Financial Results for the Fiscal Year Ended October 31, 2014
[Japan GAAP] (Consolidated)
Date:

December 11, 2014

Company:

Tomoe Engineering Co., Ltd. and Subsidiaries(URL: http://www.tomo-e.co.jp/index_e.html)

Stock exchange listing:

1st Section, Tokyo Stock Exchange

Head Office:2-2, Osaki 1-chome, Shinagawa-ku, Tokyo, Japan

President:

Noboru Shiono

Investor Relations Contacts:Mitsuo Matsumoto, Director, General Manager of Accounting Division, Tel: (03) 5435-6512
Date of Annual Shareholders Meeting: January 29, 2015
Date of Dividend Payment:January 30, 2015
Date of Financial Statement: January 29, 2015
Preparation of Supplementary Explanatory Materials for Annual Operating Results: Yes
Briefing Session for Annual Operating Results: Yes (for institutional investors)* Any fractional sums less than one million (or one thousand) yen are disregarded
1. Consolidated Financial Results for the Year Ended October 31, 2014
(1) Results of Operation (Consolidated)(Percent: change from the previous year)
Operating Income
Ordinary Income

Sales(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)

Year Ended
40,714
6.6
1,273
-16.0
1,629
October 31, 2014
Year Ended
38,176
-8.2
1,516
-38.1
1,680
October 31, 2013
(Note) Comprehensive income
Fiscal year ended October 31, 2014: 1,390 million yen (-3.4%)
Fiscal year ended October 31, 2013: 1,439 million yen (-8.4%)
Net Income
Net Income
Return on Return on
Diluted Net
per Share
EquityAssetsIncome per

-3.0
-35.5

Return on
Sales

Share
(Millions of Yen)

(Percent)

(Yen)

(Yen)

(Percent)(Percent)(Percent)

4.7

4.8

3.1

3.7

5.0

4.0

Year Ended
1,103
31.1
110.54
October
31,
2014Year Ended
841
-48.0
84.29
October31,
2013(Reference) Equity in earnings (loss) of unconsolidated subsidiaries and affiliates
Fiscal year ended October 31, 2014: None
Fiscal year ended October 31, 2013: None
(2) Financial Condition (Consolidated)
Total Assets (A)Net Assets (B)Net Assets Ratio (B / A)

Net Assets per Share(Millions of Yen)

(Millions of Yen)

(Percent)(Yen)

33,81723,94370.8

2,399.53

33,477

23,57569.8

2,340.34

Year Ended
October 31, 2014
Year Ended
October 31, 2013

1

(Reference) Net assets
Fiscal year ended October 31, 2014: 23,943 million yen
Fiscal year ended October 31, 2013: 23,353 million yen(3) Cash Flows (Consolidated)
Net Cash Provided(Used) by Operating
Activities
Year Ended
525
October 31, 2014
Year Ended
498
October 31, 2013

Net Cash Provided(Used) by Investing
Activities

Net Cash Provided(Used) by Financing
Activities(Millions of Yen)
Consolidated Cashand Cash Equivalent
as of Year-end(710)(1,562)

5,661

(755)

(381)

7,171

2. Dividend Status
Dividend per Share (Yen)
SecondThird QuarterEnd ofQuarter
Fiscal Year
0.00
45.00
22.50
22.50
22.50
22.50

First Quarter-

Year Ending October 31, 2013
Year Ending October 31, 2014
Year Ending October 31, 2015(Prospect)

Total
45.00
45.00
45.00

Total Dividend

Dividend Payout Ratio(Consolidated)

Dividend on Equity Ratio(Consolidated)(Millions of Yen)

(Percent)(Percent)

449
449
-

53.4
40.7
39.0

2.0
1.9
-

Year Ending October 31, 2013
Year Ending October 31, 2014
Year Ending October 31, 2015(Prospect)

3. Forecast for the Year Ending October 31, 2015 (Consolidated)(Percent: Change from the previous year for the full business year and 6-month period)
Sales

Operating Income

Ordinary Income(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)(Millions of Yen)

(Percent)

Six-month Period

20,700

3.7

880

4.0

900

-12.2

Full Business Year

42,700

4.9

1,830

43.7

1,850

13.5

Net Income

Net Income per Share(Millions of Yen)

(Percent)(Yen)

Six-month Period

670

-13.5

67.14

Full Business Year

1,150

4.3

115.252

Notes(1) Significant changes in subsidiaries during this period (changes in specific subsidiaries involving changes in thescope of consolidation): None
(2) Changes of the principles, procedures, and representation of the accounting policies
1) Change due to revision of accounting standard: Existing2) Other changes than the above 1): None
3) Change in accounting estimates: None
4) Retrospective restatements: None
(3) Number of outstanding shares (Common stock)1) Number of outstanding shares at year-end (including treasury stocks)
At October 31, 2014: 10,533,200 shares

At October 31, 2013: 10,533,200 shares

2) Number of treasury stocks at year-end
At October 31, 2014: 554,667 shares

At October 31, 2013: 554,592 shares

3) Number of average shares
At October 31, 2014: 9,978,566 shares

At October 31, 2013: 9,978,612 shares*Presentation Concerning Implementation of Audit ProceduresThis financial report is exempt from audit procedures based on the Financial Instruments and Exchange Act. At thetime of disclosure of this financial report, the Company has not completed the audit procedures for financial statements
based on the Financial Instruments and Exchange Act.
*Explanations for appropriate use of the earnings forecast and other special instructions
The forward-looking statements such as a forecast of our financial results described herein are based on theinformation currently available to us and certain assumptions that we believe are reasonable. Actual results could differ
materially due to various factors. For assumptions of the forecasts and necessary precautions, refer to (1) [Analysis ofOperating Results] of 1. [Operating Results and Financial Condition], on page 5.

