ANNUAL REPORT
2011

CONTENTS
PROFILE1

CONSOLIDATED BALANCE SHEETS

4

THE MESSAGE FROM THE PRESIDENTCONSOLIDATED STATEMENTS OF OPERATIONSCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMECONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

2
6
7
8

CONSOLIDATED STATEMENTS OF CASH FLOWS10REPORT OF INDEPENDENT AUDITORS

50

NON-CONSOLIDATED STATEMENTS OF OPERATIONS54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NON-CONSOLIDATED BALANCE SHEETSNON-CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTSREPORT OF INDEPENDENT AUDITORSCORPORATE OUTLINECORPORATE DATA

11

52
55
57
72
74
75

PROFILE

1MESSAGE FROM
THE PRESIDENTTHE
MESSAGE FROM THE PRESIDENTMESSAGE FROM THE PRESIDENT
I would like to extend my deepest condolences to the people who were affected by the Great East Japan
Earthquake
andtoTsunami
thatdeepest
occurredon March 11,
2011.
Ourwhocompany
is makingconcertedeffortto
I would like
extend mycondolences
to thepeoplewere affectedbyatheGreat EastJapan
assist in the swift
recoverythat
andoccurredreconstructionof theareas.
Earthquake
and Tsunami
on March
11,affected2011. Ourcompany is making a concerted effort toThrougheconomic
imposed byand the increase in exports due to theassistin the theswift
recoverymeasuresand reconstructionof thethe government
affected areas.
expansion
theeconomic
Asian markets,
theimposed
economyby
inthe
Japan
had been andexperiencing
mild
duringthis
Throughofthemeasuresgovernment
the increase
in recovery
exports dueto thecurrent term,
conditions
have changed
completely
the Greatmild
Eastrecovery
Japan Earthquake
expansionof however,the Asian themarkets,
the economy
in Japan
had beenafter
experiencing
during thisoccurred.
As however,individualthe
consumerspending
has beencompletely
decreasingafter
throughout
theEastnationandEarthquake
production
current term,
conditions
have changed
the GreatJapan
activities havebeen experiencing
sudden downturn
to the shutdown
ofthe
factories
theproduction
disaster-affectedoccurred.
As individual
consumeraspending
has been due
decreasing
throughout
nationinandarea, the prospectofexperiencing
Japanese economy
haddownturn
become uncertain.
activities
have beena suddendue to the shutdown of factories in the disaster-affected
Althoughthe constructionin Japanhas beganto show some signs of recovery in the private housingarea,
the prospectof Japanesemarket
economyhad become
uncertain.
sector,the recoveryof public market
works andinvestmentin private
facilities
are stillslow,inthus
the condition
Althoughthe constructionin Japanhas beganto showsome signsof very
recoverythe private
housingof market
continues
to remain
harsh. in private facilities are still very slow, thus the condition
sector,theenvironment
recovery of public
works
and investment
circumstances,thistocurrent
SMCC group has achieved total sales of 298.6 billion yenof Undermarkettheseenvironment
continues
remainterm,
harsh.
(down
37.8
billionyen from theprevious
operatingprofitof 5 billion
yen (down
1.6billion
billionyen
from
Under
these
circumstances,
thiscurrentfiscal
term,year),
SMCC
group hasachieved
total salesof 298.6
the previous
fiscal year),and thea net
profit offiscal
1.5 billion
yen.
(down
37.8 billion
yen from
previousyear), operating
profit of 5 billion yen (down 1.6 billion fromthe previous fiscal year), and a net profit of 1.5 billion yen.
The first fiscal year has passed since we established “The Third Mid-term Management Plan” in May 2010
in orderto create
witha highof transparency
andto strengthen
earning powerin Mayour core
The first
fiscal management
year has passedsince
we levelestablished“The Third
Mid-term
Management
Plan” in2010
business,well asto develop sustainable
activities throughand adapting
growthinorder toascreate
managementwith a high corporate
level of transparency
and tointroducing
strengthen earning
powernewin ourcore
strategies.as well as to develop sustainable corporate activities through introducing and adapting new growthbusiness,strategies.
Basic policies of the Plan are as follows:
Establish
engineering and building construction divisions and the overseas
Basic○policiesof the domestic
Plan are ascivil
follows:business as
three pillars
to achieve sustainablegrowth.
○ Establish
thethedomestic
civil engineeringand building
construction divisions and the overseas○ Further,our pillars
strength
the corebusiness segments
businessenhanceas the threetoas
achievesustainablegrowth. to maintain the current scale and ensureprofit. enhance our strength as the core business segments to maintain the current scale and ensure○ Further,profit.
The essential points of our business strategies are as follows:a. For thedomestic
engineering
we will strengthen its profit structure by establishing
The essential
pointsof our civil
businessstrategiesdivision,
are as follows:business,which is thedivision,company’s
as the coreits
segment
with an emphasison thea. theForPC
thebridge
domestic
civil engineering
weforte,will strengthen
profit structureby establishingtechnical-proposal
type which
overallisevaluation
methodwhile
alsocoreputting
our resources
into the ontunnelthe
PC bridge business,the company’s
forte,
as thesegment
with an emphasis
thebusiness, where thetypemarketsizeevaluationis large, inorder toset also
it upputting
as the second
pillar next
to thePC
technical-proposal
overallmethodwhile
our resources
into thetunnelbridge segment.
business,where the market size is large, in order to set it up as the second pillar next to the PCb. bridge
For thedomestic building construction division, as the core segment, we will fortify sales
segment.
and increase
competitivenessreceiveasmore
orderssegment,
and improve
profitabilitybyb. promotion
For the domestic
building
construction todivision,the core
we will
fortify sales
utilizingourleading-edge
coretechnologyinhigh-rise
housing
construction.
promotion and increase competitiveness to receive more orders and improve profitability byc. utilizing
For the ouroverseas
division,core
wetechnology
will develop
and upgrade
the construction.
construction and risk-management
leading-edge
in high-risehousing
involvingdivision,
overseaswe
subsidiaries,
andandfurther
expandour marketing
to cultivatec. systems
For the overseas
will develop
upgradethe construction
andefforts
risk-management
demands
mostlyinAsia.
systems involving overseas subsidiaries, and further expand our marketing efforts to cultivate
demands mostly in Asia.
As a result of working diligently in these activities, we were able to achieve our target for the first fiscal
Asofa theresultof inworking
diligently
activities,
weincome
were able
achieveprofit
our target
for healthy
the first increasefiscalyear
Planterms ofamount inoftheseorders,operatingandtoordinary
through
yearof the Planin terms of amount of orders, operating income and ordinary profit through healthy increase
inoverseas
works.
in overseas
works. to implement various measures based on this Plan, and establish a stable revenue baseWe will continue
Weresponding
will continue
to implement
variouson this Plan, and establish a stable revenue basewhileswiftly
to the changes
inmeasuresthe marketbased
environment.
while responding swiftly to the changes in the market environment.

Yoshiyuki Norihisa
Yoshiyuki Norihisa
Representative
Director,
Representative
Director,
President
And Chief
Executive Officer
President And Chief Executive Officer2Consolidated Financial Statements
Sumitomo Mitsui Construction Co., Ltd.
and Consolidated Subsidiaries
Years ended March 31, 2011 and 2010
with Report of Independent Auditors3

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Balance Sheets
March 31, 2011
As of March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

AssetsCurrent assets:
Cash and deposits (Notes 6-(c) and 10)
Trade notes and accounts receivable (Note 6-(c))
Inventories (Notes 6-(a) and 6-(f))
Deferred tax assets (Note 16)
Other current assets
Less allowance for doubtful receivables
Total current assets¥ 20,730
93,034
21,2482,764
10,819(608)
147,989¥ 29,768
102,129
24,103
3,173
13,679(1,839)171,016$ 249,308
1,118,869
255,538
33,241130,114(7,312)
1,779,783

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 (Note 6-(c))
Construction in progress
Accumulated depreciation
Property and equipment, net

16,54014,551
17,74089(25,302)
23,617

16,368
14,52517,011
9(24,598)
23,315

198,917
174,996
213,349
1,070(304,293)
284,028

2,262

2,409

27,203

Intangible fixed assets
Investments and other assets:
Investments in securities (Notes 6-(c) and 13)
Long-term loans receivable
Claims provable in bankruptcy and other
Investments in unconsolidated subsidiaries and affiliates(Note 13)
Investments in real estate (Notes 6-(b) and 6-(c))
Long-term non-operating accounts receivable (Note 20)
Deferred tax assets (Note 16)
OtherLess allowance for doubtful receivables
Total investments and other assets
Total non-current assets

4,649
7,544
7,848

4,722
7,611
7,969

55,91190,727
94,383

1,481
3,569
38,114
2,016
7,534(49,610)
23,15049,031

1,437
3,601
45,104
1,768
8,162(54,530)
25,846
51,571

17,811
42,922
458,376
24,24590,607(596,632)
278,412589,669

Total assets¥197,021¥222,588$2,369,464

2

4

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Balance Sheets
March 31, 2011

Liabilities and net assets
Current liabilities:
Short-term bank loans and current portion of
long-term debt (Notes 6-(c) and 23)
Trade notes and accounts payable
Accrued expenses
Advances received on contracts in progress
Deposits received (Note 6-(c))
Reserve for defects on completed construction projects
Allowance for losses on construction contracts (Note 6-(f))
Allowance for loss on litigation
Allowance for loss on disaster
Other current liabilities (Note 6-(c))
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 6-(c) and 23)
Accrued retirement benefits (Note 15)
Deferred tax liability on land revaluation (Note 6-(d))
Other long-term liabilities (Note 6-(c))
Total long-term liabilities
Contingent liabilities (Notes 6-(e) and 20)
Net assets:
Shareholders’ equity:
Capital stock:
Common stock:
Authorized:
2,669,464,970 shares in 2011 and 2010
Issued and outstanding:
283,363,598 shares in 2011 and
275,313,598 shares in 2010
Preferred stock:
Authorized:
26,894,644 shares in 2011 and 2010
Issued and outstanding:
13,843,700 shares in 2011 and
16,323,100 shares in 2010
Additional paid-in capital
Retained earnings
Less treasury stock, at cost:
436,646 shares in 2011 and 425,236 shares in 2010
Total shareholders’ equity
Accumulated other comprehensive income:Unrealized holding (loss) gain on securities
Land revaluation (Note 6-(d))
Translation adjustments
Total accumulated other comprehensive income (loss)
Minority interests
Total net assets
Total liabilities and net assets

As of March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

¥ 7,517
101,548
1,961
21,164
–
1,161
372
1,280
470
16,568152,045¥ 6,642
122,336
2,108
23,417
12,726
1,255
327
1,325
–
10,410180,549$

90,402
1,221,262
23,583
254,527–
13,962
4,473
15,393
5,652
199,254
1,828,562

2,582
16,135445
5,163
24,327

1,197
14,996446
5,087
21,72731,052
194,046
5,351
62,092
292,567

12,003

12,003

144,353

682
6,360

682
5,651

8,202
76,488(242)
18,804(241)
18,096(2,910)226,145

(195)
57
(694)
(833)
2,677
20,648¥197,021

37
57
(604)
(508)
2,723
20,310¥222,588(2,345)685(8,346)(10,018)
32,194
248,322$2,369,464

The accompanying notes are an integral part of these statements.

