

13,244-976-14,221

Cash and cash equivalents at beginningof period

19,717

32,957

13,240Cash and cash equivalents at end of
period32,95731,980-976

The balance of cash and cash equivalents (“cash”) on a consolidated basis at the end of theconsolidated fiscal year under review decreased ¥976 million from the end of the prior consolidated fiscal
year, to ¥31,980 million. Cash flows for the consolidated fiscal year under review are discussed below.
(Net cash provided by (used in) operating activities)
Cash generated as a result of operating activities increased 19.4% from the prior consolidated fiscal
year to ¥24,782 million.
This mainly reflected depreciation of ¥17,950 million and income before income taxes and minority
interests of ¥15,869 million, expenditure by the assets acquisition for rentals of ¥2,633 million, an
increase in notes and accounts receivable - trade of ¥5,833 million and income taxes paid of ¥5,622
million.
(Net cash provided by (used in) investing activities)
Cash flow utilized as a result of investing activities was ¥3,374 million, compared with ¥1,117 million
in the prior consolidated fiscal year.
This mainly reflected the purchase of property, plant and equipment of ¥3,102 million.
(Net cash provided by (used in) financing activities)
Cash flow used for financing activities was ¥22,405 million, compared with cash flow used infinancing activities in the prior consolidated fiscal year of ¥6,532 million.
This mainly reflected ¥15,132 million for repayments of installment payables, ¥1,347 million for
repayments of lease obligations, and ¥13,726 million for repayments of long-term loans payable.
Meanwhile, the Company posted ¥8,700 million in proceeds from long-term loans payable.

 8 

The cash flow indicator trends for the Kanamoto Group are provided below.
FY ended
October 2011

FY ended
October 2012

FY ended
October 2013

FY ended
October 2014

Equity ratio (%)

32.2

29.2

32.2

33.6

Equity ratio on a market capitalizationbasis (%)

15.1

23.3

56.4

76.3

Ratio of interest-bearing liabilities tooperating cash flow

8.5

4.9

3.9

3.5

Interest coverage ratio (times)

7.4

13.4

19.1

25.6

(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 theterm by the number of shares outstanding (after deducting treasury shares) at the end of theterm.
* Cash flows from operating activities shown on the consolidated statements of cash flows is used as
operating cash flow. Interest-bearing liabilities include all liabilities on which the Company pays
interest that are accounted for on the consolidated balance sheets. The amounts shown as interest
expenses paid on the consolidated statements of cash flows are used as interest payments.
(3) Outlook for the Next Fiscal Year (Fiscal year ending October 2015)
Turning to the outlook for the next fiscal year, construction demand is expected to remain strong mainlyin the Tohoku region and Tokyo metropolitan area, owing to the full-fledged startup of reconstruction inquake-damaged areas, the development of the Linear Shinkansen, the redevelopment of areas around new
stations on the Yamanote line, the start of construction related to the Tokyo 2020 Summer Olympics.
However, looking at construction demand in other regions, fiscal expenditures are trending downward,
creating a murkier outlook for public works and other demand. Furthermore, the business climate is
expected to be grimmer than a year earlier due to unsuccessful bidding and delays in construction starts
reflecting still-high materials and equipment prices and as the lack of skilled labor becomes the norm.
Going forward the Kanamoto Group aims to continue to assist in the quick restoration of disaster-stricken
areas. Concurrently, as the first step of the new medium-term corporate management plan, the Company
plans to accelerate branch openings in the metropolitan areas of Kanto and Kansai, and other uncharted
areas, and ultimately build a base for operations to achieve the goals in the third and final year of themedium-term corporate management plan. In addition, to continue to expand corporate value, theCompany plans to concentrate management resources in fields in which it can leverage the Group’s
comprehensive capabilities. The Company aims to build a structure to facilitate the fortification of its
financial position and earnings strength.
That said, regarding overseas business expansion, the Company aims to aggressively move forward bydeveloping partnerships with strong local companies, mainly in Asia where there is future growth potential.
[Fiscal year ending October 2015 Projected Operating Results (November 1, 2014 - October 31, 2015)](Millions of yen except net income per share, which is in yen)
Net Sales

Operating
IncomeOrdinary
IncomeNet Income

Net Income
per Share

Consolidated
full-year projection

128,600

16,96016,6109,520

264.15

Non-Consolidated
full-year projection

96,30013,91014,1908,500

235.85 9 

(4) Basic Policy Concerning Distribution of Earnings and Dividends for the Consolidated Fiscal
Year under Review and Next Consolidated Fiscal Year
Kanamoto seeks to ensure a stable return of earnings to the maximum extent possible, and considers
maintaining a stable dividend to be a fundamental management policy.
For the fiscal year ended October 2014 the Company plans an annual dividend of ¥20 per share, plus acommemorative dividend to celebrate the 50th anniversary of the Company’s founding of ¥15, for a total
per-share dividend of ¥35 (this includes the interim dividend of ¥15 per share). The Company plans anannual dividend payout for the next fiscal year ending October 2015 of ¥30 per share (which includes aninterim dividend of ¥15).
Furthermore, the Company plans to utilize its internal reserves by allocating funds for capital investment,
including the introduction of rental equipment that will serve as the source of future earnings, and forenhancing shareholders’ equity. To enable the Company to flexibly implement its capital policy, Kanamoto
has also established a system for making purchases of treasury shares.
Special benefits plan for shareholders
Shareholders owning at least 1,000 shares who are described or recorded in the Register of
Shareholders and List of Beneficial Shareholders as of October 31 (Date of Record) of each year will
receive fresh products from Hokkaido, the birthplace of Kanamoto, with a value equivalent to 3,000 yen(selected from a specially mailed catalog).
(5) 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, 2014.
The annual securities report can be viewed as the following URL.
https://www.kanamoto.ne.jp/report/index.html

