(Unaudited)

January 12, 2018
MORITO CO., LTD.
Financial Statement (Unaudited)
For the Fiscal Year ended November 30, 2017
(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：
Kenji Kojima
Director, Executive Officer and General Manager of Control Division
Telephone: +81-6-6252-3551
Scheduled date of annual general meeting of shareholders
Scheduled date of dividend payment:

February 23, 2018
February 26, 2018
February 26, 2018
Yes

Scheduled date of filling of Security Report:

Supplementary explanation material for quarterly financial results:
Presentation meeting for quarterly financial results:

Yes (for analyst and institution investors)(Amounts rounded down)
1. Consolidated Financial Results for the Fiscal Year 2017(December 1, 2016 through November 30, 2017)(1) Consolidated Financial Results(Percentages indicate year-on-year changes)
Net sales
Operating income
Ordinary income
Net income%%%%
Millions of yen
Millions of yen
Millions of yen
Millions of yen
FY 2017
41,388
3.2
1,707
1,703
3.4
3,305
179.7
△3.4
FY 2016
40,086 △7.4
1,767
2.7
1,647 △12.0
1,181 △17.5(Note) Comprehensive income : 4,882 million yen (－%) (FY 2017)

Net income
Per share
FY 2017
FY 2016△1,156 million yen (△153.7%)(FY 2016)

Fully diluted net
Income per share

Returnon equity

Ratio ofordinary income
to total assets

Ratio ofoperating income
to net sales

Yen

%

%

%

Yen
119.2941.48

119.14－10.7
3.9(Reference) Equity in earnings (losses) of affiliates : 44 million yen (FY 2017)(2) Consolidated Financial Position
Total assets
Millions of yen
FY 2017
43,473
FY 2016
40,853

Net assets
Millions of yen
32,61529,260(Reference) Equity capital : 32,581 million yen (FY 2017)

4.0
3.7

4.1
4.4

38 million yen (FY 2016)

Equity ratio
%
74.9
71.6

Net assets per shareYen
1,184.79
1,027.96

29,246 million yen (FY 2016)(3) Consolidated Cash Flows
Cash flows fromoperating activities
FY 2017
FY 2016

Millions of yen
1,802
1,391

Cash flows frominvesting activities
Millions of yen
2,939
2,728

1

Cash flows fromfinancing activities
Millions of yen△2,572△4,301

Cash and cash
equivalents at the endof the period
Millions of yen
10,7768,322

(Unaudited)

2. DividendsFirstquarterend
Yen-

Dividends per share
SecondThird
Fiscalquarter- quarteryearend
end
end
Yen
Yen
Yen
8.00
9.00
14.00
14.00

AnnualTotal dividends(Annual)Ratio ofdividends to
net assets(Consolidated)
%
1.6
2.5

Dividends
Payout ratio(Consolidated)

Yen
Millions of yen%
FY 2016
17.00
493
41.0
FY 2017
28.00
788
23.5
FY 2018
12.50
12.50
25.00
52.9
(Forecast)(Note) 1: Each 3 yen commemorative dividends are included in both of FY2017 Second quarter-end and FY2017 fiscal
year end dividends.
(Note) 2: Dividends payout ratio (consolidated) 23.5% is mentioned. But it is more than 50% based on net income
excluded extraordinary income.
(Note) 3: Each 0.50 yen commemorative dividends are included in both of FY2018 Second quarter-end and FY2018
fiscal year end dividends.

3. Consolidated Forecast for FY 2018 (December 1, 2017 through November 30, 2018)(Percentages represent changes from corresponding period of previous year)
Net Sales
Millions ofyenFull year

44,000Ordinary profit

Operating income%
6.3

Millions of
yen

2,000

Millions of
yen

%
17.1

1,900

%
11.5

Net income
per share

Net income
Millions of
yen

1,300

%
△60.7

Yen
47.27

*Notes(1) Changes of important subsidiaries during the period (changes of specific subsidiaries in accordance withchanges in the scope 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 :(3) Number of outstanding shares (common shares）(i) Number of outstanding shares, including treasury shares at end of period:
30,800,000 shares(as of November 30, 2017)30,800,000 shares(as of November 30, 2016)(ii) Number of shares of treasury stock at end of period:
3,300,100 shares(as of November 30, 2017)
2,349,000 shares(as of November 30, 2016)(iii) Average outstanding number of shares during the period:
27,709,133 shares(FY 2017)
28,485,602 shares(FY 2016)

2

None
Yes
None
None

(Unaudited)(Reference) Summary of Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for FY 2017 (December 1, 2016 through November 30, 2017)(1) Non-Consolidated Financial Results(Percentages represent changes from corresponding period of previous year)
Net Sales
Operating income
Ordinary profit
Net Income
Millions of yen%
Millions of yen%
Millions of yen%
Millions of Yen%
FY 2017
26,041
0.9
734
4.5
1,308
30.3
3,768
343.4
FY 2016
25,821 △1.2
702
4.5
1,003
△6.9
849
△32.4

