Fiscal Year ended October 31, 2018

Financial Statements Bulletin (Japan GAAP)
December 7, 2018
Kanamoto Co., Ltd.
9678
Tokyo Stock Exchange, Sapporo Stock Exchange
https://www.kanamoto.co.jp
Tetsuo 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, 2019
Scheduled date for commencement of dividend payments
January 30, 2019
Scheduled date for submission of Annual Securities Report
January 29, 2019
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, 2018
(November 1, 2017 – October 31, 2018)(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, 2018

168,188

6.2

17,5995.6

17,925

4.3

11,857

10.4

Fiscal year ended
October 31, 2017

158,428

9.4

16,665

10.1

17,193

19.4

10,74432.7(Note) Comprehensive income (millions of yen)
Fiscal year ended October 31, 2018
Fiscal year ended October 31, 201712,208
11,966(2.0%)(35.7%)

Earnings per
Share on a Fully
Diluted Basis

Earnings per
Share

Ordinary Profit toTotal Assets

ROE

OperatingMargin

Yen

Yen

%

%

%

Fiscal year ended
October 31, 2018335.54

–

13.0

7.6

10.5

Fiscal year ended
October 31, 2017

304.05

–

13.2

7.7

10.5

(Reference) Investment profit or loss accounted for by the equity method (millions of yen)
Fiscal year ended October 31, 2018

Fiscal year ended October 31, 2017
(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,
2018

241,578

102,03139.6

2,707.49

As of October 31,
2017

227,545

91,78837.92,440.41

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, 2018
As of October 31, 2017

95,68086,241(3) Consolidated Cash Flows

Millions of yen

Millions of yen

Millions of yen

Millions of yen

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

36,733Fiscal year ended
October 31, 201737,788-4,747-30,960

35,160 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, 2017

–

15.00

–

35.00

50.00

1,766

16.4

2.2

Fiscal year ended
October 31, 2018

–

20.00

–

40.00

60.00

2,120

17.9

2.3

Fiscal year ending
October 31, 2019
(projected)

–

25.00

–

40.00

65.00

21.0

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 31, 2019
(November 1, 2018 - October 31, 2019)(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

89,700

5.1

11,1001.0

11,200

0.4

7,000

3.9

180.46

Full year

175,700

4.5

18,4004.5

18,700

4.3

12,0001.2

309.37(Note) The earnings per share for the fiscal year ending October 31, 2019 (projected) and for the interim period (projected) arecalculated considering the increase in the number of shares due to the issuance of new shares and disposition of treasury
shares by way of public offering, of which the payment was completed in November 2018, and due to the third-party
allotment related to the offering of shares of the Company by over allotment, of which the payment is scheduled to becompleted in December 2018.

 2

Notes(1) Changes in material subsidiaries during the period under review (changes in specific subsidiaries in
conjunction with a change in the scope of consolidation): Yes
Company newly includedCompany newly excluded
1 company(Shanghai Jinheyuan Engineering Construction Co., Ltd.)(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, 201836,092,241 shares
As of October 31, 201736,092,241 shares(b) Number of treasury shares of at the end of the period
As of October 31, 2018753,183 shares
As of October 31, 2017753,253 shares(c) Average number of shares outstanding during the period
Fiscal year ended October 31, 201835,339,053 sharesFiscal year ended October 31, 201735,339,024 shares 3(Reference) Summary of Non-Consolidated Operating Results
1. Non-Consolidated Operating Results for the Fiscal Year Ended October 31, 2018
(November 1, 2017 – October 31, 2018)(1) Non-Consolidated Operating Results
Net Sales(Percentages show the change from the prior year)
Operating Profit%

Millions of yen

Profit%Fiscal year ended
October 31, 2018

113,990

6.3

12,233

2.3

12,971

3.6

9,529

11.4

Fiscal year ended
October 31, 2017

107,277

3.4

11,9630.8

12,521

3.2

8,553

25.1

Earnings per Share

Millions of yen

Ordinary Profit

Millions of yen%

Millions of yen%

Earnings per Shareon a Fully Diluted Basis

Yen

Yen

Fiscal year ended
October 31, 2018269.66–

Fiscal year ended
October 31, 2017242.05–(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,
2018

193,638

86,28844.6

2,441.74

As of October 31,
2017

184,340

79,04842.9

2,236.87(Reference) Equity (millions of yen)
As of October 31, 2018
As of October 31, 201786,28879,048