53

Consolidated Statements of Operations

Years ended March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)
Net sales (Note 7-(a))
Cost of sales (Note 7-(b))
Gross profit¥298,647
278,285
20,362¥336,476
313,337
23,138$3,591,665
3,346,782
244,882

15,3994,962

16,537
6,601

185,195
59,675

248
195
245
(963)
(386)
(257)
(605)
(547)
67
15
273
(44)
245
–
–
–
(811)
(2,325)
2,636

394
184
109
(989)
(4)
–
(106)
–
36
60
–
(51)
153
0
(1,280)(384)(868)(2,746)
3,854

2,982
2,345
2,946
(11,581)(4,642)(3,090)(7,276)(6,578)
805
180
3,283
(529)
2,946
–
–
–
(9,753)(27,961)
31,701

603
191
795

947
(16)
931

7,251
2,297
9,561

1,841

–

22,140

300
1,541

(378)
2,543

3,607
18,532

Selling, general and administrative expenses(Notes 7-(c) and 15)
Operating income
Other income (expenses):
Interest and dividend income
Payments received from insurance claims
Employment adjustment subsidies
Interest expense
Exchange loss, net
Corporate tax on overseas sales
Provision for doubtful receivables
Loss on disaster (Note 7-(f))
Equity in earnings of affiliates
Gain on sales of property and equipment
Gain on negative goodwill
Loss on sales and disposal of property and equipment
Gain on prior-period adjustment (Note 7-(e))
Amortization of negative goodwill upon consolidation
Allowance for loss on litigation
Relocation expenses (Note 7-(g))
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

¥

¥
(Yen)

Net income per share – basic (Note 21)
Net income per share – diluted (Note 21)

¥5.47
2.65

$

(U.S. dollars)(Note 3)
¥6.22
4.32

$0.065
0.031

The accompanying notes are an integral part of these statements.

64

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Comprehensive Income
March 31, 2011
Years ended March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 8)(Note 3)
Income before minority interests
Other comprehensive income:Unrealized holding loss on securities
Translation adjustments
Share of other comprehensive income of affiliates
accounted for by equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to the parent
Comprehensive income attributable to minority interests¥1,841–$22,140

(234)
(104)

–
–

(2,814)(1,250)(8)(347)¥1,494–––(96)(4,173)$17,967¥1,217¥ 276$14,636$ 3,319

The accompanying notes are an integral part of these statements.

75

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Changes In Net Assets
March 31, 2011
Years ended March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)

Shareholders’ equity
Capital stock:
Balance at the end of previous period
Changes in items during the period
Transfer to other additional paid-in capital
Total changes in items during the period
Balance at the end of the period
Additional paid-in capital:
Balance at the end of previous period
Changes in items during the period:
Transfer from capital stock
Deficit disposition
Disposition of treasury stock
Total changes in items during the period
Balance at the end of the period
Retained earnings (deficit):
Balance at the end of previous period
Changes in items during the period
Cash dividends paid
Deficit disposition
Net income
Reversal of revaluation reserve for land, net of taxes
Total changes in items during the period
Balance at the end of the period
Treasury stock, at cost:
Balance at the end of previous period
Changes in items during the period
Purchases of treasury stock
Disposition of treasury stock
Total changes in items during the period
Balance at the end of the period
Total shareholders’ equity:
Balance at the end of previous period
Changes in items during the period
Dividends from surplus
Transfer to other additional paid-in capital
Transfer from capital stock
Deficit disposition
Net income
Purchases of treasury stock
Disposition of treasury stockReversal of revaluation reserve for land, net of taxes
Total changes in items during the period
Balance at the end of the period

8¥12,003¥16,859$144,353––
12,003(4,855)(4,855)12,003––
144,353

682

80

8,202

–
–
(0)
(0)
682

4,855
(4,253)
(0)
601
682

–
–
(0)
(0)
8,202

5,651

(1,145)67,961

(833)
–
1,541
0
708
6,360

–
4,253
2,543
0
6,797
5,651

(10,018)–
18,53208,514
76,488

(241)

(240)

(2,898)

(0)
0
(0)
(242)

(1)
0
(0)
(241)

(0)
0
(0)
(2,910)18,096

15,553

217,630

(833)
–
–
–
1,541
(0)
0
0
708
18,804–(4,855)
4,855
–
2,543
(1)
0
0
2,543
18,096（10,018）–––
18,532
(0)
0
0
8,514
226,1456

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Changes In Net Assets
March 31, 2011

Valuation, translation adjustments and other
Unrealized holding (loss) gain on securities:
Balance at the end of previous period
Changes in items during the period
Net changes in items other than shareholders’ equity
Total changes in items during the period
Balance at the end of the period
Land revaluation:
Balance at the end of previous period
Changes in items during the period
Net changes in items other than shareholders’ equity
Total changes in items during the period
Balance at the end of the period
Translation adjustments:
Balance at the end of previous period
Changes in items during the period
Net changes in items other than shareholders’ equity
Total changes in items during the period
Balance at the end of the period
Total valuation, translation adjustments and other:
Balance at the end of previous period
Changes in items during the period
Net changes in items other than shareholders’ equity
Total changes in items during the period
Balance at the end of the period
Minority interests
Balance at the end of previous period
Changes in items during the period
Net changes in items other than shareholders’ equity
Total changes in items during the period
Balance at the end of the period
Total net assets
Balance at the end of previous period
Changes in items during the period
Dividends from surplus
Transfer to other additional paid-in capital
Transfer from capital stock
Deficit disposition
Net income
Purchases of treasury stock
Disposition of treasury stockReversal of revaluation reserve for land, net of taxes
Net changes in items other than shareholders’ equity
Total changes in items during the period
Balance at the end of the period

Years ended March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)
37

(375)

444

(233)
(233)
(195)

413
413
37

(2,802)(2,802)(2,345)

57

58

685

(0)
(0)
57

(0)
(0)
57

(0)
(0)
685

(604)

(656)

(7,263)

(90)
(90)
(694)

52
52
(604)

(1,082)(1,082)(8,346)

(508)

(973)

(6,109)

(324)
(324)
(833)

464
464
(508)

(3,896)(3,896)(10,018)

2,723

2,356

32,748

(45)
(45)
2,677

366
366
2,723

(541)
(541)
32,194

20,31016,936244,257

(833)
–
–
–
1,541
(0)
0
0
(370)
337
¥20,648–(4,855)
4,855
–
2,543
(1)
0
0
831
3,374
¥20,310(10,018)–––
18,532(0)00(4,449)4,052$248,322

The accompanying notes are an integral part of these statements.

97

Sumitomo Mitsui Construction Co., Ltd.
Consolidated Statements of Cash Flows
March 31, 2011

Operating activities
Income before income taxes and minority interests
Depreciation and amortization
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in accrued retirement benefits
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 provision for loss on disaster
Loss (gain) on sales and disposal of property and equipment
Amortization of negative goodwill upon consolidation
Interest and dividend income
Interest expense
Exchange loss, net
Equity in earnings of affiliates
Gain on negative goodwill
Relocation expenses
Decrease in trade notes and accounts receivable
Decrease in inventories
Decrease in other assets
Decrease in trade notes and accounts payable
Decrease in advances received on contracts in progress(Decrease) increase in other liabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Special retirement benefits
Relocation expenses
Net cash (used in) provided by operating activities
Investing activities
Increase in short-term investments
Purchases of property and equipment
Proceeds from sales of property and equipment
Purchases of intangible fixed assets
Purchases of investments in real estate
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
Disbursements for loans
Proceeds from collection of loans
Other
Net cash used in investing activities
Financing activities
Increase in short-term bank loans
Increase in long-term debt
Decrease in long-term debt
Increase (decrease) in long-term loans of employees
Increase in treasury stock
Cash dividends paid
Cash dividends paid for minority shareholders
Other
Net cash provided by 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
Cash and cash equivalents at end of the year

Years ended March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 3)
¥ 2,636
1,502
916
1,142
(92)
45
(45)
470
13
–
(248)
963
308
(67)
(273)
–
7,903
2,852
4,036
(20,663)(2,221)(6,023)36(6,807)
271
(959)
(984)
(32)
(293)
(8,805)¥ 3,854
1,213
(24)
(695)
(236)
(245)
1,325
–
(5)
(0)
(394)
989
130
(36)
–
384
17,5482,638
1,957(17,979)(5,337)
149
33
5,269
882
(983)
(815)
(417)
(91)
3,845

$ 31,701
18,063
11,016
13,734(1,106)
541
(541)
5,652
156
–
(2,982)
11,581
3,704(805)(3,283)–
95,04534,29948,538(248,502)(26,710)(72,435)
432(81,864)
3,259(11,533)(11,834)(384)(3,523)(105,892)(1,297)(1,508)
48
(114)
–
–
(234)
102
(15)
(220)
185
539
(2,514)(1,026)
(865)
68
(344)
(23)
59
(4)
88
(0)
(151)
299
212
(1,689)(15,598)(18,135)
577(1,371)––(2,814)1,226(180)(2,645)2,224
6,482(30,234)

1,101
3,200
(2,040)
51
(0)
(833)
(25)
(89)
1,363
(267)
(10,224)
26,967¥ 16,742

2,525–(1,489)
(65)
(1)
–
(17)
(60)
891
(75)
2,971
23,995¥ 26,967

13,241
38,484(24,533)613(0)(10,018)(300)(1,070)16,392(3,211)(122,958)
324,317$ 201,346

The accompanying notes are an integral part of these statements.

10Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

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 in which they are acquired.
Investments in affiliates which are not accounted for by the equity method are
principally stated at cost.
The Company had 14 consolidated subsidiaries, 1 unconsolidated subsidiary and 2
affiliates accounted for by the equity method as of March 31, 2011 and 14
consolidated subsidiaries, 2 unconsolidated subsidiaries and 2 affiliates accounted forby the equity method as of March 31, 2010, respectively.

11

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(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 determinedby 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 Low 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.

12Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

(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)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) Advances Received on 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.
(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.

(k) Allowance for Loss on Disaster
An allowance has been provided for future losses on recovery and restoration related
to ongoing construction projects damaged by the Great East Japan Earthquake.
(l)

Employees’ Retirement Benefits
Accrued retirement benefits for employees are provided principally at an amountcalculated based on the retirement benefit obligation and the fair value of the pension
plan assets, as adjusted for the unrecognized net retirement benefit obligation attransition, unrecognized actuarial gain or loss and unrecognized prior service cost.
13

11

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(l)

Employees’ Retirement Benefits (continued)
The net retirement benefit obligation at transition is being amortized principally over a
period of 15 years. Prior service cost is being amortized as incurred by thestraight-line method over periods (mainly 11 years) which are shorter than the averageremaining years of service of the employees. Actuarial gain or loss is amortized in
the year following the year in which the gain 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 the employees.

(m) 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 thepercentage-of-completion method, except for revenue on long-term contracts which
total less than ¥500 million.
(Change in accounting policy)
Effective the year ended March 31, 2010, the Company has adopted “AccountingStandard for Construction Contracts” (ASBJ Statement No. 15 issued on December 27,2007), and “Guidance on Accounting Standard for Construction Contracts” (ASBJ
Guidance No. 18 issued on December 27, 2007).
Under the new accounting standard and guidance, revenues and costs of construction
contracts that commenced on or after April 1, 2009, of which the percentage ofcompletion can be reliably estimated, are recognized by the percentage-of-completion
method. The percentage of completion is calculated at the cost incurred as apercentage of the estimated total cost. The completed-contract method continues tobe applied for contracts for which the percentage of completion cannot be reliably
estimated.
As a result of this change, net sales increased by ¥21,702 million, operating income
increased by ¥2,175 million, and income before income taxes increased by ¥2,195
million for the year ended March 31, 2010 compared with the corresponding amounts
which would have been recorded under the previous method.
(n) 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.

14

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(o) Derivatives and Hedge Accounting(1) Method of hedge accounting
Derivative financial instruments are mainly stated at fair value, and interest rate
swaps, which qualify for hedge accounting and meet specific matching criteria,
are not remeasured at market value, but the differential paid or received under theswap agreements is charged to income (short-cut method).
(2) Hedging instruments and hedging items
Hedging instruments is the interest rate swaps, hedging items is the interest on
debt.
(3) Hedging policy
The Company utilizes interest rate swaps only for the purpose of hedging futureinterest rate fluctuation risk.
(4) Assessment of hedge effectivenessThe evaluation of hedge effectiveness is omitted for interest rate swaps as allmeet specified criteria to be qualified for the short-cut method.
(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.
(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 files a tax return under the consolidated corporate-tax 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 ¥83.15 = U.S.$1.00, the approximate rate of exchange in effect on
March 31, 2011. This translation should not be construed as a representation that yen
have been, could have been, or could in the future be, converted into U.S. dollars at that or
any other rate.
15
13

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

4.

