February 14, 2017
Name of Listed Company: ISEKI & CO., LTD.
Stock Exchange Listings: Tokyo
Company Code:6310 (URL http://www.iseki.co.jp)
Representative: Title President
Name Eiichiro Kinoshita
Enquiries:
Title General Manager of Financial Department
Name Katsuhiro Osuga
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:
Financial Results Briefing:

March 30, 2017
March 31, 2017
March 31, 2017
Yes
Yes (for institutional investors and analysts)

Summary Announcement of Consolidated Financial Results
for the Fiscal Year Ended December 31, 2016 (Japanese GAAP)
I. Financial Results for the Fiscal Year Ended December 31, 2016 (January 1, 2016－December 31, 2016)
A. Results of Operations(Rounded down to a million yen, % indicates changes from the previous period)

FY Ended
December 31, 2016
153,097
2,469
1,635
858

%

FY Ended
December 31, 2015
145,210460
947(1,465)%Net Sales—―
Operating Income—―
Ordinary Income—―
Profit (Loss) Attributable to Owners of Parent—―
Profit (Loss) per Share (yen)(6.49)
Non-diluted
3.80
Fully Diluted
3.79―
Return on Equity (%)
1.3
(2.2)
Return on Total Assets (%)
0.8
0.5
Operating Income to Net Sales (%)
1.6
0.3
Note: Comprehensive income
Fiscal year ended December 31, 2016: –¥602 mil. (—%)
Fiscal year ended December 31, 2015: –¥2,310 mil. (—%)
Reference: Share of profit of entities accounted for using equity method
Fiscal year ended December 31, 2016: –¥1,075 mil.
Fiscal year ended December 31, 2015: ¥52 mil.
The fiscal year of the Company, previously from April 1 to March 31 of the following year, has been changed to
January 1 to December 31 of the year, effective as of the fiscal year ended December 31, 2015. Percentage changes
year on year are left blank, as the periods of the fiscal year ended December 31, 2016 and the fiscal year ended
December 31, 2015 cannot be compared due to their differences. Percentage changes for the fiscal year ended
December 31, 2015 are left blank for the same reason.

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

As of December 31, 2016

As of December 31, 2015

203,356
67,151
32.2
289.68201,149
68,09933.0
293.87

Total Assets
Net Assets
Shareholders’ Equity to Total Assets Ratio (%)
Net Assets per Share (yen)Reference: Shareholders’ equity
As of December 31, 2016: ¥65,430 mil.
As of December 31, 2015: ¥66,380 mil.
C. Cash Flows(Rounded down to a million yen)

FY Ended
December 31, 2016
8,283
(5,736)
2,621
13,909Net 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
December 31, 2015
10,830(5,757)(2,943)
8,761

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

End of2Q

End of
3Q

—
—

—
—

—
—

—

—

—

FY Ended December 31, 2015
FY Ended December 31, 2016
FY Ending December 31, 2017
(Forecast)Year-end
1.50
1.50
1.50–
3.00

Ratio of
Annual Cash Payout Ratio Dividend to
Dividend(%,
Net Assets
Annual (million yen) consolidated)(%,consolidated)
1.50
338
—
0.5
1.50
338
39.5
0.5
1.50–
—
3.00

III. Forecast for the Fiscal Year Ending December 31, 2017 (January 1, 2017－December 31, 2017)(Rounded down to a million yen, % indicates changes from the previous period)
Net SalesInterimFull Year81,200161,500

%

0.2
5.5

Operating
Income

1,900
3,500

%

8.5
41.7

Ordinary
Income

2,200
3,700

%

74.0
126.2

ProfitAttributableto Owners of
Parent

1,300
2,700

%

135.0
214.5

Profit per
Share
(yen)

5.76
11.95

* 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: None
2) Change in accounting policy other than 1):
None3) Change in accounting estimates:
None4) Restatements:
None
C Outstanding shares (common shares)
1) Outstanding shares (including treasury shares) As of December 31, 2016
229,849,936 shares
As of December 31, 2015
229,849,936 shares
2) Outstanding treasury shares
As of December 31, 2016
3,976,123 shares
As of December 31, 2015
3,964,166 shares
3) Average number of sharesFiscal year ended December 31, 2016
225,880,761 sharesFiscal year ended December 31, 2015
225,887,727 shares(Reference) Non-consolidated Financial Results
Financial Results for the Fiscal Year Ended December 31, 2016 (January 1, 2016－December 31, 2016)
A. Results of Operations(Rounded down to a million yen, % indicates changes from the previous period)

FY Ended
December 31, 2016
95,873
921
2,746
2,651

%

FY Ended
December 31, 2015
66,073(2,600)(971)(1,588)%Net Sales——
Operating Income (Loss)——
Ordinary Income (Loss)——
Profit (Loss)——
Profit (Loss) per Share (yen)Non-diluted
11.74(7.03)
Fully Diluted
11.72—
Note: The fiscal year of the Company, previously from April 1 to March 31 of the following year, has been changed
to January 1 to December 31 of the year, effective as of the fiscal year ended December 31, 2015. Percentagechanges year on year are left blank, as the periods of the fiscal year ended December 31, 2016 and the fiscal year
ended December 31, 2015 cannot be compared due to their differences. Percentage changes for the fiscal year ended
December 31, 2015 are left blank for the same reason.
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, 2016: ¥56,046 mil.
As of December 31, 2015: ¥54,737 mil.

As of December 31, 2016

As of December 31, 2015

135,976
56,13841.2
248.13

129,154
54,82942.4
242.32*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 andnon-consolidated 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
the assumptions 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 “Analyses of Management
Performance and Financial Position” on page 3 of the supplementary material for the assumptions underlying
the forecast and precautions when using the forecast.