2. Projected Non-Consolidated Operating Results for the Fiscal Year Ending October 31, 2019
(November 1, 2018 - October 31, 2019)(Percentages show the change from prior year)
Net Sales

Ordinary Profit

Millions ofyen%Interim period

60,700

Full year

118,100

ProfitEarnings per Share

Millions ofyen%Millions of
yen

5.8

8,100

3.4

5,500

7.8

141.793.6

13,000

0.2

9,100

-4.5

234.60%Yen(Note) The earnings per share for the fiscal year ending October 31, 2019 (projected) and for the interim period (projected) arecalculated considering the increase in the number of shares due to the issuance of new shares and disposition of treasury
shares by way of public offering, of which the payment was completed in November 2018, and due to the third-party
allotment related to the offering of shares of the Company by over allotment, of which the payment is scheduled to becompleted in December 2018.

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
10, 2018. 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, 2018 ······ 6(2) Overview of Financial Position for the Fiscal Year Ended October 31, 2018 ······················· 7(3) Overview of Cash Flows for the Fiscal Year Ended October 31, 2018································ 7(4) Future Outlook ········································································································· 8
2. Basic Policy Regarding Selection of Accounting Standards .................................................. 9
3. Consolidated Financial Statements and Significant Notes Thereto ....................................... 10(1) Consolidated Balance Sheets····················································································· 10(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income ·················································································································· 12(Consolidated Statements of Income) ········································································ 12(Consolidated Statements of Comprehensive Income) ·················································· 13(3) Consolidated Statements of Changes in Equity ···························································· 14(4) Consolidated Statements of Cash Flows ······································································ 16(5) Notes to the Consolidated Financial Statements··························································· 18(Notes Relating to the Going Concern Assumption) ······················································ 18(Supplemental Information) ······················································································ 18(Segment Information) ···························································································· 19(Per Share Information) ··························································································· 21(Material Events after the Close of the Consolidated Fiscal Year) ···································· 22

 51. Overview of Operating Results and Others(1) Overview of Operating Results and Others for the Fiscal Year Ended October 31, 2018
In the fiscal year under review, Japan’s economy maintained a moderate recovery trend, with continuous
improvements in employment and income environments supported by strong corporate earnings. However,circumstances requiring attention, such as uncertainty with regards to foreign economies and fluctuations
in financial capital markets accompanying international trade policies of the United States, have persisted.
In the construction industry where the Kanamoto Group belongs, public sector investments remainedsolid, and favorable private capital investments were seen in the redevelopment projects in major
metropolitan areas, and the like.
In such circumstances, the Group has focused on expanding domestic bases for operations for achieving
the “BULL55” long-term vision, while putting forth efforts to expand regional strategies in areas where weare yet to open branches, to the Kanto Region and westward, as well as in Kyushu Region and to possess
optimal machines and enrich the machine line-up for rental equipment suitable to both construction
demands and customer needs. The Group also has strived to strengthen its system, with the aims toincrease work efficiency and improve productivity by utilizing IT through the full-scale operation of new
systems.
Furthermore, we transferred all of the equity interests in Shanghai Jinheyuan Engineering Construction
Co., Ltd., which was our consolidated subsidiary.
Consequently, in the fiscal year ended October 31, 2018 net sales rose 6.2% from the prior consolidated
fiscal year level to ¥168,188 million. On the earnings front, operating profit increased 5.6% year on yearto ¥17,599 million, ordinary profit rose 4.3% to ¥17,925 million, and profit attributable to owners of parentrose 10.4% to ¥11,857 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, differences in construction
demand were seen in some regions, but rental demand for construction equipment was solid as awhole, with transportation infrastructure refurbishment related to the Tokyo Olympics and Paralympics
and large-scale redevelopment construction. Further, the Group has worked to develop 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, such as the 2018 Osaka earthquake, 2018 West Japan
floods, and 2018 Hokkaido Eastern Iburi earthquake. As a result, sales by region in this business wereup 8.9% in the Hokkaido Region, down 4.5% in the Tohoku Region, up 10.5% in the Kanto &Koushinetsu Region, up 11.0% in the Nishi-nihon Region, and up 6.7% in the Kyushu & Okinawa
Region.
Used construction equipment sales were steady against the backdrop of an excellent market
environment from the beginning of the period, as prices were pushed higher by growing demand in
China and Southeast Asia.
Reflecting these factors, the Kanamoto Group posted net sales in the construction-related
businesses of ¥150,542 million, an increase of 5.7% year-on-year, and operating profit of ¥16,358
million, an increase of 6.1%.
< Other businesses >In the Company’s other businesses, net sales were up 10.2% from the same period of the previous
consolidated fiscal year to ¥17,646 million because of steady demand in Kanamoto’s steel productsrelated, information and telecommunications-related, and welfare-related businesses. Operating
profit from these operations slipped 1.2% to ¥846 million, however, reflecting a decline in net sales 6

