(Unaudited)

January 11, 2019
MORITO CO., LTD.
Financial Statement (Unaudited)
For the Fiscal Year ended November 30, 2018
(Translated from the Japanese original)
Corporate Information
Code：9837 Listings in First Section of the Tokyo Stock Exchange(URL http : www.morito.co.jp/english/index.html )Representative： Takaki Ichitsubo
Representative Director and President
Contact：
Kenji Kojima
Director, Executive Officer and General Manager of Control Division
Telephone: +81-6-6252-3551
Scheduled date of annual general meeting of shareholders
Scheduled date of dividend payment:

February 27, 2019
February 28, 2019
February 28, 2019
Yes

Scheduled date of filling of Security Report:

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

Yes (for analyst and institution investors)(Amounts rounded down)
1. Consolidated Financial Results for the Fiscal Year 2018(December 1, 2017 through November 30, 2018)(1) Consolidated Financial Results(Percentages indicate year-on-year changes)
Net sales
Operating income
Ordinary income
Net income%%%%
Millions of yen
Millions of yen
Millions of yen
Millions of yen
FY 2018
43,943
6.2
1,725
1.0
1,790
5.1
1,257 △62.0
FY 2017
41,388
3.2
1,707
1,703
3.4
3,305
179.7
△3.4
(Note) Comprehensive income : 1,064 million yen (△78.2%) (FY 2018)

FY 2018
FY 2017

4,882 million yen (－%)(FY 2017)

Net income
Per share

Fully diluted net
Income per share

Returnon equity

Ratio ofordinary income
to total assets

Ratio ofoperating income
to net sales

Yen

Yen

%

%

%

45.71
119.2945.62
119.14

3.8
10.7(Reference) Equity in earnings (losses) of affiliates : 66 million yen (FY 2018)(2) Consolidated Financial Position
Total assets
Millions of yen
FY 2018
48,059FY 2017
43,473

Net assets
Millions of yen
32,95932,615(Reference) Equity capital : 32,905 million yen (FY 2018)

3.9
4.0

3.9
4.1

44 million yen (FY 2017)

Equity ratio
%
68.5
74.9

Net assets per share
Yen
1,196.17
1,184.79

32,581 million yen (FY 2017)(3) Consolidated Cash Flows
Cash flows fromoperating activities
Millions of yen
FY 2018
FY 2017626
1,802Cash flows frominvesting activities
Millions of yen△5,171
2,939

1

Cash flows fromfinancing activities
Millions of yen
2,303△2,572

Cash and cash
equivalents at the endof the period
Millions of yen
8,525
10,776

(Unaudited)

2. DividendsFirstquarterend
Yen-

Dividends per share
SecondThird
Fiscalquarter- quarteryearend
end
end
Yen
Yen
Yen
14.00
14.00
12.50
12.50

AnnualTotal dividends(Annual)Ratio ofdividends to
net assets(Consolidated)
%
2.5
2.1

Dividends
Payout ratio(Consolidated)

Yen
Millions of yen%
FY 2017
28.00
788
23.5
FY 2018
25.00
701
54.7
FY 2019
13.00
13.00
26.00
51.1
(Forecast)(Note) 1: Each 3 yen commemorative dividends are included in both of FY2017 Second quarter-end and FY2017 fiscal
year end dividends.
(Note) 2: Dividends payout ratio (consolidated) 23.5% in FY2017 is mentioned. But it is more than 50% based on net
income excluded extraordinary income.
(Note) 3: Each 0.50 yen commemorative dividends are included in both of FY2018 Second quarter-end and FY2018
fiscal year end dividends.

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

47,000Ordinary profit

Operating income%
7.0

Millions of
yen

1,900

Millions of
yen

%
10.1

1,900

%

Net income
per share

Net income
Millions of
yen

6.1

1,400

%
11.3

Yen
50.90

*Notes(1) Changes of important subsidiaries during the period (changes of specific subsidiaries in accordance withchanges in the scope of consolidation) : Yes
Newly included : MANEUVERLINE CO., LTD.
Extended company : None
(2) Changes in accounting policies and changes or restatement of accounting estimates(i)
Changes in accounting policies caused by revision of accounting standards :(ii)
Changes in accounting policies other than (i) :(iii)
Changes in accounting estimates :(iv)
Restatements :(3) Number of outstanding shares (common shares）(i) Number of outstanding shares, including treasury shares at end of period:
30,800,000 shares(FY 2018)
30,800,000 shares(FY 2017)(ii) Number of shares of treasury stock at end of period:
3,290,700 shares(FY 2018)
3,300,100 shares(FY 2017)(iii) Average outstanding number of shares during the period:
27,505,500 shares(FY 2018)
27,709,133 shares(FY 2017)

2

None
None
None
None

(Unaudited)(Reference) Summary of Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for FY 2018 (December 1, 2017 through November 30, 2018)(1) Non-Consolidated Financial Results(Percentages represent changes from corresponding period of previous year)
Net Sales
Operating income
Ordinary profit
Net Income
Millions of yen%
Millions of yen%
Millions of yen%
Millions of Yen%
FY 2018
27,7696.6
711 △3.1
1,244 △4.8
1,055 △72.0
FY 2017
26,041
0.9
734
4.5
1,308
30.3
3,768
343.4

FY 2018
FY 2017

Net income
per shareYen
38.37
136.00Fully diluted net
Income per share
Yen
38.30
135.83(2) Non-Consolidated Financial Position
Total assets
Net assets
Equity ratio
Net assets per share
Millions of yen
Millions of yen%
Yen
FY 2018
40,82029,33371.7
1,064.35
FY 2017
37,404
29,16877.9
1,059.46(Reference) Equity capital: 29,279 million yen (FY 2018)29,134 million yen (FY2017)*This financial summary does not need to undergo an audit.
*Disclosure and other special notes regarding performance forecasts
The forecast in this statement is based on information available to management as of the date on which these
performance-related figures were disclosed, and various factors may cause actual results to differ from these
forecasts. For issues to keep in mind when using the forecasts and criteria conditioned upon the forecasts, pleaserefer to “1. Qualitative Information for the Period under Review (4) Outlook for the next fiscal year” on page 7.
We have also introduced “Stock Granting Trust (J-ESOP)” and “Board Incentive Plan (BIP)”. Consequently, theshares held by Trust and Custody Service Bank, ltd. and The Master Trust Bank of Japan, ltd. are included in thetreasury stock.

