NAKANOCORPORATION

Annual Report 2013
Fiscal year ended 31st March 2013

Nakano Corporation Annual Report 2013

NAKANOCORPORATION

4-2-28 Kudan-kita, Chiyoda-ku, Tokyo ╤ 102-0073, Japan
Tel: +81-(0)3-3265-4685 Fax: +81-(0)3-3265-4698
www.wave-nakano.co.jp

USA

111 W Saint John St., #514 San Jose, CA 95113, USA
Tel: +1-408-286-9702 Fax: +1-408-286-9701
3020 Old Ranch Road, Suite 300, Seal Beach, CA 90740, USA
Tel: +1-562-799-5726 Fax: +60-3-9059-6277

SINGAPORE

1 Coleman St., #06-02 The Adelphi, 179803, Singapore
Tel: +65-6333-4933 Fax: +65-6338-8568

MALAYSIA

Block B, 15-4-2, Megan Salak Park Jalan 1/125E, Taman Desa Petaling, Kuala Lumpur 57100, Malaysia
Tel: +60-3-9059-6977 Fax: +60-3-9059-6277

THAILAND

17-03, 2170 Bangkok Tower, New Petchburi Road, Bangkapi, Huaykwang, Bangkok 10310, Thailand
Tel: +66-2-308-0500 Fax: +66-2-308-0497

INDONESIA

1401 Wisma Tamara 14th Floor Jl. Jend. Sudirman KAV. 24, Jakarta 12920, Indonesia
Tel: +62-21-5203674 Fax: +62-21-5203670
Jalan Laksamana Bintan Komp. Tanah Mas Blok G3A Sei Panas-Batam, Indonesia
Tel: +62-0788-463004 Fax: +62-0788-463006

VIETNAM

2nd Floor New Agency Service Center’s Office Building 19 Vo Van Tan Street Ward 6 District 3, Ho Chi Minh City, Vietnam
Tel: +84-8-3-930-6501 Fax:+84-8-3-930-6499
No.302 3rd Floor of Thang Long Industrial Park Techno-Center Dong Anh District, Hanoi, Vietnam
Tel: +84-4-3-955-0050 Fax: +84-4-3-955-0053

CHINA

Room 10A3, First World Plaza, Hongli Road West, Shenzhen 518034, China
Tel: +86-755-8296-8491 Fax: +86-755-8296-8493

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COMPANY HISTORY
2012 Changi Business
Park, Singapore

CONTENTS

2008 Ho Chi Minh City Representative Office launched.

Financial Highlights

1

Business Overview and Results

2International Operations Network

4

International Works Portfolio

6

Domestic Works Portfolio

12Report of Independent Auditors

14

Consolidated Balance Sheets

15

Consolidated Statements of Income

17

Consolidated Statements of Comprehensive Income

18

Consolidated Statements of Changes in Net Assets

19

1958 New corporate headquarters constructed.

Consolidated Statements of Cash Flows

20

1942 Re-organized to corporation (Capitalized at ¥400,000).

Notes to Consolidated Financial Statements

21

Supplemental Information
Nonconsolidated Balance Sheets

39

Nonconsolidated Statements of Income

41

Corporate Profile

42

Company History

43

Investor Information

43

Share Price Range

43

2014 Optima Condominium,
Singapore2006 Hanoi Representative Office established.
2004 Took over construction operations of
Fudo Construction. Nakano Corporation
Renamed Nakano Fudo Construction(Japanese only).

2003 Nakano Consulting is established in China.
2002 Second Indonesian office launched in Batam.

2001 ISO14001 accreditation.
1998 ISO9001 accreditation.

2009 Villa Rachatewi
Bangkok1991 Company name changed to Nakano Corporation.

1988 Thailand based operations begin in Bangkok.
1985 First Indonesian office is established in Jakarta.
1982 Malaysian Office established in Kuala Lumpur.

