Fiscal Year ended October 31, 2019

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

December 6, 2019
Kanamoto Co., Ltd.
9678
Tokyo Stock Exchange, Sapporo Stock Exchange
https://www.kanamoto.co.jp
Tetsuo Kanamoto
President and CEO
Hiroyuki Isono
Director and Corporate Officer, Division Manager,
Accounting Division
TEL 81-11-209-1600

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

January 28, 2020
January 29, 2020
January 28, 2020
Yes
Yes

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

1. Consolidated Operating Results for the Fiscal Year ended October 31, 2019
(November 1, 2018 – October 31, 2019)(1) Consolidated Operating Results(Percentages show the change from the prior year)

Net Sales

Operating Profit

Millions of yen%

Millions of yen

Profit Attributable to
Owners of Parent

Ordinary Profit%

Millions of yen%

Millions of yen%

Fiscal year ended
October 31, 2019180,694

7.4

17,842

1.4

18,2772.0

11,430-3.6

Fiscal year ended
October 31, 2018

168,188

6.2

17,5995.6

17,925

4.3

11,857

10.4(Note) Comprehensive income (millions of yen)
Fiscal year ended October 31, 2019
Fiscal year ended October 31, 2018

11,77012,208(-3.6%)(2.0%)

Earnings per
Share on a Fully
Diluted Basis

Earnings per
Share

Ordinary Profit toTotal Assets

ROE

OperatingMargin

Yen

Yen

%

%

%

Fiscal year ended
October 31, 2019295.30

–

10.8

7.2

9.9

Fiscal year ended
October 31, 2018335.54

–

13.0

7.6

10.5

(Reference) Investment profit or loss accounted for by the equity method (millions of yen)−
Fiscal year ended October 31, 2019
Fiscal year ended October 31, 2018−

(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,
2019268,182

121,77943.1

2,981.68

As of October 31,
2018

241,374

102,03139.6

2,707.49

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
Period(Reference) Equity (millions of yen)
As of October 31, 2019
As of October 31, 2018

115,507
95,680(3) Consolidated Cash Flows

Millions of yen

Millions of yen

Millions of yen

Millions of yen

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

43,511

Fiscal year ended
October 31, 201835,421-6,980-26,858

36,733− 1−

2. Dividends
Annual Dividends per Share
End offirstquarter

End ofsecondquarterYen

End ofthird
quarter

Yen

Year-end

Yen

Full-year

Yen

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

Yen Millions of yen%%

Fiscal year ended
October 31, 2018

–

20.00

–

40.00

60.00

2,120

17.9

2.3

Fiscal year ended
October 31, 2019

–

25.00

–

40.00

65.00

2,518

22.0

2.3

Fiscal year ending
October 31, 2020
(projected)

–

25.00

–

40.00

65.00

25.4

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 31, 2020
(November 1, 2019 - October 31, 2020)(Percentages show the change from the prior year)
Net Sales
Millions of yen

Operating Profit% Millions of yen

Profit Attributable to
Owners of Parent

Ordinary Profit% Millions of yen% Millions of yen%

Earnings per
Share
Yen

Interim period

92,300

0.5

9,400

-16.6

9,500

-17.5

5,700

-21.4

147.26

Full year

182,700

1.1

16,100-9.8

16,400

-10.3

9,900

-13.4

255.77− 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, 2019
38,742,241 shares
As of October 31, 201836,092,241 shares(b) Number of treasury shares of at the end of the period
As of October 31, 2019
3,259 shares
As of October 31, 2018753,183 shares(c) Average number of shares outstanding during the period
Fiscal year ended October 31, 2019
38,706,149 sharesFiscal year ended October 31, 201835,339,053 shares− 3−

(Reference) Summary of Non-Consolidated Operating Results
1. Non-Consolidated Operating Results for the Fiscal Year Ended October 31, 2019
(November 1, 2018 – October 31, 2019)(1) Non-Consolidated Operating Results
Net Sales(Percentages show the change from the prior year)
Operating Profit