FY 2017
FY 2016

Net income
per share
Yen
136.0029.84

Fully diluted net
Income per share
Yen
135.83-(2) Non-Consolidated Financial Position
Total assets
Net assets
Equity ratio
Net assets per share
Millions of yen
Millions of yen%
Yen
FY 2017
37,404
29,16877.9
1,059.46
FY 2016
35,442
26,69475.3
937.75(Reference) Equity capital: 29,134 million yen (FY 2017)
26,680 million yen (FY2016)*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 forecasts and criteria conditioned upon the forecasts, pleaserefer to “1. Qualitative Information for the Period under Review (4) Outlook for the next fiscal year” on page 7.
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.

3

(Unaudited)Index
1. Qualitative Information for the Period under Review ......................................................................................5(1) Overview of Business Performance .............................................................................................................5(2) Overview of Financial Position .....................................................................................................................6(3) Overview of Cash Flows ................................................................................................................................6(4) Outlook for the next fiscal year ....................................................................................................................7(5) Basic policy on Payment of Dividends ........................................................................................................7
2. Organization of the group ..................................................................................................................................8
3. Management Policy ...........................................................................................................................................10(1) Basic Management Policy ...........................................................................................................................10(2) Target Indicator.............................................................................................................................................10(3) Medium and Long-Term Management Strategy ........................................................................................10(4) Issues to be Addressed ...............................................................................................................................10(5) Other Material Matters .................................................................................................................................10
4. Basic concept concerning the selection of accounting standards .............................................................10
5. Consolidated Financial Statements ................................................................................................................ 11(1) Consolidated Balance Sheets ..................................................................................................................... 11(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .......13(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 in accounting principal] ...........................................................................................................................19[Additional Information] ............................................................................................................................................19[Segment Information] .............................................................................................................................................20[Per share data] .......................................................................................................................................................21
6. Others .................................................................................................................................................................22(1) Changes in Senior Managements...............................................................................................................224

(Unaudited)

1. Qualitative Information for the Period under Review(1) Overview of Business Performance
In the fiscal year ended November 30th, 2017 (From 1st December, 2016 to 30th November, 2017), theJapanese economy has shown signs of modest recovery by improving employment situation and capital
investment because corporate performance has continued stable. However, some stagnation in personal
consumption started to appear in the second half of fiscal year after price of some products started to increase.
In the global economy, the uncertain situation continued due to increase of political uncertainty in the US,
concern against Brexit in EU economy, and increase of uncertain international circumstances in Asia
In such a situation, our group is accelerating a growth strategy by the development of value-added Japanese
items, expansion of a global sales channel under the 7th mid-term management plan, and will promote therealization of value creation which the era seeks, expand our business in not only existing market such ASEAN,
china, western, but also in untapped market.
As a result, in the current quarterly performance reaches net sales ¥41,388 million (increased by 3.2% from ayear earlier), operating income ¥1,707 million (decreased by 3.4% from a year earlier), ordinary income ¥1,703
million (increased by 3.4% from a year earlier), net income ¥3,305 million (increased by 179.7% from a year
earlier).
The exchange rate used for the oversea subsidiaries’ consolidated financial statement of the current quarterend as below:
3Q Apr-Jun
4Q Jul-Sep
1Q Oct-Dec
2Q Jan-Mar
111.10(102.96)110.95(101.12)USD
109.43 (120.54)
113.61 (112.69)
122.26 (114.36)
130.43 (113.29)
EUR
117.86 (131.67)
121.04 (127.57)
16.21 (15.46)
16.63 (15.15)
RMB
15.99 (18.34)
16.56 (17.39)
14.27 (13.27)
14.20 (13.04)
HKD
14.11 (15.55)
14.64 (14.53)
3.67 (3.19)
3.67 (3.22)
TWD
3.45 (3.68)
3.66 (3.50)
0.0048 (0.0046)
0.0048 (0.0045)
VND
0.0048 (0.0053)
0.0050 (0.0050)
3.24 (2.93)
3.33 (2.91)
THB
3.09 (3.35)
3.24 (3.20)*() is the exchange rate of FY2016.
*We have changed the method which is that Income and Expense in overseas subsidiaries has been converted
by average number of exchange rate into Japanese yen is applied from the first quarter of this fiscal year.
Please refer to “5. Consolidated Financial Statements, [Changes in accounting principal] on page 19.
Segment information as below[Japan]As for the apparel division, sales of the accessories for sports apparel manufacturer which was strong in same
period a year earlier was decreased, however sales of the accessories for ladies wear, uniform/working wear
and mass retailer were increased.
In the consumer product division, sales of the accessories for shoes and video equipment were decreased,
but sales of accessories for health-related items, automobile interior components, rental and cleanup of kitchen
supplies were increased.
As a result, net sales were ¥28,466 million (increased by 1.3% from a year earlier).
[Asia]
As for the apparel division, sales of the accessories for Japanese apparel manufacturers in Shanghai weredecreased, however sales of the accessories for EU and the US apparel manufacturers in Hong Kong wasincreased.
In the consumer product division, sales of accessories for video equipment in Thailand was decreased, but
sales of accessories for video equipment in Hong Kong and sales of the automobile interior component forJapanese auto makers in Shanghai were increased.
As a result, net sales were ¥7,205 million (increased by 10.5% from a year earlier) including effect of Japanyen depreciation.
5