 10 

2. Current Conditions of the Company’s GroupThe Kanamoto Group consists of a total of 15 companies—9 consolidated subsidiaries, 4 non-consolidated
subsidiaries, and 1 affiliate. The principal business is the “Business related to the Construction Equipment
Rental Division,” which handles rental and sales of construction equipment and construction-related materials
and equipment. The “Other businesses” segment carries out related activities, mainly “Business related to
the Steel Sales Division,” and “Business related to the Information Products Division and Other Businesses.”
An explanation of the business activities and position of each company in the Kanamoto Group is provided
below.
< Business related to the Construction Equipment Rental Division >Kanamoto, Daiichi Kikaisangyo Co., Ltd., Kanki Corporation、Kyushu Kensan Co., Ltd., Toyo Industry Co.,
Ltd., Unite Co., Ltd., and KG Flowtechno Co., Ltd. are engaged in construction equipment rental and sales.
Kyushu Kensan Co., Ltd. deals in rental and sales of construction equipment centered on foundationequipment. Toyo Industry Co., Ltd. handles the rental and sales of equipment related to the shield tunneling.
Unite Co., Ltd. conducts roadway construction equipment rental and sales and roadway construction. KG
Flowtechno Co., Ltd. and its subsidiary Shanghai KG Machinery Co., Ltd. carry out equipment rental andtechnical development, and also the manufacture and sales of construction equipment for ground
improvement.
Assist Co., Ltd. and its affiliated Asahi Rentax Co., Ltd. deal in the rental and sales of furniture, fixtures andsafety products. Kanatech Co., Ltd. engages in the design and sale of modular housing units for temporary
use.
These companies, depending on need, also lease rental equipment from Kanamoto. In the same fashion,
Kanamoto leases rental equipment from these companies, which it in turns leases out to other companies.
Kanamoto purchases modular housing units for temporary use from Kanatech Co., Ltd.
In China, Shanghai Jinheyuan Engineering Construction Co., Ltd. carries out construction equipment rental
and sales, and also imports construction materials and equipment. Meanwhile, KANAMOTO (HK) CO., LTD. in
Hong Kong and Kanamoto & JP Nelson Equipment (S) PTE. Ltd. in Singapore both handle construction
equipment rentals and sales.
< Other businesses >Kanamoto Engineering Co., Ltd. manages specified worker dispatching undertakings to dispatch
engineering-related research and development employees to manufacturers and other entities.

 11 

The following diagram outlines our operating businesses and relationships.

Domestic, Overseas Customers

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

Business related to theConstruction Equipment Rental
Division /Other businesses

Kanamoto

Other businesses◎Kanamoto Engineering
Co., Ltd.

Co., Ltd.

◎Kyushu Kensan Co., Ltd.
◎Daiichi Kikaisangyo Co.,Ltd.
◎Toyo Industry Co., Ltd.
◎Unite Co., Ltd.
◎Shanghai Jinheyuan
Engineering Construction
Co., Ltd.
〇KG Flowtechno Co., Ltd.
〇Shanghai KG MachineryCo., Ltd.
〇KANAMOTO (HK) CO., LTD.
〇Kanamoto & JP Nelson
Equipment (S) PTE. Ltd.
●Asahi Rentax 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, ● indicatesaffiliates. Please see the previous page for details on the operations carried out by these companies.

 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 build a structure that will enable the Company to bolster earnings in the Tokyo metropolitan area, in linewith 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 demand potential is high.
Main targets in the medium-term corporate management plan BULL 53
Fiscal year ending
October 31, 2017
Net Sales(hundred millions of yen)

1,500

Operating Income(hundred millions of yen)

190

Equity Ratio

(%)

EPS

(Yen)

260

BPS

(Yen)

2,400

ROA

(%)

5%-plusROE(%)

10%-plus

EBITDA＋(hundred millions of yen)

45%-plus500

 13 

(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 targeting business domains,asset-ownership scale, and an asset portfolio structure, in which earnings are not substantially impacted by
the level of domestic construction investment.
a) Strengthen human resources training, and also Kanamoto Group alliances
During the next several years, intensified competition among companies in the construction
equipment rental industry is likely to reveal a clear distinction among companies and result in poor
performers falling to the wayside. Kanamoto plans to train its employees so that they will possess theknowledge and skills fitting 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.
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 is focusing on improving its financial position, and reducing interest-bearing debt andimproving capital efficiency as much as possible, by incorporating measures such as the liquidation ofassets.
c) Continuous cost reductions
When introducing assets the Company utilizes a thorough 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
The Company will enhance marketing and sales aspects, and strengthen management systems inareas such as asset management and operations management, to match its overseas development. It
also will urgently prepare a system for the assignment of human resources and personnel training forthis purpose.