Changes in Accounting Methods(a) Effective the year ended March 31, 2011, the Company has adopted “AccountingStandard for Asset Retirement Obligations” (ASBJ Statement No. 18 issued on March
31, 2008) an “Guidance for the Application of Accounting Standard for Asset
Retirement Obligations” (ASBJ Guidance No. 21, issued on March 31, 2008).
As a result, operating income decreased by ¥21 million ($252 thousand) and income
before income taxes and minority interests decreased by ¥112 million ($1,346
thousand) for the year ended March 31, 2011.
(b) Effective the year ended March 31, 2011, the Company has adopted “AccountingStandard for Equity Method of Accounting for Investments” (ASBJ Statement No. 16,
issued on March 10, 2008) and “Practical Solution on Unification of Accounting
Policies Applied to Associates Accounted for Using the Equity Method” (PITF No. 24,
issued on March 10, 2008).
The effect of this adoption has no impact on the consolidated statement of income forthe year ended March 31, 2011.
(c) Effective the year ended March 31, 2011, the Company has adopted “AccountingStandard for Business Combinations” (ASBJ Statement No. 21, issued on December
26, 2008), “Accounting Standard for Consolidated Financial Statements” (ASBJ
Statement No. 22, issued on December 26, 2008), “Partial amendments to AccountingStandard for Research and Development Costs” (ASBJ Statement No. 23, issued on
December 26, 2008), “Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7, issued on December 26, 2008), “Accounting Standard for Equity
Method of Accounting for Investments”(ASBJ Statement No. 16, issued on December
26, 2008) and “Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures” (ASBJ Guidance No. 10, issued on
December 26, 2008).
(d) Effective the year ended March 31, 2010, the Company has adopted “Partial
Amendments to Accounting Standard for Retirement Benefits (Part 3)” (ASBJ
Statement No. 19 issued on July 31, 2008).
The effect of this adoption has no impact on the consolidated statement of operations
for the year ended March 31, 2010, nor has the amount of the retirement benefit
obligation changed.
5.

Additional Information

Effective the year ended March 31, 2011, the Company has adopted “Accounting Standard
for Presentation of Comprehensive Income” (ASBJ Statement No. 25, issued on June 30,2010). The amounts recorded as “Accumulated Other Comprehensive Income” and“Total Accumulated Other Comprehensive Income” as of March 31, 2010 in theaccompanying balance sheets and statements of changings in net assets had been recorded
as “Valuation, Translation Adjustments and Other” and “Total Valuation, Translation
Adjustments and Other,” respectively, in prior years.
16Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

6.

Notes to Consolidated Balance Sheets(a) Inventories
The components of inventories as of March 31, 2011 and 2010 were as follows:
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Merchandise and finished goods
Materials and supplies
Costs on uncompleted construction
contracts
Real estate for sale

¥

484
1,937

18,717108¥21,248

¥

501
1,503

21,962
135¥24,103$

5,820
23,295225,099
1,298$255,538(b) Investments in Real Estate“Investments in real estate” includes accumulated depreciation in the amount of ¥619
million ($7,444 thousand) and ¥587 million at March 31, 2011 and 2010, respectively.
(c) Pledged Assets
The following assets were pledged at March 31, 2011 principally as collateral for
short-term bank loans, long-term debt, and guarantees (such as guarantees for thecompletion of construction contracts):
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Cash and deposits
Trade notes and accounts receivable
Land
Buildings and structures, net ofaccumulated depreciation
Machinery, equipment and vehicles,
net of accumulated depreciation
Investments in securities
Investments in real estate17¥ 2,788338
12,959¥ 2,493
3,401
12,961$ 33,529
4,064
155,850

1,371

1,498

16,488

90
1,926
3,333
¥22,809

119
2,001
3,365
¥25,841

1,082
23,16240,084$274,311

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(c) Pledged Assets (continued)
Of the above property and equipment, assets that were held in mortgage for factory
foundations at March 31, 2011 and 2010 are summarized as follows:
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Land
Buildings and structures, net ofaccumulated depreciation
Machinery, equipment and vehicles,
net of accumulated depreciation¥1,236¥1,236$14,864

267

285

3,211

90
¥1,594

119¥1,642

1,082$19,170

The secured liabilities as of March 31, 2011 and 2010 are summarized as follows:
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Short-term bank loans[Including current portion of
long-term debt]
Long-term debt
Deposits received
Other current liabilities
Other long-term liabilities¥2,213¥5,757$26,614

[873]
2,332
–
100
425

[876]
1,197
100
–
525

[10,499]
28,045
–
1,202
5,111

(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 isshown as a separate component of net assets.
The market value of the land was ¥678 million ($8,153 thousand) and ¥662 million
more than the revalued book amount at March 31, 2011 and 2010, respectively.

18

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(e) Contingent Liabilities
At March 31, 2011 and 2010, the Company and consolidated subsidiaries were
contingently liable for the followings:
As of March 31,
2011
2010
2011
(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
As endorsers of notes receivableendorsed to vendors(f)¥3,291¥3,576$39,579

433

–

5,207

7

10

84

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 amountof ¥57 million ($685 thousand) and ¥159 million as of March 31, 2011 and 2010.

7.

Notes to Consolidated Statements of Operations(a) Net sales based on percentage-of-completion method
Net sales on such construction contracts amounted to ¥208,742 million ($2,510,426
thousand) and ¥213,404 million for the year ended March 31, 2011 and 2010,
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 theamount of ¥298 million ($3,583 thousand) and ¥327 million for the year ended March
31, 2011 and 2010, respectively.

19

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(c) Selling, General and Administrative Expenses
The significant components of selling, general and administrative expenses at March
31, 2011 and 2010 were as follows:
Years ended March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Salaries and wages
Retirement benefit expenses
Rent
Provision for doubtful receivables
Other
Total

¥ 6,348
1,171
1,628
132
6,118
¥15,399¥ 6,849
1,197
2,080
81
6,327
¥16,537$ 76,343
14,082
19,5791,587
73,577$185,195(d) Research and Development Expenses
Research and development costs included in selling, general and administrative
expenses and manufacturing costs amounted to ¥916 million ($11,016 thousand) and¥1,015 million for the years ended March 31, 2011 and 2010, respectively.
(e) Gain on Prior-period Adjustment
The significant components of gain on prior-period adjustment for the years ended
March 31, 2011 and 2010 were as follows:
Years ended March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Reversal of provision for doubtfulreceivables
Gain on recovery of bad debts
Reversal of special retirement benefits
Others
Total
(f)

¥138
13
84
8
¥245

¥119
21
–
12
¥153

$1,659156
1,010
96$2,946

Loss on Disaster
Loss on disaster for the year ended March 31, 2011 included relief and support costsof ¥77 million ($926 thousand) and an allowance for loss on disaster of ¥470 million($5,652 thousand) due to the Great East Japan Earthquake.

(g) Relocation Expenses
Relocation and integration expenses for head office and branches located around theTokyo metropolitan area have been recognized for the year ended March 31, 2010.

20

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20118.

Notes to Consolidated Statements of Comprehensive Income

Comprehensive income for the year ended March 31, 2010 was as follows:
March 31, 2010
(Millions of yen)Comprehensive income attributable to the parent
Comprehensive income attributable to minority
interests
Comprehensive income¥3,007393¥3,401

Components of other comprehensive income for the year ended March 31, 2010 was
as follows:
March 31, 2010
(Millions of yen)
Unrealized holding loss on securities
Translation adjustments
Share of other comprehensive income of affiliates
accounted for by the equity method
Other comprehensive income

21

¥408
45
23
¥478

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 20119.

Notes to Consolidated Statements of Charges in Net Assets(a) Type and number of shares issued and treasury stocks(1) For the year ended March 31, 2011
Balance at
March 31,2010
Shares issued:
Common stock
2nd Series Class A preferred stock
3rd Series Class C preferred stock
3rd Series Class D preferred stockTotal

275,313,598
4,500,000
5,861,200
5,961,900
291,636,698

Increase
Decrease(Number of shares)
8,050,000–––
8,050,000–
2,479,400––
2,479,400

Balance at
March 31,2011
283,363,598
2,020,600
5,861,200
5,961,900
297,207,298

Note 1:

Increase of common stock is due to acquisition of common stock by exercising a call optionof the 2nd Series Class A preferred stock.

Note 2:

Decrease of preferred stock is due to redemption of 2nd Series Class A preferred stock toacquire common stock by exercising a call option.
Balance at
March 31,
2010

Treasury shares:
Common stock
2nd Series Class A preferred stockTotal

425,236–425,236

Increase
Decrease(Number of shares)
11,8772,479,400
2,491,277

467
2,479,400
2,479,867

Balance at
March 31,2011
436,646–436,646

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 requests topurchase fractional shares.

Note 3:

Increase of preferred stock is due to the acquisition of common stock by exercising a call
option of the 2nd Series Class A preferred stock.

Note 4:

Decrease of preferred stock is due to redemption of 2nd Series Class A preferred treasury
stock to acquire common stock by exercising a call option.

(2) For the year ended March 31, 2010
Balance at
March 31,2009
Shares issued:
Common stock
2nd Series Class A preferred stock
3rd Series Class C preferred stock
3rd Series Class D preferred stock
Total

275,097,086
4,500,000
5,868,700
5,961,900
291,427,686

Increase
Decrease(Number of shares)
216,512–––
216,512

–
–
7,500
–
7,500

Balance at
March 31,2010
275,313,598
4,500,000
5,861,200
5,961,900
291,636,698

Note 1:

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

Note 2:

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

22

20

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(a) Type and number of shares issued and treasury stocks (continued)
Balance at
March 31,
2009
Treasury shares:
Common stock
3rd Series Class C preferred stock
Total

411,183–
411,183

Balance at
March 31,2010

Increase
Decrease(Number of shares)
14,7227,500
22,222

669
7,500
8,169

425,236–425,236

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 requests topurchase fractional shares.

