Annual Report 2012
For the year ended March 31, 2012

DAIKEN CORPORATION
Registered Head Office:1-1, Inami, Nanto City, Toyama 932-0298, Japan
Phone: +81-763-82-5850
Operational Headquarters:
22F, Dojima Avanza
6-20, Dojima 1-chome Kita-ku, Osaka 530-8210, Japan
Phone: +81-6-6452-6000

DAIKEN CORPORATION

Financial Highlights

Daiken Corporation and Consolidated Subsidiaries
Years ended March 31, 2012, 2011 and 2010

Company ProﬁleSince the founding of the company in September 1945, the core focus ofour business has been the development and provision of materials forresidential housing and construction. Daiken’s corporate activities cover abroad and diverse range, including the manufacturing and sales ofmaterials for residential housing and construction as well as materials forindustrial use. These activities have led Daiken to grow into one of theworld’s foremost comprehensive manufacturers of building materials.
Through its highly-motivated research and development, Daiken is
continuously working with the latest materials, concepts and technologies.
With a core of technological and material-supply capabilities for building
materials, the very basis for the housing ﬁeld in which Daiken specializes,
Daiken shall continue to provide its customers with new generations oftechnologies and products.

Millions of Yen and Thousands of U.S. Dollars

Net sales ............................................
Operating income ..............................
Ordinary income ................................
Net income ........................................
Net assets ..........................................
Total assets ........................................

2012

2011

2010

2012

¥ 151,209
4,542
4,600
874
36,949125,469¥ 141,506
4,349
4,373
1,375
36,839115,969¥ 140,936
3,010
2,819
511
36,663
123,862$ 1,841,093
55,30256,008
10,641
449,884
1,527,687

Yen and U.S. Dollars

Net income per share ........................

¥

6.97

¥

10.88 ¥

4.01

$

0.08

Note: The translations into U.S. dollars are based on $1= ¥82.13, the approximate exchange rate on March 31, 2012
Note: Net income per share is computed based upon the weighted average number of shares of common stock outstanding
during each ﬁscal year.

1

Net sales

Total assets

Net income

Net income per share

Contents
Financial Highlights ..................................... 1
A Message from the President ................... 2
Review of Operations .................................. 4
Topics ......................................................... 6
Highlights ................................................... 7
Consolidated Balance Sheets ....................... 8
Consolidated Statements of Income ............ 10
Consolidated Statements of
Changes in Net Assets .......................... 10
Consolidated Statements ofCash Flows ............................................ 11
Notes Related to Consolidated
Financial Statements .............................. 12

2010

2011

2012

2010

2011

2012

2010

2011

2012

2010

Daiken Corporation

2011

2012

Annual Report 2012

Financial Highlights

Daiken Corporation and Consolidated Subsidiaries
Years ended March 31, 2012, 2011 and 2010

Company ProﬁleSince the founding of the company in September 1945, the core focus ofour business has been the development and provision of materials forresidential housing and construction. Daiken’s corporate activities cover abroad and diverse range, including the manufacturing and sales ofmaterials for residential housing and construction as well as materials forindustrial use. These activities have led Daiken to grow into one of theworld’s foremost comprehensive manufacturers of building materials.
Through its highly-motivated research and development, Daiken is
continuously working with the latest materials, concepts and technologies.
With a core of technological and material-supply capabilities for building
materials, the very basis for the housing ﬁeld in which Daiken specializes,
Daiken shall continue to provide its customers with new generations oftechnologies and products.

Millions of Yen and Thousands of U.S. Dollars

Net sales ............................................
Operating income ..............................
Ordinary income ................................
Net income ........................................
Net assets ..........................................
Total assets ........................................

2012

2011

2010

2012

¥ 151,209
4,542
4,600
874
36,949125,469¥ 141,506
4,349
4,373
1,375
36,839115,969¥ 140,936
3,010
2,819
511
36,663
123,862$ 1,841,093
55,30256,008
10,641
449,884
1,527,687

Yen and U.S. Dollars

Net income per share ........................

¥

6.97

¥

10.88 ¥

4.01

$

0.08

Note: The translations into U.S. dollars are based on $1= ¥82.13, the approximate exchange rate on March 31, 2012
Note: Net income per share is computed based upon the weighted average number of shares of common stock outstanding
during each ﬁscal year.

1

Net sales

Total assets

Net income

Net income per share

Contents
Financial Highlights ..................................... 1
A Message from the President ................... 2
Review of Operations .................................. 4
Topics ......................................................... 6
Highlights ................................................... 7
Consolidated Balance Sheets ....................... 8
Consolidated Statements of Income ............ 10
Consolidated Statements of
Changes in Net Assets .......................... 10
Consolidated Statements ofCash Flows ............................................ 11
Notes Related to Consolidated
Financial Statements .............................. 12

2010

2011

2012

2010

2011

2012

2010

2011

2012

2010

Daiken Corporation

2011

2012

Annual Report 2012

A Message from the President

We herein present our shareholders and persons
concerned a report on the consolidated businessresults for the Daiken Corporation in ﬁscal year
2011.

Business Progress and Results

2

Ryoji Sawaki
Representative Director, President
Chief Executive Ofﬁcer

Daiken Corporation

Annual Report 2012

In regard to the consolidated business results forthe year in review, we achieved net sales totaling¥151,209 million (an increase of 6.9% comparedwith the previous year), operating income of¥4,542 million (an increase of 4.4% comparedwith the previous year), ordinary income of¥4,600 million (an increase of 5.2% comparedwith the previous year) and a net income of ¥874
million (a decrease of 36.4% compared with theprevious year).
With demand from the infrastructure recovery
efforts in the Tohoku area affected by theearthquake coming to the fore, the outlook for
the Japanese economy this ﬁscal year isdominated by the deceleration of economies
overseas that began with the outbreak of theEuropean crisis, as well as stagnating exports dueto the continuing appreciation of the yen. As aresult the overall picture is one of economic
instability.
With regard to the housing market, the market
has been supported by the demand from therecovery effort in the Tohoku region as well as
the Recovery Support/Housing EcoPoint System.
Despite this, in ﬁscal 2011 the number of new
housing starts, with a total of 840,000 units (anincrease of 2.7% on the previous year), is stilltransitioning at a low level.
Under these business conditions, the Daiken
Group has decided to declare a “turnaround andmake outstanding progress” policy and has taken
a leap forward to actively proceed towards
developing areas where growth is predicted, suchas the remodeling market, markets overseas, theindustrial materials market and the engineering
market. Of these areas, in the overseas market
we have expanded our supply of a range of door
products produced by our consolidated subsidiarycompany Daiken Industries (Ningbo) Corporation(Zhejiang Province, China) for Japanesebusinesses. Moreover, in the ﬁeld of industrial
materials, we have worked to expand sales of oureco-friendly base plate products (afforested
timber plywood combined with special MDF), forwhich the primary raw material is MDF.
On the other hand, we have been striving tostrengthen our corporate constitution towards
reforming the company into an organization forgrowth that is capable of making a proﬁt under
severely challenging management circumstances,
as well as working to reduce ﬁxed costs acrossthe Daiken Group as a whole, such as reducing
our total personnel expenses and reforming ourdistribution system.

Issues and Policies for the Future
Looking forward at the prospects for theJapanese economy, there are signs of partial
improvement in personal consumption andcapital investment. Demand from the recovery
effort is tangible, and it is expected that theeconomy will gradually recover. However, anumber of factors continue to weigh on theeconomy, with export growth being hamperedby the high yen and share prices continuing to be
depressed, in addition to the restrictions on
power supply due to the nuclear power station
safety issue. The situation requires carefulmonitoring with regard to the direction that theJapanese economy could take as we move
forward.
With regard to new housing starts, in addition
to the demand for housing from the recovery
efforts following the earthquake, which is
expected to move into high gear, thegovernment continues to support the industry
with its preferential interest rate programs suchas the Recovery Support/Housing EcoPoint
System and Flat 35S, and as a result demand is
expected to be solid going forward.
The Daiken Group wishes to contribute to therecovery effort following the earthquake bycontinuing to ensure a steady supply of building
materials, centering on eco-materials, to themarket. As the market experiences growth, wewill strive to expand our sales by seizing thisturning point as an opportunity to introduce new
products that focus on safety, peace of mind
(earthquake resistance) and energy efﬁciency, as
well as products for the elderly.
Furthermore, our mid-term management plan
started in ﬁscal year 2011 and based on this plan,we will commit management resources toactively match expanding and growing markets,
as we look to expand the scope of our business
operations.
Moreover, we are working to expand our MDF
business and to this end on March 26 weofﬁcially launched our business alliance with
HOKUSHIN Co., Ltd. and we plan to develop
MDF products together, as well as looking toreinforce our supply and sales operations.
Accordingly, for the consolidated businessresults projected for the ﬁscal year ending at theend of March 2013, our goal is to achieve net
sales totaling ¥158,000 million, an operating
income of ¥4,600 million, an ordinary income of¥4,600 million, and a net income of ¥1,200
million.
We sincerely hope that we may continue tolook forward to the support and encouragementof all of our shareholders and persons concerned.

September 2012

Ryoji Sawaki,
Representative Director, President
Chief Executive Ofﬁcer

Daiken Corporation

Annual Report 20123

A Message from the President

We herein present our shareholders and persons
concerned a report on the consolidated businessresults for the Daiken Corporation in ﬁscal year
2011.