Millions of yen%

Millions of yen

Ordinary Profit%

Millions of yen

Profit%Millions of yen%

Fiscal year ended
October 31, 2019121,965

7.0

11,531-5.7

12,451

-4.0

8,400

-11.8

Fiscal year ended
October 31, 2018

113,990

6.3

12,233

2.3

12,971

3.6

9,529

11.4

Earnings per Share

Earnings per Shareon a Fully Diluted Basis

Yen

Yen

Fiscal year ended
October 31, 2019

217.03–Fiscal year ended
October 31, 2018269.66–(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,
2019

214,065

102,82348.0

2,654.26

As of October 31,
2018

193,459

86,28844.6

2,441.74(Reference) Equity (millions of yen)
As of October 31, 2019
As of October 31, 2018

102,823
86,288

2. Projected Non-Consolidated Operating Results for the Fiscal Year Ending October 31, 2020
(November 1, 2019 - October 31, 2020)(Percentages show the change from prior year)
Net Sales
Millions ofyenInterim period
Full year

Ordinary Profit%

Millions ofyen

61,400-1.2

122,400

0.4

ProfitEarnings per Share

%Millions of
yen

%

Yen

5,700

-22.9

3,900

-23.5

100.76

9,700

-22.1

6,600

-21.4

170.52

Note: Financial results reports are not required to be audited by certified public accountants or an audit
corporation.
Note: Explanation concerning appropriate use of the projected operating results and other items to note
(Note concerning forward-looking statements)
The forward-looking statements, including business results forecasts, contained in these materials
are based on information currently available to the Company and on certain assumptions deemed to bereasonable. The Company does not guarantee the achievement of the projections. Actual operating
results may differ substantially due to a number of factors. Please refer to “1. Overview of Operating
Results and Others (4) Future Outlook” on Page 8 of the Attachments for the conditions used asassumptions for the projected operating results and matters to note before using the projected
operating results.
(Methods of obtaining the supplementary materials and the content of the earnings briefings)
The Company plans to hold a meeting for institutional investors and analysts on Monday, December
9, 2019. Following the meeting, the Company will upload the meeting highlights and discussion (voicerecording) on the Company’s website as quickly as possible, together with the Earnings Briefings
materials used that day.

− 4−

○Attachments Table of Contents
1. Overview of Operating Results and Others ....................................................................... 6(1) Overview of Operating Results and Others for the Fiscal Year Ended October 31, 2019 ······ 6(2) Overview of Financial Position for the Fiscal Year Ended October 31, 2019 ······················· 6(3) Overview of Cash Flows for the Fiscal Year Ended October 31, 2019································ 7(4) Future Outlook ········································································································· 8
2. Basic Policy Regarding Selection of Accounting Standards ................................................. 10
3. Consolidated Financial Statements and Significant Notes Thereto ....................................... 11(1) Consolidated Balance Sheets····················································································· 11(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income ·················································································································· 13(Consolidated Statements of Income) ···································································· 13(Consolidated Statements of Comprehensive Income) ············································· 14(3) Consolidated Statements of Changes in Equity ···························································· 15(4) Consolidated Statements of Cash Flows ······································································ 19(5) Notes to the Consolidated Financial Statements··························································· 21(Notes Relating to the Going Concern Assumption) ······················································ 21(Note on Significant Changes to Shareholders’ Equity) ················································· 21(Changes to Material Subsidiaries during the Consolidated Fiscal Year under Review) ······· 21(Changes in Presentation) ························································································ 21(Segment Information) ···························································································· 22(Per Share Information) ··························································································· 24(Material Events after the Close of the Consolidated Fiscal Year) ···································· 24− 5−

