February 12, 2016
Name of Listed Company: ISEKI & CO., LTD.
Stock Exchange Listings: Tokyo
Company Code:6310 (URL http://www.iseki.co.jp)
Representative: Title President
Name Noriyuki Kimura
Enquiries:
Title Corporate Officer and General Manager of Financial Department Name Kazuma Takahashi
Telephone: +81 3 5604 7709
Date of the Regular Meeting of Shareholders:
Scheduled Date to Commence Dividend Payment:
Date of Submission of Securities Report:
Supplementary Information for Financial Results:

March 25, 2016
March 28, 2016
March 28, 2016
Yes

Financial Results Briefing:

Yes (for institutional investors and analysts)

Summary Announcement of Consolidated Financial Results
for the Fiscal Year Ended December 31, 2015 (Japanese GAAP)
I. Financial Results for the Fiscal Year Ended December 31, 2015 (April 1, 2015－December 31, 2015)
A. Results of Operations(Rounded down to a million yen, % indicates changes from the previous period)

FY Ended
December 31, 2015
145,210460
947(1,465)%FY Ended
March 31, 2015
157,417
(535)
499
(319)

%

Net Sales—(6.9)
Operating Income (Loss)——
Ordinary Income—(94.0)
Loss Attributable to Owners of Parent——
Loss per Share (yen)Non-diluted(6.49)(1.40)
Fully Diluted——
Return on Equity (%)
(2.2)
(0.5)
Return on Total Assets (%)
0.5
0.2
Operating Income to Net Sales (%)
0.3
(0.3)
Note: Comprehensive income
Fiscal year ended December 31, 2015: -¥2,310 mil. (—%)
Fiscal year ended March 31, 2015: ¥4,509 mil. (-42.0%)
Reference: Share of profit of entities accounted for using equity method
Fiscal year ended December 31, 2015: ¥52 mil.
Fiscal year ended March 31, 2015: ¥34 mil.
As the partial revision of the Articles of Incorporation was approved at the general meeting of shareholders held on
June 24, 2015, the fiscal year of the Company, previously from April 1 to March 31 of the following year, has beenchanged to the period from January 1 to December 31, effective as of the fiscal year ended December 31, 2015. As atransitional treatment, subsidiaries which adopted a fiscal year starting April 1 and ending March 31 of the following
year, the nine-month results (April 1, 2015 to December 31, 2015) have been included in the consolidated results forthe fiscal year ended December 31, 2015.
For subsidiaries which adopt a fiscal year starting January 1 and ending December 31, the twelve-month results(January 1, 2015 to December 31, 2015) have been included in the consolidated results, as in the past.
Because year-on-year comparisons are impossible, percentage changes year on year are left blank.

B. Financial Position(Rounded down to a million yen)

As of December 31, 2015

As of March 31, 2015

201,149
68,09933.0
293.87204,138
71,06534.0
307.11

Total Assets
Net Assets
Shareholders’ Equity to Total Assets Ratio (%)
Net Assets per Share (yen)Reference: Shareholders’ equity
As of December 31, 2015: ¥66,380 mil.
As of March 31, 2015: ¥69,372 mil.
C. Cash Flows(Rounded down to a million yen)

FY Ended
December 31, 2015
10,830(5,757)(2,943)8,761

Net Cash Provided by (Used in) Operating Activities
Net Cash Provided by (Used in) Investment Activities
Net Cash Provided by (Used in) Financing Activities
Cash and Cash Equivalents at End of Period

FY Ended
March 31, 2015
(4,247)(11,305)
14,031
6,570

II. Dividends
Dividend per Share (yen)End of
1Q

End of2Q

End of3Q

Yearend

—
—

—
—

—
—

—

—

—

3.00
1.50
1.50–
3.00

FY Ended March 31, 2015
FY Ended December 31, 2015
FY Ending December 31, 2016
(Forecast)

Ratio of
Annual Cash Payout Ratio Dividend to
Dividend(%,
Net Assets
Annual (million yen) consolidated)(%,consolidated)
3.00
677
—
1.0
1.50
338
—
0.5
1.50–
—
3.00

III. Forecast for the Fiscal Year Ending December 31, 2016 (January 1, 2016－December 31, 2016)(Rounded down to a million yen, % indicates changes from the previous period)
Net Sales%

Operating
Income%Ordinary
Income%ProfitAttributableto Ownersof Parent%

Profit per
Share
(yen)

83,000
—
1,400
—
1,300
—
700
—
3.10
165,000
—
3,500
—
3,200
—
1,900
—
8.41
Note: Due to the change in the fiscal year of the Company, the fiscal year ended December 31, 2015 is a nine-month
period from April 1, 2015 to December 31, 2015. Because year-on-year comparisons are impossible, percentagechanges year on year are left blank.
InterimFull Year* Notes
A Changes in important subsidiaries during the period (change in specified subsidiaries which accompanies achange in the range of consolidation): None
B Change in accounting policy, change in accounting estimates and restatements
1) Change in accounting policy in response to revision of accounting standards: Yes
2) Change in accounting policy other than 1):
None3) Change in accounting estimates:
None4) Restatements:
None
Note: For details, please refer to “Change in Accounting Policy, Change in Accounting Estimates andRestatements” on page 20 of the supplementary material.
C Outstanding shares (common shares)
1) Outstanding shares (including treasury shares) As of December 31, 2015
229,849,936 shares
As of March 31, 2015
229,849,936 shares
2) Outstanding treasury shares
As of December 31, 2015
3,964,166 shares
As of March 31, 2015
3,959,147 shares
3) Average number of sharesFiscal year ended December 31, 2015 225,887,727 sharesFiscal year ended March 31, 2015
228,018,246 shares
Note: Please refer to “Per Share Information” on page 23 of the supplementary material as to the number ofshares which provides a base for calculating loss per share (consolidated).
(Reference) Non-consolidated Financial Results
Financial Results for the Fiscal Year Ended December 31, 2015 (April 1, 2015－December 31, 2015)
A. Results of Operations(Rounded down to a million yen, % indicates changes from the previous period)

FY Ended
December 31, 2015
66,073(2,600)(971)(1,588)FY Ended
March 31, 2015
92,252(2,660)
(198)
(942)

%

%

Net Sales—(13.3)
Operating Loss——
Ordinary Loss
—
—
Loss
—
—
Loss per Share (yen)Non-diluted(4.13)(7.03)
Fully Diluted——
Note: As the partial revision of the Articles of Incorporation was approved at the general meeting of shareholders heldon June 24, 2015, the fiscal year of the Company, previously from April 1 to March 31 of the following year, has beenchanged to the period from January 1 to December 31, effective as of fiscal 2015. Because year-on-year comparisons
are impossible, percentage changes year on year are left blank.
B. Financial Position(Rounded down to a million yen)

Total Assets
Net Assets
Shareholders’ Equity to Total Assets Ratio (%)
Net Assets per Share (yen)Reference: Shareholders’ Equity
As of December 31, 2015: ¥54,737 mil.
As of March 31, 2015: ¥57,472 mil.

As of December 31, 2015

As of March 31, 2015

129,154
54,82942.4
242.32

139,195
57,541
41.3
254.42*Statement regarding implementation of the review procedure
This summary of financial results is exempt from audit procedures pursuant to the Financial Instruments andExchange Act. At the time of disclosure, audit procedures for consolidated financial statements and nonconsolidated financial statements pursuant to the Financial Instruments and Exchange Act had not been completed.
* Statement regarding the proper use of financial performance forecast and other notes
The forecast for operating results has been determined based on information presently available, as well as on theassumptions that the Company believes to be reasonable. It is possible that in the future, actual results may differ
from the anticipated figures for a variety of reasons. Please refer to “Management Performance” on page 2 of the
supplementary material for the assumptions underlying the forecast and precautions when using the forecast.