Business Progress and Results

2

Ryoji Sawaki
Representative Director, President
Chief Executive Ofﬁcer

Daiken Corporation

Annual Report 2012

In regard to the consolidated business results forthe year in review, we achieved net sales totaling¥151,209 million (an increase of 6.9% comparedwith the previous year), operating income of¥4,542 million (an increase of 4.4% comparedwith the previous year), ordinary income of¥4,600 million (an increase of 5.2% comparedwith the previous year) and a net income of ¥874
million (a decrease of 36.4% compared with theprevious year).
With demand from the infrastructure recovery
efforts in the Tohoku area affected by theearthquake coming to the fore, the outlook for
the Japanese economy this ﬁscal year isdominated by the deceleration of economies
overseas that began with the outbreak of theEuropean crisis, as well as stagnating exports dueto the continuing appreciation of the yen. As aresult the overall picture is one of economic
instability.
With regard to the housing market, the market
has been supported by the demand from therecovery effort in the Tohoku region as well as
the Recovery Support/Housing EcoPoint System.
Despite this, in ﬁscal 2011 the number of new
housing starts, with a total of 840,000 units (anincrease of 2.7% on the previous year), is stilltransitioning at a low level.
Under these business conditions, the Daiken
Group has decided to declare a “turnaround andmake outstanding progress” policy and has taken
a leap forward to actively proceed towards
developing areas where growth is predicted, suchas the remodeling market, markets overseas, theindustrial materials market and the engineering
market. Of these areas, in the overseas market
we have expanded our supply of a range of door
products produced by our consolidated subsidiarycompany Daiken Industries (Ningbo) Corporation(Zhejiang Province, China) for Japanesebusinesses. Moreover, in the ﬁeld of industrial
materials, we have worked to expand sales of oureco-friendly base plate products (afforested
timber plywood combined with special MDF), forwhich the primary raw material is MDF.
On the other hand, we have been striving tostrengthen our corporate constitution towards
reforming the company into an organization forgrowth that is capable of making a proﬁt under
severely challenging management circumstances,
as well as working to reduce ﬁxed costs acrossthe Daiken Group as a whole, such as reducing
our total personnel expenses and reforming ourdistribution system.

Issues and Policies for the Future
Looking forward at the prospects for theJapanese economy, there are signs of partial
improvement in personal consumption andcapital investment. Demand from the recovery
effort is tangible, and it is expected that theeconomy will gradually recover. However, anumber of factors continue to weigh on theeconomy, with export growth being hamperedby the high yen and share prices continuing to be
depressed, in addition to the restrictions on
power supply due to the nuclear power station
safety issue. The situation requires carefulmonitoring with regard to the direction that theJapanese economy could take as we move
forward.
With regard to new housing starts, in addition
to the demand for housing from the recovery
efforts following the earthquake, which is
expected to move into high gear, thegovernment continues to support the industry
with its preferential interest rate programs suchas the Recovery Support/Housing EcoPoint
System and Flat 35S, and as a result demand is
expected to be solid going forward.
The Daiken Group wishes to contribute to therecovery effort following the earthquake bycontinuing to ensure a steady supply of building
materials, centering on eco-materials, to themarket. As the market experiences growth, wewill strive to expand our sales by seizing thisturning point as an opportunity to introduce new
products that focus on safety, peace of mind
(earthquake resistance) and energy efﬁciency, as
well as products for the elderly.
Furthermore, our mid-term management plan
started in ﬁscal year 2011 and based on this plan,we will commit management resources toactively match expanding and growing markets,
as we look to expand the scope of our business
operations.
Moreover, we are working to expand our MDF
business and to this end on March 26 weofﬁcially launched our business alliance with
HOKUSHIN Co., Ltd. and we plan to develop
MDF products together, as well as looking toreinforce our supply and sales operations.
Accordingly, for the consolidated businessresults projected for the ﬁscal year ending at theend of March 2013, our goal is to achieve net
sales totaling ¥158,000 million, an operating
income of ¥4,600 million, an ordinary income of¥4,600 million, and a net income of ¥1,200
million.
We sincerely hope that we may continue tolook forward to the support and encouragementof all of our shareholders and persons concerned.

September 2012

Ryoji Sawaki,
Representative Director, President
Chief Executive Ofﬁcer

Daiken Corporation

Annual Report 20123

Review of Operations

Housing Business4

In regard to the consolidated
business results in this ﬁeld forthe ﬁscal year in review, weachieved net sales totaling¥80,257 million (an increase of
4.9% compared with theprevious year) and an ordinary
income of ¥1,959 million (adecrease of 37.5% comparedwith the previous year).
With regard to the interiormaterials business ﬁeld, where
our focus is on ﬂooringmaterials, in May 2010 weentered into a collaborative
business venture with
Panasonic Electric Works Co.,
Ltd. (currently: Panasonic Corp.)
and together we are working topromote eco-friendly ﬂooringbase materials, as well as
looking to take the market to
the next level. Furthermore, we
are also actively participating in
the Forestry Agency campaign
to promote the use ofdomestically produced timber.

Eco-BusinessWith regard to our homefurnishings and equipment
business, we have madeprogress by actively
strengthening our constitution
through a general cost
reduction program including
distribution costs andprocurement from overseas, inaddition to reducing theamount of stock carried bycreating a system for rapid
completion and delivery oforder-made and special orderproducts. On the sales side, oursales strategy is to meet thevaried demands of ourcustomers and to increasecustomer satisfaction and to

this end we have launched the‘My Selection Series’ and the‘Omoiyari Series’ that allows
elderly customers to choosebuilding materials.
Overall, we are looking tostimulate the housing businessthrough working with builders
and housing construction
corporations with strong sales,
as well as striving to drive down
costs of materials and procured
items. However, costcompetition is ﬁerce in thisbusiness and as a result it is achallenge to secure proﬁt.

In regard to the consolidated
business results in this ﬁeld forthe ﬁscal year in review, weachieved net sales totaling¥46,544 million (an increase of
4.5% compared with theprevious year) and an ordinary
income of ¥2,482 million (anincrease of 88.2% comparedwith the previous year).
With respect to our
eco-business, one of the corebusinesses of the Daiken Group,
due to an increase inconstruction projects involving
the building and condominium
market, net sales of Dai-Lotone
used as a ceiling material forbuildings and shops maintained
the same level as for theprevious consolidated ﬁscal year.
With regard to insulation
board, which is used in tatami
matting and as base materials
for roofs, despite the fact that

due to the sound reputation of
one of our production locations,our products that beneﬁt fromthe Takahagi Plant run by thethe unique characteristics ofTobu Daiken Corporation, waswashi Japanese paper, such as
forced to cease production due
peace of mind, safety andto the natural disaster, our net
durability.
sales in this ﬁeld showed an
The improvement inincrease on the previous
proﬁtability for these products is
consolidated ﬁscal year due tolinked to full-scale production
the demand driven by theand we have shown deﬁnitive
recovery effort.
growth in terms of sales andWith regard to MDF, we haveproﬁt across the whole of ourgrown sales for products such as
eco-related business.
our eco-friendly base plates thathave permeated the Japanese
domestic market and
we started productionof these base plates at
the Aizu Plant run by
the Tobu Daiken
Corporation.
With regard to tatami
mat surfaces, with themarket experiencing
some shrinkage, we are
Daiken-tatami Sukoyaka-kun – tatami mat surfaces
enjoying positive sales
made from washi Japanese paper

Engineering Business
The Omoiyari Series of doors,
aimed at the elderly customer

Safety handrails

The Japanese Wood Series

In regard to the consolidated
business results in this ﬁeld forthe ﬁscal year in review, weachieved net sales totaling¥14,580 million (an increase of
25.5% compared with theprevious year) and an ordinary
loss of ¥54 million (comparedwith an ordinary loss for theprevious ﬁscal year of ¥110
million).
With regard to thecondominium, building andshop market, we have worked
to increase sales bystrengthening our order-based
sales system to accommodate
composite orders. Furthermore,
on October 1, 2011 weestablished the Sendai Branchof Daiken Engineering Co., Ltd.
in order to be able to meet thedemands from the recovery
effort.
Looking at sales turnover,after a period of stagnation thecondominium, building andshop market is on an upward,
recovery trend and we areregistering growth comparedwith the previous consolidated
ﬁscal year.
Despite that, the lack ofconstruction workers has
impacted the market following
the earthquake and cost prices
have risen and this has pushed
us into negative territory interms of proﬁt.

The My Selection Series – dimensions and design made to order

Daiken Corporation

Annual Report 2012

Daiken Corporation

Annual Report 20125

Review of Operations

Housing Business4

In regard to the consolidated
business results in this ﬁeld forthe ﬁscal year in review, weachieved net sales totaling¥80,257 million (an increase of
4.9% compared with theprevious year) and an ordinary
income of ¥1,959 million (adecrease of 37.5% comparedwith the previous year).
With regard to the interiormaterials business ﬁeld, where
our focus is on ﬂooringmaterials, in May 2010 weentered into a collaborative
business venture with
Panasonic Electric Works Co.,
Ltd. (currently: Panasonic Corp.)
and together we are working topromote eco-friendly ﬂooringbase materials, as well as
looking to take the market to
the next level. Furthermore, we
are also actively participating in
the Forestry Agency campaign
to promote the use ofdomestically produced timber.

Eco-BusinessWith regard to our homefurnishings and equipment
business, we have madeprogress by actively
strengthening our constitution
through a general cost
reduction program including
distribution costs andprocurement from overseas, inaddition to reducing theamount of stock carried bycreating a system for rapid
completion and delivery oforder-made and special orderproducts. On the sales side, oursales strategy is to meet thevaried demands of ourcustomers and to increasecustomer satisfaction and to

this end we have launched the‘My Selection Series’ and the‘Omoiyari Series’ that allows
elderly customers to choosebuilding materials.
Overall, we are looking tostimulate the housing businessthrough working with builders
and housing construction
corporations with strong sales,
as well as striving to drive down
costs of materials and procured
items. However, costcompetition is ﬁerce in thisbusiness and as a result it is achallenge to secure proﬁt.