3

Table of Contents
1. Operating Results and Financial Condition……………………………………………………………………………..5(1) Analysis of Operating Results ……………………………………………………………………………………....5(2) Analysis of Financial Condition………………………………………………………..…………………………..6(3) Basic Policy for Profit Sharing and Dividends for Fiscal 2014 and 2015………………………………….......8(4) Risk Factors in Business……………………………………………………………..…………………………….8
2. Management Policy………………………..……………….…………………………………..…………………………10(1) Basic Management Philosophy………..…………..…….…………………………..……………………………10(2) Target Management Indices………..…………..…….………..……………………..……………………………10(3) Mid- and Long-term Management Strategy…..…….………..……………………..……………………………10(4) Challenges to be Addressed…..…….………………….…….……………………..……………………………10
3. Consolidated Financial Statements…………………………………..………………………………………………....12(1) Balance Sheets……………………………………………………………………………………………………...12(2) Consolidated Statements of Income and Statement of Comprehensive Income…………………………….14(3) Consolidated Statements of Changes in Shareholders' Equity………..………..……………………………15(4) Consolidated Statements of Cash Flows………………………………………………………………………...18(5) Notes for Consolidated Financial Statements…………………………………………………………………..20(Notes for premise of going concern)…………………………………………………………………………...20(Changes in accounting policies)………………………………………………………………………………...20(Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates)…………………………………………………………………………………………………………….20(Segment information) ……………………………………………………………………………………………...21(Per Shareinformation)………………………………………………………….…………………………………24(Significant subsequent events) ………………………………………………………………………………….24
4. Other Notes ……………………………………………………………………………………………………………….25(1) Appointment of Officers…………………………………………………………………………………………...25

4

1. Operating Results and Financial Condition(1) Analysis of Operating Results[1] General condition of the current consolidated fiscal year
General operating results
During the consolidated fiscal year, Japan’s economy showed its gradual recovery trend spurred by the effect of thegovernment’s economic and monetary policies, including improved corporate performance and a recovery in capital
investment despite a decline in economic performance following rush demand and negative impact afterwards
associated with the consumption tax hike.
Overseas, even as the U.S. economy remained strong, as the European economy showed signs of a slowdown, andas the economic growth of China and other newly developing countries slowed down, the future remained shroudedin unpredictable economic situation.
Given these circumstances, in the Machinery & Equipment Business net sales of components and repairs for thedomestic public sector and overseas sales of machinery including China turned flat, but net sales of machinery,equipment and construction for the domestic public sector and net sales of components and repairs in North America
remained steady. In the Chemical Products Business, net sales in the domestic plastics sector were lackluster but
net sales in the domestic fine chemicals, advanced materials, electronics materials and industrial materials sectors, allremained strong. In terms of earnings during the period, while profits were lower in the Machinery & Equipment
Business, earnings in the Chemical Products Business increased, primarily reflecting the higher sales. The Tomoe
Engineering Group also reported extraordinary income as a result of dividends received from unconsolidated
subsidiaries and the acquisition of a minority interest pertaining to the resin plastic compounding business acquired
100% ownership in Shenzhen, China.
As a result of the above, full-year consolidated net sales for the Tomoe Engineering Group rose 6.6% from theprevious consolidated fiscal year to 40,714 million yen. Operating income was 1,273 million yen, 16.0% down fromthe previous consolidated fiscal year, ordinary income was 1,629 million yen, 3.0% down from the previous
consolidated fiscal year, and net income was 1,103 million yen, 31.1% up from the previous consolidated fiscal year.
[Summary by business segment](Machinery & Equipment Business)
In the Machinery & Equipment Business, net sales of components and repairs for the domestic public sector andoverseas sales of equipment including China declined, on the other hand net sales of equipment, device andconstruction for the domestic public sector and net sales of components and repairs in North America andabrasive grain slurry recycling equipment for solar battery production increased. As a result of these factors,
consolidated net sales ended at 10,204 million yen, 9.5% up compared with the previous fiscal year. From anearnings perspective, operating income was 157 million yen, 70.1% down from the previous fiscal year against
the reporting of projects with lower profitability on overseas sales, and the reporting of devalued inventory caused
by cancellation of orders in overseas machinery sales.
(Chemical Products Business)
In the Chemical Products Business, sales in the plastics sector of commodity plastics including imported wooddecreased. On the other hand, sales of UV curing resin in the fine chemicals sector, sales in the advanced
materials sector of ceramic for use in semiconductor manufacturing, sales in electronics materials sector of carrier
tray for use in semiconductor manufacturing, sales in the industrial materials sector for housing and construction
applications were brisk. As a result, full-year consolidated net sales were 30,510 million yen, 5.7% up from theprevious fiscal year.
With respect to earnings, operating income was driven by the growth in net sales for products such as commercial
products with comparatively high margins in the advanced materials sector and the industrial material market, andamounted to 1,115 million yen, 12.8% up from the previous fiscal year.

