(Unaudited)

January 14, 2020
MORITO CO., LTD.
Financial Statement (Unaudited)
For the Fiscal Year ended November 30, 2019
(Translated from the Japanese original)
Corporate Information
Code：9837 Listings in First Section of the Tokyo Stock Exchange(URL Http: www.morito.co.jp/english/index.html )Representative： Takaki Ichitsubo
Representative Director and President
Contact：
Makoto Tsuji
Managing Director of General Affairs Dept.
Telephone: +81-6-6252-3551
Scheduled date of the annual general meeting of shareholders
Scheduled date of dividend payment:
Scheduled date of filling of Security Report:
Supplementary explanation material for quarterly financial results:
Presentation meeting for quarterly financial results:

February 26, 2020
February 27, 2020
February 27, 2020
Yes
Yes (for analyst and institution investors)(Amounts rounded down)
1. Consolidated Financial Results for the Fiscal Year 2019(December 1, 2018, through November 30, 2019)(1) Consolidated Financial Results(Percentages indicate year-on-year changes)
Net income attributableto owners of parent%%%%
Millions of yen
Millions of yen
Millions of yen
Millions of yen
FY 2019
45,987
4.7
1,734
0.5
1,779
1,402
11.6
△0.6
FY 2018
43,943
6.2
1,725
1.0
1,790
5.1
1,257 △62.0(Note) Comprehensive income : 589 million yen (△44.6%) (FY 2019)
1,064 million yen (△78.2%)(FY 2018)
Net sales

Operating income

Ordinary income

Net income
per share

Fully diluted net
Income per share

Returnon equity

Ratio ofordinary income
to total assets

Ratio ofoperating income
to net sales

Yen

Yen

%

%

%

FY 2019
FY 2018

51.17
4.3
3.8
45.71
45.62
(Reference) Equity in earnings (losses) of affiliates: 69 million yen (FY 2019)(2) Consolidated Financial Position
Total assets
Millions of yen
FY 2019
47,185FY 2018
48,011

Net assets
Millions of yen

3.7
3.9
66 million yen (FY 2018)

Equity ratio
%

3.8
3.9

Net assets per share
Yen

32,72569.2
1,193.13
32,95968.5
1,196.17(Reference) Equity capital: 32,667 million yen (FY 2019)
32,905 million yen (FY 2018)
Note: Partial amendments to “Accounting Standard for Tax Effect Accounting” (Accounting Standard Board of Japan(“ASBJ”) Statement no.28, February 16, 2018) were implemented from the current fiscal year. Regarding management
indicators mainly related to the previous fiscal year, the indicators are based on applying the accounting policy(3) Consolidated Cash Flows
Cash flows fromoperating activities
FY 2019
FY 2018

Millions of yen
3,614
626

Cash flows frominvesting activities
Millions of yen
110△5,171

1

Cash flows fromfinancing activities
Millions of yen△2,694
2,303

Cash and cash
equivalents at the endof the period
Millions of yen
9,442
8,525

(Unaudited)

2. DividendsFirstquarterend
Yen-

Dividends per share
SecondThird
Fiscalquarter- quarteryearend
end
end
Yen
Yen
Yen
12.50
12.50
13.00
13.00

AnnualTotal dividends(Annual)Ratio ofdividends to
net assets(Consolidated)
%
2.1%
2.2%

Dividends
Payout ratio(Consolidated)

Yen
Millions of yen%
FY 2018
25.00
701
54.7%
FY 2019
26.00
725
50.8%
FY 2020
13.25
13.25
26.50
50.0%
(Forecast)
Note: In both FY2018 Second quarter-end and FY2018 fiscal year-end dividends, a 0.50 yen commemorative dividend
for the celebration of the 110th anniversary of the company’s founding is included.

3. Consolidated Forecast for FY 2020 (December 1, 2019, through November 30, 2020)(Percentages represent changes from the corresponding period of the previous year)
Net Sales
Millions ofyenFull year

47,000Ordinary profit

Operating income%
2.2

Millions of
yen

1,900

Millions of
yen

%
9.6

1,900

%
6.8

Net income
per share

Net income
Millions of
yen

%

1,450

3.4

Yen
52.96

*Notes(1) Changes of important subsidiaries during the period (changes of specific subsidiaries under changes in thescope of consolidation): None
Newly included: None
Extended company: None
(2) Changes in accounting policies and changes or restatement of accounting estimates(i)
Changes in accounting policies caused by revision of accounting standards :(ii)
Changes in accounting policies other than (i) :(iii)
Changes in accounting estimates :(iv)
Restatements :

None
None
None
None

(3) Number of outstanding shares (common shares）(i) The number of outstanding shares, including treasury shares at the end of the period:
30,800,000 shares(FY 2019)
30,800,000 shares(FY 2018)(ii) The Number of shares of treasury stock at end of period:
3,420,060 shares(FY 2019)
3,290,700 shares(FY 2018)(iii) The Average outstanding number of shares during the period:
27,415,898 shares(FY 2019)
27,505,500 shares(FY 2018)*This financial summary does not need to undergo an audit.
*Disclosure and other special notes regarding performance forecasts
The forecast in this statement is based on information available to management as of the date on which these
performance-related figures were disclosed, and various factors may cause actual results to differ from these
forecasts. For issues to keep in mind when using the estimates and criteria conditioned upon the forecast, pleaserefer to “1. Qualitative Information for the Period under Review (4) Outlook for the next fiscal year” on page 6.
We have also introduced “Stock Granting Trust (J-ESOP)” and “Board Incentive Plan (BIP).” Consequently, theshares held by Trust and Custody Service Bank, ltd. and The Master Trust Bank of Japan, ltd. are included in thetreasury stock.

