ANNUAL REPORT
2014

CONTENTS
PROFILE1

CONSOLIDATED BALANCE SHEETS

4

THE MESSAGE FROM THE PRESIDENT

2

CONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMECONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSCONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6
7
8

11

13

INDEPENDENT AUDITOR'S REPORT54

NON-CONSOLIDATED STATEMENTS OF INCOME

58

NON-CONSOLIDATED BALANCE SHEETS

56

NON-CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS

59
62

INDEPENDENT AUDITOR'S REPORT72

CORPORATE DATA75

CORPORATE OUTLINE

74a

PROFILE

1

THE MESSAGE FROM THE PRESIDENT
When the 2013 fiscal year started, we had expected the continued and steady economic growth in Japan. Because, we
had seen not only the global economic recovery led by improved economic activities in the United States and otheroverseas countries, but also the ongoing yen depreciation and high stock prices under the drastic monetary-easing policy,
continuing reconstruction demand and effectiveness of supplementary budget. In fact, the Japanese economy has
continued to expand and business volume and profitability of the Japanese corporate sector has been steadily improved,
thanks to the effect of the increase of exporting business, as well as that of the “New Dimension Policy of Monetary
Easing”, the flexible fiscal policy by the Bank of Japan, and other political measures that aim to stimulate private
investments. However, we still need to have a prudent insight in seeing the future economic trends, especially including adownturn of emerging markets and the uncertainties of the upcoming outlook of overseas economies as well.
In the domestic construction market, we have seen steady growth in construction demand, led by last-minute surge in the
housing demands caused by the consumption tax rate increase in April 2014, continued reconstruction activities after theGreat East Japan Earthquake, the increase in public investments under the National Infrastructure Resilience Program,and the infrastructure improvement and repair works planned for the preparation of 2020 Tokyo Olympics andParalympics. However, the construction industry in Japan still continues to face with the difficult managerial environment,
as we continue to struggle for the short supply of skilled construction workers, and sudden increase of construction costs
such as labor fees and material costs.
Under these circumstances, for the fiscal year ended on March 31, 2014, the SMCC group has achieved net sales of 382.7
billion yen (up 40.0 billion yen from the previous year), operating income of 7.9 billion yen (up 2.2 billion yen from theprevious year) and a net income of 4.2 billion yen (up 2.2 billion yen from the previous year).
One year has passed since we announced “The 4th Mid-term Management Plan 2013-2015” (as “PLAN” hereafter) in May
2013, which supported to aim maintaining management system as clear-cut and understandable way and to strengthen our
profitability in our core business, as well as (based on our long range targets in the next 10 years) accomplish the planned
business goals and by the slogan “CHO-SEN (as challenges)” establish a sound and profitable business portfolio with strong
management control.
The major principles of the PLAN are as follows:◇ Theme: “CHO-SEN (as challenges)” to The New Dynamic Evolution◇ Strengthen the quality of the three core segments of our business and build diverse profit segments for future growth
1. “Improve Competitiveness & Profitability” in the domestic construction business
2. “Establish a Stronger Management Platform for Overseas Business” with a focus on Asia
3. “Invest in the Future” to produce sustainable contributions to the society
The key elements of our business strategies are as follows:a. For the domestic construction business, we will strengthen our operation systems by securing growth in profits throughour superior technologies in the core business, increasing competitiveness to obtain more orders and improving
profitability by outperforming our competitors, and developing our own business solution skills.
As the core activity on civil engineering division, we will continue to focus on “Prestressed Concrete Bridge” and“Tunnel Work” where our presence as the major player has already been established, and for that of the building
construction division, we will focus on the “High-rise Housing” and “Commercial & Logistics Facilities”.
b. For the overseas construction business, we will enhance the sound and profitable construction activities andrisk-management control systems including overseas subsidiaries and we reinforce our education and training programsfor our staff and employees, in order to establish a stronger business platform that will enable us to further grow in the
future.
c. For new business fields, we start a preliminary study for the new channels for growth, through utilizing our own
construction skills and practices with new schemes of operation system, such as PFI and PPP.
We will continue to increase and diversify our revenue and profit bases for sustainable growth toward the new dynamic
evolution era, in response to the changing market environment, so that these result shall be retuned to all our stakeholders shareholders, business partners, clients, employees and of course to our Globe.

Yoshiyuki Norihisa
Representative Director,
President and Chief Executive Officer2Consolidated Financial Statements
Sumitomo Mitsui Construction Co., Ltd.
and Consolidated Subsidiaries
Year ended March 31, 2014
with Independent Auditor’s Report3Sumitomo Mitsui Construction Co., Ltd.
Consolidated Balance Sheets
March 31, 2014

AssetsCurrent assets:
Cash and deposits (Notes 6-(c), 10 and 12)
Trade notes receivable, accounts receivable on completed
construction contracts and other (Notes 6-(c), 6-(g) and 12)
Inventories (Notes 6-(a) and 6-(f))
Deferred tax assets (Note 16)
Other current assets (Note 6-(c))
Allowance for doubtful receivables (Note 12)
Total current assets

Non-current assets:
Property and equipment, at cost:
Land (Notes 6-(c) and 6-(d))
Buildings and structures (Note 6-(c))
Machinery, equipment and vehicles (Notes 6-(c) and 11)
Construction in progress
Accumulated depreciation
Property and equipment, net
Intangible fixed assets
Investments and other assets:
Investments in securities (Notes 6-(c), 12 and 13)
Long-term loans receivable (Note 12)
Deferred tax assets (Note 16)
Investments in real estate (Notes 6-(b), 6-(c) and 17)
Claims provable in bankruptcy and other (Note 12)
Investments in unconsolidated subsidiaries and affiliates
Other
Allowance for doubtful receivables (Note 12)
Total investments and other assets
Total non-current assets

Total assets

4

As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)
¥ 40,320¥ 39,899$ 391,760

129,418
19,302
3,035
12,414(135)
204,356

101,279
19,184
1,673
10,424(379)
172,083

1,257,462
187,543
29,488120,617(1,311)
1,985,581

16,76616,14218,00646(26,687)
24,273

16,75015,883
18,161
16(27,109)23,701

162,903
156,840
174,951446(259,298)
235,843

2,011

2,060

19,539

5,818
6,434
1,218
4,017
795
1,378
10,099(9,687)
20,07446,360

5,238
6,491
2,867
4,243
867
1,850
31,055(29,042)
23,57049,33256,52962,514
11,83439,0307,724
13,38998,124(94,121)
195,044
450,446¥250,716¥221,416$2,436,027

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Balance Sheets
March 31, 2014

Liabilities and net assets
Current liabilities:
Trade notes payable, accounts payable on construction contracts
and other (Notes 6-(g) and 12)
Short-term bank loans and current portion of long-term debt
(Notes 6-(c), 12 and 22)
Accrued expenses
Advances received on construction contracts in progress
Reserve for defects on completed construction projects
Allowance for losses on construction contracts (Note 6-(f))
Allowance for loss on litigation
Other current liabilities (Note 6-(c))
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 6-(c), 12 and 22)
Deferred tax liability on land revaluation (Note 6-(d))
Accrued retirement benefits (Note 15)
Liability for retirement benefits (Notes 4 and 15)
Other long-term liabilities (Notes 6-(c) and 6-(e))
Total long-term liabilities
Contingent liabilities (Notes 6-(e) and 19)
Net assets:
Shareholders’ equity:
Capital stock:
Common stock:
Authorized:
2,669,464,970 shares in 2014 and 2013
Issued and outstanding:
808,262,394 shares in 2014 and675,480,576 shares in 2013
Preferred stock:
Authorized:
26,894,644 shares in 2014 and 2013
Issued and outstanding:
1,507,500 shares in 2014 and
4,428,700 shares in 2013
Additional paid-in capital
Retained earnings
Treasury stock, at cost:
468,382 shares in 2014 and 454,364 shares in 2013
Total shareholders’ equity
Accumulated other comprehensive income:Unrealized holding gain on securities
Deferred gain on hedging instruments, net of taxes (Note 14)
Land revaluation (Note 6-(d))
Translation adjustments
Retirement benefits liability adjustment (Note 4)
Total accumulated other comprehensive income (loss)
Minority interests
Total net assets
Total liabilities and net assets

As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

¥136,453¥115,338$1,325,816

15,032
3,427
22,260823
1,755–
13,742
193,494

8,391
2,642
27,768728
717
890
13,804
170,280

146,055
33,297
216,284
7,996
17,052–
133,5211,880,042

1,440
335
–
20,122
5,249
27,1472,194
335
18,057–
5,186
25,773

13,991
3,254–
195,51151,000263,767

12,003

12,003

116,624479
13,826

480
9,814

4,654
134,337(242)
26,068(241)
22,056(2,351)
253,284

294
29
40
(357)
(787)
(781)
4,787
30,074¥250,716

197
139
39
(682)
–
(306)
3,611
25,361¥221,416

2,856
281
388
(3,468)(7,646)(7,588)46,511
292,207$2,436,027

The accompanying notes are an integral part of these statements.

5

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Income
March 31, 2014

Years ended March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)
Net sales (Note 7-(a))
Cost of sales (Notes 7-(b) and 7-(d))
Gross profit¥382,724
359,829
22,894¥342,727
322,612
20,115$3,718,655
3,496,200
222,444

14,9497,944

14,3305,784

145,248
77,186

843
139
580
368
348
(799)
(461)
(304)
96
118
43
–

644
153
–
4
107
(926)
(53)
(230)
14
–
0
14

8,190
1,350
5,635
3,575
3,381
(7,763)(4,479)(2,953)
932
1,146
417
–

(44)
–
(181)
(60)
–
(690)
(3)
7,941

(21)
(194)
–
(20)
(44)
(914)
(1,466)
4,317

(427)
–
(1,758)(582)–(6,704)(29)
77,157

2,444
223
2,667

1,741
(165)
1,576

23,746
2,166
25,913

5,273
1,072
4,201

2,740
698
2,042

51,233
10,41540,818Selling, general and administrative expenses(Notes 7-(c), 7-(d) and 15)
Operating income
Other income (expenses):
Interest and dividend income
Payments received from insurance claims
Reversal of allowance for loss on litigation (Note 7-(e))
Exchange gain, net
Reversal of allowance for doubtful receivables
Interest expense
Provision of allowance for doubtful receivables
Corporate tax on overseas sales
Gain on sales of property and equipment (Note 7-(f))
Gain on donation of assets (Note 7-(g))
Gain on sales of investments in securities
Gain on liquidation of investments in securities
Loss on sales and disposal of property and equipment(Note 7-(h))
Loss on litigation
Impairment loss (Note 7-(i))
Impairment loss on membership
Loss on step acquisitions
Other, net
Income before income taxes and minority interests
Income taxes (Note 16):
Current
DeferredIncome before minority interests
Minority interests in net income of consolidated subsidiaries
Net income¥¥(U.S. dollars)(Note 3)(Yen)
Net income per share – basic (Note 20)
Net income per share – diluted (Note 20)

¥

5.51
5.17

The accompanying notes are an integral part of these statements.

6

$

¥

4.56
2.56

$

0.054
0.050

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Comprehensive Income
March 31, 2014

Years ended March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)
Income before minority interests¥5,273¥2,740$51,233

Other comprehensive income:Unrealized holding gain on securities
Deferred (loss) gain on hedging instruments, net of taxes
Land revaluation
Translation adjustments
Share of other comprehensive income of affiliates
accounted for by the equity method
Total other comprehensive income (Note 8)
Comprehensive income

97
(109)
0
418

336
108
–
205

942
(1,059)
0
4,061

(5)
400
¥5,6744655¥3,396(48)
3,886$55,130

Comprehensive income attributable to:
Owners of the parent
Minority interests¥4,514
1,160¥2,659736$43,859
11,270

The accompanying notes are an integral part of these statements.

7

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Changes In Net Assets
March 31, 2014

Capitalstock
Balance at the beginningof the period
Changes in items during
the period:
Dividends from surplus
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in items
other than shareholders’equityTotal changes in items
during the period
Balance at the end of theperiod¥12,003¥480¥ 9,814¥(241)¥22,056

(188)
4,201

(188)
4,201

(0)

(1)

(1)

0

0

–

(0)

4,012

(0)

4,011

¥12,003¥479¥13,826¥(242)¥26,068

Unrealized
holding gain
on securities
Balance at the beginningof the period
Changes in items during
the period:
Dividends from surplus
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in items
other than shareholders’equityTotal changes in items
during the period
Balance at the end of theperiodYear ended March 31, 2014
Shareholders’ equity
Additional
Total
paid-inshareholders’
Retained
Treasury
capitalequityearnings
stock, at cost
(Millions of yen)

¥197

Year ended March 31, 2014
Accumulated other comprehensive income
DeferredTotalgain (loss)
accumulated
Retirement
on hedging
otherbenefits
instruments,
comprehensive
liability
Land
Translation
net of taxes revaluation adjustments adjustments income (loss)(Millions of yen)
¥139

¥39

¥(682)¥–¥(306)

Minority
interests

Total
net assets¥3,611¥25,361
(188)
4,201
(1)
0

97

(109)

0

325

(787)

(474)

1,176

701

97

(109)

0

325

(787)

(474)

1,176

4,712

¥294

¥ 29

¥40

¥(357)¥(787)¥(781)¥4,787¥30,0748

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Changes In Net Assets
March 31, 2014

Capitalstock
Balance at the beginningof the period
Changes in items during
the period:
Dividends from surplus
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in items
other than shareholders’equityTotal changes in items
during the period
Balance at the end of theperiod$116,624$4,663$ 95,355$(2,341)$214,302(1,826)40,818(0)(1,826)40,818
(9)

(9)

0

0

–

(0)

38,981(0)

38,972$116,624$4,654$134,337$(2,351)$253,284

Unrealized
holding gain
on securities
Balance at the beginningof the period
Changes in items during
the period:
Dividends from surplus
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in items
other than shareholders’equityTotal changes in items
during the period
Balance at the end of theperiodYear ended March 31, 2014
Shareholders’ equity
Additional
Total
paid-inshareholders’
Retained
Treasury
capitalequityearnings
stock, at cost(Thousands of U.S. dollars) (Note 3)$1,914

Year ended March 31, 2014
Accumulated other comprehensive income
DeferredTotalgain (loss)
accumulated
Retirement
on hedging
otherbenefits
instruments,
comprehensive
liability
Land
Translation
net of taxes revaluation adjustments adjustments income (loss)(Thousands of U.S. dollars) (Note 3)$1,350$378$(6,626)$–$(2,973)

Minority
interests

Total
net assets$35,085$246,414(1,826)
4,818
(9)
0

942

(1,059)0

3,157(7,646)(4,605)

11,426

6,811

942(1,059)0

3,157(7,646)(4,605)

11,42645,783$2,856

$ 281

$388

$(3,468)$(7,646)$(7,588)$46,511$292,2079

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Changes In Net Assets
March 31, 2014

Capitalstock
Balance at the beginningof the period
Changes in items during
the period:
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in items
other than shareholders’equityTotal changes in items
during the period
Balance at the end of theperiod¥12,003¥481¥7,771¥(241)¥20,014

2,042

2,042

(0)

(0)

(0)

0

0

–

(0)

2,042

0

2,042

¥12,003¥480¥9,814¥(241)¥22,056

Unrealized
holding(loss) gain
on securities
Balance at the beginningof the period
Changes in items during
the period:
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in items
other than shareholders’equityTotal changes in items
during the period
Balance at the end of theperiodYear ended March 31, 2013
Shareholders’ equity
Additional
Total
paid-inshareholders’
Retained
Treasury
capitalequityearnings
stock, at cost
(Millions of yen)¥(137)

Year ended March 31, 2013
Accumulated other comprehensive income
DeferredTotalgain (loss)
accumulated
Retirement
on hedging
otherbenefits
instruments,
comprehensive
liability
Land
Translation
net of taxes revaluation adjustments adjustments income (loss)(Millions of yen)
¥ 30

¥39

¥(856)¥ –¥(923)

Minority
interests

Total
net assets¥2,913¥22,004
2,042
(0)
0

335

108

–

173

–

617

698

1,315

335

108

–

173

–

617

698

3,357

¥ 197

¥139

¥39

¥(682)¥ –¥(306)¥3,611¥25,361

The accompanying notes are an integral part of these statements.

10Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Cash Flows
March 31, 2014
Years ended March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)Operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in reserve for defects on completed construction
projects
Increase (decrease) in allowance for losses on construction contracts(Decrease) increase in allowance for loss on litigation
Increase in accrued retirement benefits
Increase in liability for retirement benefits(Gain) loss on sales and disposal of property and equipment(Gain) on sales of investment in securities(Gain) on liquidation of investments in securities
Impairment loss on membership
Interest and dividend income
Interest expense
Exchange (gain), net
Reversal of allowance for loss on litigation
Equity in (earnings) loss of affiliates
Loss on step acquisitions(Increase) decrease in trade notes receivable, accounts receivable oncompleted construction contracts and other
Decrease in inventories(Increase) decrease in other assets
Decrease (increase) in trade notes payable, accounts payable on
construction contracts and other(Decrease) in advances received on construction contracts in progress
Increase in other liabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash (used in) provided by operating activities
Investing activities
Increase (decrease) in fixed deposits
Purchases of property and equipment
Proceeds from sales of property and equipment
Purchases of intangible fixed assets
Proceeds from sales of investments in real estate
Purchases of investments in securities
Proceeds from sales of investments in securities
Increase in investments in unconsolidated subsidiaries and affiliates
Proceeds from purchases of stocks of subsidiaries resulting in change inscope of consolidation
Disbursements for loans receivable
Proceeds from collection of loans receivable
Other
Net cash (used in) investing activities11¥ 7,941
1,610
181
–
159

¥ 4,317
1,637
–
22
(31)

$ 77,157
15,643
1,758
–
1,544

88
1,037
(310)
–
1,207
(47)
(43)
–
60
(843)
799
(371)
(580)
(36)
–

(227)
(961)
28
1,229
–
6
(0)
(12)
20
(644)
926
(583)
–
135
44

855
10,075(3,012)–
11,727
(456)
(417)
–
582
(8,190)7,763(3,604)(5,635)(349)–(26,775)
134(1,114)

14,386
3,721
599(260,153)
1,301(10,823)

18,722(6,150)39
28(4,261)900(802)(2,410)(6,575)(4,564)(2,377)685(6)18,352588(894)(1,493)
16,553

181,908(59,755)378
272(41,401)
8,744(7,792)(23,416)(63,884)786(1,107)
96
(136)
284
(329)
66
–

(3,155)
(817)
21
(88)
–
(208)
1
(18)

7,636
(10,755)932(1,321)
2,759(3,196)
641
–

–
(71)
127
17
(266)

267
(63)
421
69
(3,571)

–
(689)
1,233
165
(2,584)

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Cash Flows
March 31, 2014

Years ended March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)Financing activities
Increase (decrease) in short-term bank loans
Increase in long-term debt
Decrease in long-term debt
Increase in long-term loans of employees(Increase) in treasury stock
Cash dividends paid
Cash dividends paid for minority shareholders
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Increase in cash and cash equivalents due to inclusion inconsolidation
Cash and cash equivalents at end of the year (Note 10-(a))¥ 6,657
200
(969)
33
(1)
(188)
(99)
(231)
5,400

¥(12,288)
750
(869)
53
(0)
–
(47)
(161)
(12,563)$ 64,681
1,943(9,415)320(9)(1,826)(961)(2,244)52,467916(524)
31,4001,135
1,553
29,8478,900(5,091)305,091

1,179¥ 32,055–¥ 31,400

11,455$ 311,455

The accompanying notes are an integral part of these statements.

12

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

1.

Basis of Preparation

The accompanying consolidated financial statements of Sumitomo Mitsui Construction Co.,
Ltd. (the “Company”) and consolidated subsidiaries (collectively the “Group”) are preparedon the basis of accounting principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements of International Financial
Reporting Standards, and have been compiled from the consolidated financial statements
prepared by the Company as required by the Financial Instruments and Exchange Law ofJapan.
Certain reclassifications have been made to present the accompanying consolidated
financial statements in a format which is familiar to readers outside Japan. In addition,certain amounts in the prior year’s financial statements have been reclassified to conform tothe current year’s presentation.
As permitted, amounts of less than one million yen have been omitted. As a result, thetotals shown in the accompanying consolidated financial statements do not necessarily
agree with the sums of the individual amounts.
2.

Summary of Significant Accounting Policies(a) Basis of Consolidation and Accounting for Investments in Unconsolidated
Subsidiaries and Affiliates
The accompanying consolidated financial statements include the accounts of theCompany and the significant companies which it controls directly or indirectly.
Companies over which the Company exercises significant influence in terms of theiroperating and financial policies have been included in the consolidated financial
statements on an equity basis. In the elimination of investments in subsidiaries, theassets and liabilities of the subsidiaries, including the portion attributable to minority
shareholders, are recorded based on the fair value at the time the Company acquired
control of the respective subsidiaries. All significant intercompany balances andtransactions have been eliminated in consolidation.
The excess of the cost over the underlying net assets at fair value at the respective
dates of acquisition of the consolidated subsidiaries (goodwill) or the excess of fairvalue of the net assets acquired over cost (negative goodwill) is charged or credited toincome in the year of acquisition.
Investments in affiliates not accounted for by the equity method are principally statedat cost.
The Company had 16 consolidated subsidiaries, 1 unconsolidated subsidiaries and 1
affiliate accounted for by the equity method as of March 31, 2014.

13

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(b) Fiscal Year of Consolidated Subsidiaries
All foreign consolidated subsidiaries (4 companies) have a fiscal year that ends on
December 31. The accompanying consolidated financial statements were preparedbased on the financial statements as of the same date. Necessary adjustments forconsolidation were made on significant transactions that took place during the period
between the fiscal year-end of the subsidiaries and the fiscal year-end of the Company.
(c) Securities
The accounting standard for financial instruments requires that securities be classified
into three categories: trading, held-to-maturity or other securities. Trading securities
are carried at fair value and held-to-maturity securities are carried at amortized cost.
Marketable securities classified as other securities for which market prices are
determinable are carried at fair value with any changes in unrealized holding gain or
loss, net of the applicable income taxes, included directly in net assets.
Non-marketable securities classified as other securities are carried at cost. Cost of
securities sold is determined by the moving average method.
(d) Inventories
Inventories other than materials and supplies are stated at cost determined by the
specific identification method. Materials and supplies are valued at cost determined by
the average method. Book values are written down based on any decline inprofitability.
(e) Depreciation and Amortization(1) Property and equipment (except leased assets) and investments in real estate
Depreciation of property and equipment (except leased assets) and investments inreal estate is determined primarily by the declining-balance method based on theestimated useful lives of the respective assets as prescribed in the Corporation
Tax Law of Japan except that the straight-line method is applied to officebuildings acquired on or after April 1, 1998.
Depreciation at all overseas subsidiaries is determined by the straight-line method
or by the declining-balance method based on the estimated useful lives of therespective assets.
(2) Intangible fixed assets (except leased assets)
Amortization of intangible fixed assets (except leased assets) is calculated by thestraight-line method based on the estimated useful lives of the respective assets asprescribed in the Corporation Tax Law of Japan. Amortization of computer
software for internal use is calculated by the straight-line method over theestimated useful lives of 5 years.

14

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(e) Depreciation and Amortization (continued)(3) Leased assets
Depreciation of leased assets under finance leases other than those that transfer
the ownership of the leased assets to the lessees is calculated by the straight-line
method over the lease term with a residual value of zero.
Finance leases other than those that transfer the ownership of the leased assets tothe lessees, whose commencement dates are on or before March 31, 2008,
continue to be accounted for in a similar manner as operating leases.
(f)Advances Received on Construction Contracts in Progress
As is customary in Japan, the Company and its domestic consolidated subsidiaries
receive payments from customers on an installment basis in accordance with the termsof the respective construction contracts.

(g) Allowance for Doubtful Receivables
The allowance for doubtful receivables is provided for future losses on general
receivables at an amount calculated by applying the percentage of actual losses oncollection experienced in the past, and an uncollectible amount for doubtfulreceivables estimated based on an individual assessment of each receivable andprobability of collection.
(h) Reserve for Defects on Completed Construction Projects
A reserve has been provided at an estimated amount for the fiscal year’s sales
proceeds in order to cover the liability for future costs of defects of the completed
construction projects.
(i)

Allowance for Losses on Construction Contracts
An allowance has been provided based on the estimated amount for the future losses
on construction projects in progress at the fiscal year end which are anticipated to be
substantial losses in the future.

(j)

Allowance for Loss on Litigation
An allowance has been provided for future losses on pending litigation at an estimatedamount calculated based on specific circumstances.

15

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(k) Accounting for Retirement Benefits(1) Method of attributing expected retirement benefits to periods
In calculating the retirement benefit obligation, the straight-line method is applied
to attribute the expected retirement benefits to the periods up to year ended March
31, 2014.
(2) Amortization of actuarial gain or loss, prior service cost and net retirement
benefit obligation at transition
Actuarial gain or loss is amortized in the year following the year in which thegain or loss is recognized by the straight-line method over periods (mainly 11
years), which are shorter than the average remaining years of service of theemployees.
Prior service cost is being amortized as incurred by the straight-line method overperiods (mainly 11 years), which are shorter than the average remaining years ofservice of the employees.
The net retirement benefit obligation at transition is being amortized by thestraight-line method over a period of 15 years.
(l)

Recognition of Revenues and Costs on Construction Contracts
Revenues and costs of construction contracts that commenced on or after April 1, 2009,of which the percentage of completion can be reliably estimated, are recognized by thepercentage-of-completion method. The percentage of completion is calculated at thecost incurred as a percentage of the estimated total cost. The completed-contract
method is applied for contracts for which the percentage of completion cannot be
reliably estimated.
Revenues and costs of construction contracts of the Company and certain subsidiaries
that commenced on or before March 31, 2009, which cover a construction period
longer than 12 months are, in principle, also recognized by the percentage-ofcompletion method, except for total revenue on long-term contracts of less than ¥500
million.

(m) Recognition of Income from Finance Leases
Income from finance leases is recorded as sales and cost of sales at the time a lease
payment is received.

16

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(n) Derivatives and Hedge Accounting(1) Method of hedge accounting
Derivative financial instruments are mainly stated at fair value except thoseaccounted for under deferred hedge accounting.
Foreign exchange forward contracts qualifying for allocation accounting aretranslated at the contract rate.
Interest rate swaps qualifying for hedge accounting and meeting specificmatching criteria are not remeasured at market value, but the differential paid or
received under the swap agreements is charged or credited to income (short-cut
method).
(2) Hedging instruments and hedged items
Hedging instruments:
Hedged items:

Forward foreign exchange contracts
Interest rate swaps
Future foreign currency transactions
Interest on debt

(3) Hedging policy
The Company utilizes foreign exchange forward contracts and interest rate swaps
only for the purpose of hedging future risks of fluctuation of foreign currency
exchange rates or interest rates.
(4) Assessment of hedge effectivenessThe evaluation of hedge effectiveness for a foreign exchange forward contract isperformed on a quarterly basis to confirm that amount of the foreign exchange
contract is within amount of the underlying hedged item to assess whether theforward contract qualifies for hedge accounting.
An evaluation of hedge effectiveness for interest rate swaps is not performed as
all meet specified criteria under the short-cut method.
(o) Amortization of Goodwill and Amortization Period
Goodwill is expensed as incurred when the amount is immaterial.
(p) Cash Equivalents
All highly liquid investments with a maturity of three months or less when purchased,
which can easily be converted to cash and are subject to little risk of change in value,
are considered cash equivalents.

17

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(q) Consumption Taxes
Consumption taxes are accounted for by the tax exclusion method.
(r)

Income Taxes
Deferred tax assets and liabilities are determined based on the differences between theamounts calculated for financial reporting purposes and the tax bases of the assets andliabilities and are measured using the enacted tax rates and laws which will be in effectwhen the differences are expected to reverse.
The Company has adopted the consolidated taxation system.

3.

U.S. Dollar Amounts

The translation of yen amounts into U.S. dollar amounts is included solely for theconvenience of readers outside Japan and has been made, as a matter of arithmetic
computation only, at ¥102.92 = U.S.$1.00, the approximate rate of exchange in effect on
March 31, 2014. This translation should not be construed as a representation that yen havebeen, could have been, or could in the future be, converted into U.S. dollars at that or any
other rate.
4.