3

(Unaudited)Index
1. Qualitative Information for the Period under Review ......................................................................................5(1) Overview of Business Performance .............................................................................................................5(2) Overview of Financial Position .....................................................................................................................6(3) Overview of Cash Flows ................................................................................................................................6(4) Outlook for the next fiscal year ....................................................................................................................7(5) Basic policy on Payment of Dividends ........................................................................................................7
2. Organization of the group ..................................................................................................................................8
3. Management Policy ...........................................................................................................................................10(1) Basic Management Policy ...........................................................................................................................10(2) Target Indicator.............................................................................................................................................10(3) Medium and Long-Term Management Strategy ........................................................................................10(4) Issues to be addressed................................................................................................................................10(5) Other Material Matters .................................................................................................................................10
4. Basic concept concerning the selection of accounting standards .............................................................10
5. Consolidated Financial Statements and Notes .............................................................................................. 11(1) Consolidated Balance Sheets ..................................................................................................................... 11(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .......13(3) Consolidated Statements of Changes in Shareholders’ Equity ..............................................................15(4) Consolidated Cash Flows............................................................................................................................17(5) Notes regarding Consolidated Financial Statements ..............................................................................19(Notes on assumption of going concern) ...........................................................................................................19(Business Combinations) ...................................................................................................................................20(Segment Information) .......................................................................................................................................22(Per share data) .................................................................................................................................................23(Events after the reporting period) .....................................................................................................................24
6. Others .................................................................................................................................................................24(1) Changes in Senior Managements...............................................................................................................24

4

(Unaudited)

1. Qualitative Information for the Period under Review(1) Overview of Business Performance
In the fiscal year ended November 30th, 2018 (From 1st December, 2017 to 30th November, 2018), theJapanese economy has shown signs of modest recovery by improving employment situation and capital
investment because corporate performance has continued stable.
In the global economy, despite concerns about the increase of the US-China trade friction, the global economy
was on a recovery trend.
In such a situation, our group has been accelerating a growth strategy by the development of value-added
Japanese items, expansion of a global sales channel under the 7th mid-term management plan, and promoted
the realization of value creation which the era seeks, expanded our business in not only existing market such
ASEAN, china, western, but also in untapped market.
As a result, in the current yearly performance reaches net sales ¥43,943 million (increased by 6.2% from ayear earlier), operating income ¥1,725 million (increased by 1.0% from a year earlier), ordinary income ¥1,790
million (increased by 5.1% from a year earlier), net income ¥1,257 million (decreased by 62.0% from a year
earlier).
The exchange rate used for the oversea subsidiaries’ consolidated financial statement of the current quarterend as below:
1Q Oct-Dec
USD
112.98 (109.43)
EUR
133.01 (117.86)
RMB
17.08 (15.99)
HKD
14.47 (14.11)
TWD
3.75 (3.45)
VND
0.0050 (0.0048)
THB
3.43 (3.09)*() is the exchange rate of FY2017.

2Q Jan-Mar
108.23 (113.61)
133.15 (121.04)
17.04 (16.56)
13.83 (14.64)
3.70 (3.66)
0.0048 (0.0050)
3.43 (3.24)

3Q Apr-Jun
109.10 (111.10)
130.03 (122.26)
17.13 (16.21)
13.90 (14.27)
3.67 (3.67)
0.0048 (0.0048)
3.42 (3.24)

4Q Jul-Sep
111.43 (110.95)
129.54 (130.43)
16.36 (16.63)
14.20 (14.20)
3.64 (3.67)
0.0048 (0.0048)
3.38 (3.33)

Segment information as below[Japan]As for the apparel division, sales of the accessories for sports apparel manufacturer was decreased, however
sales of the accessories for uniform/working wear and mass retailer were increased.
In the consumer product division, sales of accessories for health-related items such as medical supporters,
sales of products for hardware store/working wear store, retailers and automobile interior components, andrental/cleanup of kitchen supplies were increased.
Furthermore, the results of MANEUVERLINE CO., LTD., which acquired in April, are included in the
consolidated income statement for Consolidated fiscal year 2018. Accordingly, Sales of business on
MANEUVERLINE CO., LTD.. which imports and sells goods for marine leisure, snowboarding, andskateboarding were increased.
As a result, net sales were ¥31,326 million (increased by 10.0% from a year earlier).
[Asia]
As for the apparel division, sales of the accessories for Japanese apparel manufacturers in Shanghai wereincreased, however sales of the accessories for Europe and the US apparel manufacturers in Hong Kong weredecreased.
In the consumer product division, sales of accessories for video equipment in Hong Kong and Thailand weredecreased.
As a result, net sales were ¥6,484 million (decreased by 10.0% from a year earlier).
[Europe and the US]
As for the apparel division, sales of the accessories in Europe and the US were increased.
In the consumer product division, sales of accessories for video equipment in Europe were decreased,
however sales of automobile interior component for Japanese auto maker in Europe and the US wereincreased.
As a result, net sales were ¥6,132 million (increased by 7.3% from a year earlier).
5