 Table of contents for supplementary material
1. Management Performance ......................................................................................................................2(1) Analysis of Management Performance.............................................................................................2(2) Analysis of Financial Position ..........................................................................................................3(3) Basic Policy on Profit Distribution and Dividends for the Current and Next Fiscal Years ..............4(4) Risks Which Could Affect Our Business ..........................................................................................4
2. The ISEKI Group ...................................................................................................................................6
3. ISEKI’s Management Policies................................................................................................................7(1) ISEKI’s Basic Management Principles.............................................................................................7(2) Long-term Management Strategies and Issues to be Addressed.......................................................7
4. Basic Policy for Choosing Accounting Standards ..................................................................................8
5. Consolidated Financial Statements ........................................................................................................9(1) Consolidated Balance Sheets ............................................................................................................9(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ..... 11(3) Consolidated Statements of Changes in Equity ..............................................................................13(4) Consolidated Statements of Cash Flows ........................................................................................15(5) Notes Regarding the Consolidated Financial Statements ...............................................................17(Notes Regarding the Going Concern Assumption) .......................................................................17(Important Basic Items for Preparing Consolidated Financial Statements) ...................................17(Change in Accounting Policy, Change in Accounting Estimates and Restatements) ....................19(Consolidated Balance Sheets Information) ...................................................................................20(Consolidated Statements of Income Information).........................................................................21(Consolidated Statements of Changes in Equity Information) .......................................................22(Consolidated Statements of Cash Flows Information) ..................................................................23(Segment Information) ...................................................................................................................23(Per Share Information) ..................................................................................................................23(Significant Subsequent Events) .....................................................................................................23
6. Non-consolidated Financial Statements ...............................................................................................24(1) Non-consolidated Balance Sheets ..................................................................................................24(2) Non-consolidated Statements of Income ........................................................................................26(3) Non-consolidated Statements of Changes in Equity .......................................................................27(4) Notes Regarding the Non-consolidated Financial Statements ........................................................29(Notes Regarding the Going Concern Assumption) .......................................................................29
7. Others ...................................................................................................................................................29(1) Production, Orders & Sales ............................................................................................................29-1-

1. Management Performance(1) Analysis of Management Performance
During the fiscal year ended December 31, 2015, the outlook for the general economy in Japan remained uncertain on
the back of cautious forecasts regarding the future economy due in part to the sluggishness of the Chinese economy,
despite the benefits of a weaker yen and strong stock prices supported by a series of economic measures taken by thegovernment which benefitted by certain companies engaged in exporting businesses, as well as the diminishing impactof the drop in demand which was a rebound from the last-minute demand surge before the consumption tax rate hikelast year. Meanwhile, the world economy faced some uncertainties, mainly due to the impact of a reduction in U.S.
quantitative easing measures on the economies in China and other emerging countries.
The agricultural machinery market in Japan was recovering from the downward trend of the rice price. However, it
failed to see a full-fledged recovery in farmers’ buying motivation due in part to the uncertainty of the impact on
domestic agriculture after the basic agreement in the Trans-Pacific Partnership Agreement (TPP) negotiations. On theother hand, 2015 was regarded as the “dawn of a new agricultural administration era” as a result of ongoing steadyand significant changes to the agricultural structure.
Under such circumstances, the ISEKI Group continued its efforts to increase sales volume in Japan by launching
new products and enhancing customer service, while it endeavored to strengthen its marketing capabilities overseas
by introducing new products in North America, Europe, China, as well as the ASEAN region. As a result, the Group’sbusiness performance can be summarized as follows.
Note: Since the fiscal year ended December 31, 2015 is a transitional period, for the Company and its consolidated
subsidiaries which adopted a fiscal year starting April 1 and ending March 31 of the following year, the nine-monthresults (April 1, 2015 to December 31, 2015) have been included in the consolidated results for the fiscal year ended
December 31, 2015. For subsidiaries which adopt a fiscal year starting January 1 and ending December 31, the twelvemonth results (January 1, 2015 to December 31, 2015) have been included in the consolidated results. Because yearon-year comparisons are impossible, changes from the previous period are not mentioned.
[Consolidated business performance of the fiscal year ended December 31, 2015]
In the fiscal year ended December 31, 2015, net sales totaled ¥145,210 million. Domestic sales amounted to ¥122,508
million, mainly as a result of the decrease in sales of agricultural machinery. This decrease was due to the significant
rise in sales at our sales companies (which adopt December annual account settlement) in the period from January to
March last year, owing to the last-minute surge in demand before the rise in the consumption tax rate, and the inability
to offset the drop in sales in the period from January to March this year with sales in the period from April to December,despite showing an increase from the same period last year. Overseas sales amounted to ¥22,701 million reflecting
strong shipments to North America and the ASEAN region, as well as a contribution of sales from ISEKI France S.A.S,
which was consolidated last year. Operating income resulted in ¥460 million due to a decrease in selling, general andadministrative expenses, despite lower gross profit resulting from decreased sales. Ordinary income was ¥947 million.
Profit or loss attributable to owners of parent was a loss of ¥1,465 million.
[Non-consolidated business performance of the fiscal year ended December 31, 2015]
In the fiscal year ended December 31, 2015, net sales totaled ¥66,073 million, operating loss was ¥2,600 million, andordinary loss amounted to ¥971 million. The Company recorded a net loss of ¥1,588 million.
Sales by product are as follows.
[Domestic]
Sales of cultivating & mowing machinery (tractors, high-clearance multipurpose vehicles, etc.) were ¥29,441 million,
and sales of planting machinery (rice transplanters and vegetable transplanters) were ¥9,674 million. Sales of
harvesting and processing machinery (combine harvesters, etc.) were ¥21,816 million. Sales of spare parts and farming
implements were ¥31,250 million. Sales of other agriculture-related business (construction of facilities, etc.) were¥30,325 million.
[Overseas]
Sales of cultivating & mowing machinery (tractors, etc.) were ¥19,552 million, and sales of planting machinery (ricetransplanters, etc.) were ¥772 million. Sales of harvesting and processing machinery (combine harvesters, etc.) were¥266 million. Sales of spare parts and farming implements were ¥1,712 million. Sales of other agriculture-related
business were ¥398 million.
[Forecast for the next consolidated fiscal year]
In both Japan and overseas, economic uncertainty is expected to increase, mainly due to the uncertainty surrounding
the Chinese economy and sluggishness of oil prices and stock markets.
In Japan, initiatives to revitalize agriculture are expected to be implemented, as exemplified by agricultural policies
being made to enhance agriculture in line with the basic agreement in the TPP negotiations, amid a recovery in sluggish
rice price. Living up to the Group’s slogan “Supporting the full of dreams farming industry,” we will strive to secureand increase sales by further enhancing “our capabilities to support customers,” through which we provide high-quality-2-

marketing services and make proposals that match the agriculture management of customers, in addition to conducting“provision of energy-saving and low-cost agricultural machinery.”Overseas, we will promote sales expansion by launching strategic products that match the needs of customers in ourfour core markets (Europe, North America, ASEAN and China). In the European market, ISEKI France S.A.S, asubsidiary in France, will take initiatives in expanding the market. In the Chinese market, Dongfeng Iseki Agricultural
Machinery Co., Ltd. will take initiatives in pushing forward with sales expansion by the release of strategic products
such as combine harvesters, in addition to a full-fledged launch of tractors. In the Southeast Asian market, which is
expected to grow in the future, we will strive to establish the position of the ISEKI brand by starting full-fledged
production of strategic machines at PT. ISEKI INDONESIA, a production subsidiary in Indonesia, and sales expansion
in the Thai market by ISEKI SALES (THAILAND) Co., Ltd.
We expect increases in incomes both in Japan and overseas. In addition to an increase in the gross profit due to anincrease in sales, we expect that a thorough cost reduction by fully enforcing a low-cost operation will contribute to
the increases in incomes.
(2) Analysis of Financial Position
Total assets as of December 31, 2015 decreased ¥2,989 million from March 31, 2015 to ¥201,149 million. Looking at
the breakdown, current assets decreased ¥5,079 million and non-current assets increased ¥2,090 million. The changes
mainly resulted from a ¥5,509 million decrease in notes and accounts receivable–trade, a ¥3,919 million increase inproperty, plant and equipment, and a ¥1,858 million decrease in investments and other assets. Total liabilities decreased¥22 million from March 31, 2015 to ¥133,050 million. Net assets decreased ¥2,966 million from March 31, 2015 to¥68,099 million, mainly due to the recording of ¥1,465 million in loss attributable to owners of parent and ¥677 million
in dividends of surplus.
The equity ratio was 33.0%.
(Cash flows from operating activities)
Cash flows from operating activities came to a net cash inflow of ¥10,830 million, comprised principally ofdepreciation of ¥5,831 million and a decrease in notes and accounts receivable–trade of ¥5,376 million.
(Cash flows from investing activities)
Cash flows from investing activities resulted in a net cash outflow of ¥5,757 million, comprised principally of capital
investment expenditures of ¥7,440 million.
(Cash flows from financing activities)
Cash flows from financing activities amounted to a net cash outflow of ¥2,943 million, due primarily to the repayment
of interest-bearing liabilities.
Note: Since the fiscal year ended December 31, 2015 is a transitional period, for the Company and its consolidated
subsidiaries which adopted a fiscal year starting April 1 and ending March 31 of the following year, the nine-monthresults (April 1, 2015 to December 31, 2015) have been included in the consolidated results for the fiscal year ended
December 31, 2015. For subsidiaries which adopt a fiscal year starting January 1 and ending December 31, the twelvemonth results (January 1, 2015 to December 31, 2015) have been included in the consolidated results. Because yearon-year comparisons of cash flows are impossible, changes from the previous period are not mentioned.
Reference: The trend of cash flow indicators is as follows.
Indicator

Mar. 31,2013

Mar. 31,2014

Mar. 31,2015

Dec. 31,2015

Equity ratio (%)

34.3

34.0

34.0

33.0

Market-based equity ratio (%)

41.5

31.7

25.5

21.2

Cash flow/Interest-bearing liabilities ratio (times)

4.9

6.3

—

5.2

Interest coverage ratio (times)

11.8

9.3

—

16.0

• Equity ratio: Shareholders’ equity/Total assets• Market-based equity ratio: Total market price of shares/Total assets• Cash flow/Interest-bearing liabilities ratio: Interest-bearing liabilities/Operating cash flow
• Interest coverage ratio: Operating cash flow/Interest payments
Notes: 1.
2.
3.

