January 14, 2016
MORITO CO., LTD.
Financial Statement (Unaudited)
For the Fiscal Year ended November 30, 2015
(Translated from the Japanese original)
Corporate Information
Code：9837 Listings：Second 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:
Scheduled date of filling of Security Report:
Supplementary explanation material for financial results:
Presentation meeting for financial results:

February 25, 2016
February 26, 2016
February 26, 2016
Yes
Yes (for analyst and institution investors)(Amounts rounded down)
1. Consolidated Financial Results for Fiscal Year 2015 (December 1, 2014 through November 30, 2015)(1) Consolidated Financial Results(Percentages indicate year-on-year changes)

Net sales
Millions of yen

Operating income%

Millions of yen

FY 2015
43,29320.7
1,721
FY 201435,8628.2
1,429(Note) Comprehensive income: 2,152 million yen (△9.0%)

%

20.4
2.8
(FY 2015)

Ordinary income
Millions of yen%

Net income
Millions of yen

1,871
8.2
1,432
1,729
1.8
1,270
2,365 million yen (△11.4%) (FY 2014)

%

12.7
17.4

Ratio ofRatio of
Net income
Fully diluted net
Returnordinary income
operating income
Per share
Income per shareon equity
to total assets
to net sales
Yen
Yen
%
%
%
FY 2015
49.48
4.7
4.0
4.0
FY 2014
43.85
4.5
4.2
4.0
(Reference) Equity in earnings (losses) of affiliates: 23 million yen for FY 2015, 41 million yen for FY 2014
(Note) On July 1, 2014, Morito conducted a two-for-one split on shares of common stock. Consequently, ”net income per share ”
have been computed as if the stock split had been conducted at the beginning of the fiscal year ended November 30, 2013.
(2) Consolidated Financial Position
Total assets
Net assets
Equity ratio
Millions of yen
Millions of yen%
FY 2015
47,331
31,11365.7
FY 201445,59329,48864.7(Reference) Equity capital : 29,488 million yen (FY 2014)
27,352 million yen (FY 2013)

Net assets per share
Yen
1,081.23
1,017.79(3) Consolidated Cash Flows
Cash flows from
Cash flows from
Cash flows from
Cash and cash equivalents
operating activities
investing activities
financing activities
at the end of the period
Millions of yen
Millions of yen
Millions of yen
Millions of yen
FY 2015
2,034
8,858
977
△1,113
FY 2014
1,123
6,847△5,865
4,981
2. Dividends
Dividends per share
Total dividends
Dividends
Ratio of(Annual)Payout ratio
dividends to
First
SecondThird
FiscalAnnual(Consolidated)
net assets
quarter- quarter- quarteryear(Consolidated)
end
end
end
end
Yen
Yen
Yen
Yen
Yen
Millions of yen%%
FY 2014
12.00
6.50
367
28.5
1.2
FY 2015
7.00
7.50
14.50
426
29.3
1.4
FY 2016
8.00
8.00
16.00
30.7
(Forecast)(Note) On July 1, 2014, Morito conducted a two-for-one split on shares of common stock. Consequently, Year-end dividends forfiscal year ended November 30, 2014, are indicated at the amounts after the stock split. The dividends payout ratio for fiscal year
ended November 30, 2014 is calculated on the assumption that the said stock split was implemented at the beginning of theprevious fiscal year.

3. Consolidated Forecast for FY 2016 (December 1, 2015 through November 30, 2016)(Percentages represent changes from corresponding period of previous year)
Net Sales
Operating income
Ordinary profit
Millions of yen%
Millions of yen%
Millions of yen%
First half
21,600
0.8
900
3.0
900
△12.4
Full year
45,000
3.9
2,000
16.2
2,100
12.2

First half
Full year

Net income
Millions of yen
550
1,500

%
6.5
4.7

Net income per share
Yen
19.11
52.13

*Notes(1) Changes of important subsidiaries during the period (changes of specific subsidiaries in accordance with 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:

Yes
None
None
None

(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, 2015)
30,800,000 shares (as of November 30, 2014)(ii) Number of shares of treasury stock at end of period:
2,023,820 shares(as of November 30, 2015)
1,826,516 shares(as of November 30, 2014)(iii) Average outstanding number of shares during the period:
28,950,950 shares(FY 2015)
28,973,541 shares(FY 2014)(Note) On July 1, 2014, Morito conducted a two-for-one split on shares of common stock. Consequently, the number of endof the period treasury stock shares, and the average number of shares during the period are calculated on the assumption thatthe said stock split was implemented at the beginning of the previous fiscal year.

(Reference) Summary of Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for FY 2015 (December 1, 2014 through November 30, 2015)(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 2015
26,124
672
0.1
1,078
1,256
22.0
△0.1
△11.2
FY 2014
26,138
671
1,214
8.8
1,030
46.4
2.9
△18.3

Net income
Fully diluted net
per share
Income per shareYen
Yen
FY 2015
43.41
FY 201435.55(Note) On July 1, 2014, Morito conducted a two-for-one split on shares of common stock. Consequently, “net income per share”

have been computed as if the stock split had been conducted at the beginning of the fiscal year ended November 30, 2013.