5[2] Outlook for the next fiscal year (November 1, 2014 - October 31, 2015)
During the fiscal year ending in October 2015, Japan’s economy is expected to continue the momentum
carrying it toward a sustainable recovery, including an improvement in corporate operating performance andincrease in capital investment, as the result of various economic measures. The move toward economic
recovery is being supported by growth of corporate earnings associated with devalued yen, and effect of rising
share value to corporate assets. On the other hand, US economy is showing a recovery trend but there areuncertainties over the economies in Europe and newly developing countries, and the management
environment surrounding the Tomoe Engineering Group is projected to remain severe.
Given such circumstances, in the Machinery & Equipment Business we expect to expand our market for oilwells and petrochemicals, particularly through our local subsidiaries in the North and South America regions,while domestically we expect lower sales of our low-power, energy-saving centrifuge models from the major
projects, and we project fiscal year consolidated net sales of 11,070 million yen (8.5% up compared with theprevious year) and operating income of 650 million yen (311.8% up compared with the previous year). In theChemical Products Business, domestically we will maintain our share of sales in our existing business byworking to further enhance our portfolio of commercial products to address market needs. We also project
overseas sales to expand as a result of the development of new markets and commercial products centered on
Southeast Asia, and we project a recovery of our resin plastic compounding business in Shenzhen, China. As aresult, we project fiscal year consolidated net sales of 31,630 million yen (3.7% up compared with the previousyear), and operating income of 1,180 million yen (5.8% up compared with the previous year).
As a result of these efforts, for the entire Tomoe Engineering Group in the consolidated fiscal year ending October
2015, we project net sales to grow by 4.9% to 42,700 million yen, operating income to increase by 43.7% to 1,830
million yen, and ordinary income to increase by 13.5% to 1,850 million yen. Because we do not anticipate any special
factors, including extraordinary income or losses, we project net income to climb by 4.3% to 1,150 million yen.
The operating results forecasts for the next period described above are based on information available to theCompany at the time the forecasts were prepared and assumptions judged to be reasonable. Actual operating
results might differ from these forecasts depending upon changes in domestic and international financial andeconomic conditions, the supply and demand situation, various risk factors and other uncertainties.
(2) Analysis of Financial Condition[1] Assets, Liabilities, and Net Assets
Assets at the end of the current consolidated fiscal year were 33,817 million yen, up 340 million or 1.0% from thebalance at the end of the previous consolidated fiscal year, reflecting lower cash and deposits and increase innotes and accounts receivable-trade and noncurrent assets.
Liabilities were 9,874 million yen, down 28 million yen or 0.3% from the end of the previous consolidated fiscal
year, mainly reflected an increase of income taxes payable and a decrease of accounts payable and loans
payable.
Net assets were 23,943 million yen, 368 million yen or 1.6% up from the end of the previous consolidated
fiscal year. This mainly reflected an increase of retained earnings reported at the current consolidated net
income, and an increase in the translation adjustments account associated with overseas subsidiaries,
which was affected by the depreciation of the yen.
As a result of the above changes, the equity ratio at the end of the consolidated fiscal year rose by 1.0
points compared with the end of the previous consolidated fiscal year to 70.8%.

6[2] Cash Flow Status
Balance of cash and cash equivalent as of the end of the current consolidated fiscal year decreased by 1,510
million yen to 5,661 million yen from the previous consolidated fiscal year. Status of each cash flow and theirfactors during the current consolidated fiscal year are as follows:(Net Cash Provided by (Used in) Operating Activities)
Net cash provided by operating activities was 525 million yen (498 million yen provided during the previous
consolidated fiscal year). Income before income taxes and minority interests was 1,782 million yen, and notes
and accounts receivable-trade increased by 1,669 million yen.
(Net Cash Provided by (Used in) Investing Activities)
Because purchases of plant, property and equipment were 564 million yen, and purchases of intangible fixed
assets were 126 million yen, the net amount of cash used in investing activities was 710 million yen (755 million
yen used during the previous consolidated fiscal year).
(Net Cash Provided by (Used in) Financing Activities)
Net cash used in financing activities was 1,562 million yen (381 million yen used during the previous consolidated fiscal
year), mainly for the repayment of loans of 807 million yen and the payment of cash dividends of 673 million yen.
The trends in cash flow indices are as follows:
Trends in cash flow indicesYear Ended
October 31,
2010

Year Ended
October 31,
2011

Year Ended
October 31,
2012

Year Ended
October 31,
2013

Year Ended
October 31,
2014

62.4

64.5

66.0

69.8

70.8

38.6

42.5

39.7

46.6

51.7

Debt-repayment to Cash
Flow Ratio (Years)

0.3

0.3

0.8

1.7

0.2

Interest Coverage Ratio(Percent)

151.7

258.7

115.8

35.6

74.5

Equity Ratio (Percent)
Equity Ratio Based on
Market Value (Percent)

Equity ratio: Net assets/ Total assets
Equity ratio based on market value: Market capitalization of shares / Total assets
Debt-repayment to cash flow ratio: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow /Interest payment(Note)
1. All indices are calculated on the basis of consolidated financial figures.
2. Market capitalization is calculated based on the number of outstanding shares excluding treasury stock.
3. Cash flow refers to net cash provided by (used in) operating activities.
4. Interest-bearing debt refers to all debt reported on the consolidated balance sheet for which interest is
being paid.

7

(3) Basic Policy for Profit Sharing and Dividends for Fiscal 2014 and 2015
As its basic policy, the Tomoe Engineering Group will “implement appropriate, stable dividends by seeking toincrease internal reserves to reinforce our financial position and corporate strength, and by considering consolidated
operating results, the group’s medium-term business strategy and other factors in a comprehensive manner.”
Based on the above policy, we plan to pay a dividend of 45 yen per share, including the dividend of 22.5 yen per
share for the consolidated fiscal year ending on October 31, 2014, and the interim dividend of 22.5 yen per share.
For the dividend for the next consolidated fiscal year, we plan to pay 45 yen per share (including an interim dividend
per share of 22.5 yen), based on consideration of the outlook for consolidated operating results.
(4) Risk Factors in Business
The key areas of business risks of our group that might have significant influence on investors’ decision are as follows.
The following judgments are made based on the business information at the end of the current consolidated fiscal
year, although some forward-looking statements are contained.
[1] Influence of Foreign Exchange Fluctuation
Businesses of our group include exports and import in foreign currencies, and exchange rate fluctuations may
affect the values after translation into yen. Operating results and financial condition of our group might be affectedby the range of foreign exchange fluctuation although we make efforts to minimize exchange fluctuation risks byentering into forward exchange contracts. Since our group has overseas subsidiaries, we prepare financial
statements in foreign currencies. In preparing consolidated financial statements, there is a risk associated withexchange fluctuation when converting into yen equivalent.
[2] Potential Risk of Overseas Activities
Our group is engaged in marketing and manufacturing overseas, focusing on China and other Southeast Asian
countries. Our group will monitor the local situations with the greatest care and take appropriate actions on a timely
basis. However, our group’s operating results and financial condition might be affected by unforeseen
circumstances arising from local political conditions, governments, legal restrictions, taxation systems, customs,
etc.
[3] Risk Associated with Quality of Goods and Products
The products of our group are manufactured by paying due attention based on systematic quality control. The
products that require technical development might cause risk of having cost of repair and replacement. Also, since
our group is not directly involved in manufacturing of many of imported raw materials, defects that our group is notdirectly associated with may occur and we might be obligated to cease sales and collect such materials. Although
we are prepared to take prompt and appropriate actions to cope with the risks involved in quality of manufactured
products and commercial goods, it may affect our group’s operating results and financial condition to the extent of
the problem.
[4] Risks of New Investment
Our group is in a quest to pursue high-value-added business all the time. To do this, we must take measures suchas aggressive investment in some situations; however, these measures may involve higher potential risks thanconventional business risks. Even though we take such sufficient preparations and measures, some unexpected
events may result in affecting operating results and financial condition of our group.