 14 

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2013)

Current consolidated
fiscal year
(As of October 31, 2014)

AssetsCurrent assets
Cash and deposits*232,627

Notes and accounts receivable - trade*5

27,731

31,650*533,651

Securities

350

350

Merchandise and finished goods

642

595

Costs on uncompleted construction contracts

20

50

Raw materials and supplies

201

227

Construction machine parts

3,954

6,566

Income taxes receivable

290Consumption taxes receivable

8

43

Deferred tax assets

983

656

Other

754

515

Allowance for doubtful accounts

-335

-227

66,96874,080131,975

150,727-75,075-85,083

Rental equipment, net

56,89965,644

Buildings and structures

22,843

23,691

Accumulated depreciation-15,140-15,663

Buildings and structures, net*2

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

Machinery, equipment and vehicles
Accumulated depreciation

*2

5,480

5,541
-4,882619

659

29,79831,459

1,315

1,563

-1,012-1,013303

549

95,322

106,341

Other
Accumulated depreciation
Other, net
Total property, plant and equipment

8,027-4,861

Machinery, equipment and vehicles,
net
Land

7,702

Intangible assets
Goodwill

19

57

Other

250

208

Total intangible assets

270

266

Investments and other assets*1

Investment securities
Deferred tax assets

5,256

*1

6,286

147

265

Other

1,894

1,854

Allowance for doubtful accounts

-541

-491

Allowance for investment loss
Total investments and other assets
Total non-current assets
Total assets

 15 

-67

-110

6,689

7,804

102,282

114,411

169,250

188,491

(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2013)

Current consolidated
fiscal year
(As of October 31, 2014)

Notes and accounts payable - trade21,29323,134

Short-term loans payable

*2

591

612

Current portion of long-term loans payable

12,17911,883

Lease obligations

1,085

995

Income taxes payable

3,533

3,729

Provision for bonuses

823

850

Allowance for losses on employee pension
fund withdrawal

200

Accounts payable - other

12,72816,460

Other

1,983

2,988

Total current liabilities

54,41960,655Long-term loans payable

26,28821,698

Lease obligations

2,662

2,082

Liabilities
Current liabilities

Non-current liabilities729,32937,853

Asset retirement obligations

210

231

Net defined benefit liability



16

Provision for retirement benefits
Long-term accounts payable - other

Other

138

440

58,63862,322

113,058

122,978

Capital stock

13,652

13,652

Capital surplus

14,916

14,916

Retained earnings

24,46232,860Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Treasury shares

-48

-56

52,983

61,373

Valuation difference on available-for-salesecurities

1,567

1,977

Foreign currency translation adjustment-1

14

Total accumulated other comprehensive
income

1,566

1,992

Minority interests

1,643

2,147

Total net assets

56,19265,513

169,250

188,491

Total shareholders' equity
Accumulated other comprehensive income

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
Amortization of negative goodwill
Reversal of allowance for doubtful accounts
Reversal of provision for loss on disaster
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
Subsidy income
Gain on sales of non-current assets
Gain on sales of investment securities
Reversal of provision incurred from businesscombination
Other
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current
assetsImpairment loss
Loss on valuation of investment securities
Loss on revision of retirement benefit plan
Other
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, 2012 (From November 1, 2013
to October 31, 2013)
to October 31, 2014)
110,831
125,555
76,52285,33434,30940,220*1*122,91623,766
11,392
16,454

 17 

9
58
84
58
35
223
51
19
6
221
768

9
90
33
57
42
183

79

218
714

824
41
223
1,088
11,073

609
34
445
1,090
16,078

*2

36
34
1

*5

55



0
127

0
49

*3
*4

95

217
187

13
514
10,686
4,856
-315
4,540
6,146
336
5,809

*2

*3

12
37


215

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

(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
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, 2012 (From November 1, 2013
to October 31, 2013)
to October 31, 2014)
6,146
9,734

 18 

1,236

409

74
* 1,310
7,457

19
* 429
10,164

7,098

9,725

358

439

(3) Consolidated Statements of Changes in Equity
Prior consolidated fiscal year (From November 1, 2012 to October 31, 2013)(Unit: Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning ofcurrent period

Capital surplus

9,696

10,960

3,956

3,956

Retained earnings

Treasury shares

Total shareholders'equity19,199-27

39,829Changes of items during
periodIssuance of new shares

7,912

Dividends of surplus

-656

-656

Net income

5,809

5,809

109

109

Change of scope of
consolidation
Purchase of treasury
shares-20-20

Disposal of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period

3,956

3,956

5,262

-20

13,153

Balance at end of current
period13,652

14,916

24,462-48

52,983

Accumulated other comprehensive income

Balance at beginning ofcurrent period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
incomeMinority interests

Total net assets

331

-54

276

1,293

41,399Changes of items during
periodIssuance of new shares

7,912

Dividends of surplus-656

Net income

5,809

Change of scope of
consolidation

109

Purchase of treasury
shares-20

Disposal of treasury
sharesNet changes of items
other thanshareholders' equity

1,236

53

1,289

349

1,639

Total changes of items
during period

1,236

53

1,289

349

14,792

Balance at end of current
period

1,567

-1

1,566

1,643

56,192

 19 

Current 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
periodIssuance of new sharesDividends of surplus

-901

-901

Net income

9,299

9,299

Change of scope of
consolidation

Purchase of treasury
shares-8-8Disposal of treasury
sharesNet 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

Accumulated other comprehensive income

Balance at beginning ofcurrent period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
incomeMinority interests