Note 3:

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

Note 4:

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

(b) Dividends:
Dividends with the cut-off date in the year ended March 31, 2010 and the effective
date in the year ending March 31, 2011, were as follows:

Resolution

Total dividends Dividends(millions ofper share
yen)
(yen)

Type of shares

Annual general 2nd Series Class A preferred stock
meeting of the 3rd Series Class C preferred stock
shareholders on 3rd Series Class D preferred stock
June 29, 2010

¥ 38
394
400
¥833

¥ 8.4567.25
67.25

Cut-off
date

Effectiv
e dateMarch 31, June 30,
2010
2010

For the year ended March 31, 2012 and 2011, there were no dividends paid toshareholders.
10. Notes to Consolidated Statements of Cash Flows(a) Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2011 and 2010 were as follows:
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Cash and deposits
Time deposits with maturities of overthree months
Cash and cash equivalents
23¥20,730¥29,768$249,308(3,987)¥16,742(2,801)¥26,967(47,949)$201,346

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

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, 2011 and 2010,
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 the initial year of
application of change in accounting method)
2011
Machinery,equipment Intangible
fixed
and
assetsvehiclesAcquisition costs
Accumulated depreciation/ amortization
Net book value

2010
Machinery,equipment Intangible
fixed
and
Total
assetsvehicles(Millions of yen)

Total

¥721

¥146

¥867

¥774

¥173

¥947

431
¥290

115
¥ 30

547
¥320

358
¥415

113
¥ 59

472
¥475

2011
Machinery,equipment Intangible
fixed
and
assetsTotal
vehicles(Thousands of U.S. dollars)
Acquisition costs
Accumulated depreciation/ amortization
Net book value$8,671$1,755$10,426

5,183$3,487

1,383$1,3606,578$ 3,848

2011
2010(Millions of yen)
Future minimum payments:
Within one year
Over one year
Lease payments
Depreciation / amortization equivalents
Interest expense equivalents

2011(Thousands of
U.S. dollars)

¥135
205
¥340

¥157
340
¥498

$1,623
2,465$4,088

¥173
152
18

¥220
192
26

$2,0801,828
216

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.
24Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(a) As lessee: (continued)(2) Operating leases
2010
2011
(Millions of yen)
Future minimum payments:
Within one year
Over one year

¥ 6
3
¥10

¥11
10
¥21

2011
(Thousands of
U.S. dollars)
$ 72
36
$120

(b) As lessor:(1) Finance leases (of which the commencement dates prior to the initial year of
application of change in accounting method)
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Machinery and equipment
Acquisition costs
Accumulated depreciation/ amortization
Net book value

¥15

¥27

$180

12
¥ 2

19
¥ 7

144
$ 24

2011
2010
(Millions of yen)
Future minimum payments:
Within one year
Over one year

¥2
0
¥3

¥ 7
6
¥13

2011
(Thousands of
U.S. dollars)
$24
0
$36

Future minimum receivable are computed by the interest-inclusive method, since
the balance of future minimum payments accounts for a minimal portion of tradeaccounts at the end of fiscal year.
2011
2010
(Millions of yen)
Lease receivable
Depreciation / amortization

¥4
3

25

¥9
8

2011
(Thousands of
U.S. dollars)$48
36

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

12. Financial Instruments
Financial instruments at March 31, 2011 are summarized as follows:(a) Overview(1) Policy for financial instruments
The Group limits investments of surplus funds to the short-term bank deposits,
and raises necessary funds through bank loans.
(2) Types of financial instruments and related risk and risk management system
Trade notes and accounts receivable are exposed to credit risk in relation tocustomers and trading partners. Also, the Group’s main investments insecurities are shares of companies, and they are exposed to market pricefluctuation risk.
The management of credit risks (Risks in relation to default of customers andtrading partners)
The Company has systems enabling the management of due dates and balances oftrade notes and accounts receivable for individual customers and trading partners
and monitors their credit status. These systems enable the Group to identify any
concerns for doubtful receivables at an early stage and reduce risks ofuncollectible amounts. Consolidated subsidiaries also manage credit risks in thesame manner as the Company. The Company minimizes credit risks by mainly
holding held-to-maturity securities with high credit ratings.
Management of market risks (Risks in relation to fluctuation of currency
exchange and interest rates)
The Company and certain consolidated subsidiaries hold trade receivables inforeign currencies. However, risk of fluctuations in the currency exchange rate
is not significant because a similar amount of trade payables are also held.
Loan payables are mainly for short-term operating funds. The Group manages
loan payables to flexibly plan 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. The
derivative transactions are carried out after getting approval in accordance with
the Companies’ internal rules on transactions.
Information regarding the method of hedge Accounting, hedging instruments andhedged items, hedging policy, and assessment of hedge effectiveness is found in
Note 2-15.

26

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(a) Overview (continued)(3) Supplementary explanation of the fair value of financial instruments
The fair values of financial instruments include prices based on market prices, or,if no market prices are available, they include estimated amounts. Because
estimations of 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 sheet, market value, and thedifference on March 31, 2011, are as shown below. Moreover, items for which it isextremely difficult to determine fair values are not included in the following table (seeNote 2).
Carrying
value
Cash and deposits
Trade notes and accounts
receivable
Investments in securities
Held-to-maturity
securities
Other securities
Long-term loans
receivable
Allowance for doubtfulreceivables
Claims provable inbankruptcy and other
Allowance for doubtfulreceivables
Long-term non-operating
accounts receivable
Allowance for doubtfulreceivables
Total assets
Trade notes and accounts
payableShort-term bank loans
and current portion of
long-term debt
Long-term debt
Total liabilities
Derivative
Note 1:

2011
Fair
Carrying
Fair
value
Difference
value
value
Difference(Millions of yen)(Thousands of U.S. dollars)–$ 249,308$ 249,308

93,023
1,970

(10)
0

1,118,869
23,692

1,118,737
23,692

(120)
0

9
1,960

0
–

108
23,571

108
23,5710–

19,206(1,864)2,345

0¥ 20,730¥ 20,730

93,034
1,970
9
1,960

¥

7,544
(5,792)
1,752–

90,727
1,597

(155)

7,848
(7,653)
195$(69,657)
21,07094,383195(0)38,144(92,038)
2,345
458,737(35,245)
2,868
120,551

2,824
120,341

(43)
(210)

(423,872)
34,491
1,449,801

33,962
1,447,276(517)(2,525)

101,548

101,548–

1,221,262

1,221,262

–

7,517
2,582
¥111,648
–

7,528
2,519
¥111,597–11(63)¥ (51)–

90,402
31,052$1,342,730–

90,53530,294$1,342,116
–

132
(757)
$ (613)–Calculation of the fair value of financial instruments and other matters related to investment securities.

27

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(b) Fair value of financial instruments (continued)
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 and accounts receivable
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.
(3) Investments in securities
Concerning the market value of investment securities, the market value for stockis 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 investment
securities.”(4) Long-term loans receivable, (5) Claims provable in bankruptcy and other and(6) Long-term non-operating accounts receivable
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 and accounts payable
Because 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.

28

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(b) Fair value of financial instruments (continued)(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, which is discounted by an interest rate to be applied if
similar new loans were entered into.
The information of the fair value for derivatives is included in Note 14.
Note 2:Unlisted stock (The carrying value ¥4,160 million ($50,030 thousand)) is not included in “(3)Investments in securities” because these have no market value and it is extremely difficult to measure thefair value.

Note 3:

The redemption schedule for monetary claims and held-to-maturity debt securities with maturity dates
subsequent to the consolidated balance sheet date.

Deposits
Trade notes andaccounts
receivable
Investments insecurities
Held-to-maturi
ty securities(Bonds)Long-term loans
receivable
Claims provablein bankruptcy
and other (*)
Long-term
non-operating
accounts
receivable (*)

2011

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 1
within 5 within 10 Over 10
years
years
year
years
(Thousands of U.S. dollars)¥ 20,663¥¥–$ 248,502

–

¥

–

$

–

$

–

$

–

92,179854––

1,108,586

10,270

–

–

–

9

–

–

–

108

–

–

12

5

783

951

144

60

9,416

11,437

20

3

–

–

240

36

–

–

211
¥113,088

1,407¥2,281

0
¥783

–
¥951

2,537
$1,360,048

16,921$27,432

0$9,416–$11,437(*) The fair values of these items are extremely difficult to determine. This table does not include the amount of¥171 million ($2,056 thousand) out of claims provable in bankruptcy and other and the amount of ¥1,248
million ($15,009 thousand) out of long-term non-operating accounts receivable.
Note 4:

The redemption schedule for corporate bonds, long-term debt, and other interest bearing debt withmaturity dates subsequent to the consolidated balance sheet date. See note 23.

29

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

Financial instruments at March 31, 2010 are summarized as follows:(a) Overview(1) Policy for financial instruments
The Group limits investments of surplus funds to the short-term bank deposits,
and raises necessary funds through bank loans.
(2) Types of financial instruments and related risk and risk management system
Trade notes and accounts receivable are exposed to credit risk in relation tocustomers and trading partners. Also, the Group’s main investments insecurities are shares of companies, and they are exposed to market pricefluctuation risk.
The management of credit risks (Risks in relation to default of customers and trading
partners)
The Company has systems enabling the management of due dates and balances oftrade notes and accounts receivable for individual customers and trading partners andmonitors 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 in relation to fluctuation of currency exchange andinterest rates)
The Company and certain consolidated subsidiaries hold trade receivables in foreign
currencies. However, risk of fluctuations in the currency exchange rate is not
significant because a similar amount of trade payables are also held.
Loan payables are mainly for short-term operating funds. The Group manages loan
payables to flexibly plan or revise its fund management plans.
(3) Supplementary explanation of the fair value of financial instruments
The fair values of financial instruments include prices based on market prices, or,if no market prices are available, they include estimated amounts. Because
estimations of the fair value incorporate various factors, applying different
assumptions can in some cases result in different fair values.

30Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(b) Fair value of financial instruments
Amounts recognized in the consolidated balance sheet, market value, and thedifference on March 31, 2010, are as shown below. Moreover, items for which it isextremely difficult to determine fair values are not included in the following table (seeNote 2).
Carrying
value
Cash and deposits
Trade notes and accounts
receivable
Allowance for doubtfulreceivables
Investments in securities
Held-to-maturity
securities
Other securities
Long-term loans
receivable
Allowance for doubtfulreceivables
Claims provable inbankruptcy and other
Allowance for doubtfulreceivables
Long-term non-operating
accounts receivable
Allowance for doubtfulreceivables
Total assets
Trade notes and accounts
payableShort-term bank loans
and current portion of
long-term debt
Long-term debt
Total liabilities
Note 1:¥ 29,768

2010
Fair
value
Difference(Millions of yen)
¥ 29,768¥–

102,129(1,104)
101,025
2,045

100,980
2,045

(44)
0

9
2,035

9
2,035

0
–

1,645

(173)

507

(0)

(40,421)
4,683
139,848

4,635
139,582

(48)
(266)

122,336

122,336

–

6,642
1,197
¥130,175

6,653
1,163
¥130,153

11(33)¥ (22)

7,611(5,792)
1,819
7,969(7,461)507
45,104

Calculation of the fair value of financial instruments and other matters related to investment securities.

31

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(b) Fair value of financial instruments (continued)
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 and accounts receivable
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.
(3) Investments in securities
Concerning the market value of investment securities, the market value for stockis 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 investment
securities.”(4) Long-term loans receivable, (5) Claims provable in bankruptcy and other and(6) Long-term non-operating accounts receivable
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 and accounts payable
Because 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.

32

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(b) Fair value of financial instruments (continued)(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.
Note 2:Unlisted stock (The carrying value ¥4,114 million) is not included in “(3) Investments in securities”
because these have 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 the consolidated balance sheet date.

Within 1
year
Deposits
Trade notes andaccounts
receivable
Investments insecurities
Held-to-maturi
ty securities(Bonds)Long-term loans
receivable
Claims provablein bankruptcy
and other (*)
Long-term
non-operating
accounts
receivable (*)¥ 29,624

2010
Over 1
Over 5year and years andwithin 5 within 10
years
years
(Millions of yen)¥–¥Over 10
years

–

¥

–

96,575

4,449

–

–

–

9

–

–

29

18

784

987

21

6

–

–

979
¥127,231

1,543¥6,027

0
¥784

–
¥987

(*) The fair values of these items are extremely difficult to determine. This table does not include the amount of¥479 million out of claims provable in bankruptcy and other and the amount of ¥2,160 million out of
long-term non-operating accounts receivable.
Note 4:

The redemption schedule for corporate bonds, long-term debt, and other interest bearing debt withmaturity dates subsequent to the consolidated balance sheet date. See note 23.

(Additional information)
Effective the year ended March 31, 2010, the Company has adopted “AccountingStandard for Financial Instruments” (ASBJ Statement No. 10 issued on March 10,2008), and “Guidance on Disclosures about Fair Value of Financial Instruments”(ASBJ Guidance No. 19 issued on March 10, 2010).

33

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

13.