 Table of contents for supplementary material
1. Analyses of Management Performance and Financial Position .............................................................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(Consolidated Balance Sheets Information) ...................................................................................19(Consolidated Statements of Income Information).........................................................................20(Consolidated Statements of Changes in Equity Information) .......................................................21(Consolidated Statements of Cash Flows Information) ..................................................................22(Segment Information) ...................................................................................................................22(Per Share Information) ..................................................................................................................22(Significant Subsequent Events) .....................................................................................................22
6. Non-consolidated Financial Statements ...............................................................................................23(1) Non-consolidated Balance Sheets ..................................................................................................23(2) Non-consolidated Statements of Income ........................................................................................25(3) Non-consolidated Statements of Changes in Equity .......................................................................26(4) Notes Regarding the Non-consolidated Financial Statements ........................................................28(Notes Regarding the Going Concern Assumption) .......................................................................28
7. Others ...................................................................................................................................................28(1) Production, Orders & Sales ............................................................................................................28-1-

1. Analyses of Management Performance and Financial Position(1) Analysis of Management Performance
During the fiscal year ended December 31, 2016, the Japanese economy remained sluggish due to large swings in
the currency exchange rate, ranging from a rising trend of the yen at the beginning of the fiscal year to a depreciationof the yen toward the end of the fiscal year, in addition to continued weakness in consumer spending. Meanwhile,
although the U.S. economy remained robust backed by an improvement in the employment situation and the
expansion of consumer spending, the global economy overall remained unstable due to the continued deceleration of
growth in the Chinese economy and uncertainties over the European economy triggered by the decision of the U.K.
to leave the EU.
With regard to the environment surrounding agriculture in Japan, the rise in the price of rice did not lead to ademand recovery in the agricultural machinery market, due to uncertainties over the outlook of the industry causedby structural changes in agriculture in Japan.
Under such circumstances, the ISEKI Group worked to increase sales volume in Japan by launching new products
and enhancing customer service, while it endeavored to expand sales overseas in its core markets of North America,
Europe, China and the ASEAN region by strengthening its marketing. As a result, the Group’s business performancecan be summarized as follows.
The fiscal year of the Company, previously from April 1 to March 31 of the following year, has been changed to
January 1 to December 31 of the year, effective as of the fiscal year ended December 31, 2015. Accordingly, theprevious fiscal year, which is the transitional period of the fiscal year change, is nine months from April 1, 2015 to
December 31, 2015. Therefore, the operating results for the fiscal year ended December 31, 2016 are compared
below with the operating results for January 1, 2015 to December 31, 2015, the same period of the previous year.
(Millions of yen, %)Net Sales

Operating Income

Ordinary Income

Profit Attributableto Owners of
ParentFY Ended
1,635
858
153,097
2,469
December 31, 2016
(Reference) Same
Period of the156,794
178
373
Previous Year
Adjusted(2.4)%
338.2%—
Year-on-year Change
Note: Adjusted year-on-year change in operating income is represented by “––” since it exceeds 1,000%[Consolidated business performance of the fiscal year ended December 31, 2016]
In the fiscal year ended December 31, 2016, net sales decreased ¥3,696 million from the same period of the previous
year to ¥153,097 million (down 2.4%). Domestic sales amounted to ¥121,041 million, down ¥4,358 million (3.5%)
from the same period of the previous year. This was due to a drop in sales of agricultural machinery due to thecontinued weak demand for agricultural machinery, despite an increase in sales of farming implements, spare parts,
and repair fees. Overseas sales increased ¥661 million (2.1%) from the same period of the previous year to ¥32,055
million, due to shipments of semi-finished tractors to China, the full-scale sale of which started from this fiscal year,
as well as strong shipments of tractors in ASEAN to Indonesia and Thailand, despite an impact from changes incurrency exchange rates owing to yen appreciation. Operating income totaled ¥2,469 million, up ¥2,291 million
from the same period of the previous year, due to a significant reduction in expenses through a cut in personnel
expenses and a full enforcement of low-cost operations, despite lower gross profit resulting from decreased sales andthe impact of currency exchange rates. Ordinary income amounted to ¥1,635 million, up ¥1,262 million (338.2%)
from the same period of the previous year, due to a smaller increase in operating income resulting from the recordingof foreign exchange losses and share of loss of entities accounted for using equity method. Profit attributable toowners of parent was ¥858 million, due to the recording of a gain on sale of investment securities, despite posting aloss on disaster following the Kumamoto Earthquake.
[Non-consolidated business performance of the fiscal year ended December 31, 2016]
In the fiscal year ended December 31, 2016, net sales totaled ¥95,873 million, operating income was ¥921 million,
and ordinary income amounted to ¥2,746 million. The Company recorded a profit of ¥2,651 million.
Sales by product are as follows.
[Domestic]
Sales of cultivating & mowing machinery (tractors, high-clearance multipurpose vehicles, etc.) were ¥27,580 million(down 8.4% from the same period of the previous year), and sales of planting machinery (rice transplanters andvegetable transplanters) were ¥9,124 million (down 7.5%). Sales of harvesting and processing machinery (combine
harvesters, etc.) were ¥20,891 million (down 4.7%). Sales of spare parts and farming implements, and repair fees-2-