from steel-related works and expenses in conjunction with the Company’s push into the Kanto area
in its welfare-related operations.
(2) Overview of Financial Position for the Fiscal Year Ended October 31, 2018
Total assets at the end of the consolidated fiscal year under review stood at ¥241,578 million, an increaseof ¥14,033 million compared with the end of the prior consolidated fiscal year. This was primarily due to a
¥1,572 million increase in cash and deposits, a ¥2,459 million increase in construction equipment andmaterials, a ¥2,608 million increase in rental equipment, a ¥1,562 million increase in buildings andstructures, and a ¥1,571 million increase in investment securities.
Total liabilities were ¥139,547 million, an increase of ¥3,791 million compared with the end of the priorconsolidated fiscal year. This was primarily due to a ¥1,921 million increase in notes and accounts payable- trade, a ¥1,570 million increase in accounts payable - other and a ¥2,463 million increase in long-term
accounts payable - other, tempered by a ¥1,318 million decrease in income taxes payable.
Total net assets totaled ¥102,031 million, ¥10,242 million higher than at the end of the prior consolidated
fiscal year. This chiefly reflects profit attributable to owners of parent of ¥11,857 million. Meanwhile, theCompany posted ¥1,943 million in dividends of surplus.
(3) Overview of Cash Flows for the Fiscal Year Ended October 31, 2018
(Unit: Millions of yen)
FY Ended October 2017
(Prior consolidated fiscal
year)

FY Ended October 2018
(Consolidated fiscal year
under review)

Change from prior year

Net cash provided by (used in)operating activities

37,78835,421-2,367

Net cash provided by (used in) investing
activities-4,747-6,980-2,233

Net cash provided by (used in) financing
activities-30,960-26,858

4,102

Net increase (decrease) in cash andcash equivalents

2,091

1,572

-518

Cash and cash equivalents at beginningof period

33,06935,1602,091

Cash and cash equivalents at end of
period35,16036,733

1,572

The balance of cash and cash equivalents (“cash”) at the end of the consolidated fiscal year underreview was ¥36,733 million, an increase of ¥1,572 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 ¥35,421 million, a decrease of 6.3% from theprior consolidated fiscal year. This was primarily attributable to the following: profit before income
taxes of ¥17,216 million, depreciation of ¥25,580 million, increase (decrease) in notes and accounts
payable - trade of ¥2,211 million, as well as increase (decrease) in accounts payable - other of ¥2,155
million, purchase of construction equipment and materials of ¥1,211 million, purchase of rental
equipment of ¥4,051 million, decrease (increase) in notes and accounts receivable - trade of ¥1,792
million and income taxes paid of ¥5,822 million.
(Net cash provided by (used in) investing activities)
Cash flow utilized in investing activities was ¥6,980 million, compared with ¥4,747 million in theprior consolidated fiscal year. This mainly reflected the purchase of property, plant and equipment of¥4,413 million and the purchase of shares of subsidiaries of ¥1,692 million.

 7(Net cash provided by (used in) financing activities)
Cash flow used for financing activities was ¥26,858 million, compared with cash flow used infinancing activities in the prior consolidated fiscal year of ¥30,960 million. This mainly reflected¥13,262 million for repayments of long-term loans payable, ¥23,948 million for repayments of
installment payables, ¥1,133 million for repayments of lease obligations, and ¥1,942 million in cash
dividends paid. Meanwhile, the Company posted ¥13,300 million in proceeds from long-term loans
payable.
(Reference) Trends in Cash Flow Indicators
FY Ended October FY Ended October FY Ended October FY Ended October
2015
2016
2017
2018
Equity ratio (%)

34.3

34.7

37.9

39.6

Equity ratio on a market capitalizationbasis (%)

42.7

40.4

57.5

55.1

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

2.7

3.8

2.5

2.7

Interest coverage ratio (times)