(Unaudited)[Europe and the U.S.]
As for the apparel division, sales of the accessories in EU and the US were increased.
In the consumer product division, sales of automobile interior article for Japanese auto maker in the US andsales of the accessories for video equipment were decreased, however sales of automobile interior component
for Japanese auto makers in Europe was increased.
As a result, net sales were ¥5,716 million (increased by 4.4% from a year earlier) including effect of Japan yen
depreciation.
(2) Overview of Financial Position
Total assets came to ¥43,473 million, increased by ¥2,619 million from a year earlier.
Total current assets came to ¥28,033 million, increased by ¥2,906 million from a year earlier. This change wasmainly due to increase in cash and deposits ¥2,793 million.
Total fixed assets came to ¥15,425 million, decreased by ¥282 million from a year earlier. This change wasmainly due to decrease in land ¥697 million.
Total current liabilities came to ¥6,951 million, decreased by ¥365 million from a year earlier. This change wasmainly due to decrease in short-term loans ¥130 million.
Total fixed liabilities came to ¥3,906 million, decreased by ¥369 million from a year earlier. This change wasmainly due to decrease in bond ¥400 million.
Total net assets came to ¥32,615 million, increased by ¥3,354 million from a year earlier. Share holders’ equity
ratio was 74.9%, increased by 3.3% from a year earlier.
(3) Overview of Cash Flows
The overall situation regarding cash flow during the fiscal year as follow:[Cash flows from operating activities]
Net cash provided by operating activities was ¥1,802 million (¥1,391 million provided in the same period of theprevious fiscal year). This change was mainly due to acquisition of net income before taxes.
[Cash flows from investing activities]
Net cash provided in investing activities was ¥2,939 million (¥2,728 million provided in the same period of theprevious fiscal year). This change was mainly due to sales of tangible fixed assets.
[Cash flows from financing activities]
Net cash used by financing activities was ¥2,572 million (¥4,301 million used in the same period of theprevious fiscal year). This change was mainly due to payments to acquire treasury stock and dividends payout.
As a result of above, cash and cash equivalent was ¥10,776 million, increased by ¥2,453 million from a year
earlier.
The following table shows financial indicators associated with cash flows.
FY2015FY2016FY2017

Equity ratio

65.7%

71.6%

74.9%

Equity ratio (market value basis)

52.0%

55.7%

66.4%

Interest-bearing debt / cash flow ratio

288.7%

180.8%

89.4%

91.4

78.3

336.7

Interest coverage ratio(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 multiple 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.

6

(Unaudited)(4) Outlook for the next fiscal year
Our group set and promote 『Create Morito’s existence value, Realize “New Morito Group”』under the 7th
mid-term management plan “Make it happen, We develop our future！！！” (December 1, 2015 throughNovember 30, 2018). In the last year of this mid-term management plan, Morito considers development ofJapan made high valued items and global expansion as the core management plan, and Morito realizes tocreate Morito’s value which era needs. At the same time, we accelerate our business in not only existing
markets such as Asia, China, U.S. and EU, but also in untapped markets.
The forecast for consolidated results for the fiscal year of 2018 is net-sales ¥44,000 million yen, operating
income ¥2,000 million, ordinary profit ¥1,900 million and net income ¥1,300 million (Exchange rate: US$1.00 =¥111).
(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. In addition, we will use the internal reserve to invest, and M&A for the long-term
growth in the future.
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 in consideration of the impact in the case of that profit(loss)
attributable to owners of parent of the fiscal year fluctuates significantly due to extraordinary factors.)
The company will consider stock buy-back to enrich shareholder return promptly, based on the company’s
financial situation and share price.
During this fiscal year, we scheduled to propose the general meeting of shareholders to payout ¥14 (including¥3 for commemorative dividends) per share as dividend of year-ended. As a result, dividends for the subject
fiscal year amount to ¥28 (including ¥6 for commemorative dividends) per share including the interim dividendsof ¥14 (including ¥3 for commemorative dividends) per share.
For next fiscal year, we plan each ¥12.5 (including ¥0.5 for commemorative dividends) for both of FY2018
Second quarter-end and FY2018 fiscal year end dividends. A total dividend is ¥25 (including ¥1 forcommemorative dividends) per share.

