Consolidated Financial Results
for the Fiscal Year Ended November 30, 2020
[Japanese GAAP]
January 14, 2021
Company name: MORITO CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 9837
URL: http://www.morito.co.jp/hd_en/
Representative: Takaki Ichitsubo, Representative Director and President
Contact: Kiyomi Akui, Board Member, Senior Executive Officer and Managing Director of Administration Div.
Phone: +81-6-6252-3551
Scheduled date of Annual General Meeting of Shareholders: February 24, 2021
Scheduled date of filing annual securities report: February 25, 2021
Scheduled date of commencing dividend payments: February 25, 2021
Availability of supplementary briefing material on annual financial results: Available
Schedule of annual financial results briefing session: Scheduled (for securities analysts and institutional investors)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Fiscal Year Ended November 30, 2020 (December 1, 2019 toNovember 30, 2020)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Fiscal year ended
Million yen%
Million yen%
Million yen%
Million yen%
November 30, 2020
40,727(11.4)
856(50.6)
928(47.8)
470(66.5)
November 30, 2019
45,987
4.7
1,734
0.5
1,779
(0.6)
1,402
11.6
(Note) Comprehensive income: Fiscal year ended November 30, 2020: ¥129 million [(78.0) %]Fiscal year ended November 30, 2019: ¥589 million [(44.6) %]Basic earnings
per share

Diluted earnings
per share

Fiscal year ended
Yen
Yen
November 30, 2020
17.17
November 30, 2019
51.17
(Reference) Equity in earnings (losses) of associates:(2) Consolidated Financial Position
Total assets
Million yen

Return on equity

Ordinary profit
to total assets

Operating profit
to net sales

%

%

%

1.5
2.0
2.1
4.3
3.7
3.8
Fiscal year ended November 30, 2020: ¥37 million
Fiscal year ended November 30, 2019: ¥69 million

Net assets

Equity ratio

Net assets per share

Million yen%

Yen

32,015
As of November 30, 2020
43,69932,725
As of November 30, 201947,185(Reference) Equity: As of November 30, 2020: ¥31,958 million
As of November 30, 2019: ¥32,667 million

73.1
69.2

1,167.21
1,193.13(3) Consolidated Cash Flows
Cash flows fromoperating activities

Fiscal year ended
November 30, 2020
November 30, 2019

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end of
periodMillion yen

Million yen

Million yen

Million yen

2,462
3,614

(16)
110

(1,878)(2,694)

10,0529,442

2. Dividends
Annual dividends
1st
2nd
3rd
quarter-end quarter-end quarter-end
Fiscal year ended
November 30, 2019
November 30, 2020
Fiscal year ending
November 30, 2021
(Forecast)Year-end

Total

Yen

Yen

Yen

Yen

-

13.00
13.25

-

13.00
4.75

26.00
18.00

-

9.00

-

9.00

18.00

Total
dividends

Payoutratio(consolidated)

Yen Million yen

725
502

Dividends
to netassets(consolidated)

%

%

50.8
104.8

2.2
1.5

70.4

3. Consolidated Financial Results Forecast for the Fiscal Year Ending November 30, 2021 (December 1, 2020 toNovember 30, 2021)(% indicates changes from the previous corresponding period.)
Operating profit

Net sales

Full year

Million yen%

Million yen

43,0005.6

1,300% Million yen

51.8

Profit attributable Basic earnings per
to owners of parent
share

Ordinary profit

1,300% Million yen

40.1

700

%

Yen

48.9

25.57

* Notes:(1) Changes in significant subsidiaries during the fiscal year under review (changes in specified subsidiaries resulting
in changes in scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: Yes
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No
Note: For details, please refer to “4. Consolidated Financial Statements and Primary Notes (5) Notes to theConsolidated Financial Statements (Changes in Accounting Policies)” on page 19.
(3) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
November 30, 2020: 30,800,000 shares
November 30, 2019: 30,800,000 shares2) Total number of treasury shares at the end of the period:
November 30, 2020: 3,420,060 shares
November 30, 2019: 3,420,060 shares
3) Average number of shares during the period:
Fiscal year ended November 30, 2020: 27,379,940sharesFiscal year ended November 30, 2019: 27,415,898 shares* These consolidated financial results are outside the scope of audit by certified public accountants or audit firms.
* Explanation of the proper use of financial results forecast and other notes
The earnings forecasts and other forward-looking statements herein are based on information currently available
and certain assumptions judged to be reasonable. Actual results may differ significantly from these forecasts due toa wide range of factors.
As for suppositions that form the assumptions for the forecast of financial results and cautionary notes concerning
the use thereof, please refer to “1. Overview of Business Results, etc. (4) Future Outlook” on page 4.
The Company and some of the Morito Group companies have introduced the “Japanese version of the employee
stock ownership plan (J-ESOP)” and the “officer remuneration board incentive plan (BIP) trust.” Consequently,
the shares of the Company held by Custody Bank of Japan, Ltd. (trust account E) and The Master Trust Bank ofJapan, Ltd. (officer remuneration BIP trust account), respectively, are included in treasury shares.
Custody Bank of Japan, Ltd. was formed on July 27, 2020 via the merger of JTC Holdings, Ltd., Trust & Custody
Services Bank, Ltd., and Japan Trustee Services Bank, Ltd.