8[5] Risks when a Natural Disaster Occurs
Our group is implementing various risk measures, including seismic performance improvements to buildings andstructures (including rental properties), preparation of emergency response procedures, data backup
enhancements and the introduction of a system to confirm executive and employee safety, and working to prepare
a business contingency plan (BCP). Although we are implementing such measures, however, there is a possibility
our production capacity or sales capabilities might be substantially reduced by the occurrence of a large-scale
natural disaster to which we cannot respond, and business opportunities could be lost and our operating results
and financial position might be affected as a result.

92. Management Policy(1) Basic Management Philosophy
Our basic management philosophy is to contribute to society and provide a good quality of life to people involved
through growth and development of our company with spirit of creation and entrepreneurship and to provide ourcustomers with high level of technologies and excellent products. Guided by this policy, we shall be engaged in
the manufacture and sale of machinery based primarily on solid-liquid separation techniques and importation ofunique and specialty raw materials for chemical industry.
(2) Target Management Indices
Rather than just aiming for a volume growth, in our Machinery & Equipment Business we always try to develop
and sell products that require specialized technology, while in our Chemical Products Business we seek to handle
unique, high value-added products that demand expertise, even if their market is not so large. To pursue thesegoals, we regard improvement of profitability as our primary management goal. As a management indicator formeeting these goals, we give highest priority to ordinary income, which directly expresses the nature and changeof profitability.
(3) Mid- and Long-term Management Strategy
The long-term management strategy of Machinery & Equipment Business is to develop new products, reduce
manufacturing cost, and expand business overseas, and that of Chemical Products Business is to discoverunique new commercial products, to seek new customers and to deploy business aggressively for overseas
markets.
To achieve continuous progress on our basic strategy, in November 2013 we formulated the Tenth Mid-termManagement Plan “Target 2016” (from November 1, 2013 to October 31, 2016). The plan is devoted mainly
to implementing measures based on the following policies after newly identifying the ideal approach toallocating management resources and capturing market share. More specifically, in the Machinery &Equipment Business, we will expand foreign sales centered on North and South America, China and Southeast
Asia, while increasing domestic sales of our low-power, energy-saving centrifuge. In the Chemical Products
Business, we set key strategies to increase overseas sales by developing new markets and new commercial
products mainly in Southeast Asian market, and to maintain our market share of the existing business byimplementing measures to meet customer needs. As our objective, we will seek to achieve consolidated net salesof 47,500 million yen and ordinary income of 2,600 million yen in the fiscal year ending October 2016, the final yearof our mid-term management planning period.
(4) Challenges to be Addressed
Japan’s economy is expected to continue the momentum carrying it toward a sustainable recovery, including an
improvement in corporate operating performance and increase in capital investment, as the result of various
economic measures. The move toward economic recovery is being supported by growth of corporate earnings
associated with devalued yen, and effect of rising share value to corporate assets. On the other hand, USeconomy is showing a recovery trend but there are uncertainties over the economies in Europe and newly
developing countries, and the management environment surrounding the Tomoe Engineering Group is
projected to remain severe. In light of this environment, the Tomoe Group recognizes that achieving overseas
business expansion in both its businesses is a priority issue. In the Machinery & Equipment Business, we willconcentrate on development of the North and South America markets based on our local subsidiaries, and on10

sales growth in the markets in China and Southeast Asia based on a strengthened sales agent policy. In theChemical Products Business, we will focus on expansion of our business territory through efforts to create newmarkets and commercial products mainly in Southeast Asia, which is expected to grow. In Tomoe’s resin plastic
compounding business at its subsidiary in Shenzhen, China, the Company will undertake a rebuilding effort
aimed at reinvigorating operating results by specializing in products such as commodity plastics, and devoting
efforts to retaining existing customers and acquiring new customers and broadening the market. The Company
also will strive to further strengthen the operating base by systematically training the human resources who
support Tomoe’s overseas business and the individuals who will be responsible for the future management ofthese operations. To steadily execute these issues, the Company’s policy is to achieve sustained growth in bothof the Company’s businesses, and bolster its capacity to generate stable earnings, by promoting management
policies based on Tomoe’s 10th Medium-Term Management Plan.
To enhance and strengthen corporate governance and compliance we have established a Corporate Ethics
Committee, and in the future this committee will take the lead in efforts to ensure management in full compliancewith the letter and spirit of the law and improve corporate ethics. From the view point of corporate governance,
we will maintain our efforts to firmly establish wide-ranging risk management centered on our Risk Management
Committee, and to pursue the consolidation of our management environment from an IT perspective by
undertaking construction of our next-generation mission-critical systems. Moreover, the Company will also work
to strengthen its management organization to ensure business continuity, as a measure against the risk ofoccurrence of a major natural disaster like the Great East Japan Earthquake.