All figures have been calculated using consolidated-based financial figures.
The total market price of shares is the product of the per-share closing price at the end of the period andthe total number of shares outstanding (less treasury shares) at the end of the period.
The operating cash flow uses the Cash flows from Operating Activities as per the Consolidated
Statement of Cash Flows. Interest-bearing liabilities use all the loans payable and bonds payable as
-3-

4.

recorded in the Consolidated Balance Sheet. The Interest payments use the interest expenses paid asrecorded in the Consolidated Statement of Cash Flows.
A cash flow/Interest-bearing liabilities ratio and an interest coverage ratio for the fiscal year ended
March 31, 2015 are not presented in the table because the net cash flow for the fiscal year was an outflow(negative).

(3) Basic Policy on Profit Distribution and Dividends for the Current and Next Fiscal Years
We recognize that the method for determining dividends to be paid to shareholders is one of the most important policies
to be made. Our basic policy is to continue making and increase our dividend distribution, taking into consideration,
not just consolidated financial results, but our Group’s financial position and future business developments as well aschanges in our managerial environment. It is our basic policy to distribute retained earnings to shareholders once a
year as year-end dividends. The organ to determine the payment of dividends is a general meeting of shareholders.
With respect to dividends for the fiscal year ended December 31, 2015, we will pay a year-end dividend of 1.5 yen
per share in line with the above policy.
For the fiscal year ending December 31, 2016, we plan to pay a year-end dividend of 1.5–3.0 yen per share.
(4) Risks Which Could Affect Our Business
Latent risks and uncertainties which could affect our future financial performance are exemplified as below. We
recognize the possibility of the occurrence of such risks and uncertainties, and will strive to avoid their occurrence andtake proper measures should they occur:
1) Economic Conditions and Changes in the Environment of Agriculture
Sluggishness of domestic and/or overseas economic conditions and any change in the agriculture policy may
negatively affect our financial performance through reduced demand for agricultural machinery.
2) Exchange Rate Fluctuation
There is a possibility that fluctuation of foreign exchange may negatively affect our financial performance.
3) Price Hike of Raw Materials, Difficulty in Procurement, and Confusion in the Supply Chain
As we procure raw materials and parts from numerous suppliers, their prices suddenly increasing more rapidly
than expected and a prolonged tightening of supplies may negatively affect our business performance.
In addition, a fall in production activities due to disruptions in the supply chain may harm the ISEKI Group’sbusiness performance and financial position.
4) Dependency on Specific Customers or Suppliers
Any change of business policy, business depression and failure of our specific customers or suppliers may harm
our financial performance.
5) Competition with Other Companies
We are involved in fierce competition with other companies in the market, and unless overall productcompetitiveness, including relevant services, is maintained, there is the possibility of a decline in our
performance.
6) Serious Defects in Products and Services
The occurrence of serious defects in our products or services may negatively affect our financial performance.
7) Stock Market Fluctuation
As we hold securities, stock price declines may harm our business performance and financial position.
8) Government Regulation on Environmental Issues, etc., and Occurrence of Related Difficulties
Substantial costs may be incurred related to our products or business activities due to necessitated responses topublic regulation of environmental issues etc., corrective measures undertaken upon the occurrence of troubles,
lawsuits and other situations which could lead to a deterioration of our financial performance.
9) Risks Derived from International BusinessAs we promote overseas business development, unexpected changes in tax and legal systems or political unrestof any particular country may unfavorably affect our financial performance when we engage in international
business activities.
In addition, as we focus on expanding business to the Asian region, mainly a difficulty in ensuring humanresources, immature technological levels and unstable labor-management relationships in the region may hinder
the ISEKI Group’s business development.
10) Risk of Legal Violation
We are making group-wide efforts to accomplish complete legal compliance and drive home the code of ethicalbehavior by establishing the “ISEKI Group Code of Ethical Behavior” and preparing an internal control system.
In spite of such efforts, if any of our directors and/or employees should conduct themselves in any way that
violates laws and regulations, there is a possibility that the business activities of the Group will be restrained
and the business performance will be deteriorated. The Company and its consolidated subsidiary are currently
under on-site investigation by the Japan Fair Trade Commission regarding their tendering in a facility
construction work bid. Results of the investigation may have an adverse effect on the results of the Group.
11) Risk of Natural Disasters and Accidents
Natural disasters such as earthquakes, typhoons, flood or unexpected accidents may occur, which may harm
our financial performance.
-4-12) Business Alliances, Joint Ventures and Strategic Investment with Other Companies
We will form business alliances and joint ventures and carry out strategic investment with other companies asnecessary. We believe that these measures are an effective means for the effective utilization of the management
resources of both parties and for the timely development, production and sales of products.
However, should a conflict of interests occur between the parties concerned in business alliances or joint
ventures due to financial position or other reasons, we would not be able to maintain the alliances. With regard
to strategic investment, including acquisitions, there is a possibility that the expected results and/or effects will
not be obtained in the integration of business, technologies, products and human resources, or that more timeand expenses than expected will be required. Accordingly, the success or failure of these measures may
seriously affect the ISEKI Group’s business and may harm our business performance and financial position.
13) Debt
We have concluded syndicate loan or commitment line contracts with financial institutions. Should any of thefinancial conditions of these contracts be triggered, we could face obligations to pay back some or all of theseloans, which could negatively affect the financial position of the ISEKI Group.
There is a possibility that a hike in interest rate may harm our financial performance.
The forecasts for future results and target figures produced by ISEKI & CO., LTD., are based on information available
as the day of this announcement, and assumptions made as of the same day regarding a number of latent risks anduncertainties that could affect future financial performance. Actual results could differ considerably depending on
economic conditions, market trends, and future conditions for business operations hereafter.

-5-

2. The ISEKI GroupThe main business of the ISEKI Group is the development, manufacture and sale of agricultural machinery for riceand vegetable farming, among other related areas.
The position of the business in the ISEKI Group is stated below.
(Agriculture-related Business)
The Company primarily handles the development and design of agricultural machinery. Iseki-Matsuyama Mfg. Co.,
Ltd., Iseki-Kumamoto Mfg. Co., Ltd. and seven other companies handle our agricultural machinery manufacturing
and processing of related components, and 13 domestic sales companies market and sell the machinery across thecountry. Overseas marketing operations are handled by ISEKI France S.A.S (France), Dongfeng Iseki Agricultural
Machinery Co., Ltd. (China) and local distributors and affiliates.

Overseas Users &Customers

Domestic Users & Customers( A g r i c u l t u r e - r e l a t e d

B u s i n e s s )

Sales

Sales

Consolidated subsidiary
ISEKI France S.A.S (France) andanother company

Consolidated Subsidiaries:
Iseki-Hokkaido Co., Ltd.

Equity Method Affiliate
ISEKI SALES (THAILAND)
CO., LTD. (Thailand)

Iseki-Tohoku Co., Ltd.
and 11 other companies

Non-consolidated Subsidiary
N.V. ISEKI EUROPE S.A.
(Belgium)

Sales

Transport & Service
Products Consolidated Subsidiary:& Parts Iseki BUTSURYU Co., Ltd. and another company

Products& Parts

Transport & Service

ISEKI
Products & Parts

Products & Parts

Equity Method Affiliate:

Consolidated Subsidiaries:

Dongfeng Iseki Agricultural Machinery

Iseki-Matsuyama Mfg. Co., Ltd.