2

(Unaudited)Index
1. Qualitative Information for the Period under Review ......................................................................................4(1) Overview of Business Performance .............................................................................................................4(2) Overview of Financial Position .....................................................................................................................5(3) Overview of Cash Flows The overall situation regarding cash flow during the fiscal year is as follows: ...5
(4) Outlook for the next fiscal year ....................................................................................................................6(5) Basic policy on Payment of Dividends ........................................................................................................6
2. Organization of the group ..................................................................................................................................7
3. Basic concept concerning the selection of accounting standards ...............................................................9
4. Consolidated Financial Statements and Notes ..............................................................................................10(1) Consolidated Balance Sheets .....................................................................................................................10(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .......12(3) Consolidated Statements of Changes in Shareholders’ Equity ..............................................................15(4) Consolidated Cash Flows............................................................................................................................17(5) Notes regarding Consolidated Financial Statements ..............................................................................19(Notes on assumption of going concern) ................................................................................................................19(Changes on indication method) .............................................................................................................................19(Business Combinations) ........................................................................................................................................20(Segment Information) .............................................................................................................................................22(Per share data) .......................................................................................................................................................23
5. Others .................................................................................................................................................................24(1) Changes in Senior Management.................................................................................................................243

(Unaudited)

1. Qualitative Information for the Period under Review(1) Overview of Business Performance
In the fiscal year ended November 30, 2019 (From 1st December 2018 to 30th November 2019), The Japanese
economy’s employment rate and the income environment have improved, while personal consumption is showing
signs of modest recovery. Due to the prolongation of the US-China trade issues and the Brexit effects, the world
economy’s future remains unclear, and especially the uncertainty over the exporting industry is increasing.
Within this situation, our company group, which works mainly with apparel accessories and general-industrial
materials, has decided that FY 2019 is the year of structural reform. We transitioned to a holding company
structure as of June 1st, 2019, while holding to our management vision [Create Morito’s existence value, Realize“New Morito Group”] and focusing on the development of high-value-added products from Japan and also
expanding the earnings base globally. We will continue with the value realization our era requires and accelerate
the business developments not only in our current markets in the ASEAN・China・United States and Europe but
also in the business developments of untapped markets.
As a result, the current yearly performance reached net sales￥45,987million (increased 4.7% compared to thesame period of the previous year), operating income￥1,734million (increased 0.5% compared to the same
period of the previous year), ordinary income 1,779 million(decreased 0.6 % compared to the same period of theprevious year), net income attributed to the parent company shareholders ￥1,402million (increased 11.6 %compared to the same period of the previous year).
The exchange rate used for the overseas subsidiaries’ consolidated financial statement of the current
quarter-end is as below:
3Q Apr-Jun
4Q Jul-Sep
1Q Oct-Dec
2Q Jan-Mar(112.98)
110.23(108.23)109.90(109.10)107.37(111.43)
USD
112.91(133.01)
125.16(133.15)
123.50(130.03)119.41(129.54)EUR
128.82(17.08)16.33(17.04)16.07(17.13)15.30(16.36)CNY
16.32(14.47)
14.05(13.83)14.02(13.90)13.71(14.20)HKD
14.42(3.75)
3.58(3.70)
3.53(3.67)
3.45(3.64)
TWD
3.66(0.0050)
0.0047(0.0048)0.0047(0.0048)0.0046(0.0048)
VND
0.0048(3.43)
3.49(3.43)
3.48(3.42)
3.50(3.38)
THB
3.44
(-)
5.74
(-)
5.75
(-)
5.53
(-)
MXN
5.70
Notes 1: () is the exchange rate of FY2018.
2: MORITO SCOVILL MEXICO S.A. de C.V. has been included in the current fiscal year’s net sales. The
exchange rate used to convert the revenue and costs on the consolidated financial statements is
Mexican Peso.
Segment information as follows,[Japan]As for the apparel component division, the sales for uniforms and working wear apparel accessories has
increased.
In the consumer product division, the sales for products for single price retailers and automotive interior
components increased.
Also, as from the 3Q of the previous fiscal year, the sales results of MANEUVERLINE CO., LTD., has been
included in this financial statement. The importing and sales of marine leisure and snowboarding products haveincreased. As a result, the total net sales were ¥33,262 million (increased 6.2% compared to the same period of
the previous year)[Asia]
As for the apparel component division, sales of apparel components for Japanese apparel manufacturers inShanghai increased, while sales for Europe and the US apparel manufacturers in Hong Kong decreased.
In the consumer product division, the sales of automotive interior components for Japanese manufacturers
located in Shanghai and Thailand have increased. As a result, the total net sales was ¥ 6,963 million (increased4

(Unaudited)

7.4% compared to the same period of the previous year)[Europe and the USA]As for the apparel component division, the sales of apparel components for American apparel manufacturers
decreased. In the consumer product division, the sales of automotive interior components have increased.
As a result, the total net sales were ¥ 5,762million (decreased 6.0% compared to the same period of the previousyear).
(2) Overview of Financial Position
Total assets came to ¥47,185 million, decreased by ¥ 826 million compared to the previous consolidated fiscal
year.
Total current assets came to ¥27,657 million, increased by ¥77 million compared to the previous consolidated
fiscal year. This change was mainly due to the ¥373 million increase in cash and deposits, and the ¥235 million
decrease of notes and accounts receivable.
Total fixed assets came to ¥19,522 million, decreased by ¥900 million compared to the previous consolidated
fiscal year. This change was mainly due to the decrease in land ¥257 million, goodwill ¥357 million, andinvestment securities ¥330 million.
Total current liabilities came to ¥8,892 million, increased by ¥965 million compared to the previous consolidated
fiscal year. This change was mainly due to the increase in notes and accounts payable ¥358 million, income taxes
payable ¥312 million, and other accounts payable ¥367 million.
Total fixed liabilities came to ¥5,568 million, decreased by ¥1,558 million compared to the previous consolidated
fiscal year. This change was mainly due to the decrease in corporate bonds ¥400 million, and long-term loans
payable ¥ 992 million.
Total net assets came to ¥ 32,725 million, decreased by ¥233 million compared to the previous consolidated
fiscal year.
The shareholders’ equity ratio changed from 68.5％ to 69.2％, increased by 0.7 points from the previous
consolidated fiscal year.
(3) Overview of Cash Flows
The overall situation regarding cash flow during the fiscal year is as follows:[Cash flows from operating activities]
Net cash provided by operating activities was ¥3,614 million (¥626 million provided in the same period of theprevious fiscal year). This change was mainly due to the acquisition of net income before income taxes anddepreciation costs.
[Cash flows from investing activities]
Net cash provided in investing activities was ¥110 million (¥5,171 million used in the same period of theprevious fiscal year). This change was mainly due to the purchase and sales of tangible fixed assets andrepayment of time deposits.
[Cash flows from financing activities]
Net cash used in financing activities was ¥2,694 million (¥ 2,303 million provided in the same period of theprevious fiscal year). This change was mainly due to payments of dividends by repayment of long-term loans
payable.
As a result, cash and cash equivalent was ¥ 9,442 million, increased by ¥ 916 million compared to the end of
the previous fiscal year,