In regard to the consolidated
business results in this ﬁeld forthe ﬁscal year in review, weachieved net sales totaling¥46,544 million (an increase of
4.5% compared with theprevious year) and an ordinary
income of ¥2,482 million (anincrease of 88.2% comparedwith the previous year).
With respect to our
eco-business, one of the corebusinesses of the Daiken Group,
due to an increase inconstruction projects involving
the building and condominium
market, net sales of Dai-Lotone
used as a ceiling material forbuildings and shops maintained
the same level as for theprevious consolidated ﬁscal year.
With regard to insulation
board, which is used in tatami
matting and as base materials
for roofs, despite the fact that

due to the sound reputation of
one of our production locations,our products that beneﬁt fromthe Takahagi Plant run by thethe unique characteristics ofTobu Daiken Corporation, waswashi Japanese paper, such as
forced to cease production due
peace of mind, safety andto the natural disaster, our net
durability.
sales in this ﬁeld showed an
The improvement inincrease on the previous
proﬁtability for these products is
consolidated ﬁscal year due tolinked to full-scale production
the demand driven by theand we have shown deﬁnitive
recovery effort.
growth in terms of sales andWith regard to MDF, we haveproﬁt across the whole of ourgrown sales for products such as
eco-related business.
our eco-friendly base plates thathave permeated the Japanese
domestic market and
we started productionof these base plates at
the Aizu Plant run by
the Tobu Daiken
Corporation.
With regard to tatami
mat surfaces, with themarket experiencing
some shrinkage, we are
Daiken-tatami Sukoyaka-kun – tatami mat surfaces
enjoying positive sales
made from washi Japanese paper

Engineering Business
The Omoiyari Series of doors,
aimed at the elderly customer

Safety handrails

The Japanese Wood Series

In regard to the consolidated
business results in this ﬁeld forthe ﬁscal year in review, weachieved net sales totaling¥14,580 million (an increase of
25.5% compared with theprevious year) and an ordinary
loss of ¥54 million (comparedwith an ordinary loss for theprevious ﬁscal year of ¥110
million).
With regard to thecondominium, building andshop market, we have worked
to increase sales bystrengthening our order-based
sales system to accommodate
composite orders. Furthermore,
on October 1, 2011 weestablished the Sendai Branchof Daiken Engineering Co., Ltd.
in order to be able to meet thedemands from the recovery
effort.
Looking at sales turnover,after a period of stagnation thecondominium, building andshop market is on an upward,
recovery trend and we areregistering growth comparedwith the previous consolidated
ﬁscal year.
Despite that, the lack ofconstruction workers has
impacted the market following
the earthquake and cost prices
have risen and this has pushed
us into negative territory interms of proﬁt.

The My Selection Series – dimensions and design made to order

Daiken Corporation

Annual Report 2012

Daiken Corporation

Annual Report 20125

Topics

TopicsHighlights

1
Establishing an MDF Research Center in Malaysia

On May 2, 2012 Daiken
established an MDF research
center at its manufacturingsubsidiary Daiken Sarawak(Sarawak State, Malaysia). This
research center is the ﬁrst researchfacility of its kind establishedoverseas by a building materials
manufacturer, and the aim of the
facility is to meet the burgeoning
demand for MDF, improve
manufacturing efﬁciency throughdeveloping manufacturing
technologies and also to discover
new uses and purposes for the
product, as well as researching

6
Topicsnew types of MDF with new
functionality.
MDF is a type of wooden board
created by processing the chipsthat are created as residue whenwood is cut and processed. MDF is

widely used in construction, and asa core material for furniture, etc.
Due to environmental controls,
restrictions on logging have
reduced the amount the natural
south sea plywood that is exported
for use in industry.
Environmentallysensitive products suchas MDF have been
adopted as substitutes
and demand continues
to grow for thesewooden boards.

2
Exhibiting at BEX Asia 2011 (Singapore)

Daiken exhibited for the ﬁrst timeat Build Eco Expo (BEX) Asia 2011,
held in Singapore on September
14-16, 2011. The Expo was ouropportunity to introduce ourecologically sensitive ﬂooring andceiling board products, which arekind to the environment throughtheir use of afforestation timber aswell as unutilized resources, topeople involved in the constructionindustry in South East Asia. The
Singapore Government and various
NGOs have come together to host
BEX Asia with its focus onenvironmental concerns. The Expois a showcase of the latest products
and services in the constructionindustry. 2011 was the fourth timethe Expo has been held and at the
Daiken booth we were visited by agreat number of developers andDaiken Corporation

Annual Report 2012

people engaged in the practicalside of construction who showed a
deep interest in our products.
Moreover, Daiken’s ceilingmaterials, which enjoy an excellent
reputation due to their low levelsof formaldehyde emission as wellas their use of highly recyclable

Our door display attracted the interestof expo visitors due to ﬁne designs
and eco-friendly featuresmaterials, were awarded Singapore
Green Label* certiﬁcation from theSingapore Environment Council.

Measures taken by the Daiken Group
contributing to recovery efforts following
the Great East Japan Earthquake
Daiken was one of the ﬁrst in the industry toreact and establish an Earthquake Recovery
Support Ofﬁce (Sendai) on April 28, 2011, andsince then the Company has been involved in avariety of activities to support the recovery effort
and invigorate the affected areas, such as setting
up showrooms as well as holding events at
Daiken plants, etc.

1

Takahagi Plant plays host to a
“Reform Consultation” and the“Tobu Daiken Appreciation Fair”

On August 5-6, 2011, the technical space at the
Tobu Daiken Corporation Takahagi Plant hosted
the ﬁrst “Reform Consultation (a joint TDY
project)”—an event aimed at supporting theregional community and the recovery efforts inthe affected areas. From December 1 to 3, the“Tobu Daiken Appreciation Fair” was also held at
the plant. The ﬁrst two days of the fair werededicated to “Proposals for Clients” and wasattended by 274 client groups. The third and ﬁnal
day was the “Appreciation Fair” which wasattended by 507 people from the local
community.

2

The cities of Ishinomaki in Miyagi Prefecture andIwaki in Fukushima Prefecture sustained
signiﬁcant damage due to the earthquake andtsunami. TOTO, DAIKEN, YKK AP and NORITZ
have come together to collaborate to open ashowroom in both locations. The showroom
showcases and highlights the unique strengths ofeach of the 4 companies, and the showroom willplay an important role at the forefront of therecovery effort as a location for collecting anddisseminating information that is vital to the“rapid product delivery system” as well as
ensuring information travels in a speedy manner.

3
Singapore Green Label-certiﬁed
Daiken Ceiling Board on display* The Singapore Green Labeling Scheme (SGLS) was launched by the newly establishedSingapore Environment Council in 1992 to endorse consumer products and services thathave a reduced impact on the environment. The Green Mark system is also endorses
buildings that have environmentally sensitive features, such as energy-efﬁciency, etc.
Products sporting the Singapore Green Label are identiﬁed as being environmentally sound.

Opening of a Tohoku Area
Collaboration Showroom

Developing activities to promoteearthquake resistance measures

Following the Great East Japan Earthquake,homeowners all over Japan became very
concerned about the earthquake resistance of
their own properties. Moreover, the government
has since become very active in promoting
earthquake resistance for housing. Daiken has
been active across the country in promoting
earthquake resistance retroﬁtting, such asproviding a wide range of information onearthquake resistance retroﬁtting and proposing
solutions based on ﬁtting our ‘Kabe Taisho’Dailite Earthquake Resistant Wall panels, etc.

Daiken Corporation

Annual Report 20127

Topics

TopicsHighlights

1
Establishing an MDF Research Center in Malaysia

On May 2, 2012 Daiken
established an MDF research
center at its manufacturingsubsidiary Daiken Sarawak(Sarawak State, Malaysia). This
research center is the ﬁrst researchfacility of its kind establishedoverseas by a building materials
manufacturer, and the aim of the
facility is to meet the burgeoning
demand for MDF, improve
manufacturing efﬁciency throughdeveloping manufacturing
technologies and also to discover
new uses and purposes for the
product, as well as researching

6
Topicsnew types of MDF with new
functionality.
MDF is a type of wooden board
created by processing the chipsthat are created as residue whenwood is cut and processed. MDF is

widely used in construction, and asa core material for furniture, etc.
Due to environmental controls,
restrictions on logging have
reduced the amount the natural
south sea plywood that is exported
for use in industry.
Environmentallysensitive products suchas MDF have been
adopted as substitutes
and demand continues
to grow for thesewooden boards.

2
Exhibiting at BEX Asia 2011 (Singapore)

Daiken exhibited for the ﬁrst timeat Build Eco Expo (BEX) Asia 2011,
held in Singapore on September
14-16, 2011. The Expo was ouropportunity to introduce ourecologically sensitive ﬂooring andceiling board products, which arekind to the environment throughtheir use of afforestation timber aswell as unutilized resources, topeople involved in the constructionindustry in South East Asia. The
Singapore Government and various
NGOs have come together to host
BEX Asia with its focus onenvironmental concerns. The Expois a showcase of the latest products
and services in the constructionindustry. 2011 was the fourth timethe Expo has been held and at the
Daiken booth we were visited by agreat number of developers andDaiken Corporation

Annual Report 2012

people engaged in the practicalside of construction who showed a
deep interest in our products.
Moreover, Daiken’s ceilingmaterials, which enjoy an excellent
reputation due to their low levelsof formaldehyde emission as wellas their use of highly recyclable

Our door display attracted the interestof expo visitors due to ﬁne designs
and eco-friendly featuresmaterials, were awarded Singapore
Green Label* certiﬁcation from theSingapore Environment Council.

Measures taken by the Daiken Group
contributing to recovery efforts following
the Great East Japan Earthquake
Daiken was one of the ﬁrst in the industry toreact and establish an Earthquake Recovery
Support Ofﬁce (Sendai) on April 28, 2011, andsince then the Company has been involved in avariety of activities to support the recovery effort
and invigorate the affected areas, such as setting
up showrooms as well as holding events at
Daiken plants, etc.

1

Takahagi Plant plays host to a
“Reform Consultation” and the“Tobu Daiken Appreciation Fair”

On August 5-6, 2011, the technical space at the
Tobu Daiken Corporation Takahagi Plant hosted
the ﬁrst “Reform Consultation (a joint TDY
project)”—an event aimed at supporting theregional community and the recovery efforts inthe affected areas. From December 1 to 3, the“Tobu Daiken Appreciation Fair” was also held at
the plant. The ﬁrst two days of the fair werededicated to “Proposals for Clients” and wasattended by 274 client groups. The third and ﬁnal
day was the “Appreciation Fair” which wasattended by 507 people from the local
community.