Co., Ltd. (China)

Iseki-Kumamoto Mfg. Co., Ltd.
PT. ISEKI INDONESIA
and 5 other companies-6-3. ISEKI’s Management Policies(1) ISEKI’s Basic Management Principles
Since it was established in 1926, the ISEKI Group has been contributing to the modernization of Japan’s agriculturalindustry as a all-round manufacturer specializing in agricultural machinery. Over this time, we have consistently
pursued efficient and labor-saving advances in agriculture, and have served the market by pioneering the developmentof a great deal of agricultural machinery and facilities. When we consider the questions of an increasing world
population and food supply, and then our own nation’s food self-sufficiency and land preservation, our role to serve
the farming sector becomes important and our duty to society as a manufacturer of agricultural machinery becomeseven more significant.
The ISEKI Group will continue to operate under a basic business philosophy of “providing products that satisfy
consumers” so that the Group can contribute to agriculture, both in Japan and throughout the world. Our highest
priority objectives are “to enhance product capability, to improve quality, to accelerate cost-cutting measures and tostrengthen our sales service capabilities.” We are aiming for a strong corporate culture that can maintain a stable
operating performance and continued payment of stable dividends to shareholders and will continue in our efforts toreform our profit structure.
Furthermore, maintaining positive relations with our stakeholders, including shareholders and customers, andachieving sustainable growth and development are also important. We are endeavoring to expand and improve ourcorporate governance in order to increase the transparency and fairness of management, essential steps in order torealize these goals.
(2) Long-term Management Strategies and Issues to be Addressed
To realize future development by establishing a stable customer base in Japan and speeding up global businessdevelopment in a rapidly changing business environment, we will more quickly focus on the following challenges
with all the strength of the ISEKI Group.
1) To strengthen the responsiveness to changes in the Japanese market
The modes of cultivation have been diversifying in the Japanese agriculture industry, shifting from the conventional
growing of rice for human consumption to growing of rice as feeds, crops and vegetables and other farming. Largescale farming, utilization of information technology and farming robots have been promoted. Recent changes in the
agriculture industry are remarkable. Furthermore, it is expected that trends that aim to enhance agriculture will
accelerate, following the basic agreement in the TPP negotiation. We will properly respond to these changes in thedomestic market. With an intensifying competition in the market, we will also endeavor to stably ensure a domestic
sales share of 20% or more with a view to establishing a stable customer base.
Specifically, to cope with the diversified cultivation systems and change in agricultural management forms,
including large-scale farming, we focus on development of sales reps who are able to make diversified proposals (aproject to support “Agri-Heroes”), and building large-scale maintenance facilities, including Iseki Trade Support
Center and Kyushu Agri Service Center, to strengthen our abilities to inspect and maintain large-scale farming
machines. In October 2015, we opened Dream Agricultural Research Institute as a center for “researching and diffusing
advanced agricultural technology to support the agriculture industry in Japan.” We will strive to expand domestic sales
by further improving customer satisfaction. We will do this by enhancing “our capability to support customers” bothin our products and services through providing high-quality marketing services and proposals that match theagricultural management of customers.
2) To fully develop global strategies
We will strive to secure a ratio of overseas net sales of 20% or more and enhance our earning power by accelerating
overseas development, with an eye on the ASEAN region, where mechanization is remarkably advancing, in addition
to the existing three markets of Europe, North America and China.
With regard to North America, Europe and other markets, we will strive to further expand sales by launching “newstrategic products” that satisfy customer needs. In Europe in particular, with the recent restructuring of ISEKI France
S.A.S as a subsidiary of the Company, we will focus on expanding sales and market share.
In the Chinese market where the mechanization of agriculture is rapidly advancing, we will start a full-fledged
launch of tractors, and accelerate and strengthen the development and deployment of new products such as combine
harvesters at Dongfeng Iseki Agricultural Machinery Co., Ltd., which completed the integration of business. In the
ASEAN market, which is expected to grow in the future, we will endeavor to establish the ISEKI brand by expanding
operation at PT. ISEKI INDONESIA, which has started full-fledged production, and reinforcing the sales capabilityof ISEKI SALES (THAILAND) CO., LTD., which has begun selling strategic tractors.
In addition, we will focus on expanding our business development to meet diversifying market needs by enhancing
our development, production, sales and service structures from a locally oriented standpoint.
3) To carry out low-cost operation
The Group has been pushing forward with cost structure reforms mainly in the development and production
depratements in order to launch products that can perform better than the competition both in Japan and overseas.
However, in the fiscal year ended December 31, 2015, operating income and ordinary income both resulted in low-7-levels due to a decrease in gross profits and other factors. In order to beat off the severe competition in domestic andoverseas markets in the future, we will make concerted efforts throughout the Group, including sales divisions, in fully
enforcing low-cost operations and implementing earnings structure reforms, in addition to promoting further cost
structure reforms in the development and production departements.
4) To ensure compliance
The Company received a cease and desist order and a surcharge payment order on March 26, 2015 and February 10,2016 pursuant to the Antimonopoly Act regarding bidding for facility construction works. Furthermore, on October 6,
2015, the Company underwent on-site investigations by the Japan Fair Trade Commission (JFTC) on suspicion of
possible violation of the Antimonopoly Act regarding “bidding for orders for construction work comprising facilities
for protected horticulture and ancillary facilities which would be placed by local public agencies in the Tohoku region.”
The Company is fully cooperating with the JFTC investigations.
Recognizing the gravity of this issue severely, the Company has worked on prevention of recurrence by developing
and implementing preventive measures. In terms of the organization, as of May 1, 2015, the Management Control
Section For Agri-Plant Business’s functions of auditing and monitoring of facility operations were transferred to theInternal Control & Audit Department. At the same time, the Internal Control & Audit Department was placed directly
under the Management Supervisory Committee, independent from operational departments. The action policy andmanuals on facility operations were also revised and education and training, including at sales subsidiaries, wasreinforced.
We will strive to more thoroughly comply with laws and regulations, enhance internal control, and strengthen
preventive measures.
.

4. Basic Policy for Choosing Accounting Standards
Considering comparability of periods between consolidated financial statements and comparability between
companies, the ISEKI Group will continue to use the Japanese accounting standards for preparing consolidated
financial statements for the time being.
Regarding the international accounting standards, we will adopt them in proper timing, considering relevant
circumstances in and outside Japan.

-8-5. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015(as of Mar. 31, 2015)(as of Dec. 31, 2015)
AssetsCurrent assets
Cash and deposits

6,603

8,788

Notes and accounts receivable-trade30,40424,895Merchandise and finished goods

42,55440,600Work in process

3,679

5,856

Raw materials and supplies

1,478

1,359

Deferred tax assets

1,444

890

Other

5,777

4,437

(91)

(56)

91,851

86,771

Buildings and structures, net

20,224

22,957

Machinery, equipment and vehicles, net

9,363

10,092Tools, furniture and fixtures, net

2,754

3,283

Land

50,39550,657

Leased assets, net

8,455

8,420

Construction in progress

1,771

1,473

28

25

92,992

96,911

1,105

1,134

Investment securities

9,495

8,569

Long-term loans receivable

1,003

52

Deferred tax assets

846

731

Net defined benefit asset

513

714

Other

6,766

6,564

Allowance for doubtful accounts

(436)

(300)

Total investments and other assets

18,18916,331

112,287

114,377

204,138

201,149

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets

Total non-current assets
Total assets-9-

(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015(as of Mar. 31, 2015)(as of Dec. 31, 2015)
Liabilities
Current liabilities
Notes and accounts payable-trade36,93529,400Electronically recorded obligations-operating
Short-term loans payable

1,778
25,134

10,604
24,389Current portion of long-term loans payable

13,9418,641

Lease obligations

2,662

2,646

Accrued consumption taxes

1,175

487

Income taxes payable

776

438

Deferred tax liabilities
Accrued expenses

75
5,432

0
4,571

Provision for bonuses

322

467

Other

4,453

5,868

Total current liabilities

92,68987,518Non-current liabilities
Long-term loans payable
Lease obligations

18,5206,559

23,703
6,414

Deferred tax liabilities

1,018

1,624

Deferred tax liabilities for land revaluation

6,074

6,074

Provision for directors’ retirement benefits

125

107

Net defined benefit liability

5,298

4,806

Asset retirement obligations
Other

266
2,519

304
2,496

Total non-current liabilities
Total liabilities

40,383133,073

45,532133,050

Capital stock
Capital surplus

23,344
13,454

23,344
13,454Retained earnings

15,65813,514

Treasury shares

(986)

(988)

51,47049,325

2,979
―

2,509
1

Revaluation reserve for land

12,401

12,401

Foreign currency translation adjustment

1,771

1,425

Remeasurements of defined benefit plans

750

717

17,902

17,055

Subscription rights to shares

68

91

Non-controlling interests

1,624

1,626

Total net assets
Total liabilities and net assets

71,065204,138

68,099201,149

Net assets
Shareholders’ equity

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total accumulated other comprehensive income- 10 -

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
(Apr. 1, 2014–(Apr. 1, 2015–
Mar. 31, 2015)
Dec. 31, 2015)
Net sales

157,417

145,210

Cost of sales

111,777

104,498

Gross profit

45,64040,711

Selling, general and administrative expenses

46,17540,251(535)

460Interest income

247

109

Dividend income

168

202

Foreign exchange gains

423

230

Subsidies received

78

76

Rent income

172

144

Gain on sales of scraps

131

52

Other

903

782

2,125

1,599

Interest expenses

623

664

Sales discounts

99

86

Other

368

360

1,091

1,111

499

947

Gain on sales of non-current assets

47

41

Gain on bargain purchase

900―

Gain on change in equity

589―

Compensation income

216Gain on sales of investment securities

25

303

Gain on sales of shares of subsidiaries and associates

96

―

1,680

351

Loss on sales and retirement of non-current assets

395

187

Impairment loss

165

99

Surcharges

305

270

8

―

Total extraordinary losses

874

556

Income before income taxes

1,304

741

Income taxes-current

1,662

756

Income taxes-deferred

(29)

1,446

Total income taxes

1,633

2,202

Loss

(328)