5

(Unaudited)

The following table shows financial indicators associated with cash flows.
FY2017FY2018FY2019Equity ratio

74.9%

68.5%

69.2%

Equity ratio (market value basis)

66.4%

46.5%

46.4%

Interest-bearing debt / cash flow ratio

89.4%

896.1%

106.0%

Interest coverage ratio

336.7

109.8

473.8

(Note)
Equity ratio = Equity capital / Total assets
Equity ratio (market value basis) = Market capitalization / Total Assets
Interest-bearing debt / cash flow ratio = Interest-bearing debt/net cash provided by operating activities
Interest coverage ratio = Operating cash flows / Interest paid
*Each indicator is calculated on a consolidated basis.
*Market capitalization is based on the year-end share price multiplied by the number of shares issued
and outstanding at year-end, not including treasury stocks.
*Operating cash flows refers to net cash provided by operating activities in the consolidated statementof cash flows.
*Interest-bearing debt includes bonds and loans payable on the consolidated balance sheet.
*The interest payments use the interest paid as recorded in the consolidated statement of cash flows.
(4) Outlook for the next fiscal year
Our eighth mid-term management plan is『Create Morito’s existence value, Realize “New Morito Group”』 (5years, from December 1, 2020, through November 30, 2024). We will carry forward this plan to accelerate theexpansion of our businesses.
The forecast for the consolidated results during this period is of net-sales ¥47 billion, operating income ¥1.9
billion, ordinary profit ¥ 1.9 billion and net income attributable to owners of the parent ¥1.45 billion (Exchange
rate: US$1.00 = ¥107.69).
(5) Basic policy on Payment of Dividends
The company’s basic dividend policy is to return the profit to our shareholders by reinforced financial groundand improved profitability. Also, we will use the internal reserve to invest, and M&A for the long-term growth in
the future.
The dividend was distributed in a manner that reflects the consolidated company result and financial standing.
・Continuous dividends payment
・Maintain DOE 1.5%
・Basic policy of dividend payout ratio more than 50%(However, payment dividend will be determined with consideration of the impact in the case of that profit(loss)
attributable to owners of the parent of the fiscal year fluctuates significantly due to extraordinary factors.)
The company will consider the purchase and retirement of treasury stock to enrich shareholders’ returns
promptly, based on the company’s financial situation and share price.
During this fiscal year, we scheduled to propose the general meeting of shareholders held on February 26,
2020, to payout ¥13 per share as the dividend of year-ended.
As a result, dividends for the subject fiscal year amount to ¥26 per share, including the interim dividends of¥13 per share. There will be an increase of ¥1 on dividends comparing to the previous year’s amount of ¥25.
For the next fiscal year’s dividends, the allocation of profits will be based on the above basic policy, withinterim dividends of ¥13.25 and fiscal year-end dividends of ¥13.25. The total dividends per year will be ¥26.50.

6(Unaudited)

2. Organization of the group
Our group consists of the parent company, 23 subsidiaries, and 2 affiliate companies. The group’s primarybusiness is sales and manufacturing of materials for daily-life: including apparel materials, parts for automotive,
lifestyle goods, and rental and cleaning of kitchen appliances.
◎Consolidated subsidiaries: 21 companies
company○:Non-consolidated subsidiaries: 2 companies□:Affiliates: 1(JAPAN)◎ MORITO JAPAN CO., LTD: Selling apparel and daily-life materials◎ ACE INDUSTRIAL MACHINERY CO., LTD.: Rental service, selling, and cleaning of kitchen appliances◎ THREE RUNNERS CO., LTD.: Selling and manufacturing of sports supporters◎ MATEX INC.: Manufacturing of apparel components, designing, printing, website creation, and design,
printing and graphic design production planning○ 52DESIGN CO., LTD.: Manufacturing and selling of bags, accessories, clothes, and miscellaneous goods.
◎ MANEUVERLINE CO., LTD.: Imports and sells marine leisure, snowboarding, and skateboarding goods.
◎CANVAS CO., LTD.: A subsidiary of MANEUVERLINE CO., LTD.(100%). Imports and sells apparel goods.
◎ FUSION CO., LTD.: A subsidiary of MANEUVERLINE CO., LTD.(100%). Imports and sells snowboarding
goods.
□ Kuraray Fastening Co., Ltd.: Selling and manufacturing of hook and loop fasteners(ASIA)◎ MORITO SCOVILL HONG KONG Co., LTD.: Selling of apparel components and consumer products◎ MORITO (SHENZHEN) CO., LTD.: A subsidiary of MORITO SCOVILL HONG KONG Co., LTD.(100%)
Manufacturing of apparel components and consumer products◎ TAIWAN MORITO CO., LTD.: Selling of apparel components and consumer products◎ KANE-M SHANGHAI CO., LTD.: Selling of apparel components and consumer products◎ KANE-M DANANG CO., LTD.: Selling and manufacturing of apparel components, consumer products, andoperation of rental factories.
◎ KANE-M (THAILAND) CO., LTD.: Selling of apparel components and consumer products◎ SHANGHAI NEW WORLD MATEX INTERNATIONAL TRADE CO., LTD.: A subsidiary of MATEX INC.
(100%). Manufacturing and selling of apparel parts, design, and printing within China and overseas.
○ MATEX BANGKOK CO., LTD.: A subsidiary of MATEX INC. (100%). Manufacturing and selling of apparelcomponents, design, and printing within Thailand and overseas.
◎ GSG (SCOVILL) FASTENERS ASIA LIMITED: A subsidiary of MORITO SCOVILL AMERICAS, LLC.
(100%). Selling of apparel components and consumer products.
◎ SCOVILL FASTENERS INDIA PVT. LIMITED: A subsidiary of MORITO SCOVILL AMERICAS, LLC. (100%).
Selling of apparel components and consumer products.
(EUROPE AND USA)◎ KANE-M, INC.: Selling of apparel components and consumer products◎ MORITO (EUROPE) B.V.: Selling of apparel components and consumer products◎ MORITO SCOVILL AMERICAS, LLC.: Manufacturing and selling of apparel components and consumer
products◎ SCOVILL FASTENERS UK LIMITED: A subsidiary of MORITO SCOVILL AMERICAS, LLC. (100%). Sellingof apparel components and consumer products◎ MORITO SCOVILL MEXICO S.A. de C.V.: A subsidiary of KANE-M, INC. (89.4%) and MORITO SCOVILLAMERICAS, LLC (10.6%). Selling of automobile and apparel components.
(Note 1) MORITO SCOVILL MEXICO S.A. de C.V. is included in the scope consolidation from thisconsolidated fiscal year
(Note 2) Starting from December 1, 2018, the consolidated subsidiary, NIPPON SPORTS SUPPLY CO.,LTD. has merged with also consolidated subsidiary MANEUVERLINE CO., LTD., therefore is not included in
the scope consolidation.
(Note 3) Through a company split, we transitioned to a holding company structure from this consolidated fiscal
year, managing all services by MORITO JAPAN CO., LTD., except for strategy planning and integrated
management for each operated company.
7