11

3. Consolidated Financial Statements(1) Balance Sheets(Thousands of Yen)
Year Ended October 31, 2013

Year Ended October 31, 2014

Cash and Deposits

7,171,846

5,661,622

Notes and Accounts Receivable-Trade12,639,632

14,321,437

Merchandise and Finished Goods

3,231,590

2,834,556

Work in Process

888,624

1,193,440

Raw Materials and Supplies

988,780

772,969

Deferred Tax Assets

405,172

579,233

Others249,739

225,244-7,053-5,251

25,568,332

25,583,252

2,434,925

2,742,339

Accumulated Depreciation-1,479,133-1,533,884

Buildings and Structures, Net

955,791

1,208,455

Machinery, Equipment and Vehicles

3,867,792

4,045,863-3,136,674-3,346,731

731,117699,131920,536

930,711

9,867－-9,538－328－

2,583,008

2,581,210

1,035,492

1,102,854

Accumulated Depreciation-959,869-977,538

Others, Net

75,623125,316

5,266,406

5,544,824

511,391

451,969

Investment Securities

1,126,177

1,255,543

Guarantee Deposits

243,293

Prepaid Pension Expense

251,735
676,931

Net Defined Benefit Assets－

596,943

Deferred Tax Assets

23,456

36,616

Others

94,736

128,527

Allowance for Doubtful Accounts-41,232-22,995

Total Investments and Other Assets

2,131,805

2,237,928

Total Noncurrent Assets

7,909,602

8,234,723

Total Assets

33,477,935

33,817,976

AssetsCurrent Assets

Allowance for Doubtful Accounts
Total Current Assets
Noncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, Net
Land
Lease Assets
Accumulated Depreciation
Lease Assets, Net
Construction in progress
OthersTotal Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

12－(Thousands of Yen)
Year Ended October 31, 2013

Year Ended October 31, 2014

6,096,703

5,970,933－

Lease Obligations

731,535
775－

Accounts Payable-Others

614,544535,396

Income Taxes Payable

32,292543,046

Advances Received

77,347431,020

Provision for Bonuses

751,650

731,676

Provision for Directors' Bonuses

35,71336,900Allowance for Product Warranty

180,198

223,618

Others278,980

305,463

8,799,742

8,778,056

Noncurrent Liabilities
Long-Term Loans Payable

43,668－Provision for Retirement Benefits

47,538－Provision for Directors' Retirement Benefits

18,680Net Defined Benefit Liabilities

18,680－

Deferred Tax Liabilities

992,832

1,028,769

Total Noncurrent Liabilities

1,102,719

1,096,096

Total Liabilities

9,902,461

9,874,153

Capital Stock

1,061,210

1,061,210

Capital Surplus

1,483,410

Retained Earnings

20,838,441

1,483,410
21,267,920-363,462-363,591

Total Shareholders’ Equity

23,019,599

23,448,949

Accumulated Other Comprehensive Income
Valuation Difference on Available-for-Sale
Securities
Deferred Gains or Losses on Hedges

211,320

305,484

578

1,272

121,844－

311,609-123,493

333,743494,873

222,130－

Total Net Assets

23,575,473

23,943,822

Total Liabilities and Net Assets

33,477,935

33,817,976

Liabilities and Net Assets
Liabilities
Current Liabilities
Notes and Accounts Payable-Trade
Short-Term Loans Payable

Total Current Liabilities

48,646

Net Assets
Shareholders’ Equity

Treasury Stock

Foreign Currency Translation Adjustment
Total Adjustment on Net Defined Benefit
Total Accumulated Other Comprehensive Income
Minority Interests13(2) Consolidated Statements of Income(Thousands of Yen)
Year Ended October 31, 2013

Year Ended October 31, 2014

Net Sales

38,176,654

40,714,627

Cost of Sales

30,498,986

33,075,863

Gross Profit

7,677,668

7,638,764

Selling, General and Administrative Expenses

6,161,160

6,365,315

Operating Income

1,516,507

1,273,448

Interest income

18,952

20,369Dividends Income

19,075

122,927

Rent Income

9,584

9,100

Foreign Exchange Gains

98,091

178,251

Others59,691

54,854205,394

385,503

13,31468

6,639－

Commission Paid

9,500

9,475

Sales Discount

6,489

5,457

Others

12,066

8,025

Total Non-Operating Expenses

41,43929,597

Ordinary Income

1,680,463

1,629,354

－

3,784

19,218－

13,791
145,132

19,218

162,708－

2,034

Loss on Retirement of Noncurrent Assets

11,180Loss on Impairment

186,005

7,220－

Total Extraordinary Losses

197,186

9,255

Income before Income Taxes and Minority Interests

1,502,495

1,782,807

Income Taxes-Current

485,344820,640

Income Taxes-Deferred

254,853-132,776

740,198

687,863

Income before Minority Interests

762,297

1,094,944

Minority Interests Income-78,785-8,089841,082

1,103,033

Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses
Interest Expenses
Loss on Sales of Notes Payable

Extraordinary Income
Gain on Sales of Noncurrent Assets
Gain on Sales of Investment Securities
Gain on Negative Goodwill
Total Extraordinary Income
Extraordinary Losses
Loss on Sales of Noncurrent Assets

Total Income Taxes

Net Income

14Consolidated Statements of Comprehensive Income(Thousands of Yen)

Income before Minority Interests

Year Ended October 31,

Year Ended October 31,

2013

2014
762,297

1,094,944

188,147

94,16453693

Foreign Currency Translation Adjustment

489,269

200,751

Total Other Comprehensive Income

677,469

295,608

1,439,767

1,390,552

1,444,367

1,387,656-4,6002,896

Other Comprehensive Income
Valuation Difference on Available-for-sale Securities
Deferred Gains or Losses on Hedges

Comprehensive Income(Breakdown)Comprehensive Income attributable to Owners of the
ParentComprehensive Income attributable to Minority
Interests15

(3) Consolidated Statements of Changes in Shareholders' Equity
Previous Consolidated Fiscal Year (Year Ended October 31, 2013)(Thousands of Yen)
Shareholders' Equity
CommonStock
Surplus during Previous
Fiscal Year
Changes during This
Fiscal Year
Cash Dividend Paid

CapitalSurplus1,061,210

Retained
Earnings

1,483,410

Net Income
Issued Shares
Reacquired
Total (Net) Amount
Changed (Except
Shareholders' Equity)
Total Amount Changed
Surplus during This Fiscal
Year

Issued Shares
Reacquired

20,396,505

Total Net
Assets-363,393

22,577,731-399,146-399,146

841,082

841,082
-68

-68

―

―

441,936-68

441,867

1,061,210

1,483,410

20,838,441-363,462

23,019,599

Accumulated Other Comprehensive Income

Surplus during
Previous Fiscal Year
Changes during This
Fiscal Year
Cash Dividend Paid