1. Overview of Operating Results and Others(1) Overview of Operating Results and Others for the Fiscal Year Ended October 31, 2019
In the fiscal year under review, Japan’s economy maintained a moderate recovery trend, with continuous
improvements in employment and income environments despite apparent weaknesses in exports andproduction. However, the outlook for the business conditions remained unclear due to foreign economic
trends including Brexit issue, uncertainty over governmental policies, effects of tensions regarding tradeissues on the global economy, etc.
In the construction industry where the Kanamoto Group belongs, public sector investment was solid,
mainly in construction related to preventing and reducing damage from disasters and maintenance,
updates, etc. in response to the aging of social capital, and favorable private sector construction
investments were seen mainly in redevelopment projects, etc. in major metropolitan areas, while a chronic
shortage of skilled construction workers, persistently high material and equipment costs, and otherconditions that demand close attention persist.
In such circumstances, the Group moved forward aggressively with its regional strategy and capital
investment with the aim of ensuring earning opportunities for the entire Group and achieving the “BULL55”
long-term vision (fiscal 2015 to fiscal 2019). Also, securing and training the human resources who will lead
the Group’s future is a priority issue in order to commit to the long-term growth strategy and, anticipating
the future of the overall industry, the Group carried out personnel system reforms and other measures.
Consequently, in the fiscal year ended October 31, 2019 net sales rose 7.4% from the prior consolidated
fiscal year level to ¥180,694 million. Operating profit increased 1.4% year on year to ¥17,842 million,
ordinary profit rose 2.0% to ¥18,277 million, and profit attributable to owners of parent decreased 3.6%
to ¥11,430 million.
Results for each of the Company’s business segments were as follows.
< Business related to the Construction Equipment Rental Division >In the construction-related business, which is Kanamoto’s core business, rental demand forconstruction equipment was solid as a whole, with transportation infrastructure refurbishment related
to the Tokyo Olympics and Paralympics, large-scale redevelopment construction, construction projects
related to national resilience, etc. Further, the Group has worked to strengthen our response
capabilities by reconfiguring our existing rental equipment and augmenting our assets in order tostrengthen our support system for restoration and recovery from the natural disasters that have been
occurring one after another over recent years. As a result, sales by region in this business were up
8.8% in the Hokkaido Region, down 2.0% in the Tohoku Region, up 12.1% in the Kanto & Koushinetsu
Region, up 8.8% in the Nishi-nihon Region, and up 11.5% in the Kyushu & Okinawa Region.
In addition, used construction equipment sales increased 22.9% year-on-year, as Kanamoto soldits equipment based on its initial plan in order to maintain a proper composition of assets.
Reflecting these factors, the Kanamoto Group posted net sales in the construction-related
businesses of ¥161,831 million, an increase of 7.5% year-on-year, and operating profit of ¥16,505
million, an increase of 0.9%.
< Other businesses >In the Company’s other businesses, net sales were up 6.9% from the same period of the previous
consolidated fiscal year to ¥18,862 million because of steady demand in Kanamoto’s steel productsrelated, information and telecommunications-related, and welfare-related businesses. Operating
profit from these operations was up 7.9% to ¥913 million.
(2) Overview of Financial Position for the Fiscal Year Ended October 31, 2019
Total assets at the end of the consolidated fiscal year under review stood at ¥268,182 million, an increaseof ¥26,808 million compared with the end of the prior consolidated fiscal year. This was primarily due to a¥6,958 million increase in cash and deposits, a ¥2,838 million increase in notes and accounts receivable − 6−trade, a ¥1,255 million increase in electronically recorded monetary claims - operating, a ¥2,914 million
increase in construction equipment and materials in conjunction with operating activities, and a ¥9,578
million increase in rental equipment.
Total liabilities were ¥146,403 million, an increase of ¥7,060 million compared with the end of the priorconsolidated fiscal year. This was primarily due to a ¥2,962 million increase in notes and accounts payable- trade, a ¥2,316 million increase in income taxes payable, and a ¥8,452 million increase in long-term
accounts payable - other, tempered by a ¥1,678 million decrease in current portion of long-term loans
payable and a ¥5,881 million decrease in long-term loans payable.
Total net assets totaled ¥121,779 million, ¥19,748 million higher than at the end of the prior consolidated
fiscal year. This mainly reflected increases of ¥8,353 million from the issuance of new shares by way of apublic offering and third-party allotment and an increase of ¥2,364 million from the disposal of treasury
shares by way of a public offering, profit attributable to owners of parent of ¥11,430 million, and a decreaseof ¥2,382 million for dividends of surplus.
(3) Overview of Cash Flows for the Fiscal Year Ended October 31, 2019
(Unit: Millions of yen)
FY Ended October 2018
(Prior consolidated fiscal
year)