(Unaudited)Business Flow Chart

MORITO CO., LTD.

JAPAN

ASIA
◎ MORITO SCOVILL HONG KONG

◎ MORITO JAPAN CO., LTD.

Co., LTDEUROPE AND USA◎ MORITO (EUROPE) B.V.
◎ MORITO SCOVILL AMERICAS,◎ MATEX INC.

◎ MORITO (SHENZHEN) CO., LTD

APPAREL COMPONENT◎ MANEUVERLINE CO., LTD.

◎ TAIWAN MORITO CO., LTD

DEPARTMENT◎ CANVAS CO., LTD.

◎ KANE-M SHANGHAI CO., LTD.

○ 52DESIGN CO., LTD.

◎ KANE-M DANANG CO., LTD.
◎ KANE-M (THAILAND) CO., LTD.

LLC.
◎ SCOVILL FASTENERS UK
LIMITED◎ MORITO SCOVILL MEXICO S.A.
de C.V.

◎ SHANGHAI NEW WORLDMATEX INTERNATIONAL TRADE
CO., LTD.
○ MATEX BANGKOK CO., LTD.
◎ GSG (SCOVILL) FASTENERS
ASIA LIMITED◎ SCOVILL FASTENERS INDIA
PVT. LIMITED◎ MORITO JAPAN CO., LTD.
◎ MATEX INC.

CONSUMER PRODUCTS
DEPARTMENT◎ MORITO SCOVILL HONG KONG
Co., LTD.

◎ KANE-M, INC.
◎ MORITO (EUROPE) B.V.

◎ MANEUVERLINE CO., LTD.

◎ MORITO (SHENZHEN) CO., LTD.

◎ MORITO SCOVILL AMERICAS,◎ CANVAS CO., LTD.

◎ TAIWAN MORITO CO., LTD.

LLC.

◎ ACE INDUSTRIAL◎ KANE-M SHANGHAI CO., LTD.

◎ SCOVILL FASTENERS UK◎ KANE-M DANANG CO., LTD.

LIMITED◎ THREE RUNNERS CO., LTD.

◎ KANE-M (THAILAND) CO., LTD.

◎ MORITO SCOVILL MEXICO S.A.

◎ FUSION CO., LTD.

◎ SHANGHAI NEW WORLDde C.V.

MACHINERY CO., LTD.

□ Kuraray Fastening Co., Ltd.

MATEX INTERNATIONAL TRADE
CO., LTD.
◎ SCOVILL FASTENERS INDIA
PVT. LIMITED

CLIENTSNOTE: ◎Consolidated subsidiaries○: Non-consolidated subsidiaries

8□: Affiliate

(Unaudited)

3. Basic concept concerning the selection of accounting standards
We will continue adopting Japan's standard financial report for an easy comparison of periods and withincompanies. For IFRS implementation, we will consider the national and overseas situations and will adapt
accordingly.

9(Unaudited)

4. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheets
FY 2018

FY 2019(As of November 30, 2018) (As of November 30, 2019)
Thousands of yen

Thousands of yen

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Commercial goods and finished goods
Work in process
Raw materials and supplies

9,343,274
12,008,498

9,716,355
11,773,061

4,764,286

4,328,969

236,619

390,137

405,985

364,573859,513△38,224
27,579,953

1,115,458△30,645
27,657,908

7,510,858△3,105,590

7,473,810△3,230,638

4,405,268

4,243,172

2,000,490△1,280,361

2,147,062△1,436,321

720,129
2,173,280△1,672,556

710,740
2,342,957△1,769,947

Tools, furniture and fixtures (net)Land
Lease assets

500,723
4,332,821

573,009
4,074,904

219,354

238,524

Accumulated depreciation
Lease assets (net)
Construction-in-process-in-process△117,899△143,691

101,454
86,42094,832
114,230

Total tangible fixed assets
Intangible fixed assets
Goodwill
Lease assets

10,146,818

9,810,890

3,196,351

2,839,168

54,645

15,941Other Intangible fixed assets
Total intangible fixed assets
Investments and other fixed assets