1975 Real Estate & International divisions become
International Operations.

1975 Asian expansion begins in Singapore.
1974 International operations begins in Los Angeles, California.

1995 Singapore Tourism
Board Headquarters

1972 Raised to Tokyo Stock Exchange First Section.

1936 National Diet Building masonry construction.

1997 Swisshotel Merchant
Court, Singapore

1934 Company head office relocated to Kudan Kojimachi, Tokyo.
1933 Yoshichika Oshima takes over civil engineering operations.

1995 Motorola Electronics
Factory, Singapore

1911 Nihonbashi Bridge masony construction.
1885 Nakano-gumi Co. founded by Kisaburo Nakano in Tokyo.

INVESTOR INFORMATIONAs of 31st March 2013
Stock Listing
Tokyo Stock Exchange, First Section,
Code Number 1827

SHAREHOLDER COMPOSITION

Authorized Number of Shares
154,792,300

Securities Companies
486,358

Issued Number of Shares
34,498,097
Minimum Trading Unit
500
Number of Shareholders
4,560
Stock Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation

Annual Report 2013

Financial Institutions
4,536,749

Other Institutions
14,609,939
Foreign Institutions and Individuals
671,209
Individuals/ Other
14,193,842

SHARE PRICE RANGE

For further information contact:
Nakano Corporation
International Operations Headquarters
4-2-28 Kudan-kita, Chiyoda-ku,
Tokyo 102-0073, Japan
Tel: +81-(0)3-81-3265-4685
Fax: +81-(0)3-81-3265-4698
www.wave-nakano.co.jp

Cautionary remarks regarding forward looking statements
This Annual Report includes forward-looking statements that represent Nakano Corporation’s assumptions and expectations in lightof currently available information. These statements reflect industry trends, client’s situations and other factors, and involve risks anduncertainties which may cause actual performance results to differ from those discussed in the forward looking statements in accordancewith changes in the domestic and international business environment.
- 43 -

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FINANCIAL HIGHLIGHTS
NAKANO CORPORATION and its subsidiaries
Years ended March 31, 2009 through 2013
2009

2013

2013

					
Millions					of yenThousands of
U.S. dollars

Contract awards

2010

2011

2012

¥ 125,333¥ 107,751¥ 99,321¥ 101,198¥ 112,967$ 1,201,137

116,593

120,186

120,283

110,344

117,254

1,246,719

Operating income

2,902

2,956

1,404

229

1,522

16,182

Ordinary income

2,650

2,740

1,362

275

1,755

18,660Net income (loss)

1,768

1,829

639

(2,024)

653

6,943

-

2,007

180

(1,997)

1,958

20,818

Total net assets

10,14011,941

11,914

9,710

11,565

122,966

Total assets

80,72571,183

65,231

65,83871,927764,774

Net cash provided by (used in) operating activities

(645)

5,468

9,617

(2,462)

2,167

23,040Net cash provided by (used in) investing activities

93

73

(464)

(1,371)

2,502

26,602

Net cash provided by (used in) financing activities

1,568(4,058)(1,692)

(603)

274

2,913

Cash and cash equivalents at end of period

10,702

12,326

19,552

15,02622,153

235,544					
Yen

U.S. dollars

Net sales

Comprehensive income

Per share of common stock (in yen and U.S. dollars)
Net assets¥ 285.30¥ 336.92¥ 337.52¥ 271.14¥ 319.60$ 3.39Net income (loss)

51.40

53.19

18.58

(58.88)

19.01

0.20

Cash dividends applicable to the year

6.00

6.00

6.00

3.00

3.00

0.03

Number of employees

1,122

1,129

1,145

1,169

1,293

Note: The rate of ¥94.05 = US$1.00, the foreign exchange rate on March 31, 2013, has been used for translation.

-1-

Business Overview & Results
Since the foundation of Nakano Corporation in 1933, then known as Nakano-gumi, we have benefited from theconfidence shown to us by our esteemed customers over the last seventy five years. We greatly appreciate
the opportunity to have developed into a well established company in the construction industry. Now, a new
era has begun in this industry requiring new business models and new visions. We are committed to adapting
ourselves to this ever-changing new environment, and to accommodating our customer’s expectations andrequirements. In order to accomplish this goal, our business philosophy emphasizes three core elements,“Faith, Enthusiasm, and Creativity.”