Table of Contents
1. Overview of Business Results, etc. .................................................................................................................. 2(1) Overview of Business Results for the Period under Review ........................................................................ 2(2) Overview of Financial Position for the Period under Review ...................................................................... 3(3) Overview of Cash Flows for the Period under Review ................................................................................ 3(4) Future Outlook ............................................................................................................................................. 4(5) Basic Dividend Policy and Payments for the Period under Review and the Next Period ............................ 5
2. Overview of the Corporate Group .................................................................................................................... 6
3. Basic Stance Regarding Choice of Accounting Standards ............................................................................... 9
4. Consolidated Financial Statements and Primary Notes .................................................................................. 10(1) Consolidated Balance Sheets ..................................................................................................................... 10(2) Consolidated Statements of Income and Comprehensive Income ............................................................. 12(3) Consolidated Statements of Changes in Equity ......................................................................................... 15(4) Consolidated Statements of Cash Flows .................................................................................................... 17(5) Notes to the Consolidated Financial Statements ........................................................................................ 19(Notes on Going Concern Assumption) ..................................................................................................... 19(Changes in Accounting Policies) .............................................................................................................. 19(Additional Information) ............................................................................................................................ 19(Segment Information, etc.) ....................................................................................................................... 20(Per Share Information).............................................................................................................................. 22
5. Other Information ........................................................................................................................................... 24(1) Changes in Officers .................................................................................................................................... 24

1

1. Overview of Business Results, etc.
(1) Overview of Business Results for the Period under Review
In the fiscal year under review (from December 1, 2019 to November 30, 2020), the COVID-19 global
pandemic led to the implementation of lockdowns and state of emergency declarations in many countries,
which caused the global economy to stagnate at an unprecedented scale. Although economic activities haveresumed, along with the arrival of winter, concerns over the downside risk of the global economy haveheightened due to new waves of infection.
Amid such circumstances, the Morito Group (the “Group”), which engages in the handling of apparelmaterials and consumer products, faced extremely harsh business conditions, due to the impact of voluntarybusiness suspensions of department stores and mass retailers worldwide, as well as the impact of temporary
operational suspensions of automobile-related factories in Japan and overseas. In spite of these punitive
conditions, the Group focused on the development and sales of value-added products that take safety, security,
health and environmental-friendliness into consideration. As business suspensions occurred one after anotherdue to the lockdowns implemented in each country, we did our utmost to continue our business, in order tocontribute to society through the provision of our core products, such as by continuing the production of hooks
used in medical equipment in the U.S.
As a result, for the fiscal year under review, net sales decreased by 11.4% year on year to ¥40,727 million.
Operating profit decreased by 50.6% to ¥856 million, ordinary profit decreased by 47.8% to ¥928 million, andprofit attributable to owners of parent decreased by 66.5% to ¥470 million.
Exchange rates used for the conversion of revenue and expenses of the Group’s overseas subsidiaries during
the preparation of consolidated financial statements for the fiscal year under review are as follows.
1Q

2Q

3Q

4Q

USD

108.76(112.91)108.87(110.23)

107.63(109.90)106.22(107.37)

EUR

120.32(128.82)

120.09(125.16)118.58(123.50)

124.08(119.41)

CNY

15.44

(16.32)

15.59(16.33)15.17(16.07)15.35(15.30)

HKD

13.90

(14.42)14.01(14.05)13.89(14.02)

13.71(13.71)TWD

3.57(3.66)

3.62(3.58)

3.60(3.53)

3.62(3.45)

VND

0.0047(0.0048)0.0047(0.0047)0.0046(0.0047)0.0046(0.0046)

THB

3.59

(3.44)

3.48(3.49)

3.37(3.48)

3.39(3.50)

MXN

5.65(5.70)

5.49(5.74)

4.63(5.75)

4.81(5.53)(Note)The exchange rate of the same period in the previous fiscal year is stated in parentheses.

Business results by segment are as follows.
[Japan]In the apparel division, sales related to new demand for masks and other products increased, but sales ofaccessories for casual wear, working wear and thick-fabric menswear decreased.
In the consumer product division, sales of sports-related products for activities such as skateboarding andsurfing that can be enjoyed at a safe social distance, as well as sales of products for dollar stores increased, but
sales of products related to automobile interior components decreased.
As a result, net sales decreased by 13.4% year on year to ¥28,810 million.
2

[Asia]In the apparel division, sales of accessories to apparel manufacturers decreased.
In the consumer product division, sales of automobile interior components to Japanese automobile
manufacturers increased in China.
As a result, net sales increased by 3.8% year on year to ¥7,225 million.
[Europe and the U.S.]
In the apparel division, sales of accessories to the medical industry increased, but sales of accessories toapparel manufacturers decreased.
In the consumer product division, sales of automobile interior components to Japanese automobile
manufacturers in Europe and the U.S. decreased.
As a result, net sales decreased by 18.6% year on year to ¥4,691 million.

(2) Overview of Financial Position for the Period under Review
Total assets for the fiscal year under review decreased by ¥3,486 million from the previous fiscal year-end
to ¥43,699 million.
Current assets decreased by ¥2,161 million from the previous fiscal year-end to ¥25,496 million. This was
mainly attributable to decreases in notes and accounts receivable - trade and merchandise and finished goods by¥1,816 million and ¥390 million, respectively.
Non-current assets decreased by ¥1,320 million from the previous fiscal year-end to ¥18,201 million. Thiswas mainly attributable to decreases in investment securities and goodwill by ¥455 million and ¥277 million,
respectively.
Current liabilities decreased by ¥1,964 million from the previous fiscal year-end to ¥6,927 million. This was
mainly attributable to decreases in notes and accounts payable - trade, income taxes payable, and accounts
payable - other under other, by ¥603 million, ¥343 million and ¥660 million, respectively.
Non-current liabilities decreased by ¥811 million from the previous fiscal year-end to ¥4,756 million. Thiswas mainly attributable to decreases in long-term borrowings and deferred tax liabilities by ¥576 million and¥209 million, respectively.
Net assets decreased by ¥710 million from the previous fiscal year-end to ¥32,015 million.
The shareholders’ equity ratio increased from 69.2% to 73.1%, rising by 3.9 points from the previous fiscal
year.