1,101,569
4,352,566

1,138,306
3,993,417

Investment securities
Long-term loans
Deferred tax assets

4,727,033

4,396,289

166,000
121,481

160,800
409,360

Net defined benefit asset
Other fixed assets
Allowance for doubtful account237,765
745,652△75,148

268,300
550,348△67,253

5,922,784
20,422,170

5,717,844
19,522,152

Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Building and structures
Accumulated depreciation
Building and structures (net)
Machinery and delivery equipment
Accumulated depreciation
Machinery and delivery equipment (net)
Tools, furniture and fixtures
Accumulated depreciation

Total investments and other fixed assets
Total fixed assets
Deferred assets
Total assets

10

9,802

5,601

48,011,926

47,185,662

(Unaudited)

FY 2018
FY 2019(As of November 30, 2018) (As of November 30, 2019)
Thousands of yen

Thousands of yen

Liabilities
Current liabilities
Notes and accounts payable

4,500,593

4,859,108

Short-term loans payable

200,000

50,000Current portion of bonds
Current portion of long-term debt

400,000
749,146

400,000
506,666

Accrued tax payable

128,612441,253

Reserve for bonuses
Reserve for director’s bonuses

225,23156,929229,983
71,595

Other current liabilities

1,665,881

2,333,488

Total current liabilities
Fixed liabilities
Bonds payable

7,926,394

8,892,095

600,000

200,000

Long-term debt
Deferred tax

3,667,331
1,047,951

2,674,590
1,229,287

Deferred tax assets for revaluation
Provision for retirement benefit by stock
Provision for director’s retirement benefit

329,031
26,501
48,583275,959
31,82457,249Provision for director's retirement benefit by stock
Provision for environmental measures
Net defined benefit liability

71,04020,367
894,881

56,42819,360892,694

420,632
7,126,319
15,052,714

130,675
5,568,069
14,460,164

3,532,492

3,532,492

3,498,724
25,277,180△2,118,444

3,503,243
26,072,687△2,222,696

30,189,951

30,885,726

1,409,695

1,185,435

Other fixed liabilities
Total fixed liabilities
Total liabilities
Net Assets
Shareholders' equity
CapitalCapital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

451

946

Difference in revaluation of land
Foreign currency translation adjustment

571,368
802,769

451,115
170,300

Remeasurement of defined benefit plans
Total other comprehensive income
Subscription rights to shares△68,5502715733
53,526△25,723
1,782,074
57,697－
32,959,212
48,011,926－
32,725,498
47,185,662

Minority interests
Total net assets
Total liabilities and net assets

11

(Unaudited)(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
FY 2018
FY 2019(December 1, 2017 through (December 1, 2018 throughNovember 30, 2018)
November 30, 2019)
Thousands of yen
Thousands of yen
Net sales

43,943,632

45,987,996

Cost of sales

32,135,727

33,444,996

Gross profit
Selling, general and administrative expenses

11,807,904

12,543,000

SalaryBonus
Welfare expense

3,248,321
619,448
862,182

3,451,236
636,178
830,071Retirement benefit

150,251

204,036

Provision of director’s bonus
Provision of directors’ retirement benefits
Provision for board incentive plan

55,231
7,500
19,48868,9398,666
21,331

Postage

135,206

134,594

1,447,845
4,875

1,596,694
511

Commission paid

795,147

821,058

Rental expense

390,663309,623

Depreciation
Other selling, general and administrative expense

330,284
2,016,047

449,196
2,276,587

Total selling, general and administrative expense

10,082,494

10,808,726

1,725,409

1,734,274

Freightage and packing expense
Provision of allowance for doubtful accountOperating Income
Non-operating income
Interest received

25,99027,386

Dividends received

87,181

86,262Rent on real estateCommission received
Equity in earnings of affiliates

40,578772
66,79670,084731
69,164

Other non-operating income
Total non-operating income
Non-operating expenses

61,435
282,755

52,781
306,410

5,801
82,83039,227
19,773

8,506
83,66039,052
40,985

Others non-operating expense
Total non-operating expense
Ordinary Income

70,306217,940
1,790,224

89,171
261,377
1,779,307

Extra ordinary income
Gains on sales of fixed assets

36,409325,159

9,405

85,339630

45,814

411,128

Interest paid
Cash discount on sales
Depreciation expense of assets lentForeign Exchange Loss

Gains on sales of investment securities
Gain on reversal of subscription rights to shares
Total extra ordinary income
Extra ordinary loss
Loss on sales of fixed assets

273

67

Loss on disposal of fixed assets
Loss on sale of investment securities
Loss on devaluation of investment securities
Loss of business restructuring

21,964－－43,420

5,034
415
599
5,699

Total extra ordinary loss

65,65911,81612

(Unaudited)

FY 2018
FY 2019(December 1, 2017 through (December 1, 2018 throughNovember 30, 2018)
November 30, 2019)
Thousands of yen
Thousands of yen
Net income before taxes and other adjustment

1,770,379

2,178,619

Corporate, inhabitant and business taxes
Adjustments to corporate and other taxes

575,466△62,440

840,184△64,504

Total income taxes
Income before minority interest
Profit (loss) attributable to non-controlling interests

513,026
1,257,353－

775,679
1,402,940－

Profit (loss) attributable to owners of parent

1,257,353

1,402,940

13

(Unaudited)

Consolidated Statements of Comprehensive Income
FY 2018
FY 2019(December 1, 2017 through (December 1, 2018 throughNovember 30, 2018)
November 30, 2019)
Thousands of yen
Thousands of yen
Income before income taxes
Other comprehensive income
Unrealized gain(loss) on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Adjustments to retirement benefit
Equity equivalent to equity method affiliate
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attribute to the parent
Comprehensive income attribute to the minority shareholders

14

1,257,353

1,402,940△167,322
1,654
12,885△40,439
1△193,220
1,064,132△224,259
495△632,469
42,827△0△813,406
589,533