40.4

40.8

68.3

83.9

(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 for large projects, such as construction related to the Tokyo Olympics andParalympics, infrastructure refurbishment construction, and redevelopment projects, primarily in urban
areas.
However, there are likely concerns such as unsuccessful bids or delays in the commencement ofconstruction, due to not only the further widening of regional differences accompanying decreases in publicconstruction in some regions of Japan and the concentration of construction projects in urban areas, butalso the normalization of skilled worker shortages.
While continuing to provide support for quick recovery in disaster-stricken areas and enhance andexpand domestic operations bases, the Group focuses on establishing the structure to increase earnings
primarily in the Tokyo Metropolitan Area, the greater Kanto Region, and Kyushu and Okinawa Regions, inconsideration of the medium- to long-term demand prospects.
In addition, as a long-term growth engine, Kanamoto aims to systematically and strategically move
forward with the establishment of an overseas base for operations, mainly in China and Southeast Asia,
where strong underlying demand is a potential.
In addition, Kanamoto will proactively participate in innovation fields, such as METI’s i-Construction
project as well as the utilization of AI to raise productivity on construction sites, while aiming to build amanagement system that will facilitate sustainable growth in the long term by further improving its
earnings management and strengthening its corporate governance system.

 8The Kanamoto Group aims for net sales of ¥175,700 million, a growth of 4.5% year-on-year, operating
profit of ¥18,400 million, an increase of 4.5%, ordinary profit of ¥18,700 million, a rise of 4.3%, and profit
attributable to owners of parent of ¥12,000 million, an improvement of 1.2%.

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

 93. Consolidated Financial Statements and Significant Notes Thereto(1) Consolidated Balance Sheets(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2017)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims- operating
Securities
Merchandise and finished goods
Raw materials and supplies
Construction equipment and materials
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Rental equipment
Accumulated depreciation
Rental equipment, net
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment andvehicles, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

 10



Current consolidated
fiscal year
(As of October 31, 2018)35,22037,05736,79336,736

4,069

5,091

200
583
288
12,193
706
1,237
-784
90,772200
765
651
14,652
664
1,765
-208
97,112

198,879-125,211
73,66832,910-19,801
13,108
7,290-6,154

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

1,136

1,309

35,6232,170-1,421
749
124,286

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

486
1,110
1,596

343
1,236
1,580

8,417
436
2,308
-272
10,889136,772
227,545

9,989
396
3,367
-375
13,377
144,466
241,578

(Unit: Millions of yen)
Prior consolidated
fiscal year
(As of October 31, 2017)
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
Provision for directors’ retirement
benefits
Net defined 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

 11



Current consolidated
fiscal year
(As of October 31, 2018)

28,773994

30,695
1,146

12,02912,825

1,048
3,247
1,099
21,2693,060
71,521

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

23,846
2,017
37,12723,087
1,684
39,591

106

–

259
431
444
64,234
135,756

261
449
204
65,279139,547

13,652
14,91657,172-2,12983,612

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

2,538

2,148

0

0

85

–

5

5

2,629

2,153

5,547
91,788
227,545

6,351
102,031
241,578

(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
Foreign exchange gains
Reversal of allowance for doubtful
accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on donation 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, 2016
to October 31, 2017)
158,428
109,863
48,56531,89916,665 12



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

4
148
49
73
74
253

19
159
74
81
105
–

31

20

300
936

284
746

199
–
209
409
17,193

108
78
232
420
17,925

21
13
9
220
–
265

8
–
12
1
29
51

157

30

140

205

79

322

140

–

–
–
518
16,940
5,594
-204
5,389
11,551157
44760
17,216
4,509
16
4,525
12,691806

834

10,744

11,857

(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, 2016
to October 31, 2017)
11,551 13

Current consolidated
fiscal year
(From November 1, 2017
to October 31, 2018)
12,691

498

-397

0
-79

-0
-85

-4

0

415
11,966-483
12,208

11,147

11,382

818

826

(3) Consolidated Statements of Changes in Equity
Prior consolidated fiscal year (From November 1, 2016 to October 31, 2017)(Unit: Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginningof current period
Changes of items
during period
Dividends ofsurplusRetainedearnings

Capital surplus

13,652

14,91648,017

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

Totalshareholders’equityTreasury shares-2,12974,458-1,590-1,59010,744

10,744

–

-0

-0
–

–

–

9,154

-0

9,154

13,652

14,91657,172-2,12983,612

Accumulated other comprehensive income

Balance at beginningof current period
Changes of items
during period
Dividends ofsurplus