7

(Unaudited)

2. Organization of the group
Our group consists of the parent company, 19 subsidiaries and 1 affiliate company. The group’s main businessis sales and manufacture of materials for daily-life: including apparel materials, parts for automotive, life style
goods, and rental and cleaning of kitchen appliances etc.
◎Consolidated subsidiaries: 16 companies
company○:Non-consolidated subsidiaries: 3 companies□:Affiliates: 1◎MORITO INDUSTRIAL CO., (H.K.) LTD.: Selling of component of apparel and consumer products◎MORITO (SHENZHEN) CO., LTD.: A subsidiary of MORITO INDUSTRIAL CO., (H.K.) LTD. (100% owned)
Manufacturing of component of apparel and consumer products◎TAIWAN MORITO CO., LTD.: Selling of component of apparel and consumer products.
◎KANE-M SHANGHAI CO., LTD.: Selling of component of apparel and consumer products.
◎KANE-M, INC.: Selling of component of apparel and consumer products.
◎MORITO (EUROPE) B.V.: Selling of component of apparel and consumer products.
◎ KANE-M DANANG CO., LTD: Selling and manufacturing of component of apparel and consumer products,
operation of rental factories.
◎KANE-M (THAILAND) CO., LTD.: Selling of component of apparel 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 copying to Chinese and overseas.
○ MATEX BANGKOK CO., LTD.: A subsidiary of MATEX INC. (100%). Manufacturing and selling of apparelparts, design and copying to Thailand and overseas.
◎GSG FASTENERS, LLC.: Manufacturing and selling of component of apparel and consumer products.
◎ GSG (SCOVILL) FASTENERS ASIA LIMITED: A subsidiary of GSG FASTENERS, LLC. (100%). Selling ofcomponent of apparel and consumer products.
◎GSG FASTENERS UK LIMITED: A subsidiary of GSG FASTENERS, LLC. (100%). Selling of component ofapparel and consumer products◎ GSG FASTENERS INDIA PVT. LIMITED: A subsidiary of GSG FASTENERS, LLC. (100%). Selling ofcomponent of apparel and consumer products○ MORITO SCOVILL MEXICO S.A. de C.V.: A subsidiary of KANE-M, INC. (99%) and GSG FASTENERS,LLC (1%). Selling of component of automobile and apparel.
◎ACE INDUSTRIAL MACHINERY CO., LTD.: Rental service, selling and cleaning of kitchen appliance◎THREE RUNNERS CO., LTD.: Selling and manufacturing of sports supporter.
◎ MATEX INC.: Manufacturing and designing apparel component, HP designing and producing and DTP
printing.
○ 52DESIGN CO., LTD.: Manufacturing and selling of bags, accessories, clothes, and miscellaneous goods.
□ Kuraray Fastening Co., Ltd.: Selling and manufacturing of hook and loop fastener.
(Note 1) MORITO SCOVILL MEXICO S.A. de C.V. is established in July 31, 2017.
(Note 2) 52DESIGN CO., LTD. is established in August 1, 2017.

8

(Unaudited)Business Flow Chart

9

(Unaudited)

3. Management Policy(1) Basic Management Policy
We manage business under the corporate principle of ‘DESIGN YOUR BRIGHT FUTURE WITH OURVARIOUS PARTS’.
To enhance the sense of unity and centripetal force, we define and infiltrate our values which are existing inMorito’s employers and employees as implicit knowledge as “MORITO Value”, to all of Morito’s staffs, and werealize new value creation which is not caught in habit.
(2) Target Indicator
Our targets to be achieved at the FY 2018 under the 7th mid-term management plan are as below:
Consolidated sales: 44 billion yen
Consolidated operating sales: 2 billion yen.
(3) Medium and Long-Term Management Strategy
We promote expansion and strengthening our group revenue, establish capital policy, strengthening internal
control, under the 7th mid-term management plan from FY2016 to FY2018 『Create Morito’s existence value,
Realize “New Morito Group”』(4) Issues to be Addressed
We treat following subjects as our business challenges under the process of the 7th mid-term management
plan to enhance our corporate values.
1. Expansion and strengthening our group revenue
Strengthening plan and development with domestic and global business partners, and industry-academic
collaboration. At the same time, establish global production, purchase, and stock based on sales strategy. At
the beginning, strength domestic logistic to minimize logistic costs. And we actively invest to strength andexpand of group revenue, enhance sales tool, capital investment, new base.
2. Establish capital policy
The company changed “Basic policy on Payment of Dividends” as mentioned in 1 (5). We will try to maintainproper share price based on PBR.
3. Strengthening internal control
We and corporate governance including strength business management control and compliance, and fulfill
accountability to all of stakeholders through IR activity. We promote activation of diversity of management tocorrespond low birthrate and longevity, population decrease, and promote of female and foreign national
employees. Furthermore, we speed up decision making of management and sales from timely catching ofgroup information by the effective use of SAP.
(5) Other Material Matters
Nil