(2)Non-Consolidated Financial Position
Total assets
Net assets
Millions of yen
Millions of yen
FY 2015
39,84728,623
FY 201439,451
26,214(Note) (Reference) Equity capital : 26,823 million yen (FY 2015)

Equity ratio
%
67.3
66.4
26,214 million yen (FY 2014)

Net assets per shareYen
932,13904.79*Update on the Execution Status of Audit Procedures
As of the date on which this financial report was released, an audit of the financial statements, based on the Financial
Instruments and Exchange Law, had not been completed.
*Disclosure and other special notes regarding performance forecasts
The forecast above are 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 whenusing the forecasts and criteria conditioned upon the forecasts, please refer to “1. Operating results, (1) Analysis of operating
results” on page 3
We have also introduced “Stock Granting Trust (J-ESOP)” and “Board Incentive Plan (BIP)”. Consequently, the shares held byTrust and Custody Service Bank, ltd. is included in the treasury shares.

Index
1. Operating Results ...............................................................................................................................................5(1) Analysis of Operating Results ............................................................................................................................5(2) Analysis of Financial Position ............................................................................................................................6(3) Basic policy on Payment of Dividends and Dividends for FY 2014 and FY 2015 ................................................7
2. Organization of the group ...................................................................................................................................8
3. Management Policy ........................................................................................................................................... 11(1)
Basic Management Policy .......................................................................................................................... 11(2)
Target Indicator ......................................................................................................................................... 11(3)
Medium and Long-Term Management Strategy ........................................................................................ 11(4)
Issues to be Addressed................................................................................................................................ 11(5)
Other Material Matters ............................................................................................................................. 11
4. Consolidated Financial Statements ....................................................................................................................12(1)
Consolidated Balance Sheets ......................................................................................................................12(2)
Consolidated Statements of Income and Consolidated Statements of Comprehensive Income....................14(3)
Consolidated Statements of Changes in Shareholders’ Equity ....................................................................17(4)
Consolidated of Cash Flows .......................................................................................................................19(5)
Notes regarding Consolidated Financial Statements ..................................................................................21[Notes on assumption of going concern] ......................................................................................................................21[Changes in accounting principal]................................................................................................................................21[Additional Information] .............................................................................................................................................21[Notes to business combination, etc.] ...........................................................................................................................22[Segment Information]................................................................................................................................................22[Per share data] ..........................................................................................................................................................23[Significant subsequent events] ...................................................................................................................................24
5. Others...................................................................................................................................................................24(1)Changes in Senior Managements ......................................................................................................................24

1. Operating Results(1) Analysis of Operating Results(i) General condition of FY 2015
In the fiscal year ended November 30th, 2015 (December 1, 2014 through November 30, 2015), the Japanese economy has
shown signs of modest recovery by improvements in corporate earnings from the effects of monetary policy. However, themanagement environment still remains harsh and uncertain because of dull corporate capital investment, etc.
In the global economy, the situation is highly unpredictable, because Chinese, and other emerging countries’ economy stalling,
unstable financial market, crude oil weaker, even U.S.’s and developed countries’ economy are recovering.
In such a situation, our group is moving forward a growth strategy by expansion of a global sales channel and production base,under the mid-long term plan ‘Transforming ourselves into a company with global growth’.
As a result, in the current fiscal year performance reach net sales ¥43,293 million (increased by 20.7% from a year earlier),
operating income ¥1,721 million (increased by 20.4% from a year earlier), ordinary income ¥1,871 million (increased by 8.2%
from a year earlier), net income ¥1,432 million (increased by 12.7% from a year earlier).
The exchange rate used for the consolidated financial statement of the current fiscal year end as below:¥119.97 to the U.S. dollar, ¥134.94 to the euro, ¥18.97 to the Chinese yuan, ¥15.48 to the Hong Kong dollar,¥3.63 to the Taiwan dollar, ¥0.0053 to the Vietnamese dong, ¥3.30 to the Thai baht.
The exchange rate used for the consolidated financial statement of the year earlier fiscal year end as below:¥109.45 to the U.S. dollar, ¥138.85 to the euro, ¥17.75 to the Chinese yuan, ¥14.10 to the Hong Kong dollar,¥3.60 to the Taiwan dollar, ¥0.0052 to the Vietnamese dong, ¥3.38 to the Thai baht.

Segment information as below[Japan]As for the apparel division, sales of the accessories for major retailers and sports apparel manufacturer in Japan, EU and the
U.S. are increased.
In the consumer product division, sales of stationary, school bag, OEM products for camera, finished shoes are increased.
As a result, net sales were ¥28,397 million (increased by 3.5% from a year earlier).
[Asia]
As for the apparel division, sales of the accessories for EU and U.S. infant’s wear, outer and casual wear manufacturer are
increased.
In the consumer product division, OEM products for Camera in Hong Kong and Thailand, and sales of the automobile interior
component for Japanese auto makers in Shanghai, China are increased.
From the current fiscal year, the performance of GSG (SCOVILL) FASTENERS ASIA LIMITED and SCOVILL FASTENERS
INDIA PVT. LTD which became consolidated subsidiaries of our group are reflected.
As a result, net sales were ¥8,138 million (increased by 37.5% from a year earlier).
[Europe and the U.S.]
As for the apparel division, sales of the accessories for medical industry and uniform increased
In the consumer product division, sales of automobile interior article for Japanese automobile manufacture in the U.S. Also, thecomponent for camera in Europe increased.
From the current fiscal year, the performance of GSG FASTENERS, LLC and SCOVILL FASTENERS UK LIMITED whichbecame consolidated subsidiaries of our group are reflected.
As a result, net sales were ¥6,758 million (increased by 168.7% from a year earlier).