Securities

Securities at March 31, 2011 and 2010 are summarized as follows:(a) Held-to-maturity securities
Carrying
value
Securities whose fairvalue exceeds theircarrying value:
Bonds

¥9

Carrying
value
Securities whose fairvalue exceeds theircarrying value:
Bonds

¥9

2011
Fair
Unrealized Carrying
Fair
Unrealized
value
gain
value
value
gain
(Millions of yen)(Thousands of U.S. dollars)

¥9

¥0

$108

$108

$0

2010
Fair
Unrealized
value
gain
(Millions of yen)

¥9¥0(b) Other securities

Cost
Unrealized gain:
Stock
Unrealized loss:
Stock
Total

¥ 629

¥ 521

¥ 107

$ 7,564$ 6,265$1,286

1,331¥1,9601,625¥2,146(293)¥(186)

16,007$23,571

19,542$25,808

3,523$2,236

Cost
Unrealized gain:
Stock
Unrealized loss:
Stock
Total

2011
Balance
Balance
Unrealized
Unrealized
sheet
sheet
gain (loss)
gain (loss)
Cost
amountamount(Millions of yen)(Thousands of U.S. dollars)

2010
Balance
Unrealized
sheet
gain (loss)
amount(Millions of yen)

¥1,064

¥ 835

¥ 229

970
¥2,035

1,117¥1,953(147)¥ 82(c) Sales of securities classified as other securities
2011
2010
(Millions of yen)
Sales amount-stock
Aggregate gain-stock

¥32
3
34

¥78
9

2011
(Thousands of
U.S. dollars)$384
36

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201114. Derivatives and Hedge Accounting
Derivative transactions for the year ended March 31, 2011 are summarized as follows:(a) There are no derivative transactions to which the hedge accounting is not applied.
(b) Derivative transactions to which the hedge accounting is applied
Interest-related transactions

Short-cut method
Interest rate swaps:
Pay fixed/Receive floating
Note 1:Hedgeditem

2011
Contract
Over 1
Fair
amountyear
value(Millions of yen)

Long-term
debt¥2,500¥2,000Note 1

Contract
Over 1
Fair
amountyear
value(Thousands of U.S. dollars)$30,066$24,052

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.

For the year ended March 31, 2010, there were no derivative transactions.
15. Retirement Benefit Plans
For the year ended March 31, 2011, the Company and its consolidated subsidiaries havelump-sum retirement benefit plans covering substantially all employees. 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 Smaller Enterprise
Retirement Allowance Mutual Aid Scheme. Certain foreign consolidated subsidiaries set
up an employee pension trust.
For the year ended March 31, 2010, the Company and its consolidated subsidiaries havelump-sum retirement benefit plans covering substantially all employees who are entitled to
lump-sum or annuity payments, the amounts of which are determined by reference to theirbasic rates of pay, length of service and the conditions under which termination occurs.

35

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

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, 2011 and 2010 for theCompany’s and the consolidated subsidiaries’ defined benefit plans:
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
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 cost
Net retirement benefit obligation
Prepaid pension costAccrued retirement benefits¥(27,222)
179(27,042)¥(27,351)
370(26,980)$(327,384)
2,152(325,219)

7,934
2,876
95
(16,135)–¥(16,135)

9,917
1,909
158
(14,994)2¥(14,996)

95,417
34,5881,142(194,046)–$(194,046)

The components of retirement benefit expenses for the years ended March 31, 2011 and2010 are outlined as follows:
Years ended March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)Service cost
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¥1,146645(1)¥1,230721(1)$13,782
7,757
(12)

1,983
430
62
¥4,266

1,983
429
62
¥4,426

23,8485,171
745$51,304

The principal assumptions used for the above plans were as follows:
2011
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 transition
36

2010

Principally 1.7%
1.0%

Principally 2.5%
1.0%

Principally 11 years

Principally 11 years

Principally 11 years

Principally 11 years

Principally 15 years

Principally 15 years

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201116.

Income Taxes

The significant components of deferred tax assets and liabilities at March 31, 2011 and2010 were as follows:
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Deferred tax assets:
Tax loss carryforwards
Accrued retirement benefits
Allowance for bad debts
Allowance for loss on litigation
Reserve for defects on completed
construction projects
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Asset retirement obligations
Unrealized holding gain on securities
Other
Total deferred tax liabilities
Net deferred tax assets¥ 61,760
6,574
3,357
521

¥ 82,652
6,097
3,935
539

$ 742,754
79,06140,372
6,265

466
3,412
76,091(71,277)
4,814

506
3,033
96,764(91,768)
4,996

5,604
41,034915,105(857,209)
57,895

(11)
(1)
(19)
(32)
¥ 4,781

–
(35)
(18)
(53)
¥ 4,942

(132)
(12)
(228)
(384)
$ 57,498

The following table summarizes the significant differences between the statutory tax rate
and the effective tax rate at March 31, 2011 and 2010:
March 31,2011
2010
Statutory tax rate
Non-deductible expenses
Non-taxable income
Per capita inhabitants’ taxes
Valuation allowance
Adjustments related to consolidation
Other
Effective tax rate

40.7%
8.0
(4.7)
6.4
(16.6)
(1.0)
(2.6)
30.2%

37

40.7%
4.6
(1.0)
(1.5)
(17.2)
(0.4)
(1.0)
24.2%

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201117. Business Combinations
Business combinations for the year ended March 31, 2011 are summarized as follows:
Transactions under common control
Increase in capital of consolidated subsidiary(a) Name and business activity of company at the time of business combination, date ofbusiness combination, form of business combination, outline and purpose oftransaction.
(1) Name and business activity of combined entity
SMCC PHILIPPINES, INC.

(General Contractor)(2) Date of business combination
December 16, 2010
(3) Form of business combination
Allocation of new shares to a third party(4) Outline and purpose of transaction
In order to deal with expanding construction demand in Philippines, the Company
will strengthen the subsidiary’s financial status to facilitate stable and flexible
business growth.
(b) Summary of accounting treatment applied
In accordance with “Accounting Standard for Business Combinations” (ASBJ
Statement No. 21, issued on December 26, 2008) and “Guidance on AccountingStandard for Business Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No. 10, issued on December 26, 2008), this businesscombination has been treated as a transaction under common control.
(c) Obtaining additional shares from consolidated subsidiary(1) Acquisition cost
Cash and deposits¥3 million ($36 thousand).

(2) Amount and nature of amortization of negative goodwill upon consolidation
Amount¥79 million ($950 thousand).

NatureDue to addition of our shares, the amount of allocation of
new shares multiplied by the rate of minority equity
becomes less than the amount of accepted net asset.

38

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

Obtaining shares from minority shareholders(a) Name and business activity of company at the time of business combination, date ofbusiness combination, form of business combination, outline and purpose oftransaction.
(1) Name and business activity of combined entity
SMCC PHILIPPINES, INC.

(General Contractor)(2) Date of business combination
December 22, 2010
(3) Form of business combination
Obtaining shares from minority shareholders(4) Outline and purpose of transaction
We obtained additional shares due to offers from minority shareholders of SMCC
PHILIPPINES INC.
(b) Summary of accounting treatment applied
In accordance with "Accounting Standard for Business Combinations" (ASBJ
Statement No. 21, issued on December 26, 2008) and “Guidance on AccountingStandard for Business Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No. 10, issued on December 26, 2008), this businesscombination has been treated as a transaction with minorities.
(c) Concerning to obtaining additional shares from consolidated subsidiary(1) Acquisition cost
Cash and deposits¥12 million ($144 thousand).

(2) Amount and nature of amortization of negative goodwill upon consolidation
Amount¥191 million ($2,297 thousand).

NatureDue to the acquisition cost of additional shares becomes lessthan the decreased value of minority equity.

For the year ended March 31, 2010, there were no transactions applicable as businesscombinations.

39

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

18. Investment and Rental Property
Investment and rental property as of March 31, 2011 and 2010 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 year ended
March 31, 2011 and 2010 were ¥133 million ($1,599 thousand) and ¥134 million.
(b) Fair value of investment and rental property
The book value, net increase (decrease) and fair value of investment and rental
property for the year ended March 31, 2011 and 2010 were as follows:
2011
Book value

Book value
Balance asof previous
fiscalyear-end¥3,365

Balance as Fair value Balance as
Balance as Fair valueNetNetof current as of current of previousof current as of current
increaseincrease
fiscalfiscalfiscalfiscalfiscal(decrease)(decrease)year-end
year-end
year-end
year-end
year-end(Millions of yen)(Thousands of U.S. dollars)¥(31)¥3,333¥2,821$40,469$(372)$40,084$33,926

Note 1:

The consolidated amount is acquisition cost less accumulated depreciation and accumulated
impairment loss.

Note 2:

Net decrease mainly consists of depreciation in the amount of ¥31 million ($372 thousand)Note 3:

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

2010Book value
Balance as Fair value
Balance asNetof current as of currentof previous
increase
fiscalfiscalfiscal(decrease)year-end
year-end
year-end(Millions of yen)
¥3,397¥(31)¥3,365¥2,857Note 1:

The consolidated amount is acquisition cost less accumulated depreciation and accumulated
impairment loss.

Note 2:

Net decrease mainly consists of depreciation in the amount of ¥31 million.

Note 3:

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

(Additional information)
Effective the year ended March 31, 2010, the Company has adopted “AccountingStandard for Disclosures about Fair Value of Investment and Rental Property” (ASBJ
Statement No. 20 issued on November 28, 2008), and “Guidance on AccountingStandard for Disclosures about Fair Value of Investment and Rental Property” (ASBJ
Guidance No. 23 issued on November 28, 2008).
40

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 201119. Segment Information, etc
Segment Information for the year ended March 31, 2011
Segment Information(a) Outline of Segments
The Company’s reportable operating segments are components of an entity for which
separate financial information is available and that are evaluated regularly by theboard of directors in determining the allocation of management resources and inassessing 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 cash
segment.
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 forthings 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.

41

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(c) Segment income, segment assets and other items for reportable segments
2011
Reportable operating segments
Civil

Building

Total

Others

Total

Adjustments Consolidated(Millions of yen)
Sales
External
Customers
Intersegment
transactions
or transfers
Net sales
Segment income¥117,118¥180,741¥297,859¥787¥298,647¥–¥298,647

1,211

1

1,213

68

1,281

(1,281)–¥118,330¥180,742¥299,073¥855¥299,928¥(1,281)¥298,647

10,10010,01020,110352

20,463(100)

20,362

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.
2011
Reportable operating segments
Civil

Building

Total

Others

Total

Adjustments Consolidated(Thousands of U.S. dollars)
Sales
External
Customers
Intersegment
transactions
or transfers
Net sales
Segment income$1,408,514$2,173,674$3,582,188$ 9,464$3,591,655$–$3,591,665

14,564

12

14,588817

15,405(15,405)–$1,423,090$2,173,686$3,596,788$10,282$3,607,071$(15,405)$3,591,665

121,467

120,384

241,852

4,233

246,097(1,202)244,882(Additional Information)
Effective the year ended March 31, 2011, the Company has adopted “AccountingStandard for Disclosures about Segments of an Enterprise Related Information” (ASBJ
Statement No. 17 issued March 27, 2009) and “Guidance on Accounting Standard forDisclosures about Segments of an Enterprise and Related Information” (ASBJ
Guidance No. 20 issued March 21, 2008).

42

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(c) Segment income, segment assets and other items for reportable segments (continued)
2010
Reportable operating segments
Building

Civil

Total

Others

Total

Adjustments Consolidated(Millions of yen)
Sales
External
Customers
Intersegment
transactions
or transfers
Net sales
Segment income

Note 1:
Note 2:
Note 3:¥131,153¥204,540¥335,693¥782¥336,476

512

3

516

70

¥131,665¥204,544¥336,209

11,40911,45722,867¥–¥336,476

586

(586)

–

¥852

¥337,062¥(586)¥336,476

318

23,185(46)

23,138“Others,” which includes the Company’s business of elder care facilities and insurance agent,
does not qualify as a reportable operating segment.
Adjustment for segment income is the reduction of income recognized between reportable
operating segments.
Segment income corresponds to gross profit in the consolidated statement of income.