4. Basic concept concerning the selection of accounting standards
We keep adopting Japan standard financial report for easy comparison with other companies for certain
moment. For IFRS, we will consider to adopt it with various world and economic situation.

10

(Unaudited)

5. Consolidated Financial Statements(1) Consolidated Balance Sheets
FY 2016

FY 2017(As of November 30, 2016) (As of November 30, 2017)
Thousands of yen

Thousands of yen

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable

9,442,122
10,583,460

12,235,613
10,797,872

Commercial goods and finished goods
Work in process
Raw materials and supplies

3,574,856
168,972
290,4173,714,499
196,973
393,923

Deferred tax assets
Other current assets
Allowance for doubtful accounts

216,002881,175△29,950

151,765
578,315△35,215

25,127,055

28,033,747

Building and structures
Accumulated depreciation
Building and structures (net)
Machinery and delivery equipment

4,551,503△2,564,670
1,986,832
1,525,055

4,783,454△2,610,342
2,173,111
1,775,364

Accumulated depreciation
Machinery and delivery equipment (net)
Tools, furniture and fixtures△1,045,873
479,182
2,375,325△1,090,214
685,149
2,036,686

Accumulated depreciation
Tools, furniture and fixtures (net)△1,989,123
386,201
3,224,579△1,670,066
366,619
2,526,981

355,106△128,903
226,202273,841△153,817
120,024

Total current assets
Fixed assets
Tangible fixed assets

Land
Lease assets
Accumulated depreciation
Lease assets (net)
Construction-in-process-in-process

73,013

11,757

Total tangible fixed assets
Intangible fixed assets

6,376,011

5,883,643

Goodwill
Lease assets
Other Intangible fixed assets

3,000,353
242,152
997,0222,728,172
151,829
1,124,519

Total intangible fixed assets
Investments and other fixed assets
Investment securities

4,239,528

4,004,521

4,055,364

4,551,840

Long-term loans

112,400

100,176

Deferred tax
Net defined benefit asset
Other fixed assets

40,723
221,830
737,505

44,297289,728
621,231△74,988
5,092,834
15,708,375△70,037
5,537,236
15,425,400

Allowance for doubtful accountTotal investments and other fixed assets
Total fixed assets
Deferred assets
Total assets

11

18,20514,00440,853,636

43,473,152

(Unaudited)
FY 2016

FY 2017(As of November 30, 2016) (As of November 30, 2017)
Thousands of yen

Thousands of yen

Liabilities
Current liabilities
Notes and accounts payable
Short-term loans payable

4,262,005
180,000

4,317,325
50,000Current portion of bonds

400,000

400,000

Current portion of long-term debt
Accrued tax payable
Reserve for bonuses

375,396379,220
175,722161,081
481,935
208,130

Reserve for director’s bonuses
Other current liabilities
Total current liabilities

79,232
1,465,489
7,317,066

66,7991,266,606
6,951,879

1,400,000
161,0811,000,000

Fixed liabilities
Bonds payable
Long-term debt

1,001,179
351,211
17,375－
1,224,545
351,21124,76130,43335,05918,13341,08351,552
20,217918,021343,2124,275,706

916,630
276,133
3,906,135

11,592,772

10,858,014

3,532,492

3,532,492

3,498,724
23,966,197△1,230,960

3,498,724
24,713,167△2,122,115

Total shareholders’ equity
Other comprehensive income
Valuation difference on available-for-sale securities

29,766,453

29,622,267

1,336,046

1,577,017

Deferred gains or losses on hedges
Difference in revaluation of land
Foreign currency translation adjustment

861△1,280,438△463,484△1,203621,625
789,883

Remeasurement of defined benefit plans
Total other comprehensive income
Subscription rights to shares△112,982△519,998
14,408△28,1102,959,211
33,658－29,260,863
40,853,636－
32,615,138
43,473,152

Deferred tax
Deferred tax assets for revaluation
Provision for retirement benefit by stock
Provision for director’s retirement benefit
Provision for director's retirement benefit by stock
Provision for environmental measures
Net defined benefit liability
Other fixed liabilities
Total fixed liabilities
Total liabilities
Net Assets
Shareholders' equity
CapitalCapital surplus
Retained earnings
Treasury stock