were ¥38,558 million (up 4.3%). Sales of other agriculture-related business (construction of facilities, etc.) were¥24,887 million (down 6.3%).
[Overseas]
Sales of cultivating & mowing machinery (tractors, etc.) were ¥24,512 million (down 7.0% from the same period of
the previous year), and sales of planting machinery (rice transplanters, etc.) were ¥3,281 million (up 73.4%). Sales of
harvesting and processing machinery (combine harvesters, etc.) were ¥390 million (up 22.6%). Sales of spare partsand farming implements were ¥2,087 million (down 9.1%). Sales of other agriculture-related business were ¥1,783
million (up 245.4%).
[Forecast for the next consolidated fiscal year]
It is expected that the economies in both Japan and overseas will continue to require alertness for uncertainties,
including the risk of the U.S. economy shifting to protectionist policies despite expectations for the fiscal policies of
the new administration, the uncertain outlook of the European and Chinese economies, and the trends of exchange
rates and the domestic stock market.
In Japan, the demand for agricultural machinery is expected to remain roughly flat amid structural changes inagriculture toward a “new agricultural administration era.” Meanwhile, we expect an increase in sales mainly infarming implements, spare parts, repair fees, and construction of facilities, due to the progress of large-scale farming
primarily made by prospective farmers and agricultural policies toward a switch to the growing of vegetables andother crops.
Overseas, we expect the European and U.S. markets to shift to a recovery trend due to the launch of strategic
products. Additionally, we expect an increase in sales due to an enhanced dealer network through the acquisition of alarge-scale sales agent in Thailand within the ASEAN market and an increase in shipments of semi-finished ricetransplanters following the completion of responses to the emission gas regulations in the Chinese market.
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 an improvement in the profitability of the Indonesian business, continued low-cost
operations, and the exclusion of share of loss of entities accounted for using equity method that was recorded in theprevious fiscal year will contribute to the increases in incomes.
(2) Analysis of Financial Position
Total assets as of December 31, 2016 increased ¥2,207 million from December 31, 2015 to ¥203,356 million.
Looking at the breakdown, current assets increased ¥6,162 million and non-current assets decreased ¥3,955 million.
The changes mainly resulted from a ¥5,147 million increase in cash and deposits, a ¥1,430 million increase inmerchandise and finished goods, a ¥1,043 million decrease in other under current assets, a ¥2,250 million decrease
in investment securities, and a ¥1,579 million decrease in other under investments and other assets. Total liabilities
increased ¥3,155 million from December 31, 2015, to ¥136,205 million. This mainly reflected a ¥4,647 million
increase in short-term loans payable and long-term loans payable, a ¥2,416 million increase in notes and accounts
payable–trade, and a ¥1,200 million decrease in other under current liabilities. Net assets decreased ¥947 million
from December 31, 2015 to ¥67,151 million, mainly due to a ¥519 million increase in retained earnings, a ¥1,282
million decrease in valuation difference on available-for-sale securities, and a ¥627 million decrease in foreign
currency translation adjustment.
The equity ratio was 32.2%.
(Cash flows from operating activities)
Cash flows from operating activities came to a net cash inflow of ¥8,283 million, comprised principally ofdepreciation of ¥7,189 million, an increase in inventories of ¥1,810 million, and an increase in notes and accounts
payable–trade of ¥2,625 million.
(Cash flows from investing activities)
Cash flows from investing activities resulted in a net cash outflow of ¥5,736 million, comprised principally of capital
investment expenditures of ¥8,561 million and proceeds from sales of investment securities of ¥1,467 million.
(Cash flows from financing activities)
Cash flows from financing activities amounted to a net cash inflow of ¥2,621 million, due primarily to an increase ininterest-bearing liabilities.
Note: The fiscal year of the Company, previously from April 1 to March 31 of the following year, has been changed
to January 1 to December 31 of the year, effective as of the fiscal year ended December 31, 2015. Changes in cash
flows from the previous fiscal year are not mentioned, as the periods of the fiscal year ended December 31, 2016 andthe fiscal year ended December 31, 2015 cannot be compared due to their differences.

-3-

Reference: The trend of cash flow indicators is as follows.
Mar. 31,
Indicator
2014

Mar. 31,2015

Dec. 31,2015

Dec. 31,2016

Equity ratio (%)

34.0

34.0

33.0

32.2

Market-based equity ratio (%)

31.7

25.5

21.2

25.0

Cash flow/Interest-bearing liabilities ratio (times)

6.3

—

5.2

7.4

Interest coverage ratio (times)

9.3

—

16.0

13.7

• 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.

4.

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
and the 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 asrecorded 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 businessdevelopments as well as changes 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, 2016, 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, 2017, 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
and take 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-4-

to public regulation of environmental issues etc., corrective measures undertaken upon the occurrence oftroubles, 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 politicalunrest of any particular country may unfavorably affect our financial performance when we engage ininternational 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
ethical behavior 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 inany 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 is 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.
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 time and 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 latentrisks and uncertainties 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) and2 other companies

Consolidated Subsidiaries:

Equity Method Affiliate
ISEKI SALES (THAILAND) Co.,
Ltd. (Thailand)

Iseki-Tohoku Co., Ltd.

Iseki-Hokkaido 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 the establishment of the Company in 1926, with the principle of our founder, “free farmers from exhaustinglabor” as the cornerstone, the ISEKI Group has been striving to contribute to the modernization of Japan’s
agricultural industry as a full-time manufacturer specialized in agricultural machinery. Over this time, we haveconsistently pursued efficient and labor-saving advances in agriculture, and have served the market by pioneering
the development of a great deal of agricultural machinery and facilities. When we consider the increase of global
population, food issues, food self-sufficiency and land conservation, and global environmental issues, the role
agriculture plays is significant and, consequently, the social mission of agricultural machinery manufacturer
becomes more and more important.
To contribute to agriculture both in Japan and throughout the world, the ISEKI Group will continue to operate
under the basic business philosophy to “provide products that satisfy customers,” and endeavor to further increase
our corporate value.
[Company Motto]
Our management philosophy is to provide
1. Products that satisfy customers,
2. A stable workplace to the employees,
3. Appropriate dividend to the shareholders,
and thereby we will fulfill our social mission.