Changes in Accounting Methods

Effective the year ended March 31, 2014, the Company has adopted “Accounting Standard
for Retirement Benefits” (ASBJ Statement No. 26 issued on May 17, 2012) and “Guidanceon Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25 issued on May
17, 2012) (except for certain provisions in the main clause of Section 35 of the standard andin the main clause of Section 67 of the Guidance). These accounting standards require
entities to apply a revised method for recognizing the retirement benefit obligation, after
deducting plan assets, as a liability for retirement benefits. In addition, unrecognizedactuarial loss, unrecognized prior service cost and unrecognized net retirement benefit
obligation at transition are recognized as a liability for retirement benefits. Concerning the
adoption of the Accounting Standard for Retirement Benefits, in accordance with theprovisional treatment set out in Clause 37 of the Accounting Standard for Retirement
Benefits, the effect of such changes in the current fiscal year have been recorded inretirement benefits liability adjustments through accumulated other comprehensive income.
As a result, a liability for retirement benefits was recognized in the amount of ¥848 million($8,239 thousand) and accumulated other comprehensive income decreased by ¥787
million ($7,646 thousand) as of March 31, 2014. In addition, for information on the effectof the change on net assets per share, see “Per Share Information.”

18

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

5.

Unapplied Accounting Standards“Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26 issued on May 17,2012) and “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance
No. 25, issued on May 17, 2012)(a) Outline
These accounting standards have been revised primarily to enhance disclosures andfocusing on accounting for unrecognized actuarial differences, methods for treating
unrecognized prior service costs and calculation retirement benefit obligation andservice costs.
(b) Scheduled date of adoption
The scheduled adoption date for the revision of calculation methods of retirement
benefit obligations and service costs will be the beginning of the year ending March 31,
2015. Concerning the adoption of the Accounting Standard for Retirement benefits, inaccordance with the provisional treatment set out in Clause 37 of the AccountingStandard for Retirement Benefits, previous period financial statements is not adjusted
retroactively.
(c) Impact of the Adoption of These Accounting Standards
The Company is currently assessing the effects of the adoption of the accounting
standard and guidance on its consolidated financial statements.
6.

Notes to Consolidated Balance Sheets(a) Inventories
The components of inventories as of March 31, 2014 and 2013 were as follows:
As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Merchandise and finished goods
Materials and supplies
Costs on uncompleted construction
contracts
Real estate for sale

¥00,550
1,570¥00,579
1,341$005,343
15,254

17,1782¥19,302

17,261
2¥19,184

166,906
19$187,543(b) Investments in Real Estate“Investments in real estate” includes accumulated depreciation in the amounts of ¥714
million ($6,937 thousand) and ¥912 million at March 31, 2014 and 2013, respectively.

19

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(c) Pledged Assets
The following assets were pledged at March 31, 2014 and 2013 principally as
collateral for short-term bank loans, long-term debt, and guarantees (such as
guarantees for the completion of construction contracts):
As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Cash and deposits
Trade notes receivable, accounts
receivable on completed construction
contracts and other
Other current assets
Land
Buildings and structures, net ofaccumulated depreciation
Machinery, equipment and vehicles,
net of accumulated depreciation
Investments in securities
Investments in real estate¥00,605¥00,829$005,87825–
12,241–
9
12,241

242–
118,937

1,308

1,237

12,708

65
2,634
3,768
¥20,649

36
2,312
3,800
¥20,467631
25,592
36,610$200,631

Of the above property and equipment, mortgaged assets for factory foundations at
March 31, 2014 and 2013 are summarized as follows:
As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Land
Buildings and structures, net ofaccumulated depreciation
Machinery, equipment and vehicles,
net of accumulated depreciation20¥1,258¥1,258$12,223

217

226

2,108

65
¥1,54236¥1,521631$14,982

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(c) Pledged Assets (continued)
The secured liabilities as of March 31, 2014 and 2013 are summarized as follows:
As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Short-term bank loans[Including current portion of
long-term debt]
Long-term debt
Other current liabilities
Other long-term liabilities¥10,800¥2,574$104,935

[736]
1,223
100
124

[736]
1,960
100
225

[7,151]
11,883971
1,204(d) Land Revaluation
Land for operations was revalued by a consolidated subsidiary under the Law for Land
Revaluation during the year ended March 31, 2001. The revaluation amount is shown
as a separate component of net assets.
The market value of the land was ¥697 million ($6,772 thousand) and ¥698 million
more than the revalued book amount at March 31, 2014 and 2013, respectively.
(e) Contingent Liabilities
At March 31, 2014 and 2013, the Company and consolidated subsidiaries were
contingently liable for the following:
As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
As guarantors of bank loans tocustomers, unconsolidated subsidiaries,
an affiliate and employees
As endorsers of notes receivablediscounted with banks
(f)

¥031

¥071

$0,301

331

382

3,216

Estimated Loss on Uncompleted Construction Contracts
An estimated loss on uncompleted construction contracts was recognized and included
as part of inventories but was not offset against the amount on the balance sheet. It has
been recorded as an allowance for losses on construction contracts in the amounts of¥431 million ($4,187 thousand) and ¥49 million as of March 31, 2014 and 2013,
respectively.

21

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(g) Trade Notes Receivable Maturing on the Balance Sheet Date
Trade notes receivable maturing at the end of the fiscal year are settled on the dates
they mature.
Since the last day of the fiscal year in 2013 fell on a bank holiday, trade notes
receivable maturing on that date were excluded from the corresponding balances in the
consolidated balance sheets as of March 31, 2014 and 2013.
As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Trade notes receivable
Trade notes payable
7.

¥–
–

¥179
168

$–
–

Notes to Consolidated Statements of Income(a) Net Sales Based on Percentage-of-completion Method
Net sales on construction contracts accounted for under the percentage-of-completion
method amounted to ¥284,191 million ($2,761,280 thousand) and ¥238,596 million
for the years ended March 31, 2014 and 2013, respectively.
(b) Allowance for Losses on Construction Contracts Included in Cost of Sales
The allowance for losses on construction contracts was included in cost of sales in theamounts of ¥1,530 million ($14,865 thousand) and ¥610 million for the years ended
March 31, 2014 and 2013, respectively.
(c) Selling, General and Administrative Expenses
The significant components of selling, general and administrative expenses at March
31, 2014 and 2013 were as follows:
Years ended March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Salaries and wages
Retirement benefit expenses
Provision of allowance for doubtfulreceivables
Other
Total

22

¥06,364
1,071¥05,943
1,102$061,834
10,40645
7,468¥14,949

22
7,261¥14,330

437
72,561$145,248

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(d) Research and Development Expenses
Research and development costs included in selling, general and administrative
expenses and manufacturing costs amounted to ¥975 million ($9,473 thousand) and¥885 million for the years ended March 31, 2014 and 2013, respectively.
(e) Reversal of Allowance for Loss on Litigation
Though the Company had recognized an allowance for loss on litigation, which wasestimated in relation to claims for damages due to bid-rigging on bridgework, thecorresponding surcharge payment to the Ministry of Land, Infrastructure
Transportation and Tourism of Japan and Fukushima Prefecture was less than therecognized amount, therefore, the difference was reversed. The corresponding
payment was made during the year ended March 31, 2014.
(f)Gain on Sale of Property and Equipment
The significant components of gain on sale of property and equipment for the years
ended March 31, 2014 and 2013 were as follows:
Years ended March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Investments in real estate
Buildings and structures
Others
Total

¥90
–

5
¥96

¥0–
2
11
¥14

$874
–

48
$932

(g) Gain on Donation of Assets
A consolidated subsidiary “Amenity Life, Inc.,” which is involved in managing
operations of a senior care facility, was the receipt of a bequest from a former resident.
(h) Loss on Sales and Disposal of Property and Equipment
The significant components of loss on sales and disposal of property and equipment
for the years ended March 31, 2014 and 2013 were as follows:
Years ended March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Loss on disposal
Loss on sales
Others
Total

¥31
13
0

¥44

23

¥12
0
8
¥21

$301
126
0
$427

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

(i)

Impairment Loss
The Group recognized impairment loss on the following asset groups for the year
ended March 31, 2014.
The Group principally calculates impairment loss by grouping together assets of theconstruction segments and by grouping assets of the other segment individually.
The book values of following assets were reduced to their recoverable values as aresult of profit deterioration on rental property and a decline in the fair value of aresort facility etc. The corresponding write-down was recognized in the amount of¥181 million ($1,758 thousand) as part of other income expenses.
Location

Izumisano, Osaka

UsageClassification

Rental property (1 building)Investment andother assets
Uonuma, Niigata
Resort facility (3 rooms)
Land, Buildings
and Structure
Sapporo, Hokkaido Assets for business (1 building) Buildings andStructure

Year ended
March 31 2014,(Millions of (Thousands ofyen)
U.S. dollars)¥139$1,350

39

378

2

19

In addition, the recoverable value of the rental property was estimated based on theestimated future cash flow discounted by the rate of 1.2%.
The recoverable value of the resort facility was estimated at its net realizable value
based on amounts determined by a valuation made in accordance with real estateappraisal standards.
The recoverable value of assets for business use was estimated based on the estimatedfuture cash flow and the value was estimated at nil, because the asset will be disposed.

24

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20148.

Notes to Consolidated Statements of Comprehensive Income

Amount of recycling and amount of income tax effects associated with othercomprehensive income for the years ended March 31, 2014 and 2013 were as follows:
Years ended March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Unrealized holding gain on securities:
Changes in items during the period
Amount of recycling
Before income tax effect adjustment
Income tax effect adjustment
Unrealized holding gain on securities
Deferred gain on hedging instruments,
net of taxes:
Changes in items during the period
Amount of recycling
Before income tax effect adjustment
Income tax effect adjustment
Deferred gain on hedging instruments,
net of taxes
Land revaluation:
Income tax effect adjustment
Land revaluation
Translation adjustments:
Changes in items during the period
Amount of recycling
Before income tax effect adjustment
Income tax effect adjustment
Translation adjustments
Share of other comprehensive income of affiliates
accounted for by the equity method:
Changes in items during the period
Amount of recycling
Share of other comprehensive income ofaffiliates accounted for by the equity method
Total other comprehensive income

25

¥ 262
(1)
261
(164)
97

¥337
0
338
(1)
336

$ 2,545(9)
2,535(1,593)
942

(178)
–
(178)
69

175
–
175
(66)

(1,729)–(1,729)
670

(109)

108

(1,059)

0
0

–
–

0
0

418
–
418
–
418

205
–
205
–
205

4,061
–
4,061
–
4,061

(5)
–

4
(0)

(48)
–

(5)

4

(48)

¥ 400

¥655

$ 3,886

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

9.

Notes to Consolidated Statements of Changes in Net Assets(a) Type and number of shares issued and treasury stock(1) For the year ended March 31, 2014
Balance atApril 1,2013
Shares issued:
Common stock
2nd Series Class A preferred stock
3rd Series Class C preferred stock
3rd Series Class D preferred stock
Total

675,480,576
1,500,000
2,921,200
7,500
679,909,276

Increase
Decrease(Number of shares)
132,781,818–––
132,781,818––
2,921,200–

2,921,200

Balance at
March 31,2014

808,262,394
1,500,000–

7,500
809,769,894

Note 1:

Increase of common stock is due to the acquisition of common stock by exercising call option
on the 3rd Series Class C preferred stock.

Note 2:

Decrease of 3rd Series Class C preferred stock is due to redemption by exercising a call
option.

Balance atApril 1,
2013
Treasury shares:
Common stock
3rd Series Class C preferred stock
Total

Increase

Decrease

Balance at
March 31,
2014

(Number of shares)
454,364–454,364

15,256
2,921,200
2,936,456

1,238
2,921,200
2,922,438

468,382–
468,382

Note 1:

Increase of common stock is due to the purchase of fractional shares.

Note 2:

Decrease of common stock is due to the sale of fractional shares in response to shareholder
requests.

Note 3:

Increase of 3rd Series Class C preferred stock is due to the acquisition of common stock by
exercising a call option.

Note 4:

Decrease of 3rd Series Class C preferred stock is due to redemption by exercising a call
option.

26

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(a) Type and number of shares issued and treasury stocks (continued)(2) For the year ended March 31, 2013
Balance atApril 1,
2012
Shares issued:
Common stock
2nd Series Class A preferred stock
3rd Series Class C preferred stock
3rd Series Class D preferred stockTotal

288,989,667
1,500,000
5,781,200
5,868,700
302,139,567

Increase
Decrease(Number of shares)
386,490,909–––
386,490,909––

2,860,000
5,861,200
8,721,200

Balance at
March 31,2013

675,480,576
1,500,000
2,921,200
7,500
679,909,276

Note 1:

Increase of common stock is due to the acquisition of common stock by exercising call
options on the 3nd Series Class C preferred stock and 3rd Series Class D preferred stock.

Note 2:

Decrease of 3nd Series Class C preferred stock and 3rd Series Class D preferred stock is due
to redemption by exercising a call option.

Balance atApril 1,
2012
Treasury shares:
Common stock
3rd Series Class C preferred stock
3rd Series Class D preferred stockTotal

447,922––447,922

Increase
Decrease(Number of shares)
7,773
2,860,000
5,861,200
8,728,973

1,331
2,860,000
5,861,200
8,722,531

Balance at
March 31,2013

454,364––454,364

Note 1:

Increase of common stock is due to the purchase of fractional shares.

Note 2:

Decrease of common stock is due to the sale of fractional shares in response to shareholder
requests.

Note 3:

Increase of 3nd Series Class C preferred stock and 3rd Series Class D preferred stock is due tothe acquisition of common stock by exercising a call option.

Note 4:

Decrease of 3nd Series Class C preferred stock and 3rd Series Class D preferred stock is due
to redemption by exercising a call option.