A Message from the President
2013 Business Report
We are pleased to provide details of the company and its subsidiaries
for the fiscal year spanning 1st April 2012 to 31st March 2013.

(1) Current Corporate Group Condition
Business Course & Results
In this consolidated financial year, the global economy had been covered
with uncertainty increased by financial issue of the U.S. government,
long-lasting Euro-zone crisis, and deceleration of the growth in emerging
economies.
The Japanese regime change occurred at the end of the calendar year
and succeeding economic policy change achieved a certain level ofcorrection of yen appreciation and increase in stock prices. However, it
was not enough to offset the influence of long-lasting yen appreciation.
Overall, the Japanese economy stayed in low gear.

Although the demand for re-construction especially in civil engineering to recover from the damage causedby the Great East Japan Earthquake gained a momentum, the domestic business environment in theindustry had been severe for this year because of the reasons including the soaring labor cost due to the
exposure of the chronic labor shortage.
In these circumstances, Nakano Group had worked on the improvement of the sales profit in the domestic
operations, our sales and construction divisions working together. Meanwhile, we had proactively invested
our resources to Southeast Asia, aiming to expand its revenue base in the international operations.
As a result, our business performance for this period is as follows. Construction awards for this consolidated
fiscal year were ¥112,967 million (¥11,768 million annual increase).
The major domestic orders received during this period were new constructions of the building provisionallycalled Century Utsunomiya (1st phase) awarded from Iida Home Max Co., Ltd. and Empire Kumamoto
Castle by Shin-ei Jutaku Co., Ltd., remodeling of the Third Commercial High School of Tokyo Metropolitan
Government, and the Matsugasaki student residence of Kyoto Institute of Technology by J.S.B. Co., Ltd.
Internationally, major orders received were new construction works of the Palm Isles Condominium by
Frasers Centerpoint, Aeon Kulai Shopping Center by Aeon Co. (M) Bhd. A factory for PT. Iseki Indonesia,
and a factory for Nissan Motor Thailand Ltd.
-2-

Sales for this consolidated fiscal year were ¥117,254 million (¥6,909 million annual increase), comprisedof ¥115,363 million (¥6,898 million annual increase) for construction works, and ¥1,891 million (¥11 million
annual increase) for real estate related businesses.
Primary domestic completions included new constructions of Akabane Rehabilitation Hospital by Kyoju-nokai, Tohoku Regional Raw Material Headquarters Office of Japan Tobacco Inc., Prifoods Misawa Factory by
Prifoods Co., Ltd., a residential project provisionally called Livio Momozono Park North District (1st Phase)by Nippon Steel Kowa Real Estate Co., Ltd.
Internationally, major completions included the Changi Business Park Hotel and Office buildings in Singapore
by Ascendas Frasers Pte Ltd, a joint venture between Ascendas Land and Frasers Centerpoint, an engine
factory for PT Hino Motors Manufacturing, a Factory of PT. Tsuzuki and Asama Manufacturing, and a factoryfor Ichikoh Industries (Thailand) Co., Ltd.
From the above results, consolidated construction works to be carried forward were ¥105,816 million(¥2,396 million annual decrease).
In terms of profitability for this consolidated fiscal year, operating income was ¥1,522 million (¥1,293 million
annual increase), ordinary income was ¥1,755 million (¥1,479 million annual increase), and current net
income were ¥653 million (¥2,678 million annual increase).

Akira Asai
President, NAKANO CORPORATION-3-

NAKANO INTERNATIONALOPERATIONS NETWORK
Comprehensive Nationwide and International Design and Construction Coverage
Centering on the diverse economies of Southeast Asia, Nakano Corporation’s international construction
operations have allowed us the opportunity to partner with some of the world’s largest and most prominentinternational and domestic Japanese corporations to produce a wide and varied array of high quality,competitively priced works. In the future, it is our intention to exert every possible effort towards the realizationof even greater international expansion and development.