(3) Overview of Cash Flows for the Period under Review
The status of cash flows for the fiscal year under review is as follows.
(Cash flows from operating activities)
Cash flows provided by operating activities amounted to ¥2,462 million, compared to cash flows of ¥3,614
million provided in the previous fiscal year. This was mainly attributable to an increase in funds due to adecrease in trade receivables and the recording of depreciation and profit before income taxes, offsetting adecrease in funds due to payment of corporate taxes, etc.
(Cash flows from investing activities)
Cash flows used in investing activities amounted to ¥16 million, compared to cash flows of ¥110 million
provided in the previous fiscal year. This was mainly attributable to a decrease in funds due to purchase ofproperty, plant and equipment, offsetting an increase in funds due to withdrawal of time deposits.
3(Cash flows from financing activities)
Cash flows used in financing activities amounted to ¥1,878 million, compared to cash flows of ¥2,694
million used in the previous fiscal year. This was mainly attributable to a decrease in funds due to the payment
of dividends, repayments of long-term borrowings and redemption of bonds.
As a result of the above, cash and cash equivalents at the end of the fiscal year under review increased by¥609 million from the previous fiscal year-end to ¥10,052 million.
Trends of cash flow indicators are as follows.

Equity ratio (%)

Fiscal year ended
November 30, 2018
68.5

Fiscal year ended
November 30, 2019

Fiscal year ended
November 30, 2020

69.2

73.1

Equity ratio based on fair value (%)
46.5
46.4
38.3
Cash flow to interest-bearing debt
896.1
106.0
116.9
ratio (%)
Interest coverage ratio (times)
109.8
473.8
175.4
(Notes)Equity ratio:
Shareholders’ equity / Total assets
Equity ratio based on fair value:
Total market value of shares / Total assets
Cash flow to interest-bearing debt ratio: Interest-bearing debts / Operating cash flow
Interest coverage ratio:
Operating cash flow / Interest paid
* The indicators were calculated using financial figures on a consolidated basis.
* The total market value of shares was calculated by multiplying the closing share price by the total numberof shares outstanding (less the treasury shares) on the date of the fiscal year-end.
* Operating cash flow is the amount of net cash provided by (used in) operating activities recorded in theConsolidated Statements of Cash Flows.
* Among the liabilities recorded on the Consolidated Balance Sheets, interest-bearing debts apply to bonds
payable and borrowings.
* Interest paid is the amount of interest paid recorded on the Consolidated Statements of Cash Flows.

(4) Future Outlook
The fiscal year under review was the first fiscal year of the 8th mid-term management plan (spanning five
years from fiscal 2020 to fiscal 2024), where the Group operated under the corporate vision of “Creating
existence value: Realization of a new Morito Group.” Amid the ongoing COVID-19 global pandemic, allemployees made concerted efforts to create value and exert originality and ingenuity, as well as explored meansof how to best implement the management plan under the COVID-19 crisis. However, due to new waves ofinfection, we have deemed that it is difficult to execute the mid-term management plan, formulated before thepandemic, according to schedule, and have decided to review the implementation period of quantitative targets
in the mid-term management plan.
The two-year period from fiscal 2020 to fiscal 2021 will be set as the period to construct a business structure
for the era of the COVID-19 crisis. The period covered by the 8th mid-term management plan will be the five
years from fiscal 2022 to fiscal 2026. Aiming for consolidated net sales of ¥50.0 billion and consolidated
operating profit of ¥2.5 billion in the fiscal year ending November 30, 2026, we will implement various
initiatives to adapt to rapidly changing markets and lifestyles. Qualitative targets in the management planremain unchanged from the details announced on January 14, 2020, and we are promoting measures to achievethem.
Regarding the full-year forecast of the Group for the fiscal year ending November 30, 2021, although theoutlook for the global economy remains uncertain, due to factors including the continued spread of COVID-19
and U.S.-China trade friction, the Group will focus on sales of value-added products that will be needed in any
4circumstances. The consolidated financial results for fiscal 2021 are forecasted to exceed those of fiscal 2020,
with net sales of ¥43.0 billion, operating profit of ¥1.3 billion, ordinary profit of ¥1.3 billion, and profit
attributable to owners of parent of ¥0.7 billion.
*Notes on the future outlook
The aforementioned outlook is based on information available at the date of release of these materials.
Actual results and other details may differ from the outlook due to various factors in the future such as the
spread of COVID-19. We will promptly disclose any changes in forecast figures.

(5) Basic Dividend Policy and Payments for the Period under Review and the Next Period
The Company’s basic dividend policy is to secure a sound management foundation, strengthen its financial
structure, and improve profitability while recognizing the return of profits to shareholders as an importantmanagement issue. Internal reserves will be utilized in areas such as investments aimed at long-term growth,
expansions of existing core business, and preparations for new businesses, M&As, and such, in order toincrease our corporate value in the future.
Dividends are determined after considering factors such as the financial position and net assets.
- Realize continuous dividend payments- Maintain a dividend on equity (DOE) of 1.5%
- Depending on business results, dividend payout ratio of 50% or more in relation to profit attributable toowners of parent is the standard(However, in a fiscal year with a significant fluctuation in after-tax profit attributable to owners of parent
due to special factors such as extraordinary income or losses, the dividend amount will be determined inconsideration of the corresponding impact.)
From the perspective of striving to further enhance shareholder returns, after considering factors such as theCompany’s earnings and expenditure balance as well as the share price level, the Company will continuously
review the need to flexibly conduct a purchase or retirement of its treasury shares.
For the fiscal year under review, we plan to propose a year-end dividend of ¥4.75 per share in the Annual
General Meeting of Shareholders that will be held on February 24, 2021. Accordingly, including the interim
dividend of ¥13.25 per share, the annual dividend for the fiscal year under review will amount to ¥18.00 per
share.
Regarding dividends for the next fiscal year, based on the above-mentioned basic dividend policy, we plan
to pay out an interim dividend of ¥9.00, a year-end dividend of ¥9.00, which will combine to form an annual
dividend of ¥18.00.