Minority interests
Total net assets
Total liabilities and net assets

12

(Unaudited)(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
FY 2016
FY 2017(December 1, 2015 through (December 1, 2016 throughNovember 30, 2016)
November 30, 2017)
Thousands of yen
Thousands of yen
Net sales

40,086,554

41,388,461

Cost of sales
Gross profit
Selling, general and administrative expenses

29,285,355
10,801,198

30,245,702
11,142,759

2,987,662
628,877
683,552
89,833

3,097,032
590,211
781,530
185,361

Provision of director’s bonus

72,886

67,137

Provision of directors’ retirement benefits
Provision for board incentive plan

5,558
16,262

10,65016,492

132,425
1,184,867

136,259
1,245,748

SalaryBonus
Welfare expense
Retirement benefit

Postage
Freightage and packing expense
Provision of allowance for doubtful account

274

3,077

689,491

655,541454,575
320,659
1,766,384

409,564
300,403
1,936,062

9,033,310
1,767,888

9,435,073
1,707,685

Interest received
Dividends received
Rent on real estate

24,83180,42576,55927,562
72,39747,303

Commission received
Equity in earnings of affiliates
Other non-operating income
Total non-operating income

1,271
38,70332,496254,287

1,016
44,202
51,577
244,060

16,44886,658

5,675
83,912

8,297
155,748
107,977
375,130

9,709
4,211
144,890
248,398

1,647,045

1,703,347

Commission paid
Rental expense
Depreciation
Other selling, general and administrative expense
Total selling, general and administrative expense
Operating Income
Non-operating income

Non-operating expenses
Interest paid
Cash discount on sales
Depreciation expense of assets lentForeign Exchange Loss
Others non-operating expense
Total non-operating expense
Ordinary Income
Extra ordinary income
Gains on sales of fixed assets

18,6193,292,482

124,284
83,495
226,399－－
3,292,482

Extra ordinary loss
Loss on sales of fixed assets
Loss on disposal of fixed assets
Impairment loss

11,774
2,221－

84,038134,021405,338

Loss of business restructuring
Loss on golf membership rights
Total extra ordinary loss－－
13,99698,897700
722,996

Gains on sales of investment securities
Gains on liquidation of affiliates
Total extra ordinary income13

(Unaudited)
FY 2016
FY 2017(December 1, 2015 through (December 1, 2016 throughNovember 30, 2016)
November 30, 2017)
Thousands of yen
Thousands of yen
Net income before taxes and other adjustment
Corporate, inhabitant and business taxes

1,859,448
798,953

4,272,832
833,633

Adjustments to corporate and other taxes
Total income taxes
Income before minority interest△121,096
677,857
1,181,591

133,862
967,495
3,305,337

Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent－
1,181,591－
3,305,337

Consolidated Statements of Comprehensive Income
FY 2016
FY 2017(December 1, 2015 through (December 1, 2016 throughNovember 30, 2016)
November 30, 2017)
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
Land revaluation difference amountForeign 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

1,181,591

3,305,337△289,501
1,930
19,269△1,866,716△202,722

240,971△2,064－△2,337,740△1,156,149－
1,253,368
84,871△0
1,577,146
4,882,483△1,156,149

4,882,483－－

(Unaudited)(3) Consolidated Statements of Changes in Shareholders’ Equity
FY2016 (December 1, 2015 through November 30, 2016)(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

22,436,316

Treasury stock

Total
Shareholders’equity△956,696

28,510,835

Dividends from surplus△452,184△452,184

Profit (loss) attributableto owners of parent

1,181,591

1,181,591

Purchase of treasury stock△276,965△276,965

Disposal of treasury stock

2,702

2,702

Increase (decrease) infrom change of scopeof 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

15,431

15,431

785,043785,043－－

1,529,880△274,263

1,255,617

3,532,492

3,498,724

23,966,197△1,230,960

29,766,453

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 inrevaluationof land1,625,548△1,069△514,664

Foreigncurrencytranslation
adjustment

1,403,231

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income89,7392,602,786

StockoptionNoncontrollingshareholders'equity－－Total net
asset

31,113,622

Dividends from surplus△452,184

Profit (loss) attributableto owners of parent

1,181,591

Purchase of treasury stock△276,965

Disposal of treasury stock

2,702

Increase (decrease) infrom change of scopeof 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

15,431
785,043△289,501

1,930△765,773△1,866,716△202,722△3,122,784

14,408－△3,108,376△289,501

1,930△765,773△1,866,716△202,722△3,122,784

14,408－△1,852,758

1,336,046

861△1,280,438△463,484△112,982△519,998

14,408－29,260,853

15

(Unaudited)