Headquarters
		Tokyo, Japan						International Office					 USA		Singapore
		 Malaysia
		Thailand
		 Indonesia
		Vietnam
		China		Project Locations
Algeria
Australia
Bahrain
China
EnglandFranceGermany
Guam
Hungary
Indonesia
Iran
Iraq

Jordan
Libya
Malaysia
Myanmar
New ZealandRussiaSaudi Arabia
Singapore
South Korea
Spain
Syria
Taiwan-4-

ThailandUSA
Vanuatu
VietnamYemen

GLOBAL WORKS COVERAGE

Translating globalizing client needs into reality

Since the establishment of our first international offices in the United States in 1974 and Singapore in
1975, Nakano Corporation has successfully completed upwards of 1,300 international projects in 35 nations
around the world. By integrating advanced technical know-how with safety and quality based project management techniques has forged a reputation for sound, quality works completed within time and budgetary
constraints.

Headquarters
Tokyo Main Office
Civil Engineering Office

Regional Office
Tohoku Regional Office, Sendai
Osaka Regional Office, Osaka
Nagoya Regional Office, Nagoya
Kyushu Regional Office, Fukuoka

Branch & Sales Office
Hokkaido Branch Office, Sapporo
Higashi Kanto Branch Office, Chiba
Kita Kanto Branch Office, Saitama
Yokohama Branch Office, Yokohama
Ibaraki Branch Office, Tsuchiura
Taito Branch Office, Taito-ku
Kita Tohoku Branch Office, Hachinohe
Mie Sales Office, Yokkaichi
Hyogo Sales Office, Amagasaki
Kitakyushu Sales Office, Kitakyushu-5-

MAJOR INTERNATIONAL WORKS 2013

Lush Acres Condominium

Sengkang West Way, Singapore | 2016

Nissan Motor Thailand 2nd Plant

Located along and inspired from Sengkang West Way
which has classic yet friendly touch of modern style, Lush
Acres Singapore will best suit for families, having 3 to
5-bedroom units.

Samut Prakan, Thailand | 2014

Nissan’s second plant in Thailand with a maximum capacityof 150,000 cars, half of the production is set for export.
The real proof of strengthening connection among
Southeast Asian countries.

-6-

Optima Condominium

Tanah Merah Kechil Avenue, Singapore | 2013

Aeon Mall Claijaya

Optima Condominium is a 297 unit project of five
14-storey residential tower blocks with 28,199m2
offering full onsite luxury facilities and ease of access
via the adjacent Tanah Merah MRT station link.

Johor, Malaysia | 2013

Aeon’s 22nd shopping mall in Malaysia is aimed to bea local-oriented shopping mall with 44,0002 shopping
areas. One of the biggest mall in the region gathers all
the shoppers of various needs.

-7-Caspian
Lakeside Drive, Singapore | 2012
Set upon a spacious parcel of lakeside land, this eleven 17storey building development of 712 residential leasehold
units by Frasers Centerpoint will transform Singapore’s
Jurong Lake district into a vibrant commercial district uponproject completion in 2012. The pool area characterized
by the uniquely shaped pavilion and a jungle-themed trees
presents quite different appearances between night and day.

Palm Isles Condominium

Flora Drive, Singapore | 2015

Located in the jewel of Flora Drive, The Palm Isles is a 429-unit
project set in picturesque waterscape and lush landscapemimicking a beach resort. A comfortable lifestyle with well-defined
activity areas will appeal to a multitude of home seekers. The 28
exclusive luxurious “Garden Homes” units offer the charms of“landed-living” within a condominium setting.