Total net assets

1,567

-1

1,566

1,643

56,192

Changes of items during
periodIssuance of new sharesDividends of surplus-901

Net income

9,299

Change of scope of
consolidation

Purchase of treasury
shares-8

Disposal of treasury
sharesNet changes of items
other thanshareholders' equity

409

16

426

504

930

Total changes of items
during period

409

16

426

504

9,320

1,977

14

1,992

2,147

65,513

Balance at end of current
period 20 

(4) Consolidated Statements of Cash Flows(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2012
to October 31, 2013)

Current consolidated
fiscal year
(From November 1, 2013
to October 31, 2014)

10,686

15,86915,181217
29

17,950

26

60

178

4

0

9

8

866

684

-64

-124

-3,047187-1-2,633



-12

-183



42

54

26

6



-10



200

-200



8

-67

-99

243

347

824
-160

609
-138

-55





43

-4,107-5,833

-72

-6

3,331

2,029

1,031
114
25,45267-1,087-3,672

1,728
941
31,27599-969-5,622

20,75924,782

Cash 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
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in allowance for investment
loss
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement
benefits
Increase (decrease) in provision for loss on
disaster
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)
Reversal of provision incurred from businesscombination
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
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, 2012
to October 31, 2013)

Current consolidated
fiscal year
(From November 1, 2013
to October 31, 2014)
-1,092-340
340-3,102

100

40

-123
-343
1


-84
-311
0
-27



-66

-76
418
-1

-5
165
17

-1,117-3,374-322

313,200-13,762
7,912-10,841-2,040
-20

-656

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



8

-1

-3

-6,532-22,405134

21

13,244-976

19,717

32,957

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
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
Proceeds from issuance of common shares
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
Decrease in cash and cash equivalents resulting
from exclusion of subsidiaries from consolidation
Cash and cash equivalents at end of period 22 

-4*1

32,957*1

31,980(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: 9 companies
Consolidated subsidiary name
Assist Co., Ltd.
Kanatech Co., Ltd.
Kanki Corporation
Kanamoto Engineering Co., Ltd.
Kyushu Kensan Co., Ltd.
Shanghai Jinheyuan Engineering Construction Co., Ltd.
Daiichi Kikaisangyo Co., Ltd.
Toyo Industry Co., Ltd.
Unite Co., Ltd.
(2) Number of non-consolidated subsidiaries: 4 companies
Non-consolidated subsidiary name
KG Flowtechno Co., Ltd.
KANAMOTO (HK) CO., LTD.
Kanamoto & JP Nelson Equipment (S) PTE. Ltd.
Shanghai KG Machinery 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
Number of affiliates: 1 company
Name of affiliate
Asahi Rentax Co., Ltd.
Given net income or loss (amount corresponding to equity) and retained earnings (amountcorresponding to equity), applying the equity method to the 4 non-consolidated subsidiaries and the 1
affiliate, to which the equity method is not currently applied, would have little impact to the Company’s
consolidated financial statements. Moreover equity-method accounting is not being used due to the lackof overall significance.
3. Matters pertaining to the fiscal year closing date for consolidated subsidiaries
The fiscal year closing date for all of the consolidated subsidiaries except Shanghai Jinheyuan
Engineering Construction Co., Ltd. is October 31. The fiscal year closing date for Shanghai Jinheyuan
Engineering Construction Co., Ltd. is December 31.
When preparing the consolidated financial statements the Company used the financial statements ofShanghai Jinheyuan Engineering Construction Co., Ltd. based on a provisional settlement of accounts
implemented as of September 30, adjusted for significant transactions that occurred between thesubsidiary’s fiscal year-end and the consolidation date that have a material effect on the consolidated
financial results.

 23 

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 has 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 has adopted the cost method, cost being determined by the moving
average method.
b. Construction machine parts
The Company calculates the amount after deduction of depreciation expense according to thestraight-line method from the original prices, by separate fiscal year of purchase.
c. Inventories(i) Merchandise and finished goods
The Company has 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 has adopted the cost method, cost being determined by the specific identification
method(iii) Raw materials and supplies
The Latest 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 has adopted the straight-line method for rental equipment (for certain
consolidated subsidiaries, the declining-balance method) and the declining-balance method forother assets. Buildings on land that is leased under a fixed-term land lease agreement, however,are depreciated using the straight-line method using the remaining period of the fixed-term leaseas the depreciable life and zero residual value. For certain consolidated subsidiaries the Company
has 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 has 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).
c. Leased assets
The Company has adopted straight-line depreciation using the lease term as the depreciable lifeand zero 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 specified credits such as credits in danger of bankruptcy.