(2) Long-term Management Strategies and Issues to be Addressed
In 2025, ISEKI & Co., Ltd., will celebrate its 100th anniversary.
To establish our firm position as a manufacturer specialized in agricultual machinery in the global market by our100th anniversary, we will make concerted efforts throughout the Group in strengthening our responsiveness to
structural changes in agriculture in Japan, expanding our overseas business, reinforcing our organization andgovernance by exercising our strength as a manufacturer specialized in agricultual machinery, and utilizing ourability to develop and propose products that are competitive in the global market.
1) To strengthen the responsiveness to changes in the Japanese market
Agriculture in Japan is undergoing structural changes toward improved productivity based on the government’s
policy to make agriculture a growth industry. These changes include large-scale farming through the consolidationof farmland, a switching of cropping modes from rice to other crops, the entry of companies into agriculture, and theprogress of developing agriculture as a sixth industry.
While the Company has already been making efforts to respond to changes in agriculture in Japan as a priority
issue, we will accelerate our efforts and respond to changes in the market both in our products and services.
In terms of products, we will reinforce our efforts in developing products that respond to the “new agriculturaladministration era” by utilizing our technological capabilities such as simple specifications for reducing production
material costs, automation specifications incorporating advanced technology that address labor-saving to respond to
the lack of labor, and machines for cropping and vegetable farming, according to the cultivation system of theregion.
In terms of services, we will strengthen our proposal-based marketing abilities in local regions by operating
Dream Agricultural Research Institute Branches in the regions under the control of the Dream Agricultural ResearchInstitute, an institute established in Tsukubamirai City for the research and verification of advanced agricultural
technology and support of dissemination to prospective farmers. We will also strive to strengthen our service andsupport capabilities by reinforcing the training of service personnel through the ISEKI Global Training Center andenhancing maintenance facilities that can respond to maintenance of large machinery.
We will reinforce our domestic business foundation by supporting the “full of dreams farming industry” in Japan
with our products and services.
2) To fully develop global strategies
We will position North America, Europe, China, and the ASEAN markets as our four strategic regions, and aim toachieve an overseas sales ratio of more than 40%, including entities accounted for using equity method, by fiscal
2020.
In the North American market, we will further strengthen cooperation with our OEM partners and aim to further
expand sales by launching “new strategic products” that satisfy customer needs.
In the European market, we will position ISEKI France S.A.S as the core of business development to establish the
ISEKI brand in Europe, and focus on expanding sales and market share by enhancing our product lineup andstrengthening our service and support system.
-7-

For the Chinese and ASEAN businesses, which we position as a growth engine, we will further strengthen
cooperation with joint venture partners to expand business.
In the Chinese market, Dongfeng Iseki Agricultural Machinery Co., Ltd., completed construction of a new plant in2016. Going forward, we will enhance its product lineup and expand its business by supplying products not only
within China but also to the ASEAN market.
In the Thai market, we have been endeavoring to establish the ISEKI brand through sales by ISEKI SALES(THAILAND) Co., Ltd., which was founded in 2013. We also established ISEKI (THAILAND) Co., Ltd., in 2016 tofurther strengthen sales and services for our products not only in Thailand but also throughout the entire ASEAN
region. Going forward, we will aim to establish our business in Thailand and expand sales channels to surrounding
countries by further strengthening cooperation with joint venture partners. In addition, at PT. ISEKI INDONESIA,
which began full-fledged operations in fiscal 2016 as our central production base in the ASEAN market, we willreinforce our efforts to improve revenues by optimizing suppliers and improving work at production sites.
We will focus on expanding our overseas business by enhancing our product development, production, sales andservice structures by leveraging regional characteristics, and reinforcing the development of personnel that support
such structures.
3) To promote cost and revenue structure reforms
The Group has been pushing forward with cost structure reforms mainly in the development and production
departments in order to launch products that are competitive in the intensifying sales competition both in Japan andoverseas. During the fiscal year ended December 31, 2016, we were able to achieve the expected results bypromoting further cost structure reforms in the development and production departments as well as fully enforcing
low-cost operations, including in sales divisions. We intend to continue our Groupwide cost structure reforms to
implement revenue structure reforms.
4) To ensure compliance with laws and regulations and enhance internal control
The Company underwent on-site investigations by the Japan Fair Trade Commission (JFTC) on suspicion of a
possible violation of the Antimonopoly Act regarding bidding for facility construction works and received a ceaseand desist order and a surcharge payment order pursuant to the Antimonopoly Act.
Recognizing the severity of this issue, the Company has worked to prevent recurrence by developing preventive
measures and declaring and publicizing the cessation of bid rigging by top management.
Specifically, the Management Control Section For Agri-Plant Business’s functions of auditing and monitoring offacility operations were transferred to the Internal Control & Audit Department. At the same time, the Internal
Control & Audit Department was placed directly under the Management Supervisory Committee, independent fromoperational departments. The action policy and manuals on facility operations were also revised and education andtraining, including at sales subsidiaries, was reinforced.
Furthermore, we have allocated an officer dedicated to facility operations and have been utilizing external
personnel in audits of facility operations since March 2016. In January 2017, we allocated an officer dedicated tointegrated management of internal controls as well as audit and compliance.
We will strive to more thoroughly comply with laws and regulations and enhance internal controls, 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 Dec. 31, 2015 FY ended Dec. 31, 2016(as of Dec. 31, 2015)(as of Dec. 31, 2016)
AssetsCurrent assets
Cash and deposits

8,788

13,936

Notes and accounts receivable-trade

24,89524,911

Merchandise and finished goods

40,60042,031Work in process

5,856

6,073

Raw materials and supplies

1,359

1,211

890

1,402

4,437

3,393

(56)