FY Ended October 2019
(Consolidated fiscal year
under review)

Change from prior year

Net cash provided by (used in)operating activities

35,421

39,146

3,725

Net cash provided by (used in) investing
activities-6,980-5,989991

Net cash provided by (used in) financing
activities-26,858-26,740

117

Net increase (decrease) in cash andcash equivalents

1,572

6,388

4,815

Cash and cash equivalents at beginningof period

35,16036,733

1,572

Cash and cash equivalents at end of
period36,73343,511

6,778

The balance of cash and cash equivalents (“cash”) at the end of the consolidated fiscal year underreview was ¥43,511 million, an increase of ¥6,778 million compared with the end of the priorconsolidated fiscal year. Cash flows for the consolidated fiscal year under review are discussed below.
(Net cash provided by (used in) operating activities)
Cash generated from operating activities stood at ¥39,146 million, an increase of 10.5% from theprior consolidated fiscal year. This was primarily attributable to the following: profit before income
taxes of ¥17,723 million, depreciation of ¥27,562 million, increase in notes and accounts payable trade of ¥2,025 million, increase in accounts payable - other of ¥2,516 million, as well as purchase of
construction equipment and materials of ¥1,200 million, purchase of rental equipment of ¥3,847
million, increase in notes and accounts receivable - trade of ¥3,505 million and income taxes paid of¥3,918 million.
(Net cash provided by (used in) investing activities)
Cash flow utilized in investing activities was ¥5,989 million, compared with ¥6,980 million in theprior consolidated fiscal year. This mainly reflected the purchase of property, plant and equipment of¥3,853 million and the purchase of shares of subsidiaries of ¥1,393 million.
(Net cash provided by (used in) financing activities)
Cash flow used for financing activities was ¥26,740 million, compared with cash flow used infinancing activities in the prior consolidated fiscal year of ¥26,858 million. This mainly reflected
proceeds from issuance of common shares of ¥8,353 million, proceeds from sales of treasury sharesof ¥2,364 million, proceeds from long-term loans payable of ¥5,560 million, as well as repayments of− 7−

installment payables of ¥25,358 million, repayments of long-term loans payable of ¥13,133 million,
and cash dividends paid of ¥2,379 million.
(Reference) Trends in Cash Flow Indicators
FY Ended October FY Ended October FY Ended October FY Ended October
2016
2017
2018
2019
Equity ratio (%)

34.8

38.0

39.6

43.1

Equity ratio on a market capitalizationbasis (%)

40.5

57.6

55.2

42.1

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

3.8

2.5

2.7

2.5

Interest coverage ratio (times)