 24 

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 provides for losses from the decline in real prices of assets such as the stock ofsubsidiary companies that are subject to asset impairment accounting by applying internallyestablished standards that take into consideration subsidiary company operating results and asset
quality.
(4) Accounting policy for retirement benefits
Consolidated subsidiaries are applying a simplified method to calculate net defined benefit liability
and retirement benefit expenses by assuming the retirement benefit liability to be equal to theretirement benefits payable assuming the voluntary retirement of all employees at fiscal year-end.
(5) 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
Percentage-of-completion method (progress in construction works is estimated using the costcomparison method)b. Other construction works
Completed-contract method(6) Standard for conversion of main foreign currency-denominated assets or liabilities into Japanese yen
The Company converts monetary claims and monetary liabilities denominated in foreign currencies
into Japanese yen at the exchange market spot rate on the consolidated fiscal year settlement date,and charges the translation difference to income as a gain or loss. The assets and liabilities ofcontrolled foreign corporations are converted into Japanese yen at the spot exchange rate on theforeign 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 areaccounted for by including the amounts in the foreign currency translation adjustment and minority
interests in net assets.
(7) Hedge accounting for principal hedging methods
a. Hedge accounting method
The Company’s interest swap transactions fulfill the requirements for special rule accounting,and the Company has elected to use this to account for hedge transactions.
b. Hedge methods and hedged transactions
The Company uses interest swaps to avoid interest rate fluctuation risk related to interest onbank borrowing.
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.
d. Method for evaluating the effectiveness of hedges
The Company’s interest swap transactions fulfill the requirements for special rule accounting,and the Company has elected to use this in place of an evaluation of effectiveness.
(8) 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.
(9) Items included in cash on the consolidated statements of cash flows
Funds included in cash (cash and cash equivalents) on the consolidated statements of cash flows
include cash on hand, deposits that can be withdrawn on demand and highly liquid short-term
investments that mature within three months of the date of acquisition and which can be easily
converted into cash and that have minimal risk of a change in price.

 25 

(10) 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
Due to the March 31, 2014 official announcement of the “Act for Partial Amendment of the Income Tax
Act, etc.” (Act No. 10 of 2014) and the partial revision to the “Act on Special Measures for Securing Financial
Resources Necessary for Reconstruction from the Great East Japan Earthquake” (Law No. 117 of 2011), thespecial corporate tax for reconstruction was terminated for all consolidated fiscal years after April 1, 2014.
Accordingly, an effective corporate tax rate of 35.3%, instead of 37.7%, will be implemented in thecalculation of deferred tax assets and liabilities related to one-off items expected to be written off in the
consolidated fiscal year beginning November 1, 2014.
In light of this revision, net income declined ¥49 million reflecting a ¥49 million decrease in deferred tax
assets (after deducting deferred tax liabilities) and an increase of ¥49 million to income taxes - deferred
posted in the fiscal year under review.
(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, 2013)
Investment securities (shares)

262

Current consolidated fiscal year
(As of October 31, 2014)360*2 Assets provided for security and secured debts
Assets provided for security are as follows.
(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2013)

Current consolidated fiscal year
(As of October 31, 2014)

Cash and deposits

20

Buildings and structures

32



Land

150



Secured debts are as follows.
(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2013)
Short-term loans payable280

 26 

Current consolidated fiscal year
(As of October 31, 2014)

3. Guarantees(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2013)

Current consolidated fiscal year
(As of October 31, 2014)

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

26

30

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

160

160

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

11

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

HK$16,120 thousand(204)

HK$13,930 thousand(196)

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

US$102 thousand(10)

US$53 thousand(5)

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

SG$2,981 thousand(237)

SG$2,434 thousand
(208)

650

601

Total

4 Discount on notes receivable - trade and notes receivable - trade transferred by endorsement(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2013)

Current consolidated fiscal year
(As of October 31, 2014)

Discount on notes receivable - trade

144

83

Notes receivable - trade transferred byendorsement

105*5 Liquidation of receivables based on receivables transfer facility(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2013)
Notes receivable - trade

6,277

Current consolidated fiscal year
(As of October 31, 2014)
3,906

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, 2013)
Notes receivable - trade

1,281

 27 

Current consolidated fiscal year
(As of October 31, 2014)
707

(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, 2012
to October 31, 2013)
Employees' salaries and allowances

Current consolidated fiscal year
(From November 1, 2013
to October 31, 2014)

9,201

9,580

Depreciation

908

932

Rent expenses

2,439

2,604

Provision of allowance for doubtful
accounts

297

23

Provision for bonuses

797

824

Retirement benefit expenses

350

389

Amortization of goodwill

81

26*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, 2012
to October 31, 2013)

Current consolidated fiscal year
(From November 1, 2013
to October 31, 2014)

Buildings and structures02

Machinery, equipment and vehicles

2

5

Land

31

18

Other



11

34

37

Total

*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, 2012
to October 31, 2013)

Current consolidated fiscal year
(From November 1, 2013
to October 31, 2014)(Loss on sales of non-current assets)
Machinery, equipment and vehicles

0



Land



0

Other

0

0

Rental equipment

57

42

Buildings and structures

10

44

Machinery, equipment and vehicles

2

4

Land

1

0

Other (property, plant and equipment)

21

4



118

95

215

(Loss on retirement of non-current
assets)Other (software)Total

 28 

*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, 2012 to October 31, 2013)
Location

Use

Asset

Dormant assets

Rentalequipment

Goodwill

Shanghai, China

Asset groupings used by the Kanamoto Group to apply asset impairment accounting are based on theblock classified 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 dormant assets undershot their bookvalue. In light of this, the book value was lowered to the recoverable amount of the assets and thedecrease in value was posted as an impairment loss (¥75 million) under extraordinary losses. Rental
equipment accounts for the total ¥75 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 ¥142 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.
Current consolidated fiscal year (From November 1, 2013 to October 31, 2014)
The Company had no material items to report.
*5 Reversal of provision incurred from business combination
Prior consolidated fiscal year (From November 1, 2012 to October 31, 2013)
In the provision incurred from business combination, a gain on reversal of ¥55 million was posted. This
reflects the posting of an expected shortfall in contribution as provision incurred from businesscombination due to poor fiscal conditions at the employee pension fund that consolidated subsidiary Unite
Co., Ltd. is enrolled in. Of the amount posted, the Company drew down the difference between the
projected amount at the time of Unite’s withdrawal in the consolidated fiscal year under review and theamount recorded as an allowance for losses on employee pension fund withdrawal.
Current consolidated fiscal year (From November 1, 2013 to October 31, 2014)
The Company had no material items to report.