(26)

86,771

92,934

Buildings and structures, net

22,957

23,572

Machinery, equipment and vehicles, net

10,092

10,278Tools, furniture and fixtures, net

3,283

3,122

Land

50,65750,619Leased assets, net

8,420

7,554

Construction in progress

1,473

1,293

25

25

96,911

96,466

1,134

1,062

8,569

6,319

Long-term loans receivable

52

49

Deferred tax assets

731

1,125

Net defined benefit asset

714

674

Other

6,564

4,984

Allowance for doubtful accounts

(300)

(259)

Total investments and other assets

16,331

12,893

114,377

110,422

201,149

203,356

Deferred tax assets
Other
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
Investment securities

Total non-current assets
Total assets-9-

FY ended Dec. 31, 2015 FY ended Dec. 31, 2016(as of Dec. 31, 2015)(as of Dec. 31, 2016)
Liabilities
Current liabilities
Notes and accounts payable-trade29,40030,286

Electronically recorded obligations-operating

10,604

12,135

Short-term loans payable

24,38924,695Current portion of long-term loans payable

8,641

8,897

Lease obligations

2,646

2,552

487
438

550
703

0

7

4,571

4,520

Provision for bonuses

467

407

Provision for loss on disaster―20

Accrued consumption taxes
Income taxes payable
Deferred tax liabilities
Accrued expenses

Other

5,868

4,668

Total current liabilities

87,51889,447

Non-current liabilities
Long-term loans payable

23,70327,788

Lease obligations

6,414

5,529

Deferred tax liabilities

1,624

779

Deferred tax liabilities for land revaluation
Provision for directors’ retirement benefits

6,074
107

5,790
107

Net defined benefit liability

4,806

4,491

Asset retirement obligations

304

314

Other

2,496

1,956

Total non-current liabilities

45,532

46,757133,050

136,205

Capital stock

23,344

23,344

Capital surplus

13,454

13,454Retained earnings

13,514

14,034

Treasury shares

(988)

(990)

49,32549,842

2,509

1,227

1

6

Revaluation reserve for land

12,401

12,686

Foreign currency translation adjustment
Remeasurements of defined benefit plans

1,425
717

798
870

Total accumulated other comprehensive income
Subscription rights to shares

17,05591

15,58891

Non-controlling interests

1,626

1,629

Total net assets

68,09967,151

201,149

203,356

Total liabilities
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 liabilities and net assets- 10 -

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Millions of yen)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2016
(Jan. 1, 2016–(Apr. 1, 2015–
Dec. 31, 2016)
Dec. 31, 2015)
Net sales

145,210

153,097

Cost of sales

104,498

108,244

Gross profit

40,71144,852

Selling, general and administrative expenses

40,251

42,383460

2,469Interest income

109

134

Dividend income

202

204

Foreign exchange gains

230―

Subsidies received

76

103

Rent income

144

173

Technical support fee―

285

Gain on sales of scraps

52

39

Other

782

716

1,599

1,658

Interest expenses

664

599

Sales discounts

8691

Foreign exchange losses―

172

Share of loss of entities accounted for using equity method

―

1,075

Other

360

552

Total non-operating expenses

1,111

2,492

947

1,635

41

43

Operating income
Non-operating income

Total non-operating income
Non-operating expenses

Ordinary income
Extraordinary income
Gain on sales of non-current assets
Compensation income

6―

Gain on sales of investment securities

303

1,113

Total extraordinary income

351

1,156

Loss on sales and retirement of non-current assets

187

200

Impairment loss

99

106

Loss on disaster

―

1,068

Surcharges

270

315

Total extraordinary losses

556

1,690

Income before income taxes

741

1,101

Income taxes-current

756

1,049

Income taxes-deferred

1,446

(810)

Extraordinary losses

Total income taxes

2,202

238

Profit (loss)(1,460)862

Profit attributable to non-controlling interests

5

4

Profit (loss) attributable to owners of parent(1,465)858- 11 -

Consolidated Statements of Comprehensive Income
FY ended Dec. 31, 2015
(Apr. 1, 2015–
Dec. 31, 2015)
Profit (loss)(Millions of yen)
FY ended Dec. 31, 2016
(Jan. 1, 2016–
Dec. 31, 2016)(1,460)

862

(472)

(1,278)Deferred gains or losses on hedges

1

5

Revaluation reserve for land―284

Foreign currency translation adjustment

(105)

(265)

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

(33)

152

(239)

(364)

(849)

(1,465)(2,310)(602)(2,313)

(608)

2

5

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

Total other comprehensive income
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 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)

51,47015,658Changes of items during period
Dividends of surplus
Loss attributable to owners ofparent

(677)

(677)

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

(1)

(1)

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 oronments ofcurrency
ing 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

17,90268

1,624

Total net
assets

71,065

Changes of items during period
Dividends of surplus(677)

Loss attributable to owners ofparent(1,465)Purchase of treasury shares
Net changes of items other thanshareholders’ equity

(1)
(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- 13 -

Fiscal Year Ended December 31, 2016 (Jan. 1, 2016–Dec. 31, 2016)(Millions of yen)
Shareholders’ equity
Capital stock

Capital surplus

23,344

13,454

Balance at beginning of period

Retainedearnings

Treasury shares

Total
shareholders’equity(988)

49,325

13,514

Changes of items during period
Dividends of surplus

(338)

(338)

Profit attributable to owners ofparent858

858

Purchase of treasury shares

(2)

(2)

Net changes of items other thanshareholders’ equity―

Total changes of items during
periodBalance at end of period

—

—

519

(2)

516

23,344

13,454

14,034(990)

49,842

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

2,509

1

12,401

1,425

717

17,05591

1,626

Total net
assets

68,099Changes of items during period
Dividends of surplus(338)