1,064,132－

589,533－

(Unaudited)(3) Consolidated Statements of Changes in Shareholders’ Equity
FY2018 (December 1, 2017, through November 30, 2018)(Thousands of yen)

Shareholders’ Equity
Balance at the beginning ofcurrent period
Changes of items during
the period

Capital stock

CapitalsurplusRetainedearnings

3,532,492

3,498,724

24,713,167

Total Shareholders’equityTreasury stock

29,622,267△122,115

Dividends from surplus△743,597△743,597

Profit (loss) attributableto owners of parent

1,257,353

1,257,353-

Purchase of treasury stock

3,670

Disposal of treasury stock
Increase(decrease)amount resulting inchange in scope of
consolidation
Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders’ equity
Total changes of items
during the period
Balance at the end ofcurrent period

3,670
-

50,2573,532,492

3,498,724

50,257564,012

3,670

567,683

25,277,180△2,118,444

30,189,951

Accumulated other comprehensive income

Balance at the beginning ofcurrent period
Changes of items during
the period

Valuationdifference on
available-forsale
securities

Deferred
gains orlosses onhedgesDifference inrevaluation ofland

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income1,577,017△1,203621,625

789,883△28,1102,959,211

StockoptionNoncontrollingshareholders'equity33,658-

Total net
asset

32,615,138

Dividends from surplus△743,597

Profit (loss) attributableto owners of parent

1,257,353

Purchase of treasury stock-

Disposal of treasury stock

3,670

Increase(decrease)amount resulting inchange in scope of
consolidation
Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders’ equity
Total changes of items
during the period
Balance at the end ofcurrent period

50,257△167,322

1,655△50,257

12,885△40,439△243,477

19,868-△223,609△167,322

1,655△50,257

12,885△40,439△243,477

19,868-344,074

1,409,695

451

571,368

802,769△68,550

2,715,733

53,526-32,959,212

15

(Unaudited)

FY2019 (December 1, 2018, through November 30, 2019)(Thousands of yen)

Shareholders’ Equity

Balance at the beginning ofcurrent period
Changes of items during
the period

Capital stock

CapitalsurplusRetainedearnings

Treasury stock

Total
Shareholders’ equity

3,532,492

3,498,724

25,277,180△2,118,444

30,189,951

Dividends from surplus△713,334△713,334

Profit (loss) attributableto owners of parent

1,402,940

1,402,940

Purchase of treasury stock△151,148

46,89751,416

4,519

Disposal of treasury stock
Increase(decrease)amount resulting inchange in scope of
consolidation
Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders’ equity
Total changes of items
during the period
Balance at the end ofcurrent period△151,148△14,350△14,350

120,252

120,252-4,519

795,507△104,251695,774

3,532,492

3,503,243

26,072,687△2,222,696

30,885,726

Accumulated other comprehensive income

Balance at the beginning ofcurrent period
Changes of items during
the period

Valuationdifference on
available-forsale
securities

Deferred
gains orlosses onhedgesDifference inrevaluation ofland

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income1,409,695

451

571,368

802,769△68,550

2,715,733

Stock
optionNoncontrollingshareholders'equity53,526-

Total net
asset

32,959,212

Dividends from surplus△713,334

Profit (loss) attributableto owners of parent

1,402,940

Purchase of treasury stock△151,148

Disposal of treasury stock

51,416

Increase(decrease)amount resulting inchange in scope of
consolidation
Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders’ equity
Total changes of items
during the period
Balance at the end ofcurrent period△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

16

(Unaudited)(4) Consolidated Cash FlowsFY 2018(December 1, 2017
throughNovember 30, 2018)
Thousands of yen

FY 2019(December 1, 2018
throughNovember 30, 2019)
Thousands of yen

Cash flows from operating activities
Income (loss) before income taxes
Depreciation of amortization

1,770,379
714,633

2,178,619
860,463

Depreciation of goodwill
Change in provision for bonus
Changes in net defined benefit asset

208,075
7,701△9,520240,708
7,119
26,521

Changes net defined benefit liability
Change in reverse for retirement benefits for officers
Changes in reverse for employee stock ownership plan

△18,553
7,500
1,739

2,485
8,666
5,323

19,488△14,611

Change in allowance for doubtful accounts
Interest income and dividends income

1,973△113,171△13,219△113,649

Interest paid
Equity in net income of affiliates
Gain on reversal of subscription rights to shares

5,801△66,796－

8,506△69,164△630

Gains from sale of fixed assets△36,135△325,092

Gains from sale of investment securities
Gains from valuation of investment securities△9,405△84,924599

Changes in board incentive plan

Loss on retirement of noncurrent assets
Loss of restructuring
Change in notes and accounts－
21,96443,420△699,692

Change in inventory
Change in account payable△562,287
13,713145,907502,316

OthersSubtotal

262,508
1,563,338

515,858
3,933,423

114,891△5,709△1,045,732

115,404△7,628△426,914

626,7873,614,285△540,206△28,211

1,261,189△139,863
13,383549,028△30,313
120,721△101,442△3,556,622－△901,293

Proceed from interest and dividends income
Payment of interest
Payment of corporate tax
Net cash(used in)provided by operating activities
Cash flows from investing activities
Decrease in time deposit
Increase in time deposit
Purchase of investment securities
Increase of sale for investment securities
Purchase of stocks of affiliates
Purchase of tangible fixed assets
Proceeds from sale for tangible fixed assets
Purchase of intangible assets
Proceeds from loans receivable
Payments of loans receivable
Purchase of investments in subsidiaries resulting
in change in scope of consolidation
OthersNet cash provided by (used in) investing activities

17

5,034
5,699
40,883

154,274

615,253△69,556
86,966△100,000△219,228
16,792△3,000△2,154,961－△24,580△5,171,418△8,918110,828

(Unaudited)