 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, 2012
to October 31, 2013)

Current consolidated fiscal year
(From November 1, 2013
to October 31, 2014)

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

1,909

633





Before adjustment for tax effects

1,909

633

Tax effects

−672

−223

Valuation difference on
available-for-sale securities

1,236

409

Amount occurring during the current
period74

19

Total other comprehensive income

1,310

429

Reclassification adjustments

Foreign currency translation
adjustment:(Notes to the Consolidated Statements of Changes in Equity)
Prior consolidated fiscal year (From November 1, 2012 to October 31, 2013)
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 at
beginning ofof shares 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(Note 1)32,8723,220



36,092

Total

32,8723,220



36,092

Common shares(Note 2)

39

10



50

Total

39

10



50

Treasury shares(Notes) 1. The 3,220,000 share increase in the number of common shares outstanding consists of
2,800,000 newly issued shares and 420,000 newly issued shares via a third-party allotment.
2. The number of treasury shares of common shares increased by 10,000 shares throughpurchases of shares comprising less than one investment unit.
2. Matters pertaining to subscription rights to shares and treasury subscription rights to shares
The Company had no material items to report.

 30 

3. Dividends(1) Dividends paid
Class of shares

Total dividend(Millions of yen)

Dividend pershare (yen)December 27, 2012
Common shares
Board of Directors

328

10.00

June 7, 2013
Board of Directors

328

10.00

Resolution

Common shares

Date of record

Payment date

October 31, 2012 January 30, 2013
April 30, 2013

July 8, 2013

(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 27, 2013
Board of Directors

Common shares

360

Retainedearnings

Dividend per
Date of record Payment dateshare (yen)10.00

October 31,
2013

January 30,
2014

Current 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 of Decrease in number
Number of shares at
beginning ofshares duringof shares during
end of consolidated
consolidated fiscal
consolidated fiscal
consolidated fiscal
fiscal year
year
year
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.
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.

 31 

(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(Planned)

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.

(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, 2012
to October 31, 2013)
Cash and deposits accountTime deposits with a maturity longer
than 3 months
Securities
Cash and cash equivalents

Current consolidated fiscal year
(From November 1, 2013
to October 31, 2014)

32,62731,650

-20

-20

350

350

32,95731,9802. Details of major non-cash transactions(1) Amount of assets and liabilities related to installment transactions, amount of assets and liabilities
related to lease transactions, and acquisition of investment securities by investments in kind, thatare newly accounted for(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2012
to October 31, 2013)
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, 2013
to October 31, 2014)

22,53225,588872474(2) Amount related to asset retirement obligations that are newly accounted for(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2012
to October 31, 2013)
Amount related to asset
retirement obligations13

 32 

Current consolidated fiscal year
(From November 1, 2013
to October 31, 2014)30

(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. The details are as follows.
a) Amounts corresponding to lease property acquisition price, accumulated depreciation andoutstanding balances at the end of the fiscal year
(Unit: Millions of yen)
Prior consolidated fiscal year (As of October 31, 2013)
Accumulated
depreciation

Acquisition price
Rental equipment
Total

Outstanding balance

5,015

3,800

1,215

5,015

3,800

1,215
(Unit: Millions of yen)

Current consolidated fiscal year (As of October 31, 2014)
Accumulated
depreciation

Acquisition price
Rental equipment
Total

Outstanding balance

1,121

988

132

1,121

988

132

b) Outstanding balance of future lease payments at the end of the consolidated fiscal year
(Unit: Millions of yen)
Prior consolidated fiscal year
(As of October 31, 2013)

Current consolidated fiscal year
(As of October 31, 2014)

Outstanding balance of futurelease payments at the end of theconsolidated fiscal year
Within one year

1,202

149

After one year

160

1

1,363

150

Total

 33 

c) Amount of lease payments, depreciation expense and interest expense(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2012
to October 31, 2013)

Current consolidated fiscal year
(From November 1, 2013
to October 31, 2014)

Lease payments

1,775

865

Depreciation expense

1,170

402

66

19

Interest expensed) Accounting method for amount equivalent to depreciation expense
Straight-line depreciation using the lease term as the depreciable life and zero residual value.
e) Accounting method for amount equivalent to interest expense
Interest method using the difference between total lease payments and the acquisition price ofthe lease property, allocated to each year.
(Impairment losses)
There is no impairment loss allocated to leased assets.
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, 2013)

Current consolidated fiscal year
(As of October 31, 2014)

Within one year

2,288

2,750

After one year

7,248

7,658

9,536

10,408

Total(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.

 34 

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, 2012 to October 31, 2013)(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

102,359

8,472

110,831Net sales or transfers between related
segments

102,359

8,472

110,831

Segment income

Total

10,916

204

11,120

Segment assets

124,460

2,672

127,132

14,936

2

14,939Amortization of goodwill

29



29

Extraordinary losses

217



217

(Impairment loss)

(217)

()

(217)

26,52813

26,541Other items
Depreciation

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.
Current 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

116,572

8,983

125,556

Net sales or transfers between related
segments
Total
Segment income

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.