Profit attributable to owners ofparent858

Purchase of treasury shares(2)

Net changes of items other thanshareholders’ equity(1,282)

5

284

(627)

152

(1,466)―2(1,464)

Total changes of items during
period(1,282)

5

284

(627)

152

(1,466)

―

2

(947)

Balance at end of period

1,227

6

12,686798

870

15,588

91

1,629

67,151- 14 -

(4) Consolidated Statements of Cash Flows(Millions of yen)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2016
(Jan. 1, 2016–(Apr. 1, 2015–
Dec. 31, 2016)
Dec. 31, 2015)
Cash flows from operating activities
741

1,101

Depreciation

Income before income taxes

5,831

7,189

Impairment loss

99

106

Loss on disaster

―

1,068

Increase (decrease) in net defined benefit liability

(486)

(300)

Loss (gain) on sales of investment securities(303)(1,113)

Interest and dividend income

(311)

(339)

Interest expenses

664

599

Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment andintangible assets
Compensation income

(160)

(298)

146

156

(6)

―

Surcharges

270

315

Decrease (increase) in notes and accounts receivable-trade

5,376

(153)

Decrease (increase) in inventories(212)(1,810)

Increase (decrease) in notes and accounts payable-trade

1,419

2,625

Other

(609)

784

Subtotal

12,4589,933

Interest and dividends income received

300

342

Interest expenses paid

(678)

(603)

Proceeds from compensation

6―

Payments for loss on disaster

―

(519)

Surcharges paid

(305)

(270)

Income taxes paid

(950)

(598)

10,8308,283(7,440)(8,561)

411

373

(99)

(53)

Proceeds from sales of investment securities

605

1,467

Decrease (increase) in loans receivable

842

913

Net cash provided by (used in) operating activities
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
Other
Net cash provided by (used in) investing activities- 15 -

4

(0)

(82)

123

(5,757)(5,736)

FY ended Dec. 31, 2015 FY ended Dec. 31, 2016
(Jan. 1, 2016–(Apr. 1, 2015–
Dec. 31, 2016)
Dec. 31, 2015)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable

(745)

374

Proceeds from long-term loans payable

12,975

14,780

Repayments of long-term loans payable(13,091)(10,438)

Proceeds from sales and leasebacks

1,047

1,024

Repayments of lease obligations(2,445)(2,766)

(1)

(2)

(671)

(336)

Dividends paid to non-controlling interests

―

(3)

Other

(9)

(9)

(2,943)

2,621

61

(20)

Net increase (decrease) in cash and cash equivalents

2,190

5,147

Cash and cash equivalents at beginning of period

6,570

8,761

Cash and cash equivalents at end of period

8,761

13,909Purchase of treasury shares
Cash dividends paid

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……….26 companies(including Iseki-Matsuyama Mfg. Co., Ltd., Iseki-Kumamoto Mfg. Co., Ltd., Iseki-Hokkaido Co., Ltd. andIseki-Tohoku Co., Ltd.)ISEKI (THAILAND) Co., Ltd., which was newly established, has been included in the scope of consolidationfrom the fiscal year ended December 31, 2016.

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. Consolidated accounting period
Of the consolidated subsidiaries, 23 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, for ISEKI France S.A.S and one othercompany adopting September 30 as their annual closing date, necessary adjustments at consolidation are madefor any significant transactions that occurred between the consolidated balance sheet date and these dates.
4.

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.
(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 for directors’
retirement benefits in an amount as required by companies’ internal regulations.
- 17 -

(d) Provision for loss on disasterTo provide for expenditures required for the restoration of assets that were affected by the 2016
Kumamoto Earthquake, an estimated amount as of December 31, 2016, is booked.
(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 theend of 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
to the 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-controlling interests” 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
are hedged.
Risks associated with fluctuations in foreign currencies exchange rates concerning transactions inforeign currencies, which occur when import and export operations are performed, are hedged bykeeping a balance between export exchanges and import exchanges. With regard to risks associatedwith fluctuations in interest rates on loans payable, risks concerning variable interest rate loans payable
are hedged, 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- 18 -

(a) Accounting treatment of consumption tax
Consumption tax and local consumption taxes are accounted for using a tax-exclusive method.
(Consolidated Balance Sheets Information)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2016
Accumulated depreciation of property, plant and equipment
103,229 million yen
105,732 million yen
Guaranteed liabilities
8,099 million yen
6,636 million yen
Notes receivable less discount-trade
4 million yen
1 million yen
Endorsed notes receivable-trade
112 million yen
94 million yen
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 determinedusing a reasonable adjustment to the assessedvalue of the 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(12,493) million yen
value of the revalued land at
the end of the period and therevalued book value
6. 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, 2016 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 Dec. 31, 2015 FY ended Dec. 31, 2016
Notes receivable-trade
280 million yen
276 million yen
Note payable-trade
1,916 million yen
1,710 million yen
Electronically recorded obligations-operating
858 million yen
1,030 million yen
Other (Notes payable-facilities)
372 million yen
91 million yen
Other (Electronically recorded obligations-non-operating)
50 million yen
162 million yen
1.
2.
3.
4.
5.

- 19 -

(Consolidated Statements of Income Information)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2016
2,666 million yen
2,981 million yen

1. Research and development expenses
2.

Impairment loss
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 andhave no 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 reasonableadjustments to the assessed value of non-current assets for property tax.
Fiscal year ended December 31, 2016 (January 1, 2016–December 31, 2016)
The Company recorded impairment losses on the following assets.
Usage

Type

Location

Buildings,
Structures, Land

Idle property

Buildings,
Structures

Kanazawa, Ishikawa Pref.

48

Niigata, Niigata Pref.