40.8

68.3

83.9

104.6

(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 the
fiscal year by the number of shares outstanding (after deducting treasury shares) at the end of
the fiscal year.
* Cash flows from operating activities in the consolidated statements of cash flows are used for
operating cash flow in the table above. Interest-bearing liabilities include all liabilities posted tothe consolidated balance sheets that incur interest. Interest expenses in the consolidated
statements of cash flows are used for interest payments in the table above.
(4) Future Outlook
In the next fiscal year, the Group expects public-sector and private-sector capital investments to remainstrong, with numerous plans, such as construction related to the Tokyo Olympics and Paralympics,
infrastructure refurbishment construction, redevelopment projects, primarily in urban areas, and otherlarge projects.
The Group has formulated a new medium-term management plan “Creative 60” (fiscal 2020 to fiscal
2024) to create a new Kanamoto Group for a new era.
The Group’s corporate philosophy is to be an excellent, dynamic corporate group that uses its solid
earnings as a base to reward shareholders, customers and employees, the Group vision is to build afoundation for sustainable growth, and the Group value is as a true general rental company, a large-scalerental mall that functions as a centralized site for specialty stores, and a company that accumulates andshares all types of solutions.
Priority policies(i) Expansion of domestic base of operations: Bring together the strengths of the Group◇ Extract further potential from existing areas ◇ Enter new areas and develop areas that have a low
share ◇ Enter non-construction-related fields(ii) Overseas development: Upgrade to Overseas Strategy 2.0 (Next Generation)◇ Optimize global portfolio ◇ Establish Kanamoto version of global platform ◇ Non-organic strategy◇ Move toward 10% overseas sales ratio(iii) Optimization of internal operational processes: Improve earnings in rental business◇ Merge sales strategy (marketing and sales) and IT ◇ Invest in resources for product planning andR&D ◇ Improve productivity ◇ Improve environment to enhance Group logistics ◇ Focus on securing
and training human resources− 8−Medium-term performance plan
Overcome changes in the external environment (rising material and labor costs, intense competition,etc.), changes in the Company environment (increasing rental costs, personnel expenses, etc.) and otherfactors that will impede growth, and create a strong Kanamoto Group for a new era.
Goals for FY2024
 Net sales:¥228.0 billion
 Operating profit:¥23.0 billion
 EBITDA+:¥72.7 billion
 Equity ratio:
48.7%
 ROA:
4.8%
 ROE:
10.0%
For the consolidated results in the fiscal year ending October 31, 2020, which is the first year of the
management reforms aimed at achieving “Creative 60” that tackles the challenges in the medium to longterm, the Kanamoto Group aims for net sales of ¥182.7 billion, a growth of 1.1% year-on-year. On theearnings front, the Group will select and focus on opportunities according to the market environment whileremaining on the current growth path, plans to extend the operation period of rental equipment aimed atstrengthening the Group’s ability to respond to future restructuring in the industry and frequently occurring
serious disasters, and will proactively invest in human resources through personnel system reforms andother measures. Accordingly, the Group aims for operating profit of ¥16.1 billion, a decrease of 9.8% yearon-year, ordinary profit of ¥16.4 billion, a decrease of 10.3%, and profit attributable to owners of parentof ¥9.9 billion, a decrease of 13.4%.

− 9−

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

− 10

−

3. Consolidated Financial Statements and Significant Notes Thereto(1) Consolidated Balance Sheets(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2018)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims- operating
Securities
Merchandise and finished goods
Costs on uncompleted construction
contracts
Raw materials and supplies
Construction equipment and materials
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Rental equipment
Accumulated depreciation
Rental equipment, net
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment andvehicles, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

− 11

−

Current consolidated
fiscal year
(As of October 31, 2019)

36,79336,73643,751
39,574

5,091

6,347

200
765

–
1,017

55

33

651
14,652
1,710-208
96,448800
17,5672,527-225
111,393

203,519-127,242
76,27735,531-20,859
14,671
7,643-6,333

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

1,309

1,451

36,5662,227-1,544682
129,508

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

343
1,236
1,580

201
1,478
1,680

9,989
856
3,367
-375
13,837
144,926
241,374

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

(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2018)
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans
payableLease obligations
Income taxes payable
Provision for bonuses
Accounts payable - other
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Long-term accounts payable - other
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-forsale securities
Deferred gains or losses on hedges
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

− 12

−

Current consolidated
fiscal year
(As of October 31, 2019)30,695
1,146

33,657
1,120

12,825

11,147

945
1,929
1,136
22,8392,749
74,267

885
4,245
1,320
23,3702,772
78,51923,087
1,684
39,591261
449–
65,075
139,342

17,2061,800
48,043285
492
55
67,883
146,403

13,652
14,91667,086-2,12993,526

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

2,148

1,918

0

0

–

-192

5

-2

2,153

1,723

6,351
102,031
241,374

6,272
121,779
268,182

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

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Insurance income
Rent income
Temporary transfer charges income
Reversal of allowance for doubtful
accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Share issuance cost
Loss on cancellation of leases
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Subsidy income
Gain on sales of investment securities
Compensation income for damage
Total extraordinary income
Extraordinary losses
Impairment loss
Loss on sales and retirement of noncurrent assets
Loss on sales of shares of subsidiaries
and associates
Loss on valuation of shares of subsidiaries
and associates
Loss on sales of investment securities
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controllinginterests
Profit attributable to owners of parent

Prior consolidated
fiscal year
(From November 1, 2017
to October 31, 2018)
168,188
117,220
50,96833,36817,599− 13−