(Unaudited)(2) Overview of Financial Position
Total assets came to ¥48,059 million, increased by ¥4,586 million from a year earlier.
Total current assets came to ¥27,704 million, decreased by ¥329 million from a year earlier. This change wasmainly due to increase in notes and accounts receivable ¥1,210 million, commercial goods and finished goods¥1,049 million, and decrease in cash and deposits ¥2,892 million.
Total fixed assets came to ¥20,345 million,increased by ¥4,920 million from a year earlier. This change wasmainly due to increase in building and structures ¥2,232 million, land ¥1,805 million, and goodwill ¥468 million.
Total current liabilities came to ¥7,926 million, increased by ¥974 million from a year earlier. This change wasmainly due to increase in current portion of long-term debt ¥588 million, and notes and accounts payable ¥183
million.
Total fixed liabilities came to ¥7,173 million, increased by ¥3,267 million from a year earlier. This change wasmainly due to increase in long-term debt ¥3,667 million.
Total net assets came to ¥32,959 million, increased by ¥344 million from a year earlier. Besides, share holders’equity ratio was 68.5%, decreased by 6.4% from a year earlier.
(3) Overview of Cash Flows
The overall situation regarding cash flow during the fiscal year as follow:[Cash flows from operating activities]
Net cash provided by operating activities was ¥626 million (¥1,802 million provided in the same period of theprevious fiscal year). This change was mainly due to acquisition of net income before taxes.
[Cash flows from investing activities]
Net cash used in investing activities was ¥5,171 million (¥2,939 million provided in the same period of theprevious fiscal year). This change was mainly due to purchase of tangible fixed assets and investments in
subsidiaries resulting in change in scope of consolidation.
[Cash flows from financing activities]
Net cash provided by financing activities was ¥2,303 million (¥2,572 million used in the same period of theprevious fiscal year). This change was mainly due to proceeds from long-term loans and dividends payout.
As a result of above, cash and cash equivalent was ¥8,525 million, decreased by ¥2,250 million from a year
earlier.
The following table shows financial indicators associated with cash flows.
FY2016FY2017FY2018Equity ratio

71.6%

74.9%

68.5%

Equity ratio (market value basis)

55.7%

66.4%

46.5%

Interest-bearing debt / cash flow ratio

180.8%

89.4%

896.1%

78.3

336.7

109.8

Interest coverage ratio(Note)
Equity ratio = Equity capital / Total assets
Equity ratio (market value basis) = Market capitalization / Total Assets
Interest-bearing debt / cash flow ratio = Interest-bearing debt/net cash provided by operating activities
Interest coverage ratio = Operating cash flows / Interest paid
*Each indicator is calculated on a consolidated basis.
*Market capitalization is based on the year-end share price multiple by the number of shares issued
and outstanding at year-end not including treasury stocks.
*Operating cash flows refers to net cash provided by operating activities in the consolidated statementof cash flows.
*Interest-bearing debt includes bonds and loans payable on the consolidated balance sheet.
*The interest payments use the interest paid as recorded in the consolidated statement of cash flows.

6

(Unaudited)(4) Outlook for the next fiscal year
Our group set and has promoted 『Create Morito’s existence value, Realize “New Morito Group”』under the 7th
mid-term management plan “Make it happen, We develop our future！！！” (December 1, 2015 throughNovember 30, 2018). As we have already announced, MORITO CO., LTD. will transit to a holding company
structure on June 1, 2019. Accordingly, we will accelerate to enhance our business with create a new mid-term
management plan under new company.
The forecast for consolidated results for the fiscal year of 2019 is net-sales ¥47,000 million yen, operating
income ¥1,900 million, ordinary profit ¥1,900 million and net income ¥1,400 million (Exchange rate: US$1.00 =¥111.88).
(5) Basic policy on Payment of Dividends
The company’s basic dividend policy is to return the profit to our shareholders by reinforced financial groundand improved profitability. In addition, we will use the internal reserve to invest, and M&A for the long-term
growth in the future.
Dividend was distributed in a manner that reflects the consolidated company result and financial standing.
・Continuous dividends payment
・Maintain DOE 1.5%
・Basic policy of dividend payout ratio more than 50%(However, payment dividend will be determined in consideration of the impact in the case of that profit(loss)
attributable to owners of parent of the fiscal year fluctuates significantly due to extraordinary factors.)
The company will consider purchase and retirement of treasury stock to enrich shareholder return promptly,
based on the company’s financial situation and share price.
During this fiscal year, we scheduled to propose the general meeting of shareholders held on February 27,
2019, to payout ¥12.5 (including ¥0.5 for commemorative dividends) per share as dividend of year-ended. As aresult, dividends for the subject fiscal year amount to ¥25 (including ¥1 for commemorative dividends) per
share including the interim dividends of ¥12.5 (including ¥0.5 for commemorative dividends) per share.
For next fiscal year, we plan each ¥13 for both of FY2019 Second quarter-end and FY2019 fiscal year end
dividends. A total dividend is ¥26 per share.

7

(Unaudited)

2. Organization of the group
Our group consists of the parent company, 23 subsidiaries and 1 affiliate company. The group’s main businessis sales and manufacture of materials for daily-life: including apparel materials, parts for automotive, life style
goods, and rental and cleaning of kitchen appliances etc.
◎ Consolidated subsidiaries: 20 companies
company○:Non-consolidated subsidiaries: 3 companies□:Affiliates: 1◎ MORITO SCOVILL HONG KONG Co., LTD.: Selling of component of apparel and consumer products◎ MORITO (SHENZHEN) CO., LTD.: A subsidiary of MORITO SCOVILL HONG KONG Co., LTD.(100%)

Manufacturing of component of apparel and consumer products◎ TAIWAN MORITO CO., LTD.: Selling of component of apparel and consumer products.
◎ KANE-M SHANGHAI CO., LTD.: Selling of component of apparel and consumer products.
◎ KANE-M, INC.: Selling of component of consumer products.
◎ MORITO (EUROPE) B.V.: Selling of component of apparel and consumer products.
◎ KANE-M DANANG CO., LTD.: Selling and manufacturing of component of apparel and consumer products,

operation of rental factories.
◎ KANE-M (THAILAND) CO., LTD.: Selling of component of apparel and consumer products..
◎ SHANGHAI NEW WORLD MATEX INTERNATIONAL TRADE CO., LTD.: A subsidiary of MATEX INC.