(1,460)

(9)

5

(319)

(1,465)

Operating income (loss)
Non-operating income

Total non-operating income
Non-operating expenses

Total non-operating expenses
Ordinary income
Extraordinary income

Total extraordinary income
Extraordinary losses

Other

Profit (loss) attributable to non-controlling interests
Loss attributable to owners of parent- 11 -

Consolidated Statements of Comprehensive Income(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
(Apr. 1, 2014–(Apr. 1, 2015–
Mar. 31, 2015)
Dec. 31, 2015)
Loss

(328)

(1,460)

1,636

(472)

Deferred gains or losses on hedges―

1

Revaluation reserve for land

569―

Foreign currency translation adjustment

(31)

(105)

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted
for using equity method

2,018

(33)

645

(239)

Total other comprehensive income

4,838

(849)

4,509

(2,310)4,510(2,313)(1)

2

Other comprehensive income
Valuation difference on available-for-sale securities

Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests- 12 -

(3) Consolidated Statements of Changes in Equity
Fiscal Year Ended March 31, 2015 (Apr. 1, 2014–Mar. 31, 2015)(Millions of yen)
Shareholders’ equity
Capital stock

Capital surplus

23,344

13,454

Balance at beginning of period

Retainedearnings

Treasury shares

Total
shareholders’equity(30)

54,034

17,266

Cumulative effects of changes
in accounting policies(360)

Restated balance

23,344

13,454(360)

16,905(30)

53,673

Changes of items during period
Dividends of surplus

(918)

(918)

Loss attributable to owners ofparent

(319)

(319)

Purchase of treasury shares(956)

Change of scope of equity
method

(956)

(8)

(8)

Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of period――(1,247)(956)(2,203)

23,344

13,454

15,658(986)

51,470

Accumulated other comprehensive income
Valuation
Total
Subscription
difference Deferred
Foreign RemeasureNon-controllaccumulated
Revaluationrights to
gains oroncurrency
ments ofing interests
other
reserve forsharesavailable- losses ontranslation definedcomprehenlandfor-salehedgesadjustment benefit plans
sive income
securities

Balance at beginning of period

1,338

―

11,831

1,170(1,269) 13,072

―

1,628

Cumulative effects of changes
in accounting policies
Restated balance

Total net
assets

68,734
(360)

1,338

―

11,831

1,170(1,269) 13,072

―

1,628

68,374

Changes of items during period
Dividends of surplus(918)

Loss attributable to owners ofparent(319)

Purchase of treasury shares(956)

Change of scope of equity
method(8)

Net changes of items other thanshareholders’ equity

1,640

―

569

600

2,019

4,830

68

(3)

4,895

Total changes of items during
period

1,640

―

569

600

2,019

4,830

68

(3)

2,691

Balance at end of period

2,979

―

12,401

1,771

750

17,90268

1,624

71,065- 13 -

Fiscal Year Ended December 31, 2015 (Apr. 1, 2015–Dec. 31, 2015)(Millions of yen)
Shareholders’ equity
Capital stock

Capital surplus

23,344

13,454

Balance at beginning of period

Retainedearnings

Treasury shares

Total
shareholders’equity(986)

51,47015,658Cumulative effects of changes
in accounting policies―

Restated balance

23,344

13,454

15,658(986)

51,470Changes of items during period
Dividends of surplus
Loss attributable to owners ofparent

(677)

(677)

(1,465)(1,465)Purchase of treasury shares

(1)

(1)

Change of scope of equity
method―Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of period——(2,143)(1)(2,144)

23,344

13,454

13,514(988)

49,325

Accumulated other comprehensive income
Valuation
Total
difference Deferred
Foreign Remeasure- accumulated Subscription Non-controllRevaluationrights to
gains oroncurrency
ments ofing interests
other
reserve forsharesavailable- losses ontranslation defined comprehenlandfor-salehedgesadjustment benefit plans
sive income
securities

Balance at beginning of period

2,979

―

12,401

1,771

750

17,902

68

1,624

Cumulative effects of changes
in accounting policies
Restated balance

Total net
assets

71,065―

2,979―

12,401

1,771

750

17,90268

1,624

71,065

Changes of items during period
Dividends of surplus(677)

Loss attributable to owners ofparent(1,465)Purchase of treasury shares(1)

Change of scope of equity
method―Net changes of items other thanshareholders’ equity

(469)

1

―

(345)

(33)

(847)

22

2

(821)

Total changes of items during
period

(469)

1

―

(345)

(33)

(847)

22

2

(2,966)

Balance at end of period

2,509

1

12,401

1,425

717

17,05591

1,626

68,099- 14 -

(4) Consolidated Statements of Cash Flows(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
(Apr. 1, 2014–(Apr. 1, 2015–
Mar. 31, 2015)
Dec. 31, 2015)
Cash flows from operating activities
Income before income taxes

1,304

741

Depreciation

5,902

5,831

Impairment loss

165

99

Gain on bargain purchase

(900)

―

(1,964)(486)

Loss (gain) on sales of investment securities

(24)

(303)

Loss (gain) on sales of shares of subsidiaries and associates

(96)

―

Interest and dividend income

(415)

(311)

Interest expenses

623

664

Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment andintangible assets
Loss (gain) on change in equity

(272)

(160)

348
(589)

Compensation income

(21)

(6)

Surcharges

305

270

Decrease (increase) in notes and accounts receivable-trade

13,063

5,376

Decrease (increase) in inventories(7,835)(212)

Increase (decrease) in notes and accounts payable-trade(10,424)

1,419

Other

(115)

(609)

Subtotal(946)

12,458Interest and dividends income received

423

300

Interest expenses paid

(659)

(678)

Increase (decrease) in net defined benefit liability

146―

Proceeds from compensation

21

6

Surcharges paid

―

(305)

Income taxes paid

(3,086)(950)

Net cash provided by (used in) operating activities(4,247)

10,830(11,583)(7,440)

825

411

(1)

(99)

Proceeds from sales of investment securities

110

605

Decrease (increase) in loans receivable

(453)

842

3

4

(543)

―

(57)

―

522

―

(128)

(82)

(11,305)(5,757)

Cash flows from investing activities
Purchase of property, plant and equipment and intangible
assetsProceeds from sales of property, plant and equipment andintangible assets
Purchase of investment securities

Decrease (increase) in time deposits
Payments for investments in capital of subsidiaries andassociates
Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Other
Net cash provided by (used in) investing activities- 15 -

(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
(Apr. 1, 2015–(Apr. 1, 2014–
Dec. 31, 2015)
Mar. 31, 2015)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable

7,578

(745)

Proceeds from long-term loans payable

16,14012,975

Repayments of long-term loans payable(7,649)(13,091)

Proceeds from sales and leasebacks

2,050

1,047

Repayments of lease obligations(2,208)(2,445)Purchase of treasury shares

(956)

(1)

Cash dividends paid

(910)

(671)

Other

(12)

(9)

14,031(2,943)392

61

Net increase (decrease) in cash and cash equivalents(1,129)2,190

Cash and cash equivalents at beginning of period
Decrease in cash and cash equivalents resulting from exclusionof subsidiaries from consolidation
Cash and cash equivalents at end of period

8,169

6,570

(469)

―

6,570

8,761

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents- 16 -

(5) Notes Regarding the Consolidated Financial Statements(Notes Regarding the Going Concern Assumption)
Not applicable(Important Basic Items for Preparing Consolidated Financial Statements)
1.

Scope of consolidation
Number of consolidated subsidiaries……….25 companies(including Iseki-Matsuyama Mfg. Co., Ltd., Iseki-Kumamoto Mfg. Co., Ltd., Iseki-Hokkaido Co., Ltd. andIseki-Tohoku Co., Ltd.)

2. Scope of the equity method companies
Number of affiliates……….2 companies (Dongfeng Iseki Agricultural Machinery Co., Ltd. and ISEKI SALES(THAILAND) CO., LTD.)
3. Change of consolidated end-of-period balance sheet date
The Company, which had adopted March 31 as its consolidated end-of-period balance sheet date, changed its
balance sheet date from March 31 to December 31, effective as of the fiscal year ended December 31, 2015. The
purpose of this change is to improve the efficiency of management and business operation such as the Group’s
budget preparation and performance management, to disclose management information in a timely andappropriate manner, and to seek further transparency of corporate management. Due to this change, the fiscal
year ended December 31, 2015 is a nine-month period from April 1, 2015 to December 31, 2015.
4. Consolidated accounting period
Of the consolidated subsidiaries, 22 companies (including Iseki-Matsuyama Mfg. Co., Ltd.) use a balance sheet
date of December 31. ISEKI France S.A.S and one other company use a balance sheet date of September 30.
With regard to the preparation of the consolidated financial statements, the balance sheet date of eightcompanies (including Iseki-Matsuyama Mfg. Co., Ltd.) that adopted March 31 as their annual closing date has
been changed to December 31, and the nine-month results (April 1, 2015 to December 31, 2015) have been
included in the consolidated results for the fiscal year ended December 31, 2015. For 13 companies (including
Iseki-Hokkaido Co., Ltd.) that adopted December 31 as their annual closing date, the twelve-month results(January 1, 2015 to December 31, 2015) have been included in the consolidated results, as in the past. Furthermore,for ISEKI France S.A.S and one other company adopting September 30 as their annual closing date, necessary
adjustments at consolidation are made for any significant transactions that occurred between the consolidatedbalance sheet date and these dates.
5.