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

19
159
74
81
105

28
165
69
80
107

20

14

284
746

349
815

108
78
–
38
194
420
17,925

88
22
46
42
181
380
18,277

8
12
1
29
51

38
19
15
–
74

30

–

205

189

322

–

–

438

157
44
760
17,216
4,509
16
4,525
12,691––627
17,723
6,214
-698
5,515
12,207834

777

11,857

11,430(Consolidated Statements of Comprehensive Income)(Unit: Millions of yen)

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

Prior consolidated
fiscal year
(From November 1, 2017
to October 31, 2018)
12,691− 14−

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

-397

-234

-0
-85

0
-192

0

-10

-483
12,208-437
11,77011,382

10,999826

770

(3) Consolidated Statements of Changes in Equity
Prior consolidated fiscal year (From November 1, 2017 to October 31, 2018)(Unit: Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginningof current period
Changes of items
during period
Issuance of newsharesDividends ofsurplus
Change of scope of
consolidation
Profit attributableto owners of parent
Change inownership interestof parent due totransactions with
non-controllinginterests
Purchase oftreasury shares
Disposal oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of items
during period
Balance at end ofcurrent period

Retainedearnings

Capital surplus

13,652

14,91657,172

Treasury shares-2,129Total
shareholders’equity83,612–-1,943-1,943–

11,857

11,857

-0

-0

–
0

0

0

–

-0

9,913

0

9,913

13,652

14,91667,086-2,12993,526− 15−

Accumulated other comprehensive income

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

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasure-ments ofdefinedbenefit
plans

Total
accumulated
othercomprehensive income

Noncontrollinginterests

2,538

0

85

5

2,629

5,547

Total net
assets91,788–––-1,943–––

11,857

–

-0

–

–

–

0

-389

-0

-85

0

-475

803

328

-389

-0

-85

0

-475

803

10,242

2,148

0

–

5

2,153

6,351

102,031− 16−

Current consolidated fiscal year (From November 1, 2018 to October 31, 2019)(Unit: Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginningof current period
Changes of items
during period
Issuance of newsharesDividends ofsurplus
Change of scope of
consolidation
Profit attributableto owners of parent
Change inownership interestof parent due totransactions with
non-controllinginterests
Purchase oftreasury shares
Disposal oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of items
during period
Balance at end ofcurrent period

Retainedearnings

Capital surplus

13,652

14,916

4,176

4,176

Treasury shares

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

8,353-2,382-2,382504

504

11,43011,430

-13

-13

243

-0

-0

2,120

2,364

4,176

4,407

9,552

2,120

20,257

17,82919,324

76,638-9113,783− 17−

Accumulated other comprehensive income

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

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasure-ments ofdefinedbenefit
plans

Total
accumulated
othercomprehensive income

Noncontrollinginterests

2,148

0

–

5

2,153

6,351

Total net
assets102,031

–

8,353

–

-2,382–504–

11,430

–

-13

–

-0

–

2,364

-229

0

-192

-8

-430

-78

-509

-229

0

-192

-8

-430

-78

19,748

1,918

0

-192

-2

1,723

6,272

121,779− 18−

(4) Consolidated Statements of Cash Flows(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2017
to October 31, 2018)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Loss (gain) on sales and retirement of
non-current assets
Cost transfer resulting from sale of rental
equipment
Purchase of construction equipment andmaterials
Purchase of rental equipment
Loss (gain) on valuation of investment
securities
Loss (gain) on sales of investment
securities
Loss on valuation of shares of subsidiaries
and associates
Loss (gain) on sales of shares ofsubsidiaries and associates
Increase (decrease) in allowance for
doubtful accounts
Increase (decrease) in provision forbonuses
Increase (decrease) in retirement benefit
liability
Interest and dividend income
Assets buy on the installment planpurchase payment interest for rentals
Interest expenses
Foreign exchange losses (gains)
Compensation income for damage
Decrease (increase) in notes andaccounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes andaccounts payable - trade
Increase (decrease) in accounts payable other
Other, net
SubtotalInterest and dividend income received
Compensation for damage income
received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating
activities