5

2. Overview of the Corporate GroupThe Group consists of the parent company (the Company), 21 subsidiaries, and 1 associate. The main businessof the Group is the sales and manufacturing of materials for lifestyle goods, centering around daily necessities.
Business activities of the Group include: sales and manufacturing of materials for lifestyle goods such as apparel,transportation equipment, video equipment, stationery, and OA equipment; sales of lifestyle goods via sales
channels that are mass retailers or retail stores of hardware stores and department stores, as a distribution retailrelated business; and the rental, sales and cleaning of kitchen appliances.
◎ Consolidated subsidiaries: 20 companies○ Non-consolidated subsidiaries: 1 company□ Associates accounted for using equity method: 1 company(Japan)◎ MORITO JAPAN CO., LTD.: Sales of materials for apparel and consumer products◎ ACE INDUSTRIAL MACHINERY CO., LTD.: Rental, sales, and cleaning of kitchen appliances◎ MATEX INC.: Manufacturing of apparel secondary materials, design, printing, website creation, desktop
publishing, and graphic design production planning◎ 52DESIGN CO., LTD.: Sales and manufacturing of bags, accessories, clothes, furniture and miscellaneous
goods◎ MANEUVERLINE CO., LTD.: Import, sales and wholesaling of marine leisure, snowboarding, and apparelgoods◎ CANVAS CO., LTD.: A subsidiary of MANEUVERLINE CO., LTD. (100%); import, sales and wholesalingof apparel goods□ Kuraray Fastening Co., Ltd.: Sales and manufacturing of hook and loop fasteners(Asia)◎ MORITO SCOVILL HONG KONG Co., LTD.: Sales of materials for apparel and consumer products◎ MORITO (SHENZHEN) CO., LTD.: A subsidiary of MORITO SCOVILL HONG KONG Co., LTD. (100%);
manufacturing of materials for apparel and consumer products◎ TAIWAN MORITO CO., LTD.: Sales of materials for apparel and consumer products◎ KANE-M SHANGHAI CO., LTD.: Sales of materials for apparel and consumer products◎ KANE-M DANANG CO., LTD.: Sales and manufacturing of materials for apparel and consumer products, andoperation of rental factories◎ KANE-M (THAILAND) CO., LTD.: Sales of materials for apparel and consumer products◎ SHANGHAI NEW WORLD MATEX INTERNATIONAL TRADE CO., LTD.: A subsidiary of MATEX INC.
(100%); sales and manufacturing of apparel secondary materials, design, and sales of printing materials both inand outside China○ MATEX BANGKOK CO., LTD.: A subsidiary of MATEX INC. (100%); sales and manufacturing of apparelsecondary materials, design, and sales of printing materials both in and outside Thailand◎ GSG (SCOVILL) FASTENERS ASIA LIMITED: A subsidiary of MORITO SCOVILL AMERICAS, LLC.
(100%); sales of materials for apparel and consumer products◎ SCOVILL FASTENERS INDIA PVT. LIMITED: A subsidiary of MORITO SCOVILL AMERICAS, LLC.
(100%); sales of materials for apparel and consumer products(Europe and the U.S.)◎ KANE-M, INC.: Sales of materials for consumer products◎ MORITO (EUROPE) B.V.: Sales of materials for apparel and consumer products6◎ MORITO SCOVILL AMERICAS, LLC.: Sales and manufacturing of materials for apparel and consumer
products◎ SCOVILL FASTENERS UK LIMITED: A subsidiary of MORITO SCOVILL AMERICAS, LLC. (100%);
sales of materials for apparel and consumer products◎ MORITO SCOVILL MEXICO S.A. de C.V.: A subsidiary of KANE-M, INC. (89.4%) and MORITOSCOVILL AMERICAS, LLC (10.6%); sales of automobile interior components and apparel accessories(Notes)1. The Group has included 52DESIGN CO., LTD. in the scope of consolidation from the fiscal year under review.
2. On April 17, 2020, FUSION CO., LTD., a former consolidated subsidiary, was absorbed in an absorption-typemerger with another consolidated subsidiary MANEUVERLINE CO., LTD. as the surviving company, andtherefore has been excluded from the scope of consolidation.
3. On October 1, 2020, THREE RUNNERS CO., LTD., a former consolidated subsidiary, was absorbed in anabsorption-type merger with another consolidated subsidiary MORITO JAPAN CO., LTD. as the surviving
company, and therefore has been excluded from the scope of consolidation.

7

The Group conducts business with the following organization structure.
MORITO CO., LTD.

JAPAN
◎
◎
◎
◎
◎

MORITO JAPAN CO., LTD.
MATEX INC.
MANEUVERLINE CO., LTD.
CANVAS CO., LTD.
52DESIGN CO., LTD.