(100%). Manufacturing and selling of apparel parts, design and copying to Chinese and overseas.
○ MATEX BANGKOK CO., LTD.: A subsidiary of MATEX INC. (100%). Manufacturing and selling of apparelparts, design and copying to Thailand and overseas.
◎ MORITO SCOVILL AMERICAS, LLC.: Manufacturing and selling of component of apparel and consumer
products.
◎ GSG (SCOVILL) FASTENERS ASIA LIMITED: A subsidiary of MORITO SCOVILL AMERICAS, LLC.
(100%). Selling of component of apparel and consumer products.
◎ SCOVILL FASTENERS UK LIMITED: A subsidiary of MORITO SCOVILL AMERICAS, LLC. (100%). Sellingof component of apparel and consumer products◎ SCOVILL FASTENERS INDIA PVT. LIMITED: A subsidiary of MORITO SCOVILL AMERICAS, LLC. (100%).
Selling of component of apparel and consumer products○ MORITO SCOVILL MEXICO S.A. de C.V.: A subsidiary of KANE-M, INC. (99%) and MORITO SCOVILLAMERICAS, LLC.. Selling of component of automobile and apparel.
◎ ACE INDUSTRIAL MACHINERY CO., LTD.: Rental service, selling and cleaning of kitchen appliance◎ THREE RUNNERS CO., LTD.: Selling and manufacturing of sports supporter.
◎ MATEX INC.: Manufacturing and designing apparel component, HP designing and producing and DTP
printing.
○ 52DESIGN CO., LTD.: Manufacturing and selling of bags, accessories, clothes, and miscellaneous goods.
◎ MANEUVERLINE CO., LTD.: Imports and sells goods for marine leisure, snowboarding, and skateboarding.
◎ CANVAS CO., LTD.: A subsidiary of MANEUVERLINE CO., LTD.(100%). Imports and sells goods for
Apparel.
◎ FUSION CO., LTD.: A subsidiary of MANEUVERLINE CO., LTD.(100%). Imports and sells goods forsnowboarding.
◎ NIPPON SPORTS SUPPLY CO., LTD.: A subsidiary of MANEUVERLINE CO., LTD.(100%). Imports andsells goods for marine leisure.
□ Kuraray Fastening Co., Ltd.: Selling and manufacturing of hook and loop fastener.
(Note 1) The results of MANEUVERLINE CO., LTD. and its subsidiaries, which acquired in April 2, 2018, areincluded in the consolidated subsidiary from consolidated FY2018. Besides, MANEUVERLINE CO.,LTD. merged NIPPON SPORTS SUPPLY CO., LTD. on December 1, 2018.
(Note 2) One of business of GSG (SCOVILL) FASTENERS ASIA LIMITED has been transferred to MORITO
INDUSTRIAL CO., (H.K.) LTD. on October 1, 2018. Therefore, company name of “MORITO
INDUSTRIAL CO., (H.K.) LTD.” changed to MORITO SCOVILL HONG KONG COMPANY LIMITED.
(Note 3) One of business of KANE-M, INC. has been transferred to GSG FASTENERS, LLC. on October 1,
2018. Therefore, company name of “GSG FASTENERS, LLC.” changed to MORITO SCOVILLAMERICAS, LLC.

8

(Unaudited)Business Flow Chart

9

(Unaudited)

3. Management Policy(1) Basic Management Policy
We manage business under the corporate principle of ‘DESIGN YOUR BRIGHT FUTURE WITH OURVARIOUS PARTS’.
To enhance the sense of unity and centripetal force, we define and infiltrate our values which are existing inMorito’s employers and employees as implicit knowledge as “MORITO Value”, to all of Morito’s staffs, and werealize new value creation which is not caught in habit.
(2) Target Indicator
Our targets to be achieved at the FY 2019 are as below:
Consolidated sales: 47 billion yen
Consolidated operating sales: 1.9 billion yen.
(3) Medium and Long-Term Management Strategy
We are addressing realization of create Morito’s Value which era needs and enhancement of group revenue
by global expansion, under management vision『Create Morito’s existence value, Realize “New Morito Group”』.
We will transit to a holding company structure on June 1, 2019, then will create a new mid-term management
plan under new company.
(4) Issues to be addressed
We address following subjects as our business challenges to enhance our corporate values.
1. Expansion and strengthening our group revenue
We will separate organization into group management and promotion business to flexibly operate business, atthe same time, allocate corporate resource with middle and long term prospect of group management, undertransition to a holding company structure.
Furthermore, strengthening plan and development with domestic and global business partners, andindustry-academic collaboration. At the same time, establish global production, purchase, and stock based onsales strategy. At the beginning, strength domestic logistic to minimize logistic costs. And we actively invest to
strength and expand of group revenue, enhance sales tool, capital investment, new base.
2. Strengthen group financial function
After transition to a holding company, we delegate an authority to operating company in order to flexibly
operate business, moreover strengthen group financial function and manage properly financial risk to build
structure which able to operate global cash management system.
3. Strengthening internal control
We consider strengthening internal control as one of significant task to address after a holding company. We
and corporate governance including strength business management control and compliance, and fulfill
accountability to all of stakeholders through IR activity. We promote activation of diversity of management tocorrespond low birthrate and longevity, population decrease, and promote of female and foreign national
employees.
(5) Other Material Matters
Nil
4. Basic concept concerning the selection of accounting standards
We keep adopting Japan standard financial report for easy comparison with other companies for certain
moment. For IFRS, we will consider to adopt it with various world and economic situation.