Accounting policies(1) Valuation basis and methods of important assets(a) Securities
Held-to-maturity debt securities ....................... recorded at amortized cost
Available-for-sale securities- Securities with fair market value………. recorded at market value, based on the fair market priceat the closing date of the consolidated reporting period.
(Any estimate variance is credited or debited toShareholders’ Equity)- Securities without fair market value........ recorded at cost, based on the moving-average method(b) Inventories ........................................................ mainly recorded at cost using the gross average method(Balance sheet amounts for items with reduced
profitability have been adjusted downward accordingly)(c) Derivatives ........................................................ recorded using the market value method(2) Depreciation methods for material depreciable assets(a) Property, plant and equipment (excluding leased assets)
The straight-line method is used.
(b) Intangible assets (excluding leased assets)
The straight-line method is used. However, software for internal use is depreciated using the straight-line
method over an expected useful life within the company of five years.
(c) Leased assets
Leased assets derived from finance leases other than those leases which transfer the ownership of theassets to the lessee are amortized using the straight-line method with no residual value over the lease
period, which is deemed the useful life.
Among finance leases that do not involve transfer of ownership to lessee, leases that began before
April 1, 2008 are accounted for as normal operating leases.
- 17 -

(3) Allowances and reserves(a) Allowance for doubtful accounts
A likely unrecoverable amount is calculated by applying the historical bad debt ratio to common
receivables. For specific receivables, such as doubtful debt receivables, allowances are made byindividually evaluating the likelihood of them being collected.
(b) Provision for bonuses
To provide for future bonus payments to employees, a provision for bonuses is booked based on
estimated future payments.
(c) Provision for directors’ retirement benefits
Some of the consolidated subsidiaries record the directors’ retirement benefits to provide fordirectors’ retirement benefits in an amount as required by companies’ internal regulations.
(d) Provision for loss on construction contracts
To provide for future loss on construction contracts already concluded, an estimated amount of loss
is booked regarding construction works which had not been completed by the end of the current
fiscal year and for which a loss is expected to occur and the amount of loss can be estimatedreasonably.
(4) Accounting treatment related to retirement benefits(a) Method of attributing the projected benefits to periods of service
In calculating retirement benefits, the method of attributing the projected benefits to periods until the endof the current fiscal year is based on the benefit formula basis attribution.
(b) Method of amortization of actuarial gains or losses and prior service cost
Actuarial gains or losses are amortized as incurred over the periods, which are the average remaining
service years of employees, by the straight-line method, starting from the following fiscal year. Prior
service cost is amortized as incurred over the periods, which are the average remaining service years of
employees, by the straight-line method.
(c) Adoption of the simplified method at small companies
For calculating net defined benefit liability and retirement benefit expenses, some consolidated
subsidiaries apply the simplified method which assumes the company’s benefit obligation to be equal tothe benefits payable assuming the voluntary retirement of all employees takes place at fiscal year-end.
(5) Accounting standards for revenues and expenses(a) Accounting standards for the value and cost of completed construction contracts
The percentage-of-completion method is applied for construction in progress up to the end of theconsolidated accounting period, for which the outcome can be estimated reliably (the proportional cost
method is applied for estimating the percentage of progress of the construction). The completed-contract
method is applied for other constructions.
(6) Foreign currency translation
Monetary assets and liabilities in foreign currencies are translated into yen at the rates of exchange in effectat the balance sheet date. Gains or losses resulting from the translation are credited or charged to income.
Balance sheet accounts (except for shareholders’ equity) and revenue and expense accounts of the overseas
subsidiary are translated into yen at the rates of exchange in effect at the balance sheet dates. Differences
arising from the translation are presented as “Foreign currency translation adjustment” and “Non-controllinginterests” in shareholders’ equity and financial statements.
(7) Hedge accounting(a) Hedge accounting
Recorded in accordance with deferred hedge accounting. Such receivables and payables, which aredenominated in foreign currencies and for which forward exchange contracts have been entered, arerecorded using the forward exchange rates.
(b) Hedging instruments and hedged items(i) Hedging instruments
Forward exchange contracts and interest rate swap agreements(ii) Hedged items
Receivables and payables denominated in foreign currencies, forecasted transactions denominatedin foreign currencies, and loans payable(c) Hedging policies
The financial risks associated with fluctuations in foreign currencies exchange rates and interest rates arehedged.
Risks associated with fluctuations in foreign currencies exchange rates concerning transactions inforeign currencies, which occur when import and export operations are performed, are hedged by keeping- 18 -

a balance between export exchanges and import exchanges. With regard to risks associated withfluctuations in interest rates on loans payable, risks concerning variable interest rate loans payable arehedged, mainly with a view to equalizing interest burdens.
(8) Amortization method and amortization period of goodwill
The goodwill account is amortized by the straight-line method over a period of no longer than 20 years.
(9) Cash and cash equivalents in the Consolidated Statement of Cash Flows
Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments which arereadily convertible to cash subject to an insignificant risk of any change in their value and which werepurchased with an original maturity of three months or less.
(10) Other notes pertaining to the preparation of the Consolidated Financial Statements(a) Accounting treatment of consumption tax
Consumption tax and local consumption taxes are accounted for using a tax-exclusive method.
(Change in Accounting Policy, Change in Accounting Estimates and Restatements)(Application of accounting standard, etc., for business combinations)
From the fiscal year ended December 31,2015, the Company adopted the Revised Accounting Standard forBusiness Combinations (ASBJ Statement No. 21, September 13, 2013, hereinafter referred to as the“Accounting Standard for Business Combinations”), the Revised Accounting Standard for Consolidated
Financial Statements (ASBJ Statement No. 22, September 13, 2013, hereinafter the “Accounting Standard
for Consolidated Financial Statements”), the Revised Accounting Standard for Business Divestitures (ASBJ
Statement No. 7, September 13, 2013, hereinafter the “Accounting Standard for Business Divestitures”) andother accounting standards. To comply with these standards, the Company changed the accounting treatment
to record the amount arising from a change in equity in subsidiaries accounted for using the equity method
as capital surplus where the Company has been continuously the controlling entity, and to record the costs
associated with such acquisition as expenses for the year in which the acquisition was made. For all thebusiness combinations that will be implemented from April 1, 2015, the method to allocate acquisition costs
has changed; i.e., allocation of acquisition costs determined based on a provisional accounting treatment will
be reviewed and reflected in the consolidated financial statements for the fiscal year in which the businesscombination was implemented. In addition, the presentation of net income and other related items waschanged. The item previously presented as minority interests was also changed, to non-controlling interests.
In order to reflect these changes with regard to the previous fiscal year, the consolidated financial statements
have been restated.
The method of presentation has been changed from the consolidated statement of cash flows for the fiscal
year ended December 31, 2015, to classify cash flows related to the purchase or sales of shares of subsidiaries
not resulting in change in scope of consolidation under cash flows from financing activities, and to classify
cash flows related to expenses for the purchase of shares of subsidiaries resulting in change in scope of
consolidation or cash flows related to expenses incurred in connection with the purchase or sales of shares ofsubsidiaries not resulting in change in scope of consolidation under cash flows from operating activities.
From April 1, 2015, the Company conformed with the transitional treatments stipulated in Article 58-2 (4)of the Accounting Standard for Business Combinations, Article 44-5 (4) of the Accounting Standard forConsolidated Financial Statements and Article 57-4 (4) in the Accounting Standard for Business Divestitures
to eventually fully adopt the Accounting Standard for Business Combinations, etc.
The financial statements for the fiscal year ended December 31, 2015 were not affected by any of thesechanges.