Valuation

DeferredForeign

Total Net

Total

Difference on

Gains orCurrency

Defined

Revaluation &Available-for-saleLosses on

Translation

BenefitTranslation

Securities

HedgesAdjustment

23,172525-293,239

Minority

Total NetInterests

AssetsAdjustments―-269,541

226,731-399,146

Net Income
Issued Shares
Reacquired
Total (Net) Amount
Changed (Except
Shareholders' Equity)
Total Amount
Changed
Surplus during This
Fiscal Year

22,534,921

841,082-68
188,14753

415,084―

603,284-4,600598,684

188,14753

415,084―

603,284-4,6001,040,552

211,320578

121,844―333,743

222,130

23,575,473

16

Current Consolidated Fiscal Year (Year Ended October 31, 2014)(Thousands of Yen)
Shareholders' Equity
CommonStock
Surplus during Previous
Fiscal Year
Changes during This
Fiscal Year
Cash Dividend Paid

CapitalSurplus1,061,210

Retained
Earnings

1,483,410

Net Income
Issued Shares
Reacquired
Total (Net) Amount
Changed (Except
Shareholders' Equity)
Total Amount Changed
Surplus during This Fiscal
Year

Issued Shares
Reacquired

20,838,441

Total Net
Assets-363,462

23,019,599-673,554-673,554

1,103,033

1,103,033
-128

-128

―

―

429,479-128

429,350

1,061,210

1,483,410

21,267,920-363,591

23,448,949

Accumulated Other Comprehensive Income

Surplus during
Previous Fiscal Year
Changes during This
Fiscal Year
Cash Dividend Paid

Valuation

DeferredForeign

Total Net

Total

Difference on

Gains orCurrency

Defined

Revaluation &Available-for-saleLosses on

Translation

BenefitTranslation

Securities

HedgesAdjustment

211,320578

121,844

Minority

Total NetInterests

AssetsAdjustments―

333,743

222,130-673,554

Net Income
Issued Shares
Reacquired
Total (Net) Amount
Changed (Except
Shareholders' Equity)
Total Amount
Changed
Surplus during This
Fiscal Year

23,575,473

1,103,033-128
94,164693

189,765-123,493

161,129-222,130-61,001

94,164693

189,765-123,493

161,129-222,130368,349

305,484

1,272

311,609-123,493

494,873―

23,943,822

17

(4) Consolidated Statements of Cash Flows(Thousands of Yen)
Year EndedYear Ended

October 31, 2013

October 31, 2014

Net Cash Provided by (Used in) Operating Activities
Income before Income Taxes and Minority Interests

1,502,495

1,782,807

Depreciation and Amortization

397,696

425,118

Increase (Decrease) in Provision for Bonuses(329,666)(22,635)

Increase (Decrease) in Provision for Directors' Bonuses(34,717)

1,187

Increase (Decrease) in Allowance for Product Warranty
Increase (Decrease) in Provision for Retirement Benefits(14,165)
7,615

43,420－

Increase (Decrease) in Net Defined Benefit Liability－

493

Increase (Decrease) in Prepaid Pension Expense(243,012)－

Decrease (Increase ) in Net Defined Benefit Asset－(111,891)

Increase (Decrease) in Provision for Directors' Retirement Benefits(10,920)－

Increase (Decrease) in Allowance for Doubtful Accounts(9,730)(20,038)

Interests and Dividends Income(38,027)(143,297)Interest Expenses

13,314

6,639

Foreign Exchange Losses (Gains)(65,278)(48,807)

Loss (Gain) on Sales of Investment Securities(13,791)

Gain (Loss) on Negative Goodwill(19,218)－(145,132)

Loss on Impairment

186,005－

Loss (Gain) on Sales of Noncurrent Assets－(1,749)Loss on Retirement of Noncurrent Assets

11,1807,220

828,347(1,669,136)

362,893

333,587(1,099,851)(136,860)

17,748(20,552)366

352,296

112,889

41,0797,468(15,706)

1,583,430

644,253

Interests and Dividends Income Received

34,988

146,785

Interest Expenses Paid

(13,988)(7,055)(1,105,807)(258,343)

498,622525,638

Decrease (Increase) in Notes and Accounts
Receivable-Trade
Decrease (Increase) in Inventories
Increase (Decrease) in Notes and Accounts Payable-Trade
Increase (Decrease) in Accounts Payable-Others
Increase (Decrease) in Advances Received
Increase (Decrease) in Accrued Consumption Taxes
Others, Net
Sub total

Income Taxes Paid
Net Cash Provided by (Used in) Operating Activities

18

(Thousands of Yen)
Year EndedYear Ended

October 31, 2013

October 31, 2014

Net Cash Provided by (Used in) Investment Activities
Disbursement to Time Deposits(7,400,000)

Proceeds from Withdrawal of Time Deposits

7,400,000

Purchase of Property, Plant and Equipment(408,202)(4,300,000)
4,300,000

3,294(564,310)
8,727

Purchase of Intangible Fixed Assets(251,694)(126,478)

Purchase of Investment Securities(247,497)(15,901)

Proceeds from Sales of Investment Securities

25,60344,019Payments of Loans Receivable(3,870)(6,386)

Collection of Loans Receivable

2,844

2,007

Guarantee Deposits (Increase)126,122

2,384

Others, Net(2,528)(54,234)(755,927)(710,172)

Net Increase (Decrease) in Short-Term Loans Payable

34,110(751,299)

Repayment of Long-Term Loans(9,063)(56,534)

Repayments of Lease Obligations(7,216)－(775)(79,894)(68)(399,146)(128)(673,554)(381,384)(1,562,188)347,361(291,328)
7,463,174

236,498(1,510,223)
7,171,846

7,171,846

5,661,622

Proceeds from Sales of Property, Plant and Equipment

Net Cash Provided by (Used in) Investment Activities
Net Cash Provided by (Used in) Financing Activities

Purchase of Stock from Minority Shareholders
Purchase of Treasury Stock
Cash Dividends Paid
Net Cash Provided by (Used in) Financing Activities
Cash and Cash Equivalents
Effect of Exchange Rate Change on Cash and Cash
Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of This Fiscal Year19

(5) Notes for Consolidated Financial Statements(Notes for premise of going concern)
There are no pertinent matters to report.