2

The cities of Ishinomaki in Miyagi Prefecture andIwaki in Fukushima Prefecture sustained
signiﬁcant damage due to the earthquake andtsunami. TOTO, DAIKEN, YKK AP and NORITZ
have come together to collaborate to open ashowroom in both locations. The showroom
showcases and highlights the unique strengths ofeach of the 4 companies, and the showroom willplay an important role at the forefront of therecovery effort as a location for collecting anddisseminating information that is vital to the“rapid product delivery system” as well as
ensuring information travels in a speedy manner.

3
Singapore Green Label-certiﬁed
Daiken Ceiling Board on display* The Singapore Green Labeling Scheme (SGLS) was launched by the newly establishedSingapore Environment Council in 1992 to endorse consumer products and services thathave a reduced impact on the environment. The Green Mark system is also endorses
buildings that have environmentally sensitive features, such as energy-efﬁciency, etc.
Products sporting the Singapore Green Label are identiﬁed as being environmentally sound.

Opening of a Tohoku Area
Collaboration Showroom

Developing activities to promoteearthquake resistance measures

Following the Great East Japan Earthquake,homeowners all over Japan became very
concerned about the earthquake resistance of
their own properties. Moreover, the government
has since become very active in promoting
earthquake resistance for housing. Daiken has
been active across the country in promoting
earthquake resistance retroﬁtting, such asproviding a wide range of information onearthquake resistance retroﬁtting and proposing
solutions based on ﬁtting our ‘Kabe Taisho’Dailite Earthquake Resistant Wall panels, etc.

Daiken Corporation

Annual Report 20127

Consolidated Balance Sheets

Daiken Corporation and Consolidated Subsidiaries
March 31, 2012 and 2011

Millions of Yen
2012
2011

ASSETS
Current assets:
Cash and deposits .........................................................................
Notes and accounts receivable—trade...........................................
Short-term investment securities ...................................................
Merchandise and ﬁnished goods...................................................
Work in process ............................................................................
Raw materials and supplies ...........................................................
Deferred tax assets........................................................................
Other ............................................................................................
Allowance for doubtful accounts ..................................................
Total current assets .......................................................................

8

¥

9,639
33,42414
13,535
3,188
4,059
1,552
1,739
(193)
66,961¥Thousands of
U.S. Dollars
2012

5,733 $
28,734–
11,730
2,798
3,515
1,078
1,802
(160)
55,233

117,362
406,964
170
164,799
38,81649,421
18,896
21,173(2,349)815,305

Noncurrent assets:
Property, plant and equipment
Buildings and structures, net....................................................
Machinery, equipment and vehicles, net ..................................
Land ........................................................................................
Lease assets, net ......................................................................
Construction in progress..........................................................
Other, net ................................................................................
Total property, plant and equipment .......................................

10,191
9,595
15,522
306
1,209
1,600
38,427

10,728
10,68015,997
347
380
1,515
39,649124,083
116,826
188,993
3,725
14,72019,481
467,880

Intangible assets
Goodwill ..................................................................................
Software ..................................................................................
Other .......................................................................................
Total intangible assets..............................................................

1,009
752
200
1,962

1,095
733
196
2,026

12,2859,156
2,435
23,888Investments and other assets
Investment securities................................................................
Long-term loans receivable ......................................................
Prepaid pension cost ................................................................
Deferred tax assets...................................................................
Other .......................................................................................
Allowance for doubtful accounts .............................................
Total investments and other assets ..........................................
Total noncurrent assets .................................................................
Deferred assets...................................................................................
Bond issuance cost ........................................................................
Total assets.........................................................................................

10,288
2
2,579
3,348
2,586
(755)
18,05158,44067
67¥ 125,469

Daiken Corporation

Annual Report 2012

Millions of Yen
2012
2011

9,733
125,2642
24
2,988
31,401
4,305
40,7642,770
31,486(837)(9,192)
18,963219,785
60,639711,554
96
815
96
815
¥ 115,969 $ 1,527,687

LIABILITIESCurrent liabilities:
Notes and accounts payable—trade ..............................................
Short-term loans payable ..............................................................
Current portion of bonds ..............................................................
Current portion of long-term loans payable ..................................
Lease obligations...........................................................................
Accounts payable—other ..............................................................
Income taxes payable ....................................................................
Accrued consumption taxes ..........................................................
Provision for bonuses ....................................................................
Provision for product warranties....................................................
Provision for business structure improvement................................
Provision for loss on disaster .........................................................
Deferred tax liabilities....................................................................
Other ............................................................................................
Total current liabilities ...................................................................

¥

Thousands of
U.S. Dollars
2012

24,881
9,328
5,000
4,978
35
20,051
418
185
1,331
797
75
–
43
2,937
70,065¥ 17,624
9,027
–
6,168
34
17,129
433
105
1,531
–
84
130
23
2,870
55,162$ 302,946
113,576
60,87960,611
426
244,137
5,089
2,252
16,206
9,704
913
–
523
35,760853,098

Noncurrent liabilities:
Bonds payable...............................................................................
Long-term loans payable ...............................................................
Lease obligations...........................................................................
Deferred tax liabilities....................................................................
Provision for product warranties....................................................
Provision for retirement beneﬁts ...................................................
Provision for environmental measures ...........................................
Provision for loss on guarantees ....................................................
Negative goodwill .........................................................................
Other ............................................................................................
Total noncurrent liabilities .............................................................
Total liabilities.....................................................................................

5,000
8,231
292
1,534
–
2,858
34
113
105
284
18,45488,51910,000
8,163
327
1,666
260
2,904
161
–
117
366
23,967
79,13060,879100,219
3,555
18,677–
34,798
413
1,375
1,278
3,457
224,692
1,077,791

NET ASSETS
Shareholders’ equity:
Capital stock .................................................................................
Capital surplus ..............................................................................
Retained earnings .........................................................................
Treasury stock ...............................................................................
Total shareholders’ equity .............................................................

13,15011,8509,691(1,179)33,512

13,15011,8509,758(1,179)33,580160,112144,283
117,995(14,355)
408,036

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities ......................
Deferred gains or losses on hedges ...............................................
Foreign currency translation adjustment........................................
Total accumulated other comprehensive income...........................
Minority interests ............................................................................
Total net assets...................................................................................
Total liabilities and net assets .............................................................

162
128
(233)
56
3,380
36,949¥ 125,469

(48)
1,972
26
1,558
(251)
(2,836)
(273)
681
3,533
41,15436,839449,884¥ 115,969 $ 1,527,687

Daiken Corporation

Annual Report 20129

Consolidated Balance Sheets

Daiken Corporation and Consolidated Subsidiaries
March 31, 2012 and 2011

Millions of Yen
2012
2011

ASSETS
Current assets:
Cash and deposits .........................................................................
Notes and accounts receivable—trade...........................................
Short-term investment securities ...................................................
Merchandise and ﬁnished goods...................................................
Work in process ............................................................................
Raw materials and supplies ...........................................................
Deferred tax assets........................................................................
Other ............................................................................................
Allowance for doubtful accounts ..................................................
Total current assets .......................................................................

8

¥

9,639
33,42414
13,535
3,188
4,059
1,552
1,739
(193)
66,961¥Thousands of
U.S. Dollars
2012

5,733 $
28,734–
11,730
2,798
3,515
1,078
1,802
(160)
55,233

117,362
406,964
170
164,799
38,81649,421
18,896
21,173(2,349)815,305

Noncurrent assets:
Property, plant and equipment
Buildings and structures, net....................................................
Machinery, equipment and vehicles, net ..................................
Land ........................................................................................
Lease assets, net ......................................................................
Construction in progress..........................................................
Other, net ................................................................................
Total property, plant and equipment .......................................

10,191
9,595
15,522
306
1,209
1,600
38,427

10,728
10,68015,997
347
380
1,515
39,649124,083
116,826
188,993
3,725
14,72019,481
467,880

Intangible assets
Goodwill ..................................................................................
Software ..................................................................................
Other .......................................................................................
Total intangible assets..............................................................

1,009
752
200
1,962

1,095
733
196
2,026

12,2859,156
2,435
23,888Investments and other assets
Investment securities................................................................
Long-term loans receivable ......................................................
Prepaid pension cost ................................................................
Deferred tax assets...................................................................
Other .......................................................................................
Allowance for doubtful accounts .............................................
Total investments and other assets ..........................................
Total noncurrent assets .................................................................
Deferred assets...................................................................................
Bond issuance cost ........................................................................
Total assets.........................................................................................

10,288
2
2,579
3,348
2,586
(755)
18,05158,44067
67¥ 125,469

Daiken Corporation

Annual Report 2012

Millions of Yen
2012
2011

9,733
125,2642
24
2,988
31,401
4,305
40,7642,770
31,486(837)(9,192)
18,963219,785
60,639711,554
96
815
96
815
¥ 115,969 $ 1,527,687

LIABILITIESCurrent liabilities:
Notes and accounts payable—trade ..............................................
Short-term loans payable ..............................................................
Current portion of bonds ..............................................................
Current portion of long-term loans payable ..................................
Lease obligations...........................................................................
Accounts payable—other ..............................................................
Income taxes payable ....................................................................
Accrued consumption taxes ..........................................................
Provision for bonuses ....................................................................
Provision for product warranties....................................................
Provision for business structure improvement................................
Provision for loss on disaster .........................................................
Deferred tax liabilities....................................................................
Other ............................................................................................
Total current liabilities ...................................................................