27

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(b) Dividends:(1) Dividends paid
For the year ended March 31, 2014
Total
dividends Dividends(Millions of per share
(Yen)
yen)

Resolution

Type of shares

Annual general
meeting of theshareholders on
June 27, 2013

2nd Series Class A preferred stock
3rd Series Class C preferred stock
3rd Series Class D preferred stock

¥ 10
177
0
¥188

¥ 7.1760.85
60.85

Cut-off
date

Effective
date

March 31, June 28,
2013
2013

For the years ended March 31, 2013, there were no dividends paid to shareholdersof common stock.
(2) Dividends with the cut-off date in the year ended March 31, 2014 and theeffective date in the year ending March 31, 2015 were as follows:
Total
dividends Dividends(Millions of per share
(Yen)
yen)

Resolution

Type of shares

Annual general
meeting of theshareholders on
June 27, 2014

2nd Series Class A preferred stock
3rd Series Class D preferred stock

¥10
0
¥10

¥ 6.6958.45

Cut-off
date

Effective
date

March 31, June 30,
2014
2014

Dividends with the cut-off date in the year ended March 31, 2013 and theeffective date in the year ending March 31, 2014 were as follows:
Total
dividends Dividends(Millions of per share
(Yen)
yen)

Resolution

Type of shares

Annual general
meeting of theshareholders on
June 27, 2013

2nd Series Class A preferred stock
3rd Series Class C preferred stock
3rd Series Class D preferred stock

28

¥ 10
177
0
¥188

¥ 7.1760.85
60.85

Cut-off
date

Effective
date

March 31, June 28,
2013
2013

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

10. Notes to Consolidated Statements of Cash Flows(a) Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2014 and 2013 were as follows:
As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Cash and deposits
Time deposits with maturities of overthree months
Cash and cash equivalents¥40,320¥39,899$391,760(8,265)¥32,055(8,498)¥31,400(80,305)$311,455(b) For the year ended March 31, 2014, there were no newly consolidated subsidiaries
through the acquisition of shares.
The following is the summary of assets acquired and liabilities assumed through theacquisition of shares of MitsuiPrecon, Inc. during the year ended March 31, 2013,
related acquisition costs and net disbursement:
As of March 31,(Millions of (Thousands ofyen)
U.S. dollars)
Current assets
Non-current assets
Goodwill
Current liabilities
Long-term liabilities
Minority interests
Loss on step acquisitions
Acquisition cost for controlling interest in subsidiary
Total amount of the shares of the above consolidated
subsidiary acquired by the Company
Cash and cash equivalents of the above consolidated
subsidiary
Net Proceeds from purchases of stocks of subsidiaries
resulting in change in scope of consolidation29¥ 1,2201,484
17(1,605)(1,080)
(10)
44
(52)

$ 12,971
15,778180(17,065)(11,483)
(106)
467
(552)

18

191

(276)

(2,934)¥ 258$ 2,743

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

11. Leases
The following pro forma amounts represent the acquisition costs, accumulated depreciation /amortization and net book value of the leased property as of March 31, 2014 and 2013,
which would have been reflected in the consolidated balance sheets if finance leaseaccounting had been applied to the finance leases currently accounted for as operatingleases:(a) As lessee:(1) Finance leases (of which commencement dates were prior to application ofchange in accounting method)
As of March 31
2013
2014
Machinery,
Machinery,equipment
equipment
and
and
Total
vehiclesTotal
vehicles(Millions of yen)
Acquisition costs
Accumulated depreciation /amortization
Net book value

2014
Machinery,equipment
andTotal
vehicles(Thousands of
U.S. dollars)

¥383

¥383

¥383

¥383

$3,721$3,721

316
¥ 66

316
¥ 66

263
¥119

263
¥119

3,070
$ 641

3,070
$ 641

As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)

Future minimum payments:
Within one year
Over one year
Lease payments
Depreciation / amortization equivalents
Interest expense equivalents

¥71
0
¥71

¥058
71
¥129

$689
0
$689

¥63
52
4

¥ 83
71
7

$612
505
38

Depreciation / amortization equivalents are computed by the straight-line method
over the respective lease terms with a residual value of zero.
The difference between total lease expenses and acquisition costs of the leased
assets comprise interest equivalents. Interest equivalents are computed by theinterest method over the respective lease terms.
(2) Operating leases

As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)

Future minimum payments:
Within one year
Over one year

¥0
–

¥0
30

¥0
0
¥1

$0
–

$0

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

12. Financial Instruments(a) Overview(1) Policy for financial instruments
The Group limits investments of surplus funds to short-term bank deposits, andraises necessary funds through bank loans.
In addition, the Group only uses derivatives for hedging risk of fluctuation offoreign currency exchange rates or interest rates, not for speculative transactions.
(2) Types of financial instruments and related risk and risk management system
Trade notes receivable, accounts receivable on completed construction contracts
and other are exposed to credit risk in relation to customers and trading partners.
Also, the Group’s main investments in securities are shares of companies, andthey are exposed to market price fluctuation risk.
Management of credit risks (Risks of default by customers and trading partners)
The Company manages due dates and balances of trade notes receivable,accounts receivable on completed construction contracts and other for individual
customers and trading partners through its internal systems and monitors their
credit status. These systems enable the Group to identify any concerns for
doubtful receivables at an early stage and reduce risks of uncollectible amounts.
Consolidated subsidiaries also manage credit risks in the same manner as theCompany. The Company minimizes credit risks by mainly holding
held-to-maturity securities with high credit ratings.
Management of market risks (Risks of fluctuations in currency exchange andinterest rates)
The Company and certain consolidated subsidiaries hold trade receivables inforeign currencies. However, the risk of fluctuations in the currency exchange
rate is not significant because a similar amount of trade payables are also held,
and the Company utilizes foreign exchange forward contracts to hedge the risk ofchanges in the foreign currency exchange rate.
Loan payables are mainly for short-term operating funds. The Group manages
loan payables to flexibly execute or revise its fund management plans. In order to
fix the interest expense for long-term debt bearing interest at variable rates, theGroup utilizes interest rate swap transactions for certain long-term debt.
Derivatives are foreign currency exchange forward contracts held for the purposeof hedging future risk of fluctuation of foreign currency exchange rate of themonetary liabilities denominated in foreign currencies, and interest rate swaps
held for the purpose of hedging future risk of fluctuation of interest rates onloans.
Derivative transactions are carried out in accordance with the Companies’
internal rules on transactions, and with highly rated financial institutions used ascounter parties to reduce the risk of default.
Information regarding the method of hedge accounting, hedging instruments andhedged items, hedging policy, and assessment of hedge effectiveness is found in
Note 2-(n).
31Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(a) Overview (continued)(3) Supplementary explanation of the fair value of financial instruments
The fair values of financial instruments are based on market prices, or, if nomarket prices are available, they include estimated amounts. Because estimationsof the fair value incorporate various factors, applying different assumptions can,in some cases, result in different fair values.
In addition, the amounts of derivatives in Note 14 “Derivative and Hedge
Accounting” are not necessarily indicative of the actual market risk involved in
the derivative transactions.
(b) Fair value of financial instruments
Amounts recognized in the consolidated balance sheets, market value, and thedifference at March 31, 2014 and 2013, are as shown below. Moreover, items forwhich it is extremely difficult to determine fair values are not included in thefollowing table (see Note 2).
Carrying
value
Cash and deposits
Trade notes receivable,accounts receivable oncompleted construction
contracts and other
Securities and investments
in securities
Held-to-maturity
securities
Other securities
Long-term loans receivable
Allowance for doubtfulreceivables (*1)
Claims provable inbankruptcy and other
Allowance for doubtfulreceivables (*1)
Total assets
Trade notes payable,accounts payable on
construction contracts
and other
Short-term bank loans
and current portion of
long-term debt
Long-term debt
Total liabilities
Derivative transactions (*2)

As of March 31, 2014
Fair
Carrying
Fair
value
Difference
value
value
Difference(Millions of yen)(Thousands of U.S. dollars)¥ 40,320¥ 40,320

129,418–$ 391,760$ 391,760

129,390(27)

1,257,462

1,257,190

(262)

3,164

3,165

1

30,74230,752

9

278
2,886
6,494

279
2,886

1
–

2,701
28,04163,0972,710
28,041

9
–

1,154

(81)

11,212(787)(5,258)1,235¥(51,088)
11,999

795

$

–

7,724

(774)
21
174,160

21
174,053(0)(107)(7,520)204
1,692,188

204
1,691,148(0)(1,039)136,453

136,453–

1,325,816

1,325,816–

15,032
1,440¥152,926
45

15,036
1,397¥152,887454(43)¥ (39)–

146,055
13,991$1,485,872
437

146,094
13,573$1,485,493
437

38
(417)
$ (378)–(*1):

Allowance for doubtful receivables recognized individually is offset.

(*2):

Assets and liabilities arising from derivative transactions are shown at net value.

32

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(b) Fair value of financial instruments (continued)
As of March 31, 2013
Carrying
Fair
Difference
value
value
(Millions of yen)
Cash and deposits
Trade notes receivable,accounts receivable oncompleted construction
contracts and other
Securities and investments
in securities
Held-to-maturity
securities
Other securities
Long-term loans receivable
Allowance for doubtfulreceivables (*1)
Claims provable inbankruptcy and other
Allowance for doubtfulreceivables (*1)
Total assets¥ 39,899¥ 39,899¥ –101,279

101,265

(13)

2,582

2,584

2

217
2,365
6,551

219
2,365

2
–

1,533

(83)

(845)
21
145,40121
145,305(0)(95)(4,933)
1,617
867

Trade notes payable,accounts payable on
construction contracts andotherShort-term bank loans
and current portion of
long-term debt
Long-term debt
Total liabilities

115,338

115,338

–

8,391
2,194
¥125,923

8,407
2,142
¥125,888

16
(51)
¥(34)

Derivative transactions(*2)

224

224

–

(*1):

Allowance for doubtful receivables recognized individually is offset.

(*2):

Assets and liabilities arising from derivative transactions are shown at net value.

Note 1:

Calculation of the fair value of financial instruments and other mattersrelated to investment securities and derivative transactions

Assets(1) Cash and deposits
Because settlement periods of deposits are short and their market values arealmost the same as their book values, the book values are used.
(2) Trade notes receivable, accounts receivable on completed construction contracts
and other
The fair values are determined using the present value of discounted collectible
principal and interest amounts estimated reflecting their collectability based on an
appropriate rate in which a credit spread is added to a risk-free benchmark rate
(such as a government bond yield) corresponding to the remaining term.
33

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(b) Fair value of financial instruments (continued)(3) Securities and investments in securities
Concerning the market value of investment securities, the market value for stocks
is the price quoted on the stock exchange, and the market value for bonds is theprice provided by financial institutions.
In addition, for matters concerning to securities, see “Notes on securities.”(4) Long-term loans receivable, (5) Claims provable in bankruptcy and other
These fair values are determined using the present value of discounted collectible
principal and interest amounts estimated reflecting their collectability, based on
an appropriate rate in which a credit spread is added to a risk-free benchmark rate
(such as a government bond yield) corresponding to the remaining term. Further,
the fair value of doubtful debts are determined by discounting the value of
expected cash flows using the same discount rate, or estimated collectible amountsecured by collateral or guaranteed.
Liabilities(1) Trade notes payable, accounts payable on construction contracts and otherBecause settlement periods are short and their market values are almost the sameas their book values, the book values are used.
(2) Short-term bank loans
The carrying amount of the current portion of long-term debt approximates fairvalue since the carrying amount is equivalent to the present value of future cash
flows discounted using the current borrowing rate for similar debt with acompatible maturity. For borrowings other than the current portion of long-term
debt, the carrying amount approximates fair value due to the short maturities ofthese instruments.
(3) Long-term debt
Fair value of long-term debt is based on the price provided by financial
institutions or the present value of future cash flows discounted using the current
borrowing rate for similar debt with a comparable maturity. The fair value ofloans subject to special hedge accounting treatment of interest rate swaps is basedon the present value of the total principal and interest of the borrowings hedged
by interest rate swaps, discounted by the interest rate to be applied if similar newloans were entered into.
The information of the fair value for derivatives is included in Note 14.

34

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(b) Fair value of financial instruments (continued)
Note 2:Financial instruments for which it is extremely difficult to measure the fairvalue.
As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)

Unlisted stocks (*)¥3,409¥4,077$33,122(*): Unlisted stocks are not included in “(3) Investments in securities” because thesehave no market value and it is extremely difficult to measure the fair value.
Note 3:

The redemption schedule for monetary claims and held-to-maturity debt
securities with maturity dates subsequent to March 31, 2014 and 2013.
As of March 31, 2014

Deposits
Trade notes receivable,accounts receivable oncompleted construction
contracts and other
Securities and investments
in securities Held-tomaturity securities (Bonds)
Long-term loans receivable
Claims provable inbankruptcy and other

Within 1
year

Over 1
Over 5year and years andwithin 5 within 10
years
years
(Millions of yen)Over 10years

Over 1
Over 5year and years andwithin 5 within 10 Over 10
Within 1
years
years
year
years
(Thousands of U.S. dollars)¥ 40,282

¥

–

¥ –

¥ –

$ 391,391

$

–

$

–

$

–

122,739

6,678

–

–

1,192,567

64,885

–

–

–
3

9
82

268
355

–
794

–
29

87
796

2,603
3,449

–
7,714

21
¥163,046–¥6,771

–
¥623

–
¥794

204
$1,584,201–$65,788–$6,053–$7,714As of March 31, 2013
Over 1
Over 5year and years andWithin 1 within 5 within 10 Over 10
years
years
years
year
(Millions of yen)
Deposits
Trade notes receivable,accounts receivable oncompleted construction
contracts and other
Investments in securities
Held-to-maturity securities(Bonds)Long-term loans receivable
Claims provable inbankruptcy and other

Note 4:¥ 39,869

¥

–

¥ –

¥ –

99,435

1,844

–

–

9
3

–
77

207
690

–
846

21
¥139,339–¥1,922

–
¥897

–
¥846

The redemption schedule for corporate bonds, long-term debt, and otherinterest bearing debt with maturity dates subsequent to the consolidatedbalance sheet date. See Note 22.
35

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201413. Securities
Securities at March 31, 2014 and 2013 are summarized as follows:(a) Held-to-maturity securities
Carrying
value
Securities whose fairvalue exceeds theircarrying value:
Bonds
Securities whose fairvalue does notexceed their carrying
value:
Bonds

Securities whose fairvalue exceeds theircarrying value:
Bonds

As of March 31, 2014
Fair
Unrealized Carrying
Fair
Unrealized
value
gain (loss)
value
value
gain (loss)(Millions of yen)(Thousands of U.S. dollars)

¥216

¥218

¥2

$2,098$2,118

$19)

61
¥278

60
¥279

((0)
¥1

592
$2,701582$2,710(0)$ 9)

As of March 31, 2013
Carrying
Fair
Unrealized
value
value
gain
(Millions of yen)

¥217

¥219

¥2

(b) Other securities
Balancesheet
amountUnrealized gain:
Stock
Unrealized loss:
Stock
Total

Unrealized gain:
Stock
Unrealized loss:
Stock
Total

As of March 31, 2014
Balance
Unrealized
Unrealized
sheet
Cost
Cost
gain (loss)
gain (loss)
amount(Millions of yen)(Thousands of U.S. dollars)¥2,665¥2,076¥ 589$25,893$20,171$ 5,722220¥2,886335¥2,411

(114)
¥ 474

2,137
$28,041

3,254$23,425(1,107)$ 4,605

As of March 31, 2013
Balancesheet
Unrealized
amountCost
gain (loss)(Millions of yen)
¥1,865¥1,488¥ 376

499¥2,365663¥2,152

(163)
¥ 213

(c) Sales of other securities
Year ended March 31, 2014
(Millions of(Thousands ofyen)
U.S. dollars)
Sales proceeds
Total gain on sales of security
Total loss on sales of security

36

¥83
43
1

$806
417
9

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

14. Derivatives and Hedge Accounting
Derivative transactions for the years ended March 31, 2014 and 2013 are summarized asfollows:(a) There are no derivative transactions to which hedge accounting is not applied.
(b) Derivative transactions to which the hedge accounting is applied(1) Currency-related transactions
As of March 31, 2014

Method ofhedge
accounting

Transaction
type

Hedgeditem

Allocationaccounting
method forforeignexchange
forwardcontracts

Foreignexchange
forwardcontracts
Long
U.S. dollar
Thai baht

Accounts
payableLong
U.S. dollar
Thai baht

Future foreign
currencytransactions

Total
Note 1:
Note 2:Contract
Over 1
Fair
amountyear
value(Millions of yen)Contract
Over 1
Fair
amountyear
value(Thousands of U.S. dollars)

¥

0
1

¥ –
–

Note 2
Note 2

$

0
9

587
18
¥607

96
–
¥96

¥41
4
¥45

5,703
174
$5,897$––Note 2
Note 2

932
–
$932

$398
38
$437

Estimated fair value was provided by the counterparty financial institution.
Since foreign exchange forward contracts accounted for are included in that of the account payable as thehedged item, the fair values of the contracts are included in the fair values of the account payable.