Related Information(a) Product and service information
See “Segment income, segment assets and other items for reportable segments”(b) Geographical segment information(1) Sales
2011
Japan

Asia
Others(Millions of yen)

¥264,260
Notes:¥32,396¥1,990Total¥298,647

Japan

Asia
Others
Total(Thousands of U.S. dollars)$3,178,111 $389,609$23,932$3,591,665

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

(2) Tangible fixed assets
Geographical segment information on tangible fixed assets has been omitted forthe year ended March 31, 2011, as the amount of tangible fixed assets in Japan
constituted over 90% of total for the year then ended.
(c) Major customer information
Information on major customers has been omitted for the ended year March 31, 2011,
as there were no sales to a single customer constituting over 10% of net sales for theyear then ended.
43

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

Loss on impairment by reportable segment
For the year ended March 31, 2011, there was no loss on impairment for any reportablesegment.
Amortization of goodwill and unamortized balance by reportable segment
For the year ended March 31, 2011, there was no amortization and unamortized balance of
goodwill by reportable segment.
Gain on negative goodwill by reportable segment
For the year ended March 31, 2011, negative goodwill has been recognized due to theadditional acquisition of shares of SMCC PHILIPPINE INC. which mainly operates in
Civil Construction Segment.
Gain on negative goodwill was ¥270 million ($3,247 thousand) for the year ended March
31, 2011.
Segment Information for the year ended March 31, 2010
The Company and consolidated subsidiaries are primarily engaged in construction business,both in Japan and overseas.
Business segments
Business segment information has been omitted for the year ended March 31, 2010 as sales,
operating income and total assets of the construction segment constituted over 90% of theconsolidated totals for the years then ended.
Geographic segments
Geographic segment information has been omitted for the year ended March 31, 2010 assales, operating income and total assets in Japan constituted over 90% of the consolidated
totals for the years then ended.

44

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

Overseas sales
Overseas sales information for the Company and consolidated subsidiaries for the year
ended March 31, 2010 is summarized below:

Overseas sales
Consolidated sales
Overseas sales asa percentage ofconsolidated sales (%)

Asia

2010
Other
(Millions of yen)

¥31,839¥2,778¥ 34,617
336,476

9.5

0.8

10.3

Total

Note 1:Countries and areas are segmented based on their geographic proximity.

Note 2:Major countries and areas that belong to segments are as follows:(1) Asia ............... Singapore, India, Vietnam, Thailand, Philippines(2) Other ............. U.S.A., Guam, Kenya

Note 3:20.

Overseas sales represent sales to countries and regions outside of Japan.

Related Party Transactions

Transactions with affiliates for the year ended March 31, 2011 are summarized as follows:Year ended March 31, 2011

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

Capitalcontributionof the related
party

Number of
voting shares
held as apercentage ofvoting sharesissued¥1030.0%Capitalcontributionof the related
party

Number of
voting shares
held as apercentage ofvoting sharesissued

$120

30.0%

Nature ofTotal amounttransactionof transaction(Millions of yen)
Guarantee ofbank loan¥2,797

Balance sheet Balance at theaccount
year end

Long-term
non-operationaccounts
receivable¥609

Year ended March 31, 2011

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

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

Balance sheet Balance at theaccount
year end

Guarantee ofbank loan

Long-term
non-operationaccounts
receivable45$33,638$7,324

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

Transactions with affiliates for the year ended March 31, 2010 are summarized as follows:Year ended March 31, 2010

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

21.

Capitalcontributionof the related
party

Number of
voting shares
held as apercentage ofvoting sharesissued¥1030.0%Nature ofTotal amounttransactionof transaction(Millions of yen)
Guarantee ofbank loan¥2,847

Balance sheet Balance at theaccount
year end

Long-term
non-operationaccounts
receivable¥609

Per Share Information

Net assets and basic net income per share as of and for the years ended March 31, 2011 and2010 were as follows:2011
Net assets per share
Net income per share – basic
Net income per share – diluted(Yen)¥(44.52)
5.47
2.65

2010

2011
(U.S. dollars)¥(54.76)
6.22
4.32$(0.535)
0.065
0.031

The basis of calculation for net assets per share at March 31, 2011 and 2010 was as follows:
2011
2010
(Millions of yen)
Total net assets
Amounts deducted from total net assets[Including paid-in amounts for sharesof preferred stock][Including amount of preferred
dividends][Including minority interests]
Total net assets for common stock¥ 20,648
33,245¥ 20,310
35,364$248,322
399,819[30,568][31,807][367,624][–][2,677]¥(12,596)[833][2,723]¥(15,053)[–][32,194]$(151,485)(Thousands of shares)

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

282,926

46

2011(Thousands of
U.S. dollars)

274,888

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011

The basis for calculating basic net income per share for the years ended March 31, 2011
and 2010 was as follows:
2011
2010
(Millions of yen)
Net income per share – basic:
Net income
Amount not available to commonshareholders[Including amount of preferred
dividends]
Net income per share – basic

2011(Thousands of
U.S. dollars)¥1,541¥2,543$18,532

–

833

–

[–]
¥1,541[833]¥1,710[–]$18,532(Thousands of shares)

Average number of shares of common
stock outstanding

281,799

274,857

2010
2011(Millions of yen)
Net income per share – diluted:
Adjustment for net income[Including amount of preferred
dividends]

2011(Thousands of
U.S. dollars)

¥–

¥833

$–

[–]

[833]

[–]

(Thousands of shares)

Increase in number of share ofcommon stock[Including preferred stock]

300,056[300,056]

313,538[313,538]

22. Subsequent Event
The following acquisition of treasury stock (3rd Series Class C preferred stock) was
determined at the board of directors’ meeting held on May 13, 2011. The proposal was
submitted to the shareholders’ meeting for approval, and subsequently approved at theshareholders’ meeting held on June 29, 2011.
(a) Reason for acquisition
To maintain the value of common stock in the event that preferred stock holders
exercise their acquisition rights to common stock, and to reduce dividends, theCompany plans to acquire treasury stock pursuant to clause 156-1 of the Companies
Act.

47

Sumitomo Mitsui Construction Co., Ltd.
Notes to Consolidated Financial Statements
March 31, 2011(b) Details of acquisition of treasury stocks which was approved by shareholder’s meeting(1) Type of stock
3rd Series Class C preferred stock(2) Amount of stock
80,000 shares(3) Total of acquisition cost¥200 million ($2,405 thousand) [Maximum](4) Term for acquisition
1 year from the date of the shareholders’ meeting.
23. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans generally represent notes, principally at average annual interest rates
of 1.9% at March 31, 2011 and 2010, respectively.
Long-term debt at March 31, 2011 and 2010 is summarized as follows:
As of March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)
Debt with collateral (at average interest
rates of 2.6% at 2011 and 2.8% at 2010)
Debt without collateral (at average interest
rates of 2.4% at 2011 and 2010
Lease obligations
Current portion (excluding leaseobligations)
Current portion of lease obligations
Deposits from employees¥2,866¥2,073$34,467

416
393

50
228

5,003
4,726

(700)
(111)
1,660
¥4,525

(926)
(63)
1,608
¥2,976(8,418)(1,334)
19,963$54,419

The aggregate annual maturities of long-term debt subsequent to March 31, 2011 aresummarized as follows:Year ending March 31,
2012
2013
2014
2015 and thereafter

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

¥ 700
702
619
1,260
¥3,283$ 8,418
8,442
7,444
15,153$39,482

Notes to Consolidated Financial Statements

The aggregate annual maturities of lease obligations subsequent to March 31, 2011 aresummarized as follows:Year ending March 31,
2012
2013
2014
2015 and thereafter

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

¥111
98
90
92
¥393

$1,334
1,178
1,082
1,106
$4,726

50

Non-Consolidated Financial Statements
Sumitomo Mitsui Construction Co., Ltd.
Years ended March 31, 2011 and 2010
with Report of Independent Auditors

51

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Balance Sheets
March 31, 2011
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)

AssetsCurrent assets:
Cash and deposits (Note 4-(c))
Notes receivable (Note 4-(c))
Accounts receivable on completed contracts (Note 4-(c))
Short-term loans receivable (Note 4-(b))
Inventories (Notes 4-(a) and 4-(e))
Deferred tax assets (Note 9)
Accounts receivable, other
Advance payments
Other current assets (Note 4-(c))
Less allowance for doubtful receivables
Total current assets¥ 11,407
190
78,984
8,136
17,537
2,600
2,025
6,591
2,925
(1,218)129,180¥ 19,648
1,426
84,8898,211
20,548
2,900
2,326
9,786
2,905
(2,399)150,242$ 137,185
2,285
949,897
97,847
210,907
31,26824,353
79,26635,177(14,648)
1,553,577

Non-current assets:
Property and equipment, at cost:
Land (Note 4-(c))
Buildings (Note 4-(c))
Structures (Note 4-(c))
Machinery and equipment
VehiclesTools, furniture and fixtures
Construction in progress
Accumulated depreciation
Property and equipment, net

5,500
4,759
697
3,951
143
3,635
87
(10,398)
8,377

5,325
4,719
698
3,453
133
3,576
9
(10,090)
7,825

66,14557,233
8,382
47,516
1,719
43,716
1,046(125,051)
100,745

1,717

1,865

20,649Intangible fixed assets
Investments and other assets:
Investments in securities (Note 4-(c))
Investments in subsidiaries and affiliates(Notes 4-(c) and 8)
Long-term loans receivable
Long-term loans to employees
Claims provable in bankruptcy and other
Long-term prepaid expenses
Deferred tax assets (Note 9)Long-term guarantee deposits
Long-term non-operating accounts receivable
Other
Less allowance for doubtful receivables
Total investments and other assets
Total non-current assets

4,422

4,494

53,180

6,342
6,571
941
7,740
54
1,892
1,803
37,9285,289(51,515)
21,47031,565

6,844
6,581
976
7,810
48
1,566
2,347
44,874
5,342(56,398)
24,48834,17876,271
79,025
11,316
93,084649
22,754
21,683456,139
63,607(619,542)
258,208
379,615

Total assets¥160,745¥184,421$1,933,193

252

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Balance Sheets
March 31, 2011

Liabilities and net assets
Current liabilities:
Short-term bank loans and current portion of long-term
debt (Notes 4-(b),4-(c) and 12)
Trade notes payable (Note 4-(b))
Accounts payable on completed contracts (Note 4-(b))
Accounts payable, otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received on contracts in progress
Deposits received
Deposits received from employees
Reserve for defects on completed construction projects
Allowance for losses on construction contracts (Note 4-(e))
Allowance for loss on litigation
Allowance for loss on disaster
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 4-(c) and 12)
Accrued retirement benefits
Other long-term liabilities
Total long-term liabilities

As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)¥

8,682
35,76049,339
1,986
1,402
231
4,340
17,348
6,902
1,660
1,134
231
1,280
470
41
130,811¥

5,528
42,38062,461
2,729
1,455
268
4,389
20,872
11,999
–
1,223
222
1,325
–
1,617
156,476$ 104,413
430,066
593,373
23,884
16,861
2,778
52,194
208,634
83,006
19,963
13,6382,778
15,393
5,652
493
1,573,193

2,250
14,226
256
16,733820
13,060124
14,00527,059171,0883,078
201,238

12,003

12,003

144,353

601
601

601
601

7,227
7,227

83
934
1,018

–
1,523
1,523

998
11,232
12,242(242)
13,381(241)
13,887(2,910)160,926

(180)
(180)
13,200¥160,745

51
51
13,939¥184,421(2,164)(2,164)
158,749$1,933,193

Contingent liabilities (Note 4-(d))
Net assets:
Shareholders’ equity:
Capital stock:
Common stock:
Authorized:
2,669,464,970 shares in 2011 and 2010
Issued and outstanding:
283,363,598 shares in 2011 and
275,313,598 shares in 2010
Preferred stock:
Authorized:
26,894,644 shares in 2011 and 2010
Issued and outstanding:
13,843,700 shares in 2011 and
16,323,100 shares in 2010
Capital surplus:
Other capital surplus
Total capital surpluses
Retained earnings:
Legal retained earnings
Earned surplus carried forward
Total retained earnings
Less treasury stock, at cost:
436,646 shares in 2011 and 425,236 shares in 2010
Total shareholders’ equity
Valuation, translation adjustments and other:
Unrealized holding (loss) gain on securities
Total valuation, translation adjustments and otherTotal net assets
Total liabilities and net assets

See accompanying notes to non-consolidated financial statements.
53

3

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Operations
March 31, 2011

Years ended March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Net sales:
Completed construction (Note 5-(a))¥240,996¥275,321$2,898,328

Cost of sales:
Completed construction (Note 5-(b))
Gross profit

226,166
14,830258,868
16,4532,719,975
178,352

Selling, general and administrative expenses (Note 5-(d))
Operating income

11,447
3,382

12,478
3,974

137,666
40,673543
188
245(1,018)
(422)
(257)
(582)

463
176
109
(1,034)
–
–
(105)

6,530
2,260
2,946
(12,242)(5,075)(3,090)(6,999)

(640)
(534)
–
179
–
–
(636)
(2,935)––48
112(1,280)(384)(665)(2,560)(7,696)(6,422)–
2,152––(7,648)(35,297)

446

1,413

5,363

111
7
118
327

(109)
–
(109)
1,523

1,334
84
1,419
3,932

Other income (expenses):
Interest and dividend income
Payments received from insurance claims
Employment adjustment subsidies
Interest expense
Exchange loss, net
Corporate tax on overseas sales
Provision for doubtful receivables
Loss on devaluation of investments in subsidiaries
and affiliates
Loss on disaster (Note 5-(g))
Gain on sales of property and equipment
Gain on prior-period adjustment (Note 5-(f))
Allowance for loss on litigation
Relocation expenses (Note 5-(h))
Other, net
Income before income taxes
Income taxes (Note 9):
Current
Deferred
Net income¥

Net income per share – basic (Note 10)
Net income per share – diluted (Note 10)

¥1.16
0.56

¥

¥2.51
2.44

$

$0.0130.006

See accompanying notes to non-consolidated financial statements.