APPARELDIVISIONCONSUMERPRODUCTDIVISION◎ MORITO JAPAN CO., LTD.
◎ ACE INDUSTRIAL MACHINERYCO., LTD.
◎ MATEX INC.
◎ MANEUVERLINE CO., LTD.
◎ CANVAS CO., LTD.
□ Kuraray Fastening Co., Ltd.

ASIAEUROPE AND THE U.S.

◎ MORITO SCOVILL HONG KONG
Co., LTD.
◎ MORITO (SHENZHEN) CO., LTD.
◎ TAIWAN MORITO CO., LTD.
◎ KANE-M SHANGHAI CO., LTD.
◎ KANE-M DANANG CO., LTD.
◎ KANE-M (THAILAND) CO., LTD.
◎ SHANGHAI NEW WORLDMATEX INTERNATIONAL
TRADE CO., LTD.
◎ GSG (SCOVILL) FASTENERS
ASIA LIMITED◎ SCOVILL FASTENERS INDIA
PVT. LIMITED○ MATEX BANGKOK CO., LTD.

◎ MORITO (EUROPE) B.V.
◎ MORITO SCOVILL AMERICAS,LLC.
◎ SCOVILL FASTENERS UK
LIMITED◎ MORITO SCOVILL MEXICO S.A.
de C.V.

◎ MORITO SCOVILL HONG KONG
Co., LTD.
◎ MORITO (SHENZHEN) CO., LTD.
◎ TAIWAN MORITO CO., LTD.
◎ KANE-M SHANGHAI CO., LTD.
◎ KANE-M DANANG CO., LTD.
◎ KANE-M (THAILAND) CO., LTD.
◎ SHANGHAI NEW WORLDMATEX INTERNATIONAL
TRADE CO., LTD.
◎ GSG (SCOVILL) FASTENERS
ASIA LIMITED◎ SCOVILL FASTENERS INDIA
PVT. LIMITED◎ KANE-M, INC.
◎ MORITO (EUROPE) B.V.
◎ MORITO SCOVILL AMERICAS,LLC.
◎ SCOVILL FASTENERS UK
LIMITED◎ MORITO SCOVILL MEXICO S.A.
de C.V.

CLIENTS(Note)◎: Consolidated subsidiaries○: Non-consolidated subsidiaries

8□: Associates accounted for using equity method

3. Basic Stance Regarding Choice of Accounting Standards
Taking into consideration the comparability of consolidated financial statements across periods and among
companies, the Group’s policy is to continue preparing its consolidated financial statements using Japanese GAAP
for the time being.
With regard to the application of International Financial Reporting Standards (IFRS), the Group’s policy is to
respond appropriately based on considerations of the situation in Japan and overseas.

9

4. Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheets(Thousand yen)
As of November 30, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Right of use assets
Accumulated depreciation
Right of use assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Leased assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets

10

As of November 30, 2020

9,716,355
11,773,061
4,328,969
390,137
364,573
1,115,458(30,645)
27,657,908

10,125,070
9,957,014
3,938,285
327,184
456,382
733,414(40,942)
25,496,410

7,473,810(3,230,638)
4,243,172
2,147,062(1,436,321)
710,740
2,342,957(1,769,947)
573,009
4,074,904
238,524(143,691)
94,832－－－
114,230
9,810,890

7,463,749(3,456,342)
4,007,407
2,271,573(1,575,838)
695,734
2,354,404(1,878,222)
476,181
4,076,183
146,782(90,491)
56,291
384,915(135,111)
249,803
4,382
9,565,985

2,839,168
15,941
1,138,306
3,993,417

2,561,362
7,565
1,082,213
3,651,142

4,396,289
160,800
409,360
268,300
550,348(67,253)
5,717,844
19,522,152
5,601
47,185,662

3,940,908
54,000417,186
221,671418,693(67,945)
4,984,514
18,201,643
1,400
43,699,454

(Thousand yen)
As of November 30, 2019

As of November 30, 2020

4,859,108
50,000400,000
506,666
441,253
229,983

4,255,918
50,000200,000
530,000
98,125
184,683

71,59550,8412,333,488
8,892,095

1,557,809
6,927,378

200,000
2,674,590
1,229,287
275,959
31,824－
2,097,922
1,019,472
275,959
37,45357,24962,09956,42875,432

19,360892,694
130,675
5,568,069
14,460,164

18,974918,297
251,123
4,756,735
11,684,114

3,532,492
3,503,243
26,072,687(2,222,696)
30,885,726

3,532,492
3,507,603
25,703,378(2,227,056)
30,516,416

1,185,435
946
451,115
170,300(25,723)
1,782,074
57,697－32,725,498
47,185,662

945,536
118
451,115
112,743(67,659)
1,441,855
57,067－32,015,339
43,699,454

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of bonds payable
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for share-based remuneration
Provision for retirement benefits for directors (andother officers)
Provision for share-based remuneration for directors(and other officers)
Provision for environmental measures
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

11(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Thousand yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries
Bonuses
Welfare expenses
Retirement benefit expenses
Provision for bonuses for directors (and other officers)
Provision for retirement benefits for directors (and otherofficers)
Provision for management board incentive plan trust
Communication expenses
Freight and packing costs
Provision of allowance for doubtful accounts
Commission expenses
Rent expenses
Depreciation
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rental income from real estateCommission income
Share of profit of entities accounted for using equity
methodSubsidies for employment adjustment
Other
Total non-operating income
Non-operating expenses
Interest expenses
Sales discounts
Depreciation of assets for rent
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit

For the fiscal year
ended November 30, 2019
45,987,996
33,444,996
12,543,000

For the fiscal year
ended November 30, 2020
40,727,340
30,153,485
10,573,854

3,451,236
636,178
830,071204,036
68,9393,317,633
518,167
765,766
187,652
63,357

8,666

7,975

21,331
134,594
1,596,694
511
821,058
309,623
449,196
2,276,587
10,808,726
1,734,274