As of March 31, 2013

Method ofhedge
accounting

Transaction
type

Hedgeditem

Allocationaccounting
method forforeignexchange
forwardcontracts

Foreignexchange
forwardcontracts
Long
U.S. dollar
Thai baht

Accounts
payableLong
U.S. dollar
Thai baht

Future foreign
currencytransactions

Total

Contract
Over 1amountyear(Millions of yen)

Fair
value

¥

34
33

¥ –
–

Note 2
Note 2852
208¥1,129

71
20
¥92

¥158
65
¥224

Note 1:

Estimated fair value was provided by the counterparty financial institution.

Note 2:Since foreign exchange forward contracts accounted for are included in that of the account payable as thehedged item, the fair values of the contracts are included in the fair values of the account payable.

37

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(b) Derivative transactions to which the hedge accounting is applied (continued)(2) Interest-related transactions
As of March 31, 2014
Method ofhedge
accounting
Short-cut
methodNote 1:

Transaction
type

Hedgeditem

Interest-rate
swaps:
Pay fixed/
Receivefloating

Long-term
debt

Contract Over 1
Fairamountyear
value(Millions of yen)Contract Over 1
Fairamountyear
value(Thousands of U.S. dollars)¥1,300$12,631¥700

Note 1$6,801

Note 1Since these interest rate swaps accounted for by short-cut method are included in that of thelong-term debt as the hedged item, the fair values of the contracts are included in the fairvalues of the long-term debt.
As of March 31, 2013

Method ofhedge
accounting
Short-cut
methodNote 1:

15.

Transaction
type

Hedgeditem

Interest-rate
swaps:
Pay fixed/
Receivefloating

Long-term
debt

Contract Over 1
Fairamountyear
value(Millions of yen)

¥1,900¥1,300Note 1Since these interest rate swaps accounted for by short-cut method are included in that of thelong-term debt as the hedged item, the fair values of the contracts are included in the fairvalue of the long-term debt.

Retirement Benefit Plans

For the year ended March 31, 2014, the Group has either funded or unfunded defined
benefit and defined contribution plans.
The Group has a defined benefits pension plan, i.e. defined benefit company pension plan
and lump-sum retirement benefit plans. Certain consolidated domestic subsidiaries
participate in the Small and Medium Enterprise Retirement Allowance Mutual Aid Scheme.
Certain foreign consolidated subsidiaries have an employee pension trust. The Company
has a defined contribution pension plan.
In addition, for certain defined benefit company pension plan and lump-sum retirement
benefit plans and the defined contribution pension plan of the Company and certain
consolidated subsidiaries, the simplified method is applied to calculate their liability for
retirement benefits and retirement benefits expenses.
In March 2014, certain consolidated subsidiaries decided to transfer a part of the lump-sum
retirement benefit plans to the defined contribution pension plan, and will transfer the planin October 2014.

38

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

The changes in the retirement benefit obligation during the year ended March 31, 2014 are
as follows (excluding plans for which the simplified method is applied):Year ended March 31, 2014
(Millions of(Thousands ofyen)
U.S. dollars)
Balance at the beginning of year
Service cost
Interest cost
Actuarial loss
Retirement benefit paid
Prior service cost
Foreign currency translation
Transfer to defined contribution pension plan
Balance at the end of year

¥20,250808
337
99(2,034)
(466)
11
(0)
¥19,005$196,754
7,850
3,274
961
(19,762)(4,527)106(0)$184,657

Certain consolidated subsidiaries transferred a part of their lump-sum retirement benefit
plans to the defined contribution pension plan. As a result, retirement benefit obligation
decreased by ¥466 million ($4,527 thousand) and prior service cost of ¥466 million ($4,527
thousand) was incurred. Prior service cost is being amortized as incurred by thestraight-line method over periods, which are shorter than the average remaining years ofservice of the employees from the day of the transfer.
The changes in plan assets during the year ended March 31, 2014 are as follows (excluding
plans for which the simplified method is applied):Year ended March 31, 2014
(Millions of(Thousands ofyen)
U.S. dollars)
Balance at the beginning of year
Expected return on plan assets
Actuarial gain
Retirement benefit paid
Foreign currency translation
Balance at the end of year

¥47
4
2
(1)
5
¥58

$456
38
19
(9)
48
$563

The changes in liability for retirement benefits based on the simplified method during theyear ended March 31, 2014 are as follows:Year ended March 31, 2014
(Millions of(Thousands ofyen)
U.S. dollars)
Balance at the beginning of year
Retirement benefit expense
Retirement benefit paid
Contribution to defined contribution plan
Other
Balance at the end of year39

¥1,158
131
(111)
(8)
3
¥1,174$11,251
1,272(1,078)(77)
29$11,406

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

A reconciliation of the funded retirement benefit obligation and plan assets and the net
liability for retirement benefits recognized in the consolidated balance sheet at March 31,
2014 is as follows:
As of March 31, 2014
(Millions of(Thousands ofyen)
U.S. dollars)
Funded retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Net liability for retirement benefits in the
consolidated balance sheet
Liability for retirement benefits
Net liability for retirement benefits in the
consolidated balance sheet
Note:¥00,286(218)
67
20,054$002,778(2,118)650
194,850

20,122

195,511

20,122

195,511¥20,122$195,511

Including plans for which the simplified method is applied.

The components of retirement benefit expense during the year ended March 31, 2014 are as
follows:
Year ended March 31, 2014
(Millions of(Thousands ofyen)
U.S. dollars)Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Amortization of net retirement benefit
obligation at transition
Retirement benefit expense calculated by thesimplified method
Expense for transfer to defined contribution
pension plan
Other
Total retirement benefit expense

40¥0,808
337
(4)
362
(257)

$07,850
3,274
(38)
3,517
(2,497)

1,984

19,277

131

1,272

0
(1)
¥3,3620(9)$32,666

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

Unrecognized actuarial loss, unrecognized prior service cost and unrecognized net
retirement benefit at transition included in accumulated other comprehensive income(before tax effect) component of retirement benefits expenses during the year ended March
31, 2014 are follows:
As of March 31, 2014
(Millions of(Thousands ofyen)
U.S. dollars)
Unrecognized actuarial loss
Unrecognized prior service cost
Unrecognized net retirement benefit obligation
at transition
Total¥ 2,029(3,165)$ 19,714(30,752)

1,984
¥ 848

19,277$ 8,239

The fair value of plan assets, by major category, as a percentage of total plan assets as ofMarch 31, 2014 are follows:
As ofMarch 31, 2014
Bonds
Other
Total

93%
7%
100%

The expected return on plan assets has been estimated based on the anticipated allocation toeach asset class and the expected long-term returns on assets held in each category.
The principal assumptions used for above plans were as follows:
As ofMarch 31, 2014
Discount rate
Expected rate of return on plan assets

Principally 1.7%
5.9%

The contribution to defined contribution plans is ¥623 million ($6,053 thousand) for theyear ended March 31, 2014.
For the year ended March 31, 2013, the Company and its consolidated subsidiaries havelump-sum retirement benefit plans and defined contribution pension plan. The benefit
amounts are determined by reference to basic rates of pay, length of service and theconditions under which termination occurs. Certain consolidated domestic subsidiaries
transferred annuity payments to a defined benefits pension plan or the Small and Medium
Enterprise Retirement Allowance Mutual Aid Scheme. Certain foreign consolidated
subsidiaries set up an employee pension trust.

41

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

The following table sets forth the funded and accrued status of the plans, and the amounts
recognized in the consolidated balance sheets at March 31, 2013 for the Company’s and theconsolidated subsidiaries’ defined benefit plans:
As of March 31,
2013(Millions of yen)
Retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Unrecognized net retirement benefit obligation
at transition
Unrecognized actuarial loss
Unrecognized prior service costAccrued retirement benefits
Note 1:¥(21,558)
196(21,362)
3,969
2,292
(2,956)¥(18,057)

Certain subsidiaries adopted the simplified method to calculate theirretirement benefit obligation and recognized the remaining amount after
deducting their payments to the Small and Medium Enterprise Retirement
Allowance Mutual Aid Scheme as the retirement benefit obligation.

The components of retirement benefit expenses for the years ended March 31, 2013 areoutlined as follows:
As of March 31,
2013(Millions of yen)
Service cost (Note 1)
Interest cost
Expected return on plan assets
Amortization of net retirement benefit obligation
at transition
Amortization of actuarial loss
Amortization of prior service cost
Total retirement benefit expenses
Other (Note 2)
Total retirement benefit expenses¥0,937
365
(5)
1,984
531
(253)
¥3,559637¥4,197Note 1:

Certain subsidiaries adopted the simplified method to calculate theretirement benefit obligation and recognized the remaining amount after
deducting payments to the Small and Medium Enterprise Retirement
Allowance Mutual Aid Scheme as the retirement benefit obligation.

Note 2:“Other” is amount of payment to the defined contribution pension plan.

42

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

The principal assumptions used for the above plans were as follows:
2013
Discount rate
Expected rate of return on plan assets
Amortization period for prior service cost
Amortization period for actuarial differences
Period for recognition of net retirement benefit obligation
at transition16.

Principally 1.7%
1.0%
Principally 11 years
Principally 11 years
Principally 15 years

Income Taxes

The significant components of deferred tax assets and liabilities at March 31, 2014 and2013 were as follows:
As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Deferred tax assets:
Accrued retirement benefits
Liability for retirement benefits
Tax loss carryforwards
Allowance for bad debts
Accounts payable and accrued expenses
Allowance for loss on litigation
Allowance for losses on construction
contracts
Reserve for defects on completed
construction projects
Foreign tax credit carryforwards
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized holding gain on securities
Deferred gain on hedging instruments,
net of taxes
Asset retirement obligations
Construction assistance fund receivables
Other
Total deferred tax liabilities
Net deferred tax assets

43

¥

–
6,875
4,336
1,920
1,457
–

¥ 6,501
–
4,112
3,118
1,400
317

$

–
66,79942,12918,655
14,156
–

625

272

6,072

284
–
1,089
16,590(12,131)
4,459

271
269
1,312
17,577(12,921)
4,655

2,759
–
10,581
161,193(117,868)
43,324(169)(4)(1,642)

(16)
(13)
(7)
(0)
(207)
¥ 4,251

(85)
(10)
(6)
(8)
(115)
¥ 4,540

(155)
(126)
(68)
(0)
(2,011)$ 41,303

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

The following table summarizes the significant differences between the statutory tax rate
and the effective tax rates for the years ended March 31, 2014 and 2013:
Years ended March 31,
2014
2013
Statutory tax rate
Non-deductible expenses
Non-taxable income
Per capita inhabitants’ taxes
Valuation allowance
Different tax rate applied to foreign subsidiaries
Change in corporate tax rate
Other
Effective tax rates
Note 1:38.0 %
3.3
(2.5)
(0.9)
(4.0)
(3.2)
3.3
(0.4)
33.6 %

–%
–
–
–
–
–
–
–
–%

The reconciliation for the year ended March 31, 2013 was omitted because
the difference between the statutory tax rate and the effective tax rate is lessthan 5% of the statutory tax rate.

The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 10 of 2014) was
promulgated on March 31, 2014 and the effective statutory tax rate used to measuredeferred tax assets and liabilities was changed from 38.0% to 35.6% for temporary
differences expected to be settled from fiscal years beginning on and after April 1, 2014.
As a result, net deferred tax assets (after deducting deferred tax liabilities) decreased by¥263 million ($2,555 thousand), income taxes-deferred increased by ¥264 million ($2,565
thousand), and deferred gain on hedging instruments, net of taxes increased by ¥1 million($9 thousand) as of and for the year ended March 31, 2014.

44

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

17. Investment and Rental Property
Investment and rental property as of March 31, 2014 and 2013 were as follows:(a) Types of investment and rental property
A consolidated subsidiary maintains warehouses available for rent including land in
Saitama prefecture. Gains on investment and rental property for the years ended March
31, 2014 and 2013 were ¥137 million ($1,331 thousand) and ¥137 million,
respectively.
(b) Fair value of investment and rental property
The book value, net increase (decrease) and fair value of investment and rental
property for the years ended March 31, 2014 and 2013 were as follows:Year ended March 31, 2014
Book value
Balance
Fair value
Balance
Balance
Fair value
Net
Net
as of
as of
as of
as of
as of
increaseincrease
March 31, March 31,
April 1,March 31, March 31,(decrease)(decrease)
2014
2014
2013
2014
2014
(Millions of yen)(Thousands of U.S. dollars)Book value
Balance
as ofApril 1,
2013
¥3,270¥(31)¥3,238¥3,158$31,772$(301)$31,461$30,684

Note 1:

The amount at the end of the year represents acquisition cost less accumulated depreciation
and accumulated impairment loss.