FY2017 (December 1, 2016 through November 30, 2017)(Thousands of yen)

Shareholders’ Equity

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

Capital stock

CapitalsurplusRetainedearnings

Treasury stock

Total
Shareholders’equity3,532,492

3,498,724

23,966,197△1,230,960

29,766,453

Dividends from surplus△656,304△656,304

Profit (loss) attributableto owners of parent

3,305,337

3,305,337

Purchase of treasury stock△892,131△892,131

Disposal of treasury stock

976

976

Increase (decrease) infrom change of scopeof 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－△1,902,063△1,902,063－－

746,969△891,155△144,185

3,532,492

3,498,724

24,713,167△2,122,115

29,622,267

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 inrevaluationof land1,336,046

861△1,280,438

Foreigncurrencytranslation
adjustment△463,484

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income△112,982△519,998

Stock
optionNoncontrollingshareholders'equity14,408－

Total net
asset

29,260,863

Dividends from surplus△656,304

Profit (loss) attributableto owners of parent

3,305,337

Purchase of treasury stock△892,131

Disposal of treasury stock

976

Increase (decrease) infrom change of scopeof 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－△1,902,063

240,971△2,064

1,902,063

1,253,368

84,871

3,479,210

19,250240,971△2,064

1,902,063

1,253,368

84,871

3,479,210

19,250－3,354,274

1,577,017△1,203621,625

789,883△28,1102,959,211

33,658－32,615,138

16

3,498,460

(Unaudited)(4) Consolidated Cash FlowsFY 2016(December 1, 2015 throughNovember 30, 2016)
Thousands of yen
Cash flows from operating activities
Income (loss) before income taxes
Depreciation of amortization
Impairment loss
Depreciation of goodwill
Change in provision for bonus
Changes in net defined benefit asset
Changes net defined benefit liability
Change in reverse for retirement benefits for officers
Changes in reverse for employee stock ownership plan
Changes in board incentive plan
Change in allowance for doubtful accounts
Interest income and dividends income
Interest paid
Equity in net income of affiliates
Gains from sale of fixed assets
Gains from sale of investment securities
Loss on retirement of noncurrent assets
Loss of restructuring
Reversal of foreign currency translation adjustment for reducing
the capital of controlled foreign subsidiaries
Change in notes and accounts
Change in inventory
Change in account payable
OthersSubtotal
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
Proceeds from liquidation 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
OthersNet cash provided by (used in) investing activities

17

1,859,448
617,115－
212,195
21,882
178,246

FY 2017(December 1, 2016 throughNovember 30, 2017)
Thousands of yen
4,272,832
675,401
405,338
225,667
25,28915,70688,701△24,325
7,570

37,414
10,6507,386

14,419△24,366△105,256

16,492△2,734△99,960

16,448△38,703△6,845△124,284

5,675△44,202△3,208,443－－
134,02198,897△83,495－△353,153△13,196

98,663△34,10232,34445,0672,322,036△175,568△13,9742,450,452

103,852△17,781△1,016,211
1,391,896

111,196△5,353△754,108
1,802,187△224,457
242,899△531,728
251,723△27,871
209,288△65,769
117,473△57,1212,221－
87,723△386,153
2,944,419△32,590
52,469△105,750△31,0902,728,887－△600,962
3,933,854△124,290
56,838－△40,6452,939,372

(Unaudited)

FY 2016(December 1, 2015 throughNovember 30, 2016)
Thousands of yen
Cash flows from financing activities
Changes in short-term debt
Repayments of lease obligations
Repayment of long-term loans
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from sale from treasury stock
Payments to acquire treasury stock
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
Decrease in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at fiscal year-end

18△4,810,300△168,756△375,396
1,978,993△200,000
2,702△276,965△452,184△4,301,906△387,580△568,702
8,858,896
63,022△30,508
8,322,707

FY 2017(December 1, 2016 throughNovember 30, 2017)
Thousands of yen△130,000△119,304△375,396－△400,000
976△892,131△656,304△2,572,159
284,475
2,453,875
8,322,707－－
10,776,583

(Unaudited)(5) Notes regarding Consolidated Financial Statements[Notes on assumption of going concern]
Not applicable.
[Changes in accounting principal](Changes in the method of foreign currency conversion for Income and Expense in overseas subsidiaries)
Income and Expense in overseas subsidiaries has been converted by an exchange rate as of accounting dateinto Japanese yen up to now. However, the method, which is that Income and Expense in overseas subsidiaries
has been converted by average number of exchange rate into Japanese yen, is applied from the first quarter ofthis fiscal year. The purpose for this change was to take a financial result of overseas subsidiaries more
appropriately in consolidated accounting, because it will be becoming more important for consolidated
accounting.
As a result, retroactive application was not implemented since the effect on the previous consolidated fiscal year
and the term to beginning of the current consolidated fiscal year caused by this change was minor.
[Additional Information](Application of Implementation Guidance on Recoverability of Deferred Tax Asset)
Implementation Guidance on Recoverability of Deferred Tax Assets (ASBJ Statement No.26 of March 28, 2016),
have been applied from the first quarter of the fiscal year under review.