19,003
117,786
1,397,117
11,479784,050
177,487
539,807
1,810,101
9,717,387
856,467

27,38686,26270,084731

14,10879,32566,643733

69,16437,208－52,781
306,410

63,301
70,928332,2508,506
83,66039,052
40,98589,171
261,377
1,779,307

14,43765,75337,26060,79882,312
260,563928,15412

(Thousand yen)
For the fiscal year
ended November 30, 2019

For the fiscal year
ended November 30, 2020

325,159
85,339630
411,128867
15,263630
16,761

67
5,034
415
－
599
－
5,699
－
11,8162,178,619
840,184(64,504)
775,679
1,402,940－
1,402,940

17,52640,152－
1,080
16,0805,374
31,92826,561
138,703806,212416,227(80,113)336,114470,097－
470,097

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on reversal of share acquisition rights
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on sales of investment securities
Loss on sales of golf club memberships
Loss on valuation of investment securities
Loss on valuation of golf club membership
Restructuring loss
Loss on COVID
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

13

Consolidated Statements of Comprehensive Income(Thousand yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

For the fiscal year
ended November 30, 2019
1,402,940

For the fiscal year
ended November 30, 2020
470,097(224,259)
495(632,469)
42,827(239,898)(828)(57,556)(41,935)(0)0(813,406)
589,533(340,219)
129,877

589,533

129,877－－14

(3) Consolidated Statements of Changes in Equity
For the fiscal year ended November 30, 2019
(Thousand yen)
Shareholders’ equity
Share capital

Capital surplus

3,532,492

3,498,724

Balance at beginning of period

Retained earnings Treasury shares
25,277,180

Totalshareholders’equity(2,118,444)

30,189,951

Changes during period
Dividends of surplus(713,334)(713,334)

Profit attributable to ownersof parent

1,402,940

1,402,940

Purchase of treasury shares
Disposal of treasury shares

4,519

Effect of Change of scope of
consolidation
Reversal of revaluation
reserve for land
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period(151,148)(151,148)

46,89751,416(14,350)(14,350)

120,252

120,252－4,519

795,507(104,251)695,774

3,532,492

3,503,243

26,072,687(2,222,696)

30,885,726

Accumulated other comprehensive income

Balance at beginningof period

Valuationdifference on
available-forsale securities

Deferred
gains orlosses onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeShare
acquisitionrights

Noncontrollinginterests

Total net
assets1,409,695

451

571,368

802,769(68,550)

2,715,733

53,526－32,959,212

Changes during period
Dividends ofsurplusProfit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
shares
Effect of Change ofscope ofconsolidation
Reversal ofrevaluation reserve
for landNet changes in
items other thanshareholders’ equity
Total changes
during period
Balance at end of
period(713,334)
1,402,940(151,148)
51,416(14,350)

120,252(224,259)

495(120,252)(632,469)

42,827(933,659)

4,170

－

(929,488)(224,259)

495(120,252)(632,469)

42,827(933,659)

4,170

－

(233,713)

1,185,435

946

451,115

170,300(25,723)

1,782,074

57,697－32,725,498

15

For the fiscal year ended November 30, 2020
(Thousand yen)
Shareholders’ equity
Share capital

Capital surplus

3,532,492

3,503,243

Balance at beginning of period

Retained earnings Treasury shares

Total
shareholders’equity(2,222,696)

30,885,726

26,072,687

Changes during period
Dividends of surplus(732,691)(732,691)

Profit attributable to ownersof parent

470,097

470,097

Purchase of treasury shares
Disposal of treasury shares

4,360

Effect of Change of scope of
consolidation
Reversal of revaluation
reserve for land
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period(31,120)(31,120)

26,76031,120(106,715)(106,715)
－

－

4,360

(369,309)(4,360)(369,309)

3,532,492

3,507,603

25,703,378(2,227,056)

30,516,416

Accumulated other comprehensive income

Balance at beginningof period

Valuationdifference on
available-forsale securities

Deferred
gains orlosses onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeShare
acquisitionrights

Noncontrollinginterests

Total net
assets1,185,435

946

451,115

170,300(25,723)

1,782,074

57,697－32,725,498

Changes during period
Dividends ofsurplusProfit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
shares
Effect of Change ofscope ofconsolidation
Reversal ofrevaluation reserve
for landNet changes in
items other thanshareholders’ equity
Total changes
during period
Balance at end of
period(732,691)
470,097(31,120)
31,120(106,715)－(239,898)

(828)

－

(57,556)(41,935)(340,219)

(630)

－

(340,849)(239,898)

(828)

－

(57,556)(41,935)(340,219)

(630)

－

(710,159)

945,536

118

451,115

112,743(67,659)

1,441,855

57,067－32,015,339

16

(4) Consolidated Statements of Cash Flows(Thousand yen)
For the fiscal year
ended November 30, 2019

For the fiscal year
ended November 30, 2020

2,178,619
860,463
240,708
7,119
26,521
2,485

806,212962,214
237,745(45,929)511
11,276

8,666

4,850

5,323

5,629

(14,611)19,003(13,219)(113,649)
8,506－

10,863(93,434)
13,888(63,301)(69,164)(37,208)(630)(325,092)(84,924)
－
599
－
5,034
40,883145,907502,316
521,557
3,933,423
115,404(7,628)－(426,914)
3,614,285(630)
16,658(15,263)
1,080
16,0805,374
40,152
1,811,874
370,029(599,590)(313,206)
3,164,880
93,456(14,036)
42,004(823,727)
2,462,577(28,211)549,028(30,313)
120,721(901,293)
615,253(219,228)－
220,295(27,811)61,929(251,301)
34,274(81,873)－