¥

Thousands of
U.S. Dollars
2012

24,881
9,328
5,000
4,978
35
20,051
418
185
1,331
797
75
–
43
2,937
70,065¥ 17,624
9,027
–
6,168
34
17,129
433
105
1,531
–
84
130
23
2,870
55,162$ 302,946
113,576
60,87960,611
426
244,137
5,089
2,252
16,206
9,704
913
–
523
35,760853,098

Noncurrent liabilities:
Bonds payable...............................................................................
Long-term loans payable ...............................................................
Lease obligations...........................................................................
Deferred tax liabilities....................................................................
Provision for product warranties....................................................
Provision for retirement beneﬁts ...................................................
Provision for environmental measures ...........................................
Provision for loss on guarantees ....................................................
Negative goodwill .........................................................................
Other ............................................................................................
Total noncurrent liabilities .............................................................
Total liabilities.....................................................................................

5,000
8,231
292
1,534
–
2,858
34
113
105
284
18,45488,51910,000
8,163
327
1,666
260
2,904
161
–
117
366
23,967
79,13060,879100,219
3,555
18,677–
34,798
413
1,375
1,278
3,457
224,692
1,077,791

NET ASSETS
Shareholders’ equity:
Capital stock .................................................................................
Capital surplus ..............................................................................
Retained earnings .........................................................................
Treasury stock ...............................................................................
Total shareholders’ equity .............................................................

13,15011,8509,691(1,179)33,512

13,15011,8509,758(1,179)33,580160,112144,283
117,995(14,355)
408,036

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities ......................
Deferred gains or losses on hedges ...............................................
Foreign currency translation adjustment........................................
Total accumulated other comprehensive income...........................
Minority interests ............................................................................
Total net assets...................................................................................
Total liabilities and net assets .............................................................

162
128
(233)
56
3,380
36,949¥ 125,469

(48)
1,972
26
1,558
(251)
(2,836)
(273)
681
3,533
41,15436,839449,884¥ 115,969 $ 1,527,687

Daiken Corporation

Annual Report 20129

Consolidated Statements of Income

Daiken Corporation and Consolidated Subsidiaries
Years ended March 31, 2012 and 201110

Consolidated Statements of Changes
in Net Assets¥ 151,209 ¥

141,506
113,189
102,345
38,02039,161
33,477
34,812
4,542
4,349
1,045
982
987
957
4,600
4,373
261
1,354
2,968
2,263
1,893
3,464
741
1,995
277
93
¥
874 ¥
1,375

$ 1,841,093
1,378,168
462,924
407,60955,302
12,72312,01756,008
3,177
36,13723,048
9,022
3,372
$
10,641

Daiken Corporation and Consolidated Subsidiaries
Year ended March 31, 2012

Capitalsurplus

Balance at the end of
previous period ........................... ¥ 13,150 ¥ 11,850
Changes of items during the period
Dividends from surplus......................
Net income .......................................
Purchase of treasury stock.................
Net changes of items otherthan shareholders’ equity ...............
Total changes of items during
the period ......................................
––
Balance at the end ofcurrent period.............................. ¥ 13,150 ¥ 11,850

Retainedearnings

Deferred
Valuation
Total
Treasurydifference on gains orshareholders’ available-for- losses onstockequitysale securities hedges

Total
Foreignaccumulated Minority
currency
otherinterests
translation
adjustment comprehensive
income¥ 9,758¥(1,179) ¥ 33,580¥ (251) ¥

(941)
874

(941)
874
(0)

(0)

(67)
¥ 9,691

(0)

¥

¥ 26

(273) ¥ 3,533 ¥ 36,839
(941)
874
(0)

(67)

¥(1,179) ¥ 33,512(48)

Total net
assets

¥

211

102

17

330

(152)

178

211

102

17

330

(152)

110

162

¥128

¥ (233) ¥56 ¥ 3,380 ¥ 36,949

Thousands of U.S. Dollars
Capitalstock

CapitalsurplusRetainedearnings

Deferred
Valuation
Total
Treasurydifference on gains orshareholders’ available-for- losses onstockequitysale securities hedges

Total
Foreigncurrency accumulated Minority
otherinterests
translation
adjustment comprehensive
incomeTotal net
assetsBalance at the end of
previous period ......................... $ 160,112 $144,283 $ 118,811 $ (14,355) $ 408,863 $Changes of items during the period
Dividends from surplus....................
(11,457)(11,457)
Net income .....................................
10,641
10,641
Purchase of treasury stock...............
(0)(0)
Net changes of items otherthan shareholders’ equity .............
Total changes of items during
the period ....................................
–
–
(815)
(0)
(815)

2,569

1,241

206

4,018

(1,850)

2,167

2,569

1,241

206

4,018

(1,850)1,339

Balance at the end ofcurrent period............................ $ 160,112 $144,283 $ 117,995 $ (14,355) $ 408,036 $

1,972 $1,558 $ (2,836) $Daiken Corporation

Annual Report 2012(584) $ 316 $ (3,056) $ (3,323) $ 43,017 $ 448,544(11,457)
10,641(0)

681 $ 41,154 $ 449,884

Thousands of
U.S. Dollars

Millions of Yen
2012
2011

2012

Millions of Yen
Capitalstock

Daiken Corporation and Consolidated Subsidiaries
Years ended March 31, 2012 and 2011

Thousands of
U.S. Dollars

Millions of Yen
2012
2011

Net sales.............................................................................................
Cost of sales .......................................................................................
Gross proﬁt ...................................................................................
Selling, general and administrative expenses ......................................
Operating income .........................................................................
Non-operating income........................................................................
Non-operating expenses .....................................................................
Ordinary income.................................................................................
Extraordinary income..........................................................................
Extraordinary loss ...............................................................................
Income before income taxes and minority interests ............................
Total Income taxes..............................................................................
Minority interests in income ...............................................................
Net income.........................................................................................

Consolidated Statements of Cash FlowsNet cash provided by (used in) operating activities
Income before income taxes and minority interests.............................
Depreciation and amortization............................................................
Impairment loss ..................................................................................
Amortization of bond issuance cost ....................................................
Loss on retirement of noncurrent assets..............................................
Loss (gain) on sales of noncurrent assets.............................................
Loss (gain) on sales of investment securities........................................
Loss (gain) on valuation of investment securities .................................
Loss on valuation of golf club memberships........................................
Amortization of goodwill ....................................................................
Gain on negative goodwill ..................................................................
Increase (decrease) in allowance for doubtful accounts.......................
Increase (decrease) in provision for bonuses........................................
Increase (decrease) in provision for product warranties .......................
Increase (decrease) in provision for business structure improvement ...
Increase (decrease) in provision for loss on ofﬁce transfer ...................
Increase (decrease) in provision for loss on disaster.............................
Increase (decrease) in provision for retirement beneﬁts.......................
Increase (decrease) in provision for environmental measures...............
Increase (decrease) in provision for loss on guarantees .......................
Interest and dividends income.............................................................
Interest expenses ................................................................................
Foreign exchange losses (gains) ..........................................................
Equity in (earnings) losses of afﬁliates .................................................
Decrease (increase) in notes and accounts receivable-trade.................
Decrease (increase) in inventories........................................................
Increase (decrease) in notes and accounts payable-trade ....................
Decrease (increase) in consumption taxes refund receivable................
Increase (decrease) in accrued consumption taxes...............................
Other, net ...........................................................................................
Subtotal ........................................................................................
Interest and dividends income received...............................................
Interest expenses paid.........................................................................
Income taxes paid ...............................................................................
Net cash provided by (used in) operating activities ...................................
Net cash provided by (used in) investing activities
Decrease (increase) in time deposits....................................................
Purchase of property, plant and equipment ........................................
Proceeds from sales of property, plant and equipment .......................
Purchase of investment securities........................................................
Proceeds from sales of investment securities.......................................
Purchase of investments in subsidiaries ...............................................
Purchase of investments in subsidiaries resulting in change in scopeof consolidation ...............................................................................
Other, net ...........................................................................................
Net cash provided by (used in) investing activities.....................................
Net cash provided by (used in) ﬁnancing activities
Net increase (decrease) in short-term loans payable ............................
Proceeds from issuance of bonds ........................................................
Proceeds from long-term loans payable ..............................................
Repayment of long-term loans payable...............................................
Repayments of ﬁnance lease obligations.............................................
Purchase of treasury stock ..................................................................
Cash dividends paid ............................................................................
Cash dividends paid to minority shareholders .....................................
Other, net ...........................................................................................
Net cash provided by (used in) ﬁnancing activities ....................................
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....................................
Increase in cash and cash equivalents from newly consolidated
subsidiary...............................................................................................
Cash and cash equivalents at end of period .............................................

¥

¥

1,893
4,217
–
28
100
(123)
(2)
15
5
75
(104)
(49)
(199)
537
(9)
–
(130)
362
(126)
113
(193)
495
(0)
(42)
(4,828)(2,709)
9,664
45
79
828
9,941
193
(499)
(561)
9,074

3,464 $
4,574
755
16
229
(1,237)
(2)
200
1
75
(87)
(41)
(23)
122
(27)
(75)
130
(46)
–
–
(190)
607
(16)
(45)
917
(941)
(1,806)
(67)
(307)
(179)
5,997
190
(624)
(1,125)
4,438

23,04851,345–340
1,217(1,497)
(24)
182
0
913
(1,266)(596)(2,422)
6,538
(109)
–
(1,582)
4,407(1,534)
1,375(2,349)
6,027
(0)
(511)
(58,784)(32,984)
117,667547
961
10,081
121,039
2,349(6,075)(6,830)110,4839(3,460)
998
(176)
14
(368)

35
(3,549)
1,450
(513)
407
407

109
(42,128)
12,151(2,142)170(4,480)–(236)(3,218)

(128)
(320)
(2,618)–(2,873)(39,181)

280
–
5,150
(6,319)
(34)
(0)
(941)
(65)
–
(1,929)
(12)
3,914
5,716

(5,574)4,927
600(5,930)
(33)
(449)
(634)
–
0
(7,095)(24)(5,299)10,935

3,409–
62,705(76,938)(413)(0)(11,457)(791)–(23,487)(146)
47,656
69,596

–
9,630

¥

2012

¥

81
5,716

Daiken Corporation$–
117,253

Annual Report 201211

Consolidated Statements of Income

Daiken Corporation and Consolidated Subsidiaries
Years ended March 31, 2012 and 201110