Note 2:

Net decrease is due to depreciation.

Note 3:

Fair values are calculated based on the appraisal value for major properties.

Year ended March 31, 2013
Book value
Balance
Fair value
Balance
Net
as of
as of
as of
increase
March 31, March 31,
April 1,
(decrease)
2013
2013
2012
(Millions of yen)
¥3,302¥(31)¥3,270¥3,001

Note 1:

The amount at the end of the year represents acquisition cost less accumulated depreciation
and accumulated impairment loss.

Note 2:

Net decrease is due to depreciation.

Note 3:

Fair values are calculated based on the appraisal value for major properties.

45

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201418. Segment Information, etc
Segment Information(a) Outline of Segments
The Company’s reportable operating segments are components for which separate
financial information is available and that are evaluated regularly by the board of
directors in determining the allocation of management resources and in assessing
performance.
The Company currently divides its operations into Civil Construction and Building
Construction, managed by the Civil Engineering Division and the Building
Administration Division, respectively. Business strategies are formulated by eachsegment.
Accordingly, the Company divides its operations into two reportable operating
segments on the same basis as it uses internally; Civil Construction and Building
Construction.
Civil Construction consists mainly of governmental public works like bridge
construction. Building Construction is awarded by private sector companies for things
like high rise apartment buildings.
(b) Accounting methods used to calculate segment income (loss), segment assets andother items for reportable segments
Accounts for reportable segments are for the most part calculated in line with thegenerally accepted standards used for the preparation of the consolidated financial
statements.
Segment income (loss) for reportable segments is based on gross profit.
Amounts for intersegment transactions or transfers are based on the market prices
determined by third party transactions.
The Company does not allocate any assets to reportable operating segments.
(c) Segment income, segment assets and other items for reportable segments
Year ended March 31, 2014
Reportable operating segments
Building
Total
Others
Total
Civil(Millions of yen)

Sales
External
Customers
Intersegment
transactions
or transfers
Net sales
Segment income

Adjustments Consolidated¥135,124¥246,794¥381,918¥805¥382,724¥–¥382,724

1,344¥136,469

65¥246,859

1,409¥383,328

53
¥859

1,463
¥384,187(1,463)¥(1,463)–¥382,724

12,14910,52022,669356

23,025(131)

22,894Note 1:“Others,” which includes the Company’s business of elder care facilities and insurance agent, does not
qualify as a reportable operating segment.

Note 2:Adjustment for segment income is the reduction of income recognized between reportable operating
segments.

Note 3:

Segment income corresponds to gross profit in the consolidated statement of income.

46

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

Segment Information (continued)
Year ended March 31, 2014
Reportable operating segments
Building
Total
Others
Total
Civil(Thousands of U.S. dollars)

Adjustments Consolidated

Sales
External
Customers
Intersegment
transactions
or transfers
Net sales$1,312,903$2,397,920$3,710,823$7,821$3,718,655$–$3,718,655

13,058$1,325,971

631$2,398,552

13,690$3,724,523

514$8,346

14,214$3,732,870(14,214)$(14,214)–$3,718,655

Segment income

118,043

102,215

220,258

3,458

223,717(1,272)

222,444

Year ended March 31, 2013
Reportable operating segments
Building
Total
Others
Total
Civil(Millions of yen)

Sales
External
Customers
Intersegment
transactions
or transfers
Net sales

Adjustments Consolidated¥136,370¥205,546¥341,917¥810¥342,727¥–¥342,727

1,352¥137,722

0¥205,546

1,352¥343,269

58
¥868

1,410
¥344,138(1,410)¥(1,410)–¥342,727

11,326

8,608

19,935301

20,237(122)

20,115

Segment income

Note 1:“Others,” which includes the Company’s business of elder care facilities and insurance agent,
does not qualify as a reportable operating segment.

Note 2:Adjustment for segment income is the reduction of income recognized between reportable
operating segments.

Note 3:

Segment income corresponds to gross profit in the consolidated statement of income.

Related Information
For the year ended March 31, 2014(a) Product and service information
See “Segment income, segment assets and other items for reportable segments.”(b) Geographical segment information(1) Sales
Japan

Asia
Others(Millions of yen)

¥312,514
Notes:¥68,603¥1,606

Year ended March 31, 2014
Total
Japan
Asia
Others
Total(Thousands of U.S. dollars)¥382,724$3,036,474 $666,566$15,604$3,718,655

Geographical segments are determined based on the country/region of domicile ofcustomers.

47

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

Related Information (continued)(2) Tangible fixed assets
Geographical segment information on tangible fixed assets has been omitted as
the amount of tangible fixed assets in Japan constituted over 90% of total as ofMarch 31, 2014.
(c) Major customer information
Information on major customers has been omitted as there were no sales to a single
customer constituting over 10% of net sales for the year ended March 31, 2014.
For the year ended March 31, 2013(a) Product and service information
See “Segment income, segment assets and other items for reportable segments.”(b) Geographical segment information(1) SalesJapan

Year ended March 31, 2013
Asia
Others
Total(Millions of yen)

¥270,668
Notes:¥70,200¥1,859¥342,727

Geographical segments are determined based on the country/region of domicile ofcustomers.

(2) Tangible fixed assets
Geographical segment information on tangible fixed assets as the amount oftangible fixed assets in Japan constituted over 90% of total as of March 31, 2013.
(c) Major customer information
Information on major customers has been omitted as there were no sales to a single
customer constituting over 10% of net sales for the year ended March 31, 2013.
Loss on impairment by reportable segment
For the year ended March 31, 2014, ¥181 million ($1,758 thousand) impairment loss wasrecorded.
Note 1:

The above amount consists of rental property of ¥139 million ($1,350 thousand),resort facility of ¥39 million ($378 thousand), and assets for business of ¥2
million ($19 thousand).

Note 2:The impairment loss was not allocated to operating segments.

For the year ended March 31, 2013, there was no loss on impairment for any reportablesegment.
48

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

Amortization of goodwill and unamortized balance by reportable segment
For the year ended March 31, 2014, there was no amortization and unamortized balance of
goodwill by reportable segment.
For the year ended March 31, 2013, the information is omitted due to the immateriality ofamounts.
Gain on negative goodwill by reportable segment
For the years ended March 31, 2014 and 2013, there were no gain on negative goodwill byreportable segment.
19. Related Party Transactions(a) Related party transaction
Transactions with affiliates for the year ended March 31, 2014 were summarized asfollows:

Affiliated company:
Yoshiikikaku Co., Ltd.
(Real estate business)

Affiliated company:
Yoshiikikaku Co., Ltd.
(Real estate business)

Capitalinvestment

Number of
voting shares
held as apercentage ofvoting sharesissued¥1030.0%Capitalinvestment

Number of
voting shares
held as apercentage ofvoting sharesissued$9730.0%Year ended March 31, 2014

Nature ofTotal amounttransactionof transaction(Millions of yen)
Long-term
non operating
accounts
receivable
Long-term
accounts
payable¥2,579¥2,579Balance sheet
account

Long-term
non operating
accounts
receivable
Long-term
accounts
payableBalance at
March 31,2014

¥3,158¥2,579Year ended March 31, 2014

Nature ofTotal amounttransactionof transaction(Thousands of U.S. dollars)

Balance sheet
account

Long-term
non operating
accounts
receivable
Long-term
accounts
payableLong-term
non operating
accounts
receivable
Long-term
accounts
payable$25,058$25,058

Balance at
March 31,2014

$30,684$25,058

Note 1:

Total amount of transaction represents the amount of a claim for damages from Yoshiikikaku Co., Ltd. and theamount of guarantee for financial institution.

Note 2:

Allowance for above long-term non operating accounts receivable was recognized in the amount of ¥2,840
million ($27,594 thousand). In addition, a provision of allowance for above long-term non operating accounts
receivable was ¥60 million ($582 thousand) for the year ended March 31, 2014.

Note 3:

Consumption tax was excluded from the total amount of the transaction, however it was included in the balance
at March 31, 2014.

49

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014(a) Related party transaction (continued)
Transactions with affiliates for the year ended March 31, 2012 were summarized asfollows:
Year ended March 31, 2013

Affiliated company:
Yoshiikikaku Co., Ltd.
(Real estate business)

Capitalinvestment

Number of
voting shares
held as apercentage ofvoting sharesissued¥1030.0%Nature ofTotal amounttransactionof transaction(Millions of yen)
Long-term
non operating
accounts
receivable
Long-term
accounts
payable¥2,579Balance sheet
account

Long-term
non-operationaccounts
receivable
Long-term
accounts
payable¥2,579Balance at
March 31,2013

¥3,158¥2,579Note 1:

Total amount of transaction represents the amount of a claim for damages from Yoshiikikaku Co., Ltd. and theamount of guarantee for financial institution.

Note 2:

Allowance for above long-term non operating accounts receivable was recognized in the amount of ¥2,840
million ($27,594 thousand). In addition, a provision of allowance for above long-term non operating accounts
receivable was ¥60 million ($582 thousand) for the year ended March 31, 2014.

Note 3:

Consumption tax was excluded from the total amount of the transaction, however it was included in the balance
at March 31, 2014.

(b) Significant affiliates(1) The parent information
There is no parent company at March 31, 2014 and 2013.
(2) Financial information about significant affiliates
There is no significant affiliates at March 31, 2014 and 2013
20. Per Share Information
Net assets and basic net income per share as of and for the years ended March 31, 2014 and2013 were as follows:2014
Net assets per share
Net income per share – basic
Net income per share – diluted¥30.34
5.51
5.17

50

(Yen)

2013

2014
(U.S. dollars)¥19.984.56
2.56$0.2950.054
0.050

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

The basis of calculation for net assets per share at March 31, 2014 and 2013 was as follows:
As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Total net assets
Amounts deducted from total net assets[Including paid-in amounts for sharesof preferred stock][Including cash dividends on preferredstock][Including minority interests]
Total net assets attributable tocommon stock¥ 30,074
5,567¥ 25,361
11,872$292,207
54,090[768][8,071][7,462][10][4,787][188][3,611][97][46,511]¥24,507¥13,489$238,116(Thousands of shares)

Number of shares of common stock
used to determine net assets per share

807,794

675,026

The basis for calculating basic net income per share – based and net income per share –diluted for the years ended March 31, 2014 and 2013 were as follows:
Years ended March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Net income per share – basic:
Net income
Amount not available to commonshareholders[Including cash dividends on
preferred stock]
Net income per share – basic¥4,201¥2,042$40,818

10

188

97

[10]
¥4,191[188]¥1,853[97]$40,720(Thousands of shares)

Average number of shares of common
stock outstanding

760,51051

406,066

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

Years ended March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Net income per share – diluted:
Adjustment for net income[Including cash dividends on preferredstock]
Increase in number of share of common
stock[Including preferred stock]

¥ 10

¥ 188

$ 97

[10]

[188]

[97]

(Thousands of shares)
52,449[52,449]

393,097[393,097]

As described in “Changes in Accounting Methods,” the Accounting Standard for
Retirement Benefits was adopted, and the Company calculated net asset per share inaccordance with the provisional treatment set out in Clause 37 of the Accounting Standard
for Retirement Benefits. As a result, net assets per share decreased by ¥0.97 as of March 31,
2014.
21. Subsequent Event
There is no information to be disclosed as of March 31, 2014.
22. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans generally represent notes, principally at average annual interest ratesof 2.2% and 2.0% at March 31, 2014 and 2013, respectively.
Long-term debt at March 31, 2014 and 2013 was summarized as follows:
As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Debt with collateral (at average interest
rates of 2.4% at 2014 and 2013)
Debt without collateral (at average interest
rates of 1.9% at 2014 and 2.1% at 2013)
Lease obligations
Current portion (excluding leaseobligations)
Current portion of lease obligations
Deposits from employees

52¥1,960¥2,696$19,043

433
769

466
548

4,207
7,471

(953)
(274)
1,845
¥3,780

(969)
(188)
1,812
¥4,365(9,259)(2,662)
17,926$36,727

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2014

The aggregate annual maturities of long-term debt subsequent to March 31, 2014 aresummarized as follows:Year ending March 31,
2015
2016
2017
2018 and thereafter(Millions ofyen)(Thousands of
U.S. dollars)

¥ 953
887
303
249
¥2,394$ 9,259
8,618
2,944
2,419
$23,260

The aggregate annual maturities of lease obligations subsequent to March 31, 2014 aresummarized as follows:Year ending March 31,
2015
2016
2017
2018 and thereafter

53(Millions ofyen)(Thousands of
U.S. dollars)

¥274
199
149
145
¥769

$2,662
1,933
1,447
1,408
$7,471

54

Non-Consolidated Financial Statements
Sumitomo Mitsui Construction Co., Ltd.
Year ended March 31, 2014
with Independent Auditor’s Report55

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Balance Sheets
March 31, 2014

AssetsCurrent assets:
Cash and deposits (Note 3-(b))
Trade notes receivable (Note 3-(d))
Accounts receivable on completed construction contracts(Note 3-(b))
Inventories
Deferred tax assets (Note 6)
Accounts receivable, other
Advance payments
Other current assets (Note 3-(d))
Allowance for doubtful receivables
Total current assets

As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
¥ 17,209
171¥ 19,915
756$0,167,207
1,661

105,814
15,483
2,545
2,654
7,108
3,534
(457)
154,064

82,08915,003
1,321
2,079
6,110
3,002
(809)
129,469

1,028,118
150,437
24,72725,78769,06334,337(4,440)1,496,929

5,500
4,749
726
2,353
347
3,178
7
(9,219)
7,643

5,500
4,776
711
2,675
316
3,546
11
(9,670)7,867

53,43946,142
7,054
22,862
3,371
30,87868(89,574)
74,261

1,349

1,443

13,107

Investments and other assets:
Investments in securities (Note 3-(b))
Investments in subsidiaries and affiliates (Notes 3-(b) and 5)
Long-term loans receivable
Long-term loans to employees
Claims provable in bankruptcy and other
Long-term prepaid expenses
Deferred tax assets (Note 6)Long-term non-operating accounts receivable
Other
Allowance for doubtful receivables
Total investments and other assets
Total non-current assets