32

Kumenan-cho, Kume-gun, Okayama
Pref.
Kawaminami-cho, Koyu-gun,Miyazaki Pref.
Minamiaizu-machi, Minamiaizu-gun,
Fukushima Pref.
Yonago, Tottori Pref.

Land(Millions of yen)
Impairment loss

Taragi-machi, Kuma-gun, Kumamoto
Pref.
Mimata-cho, Kitamorokata-gun,Miyazaki Pref.
Total

7
7
3
2
2
2

106
(Reason to record impairment loss)
The Company recorded an impairment loss on the above assets because idle properties are not being used andhave no 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 reasonableadjustments to the assessed value of non-current assets for property tax.

- 20 -

(Consolidated Statements of Changes in Equity Information)
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
Decrease in number
Increase 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.
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
Fiscal year ended December 31, 2016 (January 1, 2016–December 31, 2016)
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, 2016)(as of Jan. 1, 2016)
periodperiod(Number ofoutstanding shares)
Common stock
229,849,936——
229,849,936(Treasury shares)
Common stock
3,964,166
11,957—
3,976,123
The increase in the number of shares by 11,957 shares during the period was due to the purchasing of shares below
stock trading unit.

- 21 -

2. Dividends(1) Cash dividends paid
Resolution

Type of shares

RegularMeeting of
Shareholders on
Mar. 25, 2016

Common stock

Total amount ofdividend paid
(millions of yen)
338

Dividend pershare (yen)
1.50

Record date

Effective date

Dec. 31, 2015

Mar. 28, 2016

(2) Of the dividends for which the record date belongs to the fiscal year ended December 31, 2016, those for which
the effective date of the dividends will be in the fiscal year ending December 31, 2017.
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, 2016
Mar. 31, 2017
Shareholders on
earnings
Mar. 30, 2017
(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 Dec. 31, 2015 FY ended Dec. 31, 2016
Cash and deposits
8,788 million yen
13,936 million yen
Time deposits with terms of more than 3 months(27) million yen(27) million yen
Total cash and cash equivalents
8,761 million yen
13,909 million yen(Segment Information)
Since the Group had the only “agriculture-related business” segment, the segment information is omitted.
(Per Share Information)(Yen)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2016
Net assets per share
293.87289.68
Profit (loss) per share(6.49)
3.80
Fully diluted profit per share—
3.79
Notes:
1. Because the Company reported loss per share, the Company has not presented fully diluted profit per sharefor the fiscal year ended December 31, 2015.
2. Non-diluted profit per share or non-diluted loss per share and the basis of calculation, and fully diluted profit
per share and the basis of calculation are as follows:(Millions of yen)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2016
Profit (loss) per share
Profit (loss) attributable to owners of parent reported in theConsolidated Statements of Income
Profit (loss) not attributable to common shares
Profit (loss) attributable to owners of parent attributed tocommon shares
During period average number of common shares (shares)
Fully diluted profit per share
Adjustment of profit attributable to owners of parent reported
in the Consolidated Statements of Income
Increase in common shares (shares)[Portion of subscription rights to shares] (shares)
Dilutive securities that were not included in the computation of
fully diluted profit per share because of their anti-dilutive effect(Significant Subsequent Events)
Not applicable- 22 -(1,465)858——(1,465)858

225,887,727

225,880,761

—

—

—
—

399,170[399,170]——

6. Non-consolidated Financial Statements(1) Non-consolidated Balance Sheets(Millions of yen)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2016(as of Dec. 31, 2015)(as of Dec. 31, 2016)
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- 23 -

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

8,992
2,701
27,49013,411
28
335
214
271
594
11,6342,598(4)68,267

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

6,699
643
1,989
1
1,150
25,399327
886
37,098

85
210
189
85
571

85
220
167
42
515

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

6,013
19,037
92
1,941
2,941
534
381
(22)
(825)
30,09567,708135,976

FY ended Dec. 31, 2015 FY ended Dec. 31, 2016(as of Dec. 31, 2015)(as of Dec. 31, 2016)
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
Provision for loss on disaster
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- 24 -

8,316
5,282
18,011
6,000
4,703
167
698
2,284
―
79
308
95
―
937
46,886

7,488
5,784
20,232
6,000
4,862
178
656
2,277
206
150
227
82
15
551
48,713

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

21,257
353
524
5,790
2,341
112
596
147
31,124
79,837

23,344

23,344

11,5542,450
14,004

11,5542,450
14,004

3,476
3,476
(988)
39,838

5,789
5,789
(990)
42,1472,497
12,401
14,89991
54,829129,154

1,212
12,686
13,89891
56,138135,976

(2) Non-consolidated Statements of Income(Millions of yen)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2016
(Jan. 1, 2016–(Apr. 1, 2015–
Dec. 31, 2016)
Dec. 31, 2015)
Net sales

66,073

95,873

Cost of sales

59,32883,040Gross profit

6,745

12,833

Selling, general and administrative expenses

9,346

11,911

Operating income (loss)(2,600)921

Interest income

219

312

Dividend income

1,069

1,116

Rent income

976

1,301

Other

805

785

3,071

3,515

Interest expenses

238

227

Sales discounts

34

44

Rent expenses

799

1,064

Other

368

354

1,441

1,690

(971)

2,746

Gain on sales of non-current assets

24

24Gain on sales of investment securities

303

1,113

Total extraordinary income

327

1,137

100

57

Impairment loss

2―

Loss on disaster―

659

Surcharges

151

315

Total extraordinary losses

255

1,032

(899)

2,851

Income taxes-current

18

223

Income taxes-deferred

670

(23)