(ii) Outlook for the next fiscal year
Our group set and promote 『Create Morito’s existence value, Realize “New Morito Group”』 under 7th mid-term management
plan “Make it happn, We develop our future！！！” (December 1, 2015 through November 30, 2019). In the first year of thismid-term management plan FY2016, Morito considers development of Japan made high valued items and global expansion as
the core management plan, and Morito realizes to create Morito’s value which era needs. At the same time, we accelerate ourbusiness 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 full year of fiscal 2016 is net sales ¥45,000 million yen, operating income ¥2,000
million, ordinary profit ¥2,100 million and net income ¥1,500 million.

5(2) Analysis of Financial Position(i) Assets, liability and net assets
Total assets stood at ¥44,331million, increased by ¥1,737million from a year earlier.
Total current assets reached ¥26,166 million, increased by ¥1,948 million from a year earlier. This change was primarily due toincrease in cash ¥2,148 million.
Total fixed assets came to ¥21,164 million, decreased by ¥2,100 million from a year earlier. This change was mainly due todecrease in million and investments in securities ¥6,270 million.
Total current liabilities reached ¥12,298 million, increased by ¥4,150 million yen from a year earlier. This change was mainly
due to increase in income tax payable ¥4,985 million.
Total fixed liabilities came to ¥3,918 million, decreased by ¥3,200 million from a year earlier. This change was mainly due toincrease in long-term debt¥3,750 million.
Total net assets became ¥31,113 million, increased by ¥1,624 million from a year earlier. Share holders’ equity ratio was 65.7%,
decreased by 64.7% from a year earlier.
(ii) 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 ¥12,034 million (¥1,123 million provided in the same period of the previous fiscal
year). This change was mainly due to acquisition of net income before taxes.
[Cash flows from investing activities]
Net cash used in investing activities was ¥9,770 million (compared with ¥5,865 million used in the same period of the previous
fiscal year).This change was principally due to tangible fixed assets.
[Cash flows from financing activities]
Net cash provided by financing activities was ¥1,113 million yen (compared with ¥4,981 million provided in the same period of
the previous fiscal year). The change was mainly due to short-term debt.
As a result of above, cash and cash equivalent was ¥8,858 million, increased by ¥2,011 million from a year earlier.
The following table shows financial indicators associated with cash flows.

Equity ratio
Equity ratio (market value basis)
Interest-bearing debt / cashflow ratio
Interest coverage ratio

FY 2013
76.4%
33.4%
51.2%
95.5

FY 201464.7%
52.0%
556.1%
77.5

FY 201565.7%
52.0%
288.7%
91.4(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 statement of cash flows.
*Interest-bearing debt includes short-term loans payable on the consolidated balance sheet.
*The interest payments use the interest paid as recorded in the consolidated statement of cash flows.

6(3) Basic policy on Payment of Dividends and Dividends for FY 2014 and FY 2015

The company’s basic dividend policy is to return the profit to our shareholders by reinforced financial ground and improved
profitability. In addition, we will use the internal reserve to invest 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%・Basic policy of dividend payout ratio by 30%
During this fiscal year, we scheduled to propose the general meeting of shareholders to payout ¥6.5 per share as dividend of
year-ended. As a result, dividends for the subject fiscal year amount to ¥18.5 per share including the interim dividends of¥12 per share.
On July 1, 2014, Morito conducted a two-for-one split on shares of common stock. If calculated on pre-stock-split basis, thedividends of year-ended ¥13 per share. As a result, the annual dividends would be ¥25 per share (compared with ¥5 pershare increased from a year earlier).
The annual dividend for next fiscal year is planned ¥14 per share, consisting of an interim dividend of ¥7 per share and a
year-end dividend of ¥7 per share.

72.

Organization of the group

Our group consists of the parent company, 23 subsidiaries and 1 affiliate company. The group’s main business is sales andmanufacture of materials for daily-life: including apparel materials, parts for automotive, life style goods, and rental andcleaning of kitchen appliances etc.
◎:Consolidated subsidiaries: 18 companies○:Non-consolidated subsidiaries: 5 companies□:Affiliates: 1 company◎

MORITO INDUSTRIAL CO., (H.K.) LTD. : Selling of apparel and consumer products◎

MORITO INDUTRIAL CO., (SHENZHEN) LTD. : Subsidiaries of Morito Industrial Co., (H.K.) Ltd. (100% owned)

Manufacturing of component of apparel and consumer products◎

MORITO (SHENZHEN) CO., LTD. : Subsidiaries of Morito Industrial Co., (H.K.) Ltd.(100% owned)

Manufacturing of component of apparel and consumer products◎

TAIWAN MORITO CO., LTD. : Selling and manufacturing of component of apparel and consumer products.

◎

KANE-M SHANGHAI CO., LTD. :◎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.

Selling and manufacturing of component of apparel and consumer products,

operation of rental factories.
○

MORITO VIETNAM CO., LTD. : Subsidiaries of KANE-M DANANG CO., LTD (100% owned)

Manufacturing and assembling of component of apparel and consumer products.
◎

KANE-M (THAILAND) CO., LTD. : Selling of component of electronic and automobile.

○

MORITO ISHIHARA AUTO PARTS (SHENZHEN) CO., LTD: Manufacturing and assembling of automotive

equipment.
○

MATEX SHANGHAI : Subsidiaries of MATEX INC. (100%). Manufacturing and selling of apparel parts, design andcopying to Chinese and overseas.
○

MATEX BANGKOK CO., LTD. : Subsidiaries of MATEX INC. (100%). Manufacturing and selling of apparel parts,

design and copying to Thailand and overseas.
◎

GSG FASTENERS, LLC. : Manufacturing and selling of component of apparel and consumer products.