29,287

16,792(3,000)(8,918)110,828

7,200－(8,762)(16,761)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in provision for bonuses
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for retirement benefits
for directors (and other officers)
Increase (decrease) in provision for share-based
remuneration
Increase (decrease) in provision for share-based
remuneration for directors (and other officers)
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Subsidies for employment adjustment
Share of loss (profit) of entities accounted for using
equity method
Gain on reversal of share acquisition rights
Loss (gain) on sales of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on sales of golf club memberships
Loss (gain) on valuation of investment securities
Loss on valuation of golf club membership
Loss on retirement of non-current assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Interest paid
Subsidies for employment adjustment received
Income taxes paid
Net cash provided by (used in) operating activities
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 and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Proceeds from sales of shares of subsidiaries andassociates
Collection of loans receivable
Loan advances
Other, net
Net cash provided by (used in) investing activities

17

(Thousand yen)
For the fiscal year
ended November 30, 2019

For the fiscal year
ended November 30, 2020

(150,000)(58,009)－(1,235,221)(400,000)－(151,148)
13,221(713,334)(2,694,493)(146,070)
884,549
8,525,759－(41,903)(150,370)(553,334)(400,000)
31,120(31,120)－(732,691)(1,878,299)
9,444
576,961
9,442,330

32,021

32,7799,442,330

10,052,070

Cash flows from financing activities
Increase (decrease) in short-term borrowings
Repayments of lease obligations
Repayments of lease liabilities
Repayments of long-term borrowings
Redemption of bonds
Proceeds from sales of treasury shares
Purchase of treasury shares
Proceeds from exercise of employee share options
Dividends paid
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
Increase in cash and cash equivalents resulting from
inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of period18

(5) Notes to the Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Changes in Accounting Policies)
Some overseas consolidated subsidiaries have applied IFRS 16 “Leases” from the beginning of the fiscal
year under review, where in principle, lessees recognize all leases as assets and liabilities. Regarding theapplication of the said accounting standard, the method of recognizing the cumulative effects due to theapplication of the standard on the initial date of application, which is permitted as a transitional measure, hasbeen adopted.
The impact of this change on the consolidated financial statements for the fiscal year ended November 30,
2020 is immaterial.
(Additional Information)(Impact of COVID-19 pandemic on accounting estimates)
In the fiscal year under review (from December 1, 2019 to November 30, 2020), the COVID-19 global
pandemic led to the implementation of lockdowns and state of emergency declarations in many countries,
which caused the global economy to stagnate at an unprecedented scale. Although economic activities haveresumed, the arrival of winter has triggered new waves of infection, intensifying downside risks to the global
economy.
Amid such circumstances, the Group, which engages in the handling of apparel materials and consumer
products, estimated future cash flows and made accounting estimates related to the application of impairment
accounting to non-current assets (including goodwill) for the fiscal year under review in the segments of Japan,
Asia, Europe and the U.S. based on the following assumptions:
In Japan, we assume that the economy will recover to the levels of the previous year in and after the middleof the next fiscal year.
In Asia, we assume that the economy will recover to the levels of the previous year in the middle of thenext fiscal year, as in Japan.
In Europe and the U.S., we assume that the economy will begin recovering gradually in the middle of thenext fiscal year and regain the levels of the previous year toward the end of the next fiscal year onward.
While estimates are made according to information currently available, the Group’s business results andfinancial position may be affected in the event of any discrepancies between assumed recovery trends andactual trends in the future.

19

(Segment Information, etc.)[Segment information]
I.

For the fiscal year ended November 30, 2019
1. Information on amounts of net sales, profit (loss), assets, liabilities and other items by reportable segment(Thousand yen)

Japan

Asia

Europe andthe U.S.

Total

Adjustment(Notes 1, 3)

Amountrecorded in
Consolidated
Financial
Statements(Note 2)33,262,134
2,364,981
35,627,115
1,509,267
32,734,371

6,963,361
3,070,111
10,033,473
524,4076,874,226

5,762,501
31,396
5,793,897
13,173
6,319,317

45,987,996
5,466,489
51,454,486
2,046,848
45,927,914－(5,466,489)(5,466,489)(312,574)
1,257,747

45,987,996－
45,987,996
1,734,274
47,185,662

541,001

169,539

149,923

860,463－

860,463482,649

208,675

277,493

968,818－

968,818

Reportable Segment

Net sales
Net sales to external customers
Inter-segment sales or transfers
Total
Segment profit
Segment assets
Other items
Depreciation
Increase in property, plant andequipment and intangible
assets(Notes) 1. The adjustment of ¥(312,574) thousand to segment profit includes corporate expenses of ¥(298,112) thousand notallocated to the reportable segments, and other in the amount of ¥(14,461) thousand.
2. The amount of segment profit has been adjusted with operating profit in the Consolidated Statements of Income.
3. The amount of the adjustment to segment assets includes inter-segment elimination of ¥(8,820,399) thousand, andcorporate assets of ¥10,078,147 thousand not allocated to the reportable segments. Corporate assets mainly refer tothe financial assets (cash and deposits, investment securities, etc.) held by the Company, which is the holding
company of the Group.

2. Matters regarding changes, etc. in reportable segments(Change in method of measuring profit (loss) of reportable segments)
In line with the transition to a holding company structure, the allocation standards for corporate expenses
have been changed from the fiscal year under review. Group administrative expenses mainly incurred by theCompany, which is the holding company, is reported as corporate expenses not allocated to the reportablesegments.
In line with this change, segment profit of “Japan” decreased by ¥52,881 thousand, and the adjustment ofsegment profit increased by ¥52,881 thousand compared to the former method.