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasure-ments ofdefinedbenefit
plans

Total
accumulated
othercomprehensive income

Noncontrollinginterests

2,051

–

164

8

2,225

4,750

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

Total net
assets81,434–-1,590–10,744

–

–

–

-0

–

–

486

0

-79

-3

404

796

1,200

486

0

-79

-3

404

796

10,354

2,538

0

85

5

2,629

5,547

91,788 14Current 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
Dividends ofsurplusRetainedearnings

Capital surplus

13,652

14,91657,172

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

Totalshareholders’equityTreasury shares-2,12983,612-1,943-1,943

11,857

11,857

-0

-0

–
0

0

0

–

-0

9,913

0

9,913

13,652

14,91667,086-2,12993,526

Accumulated other comprehensive income

Balance at beginningof current period
Changes of items
during period
Dividends ofsurplus

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

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

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 15(4) Consolidated Statements of Cash Flows(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2016
to October 31, 2017)
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 net defined 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

 16



Current consolidated
fiscal year
(From November 1, 2017
to October 31, 2018)16,94024,428157
142

17,21625,580
30
142

119

196

994

1,449

-1,073-1,211-2,731-4,051

–

44

-220

156

140

–

79

322

-113

121

8

36

21

2

-153

-178

349

315

199
-199
–

108
65
-29

-808

-1,792

236

-594

1,915

2,211

1,276

2,155

884
42,593153-841
41,458
177

–

29

-553
-4,404-422-5,82237,78835,421

(Unit: Millions of yen)
Prior consolidated
fiscal year
(From November 1, 2016
to October 31, 2017)
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
Proceeds from sales of shares ofsubsidiaries
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–termloans payable
Proceeds from long–term loans payable
Repayments of long–term loans payable
Redemption of bonds
Repayments of installment payables
Repayments of lease obligations
Cash dividends paid
Dividends paid to non–controllinginterests
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
periodCash and cash equivalents at end of period

 17



Current consolidated
fiscal year
(From November 1, 2017
to October 31, 2018)

-560

-450

640

450

-583

-9

450

50

-2,731-4,413

31

92

-461

-365

–

-9

-917

-1,692

76

–

-100

-99

-742
28
122

-621
135
-46

-4,747-6,980-212

152

10,900-15,667-40-22,582-1,744-1,591

13,300-13,262–-23,948-1,133-1,942

-22

-22

-0

0

-30,960-26,858

10

-9

2,091

1,572

33,06935,16035,16036,733

(5) Notes to the Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Supplemental Information)
Provision for directors’ retirement benefits
Certain consolidated subsidiaries resolved at the Board of Directors meeting held in January 2018 todiscontinue the system for retirement allowances to directors and pay a termination payment, in
conjunction with revisions to the Work Provisions for Directors. In accordance with this change, Kanamotohas reversed the full amount of the retirement allowances to directors for the period until the resolutionof the same Board of Directors meeting, and disclosed the unpaid amount of ¥108 million in conjunction
with the termination payment by including the amount in long–term accounts payable–other reported
under long–term liabilities.

 18



(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 are generally identical to the description in “Important Matters Usedas 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 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, 2016 to October 31, 2017)(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

142,414

16,013

158,428–––

142,414

16,013

158,428

Net sales or transfers between related
segments
Total
Segment income

15,415856

16,272

Segment assets

172,9817,793

180,775

23,285985

24,271

76

66

142

22,838

1,153

23,992Other 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.

 19



Current 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–––

Net sales or transfers between related
segments

150,542

17,646

168,188

Segment income

Total

16,358846

17,205

Segment assets

182,443

7,681

190,125

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.
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

142,414150,542

Net sales for “Other businesses” classification

16,013

17,646––

158,428

168,188

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

15,415

16,358

Income for “Other businesses” classification

856

846

Other adjustments

393

394

16,665

17,599Operating profit reported in the consolidated financial
statements(Unit: Millions of yen)
Prior consolidated
fiscal year

AssetsReporting segment total

Current consolidated
fiscal year

172,981

182,443

Assets of “Other businesses” classification

7,793

7,681

Company assets (Note)

46,76951,453

Total assets reported in the consolidated financial
statements

227,545

241,578 20

(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

23,285

24,150

985

1,122

156

307

24,42825,580

Amount of increase ofproperty, plant andequipment andintangible assets

22,83831,081

1,153

1,034

526

454

24,51832,570(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, 2016 to October 31, 2017)