◎

GSG FATENERS ASIA LIMITED : Subsidiaries of GSG FASTENERS, LLC. (100%). Selling of component of appareland consumer products.
◎

GSG FATENERS UK LIMITED : Subsidiaries of GSG FASTENERS, LLC. (100%). Selling of component of appareland consumer products◎

GSG FATENERS INDIA LIMITED : Subsidiaries of GSG FASTENERS, LLC. (100%). Selling of component ofapparel and consumer products◎

ACE INDUSTRIAL MACHINERY CO., LTD. : Rental service, selling and cleaning of kitchen appliance○

IAKK SERVICE CO., LTD. : Subsidiaries of ACE SERVICE CO., LTD. (95%). Cleaning and construction of kitchen

exhaust system.
◎

COLOR FASTENER INDUSTRIAL CO., LTD. : Selling and manufacturing of consumer products.

◎

THREE RUNNERS CO., LTD. :○TRINTO CO., LTD. : Manufacturing of consumer products.

◎

ANNU ARE CO., LTD. : Selling and manufacturing of bag and accessories.

◎

MATEX INC. : Manufacturing and designing apparel component, HP designing and producing and DTP printing.

□Kuraray Fastening Co., Ltd. :Selling and manufacturing of sports supporter.

Selling and manufacturing of hook and loop fastener.

8

(Note 1)
MORITO VIETNAM CO., LTD is in process.
(Note 2)TORINTO CO., LTD was liquidated on July 23th, 2014.
(Note 3)In the current consolidated fiscal year, we acquired all the outstanding shares of MATEX INC., made it a consolidated
subsidiary.
(Note 4)In the current consolidated fiscal year, we acquired all the outstanding shares of GSG FASTENERS, LLC, made it and its
3subsidiaries consolidated subsidiary.
(Note 5)In January 1st, 2015, MORITO INDUTRIAL CO., (SHENZHEN) LTD. merged with MORITO (SHENZHEN) CO., LTD.

9

Business Flow Chart

KANE-M, INC.

ACE INDUSTRIAL
MORITO (EUROPE) B.V

MACHINERY CO., LTD
1 Subsidiary.

MORITO INDUSTRIAL
CO., (H.K.) LTD.
COLOR FASTENER
INDUSTRIAL
MORITO (SHENZHEN) CO.,CO., LTD.
LTD.

Overseas
Customer

KANE-M SHANGHAIMORITO

CO., LTD.

CO., LTD.

Domestic
THREE RUNNERS
CO., LTD.

TAIWAN MORITO
CO., LTD.

Kuraray Fastening
Co., Ltd.

KANE-M (THAILAND)
CO., LTD.

KANE-M DANANG
ANNU ARE CO., LTD.

CO., LTD.

GSG Fasteners LLC.

Matex INC

3 Subsidiaries

2 Subsidiaries

10

Customers

3. Management Policy(1) Basic Management Policy
We manage business under the corporate principle of ‘DESIGN YOUR BRIGHT FUTURE WITH OUR VARIOUS PARTS’.
To enhance the sense of unity and centripetal force, we define and infiltrate our values which are existing in Morito’s employers
and employees as implicit knowledge as “MORITO Value”, to all of Morito’s staffs, and we realize new value creation which is
not caught in habit.
(2) Target Indicator
Our targets to be achieved at the FY 2019 under the 7 th mid-term management plan are as below:
Consolidated sales:
50 billion yen
Consolidated operating sales: 26 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 middle of mid-term management plan from FY2016 to FY2019 『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 7 th mid-term management plan to enhance ourcorporate values.
1, Expansion and strengthening our group revenue
Strengthening plan and development with domestic and global business partners, and establish global production, purchase, andstock based on sales strategy. And we actively invest to strength and expand of group revenue, enhance sales tool, capital
investment, new base, M&A.
2, Establish capital policy
Formulation of proper raising fund, maintain proper stock price, return policy to shareholders.
3, Strengthening internal control
We correspond proper “corporate governance codes” under government’s policy. We promote activation of human resources,
diversity of management, the effective use of SAP, global cash management.
(5) Other Material Matters
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.

11

4.

Consolidated Financial Statements(1) Consolidated Balance Sheets
FY 2014(As of November 30, 2014)
Thousands of yen

FY 2015(As of November 30, 201)
Thousands of yen

AssetsCurrent assets
Cash and deposits

7,862,616

10,010,892

Notes and accounts receivable

10,388,944

10,755,928

Commercial goods and finished goods

3,873,752

3,835,339

Work in process

233,751

188,413

Raw materials and supplies

449,903379,848

Deferred tax assets

318,275

272,235

Other current assets

1,126,885

762,878

Allowance for doubtful accounts－36,023－38,959

24,218,105

26,166,569

5,825,508

6,160,984

Accumulated depreciation－3,450,041－3,481,294

Building and structures, net

2,375,467

2,679,689

Machinery and delivery equipment

1,905,336

1,736,143－1,322,130－1,145,856

583,205590,286

Tools, furniture and fixtures

2,434,446

2,488,395

Accumulated depreciation－2,031,415－2,040,161

403,031448,233

6,158,454

5,926,237

307,714426,970－104,130－159,761

203,584

207,208

387,811

91,999

10,111,554

10,003,656

Goodwill

4,210,819

3,687,790

Lease assets

367,531339,349

Other Intangible fixed assets

123,279

1,210,517

Total intangible fixed assets

4,701,630

5,237,657

5,262,788

4,634,984

Long-term loans

238,077

106,400

Deferred tax

262,026

60,538Net defined benefit asset

238,158

400,076

Other fixed assets

690,792

801,628

Allowance for doubtful account-129,635－80,393

Total investments and other fixed assets

6,562,209

5,923,234

Total current assets
Fixed assets
Tangible fixed assets
Building and structures

Accumulated depreciation
Machinery and delivery equipment, net

Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction-in-process-in-process
Total tangible fixed assets
Intangible fixed assets