Cash flows from financing avtivities
Changes in short-term debt
Repayments of lease obligations
Proceeds from long-term loans
Repayment of long-term loans
Redemption of bonds
Proceeds from sale from treasury stock
Payments to acquire treasury stock
Proceeds from execution of stock option
Payments of dividends
Net cash used in financing activities
Effects of exchange rate on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at fiscal year-end

18

FY 2018(December 1, 2017 throughNovember 30, 2018)
Thousands of yen

FY 2019(December 1, 2018 throughNovember 30, 2019)
Thousands of yen－△82,729
4,100,000△571,962△400,000
1,870－－△743,597
2,303,581△9,774△2,250,823
10,776,583△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－

32,021

8,525,759

9,442,330

(Unaudited)(5) Notes regarding Consolidated Financial Statements(Notes on assumption of going concern)
Not applicable.
(Changes on indication method)

Changes due to partial amendments to “Accounting Standard for Tax Effect Accounting.”“Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standard Board of Japan(“ASBJ”) Statement no.28, February 16, 2018), has been implemented from the current fiscal year. Deferred tax
assets have been added to the section of investments and other assets, and deferred tax liabilities have been
added to the fixed liabilities section.
As a result, the “current assets’ deferred tax assets,” has decreased 124,068 thousand yen, compared to theprevious consolidated fiscal year’s consolidated balance sheet. In contrast, “ investments and other assets’deferred tax assets” have increased 76,612 thousand yen.
Also, fixed liabilities’ deferred tax liabilities, has decreased 47,456 thousand yen.
Moreover, the same taxable entities, deferred tax assets, and deferred tax liabilities are indicated as offset,
decreasing the total assets by 47,456 thousand yen, compared to before these changes.

19

(Unaudited)(Business Combinations)(Transactions under common control)
Transition to a holding company structure through a company split
Our company has transitioned to a holding company structure under an absorption-type company split
agreement on December 13, 2018, which was concluded on June 1, 2019 with MORITO JAPAN CO., LTD.
As a result, as of June 1, 2019, we have transitioned to a holding company structure.
1. Company split overview(1) Information on departments in question
Manufacturing and selling of apparel components and automotive interior components(2) Date of business combination
June 1, 2019,(3) Legal form of business combination
MORITO JAPAN CO., LTD. (100% subsidiary), has become the successor company in this absorption-type
split.
(4) Company name after business combination
Split company: MORITO CO., LTD.
Successor company: MORITO JAPAN CO., LTD.
(5) Purpose of company split:
The surrounding environment of our group is in the mid-to-long-term national demand decrease due topopulation decline in Japan, along with the creation of new and rapidly changing business models, including
the usage of new technologies such as IoT (Internet of the Things)・AI (Artificial intelligence).
For this reason, as this new business environmental requires, we aim to create value and expand ourearnings base globally under our company’s management vision of [Create Morito’s existence value, Realize“New Morito Group”].
Hereafter, to assure our group’s further growth, we concluded the transition to a holding company structure.
Our purposes are as follows,
1) Strengthen the group’s management strategic function
The holding company - focus on the management of our entire group and developing management strategies
aiming for further expansion in new businesses, including M&A, and striving to maximize the group’s company
value by distributing the management resources in the best and most effective way.
2) Accelerate decision-making process by clarifying the authorities and responsibilities
By separating the organizations that supervise the group management and business developments,
we aim to accelerate the decision-making process by defining the authorities and responsibilities and strengthen
our competitiveness by developing businesses more flexibly.
3) Maximize our group’s synergy
With a holding company structure as its core, we aim to maximize our group’s synergy by making the best use of
our management resources horizontally and effectively.
2.Overview of the implemented accounting processThis transaction was treated under common control based on the “Accounting Standard for Business
Combinations” (ASBJ Statement No.21, September 13, 2013) and the Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10, September
13, 2013).

20

(Unaudited)

3.Overview of departments’ split(1) Content of the departments’ split
Apparel components and consumer products departments(2) Operating results for the split departments fiscal year 2018 (December 1, 2017, through November 30,
2018)

Net Sales

Split departments (a)¥27,769 million

Achievements(non-consolidated) (b)¥27,769 million

Ratio (a÷b）100%(3) Section and amount for the split assets and liabilities (as of, June 1, 2019)
SectionCurrent assets
Fixed assets
Total

AssetsCarrying amount¥11,325 million¥809 million¥12,134 million

SectionCurrent assets
Fixed assets
Total

Liabilities
Carrying amount¥3,679 million¥694 million¥4,373 million(4) Conditions after the split (as of, June 1, 2019)(1) Name(2) Address(3) Representative’s name andposition(4) Business content(5) Capital(6) Fiscal period

Split company
MORITO CO., LTD,
4-2-4, MINAMI HOMMACHI,
CHUO-KU, OSAKA 541-0054
JAPAN
Representative Director andPresident Takaki Ichitsubo
Integrated management andgroup’s strategy planning¥3,532 million
November 30th

21

Successor company
MORITO JAPAN CO., LTD
4-2-4, MINAMI HOMMACHI,
CHUO-KU, OSAKA 541-0054
JAPAN
Representative Director andPresident Masato Kimoto
Manufacturing and selling ofapparel components, automotive
interior components and other parts¥310 million
November 30th

(Unaudited)(Segment Information)
1. Fiscal year 2018 (December 1, 2017, through November 30, 2018)
The information on net sales, income or loss, assets, and other items by reportable segment(Thousands of yen)

Reportable Segment
Japan

Asia

EU and US

Total

Adjustment(Note 1,3)