10

(Unaudited)

5. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheets
FY 2017

FY 2018(As of November 30, 2017) (As of November 30, 2018)
Thousands of yen
Thousands of yen
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Commercial goods and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Building and structures
Accumulated depreciation
Building and structures (net)
Machinery and delivery equipment
Accumulated depreciation
Machinery and delivery equipment (net)
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures (net)Land
Lease assets
Accumulated depreciation
Lease assets (net)
Construction-in-process-in-process
Total tangible fixed assets
Intangible fixed assets
Goodwill
Lease assets
Other Intangible fixed assets
Total intangible fixed assets
Investments and other fixed assets
Investment securities
Long-term loans
Deferred tax
Net defined benefit asset
Other fixed assets
Allowance for doubtful accountTotal investments and other fixed assets
Total fixed assets
Deferred assets
Total assets

11

12,235,613
10,797,872
3,714,499
196,973
393,923
151,765
578,315△35,215
28,033,747

9,343,274
12,008,498
4,764,286
236,619
405,985
124,068
859,513△38,224
27,704,021

4,783,454△2,610,342
2,173,111
1,775,364△1,090,214
685,149
2,036,686△1,670,066
366,619
2,526,981
273,841△153,817
120,024
11,757
5,883,643

7,510,858△3,105,590
4,405,268
2,000,490△1,280,361
720,129
2,173,280△1,672,556
500,723
4,332,821
219,354△117,899
101,454
86,42010,146,818

2,728,172
151,829
1,124,519
4,004,521

3,196,351
54,645
1,101,569
4,352,566

4,551,840
100,176
44,297289,728
621,231△70,037
5,537,236
15,425,400
14,00443,473,152

4,727,033
166,000
44,869237,765
745,652△75,148
5,846,172
20,345,558
9,802
48,059,383

(Unaudited)

FY 2017

FY 2018(As of November 30, 2017)(As of November 30, 2018)
Thousands of yen
Liabilities
Current liabilities
Notes and accounts payable
Short-term loans payable
Current portion of bonds
Current portion of long-term debt
Accrued tax payable
Reserve for bonuses
Reserve for director’s bonuses
Other current liabilities
Total current liabilities
Fixed liabilities
Bonds payable
Long-term debt
Deferred tax
Deferred tax assets for revaluation
Provision for retirement benefit by stock
Provision for director’s retirement benefit
Provision for director's retirement benefit by stock
Provision for environmental measures
Net defined benefit liability
Other fixed liabilities
Total fixed liabilities
Total liabilities
Net Assets
Shareholders' equity
CapitalCapital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Difference in revaluation of land
Foreign currency translation adjustment
Remeasurement of defined benefit plans
Total other comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

12

Thousands of yen

4,317,325
50,000400,000
161,081
481,935
208,130
66,7991,266,606
6,951,879

4,500,593
200,000
400,000
749,146
128,612225,23156,9291,665,881
7,926,394

1,000,000－
1,224,545
351,21124,761
41,08351,552
20,217
916,630
276,133
3,906,135
10,858,014

600,000
3667331
1,095,407
329,031
26,501
48,58371,04020,367
894,881420,632
7,173,776
15,100,171

3,532,492
3,498,724
24,713,167△2,122,115
29,622,267

3,532,492
3,498,724
25,277,180△2,118,444
30,189,951

1,577,017△1,203621625789883△28,110295921133,658－32,615,138
43,473,152

1,409,695
451
571,368
802,769△68,550
2,715,733
53,526－32,959,212
48,059,383

(Unaudited)(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
FY 2017
FY 2018(December 1, 2016 through (December 1, 2017 throughNovember 30, 2017)
November 30, 2018)
Thousands of yen
Thousands of yen
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
SalaryBonus
Welfare expense
Retirement benefit
Provision of director’s bonus
Provision of directors’ retirement benefits
Provision for board incentive plan
Postage
Freightage and packing expense
Provision of allowance for doubtful accountCommission paid
Rental expense
Depreciation
Other selling, general and administrative expense
Total selling, general and administrative expense
Operating Income
Non-operating income
Interest received
Dividends received
Rent on real estateCommission received
Equity in earnings of affiliates
Other non-operating income
Total non-operating income
Non-operating expenses
Interest paid
Cash discount on sales
Depreciation expense of assets lentForeign Exchange Loss
Others non-operating expense
Total non-operating expense
Ordinary Income
Extra ordinary income
Gains on sales of fixed assets
Gains on sales of investment securities
Total extra ordinary income
Extra ordinary loss
Loss on sales of fixed assets
Loss on disposal of fixed assets
Impairment loss
Loss of business restructuring
Loss on golf membership rights
Total extra ordinary loss

13

41,388,461
30,245,702
11,142,759

43,943,632
32,135,727
11,807,904

3,097,032
590,211
781,530
185,361
67,137
10,65016,492
136,259
1,245,748
3077
655,541
409,564
300,403
1,936,062
9,435,073
1,707,685

3,248,321
619,448
862,182
150,251
55,231
7,500
19,488135,206
1,447,845
4,875
795,147
390,663
330,284
2,016,047
10,082,494
1,725,409

27,562
72,39747,303
1,016
44,202
51,577
244,060

25,99087,181
40,578772
66,79661,435
282,755

5,675
83,912
9,709
4,211
144,890
248,398
1,703,347

5,801
82,83039,227
19,77370,306217,940
1,790,224

3,292,482－
3,292,482

36,4099405
45,81484,038134,021405,338
98,897700
722,996

273
21,964－43,420－65,659(Unaudited)
FY 2017
FY 2018(December 1, 2016 through (December 1, 2017 throughNovember 30, 2017)
November 30, 2018)
Thousands of yen
Thousands of yen
Net income before taxes and other adjustment
Corporate, inhabitant and business taxes
Adjustments to corporate and other taxes
Total income taxes
Income before minority interest
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

4,272,832
833,633
133862
967,495
3,305,337－
3,305,337

1,770,379
575,466△62,440
513,026
1,257,353－
1,257,353

Consolidated Statements of Comprehensive Income
FY 2017
FY 2018(December 1, 2016 through (December 1, 2017 throughNovember 30, 2017)
November 30, 2018)
Thousands of yen
Thousands of yen
Income before income taxes
Other comprehensive income
Unrealized gain(loss) on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Adjustments to retirement benefit
Equity equivalent to equity method affiliate
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attribute to the parent
Comprehensive income attribute to the minority shareholders