Investments and other fixed assets
Investment securities

12

Total fixed assets

21,375,394

21,164,548

Total assets

45,593,500

47,331,118

Notes and accounts payable

4,558,697

4,502,734

Short-term loans payable

4,960,000

4,960,000

Current portion of long-term debt

375,396375,396

Accrued tax payable

313,950

616,237

Reserve for bonuses

136,269

164,592

Liabilities
Current liabilities

Reserve for director’s bonuses

48,10072,511Other current liabilities

1,460,848

1,607,517

Total current liabilities

11,883,262

12,298,989

Long-term debt

911,873

536,477

Deferred tax

1,074,667

1,129,115

835,925

758,339－

9,804

752,563

54,758

4,626

20,640

Provision for director’s retirement benefit

129,608

23,813

Provision for environmental measures

23,658829,319

Other fixed liabilities

488,510556,239

Total fixed liabilities

4,221,432

3,918,507

16,104,695

16,217,496

Capital3,532,492

3,532,492

Capital surplus

3,395,115

3,498,724

Retained earnings

21,364,202

22,436,316

Treasury stock-680,993－956,696

27,610,816

28,510,835

1,812,097

1,625,548

Deferred gains or losses on hedges－1,853－1,069Difference in revaluation of land

－586,591－514,664

Foreign currency translation adjustment

545,742

1,403,231

Remeasurements of defined benefit plans

108,593

89,7391,877,988

2,602,786－－

Total net assets

29,488,805

31,113,622

Total liabilities and net assets

45,593,500

47,331,118

Fixed liabilities

Deferred tax assets for revaluation
Provision for retirement benefits
Net defined benefit liability
Reserve for retirement allowance

Total liabilities
Net Assets
Shareholders' equity

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

Total other comprehensive income
Minority interests13(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated statements of income

Net sales
Cost of sales

FY 2014(December 1, 2012 throughNovember 30, 2014)
Thousands of yen
35,862360
26.603,942

FY 2015(December 1, 2013 throughNovember 30, 2015)
Thousands of yen
43,293,935
32,174,918

Gross profit

9,258,418

11,119,017

2,596,993

3,126,916

564,266

556,773

612,416

723,426

21,31821,060－82,29722,70059,747

20,9989,600－

20,640141,893

140,170

1,117,404

1,174,406

5,947－8,734495,257

763,732

366,912412,594

297,982372,782

1,498,304

1,942,595

Total selling, general and administrative expense

7,829,173

9,398,007

Operating Income
Non-operating income
Interest received
Dividends received
Rent on real estate
Foreign exchange gains
Commission received
Equity in earnings of affiliates
Others1,429,244

1,721,010

27,97827,387

109,438

87,482

72,662

76,118

159,50248,264

2,453

3,647

41,18223,01088,84996,635

Total non-operating income

502,067

362,545

14,005

22,131

97,29691,926

13,55011,112

76,71186,933

201,564

212,104

1,792,747

1,871,451

278,064

337,128

174,365

699,121

Selling, general and administrative expenses
SalaryBonus
Welfare expense
Retirement bonus for directors
Provision of retirement benefits
Provision of director’s bonus
Provision for directors’ retirement benefits
Provision for board incentive plan
Postage
Freightage and packing expense
Provision of allowance for doubtful accountCommission paid
Rental expense
Depreciation
Other selling, general and administrative expense

Non-operating expenses
Interest paid
Cash discount on sales
Depreciation expense of assets lent
Others non-operating expense
Total non-operating expense
Ordinary Income
Extra ordinary income
Gains on sales of fixed assets
Gains on sales of securities
14

Gain on negative goodwill
Total Extra Ordinary Income
Extra ordinary expenses
Losses on retirement of fixed assets
Losses on sales of fixed assets
Impairment loss
Losses on sales of investments in securities
Losses on revaluation of investments in securities

79,894－532,323

1,036,249

133,110

11,704

10,741

3,992

95,262

－

1,517

－

52,73721,022

Loss on liquidation of affiliates

56,124

458,658

Total extra ordinary loss

349,494495,378

1,912,577

2,412,322

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

639,032

883,924

3,118

95,995

Total income taxes

642,150

979,920

1,270,427

1,432,401

Net income before taxes and other adjustment

Income before minority interest
Minority interest-

Net income

1,270,427

15

1,432,401

Consolidated statement of comprehensive income

Income before minority interests
Other comprehensive income

FY 2014(December 1, 2012 throughNovember 30, 2014)
Thousands of yen
1,270,427

FY 2015(December 1, 2013 throughNovember 30, 2015)
Thousands of yen
1,432,401－186,548

Unrealized gain(loss) on available-for-sale securities

561,443

Deferred gains or losses on hedges－1,853784－

67,545535,370

857,488－－18,853

1,094,961

720,416

2,365,388

2,152,818

2,365,388

2,152,818

Land Revaluation
Foreign currency translation adjustment
Adjustments to retirement benefit
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attribute to the parent
Comprehensive income attribute to the minority
shareholders-

16

(3) Consolidated Statements of Changes in Shareholders’ Equity
FY 2014 (December 1, 2013 through November 30, 2014)(Thousands of yen)
Shareholders’ Equity
Capital stock