Consolidated
Statement
Amount(Note 2)Net Sales
Sales to external customers
31,326,136
6,484,696
6,132,799
43,943,632
43,943,632Inter segment sales and transfer
2,515,242
3,345,322
36,064
5,896,629△5,896,629
Total
33,841,378
9,830,018
6,168,864
49,840,262△5,896,629
43,943,632
Segment income
1,361,395
469,331305,800
2,136,527△411,117
1,725,409
Segment asset
35,523,056
6,837,501
7,227,915
49,588,473△1,529,090
48,059,383
Other
Depreciation
400,713
144,851
169,067
714,633
714,633
Increase in tangible fixed assets
3,464,358
200,988
73,363
3,738,710
3,738,710(Notes)1. Adjustment of △411,117 thousand yen includes △277,815 thousand yen corporate expenses that are notdistributed to each reportable segment and others △133,302 thousand yen.
2. The amounts for income or losses in the reportable segments were subsequently adjusted with the amount ofoperating income on the consolidated profit and loss statement.
3. The adjustment for segment asset includes the elimination of intersegment transaction △9,925,250 thousand
yen and corporate asset 8,396,160 thousand yen that have not been distributed to reportable segment.
Corporate assets consist mainly of assets not belonging to a specific segment (cash and cash equivalent andinvestments in securities) and assets related to administrative operations.
2. Fiscal Year 2019(December 1, 2018, through November 30, 201)
(1) The information on net sales, income or loss, assets, and other items by reportable segment(Thousands of yen)Japan

Reportable Segment
EuropeAsia
and theUSA

Total

Adjustment(Note 1,3)

Consolidated
Statement
Amount(Note 2)Net Sales
Sales to external customers
33,262,134
6,963,361
5,762,501
45,987,996
45,987,996
Inter segment sales and transfer
2,364,981
3,070,111
31,396
5,466,489△5,466,489
Total
35,627,115
10,033,473
5,793,897
51,454,486△5,466,489
45,987,996
Segment income
1,509,267
524,407
13,173
2,046,848△312,574
1,734,274
Segment asset
32,734,371
6,874,226
6,319,317
45,927,914
1,257,747
47,185,662
Other
Depreciation
541,001
169,539
149,923
860,463
860,463
Increase in tangible fixed assets
482,649
208,675
277,493
968,818
968,818(Notes)1. Adjustment of △312,574 thousand yen includes △298,112 thousand yen corporate expenses that are notdistributed to each reportable segment and other △14,461 thousand yen.
2. The amounts for income or losses in the reportable segments were subsequently adjusted with the amount ofoperating income on the consolidated profit and loss statement.
3. The adjustment for segment assets includes the elimination of intersegment transactions △8,820,399
thousand yen and corporate asset 10,078,147 thousand yen that have not been distributed to reportablesegment. Corporate assets consist mainly of financial assets the holding company possesses (cash and cash
equivalent and investments in securities).

22

(Unaudited)(2) Reportable segments changes(Changes regarding the measuring method of the reportable segments’ profits or losses)
Due to the transition to a holding company structure, from this consolidated fiscal year, the company’s costallocation bases have changed.
Mainly, the group’s management costs generated by the holding company is not allocated to each reporting
segment and is indicated as the total company’s cost.
Due to these changes, compared to the original method, the [JAPAN] segment profits have decreased 52,881
thousand yen, and the adjusted segment profits have increased 52,881 thousand yen.
(Per share data)

FY2018(December 1, 2017, throughNovember 30, 2018)
1,196.17 yen
45.71 yen
45.62 yenItem
Net assets per share
Net income per share
Diluted net income per share

FY2019(December 1, 2018, throughNovember 30, 2019)
1,193.13 yen
51.17 yen-

(Notes)1. No statement is made of the amount of current net profit per share after adjusting for residual stocks because there
were no residual stocks that had a dilution effect.
The amount of treasury stock to calculate the net assets per share and the weighted-average number of commonshares to calculate net income per share and net income per share after adjustment for dilutive securities included
the company’s shares owned by Trust & Custody Services Bank, Ltd (for J-ESOP, FY2018, 377 thousand shares,
FY2019, 376 thousand shares), and The Master Trust Bank Of Japan, LTD ( for BIP, FY2018, 173 thousand shares,
FY2019, 153 thousand shares).
2. In this consolidated fiscal year, there were no diluted stocks. Therefore there is no entry in the diluted net income
per share adjusted section.
(Notes)The basis for calculating
1. Net assets per share
FY2018(As of November 30, 2018)

FY2019(As of November 30, 2019)

32,959,212

32,725,498

53,526

57,697(53,526)(57,697)--

32,905,685

32,667,801

Number of issued stock (Thousand shares)

30,80030,800

Number of treasury stock (Thousand shares)

3,290

3,420

Number of common stock for calculating the net
assets per share (Thousand shares)

27,50927,379Item
The total net assets in the consolidated balance
sheet (Thousands of yen)
Deducted amount(Thousands of yen)

from

total

net

asset

(Stock Option (Thousands of yen))(Non-controlling interests (Thousands of yen))
The net assets associated with common stock(Thousands of yen)

(Note)
The amount of treasury stock of common stock to calculate the net asset per share is included the stock of Trust &Custody Services Bank, Ltd. and Master Trust Bank Of Japan, LTD owned.

23

(Unaudited)
2. Net income per share and Diluted net income per share
FY2018(December 1, 2017, throughNovember 30, 2018)

FY2019(December 1, 2018, throughNovember 30, 2019)

1,257,353

1,402,940--

1,257,353

1,402,940

27,50527,415

Net income adjustment attributable to parent
company shareholder (Thousands of yen)--

The number of increase in common stock(Thousand shares)

53-(Stock Option (Thousands of yen))

53

-

-

General meeting ofshareholders and board of
directors for stockacquisition rights
549,500
common stocks(Date: February 25, 2016)

Item
Net income per share

Profit (loss) attributable to owners of parent(Thousands of yen)
Share unallocated(Thousand shares)tocommonstock

Profit (loss) attributable to owners of parent
relating to common stock
Shares on the average during the fiscal year
(Thousand shares)

Diluted net income per share adjusted

Details of shares not included in the calculation of
fully diluted net income per share due tonon-dilutive effect(Note)
The weighted-average number of common shares to calculate the net income per share is included the stock ofTrust & Custody Services Bank, Ltd. and The Master Trust Bank of Japan, Ltd. owned.

5. Others(1) Changes in Senior Management(i) Changes in President
Not applicable.
(ii) Changes in other officers
Not applicable.

24