Consolidated Statements of Changes
in Net Assets¥ 151,209 ¥

141,506
113,189
102,345
38,02039,161
33,477
34,812
4,542
4,349
1,045
982
987
957
4,600
4,373
261
1,354
2,968
2,263
1,893
3,464
741
1,995
277
93
¥
874 ¥
1,375

$ 1,841,093
1,378,168
462,924
407,60955,302
12,72312,01756,008
3,177
36,13723,048
9,022
3,372
$
10,641

Daiken Corporation and Consolidated Subsidiaries
Year ended March 31, 2012

Capitalsurplus

Balance at the end of
previous period ........................... ¥ 13,150 ¥ 11,850
Changes of items during the period
Dividends from surplus......................
Net income .......................................
Purchase of treasury stock.................
Net changes of items otherthan shareholders’ equity ...............
Total changes of items during
the period ......................................
––
Balance at the end ofcurrent period.............................. ¥ 13,150 ¥ 11,850

Retainedearnings

Deferred
Valuation
Total
Treasurydifference on gains orshareholders’ available-for- losses onstockequitysale securities hedges

Total
Foreignaccumulated Minority
currency
otherinterests
translation
adjustment comprehensive
income¥ 9,758¥(1,179) ¥ 33,580¥ (251) ¥

(941)
874

(941)
874
(0)

(0)

(67)
¥ 9,691

(0)

¥

¥ 26

(273) ¥ 3,533 ¥ 36,839
(941)
874
(0)

(67)

¥(1,179) ¥ 33,512(48)

Total net
assets

¥

211

102

17

330

(152)

178

211

102

17

330

(152)

110

162

¥128

¥ (233) ¥56 ¥ 3,380 ¥ 36,949

Thousands of U.S. Dollars
Capitalstock

CapitalsurplusRetainedearnings

Deferred
Valuation
Total
Treasurydifference on gains orshareholders’ available-for- losses onstockequitysale securities hedges

Total
Foreigncurrency accumulated Minority
otherinterests
translation
adjustment comprehensive
incomeTotal net
assetsBalance at the end of
previous period ......................... $ 160,112 $144,283 $ 118,811 $ (14,355) $ 408,863 $Changes of items during the period
Dividends from surplus....................
(11,457)(11,457)
Net income .....................................
10,641
10,641
Purchase of treasury stock...............
(0)(0)
Net changes of items otherthan shareholders’ equity .............
Total changes of items during
the period ....................................
–
–
(815)
(0)
(815)

2,569

1,241

206

4,018

(1,850)

2,167

2,569

1,241

206

4,018

(1,850)1,339

Balance at the end ofcurrent period............................ $ 160,112 $144,283 $ 117,995 $ (14,355) $ 408,036 $

1,972 $1,558 $ (2,836) $Daiken Corporation

Annual Report 2012(584) $ 316 $ (3,056) $ (3,323) $ 43,017 $ 448,544(11,457)
10,641(0)

681 $ 41,154 $ 449,884

Thousands of
U.S. Dollars

Millions of Yen
2012
2011

2012

Millions of Yen
Capitalstock

Daiken Corporation and Consolidated Subsidiaries
Years ended March 31, 2012 and 2011

Thousands of
U.S. Dollars

Millions of Yen
2012
2011

Net sales.............................................................................................
Cost of sales .......................................................................................
Gross proﬁt ...................................................................................
Selling, general and administrative expenses ......................................
Operating income .........................................................................
Non-operating income........................................................................
Non-operating expenses .....................................................................
Ordinary income.................................................................................
Extraordinary income..........................................................................
Extraordinary loss ...............................................................................
Income before income taxes and minority interests ............................
Total Income taxes..............................................................................
Minority interests in income ...............................................................
Net income.........................................................................................

Consolidated Statements of Cash FlowsNet cash provided by (used in) operating activities
Income before income taxes and minority interests.............................
Depreciation and amortization............................................................
Impairment loss ..................................................................................
Amortization of bond issuance cost ....................................................
Loss on retirement of noncurrent assets..............................................
Loss (gain) on sales of noncurrent assets.............................................
Loss (gain) on sales of investment securities........................................
Loss (gain) on valuation of investment securities .................................
Loss on valuation of golf club memberships........................................
Amortization of goodwill ....................................................................
Gain on negative goodwill ..................................................................
Increase (decrease) in allowance for doubtful accounts.......................
Increase (decrease) in provision for bonuses........................................
Increase (decrease) in provision for product warranties .......................
Increase (decrease) in provision for business structure improvement ...
Increase (decrease) in provision for loss on ofﬁce transfer ...................
Increase (decrease) in provision for loss on disaster.............................
Increase (decrease) in provision for retirement beneﬁts.......................
Increase (decrease) in provision for environmental measures...............
Increase (decrease) in provision for loss on guarantees .......................
Interest and dividends income.............................................................
Interest expenses ................................................................................
Foreign exchange losses (gains) ..........................................................
Equity in (earnings) losses of afﬁliates .................................................
Decrease (increase) in notes and accounts receivable-trade.................
Decrease (increase) in inventories........................................................
Increase (decrease) in notes and accounts payable-trade ....................
Decrease (increase) in consumption taxes refund receivable................
Increase (decrease) in accrued consumption taxes...............................
Other, net ...........................................................................................
Subtotal ........................................................................................
Interest and dividends income received...............................................
Interest expenses paid.........................................................................
Income taxes paid ...............................................................................
Net cash provided by (used in) operating activities ...................................
Net cash provided by (used in) investing activities
Decrease (increase) in time deposits....................................................
Purchase of property, plant and equipment ........................................
Proceeds from sales of property, plant and equipment .......................
Purchase of investment securities........................................................
Proceeds from sales of investment securities.......................................
Purchase of investments in subsidiaries ...............................................
Purchase of investments in subsidiaries resulting in change in scopeof consolidation ...............................................................................
Other, net ...........................................................................................
Net cash provided by (used in) investing activities.....................................
Net cash provided by (used in) ﬁnancing activities
Net increase (decrease) in short-term loans payable ............................
Proceeds from issuance of bonds ........................................................
Proceeds from long-term loans payable ..............................................
Repayment of long-term loans payable...............................................
Repayments of ﬁnance lease obligations.............................................
Purchase of treasury stock ..................................................................
Cash dividends paid ............................................................................
Cash dividends paid to minority shareholders .....................................
Other, net ...........................................................................................
Net cash provided by (used in) ﬁnancing activities ....................................
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....................................
Increase in cash and cash equivalents from newly consolidated
subsidiary...............................................................................................
Cash and cash equivalents at end of period .............................................

¥

¥

1,893
4,217
–
28
100
(123)
(2)
15
5
75
(104)
(49)
(199)
537
(9)
–
(130)
362
(126)
113
(193)
495
(0)
(42)
(4,828)(2,709)
9,664
45
79
828
9,941
193
(499)
(561)
9,074

3,464 $
4,574
755
16
229
(1,237)
(2)
200
1
75
(87)
(41)
(23)
122
(27)
(75)
130
(46)
–
–
(190)
607
(16)
(45)
917
(941)
(1,806)
(67)
(307)
(179)
5,997
190
(624)
(1,125)
4,438

23,04851,345–340
1,217(1,497)
(24)
182
0
913
(1,266)(596)(2,422)
6,538
(109)
–
(1,582)
4,407(1,534)
1,375(2,349)
6,027
(0)
(511)
(58,784)(32,984)
117,667547
961
10,081
121,039
2,349(6,075)(6,830)110,4839(3,460)
998
(176)
14
(368)

35
(3,549)
1,450
(513)
407
407

109
(42,128)
12,151(2,142)170(4,480)–(236)(3,218)

(128)
(320)
(2,618)–(2,873)(39,181)

280
–
5,150
(6,319)
(34)
(0)
(941)
(65)
–
(1,929)
(12)
3,914
5,716

(5,574)4,927
600(5,930)
(33)
(449)
(634)
–
0
(7,095)(24)(5,299)10,935

3,409–
62,705(76,938)(413)(0)(11,457)(791)–(23,487)(146)
47,656
69,596

–
9,630

¥

2012

¥

81
5,716

Daiken Corporation$–
117,253

Annual Report 201211

Notes Related to Consolidated
Financial Statements

Summary of signiﬁcant accounting policies
1. Securities
Held-to-maturity securities are carried and calculated by theamortized cost method (straight-line method).
Marketable securities classiﬁed as other securities are carriedat fair value, based on market prices on settlement date ofaccounts, with any changes in unrealized holding gain or loss
directly charged to net assets. Cost of securities sold is
calculated principally by the moving average method.
Non-marketable securities classiﬁed as other securities arecarried at cost determined principally by the moving averagemethod.
2. Derivatives
Derivatives are carried at fair value.
3. Inventories
In principle, inventories of the Company and its consolidated
subsidiaries are calculated as costs, as determined by the moving
average method. (The value in the consolidated balance sheets is
calculated by the method of reduction in book value based on
decline in proﬁtability.) Furthermore, for the real estate for sale, aseparate method is applied, calculated as costs. (The value in the
consolidated balance sheets is calculated by the method of
reduction in book value based on decline in proﬁtability.) For partly
ﬁnished work, a separate method is applied, calculated as costs.