5,572
16,779
5,618
786
771
34
927
4,092
5,552
(12,014)
28,12037,113

5,004
16,457
5,618
840
821
41
2,686
24,485
6,116(31,323)
30,74840,06054,139163,02954,586
7,636
7,491
330
9,006
39,75953,944(116,731)
273,221360,600

Total assets¥191,178¥169,529$1,857,539

Non-current assets:
Property and equipment, at cost:
Land (Note 3-(b))
Buildings (Note 3-(b))
Structures (Note 3-(b))
Machinery and equipment
VehiclesTools, furniture and fixtures
Construction in progress
Accumulated depreciation
Property and equipment, net
Intangible fixed assets

56

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Balance Sheets
March 31, 2014

Liabilities and net assets
Current liabilities:
Trade notes payable (Note 3-(a))
Accounts payable on construction contracts (Note 3-(a))
Short-term bank loans and current portion of long-term debt
(Notes 3-(b) and 8)
Accounts payable, otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received on construction contracts in progress
Deposits received
Reserve for defects on completed construction projects
Allowance for losses on construction contracts
Allowance for loss on litigation
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 3-(b) and 8)
Accrued retirement benefits
Long-term accounts payable (Note 3-(a))
Other long-term liabilities
Total long-term liabilities

As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)¥040,148
67,781¥ 31,202
61,208$ 390,089
658,579

14,941
1,765
1,917
208
1,191
16,384
5,655
680
1,714
–
1,943
154,332

8,264
1,668
1,787
213
1,463
18,921
5,690
635
590
890
1,885
134,419

145,171
17,14918,626
2,020
11,572
159,191
54,945
6,607
16,653–
18,8781,499,533

1,217
16,6152,579
220
20,632

1,933
15,654
2,579
188
20,356

11,824
161,436
25,0582,137
200,466

12,003

12,003

116,624

399
399

400
400

3,876
3,876

102
3,621
3,723

83
2,164
2,247

991
35,182
36,173(242)
15,884(241)
14,409(2,351)
154,333300
29
329
16,213¥191,178

204
139
343
14,753¥169,529

2,914
281
3,196
157,530$1,857,539

Contingent liabilities (Note 3-(c))
Net assets:
Shareholders’ equity:
Capital stock:
Common stock:
Authorized:
2,669,464,970 shares in 2014 and 2013
Issued and outstanding:
808,262,394 shares in 2014 and675,480,576 shares in 2013
Preferred stock:
Authorized:
26,894,644 shares in 2014 and 2013
Issued and outstanding:
1,507,500 shares in 2014 and
4,428,700 shares in 2013
Capital surplus:
Other capital surplus
Total capital surpluses
Retained earnings:
Legal retained earnings
Earned surplus carried forward
Total retained earnings
Treasury stock, at cost:
468,382 shares in 2014 and 454,364 shares in 2013
Total shareholders’ equity
Valuation, translation adjustments and other:
Unrealized holding gain on securities
Deferred gain on hedging instruments, net of taxes
Total valuation, translation adjustments and otherTotal net assets
Total liabilities and net assets

See accompanying notes to non-consolidated financial statements.
57

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Income
March 31, 2014

Years ended March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)

Net sales:
Completed construction (Note 4-(a))¥280,612¥256,027$2,726,506

Cost of sales:
Completed construction
Gross profit

268,404
12,207244,106
11,921

2,607,889
118,606

Selling, general and administrative expenses (Note 4-(d))
Operating income

10,485
1,722

10,107
1,813

101,875
16,731

729
134
580
447
325
273
(834)
(521)
(304)
43
1
(9)

757
146
–
149
47
101
(961)
(216)
(230)
0
–
(9)

7,083
1,301
5,635
4,343
3,157
2,652
(8,103)(5,062)(2,953)
417
9
(87)

–
–
(139)
(60)
(417)
249
1,971

(354)
(194)
–
(20)
(310)
(1,212)601––(1,350)(582)(4,051)
2,419
19,150

(132)
439
306
1,664

92
(0)
91
509

(1,282)
4,265
2,973
16,167

Other income (expenses):
Interest and dividend income (Note 4-(b))
Payments received from insurance claims
Reversal of allowance for loss on litigation (Note 4-(c))
Reversal of allowance for doubtful receivables
Exchange gain, net
Royalty income (Note 4-(b))
Interest expense
Provision of allowance for doubtful receivables
Corporate tax on overseas sales
Gain on sales of investments in securities
Gain on liquidation of subsidiaries
Loss on sales and disposal of property and equipment
Loss on valuation of investments in subsidiaries andaffiliates
Loss on litigation
Impairment loss
Impairment loss on membership
Other, net
Income before income taxes
Income taxes (Note 6):
Current
Deferred
Net income¥¥(U.S. dollars)(Note 2)(Yen)
Net income per share – basic
Net income per share – diluted

¥

2.18
2.05

See accompanying notes to non-consolidated financial statements.

58

$

¥

0.79
0.63

$

0.021
0.020

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Changes In Net Assets
March 31, 2014

Year ended March 31, 2014
Shareholders’ equity
Additional
paid-in
capitalBalance at the beginningof the period
Changes in items
during the period
Dividends from surplus
Provision of legal
retained earnings
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in
items other thanshareholders’ equity
Total changes in items
during the period
Balance at the end of theperiodBalance at the beginningof the period
Changes in items
during the period
Dividends from surplus
Provision of legal
retained earnings
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in
items other thanshareholders’ equity
Total changes in items
during the period
Balance at the end of theperiodCapitalstock

Other capitalsurplus

Earnedreserve¥12,003

¥400

¥ 83

Retained earnings
Earned surplus
Total
carriedretainedforwardearnings(Millions of yen)

18

Total
Treasuryshareholders’
stock, at costequity¥2,164¥2,247

(188)

(188)

(188)

(18)
1,664

–
1,664

–
1,664

(0)

¥(241)¥14,409

(1)

(1)

0

0

–

(0)

18

1,456

1,475

(0)

1,474

¥12,003

¥399

¥102

¥3,621¥3,723¥(242)¥15,884

Year ended March 31, 2014
Valuation, translation adjustments and other
DeferredTotalgain (loss)
valuation,
Unrealized
on hedging
translation
holding gain instruments, adjustmentson securities net of taxes
and other(Millions of yen)
¥204

¥ 139

¥343

Total
net assets¥14,753
(188)
–
1,664
(1)
0

96

(109)

(13)

(13)

96

(109)

(13)

1,460

¥300

¥ 29

¥329

¥16,21359

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Changes In Net Assets
March 31, 2014

Year ended March 31, 2014
Shareholders’ equity
Additional
paid-in
capitalBalance at the beginningof the period
Changes in items during
the period
Dividends from surplus
Provision of legal
retained earnings
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in
items other thanshareholders’ equity
Total changes in items
during the period
Balance at the end of theperiodBalance at the beginningof the period
Changes in items during
the period
Dividends from surplus
Provision of legal
retained earnings
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in
items other thanshareholders’ equity
Total changes in items
during the period
Balance at the end of theperiodCapitalstock

Other capitalsurplus$116,624$3,886

Retained earnings
Earned surplus
Total
Earnedcarriedretainedreserveforwardearnings(Thousands of U.S. dollars) (Note 2)
$806

174

Total
Treasuryshareholders’
stock, at costequity$21,026$21,832(1,826)(1,826)(1,826)(174)
16,167–
16,167–
16,167(0)$(2,341)$140,001

(9)

(9)

0

0

–

(0)

174

14,146

14,331(0)

14,321$116,624$3,876$991$35,182$36,173$(2,351)$154,333

Year ended March 31, 2014
Valuation, translation adjustments and other
DeferredTotalgain (loss)
valuation,
Unrealized
on hedging
translation
Total
holding gain instruments, adjustments
net assets
on securities net of taxes
and other(Thousands of U.S. dollars) (Note 2)$1,982$ 1,350$3,332$143,344(1,826)–
16,167(9)
0932(1,059)

(126)

(126)

932

(1,059)(126)

14,185$3,196$157,530$2,914$281

60

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Changes In Net Assets
March 31, 2014

Year ended March 31, 2013
Shareholders’ equity
Additional
paid-in
capitalBalance at the beginningof the period
Changes in items during
the period
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in
items other thanshareholders’ equity
Total changes in items
during the period
Balance at the end of theperiodBalance at the beginningof the period
Changes in items during
the period
Net income
Purchases of treasury
stock
Disposition of treasurystock
Net changes in
items other thanshareholders’ equity
Total changes in items
during the period
Balance at the end of theperiodCapitalstock

Other capitalsurplus

Earnedreserve¥12,003¥400¥83

Retained earnings
Earned surplus
Total
carriedretainedforwardearnings(Millions of yen)
¥1,654¥1,737

509

509

(0)

Total
Treasuryshareholders’
stock, at costequity¥(241)¥13,900
509

(0)

(0)

0

0

–

(0)

–

509

509

0

509

¥12,003¥400¥83¥2,164¥2,247¥(241)¥14,409

Year ended March 31, 2013
Valuation, translation adjustments and other
Total
Unrealized Deferred gain
valuation,
holding (loss) on hedging
translation
gain oninstruments, adjustments
securities
net of taxes
and other(Millions of yen)¥(124)¥ 30¥ (94)

Total
net assets¥13,805
509
(0)
0

329

108

438

438

329

108

438

947

¥ 204

¥139

¥343

¥14,753

See accompanying notes to non-consolidated financial statements.

61

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014
1.

Summary of Significant Accounting Policies(a) Basis of Presentation
The accompanying non-consolidated financial statements of Sumitomo Mitsui
Construction Co., Ltd. (the “Company”) are prepared on the basis of accounting
principles generally accepted in Japan, which are different in certain respects as to theapplication and disclosure requirements of International Financial Reporting Standards,
and have been compiled from the non-consolidated financial statements prepared by
the Company as required by the Financial Instruments and Exchange Law of Japan.
Certain reclassifications have been made to present the accompanying financial
statements in a format which is familiar to readers outside Japan. In addition, certain
amounts in the prior year’s financial statements have been reclassified to conform tothe current year’s presentation.
As permitted, amounts of less than one million yen have been omitted. As a result, thetotals shown in the accompanying financial statements do not necessarily agree withthe sums of the individual amounts.
(b) Securities and Investments in Subsidiaries and Affiliates
The accounting standard for financial instruments requires that securities be classified
into three categories: trading, held-to-maturity or other securities. Under this standard,
trading securities are carried at fair value and held-to-maturity securities are carried atamortized cost. Marketable securities classified as other securities for which market
prices are determinable are carried at fair value with any changes in unrealized holding
gain or loss, net of the applicable income taxes, included directly in net assets.
Non-marketable securities classified as other securities are carried at cost. Cost of
securities sold is determined by the moving average method. Investments in
subsidiaries and affiliates are stated at cost determined by the moving average method.
(c) Inventories
Inventories other than materials and supplies are stated at cost determined by the
specific identification method. Materials and supplies are valued at cost determined by
the average method. Book values are written down based on any decline inprofitability.

62

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014(d) Depreciation and Amortization(1) Property and equipment (except leased assets)
Depreciation of property and equipment (except leased assets) is determined by
the declining-balance method based on the estimated useful lives of therespective assets as prescribed in the Corporation Tax Law of Japan except thatthe straight-line method is applied to office buildings acquired on or after April 1,
1998.
(2) Intangible fixed assets (except leased assets) and long-term prepaid expenses
Amortization of intangible fixed assets (except leased assets) and long-term
prepaid expenses is calculated by the straight-line method based on the estimateduseful lives of the respective assets as prescribed in the Corporation Tax Law ofJapan. Amortization of computer software for internal use is calculated by thestraight-line method over the estimated useful lives of 5 years.
(3) Leased assets
Depreciation of leased assets under finance leases other than those that transfer
the ownership of the leased assets to the lessees is calculated by the straight-line
method over the lease term with a residual value of zero.
Finance leases other than those that transfer the ownership of the leased assets tothe lessees, whose commencement dates are on or before March 31, 2008,
continue to be accounted for in a similar manner as operating leases.
(e) Advances Received on Construction Contracts in Progress
As is customary in Japan, the Company receives payments from customers on an
installment basis in accordance with the terms of the respective construction contracts.
(f)

Allowance for Doubtful Receivables
The allowance for doubtful receivables is provided for future losses on general
receivables at an amount calculated by applying the percentage of actual losses oncollection experienced in the past, and an uncollectible amount for doubtfulreceivables estimated based on an individual assessment of each receivable andprobability of collection.

(g) Reserve for Defects on Completed Construction Projects
A reserve has been provided at an estimated amount for the fiscal year’s sales
proceeds in order to cover the liability for future costs of defects of the completed
construction projects.
(h) Allowance for Losses on Construction Contracts
An allowance has been provided based on the estimated amount for the future losses
on construction projects in progress at the fiscal year end which are anticipated to be
substantial losses in the future.
63

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014(i)

Allowance for Loss on Litigation
An allowance has been provided for future losses on pending litigation at on estimatedamount calculated based on specific circumstances.

(j)

Employees’ Retirement Benefits(1) Method of attributing expected retirement benefits to periods
In calculating the retirement benefit obligation, the straight-line method isapplied to attribute the expected retirement benefits to the periods up to year
ended March 31, 2014.
(2) Amortization of actuarial gain or loss, prior service cost and net retirement
benefit obligation at transition
Actuarial gain or loss is amortized in the year following the year in which thegain or loss is recognized by the straight-line method over periods (11 years),
which are shorter than the average remaining years of service of the employees.
Prior service cost is being amortized as incurred by the straight-line method overperiods (11 years), which are shorter than the average remaining years of serviceof the employees.
The net retirement benefit obligation at transition is being amortized by thestraight-line method over a period of 15 years.