- 19 -

(Consolidated Balance Sheets Information)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
1. Accumulated depreciation of property, plant and equipment
100,630 million yen
103,229 million yen
2. Guaranteed liabilities
8,830 million yen
8,099 million yen
3. Contingent liabilities
On October 6, 2015, the Company underwent on-site investigations by the Japan Fair Trade Commission (JFTC)
on suspicion of possible violation of the Antimonopoly Act regarding “bidding for orders for construction work
comprising facilities for protected horticulture and ancillary facilities which would be placed by local publicagencies in the Tohoku region.” The investigation is continuing. The investigations may result in an order for
payment of surcharge or any other disposition by the Company. But it is difficult to reasonably estimate theamount of loss arising from such disposition at this point, and what impact it would have on the consolidated
financial statements is not certain yet.
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
4. Notes receivable less discount-trade
2 million yen
4 million yen
5. Endorsed notes receivable-trade
106 million yen
112 million yen
6. Revaluation of land for business use
The Company has revalued its land for business use pursuant to the law (Law No. 19, announced on March 31,
2001) which revises parts of the law relating to the revaluation of land. The equivalent tax related to the change
in the said revaluation has been recorded in the liabilities (non-current liabilities) as a “Deferred tax liabilities forland revaluation” and the deducted amount has been recorded under net assets as “Revaluation reserve for land.”• Revaluation method···························The revaluation of land has been determined using
a reasonable adjustment to the assessed value ofthe non-current assets for property tax as
stipulated in Paragraph 3, Article 2 of theenforcement order (Government ordinance No.
119, announced on March 31, 1998)• Revaluation date··························March 31, 2001
• Variance between the market ··························(12,294) million yen(12,294) million yen
value of the revalued land at theend of the period and therevalued book value
7. Notes to mature on the last day of the fiscal year, etc.
Notes to mature on the last day of the fiscal year, etc. are settled as of the clearing date. Since the last day of the
fiscal year ended December 31, 2015 fell on a holiday of financial institutions, the balance at the end of period
includes the following notes to mature on the last day of the fiscal year, etc.
FY ended Mar. 31,
FY ended Dec. 31, 2015
2015
Notes receivable-trade— million yen
280 million yen
Note payable-trade— million yen
1,916 million yen
Electronically recorded obligations-operating— million yen
858 million yen
Other (Notes payable-facilities)— million yen
372 million yen
Other (Electronically recorded obligations-non-operating)— million yen
50 million yen- 20 -

(Consolidated Statements of Income Information)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
4,580 million yen
2,666 million yen

1. Research and development expenses
2.

Impairment loss
Fiscal year ended March 31, 2015 (April 1, 2014 – March 31, 2015)
The Company recorded impairment losses on the following assets.
Usage

Buildings,
Structures, Land
Idle property

Location(Millions of yen)
Impairment loss

Inashiki, Ibaraki Pref.

20

Ohtawara, Tochigi Pref.

82

Matsusaka, Mie Pref.

4

Mihara, Hiroshima Pref.

5

Kita Akita, Akita Pref.

11

Annaka, Gunma Pref.

13

Anjo, Aichi Pref.

24

Kunisaki, Oita Pref.

3

Type

Buildings, Land

Land

Total
165
(Reason to record impairment loss)
The Company recorded an impairment loss on the above assets because idle properties are not being used and haveno prospect for use in the future. In addition, their market price is declining.
(Measurement of recoverable amount)
Recoverable amount is measured using net selling price. The price is determined by applying reasonable adjustments
to the assessed value of non-current assets for property tax.
Fiscal year ended December 31, 2015 (April 1, 2015–December 31, 2015)
The Company recorded impairment losses on the following assets.
Usage

Type
Buildings,
Structures, Land
Buildings, Land

Idle property
Land

Location(Millions of yen)
Impairment loss

Uonuma, Niigata Pref.

19

Akita, Akita Pref.

38

Matsuyama, Ehime Pref.

19

Hitachinaka, Ibaraki Pref.

3

Niigata, Niigata Pref.

1

Shinano-machi, Kamiminochi-gun,
Nagano Pref.

2

Matsusaka, Mie Pref.

2

Mitoyo, Kagawa Pref.

3

Kirishima, Kagoshima Pref.

7

Total
99
(Reason to record impairment loss)
The Company recorded an impairment loss on the above assets because idle properties are not being used and haveno prospect for use in the future. In addition, their market price is declining.
(Measurement of recoverable amount)
Recoverable amount is measured using net selling price. The price is determined by applying reasonable adjustments
to the assessed value of non-current assets for property tax.

- 21 -

(Consolidated Statements of Changes in Equity Information)
Fiscal year ended March 31, 2015 (April 1, 2014–March 31, 2015)
1. Matters concerning the classes and number of outstanding stock and classes and number of treasury shares
Decrease in number
Increase in number
Number of shares
Number of sharesof shares duringof shares during(as of Mar. 31, 2015)(as of Apr. 1, 2014)
periodperiod(Number ofoutstanding shares)
Common stock
229,849,936——
229,849,936(Treasury shares)
Common stock
117,254
3,841,893—
3,959,147
The increase in the number of shares by 3,841,893 shares during the period was due to the purchasing of 11,893 shares
below stock trading unit, and the purchasing of 3,830,000 shares pursuant to the decision by the Board of Directors(resolution on May 29, 2014).
2. Dividends(1) Cash dividends paid
Resolution

Type of shares

RegularMeeting of
Shareholders on
Jun. 25, 2014

Common stock

Total amount ofdividend paid
(millions of yen)
918

Dividend pershare (yen)
4.00

Record date

Effective dateMar. 31, 2014

Jun. 26, 2014

(2) Of the dividends for which the record date belongs to the fiscal year ended March 31, 2015, those for which theeffective date of the dividends will be in the fiscal year ending December 31, 2015.
Total
amount ofDividend
Source ofdividend
per share
Record date
Effective date
Resolution
Type of sharesfunds for
paid
(yen)
dividends(millionsof yen)Regular
Retained
Meeting ofCommon stock677
3.00 Mar. 31, 2015
Jun. 25, 2015
earnings
Shareholders on
Jun. 24, 2015
Fiscal year ended December 31, 2015 (April 1, 2015–December 31, 2015)
1. Matters concerning the classes and number of outstanding stock and classes and number of treasury shares
Increase in number
Decrease in number
Number of shares
Number of sharesof shares duringof shares during(as of Dec. 31, 2015)(as of Apr. 1, 2015)
periodperiod(Number ofoutstanding shares)
Common stock
229,849,936——
229,849,936(Treasury shares)
Common stock
3,959,147
5,019—
3,964,166
The increase in the number of shares by 5,019 shares during the period was due to the purchasing of shares below
stock trading unit.

- 22 -

2. Dividends(1) Cash dividends paid
Resolution

Type of shares

RegularMeeting of
Shareholders on
Jun. 24, 2015

Common stock

Total amount ofdividend paid
(millions of yen)
677

Dividend pershare (yen)
3.00

Record date

Effective dateMar. 31, 2015

Jun. 25, 2015

(2) Of the dividends for which the record date belongs to the fiscal year ended December 31, 2015, those for which
the effective date of the dividends will be in the fiscal year ending December 31, 2016.
Total
amount ofDividend
Source ofdividend
per share
Record date
Effective date
Resolution
Type of sharesfunds for
paid
(yen)
dividends(millionsof yen)RegularMeeting ofRetained
Common stock338
1.50 Dec. 31, 2015
Mar. 28, 2016
Shareholders on
earnings
Mar. 25, 2016
(Consolidated Statements of Cash Flows Information)
Reconciliation between cash and cash equivalents at the end of period and the amount reported in the Consolidated
Balance Sheet.
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
Cash and deposits
6,603 million yen
8,788 million yen
Time deposits with terms of more than 3 months(32) million yen(27) million yen
Total cash and cash equivalents
6,570 million yen
8,761 million yen(Segment Information)
Since the Group had the only “agriculture-related business” segment, the segment information is omitted.
(Per Share Information)
FY ended Mar. 31, 2015
307.11(1.40)(Yen)
FY ended Dec. 31, 2015
293.87(6.49)Net assets per share
Loss per share
Notes:
1. Because the Company reported loss per share, the Company has not presented loss per share after adjustment
for dilutive securities.
2. Basis of calculation of loss per share(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
Loss per share
Loss attributable to owners of parent reported in theConsolidated Statements of Income
Loss attributable to owners of parent attributed to commonsharesLoss not attributable to common shares
During period average number of common shares (shares)(Significant Subsequent Events)
Not applicable- 23 -(319)(1,465)(319)(1,465)—228,018,246—
225,887,727

6. Non-consolidated Financial Statements(1) Non-consolidated Balance Sheets(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015(as of Mar. 31, 2015)(as of Dec. 31, 2015)
AssetsCurrent assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Advance payments-trade
Prepaid expenses
Deferred tax assets
Short-term loans receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Structures, net
Machinery and equipment, net
Vehicles, net
Tools, furniture and fixtures, net
Land
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Leasehold right
SoftwareLeased assets
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital
Investments in capital of subsidiaries and associates
Long-term loans receivable
Long-term prepaid expenses
Other
Allowance for doubtful accounts
Allowance for investment loss
Total investments and other assets
Total non-current assets
Total assets- 24 -

2,687
7,233
30,082
15,825
295
301
158
216
354
9,255
3,310
(9)
69,711

3,828
3,599
21,762
15,603
51
364
179
268
473
11,1042,445(7)59,674

5,049
464
2,163
1
1,304
25,276298
675
35,233

6,082
610
2,120
2
1,373
25,395329
495
36,410

85
219
209
64
578

85
210
189
85
571

9,182
18,637
95
1,941
3,237
514
864
(122)
(680)
33,671
69,483
139,195

8,292
18,637
95
1,941
3,023
583
837
(88)
(825)
32,497
69,479129,154

(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015(as of Mar. 31, 2015)(as of Dec. 31, 2015)
Liabilities
Current liabilities
Notes payable-trade
Electronically recorded obligations-operating
Accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Account payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for retirement benefits
Asset retirement obligations
Long-term deposits received
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuations and translation adjustments
Valuation difference on available-for-sale securities
Revaluation reserve for land
Total valuation and translation adjustments
Subscription rights to shares
Total net assets
Total liabilities and net assets- 25 -