14

3,305,337

1,257,353

240,971△2,064
1,253,368
84,871△0
1,577,146
4,882,483△167,322
1,654
12,885△40,439
1△193,220
1,064,132

4,882,483－

1,064,132－

(Unaudited)(3) Consolidated Statements of Changes in Shareholders’ Equity
FY2017 (December 1, 2016 through November 30, 2017)(Thousands of yen)

Shareholders’ Equity

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

Capital stock

CapitalsurplusRetainedearnings

Treasury
stock

Total
Shareholders’equity3,532,492

3,498,724

23,966,197△1,230,960

29,766,453

Dividends from surplus△656,304△656,304

Profit (loss) attributableto owners of parent

3,305,337

3,305,337

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

Disposal of treasury stock

976

976

Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders’ equity
Total changes of items
during the period
Balance at the end ofcurrent period△1,902,063△1,902,063－－

746,969△891,155△144,185

3,532,492

3,498,724

24,713,167△2,122,115

29,622,267

Accumulated other comprehensive income

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

Valuationdifference on
available-forsale
securities

Deferred
gains orlosses onhedgesDifference inrevaluation ofland

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income1,336,046

861△1,280,438△463,484△112,982△519,998

Stock
optionNoncontrollingshareholders'equity14,408－

Total net
asset

29,260,863

Dividends from surplus△656,304

Profit (loss) attributableto owners of parent

3,305,337

Purchase of treasury stock△892,131

Disposal of treasury stock976

Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders’ equity
Total changes of items
during the period
Balance at the end ofcurrent period△1,902,063

240,971△2,064

1,902,063

1,253,368

84,871

3,479,210

19,250240,971△2,064

1,902,063

1,253,368

84,871

3,479,210

19,250－3,354,274

1,577,017△1,203621,625

789,883△28,1102,959,211

33,658－32,615,138

15

3,498,460

(Unaudited)

FY2018 (December 1, 2017 through November 30, 2018)(Thousands of yen)

Shareholders’ Equity

Balance at the beginning ofcurrent period

Capital stock

CapitalsurplusRetainedearnings

3,532,492

3,498,724

24,713,167

Total
Shareholders’equityTreasurystock△2,122,11
5

29,622,267

Changes of items during
the period
Dividends from surplus△743,597△743,597

Profit (loss) attributableto owners of parent

1,257,353

1,257,353

Purchase of treasury stock

－
3,670

Disposal of treasury stockReversal of revaluation
reserve for land
Net changes of items otherthan shareholders’ equity
Total changes of items
during the period
Balance at the end ofcurrent period

50,257－－564,0123,532,492

3,498,724

25,277,180

3,670
50,257

3,670△2,118,44
4

567,683
30,189,951

Accumulated other comprehensive income

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

Valuationdifference on
available-forsale
securities

Deferred
gains orlosses onhedgesDifference inrevaluation ofland

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income1,577,017△1,203621,625

789,883△28,1102,959,211

StockoptionNoncontrollingshareholders'equity33,658－

Total net
asset

32,615,138

Dividends from surplus△743,597

Profit (loss) attributableto owners of parent

1,257,353

Purchase of treasury stock－

Disposal of treasury stock

3,670

Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders’ equity
Total changes of items
during the period
Balance at the end ofcurrent period

50,257△167,322

1,655△50,257

12,885△40,439△243,477

19,868－△223,609△167,322

1,655△50,257

12,885△40,439△243,477

19,868－344,074

1,409,695

451

571,368

802,769△68,550

2,715,733

53,526－32,959,212

16

(Unaudited)(4) Consolidated Cash FlowsFY 2017

FY 2018(December 1, 2016 through (December 1, 2017 throughNovember 30, 2017)
November 30, 2018)
Thousands of yen
Thousands of yen

Cash flows from operating activities
Income (loss) before income taxes
Depreciation of amortization
Impairment loss
Depreciation of goodwill
Change in provision for bonus
Changes in net defined benefit asset
Changes net defined benefit liability
Change in reverse for retirement benefits for officers
Changes in reverse for employee stock ownership plan
Changes in board incentive plan
Change in allowance for doubtful accounts
Interest income and dividends income
Interest paid
Equity in net income of affiliates
Gains from sale of fixed assets
Gains from sale of investment securities
Loss on retirement of noncurrent assets
Loss of restructuring
Change in notes and accounts
Change in inventory
Change in account payable
OthersSubtotal
Proceed from interest and dividends income
Payment of interest
Payment of corporate tax
Net cash(used in)provided by operating activities
Cash flows from investing activities
Decrease in time deposit
Increase in time deposit
Purchase of investment securities
Increase of sale for investment securities
Purchase of stocks of affiliates
Purchase of tangible fixed assets
Proceeds from sale for tangible fixed assets
Purchase of intangible assets
Proceeds from loans receivable
Payments of loans receivable
Purchase of investments in subsidiaries resulting inchange in scope of consolidation
OthersNet cash provided by (used in) investing activities

17

4,272,832
675,401
405,338
225,667
25,28915,70637,414
10,6507,386
16,492△2,734△99,960
5,675△44,202△3,208,443－
134,02198,897
98,663△34,102△175,568△13,9742,450,452
111,196△5,353△754,108
1,802,187

1,770,379
714,633－
208,075
7,701△9,520△18,553
7,500
1,739
19,488
1,973△113,171
5,801△66,796△36,135△9,40521,96443,420△699,692△562,287
13,713
262,508
1,563,338
114,891△5,709△1,045,732
626,787△531,728
251,723△65,769
117,473△57,121△600,962
3,933,854△124,290
56,838－△540,206
1,261,189△139,863
13,383△101,442△3,556,622
154,274△69,556
86,966△100,000－△2,154,961△40,6452,939,372△24,580△5,171,418