Balance at the beginningof current period

3,532,492

Capital surplus

3,386,004

Retainedearnings

20,559,086

Treasury stock

Total
Shareholders’equity－671,920

26,805,757

Changes of items during
the period－337,703
1,270,427

Dividends from surplus
Net income
Purchase of treasury
stock
Disposal of treasury
stock

9,016

Reversal of revaluation
reserve for land

－337,703
1,270,427－153,132－153,132

144,060

153,076－127,607－127,607

Net changes of items
other
than
shareholders’ equity
Total changes of items
during the period

－

9,016

805,116－9,072805,059

Balance at the end ofcurrent period

3,532,492

3,395,115

21,364,202－680,993

27,610,816

Accumulated other comprehensive income

Balance at the beginningof current period

Valuationdifference on
available-for-sal
e securities

Deferred gains
or losses onhedgesDifference inrevaluation ofland

1,250653－－714,198

Foreigncurrencytranslation
adjustment

10,371

Total
accumulated
othercomprehensive
income546,826

Minority
interest－

Total net asset

27,352,583

Changes of items during
the period－337,703
1,270,427

Dividends from surplus
Net income
Purchase of treasury
stock－153,132

Disposal of treasury
stock

153,076

Reversal of revaluation
reserve for land

－127,607

Net changes of items
other
than
shareholders’ equity

561,443－1,853

127,607535,370

108,593－

1,331,161

Total changes of items
during the period

561,443－1,853

127,607535,370

108,593－

2,136,221

Balance at the end ofcurrent period

1,812,097－1,853－586,591

545,741

108,593－

29,488,805

17

FY 2015 (December 1, 2014 through November 30, 2015)(Thousands of yen)
Shareholders’ Equity
Capital stock

Balance at the beginningof current period

Capital surplus

3,532,492

3,395,115

Changes of items during
the period
Balance After Changes of
items during the period

Retainedearnings

21,364,202

Treasury stock

Total
Shareholders’equity－680,993

27,610,816

41,7523,532,492

3,395,115

21,405,955

41,752－680,993－397,659
1,432,401

Dividends from surplus
Net income
Purchase of treasury
stock
Disposal of treasurystock

103,608

Reversal of revaluation
reserve for land

27,610,816－397,659
1,432,401－340,109－340,109

64,405

168,014－4,381－4,381

Net changes of items
other
than
shareholders’ equity
Total changes of items
during the period－

103,608

1,030,361－275,703

858,256

Balance at the end ofcurrent period

3,532,492

3,498,724

22,436,316－956,696

28,510,835

Accumulated other comprehensive income

Balanceatthebeginning of current
periodValuationdifference on
available-forsale
securities

Deferred
gains orlosses onhedgesDifference inrevaluationof land

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensi
ve income

1,812,097－1,853－586,591

545,742

108,593

1,877,988

Minority
interest

Total net asset－

Changes of items
during the period
Balance
After
Changes of items
during the period
Dividends
surplus29,488,805
41,752

1,812,097－1,853－586,591

545,742

108,593

1,877,988－

from29,530,557－397,659

Net income

1,432,401

Purchaseoftreasury stock－340,109

Disposaloftreasury stock

168,014

Reversalofrevaluation
reserve for land

－4,381

Net changes of
items other thanshareholders’equity－186,548

784

71,926

857,488－18,853

724,797－724,797

Total changes of
items during the－186,548

784

71,926

857,488－18,853

724,797－

1,583,064

18

period
Balance at the endof current period

1,625,548－1,069－514,664

1,403,231

89,7392,602,786－

31,113,622(4) Consolidated of Cash Flows

Cash flows from operating activities
Income (loss) before income taxes
Depreciation of amortization
Depreciation of goodwill
Impairment loss
Change in provision for bonus
Change provision for retirement benefits
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
Profit from revaluation of investment securities

FY 2014(December 1, 2012 throughNovember 30, 2014)
Thousands of yen

FY 2015(December 1, 2013 throughNovember 30, 2015)
Thousands of yen

1,912,577

2,412,322

462,789

726,22139,008237,208

95,262－

5,511

25,083－753,817－－238,158－161,918

752,563

76,756－50,279－74,850

4,626

5,178

－

20,64040,442－47,053－137,416－114,869

14,005

22,131－41,182－23,010－267,322－333,135－172,847－699,121

133,110

11,70452,73721,022

Reversal of foreign currency translation adjustment for
reducing the capital of controlled foreign subsidiaries－23,769

458,658

Change in notes and accounts
Change in inventory
Change in account payable
Others187,070－108,627－294,569

333,308－112,750－276,601

81,342

22,603

1,688,932

2,533,654

133,464

119,604

Subtotal
Proceed from interest and dividends income
Payment of interest
Payment of corporate tax－14,494－22,251－684,561－596,218

Net cash(used in)provided by operating activities

1,123,341

2,034,248－591,150－104,040

142,627－－24,600－27,604

413,578865,498－5,473,710－261,500

39,704－

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
19

Purchase of tangible fixed assets
Proceeds from sale for tangible fixed assets
Proceeds from loans receivable
OthersNet cash provided by (used in) investing activities
Cash flows from financing activities
Changes in short-term debt
Repayments of lease obligations
Proceeds from long-term loans payable
Repayment of long-term loans
Proceeds from sale from treasury stock
Payments to acquire treasury stock
Payments of dividends－934,776－549,070