20

II.

For the fiscal year ended November 30, 2020
Information on amounts of net sales, profit (loss), assets, liabilities and other items by reportable segment(Thousand yen)

Total

Adjustment(Notes 1, 3)

Amountrecorded in
Consolidated
Financial
Statements(Note 2)

4,691,622
54,3304,745,952(63,042)6,050,196

40,727,340
3,533,668
44,261,009
1,061,478
41,421,066－(3,533,668)(3,533,668)(205,011)
2,278,387

40,727,340－
40,727,340
856,467
43,699,454

294,710

178,552

962,214－962,214

195,754

56,934

529,952－

529,952

Reportable Segment

Net sales
Net sales to external customers
Inter-segment sales or transfers
Total
Segment profit (loss)
Segment assets
Other items
Depreciation
Increase in property, plant andequipment and intangible
assets

Japan

Asia

28,810,688
1,285,134
30,095,822
868,563
29,019,427

7,225,029
2,194,204
9,419,234
255,957
6,351,442

488,951
277,262

Europe andthe U.S.

(Notes) 1. The adjustment of ¥(205,011) thousand to segment profit includes corporate expenses of ¥(210,100) thousand notallocated to the reportable segments, and other in the amount of ¥5,088 thousand.
2. The amount of segment profit has been adjusted with operating profit in the Consolidated Statements of Income.
3. The amount of the adjustment to segment assets includes inter-segment elimination of ¥(8,932,180) thousand, andcorporate assets of ¥11,210,568 thousand not allocated to the reportable segments. Corporate assets mainly refer tothe financial assets (cash and deposits, investment securities, etc.) held by the Company, which is the holding
company of the Group.
4. As stated in “Changes in Accounting Policies,” some overseas consolidated subsidiaries have applied IFRS 16“Leases” from the beginning of the fiscal year under review, where in principle, lessees recognize all leases asassets and liabilities.
The impact of this change on segment results is immaterial.

21

(Per Share Information)

Item
Net assets per share

Previous fiscal year
(December 1, 2018 toNovember 30, 2019)¥1,193.13

Fiscal year under review(December 1, 2019 toNovember 30, 2020)¥1,167.21¥51.17¥17.17－－

Basic earnings per share
Diluted earnings per share(Notes) 1. The number of common shares that are treasury shares used to calculate “net assets per share,” and theaverage number of common shares during the period that are treasury shares used to calculate “basic
earnings per share” include the Company’s shares (376 thousand shares in the previous fiscal year, 376
thousand shares in the fiscal year under review) held by Custody Bank of Japan, Ltd. (trust account E), andthe Company’s shares (153 thousand shares in the previous fiscal year, 166 thousand shares in the fiscal
year under review) held by The Master Trust Bank of Japan, Ltd. (officer remuneration BIP trust account).
2. Diluted earnings per share are not stated as there were no residual shares with a dilutive effect.
3. Custody Bank of Japan, Ltd. was formed on July 27, 2020 via the merger of JTC Holdings, Ltd., Trust &Custody Services Bank, Ltd., and Japan Trustee Services Bank, Ltd.
(Note) Basis for the Calculations
1. Net assets per share
Item

As of November 30, 2019

As of November 30, 2020

Total net assets on Consolidated Balance Sheets
32,725,498
32,015,339(Thousand yen)Amount deducted from total net assets (Thousand
57,69757,067yen)[Including: Share acquisition rights (Thousand[57,697][57,067]
yen)][Including: Non-controlling interests (Thousand
－
－
yen)]
Net assets relating to common shares (Thousand
32,667,801
31,958,271
yen)Number of common issued shares (Thousand
30,80030,800shares)Number of common shares that are treasury
3,420
3,420
shares (Thousand shares)
Number of common shares used to calculate net
27,37927,379assets per share (Thousand shares)(Note) The number of common shares that are treasury shares used to calculate net assets per share includes theCompany’s shares held respectively by Custody Bank of Japan, Ltd. (trust account E) and The Master
Trust Bank of Japan, Ltd. (officer remuneration BIP trust account) as treasury shares.

22

2.

Basic earnings per share

Item
Basic earnings per share
Profit attributable to owners of parent(Thousand yen)Amount not attributable to commonshareholders (Thousand yen)
Profit attributable to owners of parent relating tocommon shares (Thousand yen)
Average number of common shares during theperiod (Thousand shares)
Overview of residual shares not included in
calculation of diluted earnings per share due tolack of dilutive effectPrevious fiscal year
(December 1, 2018 toNovember 30, 2019)

Fiscal year under review(December 1, 2019 toNovember 30, 2020)

1,402,940

470,097－－

1,402,940

470,097

27,41527,379

Share acquisition rights
resolved by the Board of
Directors and at the Annual
General Meeting of
Shareholders held on
February 25, 2016
Common shares: 549,500

Share acquisition rights
resolved by the Board of
Directors and at the Annual
General Meeting of
Shareholders held on February
25, 2016
Common shares: 543,500(Note) The average number of common shares during the period used to calculate basic earnings per share anddiluted earnings per share includes the Company’s shares held respectively by Custody Bank of Japan,
Ltd. (trust account E) and The Master Trust Bank of Japan, Ltd. (officer remuneration BIP trust account)as treasury shares.

235. Other Information(1) Changes in Officers
1.

Changes of representative
Not applicable.

2.

Changes of other officers
Not applicable.

24