12

4. Method of calculating the depreciation of important
assets to be amortized
1) Property, plant and equipment (excluding leased assets)
At Daiken Corporation and its domestic consolidated
subsidiaries, the depreciation is primarily computed by the
declining-balance method, with the exception of buildings(excluding attached ﬁttings and structures) acquired on orafter April 1, 1998, the depreciation of which is computed by
the straight-line method. The foreign consolidated
subsidiaries use the straight-line method to calculate
depreciation.
The principal estimated useful lives are as follows:
Buildings and structures
mainly 3 to 60 years
Machinery, equipment and vehicles mainly 4 to 15 years
2) Intangible assets (excluding leased assets)
The depreciation of intangible assets is computed by thestraight-line method. Expenditures related to computer
software for internal use are amortized by the straight-line
method over their estimated useful lives in the company, a5-year period.
3) Leased assets
The depreciation of leased assets is computed by thestraight-line method, with the lease period as the useful life
period and the remaining value at the end of the lease period
is taken as zero. Finance leases, other than those for which
the ownership of the leased asset will be transferred to thelessee, commenced on or before March 31, 2008, areaccounted for by a method similar to that applicable toordinary operating leases.
4) Deferred assets
The amortization of bond issuance cost is computed using thestraight-line method for the 5-year period until redemption.
5. Provisions and allowances
1) Allowance for doubtful accounts
In order to prepare irrecoverable accounts such as accounts
and loans receivable, provisions for doubtful accounts are
generally made on the basis of historical default rates. Claims
whose possibility of collection is deemed doubtful areprovided for in the expected uncollectible amounts, giving
due consideration to the speciﬁc circumstances.
2) Provision for bonuses
In order to prepare primarily for the payment of bonuses to
employees, provisions are based on the expected amounts of
payment.

Daiken Corporation

Annual Report 2012

Daiken Corporation and Consolidated Subsidiaries
March 31, 2012

3) Provision for product warranties
In order to prepare primarily for the payment of expenses
expected to occur after the delivery of products, provisions for
estimated repairing costs during the term of warranty aremade.
4) Provision for business structure improvements
In order to prepare for the payment of expenses expected tooccur for business structure improvements, provisions are
made for estimated improvement expenses at the end of theterm under review.
5) Provision for retirement beneﬁts
Provisions for employees’ retirement beneﬁts are made in theamount deemed necessary at the term end, based on
estimated retirement obligations and plan assets. (Regarding
the company pension plan, a prepaid pension expense has
been appropriated, as the value of the pension plan assets
exceeds the amount of the retirement beneﬁt obligation as
adjusted for unrecognized prior service cost and net
unrecognized actuarial gain or loss.)
Net unrecognized actuarial gain or loss is amortizedcommencing the ﬁscal year following the consolidated ﬁscal
year in which the gain or loss was recognized by thestraight-line method over the estimated average remaining
years of service of the eligible employees (mainly 10 years).
6) Provision for environmental measures
In order to prepare primarily for the payment of expenses
expected to occur for environmental measures, provisions are
made for estimated expenses.
7) Provision for loss on guarantee
In order to prepare for the payment of expenses expected tooccur related to guarantee obligations, provisions have been
made for the estimated amount of expenses to be borne,
considering the ﬁnancial condition of the companies
guaranteed.
(Additional information)
Since the probability is increasing of a loss occuring due toguarantee obligations for companies guaranteed, theabovementioned provision is made from the current
consolidated ﬁscal year.
6. Criteria for appropriating important incomes andexpenses
Criteria for appropriating the amounts and costs of completedwork:1) Work conﬁrmed as certain to be progressed partly by the endof the current ﬁscal term: The criterion is the progress of said
work. (The rate of progress is estimated using the cost
proportion method.)2) Other work: The criterion is the completion of said work.
7. Criteria of translations into Japanese yen amounts ofimportant assets or liabilities denominated in foreign
currencies
The monetary credits and debts denominated in foreign
currencies are translated into Japanese yen at the current
exchange rate on the consolidated settling date and translationdifference is treated as gain or loss. The assets and liabilities offoreign consolidated subsidiaries are translated into Japanese yenat the current exchange rate on the consolidated settling dateand gain or loss is also translated into Japanese yen at thecurrent exchange rate on the consolidated settling date. Anytranslation differences are included in the translation adjustment
account and minority interests in the net assets section.
8. Important methods of hedge accounting
1) Method of hedge accounting
The deferred method of hedge accounting is adopted. As forforeign exchange forward contracts and foreign currency
option contracts, the allotment process is adopted if therequired conditions are satisﬁed. As for interest rate swap
contracts, the exception process is adopted if the requiredconditions for this process are satisﬁed.
2) Hedging measures and objectives

Hedging measures are foreign exchange forward contracts
and foreign currency option contracts. The objectives areaccounts receivable and payable and anticipated transactions
denominated in foreign currencies. Interest rate swap
contracts are other measures, the objectives of which areloans and debts.
3) Hedging policy
In accordance with our internal "Risk Management Policy,"
we hedge against foreign exchange rate ﬂuctuation risks.
4) Method of evaluating the efﬁciency of hedging
Accumulations of cash ﬂow ﬂuctuations of hedging objectives
or exchange rate ﬂuctuations are compared withaccumulations of cash ﬂow ﬂuctuations of hedging measures
or exchange rate ﬂuctuations for every half term. The
efﬁciency of hedging is evaluated on the basis of both these
ﬂuctuated values. However, for interest rate swap contracts
using the exception process, we omit this evaluation of
efﬁciency.
9. Method and term of calculating the depreciation of
goodwill
The depreciation of goodwill is computed in accordance with thestraight-line method for a period of 20 years.
10. Scope of funds in consolidated statements of cash ﬂows
Funds consist of money in hand, deposits that can be withdrawn
as required, and short-term investments with a redemption
period of within three months from the date of acquisition,
which are easy to realize and with minimal risk of value
ﬂuctuations.
11. Transaction of consumption tax
Consumption taxes and local consumption taxes withheld and/or
paid are not included in the accompanying statements ofoperations.

Notes Related to Consolidated Balance Sheets
1. Accumulated depreciation of property, plant andequipment¥ 60,855 million
2. Items for non-consolidated subsidiaries and afﬁliates
are as follows:
Investment securities (stocks)¥
895 million
3. Assets pledged as collateral
Buildings and structures
Machinery, equipment andvehiclesLand
Other current assets
Other noncurrent assets
Total

¥

991 million¥ 1,479 million¥ 3,171 million¥ 1,147 million¥
202 million¥ 6,992 million

Loans corresponding to the above
Short-term loans payable¥
498 million
Current portion of long-termloans payable¥
304 million
Long-term loans payable¥ 1,051 million
Besides the above, securities amounting to ¥14 million andinvestment securities amounting to ¥34 million are held as adeposit relating to our housing land and building agency
registration.
4. Guarantee obligations
Guarantees are provided for bank loans assumed
by the company mentioned below, as follows:
For Daiken Engineering(Singapore) Pte. Ltd.
¥
50 million
5. Contingent liabilities
Liability for redemption following
liquidation of credit

During the current consolidated ﬁscal year, an issue related tosurface material exfoliation occurred on one of our Group
products (secondary decorative board), and we are taking
measures including inspections and repairs. The relative
inspection and repair expenses, where the amounts can be
estimated rationally, have been appropriated in the budget
for the current consolidated ﬁscal year. There will be apossibility of occurring additional expenses for inspection andrepair from the next consolidated ﬁscal year onward,
however, at the present point it is difﬁcult to estimate thenecessary amount rationally, so the expense amount has notbeen appropriated in the budget.
As the cause of the issue was traced to an error by an
external supplier, we have ﬁled a suit for compensatory
damages against relevant expenses.
6. In order to efﬁciently raise working capital, the Company
concluded overdraft contracts and loan commitment
contracts with ﬁve of our ﬁnancial institutions.
The unexecuted loan balances related to such overdraft
contracts and loan commitment contracts at the term end are
as follows:
Maximum overdraft amount andthe total amount of loan
commitment¥ 13,200 million
Executed loan amounts
–
Total

¥

13,200 million

7. Notes to mature at the closing date of the consolidated ﬁscal
year
Notes to mature at the closing date of the consolidated
ﬁscal year are settled at the clearing date of the notes as per
the accounting procedures.
As for the current consolidated ﬁscal year, however, theclosing date corresponded with a bank holiday, andtherefore, the undermentioned notes to mature at the closing
date of the consolidated ﬁscal year are included in thebalance at the end of the current consolidated ﬁscal year.
Notes receivable¥
77 million
Notes payable¥
1,033 million

Notes Related to Consolidated Statementsof Income
1. Primary selling, general and administrative expenses
Transportation and storage
expenses¥ 11,432 million
Transfer to allowancefor doubtful accounts¥
21 million
Salaries and allowances¥
7,645 million
Transfer to provision for bonuses¥
879 million
Expenses for retirement beneﬁts¥
1,353 million
2. Research and development costs
Research and development costs are included in the cost ofgeneral and administrative expenses and the cost of production
for the year ended March 31, 2012, totaling ¥1,470 million.
3. Contents of gain on sales of noncurrent assets
Machinery, equipment and vehicles¥
6 million
Land¥
117 million
Total

¥

123 million

4. Contents of loss on retirement of noncurrent assets
Buildings and structures¥
18 million
Machinery, equipment and vehicles¥
46 million
Other¥
35 million
Total

¥

100 million

5. Loss on valuation of golf club memberships includes ¥3
million of the transfer to allowance for doubtful
accounts¥ 1,883 million

Daiken Corporation

Annual Report 201213

Notes Related to Consolidated
Financial Statements

Summary of signiﬁcant accounting policies
1. Securities
Held-to-maturity securities are carried and calculated by theamortized cost method (straight-line method).
Marketable securities classiﬁed as other securities are carriedat fair value, based on market prices on settlement date ofaccounts, with any changes in unrealized holding gain or loss
directly charged to net assets. Cost of securities sold is
calculated principally by the moving average method.
Non-marketable securities classiﬁed as other securities arecarried at cost determined principally by the moving averagemethod.
2. Derivatives
Derivatives are carried at fair value.
3. Inventories
In principle, inventories of the Company and its consolidated
subsidiaries are calculated as costs, as determined by the moving
average method. (The value in the consolidated balance sheets is
calculated by the method of reduction in book value based on
decline in proﬁtability.) Furthermore, for the real estate for sale, aseparate method is applied, calculated as costs. (The value in the
consolidated balance sheets is calculated by the method of
reduction in book value based on decline in proﬁtability.) For partly
ﬁnished work, a separate method is applied, calculated as costs.