(k) Recognition of Revenues and Costs on Construction Contracts
Revenues and costs of construction contracts that commenced on or after April 1, 2009,of which the percentage of completion can be reliably estimated, are recognized by thepercentage-of-completion method. The percentage-of-completion is calculated at thecost incurred as a percentage of the estimated total cost. The completed-contract
method is applied for contracts for which the percentage of completion cannot be
reliably estimated.
Revenues and costs of construction contracts that commenced on or before March 31,
2009, which cover a construction period longer than 12 months are, in principle, also
recognized by the percentage-of-completion method, except for total revenue on
long-term contracts of less than ¥500 million.
(l)

Derivatives and Hedge Accounting(1) Method of hedge accounting
Derivative financial instruments are mainly stated at fair value except thoseaccounted for under deferred hedge accounting.
Foreign exchange forward contracts qualifying for allocation accounting aretranslated at the contract rate.
Interest rate swaps qualifying for hedge accounting and meeting specificmatching criteria are not remeasured at market value, but the differential paid or
received under the swap agreement is charged or credited to income (short-cut
method).
64

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014(l)

Derivatives and Hedge Accounting (continued)(2) Hedging instruments and hedged items
Hedging instruments:

Forward foreign exchange forward contracts
Interest rate swaps

Hedged items:

Future foreign currency transactions
Interest on debt

(3) Hedging policy
The Company utilizes foreign exchange forward contracts and interest rate swaps
only for the purpose of hedging future risks of fluctuation of foreign currency
exchange rates or interest rates.
(4) Assessment of hedge effectivenessAn evaluation of hedge effectiveness for a foreign exchange forward contract isperformed on a quarterly basis to confirm that amount of the foreign exchange
contract is within amount of the underlying hedged item to assess whether theforward contract qualifies for hedge accounting.
An evaluation of hedge effectiveness for interest rate swaps is not performed as
all meet specified criteria under the short-cut method.
(m) Accounting for Retirement Benefits
Accounting for unrecognized actuarial loss, unrecognized prior service cost andunrecognized net retirement benefit obligation at transition on non-consolidated
financial statements is different from the accounting on consolidated financial
statements.
(n) Consumption Taxes
Consumption taxes are accounted for by the tax exclusion method.
(o) Income Taxes
Deferred tax assets and liabilities are determined based on the differences between theamounts calculated for financial reporting purposes and the tax bases of the assets andliabilities and are measured using the enacted tax rates and laws which will be in effectwhen the differences are expected to reverse.
The Company has adopted the consolidated taxation system.

65

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014
2.

U.S. Dollar Amounts

The translation of yen amounts into U.S. dollar amounts is included solely for the convenienceof readers outside Japan and has been made at ¥102.92 = U.S.$1.00, the approximate rate ofexchange prevailing on March 31, 2014. This translation should not be construed as arepresentation that yen have been, could have been, or could in the future be, converted into
U.S. dollars at that or any other rate.
3.

Notes to Non-Consolidated Balance Sheets(a) Outstanding Balances with Subsidiaries and Affiliates
Significant outstanding balances for subsidiaries and affiliates other than individuallypresented on the accompanying non-consolidated balance sheets at March 31, 2014
and 2013 were as follows:
As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Trade notes payable
Accounts payable on construction
contracts¥00,822¥00,654$007,986

16,047

15,731

155,917(b) Pledged Assets
The following assets were pledged at March 31, 2014 and 2013 principally as
collateral for short-term bank loans, long-term debt and guarantees (such as guarantees
for the completion of construction contracts):
As of March 31,
2013
2014
2014
(Millions of yen)(Thousandsof U.S.
dollars)
Cash and deposits
Accounts receivable on completed
construction contracts
Land
Buildings, net of accumulated
depreciation
Structures, net of accumulated
depreciation
Investments in securities
Investments in subsidiaries and affiliates

66¥0,539¥0,807$05,237

25
5,209

–
5,209

242
50,612

328

351

3,186

26
2,606
364
¥9,101

28
2,293
364
¥9,055

252
25,3203,536$88,427

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014(b) Pledged Assets (continued)
The secured liabilities as of March 31, 2014 and 2013 are summarized as follows:
As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Short-term bank loans[Including current portion of long-termdebt]Long-term debt

¥10,763¥2,538$104,576

[700]
1,000

[700]
1,700

[6,801]
9,716(c) Contingent Liabilities
At March 31, 2014 and 2013, the Company was contingently liable for the following:
As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
As guarantor of bank loans to customers,
subsidiaries, an affiliate and employees
As endorsers of notes receivablediscounted with banks
As endorsers of other current assets(Non-operating notes receivable)
discounted with banks¥1,047¥1,284$10,172

242

234

2,351

88

148

855

(d) Trade Notes Receivable Maturing on the Balance Sheet Date
Trade notes receivable maturing at the end of the fiscal year are settled on the dates
they mature. Since the last day of the fiscal year in 2013 fell on a bank holiday, Tradenotes receivable maturing on that date were excluded from the corresponding balancesin the non-consolidated balance sheet as of March 31, 2014 and 2013.
As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
¥–
¥04
$–

Trade notes receivable
Other current assets (Non-operating
notes receivable)

–

67

26

–

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014
4.

Notes to Non-Consolidated Statements of Income(a) Net Sales Based on Percentage-of-completion Method
Net sales on construction contracts accounted for under the percentage-of-completion
method amounted to ¥230,978 million ($2,244,247 thousand) and ¥194,563 million
for the years ended March 31, 2014 and 2013, respectively.
(b) Transactions with Subsidiaries and Affiliates
Significant transactions with subsidiaries and affiliates other than individuallypresented on the accompanying non-consolidated statements of income for the years
ended 2014 and 2013 were as follows:
Years ended March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Dividend income
Royalty income

¥462
273

¥490
101

$4,4882,652(c) Reversal of Allowance for Loss on Litigation
Though the Company had recognized an allowance for loss on litigation, which wasestimated in relation to claims for damages due to bid-rigging on bridgework, thecorresponding surcharge payment to the Ministry of Land, Infrastructure
Transportation and Tourism of Japan and Fukushima Prefecture was less than therecognized amount, therefore, the difference was reversed. The corresponding
payment was made during the year ended March 31, 2014.
(d) Selling, General and Administrative Expenses
The significant components of selling, general and administrative expenses for theyears ended March 31, 2014 and 2013 were as follows:
Years ended March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Salaries and wages
Rent
Retirement benefit expenses
Communication and traveling expenses
Legal welfare expenses
Depreciation expenses
Other
Total

¥04,460
1,027
928
825
674
439
2,128
¥10,48568¥ 4,171
1,019
974
845
609
431
2,055
¥10,107$043,334
9,978
9,016
8,015
6,548
4,265
20,676$101,875

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014
5.

Securities

Stocks of subsidiaries and affiliates at March 31, 2014 and 2013 were as follows:
As of March 31, 2014
Carrying
Fair
Unrealized Carrying
Fair
Unrealized
value
value
gain
value
value
gain
(Millions of yen)(Thousands of U.S. dollars)
Stocks ofa subsidiary¥717¥2,142¥1,424$6,966$20,812$13,835

As of March 31, 2013
Carrying
Fair
Unrealized
value
value
gain
(Millions of yen)
Stocks ofa subsidiary
Note:

¥717

¥1,932¥1,215

Stocks of subsidiaries and affiliates for which it is extremely difficult todetermine market values were excluded from the above as follows:
As of March 31,
2014
2013
Carrying value
Carrying value(Millions of(Thousands of(Millions ofyen)
U.S. dollars)yen)

Stocks ofa subsidiaries
Stocks ofa affiliates¥2,696$26,195¥2,706

6

58

6

69

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014
6.

Income Taxes

The significant components of the Company’s deferred tax assets and liabilities at March
31, 2014 and 2013 were as follows:
As of March 31,
2014
2013
2014
(Millions of yen)(Thousands of
U.S. dollars)
Deferred tax assets:
Accrued retirement benefits
Allowance for bad debts
Tax loss carryforwards
Account payable and accrued
expenses
Loss on devaluation of investments in
subsidiaries and affiliates
Allowance for losses on construction
contracts
Allowance for loss on litigation
Foreign tax credit carryforwards
Reserve for defects on completed
construction projects
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized holding gain on securities
Deferred gain on hedging instruments,
net of taxes
Asset retirement obligations
Total deferred tax liabilities
Net deferred tax assets¥ 5,921
2,871
1,952

¥ 5,631
4,163
1,365

$ 57,530
27,895
18,966

929

994

9,026

875

1,234

8,501

611

–
–

224
317
269

5,936

242
315
13,720(10,060)
3,660

241
233
14,675(10,575)
4,100

2,351
3,060
133,307(97,745)
35,561(165)(0)(1,603)

(16)
(5)
(187)
¥ 3,472

(85)
(5)
(92)
¥ 4,007(155)(48)(1,816)$ 33,734––

The following table summarizes the significant differences between the statutory tax rates
and the effective tax rates for the years ended March 31, 2014 and 2013:
Years ended March 31,
2014
2013
Statutory tax rates
Non-deductible expenses
Non-taxable income
Per capita inhabitants’ taxes
Tax credit
Valuation allowance
Change in corporate tax rate
Other
Effective tax rates

38.0 %
7.8
(9.1)
(6.7)
–
(26.6)
12.5(0.3)
15.6 %
70

38.0 %
43.3(30.0)(2.4)(49.2)
16.1–(0.5)
15.3 %

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2014

The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 10 of 2014) was
promulgated on March 31, 2014 and the effective statutory tax rate used to measuredeferred tax assets and liabilities was changed from 38.0% to 35.6% for temporary
differences expected to be settled from fiscal years beginning on and after April 1, 2014.
As a result, net deferred tax assets (after deducting deferred tax liabilities) decreased ¥245
million ($2,380 thousand), income taxes-deferred increased ¥246 million ($2,390 thousand),and deferred gain on hedging instruments, net of taxes increased ¥1 million ($9 thousand)as of and for the year ended March 31, 2014.
7.

Subsequent Event

There is no information to be disclosed as of March 31, 2014.
8.

Short-Term Bank Loans and Long-Term Debt

Short-term bank loans generally represent notes, principally at average interest rates of
2.2% and 2.0% at March 31, 2014 and 2013, respectively.
Long-term debt at March 31, 2014 and 2013 is summarized as follows:
As of March 31,
2013
2014
2014
(Millions of yen)(Thousands of
U.S. dollars)
Debt with collateral (at average interest
rates of 2.3% and 2.4% at 2014 and2013)
Less current portion¥1,700(700)¥1,00071¥2,400(700)¥1,700$16,517(6,801)$09,716

72

73

CORPORATE OUTLINE
Corporate Name:

Sumitomo Mitsui Construction Co.,Ltd.

Established:

October 14, 1941

Permission:(Special-23)No.200, Specified Constructor,
granted by the Minister of Land,
Infrastructure and Transport

License:(15)No.1, Housing, Land and Building Dealer,
granted by the Minister of Land, Infrastructure
and Transport

Main Scope of Business:

1) To contract, plan, design and/or supervise
civil engineering, architectural, prestressed
concrete, electrical, piping and other works
2) To plan, design and supervise marine
development, regional development,
urban development, natural resource
development and environment
maintenance3) To manufacture, sell and lease materials
for civil and building works, prestressed
concrete products, seismic isolating
device, seismic damping device, andother machinery and instruments

Corporate History

74

Main Banks

Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Ltd

Main Shareholders

Japan Securities Finance Co., Ltd.
Matsui Securities Co., Ltd.
BBH Boston Custodian for GMO INTL. Intrinsic Value
Fund
State Street Bank and Trust Company 505041
SBI Securities Co., Ltd.

CORPORATE DATAHEAD OFFICE

2-1-6 Tsukuda, Chuo-ku,
Tokyo, 104-0051, Japan

INTERNATIONAL DIVISION
2-1-6 Tsukuda, Chuo-ku,
Tokyo, 104-0051, Japan
TEL:81-3-4582-3171
FAX:81-3-4582-3247

Bangkok:(Thailand)

26/49, 14th Floor, Orakarn Building, Soi Chidlom,
Ploenchit Road, Lumpini, Pathumwan, Bangkok
10330, Thailand
TEL:66-2-250-0560
FAX:66-2-254-7405

2nd Floor, Pioneer House Building, 108 Paseo deRoxas, Makati City, Metro Manila, Philippines
TEL:63-2-840-4913
FAX:63-2-840-4912

Guam:(USA)Suite 105-107, IBC Building, J.L. Baker Street,
Harmon Industrial Park, Harmon, Guam 96913(P.O.Box 9670, Tamuning, Guam 96931)
TEL:1-671-649-7521
FAX:1-671-649-7550

Hanoi:(Vietnam)

17-21 Floor Building, Building Group No 4,
Hacinco Student's Village, Nguy Nhu Kon Tumroad, Nhan Chinh Wrd, Thanh Xuan District, Hanoi,
Vietnam
TEL:84-4-3942-8888
FAX:84-4-3942-8808

Yangon:(Myanmar)No.45(N), Taynuyin Avenue, 7 1/2 Mile, Pyay
Road, Mayangone Township, Yangon, Myanmar

SUBSIDIARY COMPANIES INOVERSEAS
SMCC(Thailand)Co.,Ltd.

26/49, 14th Floor, Orakarn Building, Soi Chidlom,
Ploenchit Road, Lumpini, Pathumwan, Bangkok
10330, Thailand
TEL:66-2-250-0560
FAX:66-2-254-7405

Pt.SMCC Utama Indonesia

Summitmas 2, 20th Floor JL.Jend. Sudirman Kav.
61-62, Jakarta Selatan 12190, Indonesia
TEL:62-21-520-1757
FAX:62-21-525-0905

SMCC Construction India Ltd.

23,Local Shopping Centre, Madangir,Near Pushp
Bhawan, New Delhi 110062,India
TEL:91-11-41392800
FAX:91-11-41652592,41652593

Singapore:

491B River Valley Road, #10-01, Singapore 248373
TEL:65-6933-8000
FAX:65-6933-8001

Jakarta:(Indonesia)

Summitmas 2, 20th Floor JL.Jend. Sudirman Kav.
61-62, Jakarta Selatan 12190, Indonesia
TEL 62-21-520-1757
FAX 62-21-525-0905

Room No.202, No.2 Building, 641 Tian Shan Road,
Chang Ning Zone, Shanghai 200336, China
TEL:86-21-6228-6780
FAX:86-21-6228-6781

SMCC Guam, Inc.

OVERSEAS OFFICE
Manila:(Philippines)

SMCC Shanghai

SMCC Philippines, Inc.

2nd Floor, Pioneer House Building, 108 Paseo deRoxas, Makati City, Metro Manila, Philippines
TEL:63-2-840-4913
FAX:63-2-840-4912

75

Suite 105-107, IBC Building, J.L. Baker Street,
Harmon Industrial Park, Harmon, Guam 96913(P.O.Box 9670, Tamuning, Guam 96931)
TEL:1-671-649-7521
FAX:1-671-649-7550

SMCC Malaysia Sdn.Bhd.

Suite 1301, 13th Floor, City Plaza Jalan Tebrau,
80300 Johor Bahru, Johor, Malaysia

ANNUAL REPORT2014