− 19

−

Current consolidated
fiscal year
(From November 1, 2018
to October 31, 2019)17,21625,58030
14217,72327,562
–
142

196

151

1,449

828

-1,211-1,200-4,051-3,847

44

–

156

-15

–

438

322

–

121

-10

36

172

2

9

-178

-194

315

293

108
65
-29

88
-11
–

-1,792-3,505

-594

-13

2,211

2,025

2,155

2,516

-841
41,458177

92
43,245
193

29

–

-422
-5,822-374-3,91835,421

39,146

(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2017
to October 31, 2018)
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time
deposits
Purchase of investment securities
Proceeds from sales of investment
securities
Purchase of property, plant andequipment
Proceeds from sales of property, plantand equipment
Purchase of intangible assets
Payments for sales of shares ofsubsidiaries resulting in change in scopeof consolidation
Purchase of shares of subsidiaries
Purchase of shares of subsidiaries andassociates
Payments of loans receivableCollection of loans receivableCollection of long-term accounts
receivable - other
Other, net
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Net increase (decrease) in short-termloans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of installment payables
Repayments of lease obligations
Proceeds from issuance of commonsharesProceeds from sales of treasury shares
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controllinginterests
Payments from changes in ownershipinterests in subsidiaries that do not resultin change in scope of consolidation
Other, net
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
periodIncrease in cash and cash equivalents fromnewly consolidated subsidiary
Cash and cash equivalents at end of period− 20−

Current consolidated
fiscal year
(From November 1, 2018
to October 31, 2019)

-450

-450

450

470

-9

-9

50

51

-4,413-3,853

92

42

-365

-490

-9

–

-1,692-1,393

-99

–

-621
135

-588
112

–

125

-46

-5

-6,980-5,989152-256

13,300-13,262-23,948-1,133

5,560-13,133-25,358-1,027

–

8,353

–
–
-1,9422,364-0-2,379

-22

-22

–

-840

0

-0

-26,858-26,740

-9

-28

1,572

6,388

35,16036,733–390

36,73343,511

(5) Notes to the Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Note on Significant Changes to Shareholders’ Equity)
At its Board of Directors meeting held on November 12, 2018, the Company resolved to issue new sharesby way of public offering and third-party allotment, dispose of treasury shares by way of public offering, andconduct a secondary offering of the Company’s shares. Accordingly, the Company issued 2,250,000 newshares by way of public offering with a payment date of November 28, 2018, which increased the capitalstock and capital surplus of the Company by ¥3,546 million each, and disposed of 750,000 shares of treasury
shares by way of public offering, which decreased treasury shares by ¥2,120 million and increased capitalsurplus by ¥243 million. The delivery of 450,000 secondary offering shares of the Company was completed
on November 29, 2018 and the capital stock and capital surplus of the Company each increased by ¥630
million through the issuance of 400,000 new shares by way of third-party allotment for which the payment
date was December 19, 2018.
As a result, as of October 31, 2019 the Company’s capital stock was ¥17,829 million, its capital surplus
was ¥19,324 million and treasury shares were –¥9 million.
(Changes to Material Subsidiaries during the Consolidated Fiscal Year under Review)
The Company had no material items to report.
Although not a change corresponding to changes in specific subsidiaries, beginning from the current
consolidated fiscal year the Company is including KG Flowtechno Co., Ltd. and KANAMOTO (CHINA)INVESTMENT CO., LTD., which were non-consolidated subsidiaries in the prior consolidated fiscal year, within
the scope of consolidation because their material importance increased.
(Changes in Presentation)(Changes Accompanying the Application of the Partial Amendments to Accounting Standard for Tax EffectAccounting)
Beginning from the current consolidated fiscal year, the Company is applying the Partial Amendments to
Accounting Standard for Tax Effect Accounting (Accounting Standards Board of Japan Accounting Standard
Statement No. 28 dated February 16, 2018) and has included deferred tax assets in the category“investments and other assets.”
As a result, in the consolidated balance sheets for the prior consolidated fiscal year, deferred tax assets
in the category “current assets” decreased by ¥664 million, and deferred tax assets in the category“investments and other assets” increased by ¥459 million.
Deferred tax assets and deferred tax liabilities of the same taxable entity are offset in presentation, andtotal assets decreased by ¥204 million compared with the amount before the change.