(Unaudited)
FY 2017

FY 2018(December 1, 2016 through (December 1, 2017 throughNovember 30, 2017)
November 30, 2018)
Thousands of yen
Thousands of yen

Cash flows from financing avtivities
Changes in short-term debt
Repayments of lease obligations
Proceeds from long-term loans
Repayment of long-term loans
Redemption of bonds
Proceeds from sale from treasury stock
Payments to acquire treasury stock
Payments of dividends
Net cash used in financing activities
Effects of exchange rate on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at fiscal year-end△130,000△119,304－△375,396△400,000
976△892,131△656,304△2,572,159
284,475
2,453,875
8,322,707
10,776,583

18－△82,729
4,100,000△571,962△400,000
1,870－△743,597
2,303,581△9,774△2,250,823
10,776,583
8,525,759

(Unaudited)(5) Notes regarding Consolidated Financial Statements(Notes on assumption of going concern)
Not applicable.

19

(Unaudited)(Business Combinations)<Business combinations through acquisition>
1. Outline of business combination(1) Name of the acquired company and its business
MANEUVERLINE CO., LTD.

Import and sell of goods for Marine leisure, Snowboarding, and apparel supplies.
(2) Main reasons for the business combination
Morito Group has been steadily developing business so far with its basic policy of management
specializing in apparel-related accessories for clothing and footwear, and consumer products for personal
belongings.
We position M&A as one of the priority measures under the 7th mid-term management plan. Our target of
M&A is that the business of the target company are within the scope of our organic business area or its
surrounding area, a niche top, its stability, and some synergies with our business.
On the other hand, although the Company is maintaining a very stable achievement in the wholesaleindustry as a top runner in importing and selling goods for marine leisure, snowboarding, apparel supplies,
etc., the Company was heirless. Then, as a result of these, the speculation of two companies matched.
In addition, we anticipate the synergy of switching accessories used for products that the Company
purchases from third-party to our core products such as metal, plastic and fiber accessories, or of anincrease opportunities for sales at each other's sales channels.
(3) Date of business combination
April 2, 2018(4) Legal form of the business combinations
Acquisition of 100% share of MANEUVERLINE CO., LTD.

(5) Name of the entity after the business combination
No changes(6) Percentage share of voting rights of acquired entity
100%(7) Main reason for deciding to acquire the company
It is because MORITO CO., LTD. has acquired 100% share of MANEUVERLINE CO., LTD. in cash.
2. Period of the acquired company’s financial results included in the consolidated statements of income

The results from April 1, 2018 to September 30, 2018 of MANEUVERLINE CO., LTD. are included in the
consolidated income statement for Consolidated Financial Results of the FY2018.
3. Acquisition cost of the acquired company

Consideration for the acquisition company

Cash (incl. accounts payable)

Acquisition cost of the acquired company

3,342,715
3,342,715

thousand yen
thousand yen

4. Main acquisition related item and its expense
Advisory Fee
17,619 thousand yen
5. Goodwill(1) Amount of goodwill
661,478 thousand yen
This amount was the provisionally calculated amount because allocation of acquisition cost has notcompleted at the end of the third quarter of consolidated accounting period of FY2018. However, its
allocation has completed.
The followings was revised amount of goodwill.
Goodwill (before revised)
Goodwill (after revised)861,478
661,478

thousand yen
thousand yen(2) Reason for goodwill
We accounted for the difference between the acquisition cost and net assets of the acquired company as
goodwill.

20

(Unaudited)(3) Method and term to amortize goodwill
Straight-line method over 10 years
6. Amount and breakdown of assets and liabilities accepted at the date of acquisition
Current assets
2,145,733 thousand yen
Fixed assets
1,870,430 thousand yen
Total assets
4,016,163 thousand yen
Current liabilities
745,603 thousand yen
Fixed liabilities
589,322 thousand yen
Total liabilities
1,334,926 thousand yen
7. Impact on the consolidated income statement for consolidated fiscal year of 2018 under the assumptionthat business combination has completed at the beginning of consolidated fiscal year of 2018.
We have not calculated due to difficult to reasonable calculation.

21

(Unaudited)(Segment Information)
1. Fiscal Year 2017 (December 1, 2016 through November 30, 2017)
The information on net sales, income or loss, assets and other items by reportable segment(Thousands of yen)

Reportable Segment
Japan

Asia

EU and US

Total

Adjustment(Note 1,3)

Consolidated
Statement
Amount(Note 2)Net Sales
Sales to external customers
28,466,578
7,205,020
5,716,863
41,388,461－
41,388,461
Inter segment sales and transfer
2,343,603
2,474,860
58,6984,877,162△4,877,162－
Total
30,810,181
9,679,880
5,775,562
46,265,624△4,877,162
41,388,461
Segment income
1,314,413
538,441
164,260
2,017,114△309,429
1,707,685
Segment asset
27,225,575
6,995,578
7,057,483
41,278,638
2,194,513
43,473,152
Other
Depreciation
347,491
147,115
180,794
675,401－
675,401
Increase in tangible fixed assets
626,539
112,881111,908
851,329
851,329－(Notes)1. Adjustment of △309,429 thousand yen includes △314,992 thousand yen corporate expenses that are notdistributed to each reportable segment and other 5,562 thousand yen.
2. The amounts for income or losses in the reportable segments were subsequently adjusted with the amount ofoperating income on the consolidated profit and loss statement.
3. The adjustment for segment asset includes elimination of intersegment transaction △10,114,614 thousand yen
and corporate asset 12,309,128 thousand yen that have not been distributed to reportable segment. Corporate
assets consist mainly of assets not belonging to specific segment (cash and cash equivalent and investments
in securities) and assets related to administrative operations..
2. Fiscal Year 2018(December 1, 2017 through November 30, 2018)(1) The information on net sales, income or loss, assets and other items by reportable segment(Thousands of yen)