 35 

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

102,359

116,572

8,472

8,983



-1

110,831

125,555

Intersegment eliminations
Net sales reported in the consolidated financial statements

Current consolidated
fiscal year

(Unit: Millions of yen)
Prior consolidated
fiscal year

IncomeReporting segment total

Current consolidated
fiscal year

10,916

15,910

Income for “Other businesses” classification

204

216

Other adjustments

272

327

11,392

16,454

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

AssetsReporting segment total

Current consolidated
fiscal year

124,460

143,420

Assets of “Other businesses” classification

2,672

3,404

Company assets (Note)

42,11841,666

Total assets reported in the consolidated financial statements

169,250

188,491(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)
Other items

Reporting segment total

Other businesses

Amount of adjustment

Amount reported in the
consolidated financial
statements

Prior
Current
Prior
Prior
Current
Prior
Current
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

14,936

17,713

2

4

242

233

15,181

17,950

Amount of increase ofproperty, plant andequipment andintangible assets

26,52828,937

13

16

252

170

26,794

29,125(Note) The adjustments to the increases in property, plant and equipment and intangible assets are capital
investments related to administrative divisions.

 36 

[Related information]
Prior consolidated fiscal year (From November 1, 2012 to October 31, 2013)
1. Information by product and service
The Company has omitted a description of information by product and service because this same
information 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, 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.
[Information concerning impairment loss on property, plant and equipment by reporting
segment]
Prior consolidated fiscal year (From November 1, 2012 to October 31, 2013)(Unit: Millions of yen)

Impairment loss

Business related
to theConstruction
Equipment
Rental Division

Other businesses

Corporate andeliminations

217





 37 

Total

217

Current consolidated fiscal year (From November 1, 2013 to October 31, 2014)
The Company had no material items to report.
[Information concerning amortization of goodwill and unamortized balances by reporting
segment]
Prior consolidated fiscal year (From November 1, 2012 to October 31, 2013)(Unit: Millions of yen)
Business related
to theConstruction
Equipment
Rental Division

Other businesses

Corporate andeliminations

Amortization in thecurrent period (Goodwill)

81





81

Amortization in thecurrent period (Negative
goodwill)

−51





−51

Balance at the end of theperiod (Note)

19





19

Total

(Note) In the fiscal year under review, the Company posted a loss on goodwill impairment of ¥142
million.
Current 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

(Per Share Information)
Prior consolidated fiscal year
(From November 1, 2012 to October 31, 2013)

Current consolidated fiscal year
(From November 1, 2013 to October 31, 2014)

Net assets per share¥1,513.49 Net assets per share¥1,758.24

Net income per share¥175.50 Net income per share¥258.02

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.
(Note) The basis for calculating net income per share is as follows.

 38 

Same as at left(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2012 to
October 31, 2013)
Net Income amountAmount not attributed to commonshare shareholders
Net income related to commonsharesAverage number of shares outstanding
during the fiscal year

5,809

9,299





5,809

9,299

33,101,017

36,039,719(Material Events after the Close of the Consolidated Fiscal Year)
The Company had no material items to report.

 39 

Current consolidated fiscal year
(From November 1, 2013 to
October 31, 2014)

5. Non-Consolidated Financial Statements(1) Balance Sheets(Unit: Millions of yen)
Prior fiscal year
(As of October 31, 2013)

Current fiscal year
(As of October 31, 2014)

27,8283,238
15,669
350
343
20
3,954
113
241
721
316
212
-191
52,81925,752
6,401
18,329
350
327
50
6,566
130
258
469
240
240
-124
58,99286,534-44,839
41,695
15,144-9,576
5,567
5,178-4,1591,019
4,810-4,273
536
98
-89
9
907
-746
160
28,95831
77,977

101,640-52,249
49,391
15,516-9,921
5,594
5,406-4,272
1,134
4,865-4,289
576
108
-100
8
967
-740
227
30,534254
87,719

19
136
52
208

0
77
52
129

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
Accumulated depreciation
Rental equipment, net
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment
Intangible assets
Goodwill
SoftwareTelephone subscription right
Total intangible assets

 40 

(Unit: Millions of yen)
Prior fiscal year
(As of October 31, 2013)

Current fiscal year
(As of October 31, 2014)

4,868
3,921
12

5,766
4,864
12

2,468

2,401

92

45

21
27
825
52
-1,621-461
10,20788,393
141,213

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

12,892
3,813
10,190
10,242
453
2,599
81
198
529
542
115
41,660

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

21,70324,280120
141
46,24687,906

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

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

 41 

(Unit: Millions of yen)
Prior fiscal year
(As of October 31, 2013)

Current fiscal year
(As of October 31, 2014)

13,652

13,652

14,773143
14,916

14,773143
14,916

1,375

1,375

19

19

15,731
6,119
23,246-48
51,767

19,731
9,399
30,526-56
59,039

1,539

1,928

1,539
53,307141,213

1,928
60,968
158,784

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

 42 

(2) Statements of Income(Unit: Millions of yen)
Prior fiscal year
(From November 1, 2012
to October 31, 2013)