Current consolidated fiscal year
(From November 1, 2017 to October 31, 2018)

Net assets per share¥2,440.41 Net assets per share¥2,707.49

Earnings per share¥304.05 Earnings per share¥335.54

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, 2016 to
October 31, 2017)
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

 21



Current consolidated fiscal year
(From November 1, 2017 to
October 31, 2018)

10,744

11,857––

10,744

11,85735,339,024

35,339,053

(Material Events after the Close of the Consolidated Fiscal Year)(Material issuance of new shares)
At the Board of Directors meeting held on November 12, 2018, the Company made resolutions
concerning the issuance of new shares by public offering and allocation to a third party, disposal of treasury
shares by public offering, and sale of Company shares. With regards to the issuance of new shares by
public offering and disposal of treasury shares by public offering, its payment has been completed on
November 28, 2018. With regards to the sale of Company shares, the transfer has been completed on
November 29, 2018. The outline thereof is as follows.
1. Issuance of new shares due to public offering (standard offering)(1) Class and number of offered shares

Common shares of the Company: 2,250,000 shares(2) Issue price (offering price)¥3,288 per share(3) Total of issue price¥7,398,000,000(4) Amount to be paid in¥3,152.40 per share(5) Total amount to be paid in¥7,092,900,000(6) Total of increased capital and legal capital

Total of increased capital: ¥3,546,450,000

surplus

Total of increased legal capital surplus: ¥3,546,450,000(7) Application period

From November 21, 2018 to November 22, 2018(8) Payment dateNovember 28, 2018

2. Disposal of treasury shares (standard offering)(1) Class and number of offered shares

Common shares of the Company: 750,000 shares(2) Disposal price (offering price)¥3,288 per share(3) Total of disposal price¥2,466,000,000(4) Amount to be paid in¥3,152.40 per share(5) Total amount to be paid in¥2,364,300,000(6) Application period

From November 21, 2018 to November 22, 2018(7) Payment dateNovember 28, 2018

3. Sale of Company shares (sale by over–allotment)(1) Class and number of shares soldCommon shares of the Company: 450,000 shares(2) Seller

Nomura Securities Co., Ltd.

(3) Sale amount¥3,288 per share(4) Total sale price¥1,479,600,000(5) Application period

From November 21, 2018 to November 22, 2018(6) Delivery dateNovember 29, 2018

4. Issuance of new shares due to allocation to a third party(1) Class and number of offered shares(maximum)Common shares of the Company: 450,000 shares(2) Amount to be paid in¥3,152.40 per share(3) Total amount to be paid in (maximum)¥1,418,580,000(4) Total of increased capital and legal capitalsurplus (maximum)

Total of increased capital: ¥709,290,000
Total of increased legal capital surplus: ¥709,290,000(5) Allottee

Nomura Securities Co., Ltd.

(6) Application period (application date)

December 18, 2018(7) Payment date

December 19, 2018

5. Use of funds
Funds are planned to be appropriated for the payments for the fiscal year ending October 2019,2020, and 2021, as partial repayment of installment debts, etc. pertaining to purchase of rental
 22

equipment by means of installment transactions of the fiscal year ending October 2019. Furthermore,this is a policy for investing with low-risk financial instruments until the specific appropriation period.
(Capital increase of subsidiary)
At the Board of Directors meeting held on December 7, 2018, the Company made a resolution to theeffect that Kanamoto (China) Investment Co., Ltd., a non–consolidated subsidiary, carries out a capitalincrease through a third–party allotment, and the Company subscribes to all of the amount thereof.
1. Objective of capital increase
Purchase of rental equipment
2. Overview of subsidiary increasing capital(1) Trade name

Kanamoto (China) Investment Co., Ltd.

(2) Date of establishment(3) Location

September 2017
Room 2407, 24th Floor, New Town Center Building, 83 Loushanguan(4) Chairman of the Board

Road, Changning District, Shanghai City
Kanchu Kanamoto(5) Capital stock(6) Description of business

US$12,000,000
Rental, sales, and import/export businesses of construction machinery(7) Fiscal year end(8) Ownership by theDecemberCompany

100.0%

3. Description of capital increase(1) Amount of capitalincrease(2) Capital stock after
capital increase(3) Ownership by theCompany after capitalincrease

US$18,000,000
US$30,000,000

100.0%

 23