569,926

1,049,020

42,80445,026－49,625－40,215－5,865,186

977,1144,510,000－－138,372－168,635

1,500,000－－551,914－375,396－

168,014－56－340,109－337,703－397,659

4,981,952－1,113,784

Effects of exchange rate on cash and cash equivalents

241,195

113,651

Net increase (decrease) in cash and cash equivalents

481,3032,011,229

Cash and cash equivalents at beginning of year

6,366,363

6,847,667

Cash and cash equivalents at fiscal year-end

6,847,667

8,858,896

Net cash used in financing activities

20(5) Notes regarding Consolidated Financial Statements[Notes on assumption of going concern]
Not applicable.
[Changes in accounting principal](The adoption of the accounting standard concerning retirement benefit)
The company applied “Accounting standard concerning retirement benefit (ASBJ Statement No.26, May 17, 2013)”(hereinafter referred to as the "Accounting standard of retirement benefit") and “Guideline on accounting standers concerning
retirement benefit (ASBJ Guideline No.25, May 17, 2013” (hereinafter referred to as the “Guideline of retirement benefit”)
from fiscal year 2014. The company recorded unrecognized actuarial gains and losses and unrecognized past service liabilities
as “Assets for retirement benefit” and “Liability for retirement benefit” with changing the method of record.(The liability for
retirement is recorded for the difference between pension assets minus benefit obligation).
The adoption of the accounting standard of retirement benefit is based on the Accounting Standards for retirement benefit
No.37. The impact of this change was adjusted for accumulated other comprehensive income.
As a result, assets for retirement benefit increased by ¥115,476 thousand yen, liability for retirement benefit increased by¥50,643 thousand yen and other comprehensive income were increased by ¥41,752 thousand yen. The effect to operating
income, ordinary income, net income before taxes and other adjustment of this financial year is minor.

[Additional Information](The transaction for employees through trust)(1) The overview of the transaction
We have introduced “Stock Granting Trust(J-Esop)” to motivate employees for share price and revenue.
This is the system that employee get Morito’s share based on certain requirement which determined by our stock benefit
regulations.
It imparts points in accordance with the individual contributions, to benefit the stock corresponding to the granted point when
acquiring the entitlement by certain conditions. For shares to be benefits to employees, including to get future than the amountwhich had been previously trust settings, and then shall be managed separately as trust property.
With the introduction of this system, in addition to interest in the motivation and stock of employees’ increases, it is expected that
contribute to secure excellent human resources.
(2) Treasury stock in the trust
The treasury shares in the trust, booked value in the trust, have been recorded as treasury shares in net assets.
The number of shares and booked value are 153,076 thousand yen, 392shares in FY2014, and 153,076 thousand yen, 392shares in
FY2015.

(The Transaction for the Board Incentive Plan Trust)
The Board Incentive Plan Trust was approved by the general shareholders meeting held on February 26, 2015. The main
objective of this scheme is to increase the board members’ motivation to make contributions to improve business performance andincrease enterprise value.
Trust transaction is accounted based on “Practical handling concerning the delivering of company outstanding shares to
employee through the trust” (ASBJ PITF No.30 of March 26, 2015).
(1) Summary of the Transaction
This system is a performance-based stock compensation which delivers treasury stock to directors by level of achievement
for sales and operating profit of each fiscal year. However, board member may receive the grant of the company shares at
the time of retirement.
(2) Remaining treasury stock in the trust
Remaining treasury stock in the trust is recorded in net assets as treasury stock by book value of the trust.
The book value of the treasury stock at the end of the Third quarter of current fiscal year is ¥168,000 thousand.
The number of the treasury stock at the end of the second quarter of current fiscal year is 175 thousand.

21

[Notes to business combination, etc.]
1.

The acquisition of GSG FASTENERS, LLC
Adjusted amount from former acquisition cost.
In FY2014, the distribution of acquisition cost has not been completed. The amount of goodwill is calculated on a tentative basis
and the amortization method and period were currently under review, in this FY2015, distribution of acquisition cost has been
completed, and changed goodwill cost is as followings.
Adjusted subjects
Goodwill (before adjustment)Land
TrademarkDeffered tax liability
OthersTotal of adjustment
Goodwill (After adjustment)

Adjusted amount
3,469,662－59,345－1,032,495
399,61386,084－606,141
2,863,520

2.

Goodwill(1) Amount of goodwill
2,863,520 thousand yen(2) Reason of goodwill
Acquisition cost was more than net asset.
(3) Amortization period
20years (equal installment)

3.

Distribution to intangible fixed asset except goodwill(1) Cost distributed to intangible fixed asset
1,032,495 thousand yen(2) Breakdown
Trademark 1,032,495 thousand yen(3) Amortization period
20years (equal installment)(unit : thousand yen)

[Segment Information]
1. Fiscal 2014(December 1, 2013 through November 30, 2014)
The information on net sales, income or loss, assets and other items by reportable segment

Japan

Reportable Segment
Asia
EU and US

Total(Thousands of yen)
Adjustment Consolidated(Note 1,3)
Statement
Amount(Note 2)Net Sales
Sales to external customers
27,427,690
5,919,575
2,515,094
35,862,360
35,862,360
Inter segment sales and2,439,867
2,451,331
4,782
4,895,981 －4,895,981
transfer
Total
29,867,558
8,370,906
2,519,876
40,758,342 －4,895,981
35,862,360
Segment income
1,194,706
373,283
186,890
1,754,880
1,429,244－325,635
Segment asset
32,006,183
6,651,721
6,810,092
45,467,997
125,50345,593,500
Other
Depreciation
295,775
147,294
19,719462,789
462,789－
Increase in tangible fixed
769,884
248,262
59,3581,077,506
1,077,506－
assets(Notes)1. Adjustment of －325,635 thousand yen includes －304,010 thousand yen corporate expenses that are not distributed toeach reportable segment and other －21,625 thousand yen.
2. The amounts for income or losses in the reportable segments were subsequently adjusted with the amount of operating
income on the consolidated profit and loss statement.
3. The adjustment for segment asset includes elimination of intersegment transaction －9,965,286 thousand yen andcorporate asset 10,090,790 thousand yen that have not been distributed to reportable segment. Corporate assets consists
mainly of assets not belonging to specific segment (cash and cash equivalent and investments in securities) and assets

22related to administrative operations.
4. In this fiscal year, the allocation of acquisition cost is not completed because the acquisition costs are to be determined
and the identifiable assets acquired, the liabilities assumed on combination date is under reviewing. The amount of
goodwill is calculated on a tentative basis and recorded in the US.