17,471436
15,5358,400
10,620
164
907
2,984
37
384
231
—
976
58,1498,316
5,282
18,011
6,000
4,703
167
698
2,284
―
79
308
95
937
46,886

12,702
378
498
6,074
3,026
112
647
63
23,50481,654

16,469
389
1,069
6,074
2,654
112
625
42
27,43874,324

23,344

23,344

11,5542,450
14,004

11,5542,450
14,004

5,743
5,743
(986)
42,105

3,476
3,476
(988)
39,8382,965
12,401
15,36668
57,541
139,195

2,497
12,401
14,89991
54,829129,154

(2) Non-consolidated Statements of Income(Millions of yen)
FY ended Mar. 31, 2015 FY ended Dec. 31, 2015
(Apr. 1, 2014–(Apr. 1, 2015–
Mar. 31, 2015)
Dec. 31, 2015)
Net sales

92,252

66,073

Cost of sales

81,23259,328Gross profit

11,0206,745

Selling, general and administrative expenses

13,6809,346

Operating loss

(2,660)(2,600)Interest income

406

219

Dividend income

977

1,069

Rent income

1,335

976

Other

1,398

805

Total non-operating income

4,117

3,071

Interest expenses

254

238

Sales discounts

43

34

Rent expenses

1,158

799

200

368

1,656

1,441

(198)

(971)

Gain on sales of non-current assets

624Gain on sales of shares of subsidiaries and associates

11―

Gain on sales of investment securities―

303

Total extraordinary income

17

327

Loss on sales and retirement of non-current assets

204

100

Impairment loss—

2

Surcharges

305

151

7

―

517

255

Loss before income taxes

(698)

(899)

Income taxes-current

353

18

Income taxes-deferred

(109)

670

Total income taxes

243

689

Loss

(942)

(1,588)Non-operating income

Non-operating expenses

Other
Total non-operating expenses
Ordinary loss
Extraordinary income

Extraordinary losses

Other
Total extraordinary losses- 26 -

(3) Non-consolidated Statements of Changes in Equity
Fiscal Year Ended March 31, 2015 (Apr. 1, 2014–Mar. 31, 2015)(Millions of yen)
Shareholders’ equity
Capital surplus

Balance at beginning of period

Retained earnings
Otherretainedearnings

Capital
stock

Legal
Other
Total
Total
capital capital capital Retained retained
surplus surplus surplus earnings earnings
brought
forward23,344

11,5542,450

14,004

TreasurysharesTotalshareholders’equity(30)

45,406

8,087

8,087

(483)

(483)

7,604

7,604

Dividends of surplus

(918)

(918)

(918)

Loss

(942)

(942)

(942)

Cumulative effects of changes
in accounting policies
Restated balance

23,344

11,5542,450

14,004(483)(30)

44,923

Changes of items during period

Purchase of treasury shares

(956)

(956)

(1,861) (1,861)(956)(2,817)

5,743

(986)

42,105

Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of period

—

—

—

—

23,344

11,5542,450

14,004

5,743

Valuation and translation adjustments

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Revaluation
reserve for land

Total valuationand translation
adjustments

1,321

11,831

13,153

Subscription
rights toshares—Cumulative effects of changes
in accounting policies
Restated balance

Total net
assets58,560
(483)

1,321

11,831

13,153—58,077

Changes of items during period
Dividends of surplus

(918)

Loss

(942)

Purchase of treasury shares(956)

Net changes of items other thanshareholders’ equity

1,643

569

2,212

68

2,281

Total changes of items during
period

1,643

569

2,212

68

(536)

Balance at end of period

2,965

12,401

15,36668

57,541- 27 -

Fiscal Year Ended December 31, 2015 (Apr. 1, 2015–Dec. 31, 2015)(Millions of yen)
Shareholders’ equity
Capital surplus

Balance at beginning of period

Retained earnings
Otherretainedearnings

Capital
stock

Legal
Other
Total
Total
capital capital capital Retained retained
surplus surplus surplus earnings earnings
brought
forward23,344

11,5542,450

14,004

5,743

5,743

TreasurysharesTotalshareholders’equity(986)

42,105

Cumulative effects of changes
in accounting policies
Restated balance―
23,344

11,5542,450

14,004

5,743

5,743

(986)

42,105

(677)

(677)

(677)

(1,588) (1,588)(1,588)Changes of items during period
Dividends of surplus
Loss
Purchase of treasury shares

(1)

(1)

(1)

(2,267)(988)

39,838Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of period

—

—

—

—

23,344

11,5542,450

14,004(2,266) (2,266)
3,476

3,476

Valuation and translation adjustments

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Revaluation
reserve for land

Total valuationand translation
adjustments

2,965

12,401

15,366

Subscription
rights toshares
68

Cumulative effects of changes
in accounting policies
Restated balance

Total net
assets57,541―

2,965

12,401

15,36668

57,541

Changes of items during period
Dividends of surplus

(677)

Loss

(1,588)Purchase of treasury shares
Net changes of items other thanshareholders’ equity

(1)
(467)

―

(467)

22

(444)

Total changes of items during
period

(467)

―

(467)

22

(2,711)

Balance at end of period

2,497

12,401

14,89991

54,829- 28 -

(4) Notes Regarding the Non-consolidated Financial Statements(Notes Regarding the Going Concern Assumption)
Not applicable

7. Others(1) Production, Orders & Sales
Note: Since the fiscal year ended December 31, 2015 is a transitional period, for the Company and its
consolidated subsidiaries which adopted a fiscal year starting April 1 and ending March 31 of the following year,
the nine-month results (April 1, 2015 to December 31, 2015) have been included in the consolidated results forthe fiscal year ended December 31, 2015. For subsidiaries which adopt a fiscal year starting January 1 and ending
December 31, the twelve-month results (January 1, 2015 to December 31, 2015) have been included in the
consolidated results. Because year-on-year comparisons are impossible, changes from the previous period for
production, orders, and sales are not mentioned.
1) Production results per product-type(Millions of yen)
FY ended Mar. 31, 2015
FY ended Dec. 31, 2015
Product-type(Apr. 1, 2014-Mar. 31, 2015)(Apr. 1, 2015-Dec. 31, 2015)

Cultivating & mowing machinery

55,64639,986

Planting machinery

18,3308,776

Harvesting and processing machinery

28,378

16,103

Parts and farming implements

2,307

1,488

Other agriculture related business

7,261

5,303

111,923

71,658Total
Note: Figures are shown in terms of sales values.

2) Orders
We operate a system whereby production is based mostly on projected demand. We hardly ever produce on order.
3) Sales results per product-type(a) Total

Product-type

FY ended Mar. 31, 2015

(Millions of yen)
FY ended Dec. 31, 2015

(Apr. 1, 2014- Mar. 31, 2015)(Apr. 1, 2015-Dec. 31, 2015)

AmountAmount

Ratio
%

Ratio
%

Cultivating & mowing machinery

52,27333.2

48,993

33.7

Planting machinery

11,8707.5

10,447

7.2

Harvesting and processing machinery

24,322

15.5

22,082

15.2

Parts and farming implements

34,86722.1

32,962

22.7

Other agriculture related business

34,08321.7

30,72421.2

157,417100

145,210

100

Total

- 29 -

(b) Domestic

Product-type

FY ended Mar. 31, 2015

(Millions of yen)
FY ended Dec. 31, 2015

(Apr. 1, 2014- Mar. 31, 2015)(Apr. 1, 2015-Dec. 31, 2015)

AmountAmount

Ratio

Ratio

%

%

Cultivating & mowing machinery

31,63424.0

29,441

24.0

Planting machinery

9,764

7.4

9,674

7.9

Harvesting and processing machinery

23,99618.2

21,816

17.8

Parts and farming implements

33,07525.0

31,25025.5

Other agriculture related business

33,48525.4

30,32524.8

131,956100

122,508100

Total(c) Overseas

Product-type

FY ended Mar. 31, 2015

(Millions of yen)
FY ended Dec. 31, 2015

(Apr. 1, 2014- Mar. 31, 2015)(Apr. 1, 2015-Dec. 31, 2015)

AmountAmount

Ratio
%

Ratio
%

Cultivating & mowing machinery

20,63981.1

19,552

86.1

Planting machinery

2,105

8.3

772

3.4

325

1.3

266

1.2

1,792

7.0

1,712

7.5

598

2.3

398

1.8

25,460100

22,701100

Harvesting and processing machinery
Parts and farming implements
Other agriculture related business
Total- 30 -