12

4. Method of calculating the depreciation of important
assets to be amortized
1) Property, plant and equipment (excluding leased assets)
At Daiken Corporation and its domestic consolidated
subsidiaries, the depreciation is primarily computed by the
declining-balance method, with the exception of buildings(excluding attached ﬁttings and structures) acquired on orafter April 1, 1998, the depreciation of which is computed by
the straight-line method. The foreign consolidated
subsidiaries use the straight-line method to calculate
depreciation.
The principal estimated useful lives are as follows:
Buildings and structures
mainly 3 to 60 years
Machinery, equipment and vehicles mainly 4 to 15 years
2) Intangible assets (excluding leased assets)
The depreciation of intangible assets is computed by thestraight-line method. Expenditures related to computer
software for internal use are amortized by the straight-line
method over their estimated useful lives in the company, a5-year period.
3) Leased assets
The depreciation of leased assets is computed by thestraight-line method, with the lease period as the useful life
period and the remaining value at the end of the lease period
is taken as zero. Finance leases, other than those for which
the ownership of the leased asset will be transferred to thelessee, commenced on or before March 31, 2008, areaccounted for by a method similar to that applicable toordinary operating leases.
4) Deferred assets
The amortization of bond issuance cost is computed using thestraight-line method for the 5-year period until redemption.
5. Provisions and allowances
1) Allowance for doubtful accounts
In order to prepare irrecoverable accounts such as accounts
and loans receivable, provisions for doubtful accounts are
generally made on the basis of historical default rates. Claims
whose possibility of collection is deemed doubtful areprovided for in the expected uncollectible amounts, giving
due consideration to the speciﬁc circumstances.
2) Provision for bonuses
In order to prepare primarily for the payment of bonuses to
employees, provisions are based on the expected amounts of
payment.

Daiken Corporation

Annual Report 2012

Daiken Corporation and Consolidated Subsidiaries
March 31, 2012

3) Provision for product warranties
In order to prepare primarily for the payment of expenses
expected to occur after the delivery of products, provisions for
estimated repairing costs during the term of warranty aremade.
4) Provision for business structure improvements
In order to prepare for the payment of expenses expected tooccur for business structure improvements, provisions are
made for estimated improvement expenses at the end of theterm under review.
5) Provision for retirement beneﬁts
Provisions for employees’ retirement beneﬁts are made in theamount deemed necessary at the term end, based on
estimated retirement obligations and plan assets. (Regarding
the company pension plan, a prepaid pension expense has
been appropriated, as the value of the pension plan assets
exceeds the amount of the retirement beneﬁt obligation as
adjusted for unrecognized prior service cost and net
unrecognized actuarial gain or loss.)
Net unrecognized actuarial gain or loss is amortizedcommencing the ﬁscal year following the consolidated ﬁscal
year in which the gain or loss was recognized by thestraight-line method over the estimated average remaining
years of service of the eligible employees (mainly 10 years).
6) Provision for environmental measures
In order to prepare primarily for the payment of expenses
expected to occur for environmental measures, provisions are
made for estimated expenses.
7) Provision for loss on guarantee
In order to prepare for the payment of expenses expected tooccur related to guarantee obligations, provisions have been
made for the estimated amount of expenses to be borne,
considering the ﬁnancial condition of the companies
guaranteed.
(Additional information)
Since the probability is increasing of a loss occuring due toguarantee obligations for companies guaranteed, theabovementioned provision is made from the current
consolidated ﬁscal year.
6. Criteria for appropriating important incomes andexpenses
Criteria for appropriating the amounts and costs of completedwork:1) Work conﬁrmed as certain to be progressed partly by the endof the current ﬁscal term: The criterion is the progress of said
work. (The rate of progress is estimated using the cost
proportion method.)2) Other work: The criterion is the completion of said work.
7. Criteria of translations into Japanese yen amounts ofimportant assets or liabilities denominated in foreign
currencies
The monetary credits and debts denominated in foreign
currencies are translated into Japanese yen at the current
exchange rate on the consolidated settling date and translationdifference is treated as gain or loss. The assets and liabilities offoreign consolidated subsidiaries are translated into Japanese yenat the current exchange rate on the consolidated settling dateand gain or loss is also translated into Japanese yen at thecurrent exchange rate on the consolidated settling date. Anytranslation differences are included in the translation adjustment
account and minority interests in the net assets section.
8. Important methods of hedge accounting
1) Method of hedge accounting
The deferred method of hedge accounting is adopted. As forforeign exchange forward contracts and foreign currency
option contracts, the allotment process is adopted if therequired conditions are satisﬁed. As for interest rate swap
contracts, the exception process is adopted if the requiredconditions for this process are satisﬁed.
2) Hedging measures and objectives

Hedging measures are foreign exchange forward contracts
and foreign currency option contracts. The objectives areaccounts receivable and payable and anticipated transactions
denominated in foreign currencies. Interest rate swap
contracts are other measures, the objectives of which areloans and debts.
3) Hedging policy
In accordance with our internal "Risk Management Policy,"
we hedge against foreign exchange rate ﬂuctuation risks.
4) Method of evaluating the efﬁciency of hedging
Accumulations of cash ﬂow ﬂuctuations of hedging objectives
or exchange rate ﬂuctuations are compared withaccumulations of cash ﬂow ﬂuctuations of hedging measures
or exchange rate ﬂuctuations for every half term. The
efﬁciency of hedging is evaluated on the basis of both these
ﬂuctuated values. However, for interest rate swap contracts
using the exception process, we omit this evaluation of
efﬁciency.
9. Method and term of calculating the depreciation of
goodwill
The depreciation of goodwill is computed in accordance with thestraight-line method for a period of 20 years.
10. Scope of funds in consolidated statements of cash ﬂows
Funds consist of money in hand, deposits that can be withdrawn
as required, and short-term investments with a redemption
period of within three months from the date of acquisition,
which are easy to realize and with minimal risk of value
ﬂuctuations.
11. Transaction of consumption tax
Consumption taxes and local consumption taxes withheld and/or
paid are not included in the accompanying statements ofoperations.

Notes Related to Consolidated Balance Sheets
1. Accumulated depreciation of property, plant andequipment¥ 60,855 million
2. Items for non-consolidated subsidiaries and afﬁliates
are as follows:
Investment securities (stocks)¥
895 million
3. Assets pledged as collateral
Buildings and structures
Machinery, equipment andvehiclesLand
Other current assets
Other noncurrent assets
Total

¥

991 million¥ 1,479 million¥ 3,171 million¥ 1,147 million¥
202 million¥ 6,992 million

Loans corresponding to the above
Short-term loans payable¥
498 million
Current portion of long-termloans payable¥
304 million
Long-term loans payable¥ 1,051 million
Besides the above, securities amounting to ¥14 million andinvestment securities amounting to ¥34 million are held as adeposit relating to our housing land and building agency
registration.
4. Guarantee obligations
Guarantees are provided for bank loans assumed
by the company mentioned below, as follows:
For Daiken Engineering(Singapore) Pte. Ltd.
¥
50 million
5. Contingent liabilities
Liability for redemption following
liquidation of credit

During the current consolidated ﬁscal year, an issue related tosurface material exfoliation occurred on one of our Group
products (secondary decorative board), and we are taking
measures including inspections and repairs. The relative
inspection and repair expenses, where the amounts can be
estimated rationally, have been appropriated in the budget
for the current consolidated ﬁscal year. There will be apossibility of occurring additional expenses for inspection andrepair from the next consolidated ﬁscal year onward,
however, at the present point it is difﬁcult to estimate thenecessary amount rationally, so the expense amount has notbeen appropriated in the budget.
As the cause of the issue was traced to an error by an
external supplier, we have ﬁled a suit for compensatory
damages against relevant expenses.
6. In order to efﬁciently raise working capital, the Company
concluded overdraft contracts and loan commitment
contracts with ﬁve of our ﬁnancial institutions.
The unexecuted loan balances related to such overdraft
contracts and loan commitment contracts at the term end are
as follows:
Maximum overdraft amount andthe total amount of loan
commitment¥ 13,200 million
Executed loan amounts
–
Total

¥

13,200 million

7. Notes to mature at the closing date of the consolidated ﬁscal
year
Notes to mature at the closing date of the consolidated
ﬁscal year are settled at the clearing date of the notes as per
the accounting procedures.
As for the current consolidated ﬁscal year, however, theclosing date corresponded with a bank holiday, andtherefore, the undermentioned notes to mature at the closing
date of the consolidated ﬁscal year are included in thebalance at the end of the current consolidated ﬁscal year.
Notes receivable¥
77 million
Notes payable¥
1,033 million

Notes Related to Consolidated Statementsof Income
1. Primary selling, general and administrative expenses
Transportation and storage
expenses¥ 11,432 million
Transfer to allowancefor doubtful accounts¥
21 million
Salaries and allowances¥
7,645 million
Transfer to provision for bonuses¥
879 million
Expenses for retirement beneﬁts¥
1,353 million
2. Research and development costs
Research and development costs are included in the cost ofgeneral and administrative expenses and the cost of production
for the year ended March 31, 2012, totaling ¥1,470 million.
3. Contents of gain on sales of noncurrent assets
Machinery, equipment and vehicles¥
6 million
Land¥
117 million
Total

¥

123 million

4. Contents of loss on retirement of noncurrent assets
Buildings and structures¥
18 million
Machinery, equipment and vehicles¥
46 million
Other¥
35 million
Total

¥

100 million

5. Loss on valuation of golf club memberships includes ¥3
million of the transfer to allowance for doubtful
accounts¥ 1,883 million

Daiken Corporation

Annual Report 201213

Annual Report 2012
For the year ended March 31, 2012

DAIKEN CORPORATION
Registered Head Office:1-1, Inami, Nanto City, Toyama 932-0298, Japan
Phone: +81-763-82-5850
Operational Headquarters:
22F, Dojima Avanza
6-20, Dojima 1-chome Kita-ku, Osaka 530-8210, Japan
Phone: +81-6-6452-6000

DAIKEN CORPORATION