(Changes in accounting principles)
Beginning from the end of the consolidated accounting period, the Company will apply the Accounting Standard for
Retirement Benefits (Accounting Standards Board of Japan (ASBJ) Statement No. 26, referred to below as “theRetirement Benefit Accounting Standard”) and the Implementation Guidance on Accounting Standard for Retirement
Benefits (ASBJ Guidance No. 25, referred to below as “the Retirement Benefits Implementation Guidance”)(excluding, however, the provisions described in the text of paragraph 35 of the Retirement Benefit AccountingStandard and the text of paragraph 67 of the Retirement Benefits Implementation Guidance) and has changed its
reporting method to record the amount after deduction of pension asset value from the projected benefit obligation as
either a net defined benefit asset or liability, and has recorded the unrecognized actuarial difference and unrecognized
past service costs in net defined benefit asset or liability. Furthermore, beginning from the end of the consolidated
accounting period, the prepaid pension expense, which traditionally was included in “other” under investments andother assets, will be recorded in noncurrent assets under investments and other assets as a net defined benefit asset.
In the consolidated balance sheet for the prior consolidated accounting period, the amount of 771,667,000 yen for“other” under investments and other assets has been restated into prepaid pension expense of 676,931,000 yen and“other” of 94,736,000 yen.
For its application of the Retirement Benefit Accountings Standard, the Company will revise the re-measurements ofdefined benefit plans reported under accumulated other comprehensive income at the end of the consolidated
accounting period for the effect of this change, in accordance with the transitional accounting treatment set forth inparagraph 37 of the Retirement Benefit Accounting Standard.
As a result, at the end of the consolidated accounting period the Company recorded a net defined benefit asset of596,943,000 yen and a net defined benefit liability of 48,646,000 yen. The amount for accumulated othercomprehensive income was reduced by 123,493,000 yen.
Net assets per share have been decreased by 12.38 yen.

20

(Segment information)
1. Summary of reporting segments
TOMOE Engineering Co., Ltd. has established two operational headquarters. These operational headquarters aredeveloping their business activities by planning comprehensive domestic and overseas strategies for the respective
manufactured and commercial products they handle.
We therefore have assumed these two businesses, referred to as the “Machinery & Equipment Business” and the“Chemical Products Business”, as our company reporting segments. The Machinery & Equipment Business mainly
manufactures and sells centrifuge decanters, and the Chemical Products Business mainly manufactures, stocks
and sells chemical industry products.
The Company’s reporting segments are those units of the Company’s for which discrete financial information isavailable and for which the Board of Directors regularly conducts a review for the purpose of making decisions about
resources to be allocated to the segments and assess the segments' performance.
2. Method for calculating amounts of net sales, income or loss, assets, liabilities and other items for each reporting
segment
The accounting methods for reporting segments are identical to the accounting methods adopted for preparation of
the consolidated financial statements.

3. Information concerning the amount of net sales, income or loss, assets, liabilities and other items for each reporting
segment(Thousands of Yen)
Amount ofConsolidated
Adjustment
Financial
Note 1
Statements
Reported
AmountPrevious Consolidated Fiscal Year (Year Ended October 31, 2013)
Reporting segment
Machinery &Equipment
Business
Sales
Sales to Unaffiliated Customers
Internal Sales Among
Segments or AmountTransferred
Total
Segment Income
Segment Assets
Other Items
Depreciation & Amortization
Increase in Property, Plant &Equipment and Intangible
AssetsChemical
Products
Business

Total

9,316,923

28,859,730

38,176,654

0
9,316,923
527,594
8,456,726

0
28,859,730
988,913
14,209,246

262,384
577,0870038,176,654
0

38,176,654
1,516,507
22,665,973

000
10,811,962

38,176,654
1,516,507
33,477,935

135,311397,696

0397,696

149,308

726,3960726,396(Notes)1. The adjustment amount for segment assets is the assets of the entire company that cannot be allocated to eachreporting segment, and is mainly idle operating funds (cash on hand and in banks), long-term investments(investment securities) and assets acquired in relation to a district redevelopment project.
2. The total amount for segment income agrees with the operating income reported on the Consolidated Statement of
Income.

21

(Thousands of Yen)
Consolidated
Amount of
Financial
Adjustment
Statements
Note 1
Reported
AmountCurrent Consolidated Fiscal Year (Year Ended October 31, 2014)
Reporting segment
Machinery &Equipment
Business
Sales
Sales to Unaffiliated Customers
Internal Sales Among
Segments or AmountTransferred
Total
Segment Income
Segment Assets
Other Items
Depreciation &Amortization
Increase in Property, Plant&Equipment and Intangible
AssetsChemical
Products
Business

Total

10,204,351

30,510,276

40,714,627

0

40,714,627

0

0

0

0

0

10,204,351
157,852
9,141,508

30,510,276
1,115,596
15,178,953

40,714,627
1,273,448
24,320,461

009,497,514

40,714,627
1,273,448
33,817,976

331,764

93,353425,118

0425,118

499,154

66,382565,536

66,4100

631,946(Notes)1.The adjustment amount for segment assets is the assets of the entire company that cannot be allocated to eachreporting segment, and is mainly idle operating funds (cash on hand and in banks), long-term investments(investment securities) and assets acquired in relation to a district redevelopment project.
2. The total amount for segment income agrees with the operating income reported on the Consolidated Statement of
Income.
(Related information)
Previous Consolidated Fiscal Year (Year Ended October 31, 2013)
1. Information by product and service
The Company has omitted a description of information by product and service because this same information isdisclosed in segment information.
2. Regional Information(Thousands of Yen)

1. Net Sales
Japan

Asia

31,554,864

5,906,489

OthersTotal

715,300

38,176,654(Note)Net sales are classified by country or region based on the customer’s location.
2. Property, Plant and Equipment(Thousands of Yen)Japan
5,054,309

Asia
189,405

OthersTotal

22,691

5,266,406

3. Main Customer Information
The Company has omitted a description of sales to outside customers because there are no customers to which sales
account for more than 10% of the net sales reported in the Consolidated Statements of Income.