Current fiscal year
(From November 1, 2013
to October 31, 2014)

60,381
20,97881,36069,80824,492
94,30140,19045,849225
16,188247
16,661343
16,31856,50824,852343
17,896355
18,595327
018,26864,11730,183

77
198
167
48
93
6,530
1,476
529
258
374
180
276
138
415
278
438
1,257
672
1,634
880

80
206
171

94
6,888
1,625
544
270
382
167
280
142
405
294
473
1,381
701
1,729
911

15,925

16,7498,926

13,433

36
0
57
240
35
35
88
6


212
714

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

Net sales
Rental sales
Net sales of goods
Total net sales
Cost of sales
Cost of rental sales
Cost of goods soldBeginning goods
Cost of purchased goods
Transfer from other account
Total
Ending goods
Valuation loss on goods
Cost of goods soldTotal cost of sales
Gross profit
Selling, general and administrative expenses
Sales fare
Vehicle expenses
Advertising expenses
Provision of allowance for doubtful accounts
Directors' compensations
Salaries and allowances
Bonuses
Provision for bonuses
Retirement benefit expenses
Traveling and transportation expenses
Insurance expenses
Communication expenses
Repair expenses
Supplies expenses
Utilities expenses
Taxes and dues
Welfare expenses
Depreciation
Rent expenses
Other
Total 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 provision for loss on disaster
Reversal of allowance for investment loss
Reversal of allowance for doubtful accounts
Other
Total non-operating income 43 

(Unit: Millions of yen)
Prior fiscal year
(From November 1, 2012
to October 31, 2013)

Current fiscal year
(From November 1, 2013
to October 31, 2014)

355
38
176
11
197
779
8,861

264
32
5
634
349
1,286
13,550

0
1
7
0
8

4

0
0
4

79

187

187



200



467
8,402
3,743
-256
3,486
4,916

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

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
Gain on sales of investment securities
Subsidy income
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
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income

 44 

[Statements of Cost of Rental Revenues]

Classification

Notes

Prior fiscal year
(From November 1, 2012
to October 31, 2013)

Current fiscal year
(From November 1, 2013
to October 31, 2014)

Amount(Millions of yen)Amount(Millions of yen)

Percent

Percent

Rent expenses

16,96742.2

18,888

41.2

Repair expenses

3,857

9.6

4,432

9.7

Fares

6,536

16.3

7,136

15.6

9,793

24.4

12,009

26.2

1,068

2.6

971

2.1

1,967

4.9

2,411

5.2

40,190100.045,849100.0

Depreciation2

Supplies expenses
Other

3
Total

Note 1

Cost of rental revenues is the direct cost
incurred to receive revenues from therental of construction equipment and othergoods.

Same as at left

Note 2The Company recorded rental equipment
depreciation expense of ¥9,459 million andconstruction machine parts depreciation
expense of ¥333 million.

The Company recorded rental equipment
depreciation expense of ¥11,431 million
and construction machine parts
depreciation expense of ¥577 million.

Note 3

Other costs consisted mainly of taxes anddues of ¥676 million, insurance expensesof ¥657 million and interest of ¥182 million
related to installment payment purchasesof rental equipment.

Other costs consisted mainly of taxes anddues of ¥781 million, insurance expensesof ¥748 million and interest of ¥234 million
related to installment payment purchasesof rental equipment.

 45 

(3) Statements of Changes in Equity
Prior fiscal year (From November 1, 2012 to October 31, 2013)(Unit: Millions of yen)
Shareholders' equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at beginning ofcurrent period

Legalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

Reserve foradvanceddepreciationof
non-current
assets

9,696

10,817143

10,960

1,375

19

3,956

3,956

Retainedearnings
brought
forwardGeneralreserve

13,731

3,859

Total
retainedearnings

18,986

Changes of items
during period
Issuance of newshares3,956

Provision of generalreserve

Dividends of surplus


2,000

-2,000





-656

-656

Net income



4,916

4,916

Purchase of treasury
shares

Disposal of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period

3,956

3,956



3,956





2,000

2,259

4,259

Balance at end ofcurrent period

13,652

14,773143

14,9161,375

19

15,731

6,119

23,246

Shareholders' equity
Treasury shares
Balance at beginning ofcurrent period-27

Valuation and translation adjustments

Total shareholders'equityValuation difference
on available-for-salesecurities

Total valuation andtranslation
adjustments

39,616336

336

Total net assets

39,952

Changes of items
during period
Issuance of newshares

7,912

7,912

Provision of generalreserve

Dividends of surplus

-656

-656

Net income

4,916

4,916

−20

-20





Purchase of treasury
shares-20

Disposal of treasury
sharesNet changes of items
other thanshareholders' equity

1,203

1,203

1,203

Total changes of items
during period-20

12,151

1,203

1,203

13,354

Balance at end ofcurrent period-48

51,767

1,539

1,539

53,307

 46 

Current 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

15,731

6,119

Total
retainedearnings

23,246

Changes of items
during period
Issuance of newshares

Provision of generalreserve

Dividends of surplus


4,000

-4,000





-901

-901

Net income



8,181

8,181

Purchase of treasury
shares

Disposal of treasury
shares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
Issuance of newsharesProvision of generalreserve

Dividends of surplus

-901

-901

Net income

8,181

8,181

−8

-8





Purchase of treasury
shares-8

Disposal of treasury
sharesNet 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

 47 