Fiscal 2015(December 1, 2014 through November 30, 2015)
The information on net sales, income or loss, assets and other items by reportable segment

Japan

Reportable Segment
Asia
EU and US

Total(Thousands of yen)
Adjustment Consolidated(Note 1,3)
Statement
Amount(Note 2)Net Sales
Sales to external customers
28,397,032
8,138,317
6,758,585
43,293,935
43,293,935－
Inter segment sales and2,494,776
2,225,975
117,525
4,838,277 －4,838,277－
transfer
Total
30,891,809
10,364,293
6,876,110
48,132,213 －4,838,277
43,293,935
Segment income
1,176,332
468,718
468,136
2,113,188
1,721,010－392,178
Segment asset
31,399,836
7,011,055
7,743,139
46,154,030
1,177,087
47,331,118
Other
Depreciation
375,775
181,462
168,983
726,221,726,221－
Increase in tangible fixed
536,707
99,86998,179734,755
734,755－
assets(Notes)1. Adjustment of －392,178 thousand yen includes －326,820 thousand yen corporate expenses that are not distributed toeach reportable segment and other －65,357 thousand yen.
2. The amounts for income or losses in the reportable segments were subsequently adjusted with the amount of operating
income on the consolidated profit and loss statement.
3. The adjustment for segment asset includes elimination of intersegment transaction －9,867,282 thousand yen andcorporate asset 11,044,370 thousand yen that have not been distributed to reportable segment. Corporate assets consists
mainly of assets not belonging to specific segment (cash and cash equivalent and investments in securities) and assets
related to administrative operations.

[Per share data]

Item
Net assets per share
Net income per share
Diluted net income per share

FY2014(December 1, 2013 throughNovember 30, 2014)
1,017.79 yen
43.85 yen－

FY2015(December 1, 2014 throughNovember 30, 2015)
1,081.23 yen
49.48 yen－

(Notes)1. No statement is made of the amount of current net profit per share after adjusting for residual stocks because there were noresidual 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 common shares tocalculate 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..
3. On July 1, 2014, Morito conducted a two-for-one split on shares of common stock. Consequently, ”net income per share ”
have been computed as if the stock split had been conducted at the beginning of the fiscal year ended November 30, 2013.
4. The company applied “Accounting standard concerning retirement benefit (ASBJ Statement No.26, May 17, 2013)”(hereinafter referred to as the "Accounting standard of retirement benefit") and “Guideline on accounting standers concerning
retirement benefit (ASBJ Guideline No.25, May 17, 2013” (hereinafter referred to as the “Guideline of retirement benefit”)
from fiscal year 2014. The company recorded unrecognized actuarial gains and losses and unrecognized past service

23liabilities as “Assets for retirement benefit” and “Liability for retirement benefit” with changing the method of record.(Theliability for retirement is recorded for the difference between pension assets minus benefit obligation).
The adoption of the accounting standard of retirement benefit is based on the Accounting Standards for retirement benefit
No.37. The impact of this change was adjusted for accumulated other comprehensive income.
As a result, net income per share increased by 1.45yen, and the effect to net income per share is minor.

(Notes)The basis for calculating
1. Net assets per share
FY2014(December 1, 2013 throughNovember 30, 2014)
29,488,805

FY2015(December 1, 2014 throughNovember 30, 2015)
31,113,622

29,488,805

31,113,622－－

Number of issued stock (Thousand shares)

30,80030,800

Number of treasury stock (Thousand shares)

1,826

2,023

Number of common stock for calculating the net
assets per share

28,973

28,776Item
The total net assets in the consolidated balance sheet(Thousand of yen)
The net assets associated with common stock(Thousand of yen )Major breakdown of differences (Thousand of yen)
Minority interests(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. owned.
2.

Net income per share and Diluted net income per share
Item

FY2014(December 1, 2013 throughNovember 30, 2014)

FY2015(December 1, 2014 throughNovember 30, 2015)

Net income per share
Net income(Thousand yen)
Share unallocated to common stock (Thousand shares)
Net income relating to common stock
Shares on the average during the fiscal year
(Thousand share)

1,270,427

1,270,427－－

1,270,427

1,270,427

28,973

28,973(Note)
The weighted-average number of common shares to calculate the net income per share is included the stock of Trust &Custody Services Bank, Ltd. owned.
[Significant subsequent events]

Not applicable.

5. Others(1)Changes in Senior Managements(i) Changes in President
Not applicable.
(ii)Changes in other officers (Limited scheduled on February 25 th, 2016)
1. Newly appointed director candidate

24Director Mayumi Ishihara
Unaffiliated Director Candidate which is set by Ordinance for Enforcement of the Companies Act 2.3.7.
2.

Retiring auditor
Director
Mitsuyuki Mouri

3.

Newly appointed auditor
Not applicable

4.

Retiring auditor
Not applicable25