19

(Unaudited)[Segment Information]
1. Fiscal Year 2016 (December 1, 2015 through November 30, 2016)
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
28,089,934
6,522,586
5,474,033
40,086,554－
40,086,554
Inter segment sales and transfer－
2,396,899
2,376,064
49,156
4,822,120△4,822,120
Total
30,486,833
8,898,651
5,523,189
44,908,675△4,822,120
40,086,554
Segment income
1,310,161
489,481
250,774
2,050,416△282,528
1,767,888
Segment asset
28,056,904
6,149,224
6,534,711
40,740,840
112,796
40,853,636
Other
Depreciation
336,824
149,928
130,362
617,115－
617,115
Increase in tangible fixed assets
293,901
94,66968,917457,488
－457,488(Notes)1. Adjustment of △282,528 thousand yen includes △343,105 thousand yen corporate expenses that are notdistributed to each reportable segment and other 60,576 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 elimination of intersegment transaction △9,855,011 thousand yen
and corporate asset 9,967,807 thousand yen that have not been distributed to reportable segment. Corporate
assets consist mainly of assets not belonging to specific segment (cash and cash equivalent and investments
in securities) and assets related to administrative operations.
2. Fiscal Year 2017(December 1, 2016 through November 30, 2017)
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
28,466,578
7,205,020
5,716,863
41,388,461－
41,388,461
Inter segment sales and transfer
2,343,603
2,474,860
58,6984,877,162△4,877,162－
Total
30,810,181
9,679,880
5,775,562
46,265,624△4,877,162
41,388,461
Segment income
1,314,413
538,441
164,260
2,017,114△309,429
1,707,685
Segment asset
27,225,575
6,995,578
7,057,483
41,278,638
2,194,513
43,473,152
Other
Depreciation
347,491
147,115
180,794
675,401－
675,401
Increase in tangible fixed assets
626,539
112,881111,908
851,329
851,329－(Notes)1. Adjustment of △309,429 thousand yen includes △314,992 thousand yen corporate expenses that are notdistributed to each reportable segment and other 5,562 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 elimination of intersegment transaction △10,114,614 thousand yen
and corporate asset 12,309,128 thousand yen that have not been distributed to reportable segment. Corporate
assets consist mainly of assets not belonging to specific segment (cash and cash equivalent and investments
in securities) and assets related to administrative operations.

20

(Unaudited)[Per share data]

FY2016(December 1, 2015 throughNovember 30, 2016)
1,027.96yen
41.48 yen－Item
Net assets per share
Net income per share
Diluted net income per share

FY2017(December 1, 2016 throughNovember 30, 2017)
1,184.79 yen
119.29 yen
119.14 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.
2. 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, FY2017 387 thousand shares,
FY2016 389 thousand shares), and The Master Trust Bank Of Japan, LTD ( for BIP, FY2017 173 thousand shares,
FY2016 173 thousand shares).

(Notes)The basis for calculating
1. Net assets per share
FY2016(As of November 30, 2016)

FY2017(As of November 30, 2017)29,260,863

32,615,138

14,40833,658(14,408)(33,658)－－

29,246,455

32,581,479

Number of issued stock (Thousand shares)

30,80030,800

Number of treasury stock (Thousand shares)

2,349

3,300

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

28,451

27,499Item
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.
2. Net income per share and Diluted net income per share
FY2016(December 1, 2015 throughNovember 30, 2016)

FY2017(December 1, 2016 throughNovember 30, 2017)

1,181,591

3,305,337

stock

－

－

Profit (loss) attributable to owners of parent

1,181,591

3,305,337

Item
Net income per share

Profit (loss) attributable to owners of parent(Thousands of yen)
Share unallocated(Thousand shares)tocommonrelating to common stock21

(Unaudited)
Shares on the average during the fiscal year
(Thousand share)

28,48527,709Net income adjustment attributable to parent
company shareholder (Thousands of yen)－－

The number of increase of common stock(Thousand share)－

33(Stock Option (Thousands of yen))－

33

Stock option of resolutions at
the ordinary general meeting ofshareholders and resolutions by
the Board of Directors on
February 25, 2016
CommonStock:
591,000
shares－Diluted net income per share adjusted

Details of shares not included in 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 Master Trust Bank Of Japan, LTD owned.

6. Others(1) Changes in Senior Managements(i) Changes in President
Not applicable.
(ii) Changes in other officers
Not applicable22