Reportable Segment
Japan

Asia

EU and US

Total

Adjustment(Note 1,3)

Consolidated
Statement
Amount(Note 2)Net Sales
Sales to external customers
31,326,136
6,484,696
6,132,799
43,943,632－
43,943,632Inter segment sales and transfer
2,515,242
3,345,322
36,064
5,896,629△5,896,629－
Total
33,841,378
9,830,018
6,168,864
49,840,262△5,896,629
43,943,632
Segment income
1,361,395
469,331305,800
2,136,527△411,117
1,725,409
Segment asset
35,523,056
6,837,501
7,227,915
49,588,473
1,529,090
48,059,383
Other
Depreciation
400,713
144,851
169,067
714,633－
714,633
Increase in tangible fixed assets
3,464,358
200,988
73,363
3,738,710
3,738,710－(Notes)1. Adjustment of △411,117 thousand yen includes △277,815 thousand yen corporate expenses that are notdistributed to each reportable segment and other △133,302 thousand yen.
2. The amounts for income or losses in the reportable segments were subsequently adjusted with the amount ofoperating income on the consolidated profit and loss statement.
3. The adjustment for segment asset includes elimination of intersegment transaction △9,925,250 thousand yen
and corporate asset 8,396,160 thousand yen that have not been distributed to reportable segment. Corporate
assets consist mainly of assets not belonging to specific segment (cash and cash equivalent and investments
in securities) and assets related to administrative operations.
(2) The information on impairment loss of fixed assets and goodwill by reportable segment<Major change on amount of goodwill>
For details, please refer to “(Business combinations):Buiness combinations through acquisition”.
22

(Unaudited)(Per share data)

FY2017(December 1, 2016 throughNovember 30, 2017)
1,184.79 yen
119.29 yen
119.14 yen

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

FY2018(December 1, 2017 throughNovember 30, 2018)
1,196.17 yen
45.71 yen
45.62 yen

(Notes)1. No statement is made of the amount of current net profit per share after adjusting for residual stocks because there
were no residual stocks that had a dilution effect.
2. The amount of treasury stock to calculate the net assets per share and the weighted-average number of commonshares to calculate net income per share and net income per share after adjustment for dilutive securities included
the company’s shares owned by Trust & Custody Services Bank, Ltd (for J-ESOP, FY2017 387 thousand shares,
FY2018 377 thousand shares), and The Master Trust Bank Of Japan, LTD ( for BIP, FY2017 173 thousand shares,
FY2018 173 thousand shares).
(Notes)The basis for calculating
1. Net assets per share
FY2017(As of November 30, 2017)

FY2018(As of November 30, 2018)

32,615,138

32,959,212

33,65853,526(33,658)(53,526)－－

32,581,479

32,905,685

Number of issued stock (Thousand shares)

30,80030,800

Number of treasury stock (Thousand shares)

3,300

3,290

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

27,49927,509Item
The total net assets in the consolidated balance
sheet (Thousands of yen)
Deducted amount(Thousands of yen)

from

total

net

asset

(Stock Option (Thousands of yen))(Non-controlling interests (Thousands of yen))
The net assets associated with common stock(Thousands of yen )(Note)
The amount of treasury stock of common stock to calculate the net asset per share is included the stock of Trust &Custody Services Bank, Ltd. and Master Trust Bank Of Japan, LTD owned.
2. Net income per share and Diluted net income per share
Item

FY2017(December 1, 2016 throughNovember 30, 2017)

FY2018(December 1, 2017 throughNovember 30, 2018)

3,305,337

1,257,353－－

3,305,337

1,257,353

Net income per share

Profit (loss) attributable to owners of parent(Thousands of yen)
Share unallocated(Thousand shares)tocommonstock

Profit (loss) attributable to owners of parent
relating to common stock23

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

27,70927,505

Net income adjustment attributable to parent
company shareholder (Thousands of yen)－－

The number of increase of common stock(Thousand share)

33

53(Stock Option (Thousands of yen))

33

53

－

－

Diluted net income per share adjusted

Details of shares not included in calculation of
fully diluted net income per share due tonon-dilutive effect(Note)
The weighted-average number of common shares to calculate the net income per share is included the stock ofTrust & Custody Services Bank, Ltd. and Master Trust Bank Of Japan, LTD owned.

(Material Subsequent Event)<Conclusion of Absorption-type Company Split Agreement for the purpose of transition to a holding company
structure>
MORITO CO., LTD. has resolved at the Board of Directors’ meeting held on November 15, 2018, to establish
MORITO JAPAN CO.,LTD. which is the Company’s wholly-owned subsidiary as company sprit preparationcompany due to transition to a holding company structure on June 1, 2019, then MORITO JAPAN CO., LTD. wasestablished on December 3, 2018.
Furthermore, MORITO CO., LTD. has resolved at the Board of Directors’ meeting held on December 13, 2018, toapproval of conclusion of Absorption-type Company Split Agreement with MORITO JAPAN CO.,LTD. (the“Split”) due to transition to a holding company structure by executing a company split.
MORITO CO., LTD. after the Split will revise business purposes according to business after transition to aholding company on June 1, 2019. The Split will be carried out on condition that approval at the
Shareholder’s Meeting held on February 27, 2019, and permission of the governing agency are obtained.
For details, please refer “Notice regarding Conclusion of Absorption-type Company Split Agreement withtransition to a holding company structure” on December 13, 2018.
6. Others(1) Changes in Senior Managements(i) Changes in President
Not applicable.
(ii) Changes in other officers (scheduled on February 27, 2019)
1. Newly appointed director candidate
Director KIYOMI AKUI
2. Retiring director
Not applicable
3. Newly appointed auditor candidate
AuditorMOTOSHI ISHIBASHI
4. Retiring auditor
AuditorSATOSHI KOBYASHI

24