54

4

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Changes In Net Assets
March 31, 2011

Years ended March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)

Shareholders’ equity
Capital stock:
Balance at the end of previous period
Changes in items during the period
Transfer to other additional paid-in capital
Total changes in items during the period
Balance at the end of the period
Additional paid-in capital:
Other capital surplus:
Balance at the end of previous period
Changes in items during the period
Transfer from capital stock
Deficit disposition
Disposal of treasury stock
Total changes of items during the period
Balance at the end of the period
Retained earnings (deficit):
Earned reserve:
Balance at the end of previous period
Changes in items during the period
Provision of legal retained earnings
Deficit disposition
Total changes in items during the period
Balance at the end of the period
Earned (deficit) surplus carried forward:
Balance at the end of previous period
Changes in items during the period
Cash dividends paid
Provision of legal retained earnings
Deficit disposition
Net income
Total changes in items during the period
Balance at the end of the period
Total retained earnings (deficit):
Balance at the end of previous period
Changes in items during the period
Cash dividends paid
Provision of legal retained earnings
Deficit disposition
Net income
Total changes in items during the period
Balance at the end of the period

55¥12,003¥16,859$144,353––
12,003(4,855)(4,855)12,003––
144,353

601

–

7,227

–
–
(0)
(0)
601

4,855
(4,253)
(0)
601
601

–
–
(0)
(0)
7,227

–

109

–

83
–
83
83

–
(109)
(109)
–

998
–
998
998

1,523

(4,362)

18,316

(833)
(83)
–
327
(588)
934

–
–
4,362
1,523
5,885
1,523

(10,018)
(998)
–
3,932
(7,071)
11,232

1,523(4,253)18,316

(833)
–
–
327
(505)
1,018

–
–
4,253
1,523
5,776
1,523

(10,018)––
3,932(6,073)
12,2425

Sumitomo Mitsui Construction Co., Ltd.
Non-Consolidated Statements of Changes In Net Assets
March 31, 2011

Years ended March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Treasury stock, at cost:
Balance at the end of previous period
Changes in items during the period
Purchases of treasury stock
Disposition of treasury stock
Total changes in items during the period
Balance at the end of the period
Total shareholders’ equity:
Balance at the end of previous period
Changes in items during the period
Cash dividends paid
Provision of legal retained earnings
Transfer to other additional paid-in capital
Transfer from capital stock
Deficit disposition
Net income
Purchases of treasury stock
Disposition of treasury stock
Total changes in items during the period
Balance at the end of the period
Valuation, translation adjustments and other
Unrealized holding gain on securities:
Balance at the end of previous period
Changes in items during the period
Net changes in items other than shareholders’ equity
Total changes in items during the period
Balance at the end of the period
Total net assets
Balance at the end of previous period
Changes in items during the period
Cash dividends paid
Provision of legal retained earnings
Transfer to other additional paid-in capital
Transfer from capital stock
Deficit disposition
Net income
Purchases of treasury stock
Disposition of treasury stock
Net changes in items other than shareholders’ equity
Total changes in items during the period
Balance at the end of the period

(241)

(240)

(2,898)

(0)
0
(0)
(242)

(1)
0
(0)
(241)

(0)
0
(0)
(2,910)13,887

12,365167,011

(833)
–
–
–
–
327
(0)
0
(506)
13,381––(4,855)
4,855
–
1,523
(1)
0
1,522
13,887(10,018)
–
–
–
–
3,932
(0)
0
(6,085)160,926

51

(361)

613

(232)
(232)
(180)

413
413
51

(2,790)(2,790)(2,164)

13,93912,003

167,636

(833)
–
–
–
–
327
(0)
0
(232)
(738)
¥13,200––(4,855)
4,855
–
1,523
(1)
0
413
1,935
¥13,939(10,018)
–
–
–
–
3,932
(0)
0
(2,790)(8,875)$158,749

See accompanying notes to non-consolidated financial statements.

56

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Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011
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,
the totals shown in the accompanying financial statements do not necessarily agreewith the 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 thisstandard, trading securities are carried at fair value and held-to-maturity securities arecarried at amortized cost. Marketable securities classified as other securities forwhich 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 determinedby the average method. Book values are written down based on any decline inprofitability.
(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 Low of Japan except thatthe straight-line method is applied to office buildings acquired on or after April 1,
1998.

57

7

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011(d)

Depreciation and Amortization (continued)(2) Intangible fixed assets (except lease assets) and long-term prepaid expenses
Amortization of intangible fixed assets (except lease 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) Leases 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) 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.
(f)Advances Received on 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.

(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.
(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.
58

8

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011(j)

Allowance for Loss on Disaster
An allowance has been provided for future losses on recovery and restoration related
to ongoing construction projects damaged by the Great East Japan Earthquake.

(k) Employees’ Retirement Benefits
Accrued retirement benefits for employees are provided principally at an amountcalculated based on the retirement benefit obligation and the fair value of the pension
plan assets, as adjusted for the unrecognized net retirement benefit obligation attransition, unrecognized actuarial gain or loss and unrecognized prior service cost.
(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 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 revenue on long-term
contracts which total less than ¥500 million.
(Change in accounting policy)
Effective the year ended March 31, 2010, the Company has adopted “AccountingStandard for Construction Contracts” (ASBJ Statement No. 15 issued on December 27,2007), and “Guidance on Accounting Standard for Construction Contracts” (ASBJ
Guidance No. 18 issued on December 27, 2007).
Under the new accounting standard and guidance, revenues and costs of construction
contracts that commenced on or after April 1, 2009, of which the percentage ofcompletion can be reliably estimated, are recognized by the percentage-of-completion
method. The percentage of completion is calculated at the cost incurred as apercentage of the estimated total cost. The completed-contract method continues tobe applied for contracts for which the percentage of completion cannot be reliably
estimated.
As a result of this change, net sales increased by ¥20,452 million, operating income
and income before income taxes increased by ¥2,147 million for the year ended March
31, 2010 compared with the corresponding amounts which would have been recorded
under the previous method.
Until the year ended March 31, 2009, revenues and costs of construction contracts,
which cover a construction period longer than 12 months, were in principle,
recognized by the percentage-of-completion method, except for revenue on long-term
contracts which totaled less than ¥500 million. Net sales on such contracts amounted
to ¥225,903 million for the year ended March 31, 2009.
59

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Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011(m) Derivatives and Hedge Accounting(1) Method of Hedge Accounting
Derivative financial instruments are mainly stated at fair value, and interest rate
swaps, which qualify for hedge accounting and meet specific matching criteria,
are not remeasured at market value, but the differential paid or received under theswap agreements is charged to income (short-cut method).
(2) Hedging instruments and hedging items
Hedging instruments is the interest rate swaps, hedging items is the interest on
debt.
(3) Hedging policy
The Company utilizes interest rate swaps only for the purpose of hedging futureinterest rates fluctuation risk.
(4) Assessment of hedge effectivenessThe evaluation of hedge effectiveness is omitted for interest rate swaps as allmeet specified criteria to be qualified for the short-cut method.
(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 files a tax return under the consolidated corporate-tax system.
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 ¥83.15 = U.S.$1.00, the approximate rate ofexchange prevailing on March 31, 2011. 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.

60

10Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011
3.

Changes in Accounting Methods(a) Effective the year ended March 31, 2011, the Company has adopted “AccountingStandard for Asset Retirement Obligations” (ASBJ Statement No. 18 issued on March
31, 2008) and “Guidance for the Application of Accounting Standard for Asset
Retirement Obligations” (ASBJ Guidance No. 21, issued on March 31, 2008).
As a result, operating income decreased by ¥15 million ($180 thousand) and income
before income taxes and minority interests decreased by ¥57 million ($685 thousand)for the end year ended March 31, 2011.
(b) Effective the year ended March 31, 2010, the Company has adopted “Partial
Amendments to Accounting Standard for Retirement Benefits (Part 3)” (ASBJ
Statement No. 19 issued on July 31, 2008).
The effect of this adoption has no impact on the consolidated statement of income forthe year ended March 31, 2010, nor has the amount of the retirement benefit
obligation changed.
4.

Notes to Non-Consolidated Balance Sheets(a) Inventories
The components of inventories as of March 31, 2011 and 2010 were as follows:
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Costs on uncompleted construction
contracts
Real estate for sale

¥17,430
106¥17,537¥20,414133¥20,548$209,621
1,274$210,907(b) Transactions and 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, 2011
and 2010 were as follows:
2011
2010
(Millions of yen)
Short-term loans receivable
Trade notes payable
Accounts payable on completed
contracts
Short-term bank loans and current
portion of long-term debt
61

2011
(Thousands of
U.S. dollars)¥ 8,008711¥ 8,201637$ 96,3078,550

12,22012,879146,963

2,388–

28,71911

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011(c) Pledged Assets
The following assets were pledged at March 31, 2011 and 2010 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,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Cash and deposits
Notes receivable
Accounts receivable on completed contracts
Other current assets
Land
Buildings, net of accumulated depreciation
Structures, net of accumulated depreciation
Investments in securities
Investments in subsidiaries and affiliates¥ 2,776
–
–
–
5,209
402
34
1,909
358
¥10,691¥ 2,426
289
2,193
130
5,209
436
40
1,978
358
¥13,063$ 33,385–––
62,645
4,834
408
22,9584,305$128,574

The secured liabilities as of March 31, 2011 and 2010 are summarized as follows:
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Short-term bank loans[Including current portion of long-termdebt]Long-term debt

¥2,123¥5,528$25,532

[500]
2,000

[840]
820

[6,013]24,052(d) Contingent Liabilities
At March 31, 2011 and 2010, the Company was contingently liable for the followings:
As of March 31,
2011
2010
2011
(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

62¥4,358¥4,819$52,411

433

–

5,207

12

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011(e) 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 amountof ¥51 million ($613 thousand) and ¥82 million as of March 31, 2011 and 2010,
respectively.
5.