− 21

−

(Segment Information)
1. Summary of reporting segments
The Company’s reporting segments are those units of the Company’s for which discrete financial
information is available and for which the Board of Directors regularly conducts a review for the
purpose of making decisions about resources to be allocated to the segments and assess the segments’performance.
The Company conducts business operations by product and service. The “business related to theConstruction Equipment Rental Division” is the reporting segment.
The Company’s “business related to the Construction Equipment Rental Division” rents and sells
construction equipment and temporary materials for construction use.
2. Method of calculating the amount of net sales, income or loss, assets, liabilities and other items ofeach reporting segment
Except for the Standard for Measurement of Inventories, the accounting standards and methods forthe reported business segment comply with accounting standards that have been adopted in preparing
the consolidated financial statements.
The Company values inventory assets using prices before write-downs of book value based on
decline in profitability.
Reporting segment earnings are the values on an operating profit basis.
3. Information concerning the amount of net sales, income or loss, assets, liabilities and other items ofeach reporting segment
Prior consolidated fiscal year (From November 1, 2017 to October 31, 2018)(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

150,542

17,646

168,188–––

150,542

17,646

168,188

Net sales or transfers between related
segments
Total
Segment income

16,358846

17,205

Segment assets

182,418

7,680

190,099

24,1501,122

25,273

76

66

142

31,081

1,034

32,116

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

− 22

−

Current consolidated fiscal year (From November 1, 2018 to October 31, 2019)(Unit: Millions of yen)
Reporting segment
Business related to
the Construction
Equipment Rental
Division

Other businesses(Note)Total

Net sales
Net sales to outside customers

161,831

18,862

180,694–––

Net sales or transfers between related
segments

161,831

18,862

180,694

Segment income

Total

16,505913

17,419Segment assets

203,504

7,731

211,235

25,993

1,165

27,158

76

66

142

35,5591,186

36,745

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

Net sales

Current consolidated
fiscal year

Reporting segment total

150,542

161,831

Net sales for “Other businesses” classification

17,646

18,862––

168,188

180,694

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

IncomeReporting segment total

Current consolidated
fiscal year

16,35816,505

Income for “Other businesses” classification

846

913

Other adjustments

394

423

17,59917,842

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

AssetsReporting segment total

Current consolidated
fiscal year

182,418

203,504

Assets of “Other businesses” classification

7,680

7,731

Company assets (Note)

51,27556,947

Total assets reported in the consolidated financial
statements

241,374

268,182− 23−

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

Other businesses

Amount reported in the
consolidated financial
statements

Amount of adjustment

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

Depreciation

24,15025,993

1,122

1,165

307

404

25,58027,562

Amount of increase ofproperty, plant andequipment andintangible assets

31,08135,559

1,034

1,186

454

580

32,57037,325(Note) The adjustments to the increases in property, plant and equipment and intangible assets are capital
investments related to administrative divisions.
(Per Share Information)
Prior consolidated fiscal year
(From November 1, 2017 to October 31, 2018)

Current consolidated fiscal year
(From November 1, 2018 to October 31, 2019)

Net assets per share¥2,707.49 Net assets per share¥2,981.68

Earnings per share¥335.54 Earnings per share¥295.30

Earnings per share on a fully diluted
basis

–

Earnings per share on a fully diluted
basis

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

–

Same as at left

(Note) The basis for calculating earnings per share is as follows.
(Unit: Millions of yen)
Prior consolidated fiscal year
(From November 1, 2017 to
October 31, 2018)
Profit attributable to owners of parent
Amount not attributed to commonshare shareholders
Profit attributable to owners of parent
related to common shares
Average number of shares
outstanding during the fiscal year

11,857

11,430––11,857

11,43035,339,053

38,706,149(Material Events after the Close of the Consolidated Fiscal Year)
The Company had no material items to report.

− 24

−

Current consolidated fiscal
year(From November 1, 2018 to
October 31, 2019)