Total income taxes

689

200

(1,588)2,651

Non-operating income

Total non-operating income
Non-operating expenses

Total non-operating expenses
Ordinary income (loss)
Extraordinary income

Extraordinary losses
Loss on sales and retirement of non-current assets

Income (loss) before income taxes

Profit (loss)- 25 -

(3) Non-consolidated Statements of Changes in Equity
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

Treasuryshares

(986)

Total
shareholders’equity

5,743

5,743

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)

Net 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

(1)

(2,267)(988)

39,838Valuation 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 toshares68

Total net
assets57,541

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- 26 -

Fiscal Year Ended December 31, 2016 (Jan. 1, 2016–Dec. 31, 2016)(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

Treasuryshares

(988)

Total
shareholders’equity

3,476

3,476

39,838Dividends of surplus

(338)

(338)

(338)

Profit

2,651

2,651

2,651

Changes of items during period

Purchase of treasury shares

(2)

(2)

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

―
—

—

—

—

2,312

2,312

(2)

2,309

23,344

11,5542,450

14,004

5,789

5,789

(990)

42,147

Valuation and translation adjustments

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Revaluation
reserve for land

Total valuationand translation
adjustments

2,497

12,401

14,899Subscription
rights toshares91

Total net
assets54,829Changes of items during period
Dividends of surplus(338)

Profit2,651

Purchase of treasury shares
Net changes of items other thanshareholders’ equity(2)(1,284)284(1,000)―(1,000)Total changes of items during
period(1,284)284(1,000)―1,309

Balance at end of period

1,212

12,686

13,89891

56,138- 27 -

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

7. Others(1) Production, Orders & Sales
Note: The fiscal year of the Company, previously from April 1 to March 31 of the following year, has been changed
to January 1 to December 31 of the year, effective as of the fiscal year ended December 31, 2015. Accordingly, theprevious fiscal year, which is the transitional period of the fiscal year change, is nine months from April 1, 2015 to
December 31, 2015. Because year-on-year comparisons are impossible, changes in production results per
product-type from the previous period are not mentioned. Sales results per product-type are compared with theresults for January 1, 2015, to December 31, 2015, which is the same period of the previous year.
1) Production results per product-type(Millions of yen)
FY ended Dec. 31, 2015
FY ended Dec. 31, 2016
Product-type(Apr. 1, 2015–Dec. 31, 2015)(Jan. 1, 2016–Dec. 31, 2016)
Cultivating & mowing machinery

39,98659,356

Planting machinery

8,776

12,034

Harvesting and processing machinery

16,10322,164

Parts and farming implements

1,488

1,992

Other agriculture related business

5,303

5,460

71,658101,009

Total
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(Millions of yen)

Product-type

FY ended Dec. 31,
2015(Apr. 1, 2015–
Dec. 31, 2015)
Amount(Reference)
Same period of theprevious year
(Jan. 1, 2015–
Dec. 31, 2015)

Ratio

Amount%Ratio

FY ended Dec. 31,
2016(Jan. 1, 2016–

Change fromprevious period

Dec. 31, 2016)
Amount%Ratio

Amount

%

Ratio

%

Cultivating & mowing
machinery

48,99333.7

56,46836.0

52,09234.0(4,375)(7.7)

Planting machinery

10,4477.2

11,756

7.5

12,406

8.1

649

5.5

22,082

15.2

22,232

14.2

21,282

13.9

(949)

(4.3)

37,83326.1

39,25125.0

40,645

26.6

1,394

3.6

25,85317.8

27,085

17.3

26,670

17.4

(415)

(1.5)

145,210100

156,794100

153,097100(3,696)(2.4)

Harvesting and processing
machineryParts and farming
implements, and repair fees
Other agriculture related
business
Total- 28 -

(b) Domestic(Millions of yen)

Product-type

FY ended Dec. 31,
2015(Apr. 1, 2015–
Dec. 31, 2015)
Amount(Reference)
Same period of theprevious year
(Jan. 1, 2015–
Dec. 31, 2015)

Ratio

AmountRatio%

FY ended Dec. 31,
2016(Jan. 1, 2016–

Change fromprevious period

Dec. 31, 2016)
AmountRatio%

Amount

%

Ratio

%

Cultivating & mowing
machinery

29,44124.0

30,09824.0

27,58022.8(2,518)(8.4)

Planting machinery

9,674

7.9

9,864

7.9

9,124

7.5

(739)

(7.5)

21,816

17.8

21,91317.5

20,89117.3(1,021)(4.7)

36,12029.5

36,95429.4

38,558

31.8

1,603

4.3

25,45520.8

26,56921.2

24,887

20.6(1,682)(6.3)

122,508100

125,400

100

121,041

100(4,358)(3.5)

Harvesting and processing
machineryParts and farming
implements, and repair fees
Other agriculture related
business
Total(c) Overseas(Millions of yen)

Product-type

FY ended Dec. 31,
2015(Apr. 1, 2015–
Dec. 31, 2015)
Amount(Reference)
Same period of theprevious year
(Jan. 1, 2015–
Dec. 31, 2015)

Ratio

Amount%Ratio

FY ended Dec. 31,
2016(Jan. 1, 2016–

Change fromprevious period

Dec. 31, 2016)
Amount%Ratio

Amount

%

Ratio

%

Cultivating & mowing
machinery

19,552

86.1

26,36984.0

24,51276.5(1,857)(7.0)

Planting machinery

772

3.4

1,892

6.0

3,281

10.2

1,388

73.4

Harvesting and processing
machineryParts and farming
implements
Other agriculture related
business

266

1.2

318

1.0

390

1.2

72

22.6

1,712

7.5

2,296

7.3

2,087

6.5

(208)

(9.1)

398

1.8

516

1.7

1,783

5.6

1,266

245.4

Total

22,701

661

2.1

100

31,394- 29 -

100

32,055100