Notes to Non-Consolidated Statements of Operations(a) Net sales based on percentage-of-completion method
Net sales on such construction contracts amounted to ¥185,894 million ($2,235,646
thousand) and ¥199,122 million for the year ended March 31, 2011 and 2010,
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 theamount of ¥156 million ($1,876 thousand) and ¥222 million for the year ended March
31, 2011 and 2010, respectively.
(c) Transactions and Outstanding Balances with Subsidiaries and Affiliates
Significant transactions with subsidiaries and affiliates other than individuallypresented on the accompanying non-consolidated statements of operations for theyears ended 2011 and 2010 were as follows:
2011
2010
(Millions of yen)Interest and dividend income

¥461

¥361

2011
(Thousands of
U.S. dollars)$5,544(d) Selling, General and Administrative Expenses
The significant components of selling, general and administrative expenses at March
31, 2011 and 2010 were as follows:
Years ended March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Salaries and wages
Retirement benefit expenses
Rent
Other
Total

¥ 4,590
1,016
1,363
4,477
¥11,44763¥ 5,096
1,075
1,800
4,507
¥12,478$ 55,201
12,21816,392
53,842$137,666

13

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011(e) Research and Development Expenses
Research and development costs included in selling, general and administrative
expenses and manufacturing costs amounted to ¥842 million ($10,126 thousand) and¥927 million for the years ended March 31, 2011 and 2010, respectively.
(f)Gain on Prior-period Adjustment
The significant components of gain on prior-period adjustment for the years ended
March 31, 2011 and 2010 were as follows:
Years ended March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Reversal of provision for doubtfulreceivables
Gain on recovery of bad debts
Reversal of special retirement benefits
Other
Total

¥ 81

¥ 87

$ 974

13
84
–
¥179

21
–
3
¥112

156
1,010
–
$2,152(g) Loss on Disaster
Loss on disaster for the year ended March 31, 2011 included relief and support costsof ¥64 million ($769 thousand) and an allowance for loss on disaster of ¥470 million($5,652 thousand) due to the Great East Japan Earthquake.
(h) Relocation Expenses
Relocation and integration expenses for head office and branches located around theTokyo metropolitan area have been recognized for the year ended March 31, 2010.

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Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011
6.

Notes to Non-Consolidated Statements of Changes in Net Assets

Type and number of treasury stocks at March 31, 2011 are as follows:
Balance at
March 31,
2010
Treasury shares:
Common stock
2nd Series Class A preferred stockTotal

425,236–425,236

Increase
Decrease(Number of shares)
11,8772,479,400
2,491,277

467
2,479,400
2,479,867

Balance at
March 31,2011

436,646–436,646

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 requests topurchase fractional shares.

Note 3:

Increase of preferred stock is due to the acquisition of common stock by exercising a call
option of the 2nd Series Class A preferred stock.

Note 4:

Decrease of preferred stock is due to redemption of 2nd Series Class A preferred treasury
stock to acquire common stock by exercising a call option.

Type and number of treasury stocks at March 31, 2010 were as follows:
Balance at
March 31,
2009
Treasury shares:
Common stock
3rd Series Class C preferred stock
Total

411,183–
411,183

Increase
Decrease(Number of shares)
14,7227,500
22,222

669
7,500
8,169

Balance at
March 31,2010

425,236–425,236

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 requests topurchase fractional shares.

Note 3:

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

Note 4:

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

65

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Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011
7.

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, 2011 and 2010,
which would have been reflected in the non-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 the initial year of
application of change in accounting method)

VehiclesAcquisition costs
Accumulated
depreciation/ amortization
Net book value

2011
Tools,
furniture Intangible
and
fixed
fixturesassets

Total
Vehicles(Millions of yen)

2010
Tools,
furniture Intangible
and
fixed
fixturesassets

Total

¥10

¥116

¥133

¥260

¥10

¥130

¥155

¥296

9
¥ 1

88
¥ 28

104
¥ 29

201
¥ 59

7
¥ 3

77
¥ 53

99
¥ 56

183
¥113

2011
Tools,
furniture Intangible
and
fixed
Vehiclesfixturesassets
Total(Thousands of U.S. dollars)
Acquisition costs
Accumulated
depreciation/ amortization
Net book value$120$1,395$1,599$3,126

108
$ 12

1,058
$ 336

1,250
$ 348

2,417
$ 709

2011
2010
(Millions of yen)
Future minimum payments:
Within one year
Over one year
Lease payments
Depreciation / amortization equivalents
Interest expense equivalents

66

2011
(Thousands of
U.S. dollars)

¥46
17
¥63

¥ 55
63
¥119

$553
204
$757

¥59
53
3

¥ 91
81
6

$709
637
36

16

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011(a) As lessee: (continued)
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 the interest
method over the respective lease terms.
(2) Operating leases
2011
2010
(Millions of yen)
Future minimum payments:
Within one year
Over one year

8.

¥0
0
¥1

2011
(Thousands of
U.S. dollars)

¥0
1
¥2

$ 0
0
$12

Securities

Stocks of subsidiaries and affiliates at March 31, 2011 were as follows:
2011
Carrying
Fair
Unrealized Carrying
Fair
Unrealized
value
value
gain
value
value
gain
(Millions of yen)(Thousands of U.S. dollars)
Stocks ofa subsidiary
Note:

¥717

¥1,394¥677$8,622$16,764$8,141

Stocks of subsidiaries and affiliates for which it is extremely difficulty todetermine market values and therefore excluded from the above as follows:
2011
Carrying value(Millions of(Thousands ofyen)
U.S. dollars)

Stocks ofa subsidiaries
Stocks ofa affiliates¥2,618$31,485

400

4,810

67

17

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011
Stocks of subsidiaries and affiliates at March 31, 2010 were as follows:2010
Carrying
Fair
Unrealized
value
value
gain
(Millions of yen)
Stocks ofa subsidiary
Note:

¥717

¥926

¥209

Stocks of subsidiaries and affiliates for which it is extremely difficulty todetermine market values and therefore excluded from the above as follows:2010
Carrying value(Millions of yen)

Stocks ofa subsidiaries
Stocks ofa affiliates
9.

¥2,775745

Income Taxes

The significant components of the Company’s deferred tax assets and liabilities at March
31, 2011 and 2010 were as follows:
As of March 31,
2010
2011
2011
(Millions of yen)(Thousands of
U.S. dollars)
Deferred tax assets:
Tax loss carryforwards
Accrued retirement benefits
Allowance for bad debts
Loss on devaluation of investments in
subsidiaries and affiliates
Allowance for loss on litigation
Reserve for defects on completed
construction projects
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Asset retirement obligations
Unrealized holding gain on securities
Total deferred tax liabilities
Net deferred tax assets
68¥ 59,469
5,790
4,432

¥ 80,300
5,315
5,032

$ 715,201
69,63353,301

1,277
521

1,028
539

15,357
6,265

461
2,149
74,101(69,601)
4,500

497
1,963
94,678(90,178)
4,500

5,544
25,844
891,172(837,053)
54,119(7)(0)(7)¥ 4,492

–
(34)
(34)
¥ 4,466

(84)
(0)
(84)
$ 54,022

18

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011
The following table summarizes the significant differences between the statutory tax rate
and the effective tax rate for years ended March 31, 2011 and 2010:
March 31,2011
2010
Statutory tax rate
Non-deductible expenses
Non-taxable income
Per capita inhabitants’ taxes
Valuation allowance
Effective tax rate

40.7 %
40.2(27.7)
26.6(53.2)
26.6%

40.7 %
9.7
(2.7)
(7.7)
(47.7)(7.7)%

10. Per Share Information
Net assets and basic net income per share as of and for the years ended March 31, 2011 and2010 were as follows:2011
Net assets per share
Net income per share – basic
Net income per share – diluted(Yen)¥(61.38)
1.16
0.56

2010

2011
(U.S. dollars)¥(68.03)
2.51
2.44$(0.738)
0.013
0.006

The basis of calculation for net assets per share at March 31, 2011 was as follows:
2011
2010
(Millions of yen)
Total net assets
Amounts deducted from total net
assets[Including paid-in amounts forshares of preferred stock][Including amount of preferred
dividends]
Total net assets for common stock2011(Thousands of
U.S. dollars)¥ 13,200¥ 13,939$ 158,749

30,56832,640367,624[30,568][31,807][367,624][–]¥(17,367)[833]¥(18,701)[–]$(208,863)(Thousands of shares)

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

282,92669

274,888

3,402,597

19

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011
The basis for calculating basic net income per share – basic and net income per share –diluted for the years ended March 31, 2011 and 2010 was as follows:
2010
2011
(Millions of yen)
Net income per share – basic:
Net income
Amount not available to commonshareholders[Including amount of preferred
dividends]
Net income per share – basic

2011(Thousands of
U.S. dollars)¥327¥1,523$3,932

–

833

–

[–]
¥327

[833]
¥0,690[–]$3,932(Thousands of shares)

Average number of share of common
stock outstanding

281,799

274,857

2011
2010(Millions of yen)
Net income per share – diluted:
Adjustment for net income[Including amount of preferred
dividends]

2011(Thousands of
U.S. dollars)

¥–

¥394

$–

[– ]

[394]

[–]

(Thousands of shares)

Increase in number of share ofcommon stock[Including preferred stock]

300,056[300,056]

169,241[169,241]

11. Subsequent Event
The following acquisition of treasury stock (3rd Series Class C preferred stock) was
determined at the board of directors’ meeting held on May 13, 2011. The proposal was
submitted to the shareholders’ meeting for approval, and subsequently approved at theshareholders’ meeting held on June 29, 2011.
(a) Reason for acquisition
To maintain the value of common stock in the event that preferred stock holders
exercise their acquisition rights to common stock, and to reduce dividends, theCompany plans to acquire treasury stock pursuant to clause 156-1 of the Companies
Act.

70

20

Sumitomo Mitsui Construction Co.,Ltd.

Notes to Non-Consolidated Financial Statements
March 31, 2011(b) Details of acquisition of treasury stocks which was approved by shareholder’s meeting(1) Type of stock
3rd Series Class C preferred stock(2) Amount of stock
80,000 shares(3) Total of acquisition cost¥200 million ($2,405 thousand) [Maximum](4) Term for acquisition
1 year from the date of the shareholders’ meeting.
12. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans generally represent notes, principally at average interest rates of
2.1% and 2.8% at March 31, 2011 and 2010, respectively.
Long-term debt at March 31, 2011 and 2010 is summarized as follows:
As of March 31,
2011
2010
2011
(Millions of yen)(Thousands of
U.S. dollars)
Debt with collateral (at average interest
rates of 2.6% at 2011 and 2010)
Less current portion¥2,500(500)¥2,00071¥1,660(840)¥ 820$30,066
6,013$24,052

21

72

73

CORPORATE OUTLINE
Corporate Name:

Sumitomo Mitsui Construction Co.,Ltd.

Established:

October 14,1941

Permission:(Special-18)No.200, Specified Constructor,
granted by the Minister of Land,
Infrastructure and Transport

License:(14)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 Trust & Banking Co.,Ltd.

Main Shareholders

Daiwa Securities SMBC Principal Investments Co. Ltd.
Mitsui Fudosan Co.,Ltd.
Isao Nasu
Mitsui Sumitomo Insurance Co.,Ltd.
Sumitomo Mitsui Banking Corporation

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

OVERSEAS OFFICE

Jakarta:(Indonesia)

SMCC Shanghai

Bangkok:(Thailand)

SMCC Guam, Inc.

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

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

Shanghai:(China)

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

Taipei:(Taiwan)

8F., No.96, Guangfu N. Rd., Songshan Dist., Taipei
City 105, Taiwan R.O.C.

Nairobi:(Kenya)

P.O.Box 60487-00200 Arwings Kodhek Road,
Chemusian Apartments, Apartment No.2 Next to
Olive Garden Hotel, Hurlingham, Nairobi, Kenya
TEL:254-20-2722560
FAX:254-20-2722619

SUBSIDIARY COMPANIES INOVERSEAS

Manila:(Philippines)

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

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

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

Singapore:No.4 Leng Kee Road, #06-05 SIS Building,Singapore 159088
TEL:65-64750079
FAX:65-64756996

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

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

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

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

ANNUAL REPORT
2011