22

Current Consolidated Fiscal Year (Year Ended October 31, 2014)
1. Information by product and service
The Company has omitted a description of information by product and service because this same information isdisclosed in segment information.
2. Regional Information(Thousands of Yen)

1. Net Sales
Japan

Asia

OthersTotal

33,239,806

6,263,736

1,211,084

40,714,627(Note) Net sales are classified by country or region based on the customer’s location.
(Thousands of Yen)

2. Property, Plant and Equipment
Japan
5,033,485

Asia

Others192,041

Total

319,298

5,544,824

3. Main Customer Information
The Company has omitted a description of sales to outside customers because there are no customers to which sales
account for more than 10% of the net sales reported in the Consolidated Statements of Income.
(Information concerning impairment losses on fixed assets by reporting segment)
Previous Consolidated Fiscal Year (Year Ended October 31, 2013)(Thousands of Yen)
Reported segments
Machinery &Equipment
Business
Impairment loss

5,423

Chemical
Products
Business

Subtotal

180,582

186,005

Elimination at
the Company
0

Total

186,005

Current Consolidated Fiscal Year (Year Ended October 31, 2014)
There are no pertinent matters to report.
(Information concerning amortization of goodwill and unamortized balances by reporting segment)
There are no pertinent matters to report.
(Information concerning gain on negative goodwill by reporting segment)
Previous Consolidated Fiscal Year (Year Ended October 31, 2013)
There are no pertinent matters to report.
Current Consolidated Fiscal Year (Year Ended October 31, 2014)
The Tomoe Engineering Group had a gain on negative goodwill in the Chemical Products Business in conjunction withthe acquisition of the stock of Interstella Co., Ltd., a consolidated subsidiary of Tomoe Engineering, which was owned byanother company. The reported amount of the gain on negative goodwill as a result of this acquisition was 145,132,000
yen.

23

(Per Share Information)
Year EndedYear Ended

October 31, 2013
Net Asset per ShareNet Income per Share

October 31, 201434

¥2,340.

¥2,399.53¥84.29¥110.54(Note 1) Income per share for this fiscal year after adjustment of the residual securities is not presented as there are noresidual securities.
(Note 2) Calculation basis for net income per share are as follows:Year EndedYear Ended

October 31, 2013

October 31, 2014

Net Income for this Fiscal Year (thousands of yen)

841,082

1,103,033

Net Income for Common Stock (thousands of yen)

841,082

1,103,033

9,978,612

9,978,566

Average number of Common Stock during the Fiscal Year
(Note3) Calculation basis for net asset per share are as follows:

Total for Net Asset in Consolidated Balance SheetYear EndedYear Ended

October 31, 2013

October 31, 2014

23,575,473

23,943,822

Amount deducted from the total for Net Assets (thousands of yen)

222,130－(Minority Interests) (thousands of yen)

(222,130)(－)

Net Asset for Common Stock (thousands of yen)

23,353,342

23,943,822

9,978,608

9,978,533(thousands of yen)

Number of Common Stock used for calculation of Net Assets
per Share (share)(Significant subsequent events)
None
.

24

6. Other Notes(1) Appointment of Officers
1) Appointment of Representative Directors (As of January 29, 2015 Announced on November 5, 2014)
1. New candidate for President
President
Hitoshi Yamamoto(Currently Senior Managing Director and General Manager, Chemical Products Div.)
2. President scheduled to retire
President
Noboru Shiono(planned appointment to Counselor of Tomoe Engineering Co., Ltd.)
2) Other Directors (scheduled as of January 29, 2015)
1. New candidates for Director
Director and Deputy General Manager, Chemical Products Div. and In charge of Advanced Materials Dept.
and Electronic Materials Dept., serving concurrently as General Manager, Chemical Products Div.
Akiyoshi Shinoda(Currently Manager, Fine Chemicals Dept., Chemical Products Div.)
Director and Deputy General Manager, Machinery & Equipment Div. and Serving concurrently as Manager,
Environmental Equipment Sales Dept.
Masahiko Nakamura(Currently Manager, Environmental Equipment Sales Dept., Machinery & Equipment Div.)
Director (in charge of Management Planning Dept., serving concurrently as General Manager, Accounting
Div.)
Toshiaki Yagura(currently General Manager, Accounting Div.)
Director (Outside Director)
Yutaka Imai
(Currently licensed tax accountant)
2. Directors scheduled to retire
Director and Deputy General Manager, Machinery & Equipment Div.
(in charge of Environmental Equipment Sales Dept.)
Akira Okada(planned appointment to Advisor of Tomoe Engineering Co., Ltd.)
Director (in charge of Accounting Div. and Management Planning Dept.)
Mitsuo Matsumoto(planned appointment to Corporate Auditor of Tomoe Engineering Co., Ltd.)3. New candidate for Corporate Auditor
Senior Head Auditor (in charge of Accounting Div. and Management Planning Dept.)
Mitsuo Matsumoto(currently Auditor)
4. Corporate Auditor scheduled to retire
Senior Head Auditor:
Kenichi Ito(planned appointment to Advisor of Tomoe Engineering Co., Ltd.)25

5. Planned promotions to Director
Senior Managing Director and General Manager, Chemical Products Div.:
Tetsuo Yamada
Currently Director and Deputy General Manager, Chemical Products Div. (in charge of Advanced Materials
Dept., Electronic Materials Dept. and Fine Chemicals Dept.)
Managing Director(in charge of General Affairs Div. and Business Coordination Div.)
Masayoshi Fukasawa
Currently Director (in charge of General Affairs Div. and Business Coordination Div.)

26