Changi Business Park

(Commercial Complex ▪ Hotel ▪
Office Building)
Changi South, Singapore | 2012
Changi Business Park is a mixed use
development project set for com pletion in
2012. The construction is awarded from
Ascendas Frasers, a joint venture
between Ascendas Land and Frasers
Centerpoint. The project com-prises aretail shopping complex, office building,and hotel development. Opening in 2012,
the project features onsite landscaped
gardens, as well as easy access throughtransport links, and a number of hi-tech
corporations in the surrounding area.

INTERNATIONAL INDUSTRIAL WORKS 2013

NTT Data Center 2nd Phase | Cyberjaya, Malaysia | 2013

CSF CX5 Data Center | Cyberjaya, Malaysia | 2011

Asian Market Development

1,300+

Major Project
Completions
Across Asia so far

Teraoka Factory
Indonesia | 2013

Marimo Service Apartment
Indonesia | 2013

Parker Factory
Vietnam | 2013

Ajinomoto BR2 Factory
Thailand | 2013- 10 -

Caipis Factory
Thailand | 2014

POKKA Factory
Malaysia | 2014

Iseki Factory
Indonesia | 2013

Sumino & Aapico Factory
Thailand | 2014

Tokai Rubber
Indonesia | 2014

YMPI Factory
Indonesia | 2013

Indo Steel Japan
Indonesia | 2013

HOSEI Brake Factory
Thailand | 2014

- 11 -

DOMESTIC WORKS PORTFOLIO 2013

Eishin Ikebukuro East Gate Project | Tokyo | 2014

Tokyo Office Obtains COHSMS Occupational Health and Safety Management System
In December 2010 Nakano was accredited with COHSMS certification (Occupational Health and Safety
Management System) by the Japan Construction Occupational Safety and Health Association. The
COHSMS system structure focuses on initiatives to realize safe, comfortable working environments,
the eradication of occupational injury causes, and the betterment of onsite corporate construction
health and safety standards.

Empire Kumaoto Castle II
Fukuoka | 2013

Akabane Rehabilitation HospitalTokyo | 2013

Long-Term Care Health Facility Asahi
Tokyo | 2013

Kasumi Fujimino Store
Saitama | 2012

Ooedo Onsen Monogatari Atami Renovation
Shizuoka | 2012

Livio Momozono Park North District 1st Phase
Fukuoka | 2013- 13 -

- 14 -

CONSOLIDATED BALANCE SHEETSNAKANO CORPORATION and its subsidiaries
As of March 31, 2012 and 2013
Thousands of
U.S. dollars
		Millions of yen(Note 2)

2012

2013

2013

AssetsCurrent assets:
Cash and deposits (Notes 4, 6 and 7)¥ 17,102 		¥ 24,203 		$ 257,341
Notes receivable, accounts receivable from completed
construction contracts and other (Notes 4 and 7) 		 25,977 			 27,896 			 296,608
Costs on uncompleted construction contracts (Note 4) 		 1,626 			 1,083 			 11,515
Real estate for sale 		
550 			
- 			Costs on real estate business 		
242 			229 			 2,434
Raw materials and supplies 		23 			
24 			
255
Accounts receivable-other 		
520 			 1,239 			 13,173
Other 		 1,358 			
436 			 4,635
Allowance for doubtful accounts 		 (255) 		
(232 ) 		 (2,466)
Total current assets 		 47,146 			 54,881 			 583,530
Noncurrent assets:
Property, plant and equipment (Note 4)
		 Buildings and structures 		 8,309 			 7,212 			 76,682
		 Machinery, vehicles, tools, furniture and fixtures 		 1,350 			 1,296 			 13,779
		 Land 		 10,975 			 10,048 			 106,836
		 Accumulated depreciation 		 (5,178) 		 (4,989 ) 		 (53,046 )Total property, plant and equipment 		 15,456 			 13,567 			 144,253
Intangible assets 		

123 			

140 			

1,488

Investments and other assets												Investment securities (Notes 4, 7 and 8) 		 2,390 			 2,669 			 28,378
		 Long-term loans receivable 		364 			323 			 3,434
		 Claims provable in bankruptcy, claims provable		 in rehabilitation and other 		
176 			32 			340
		 Deferred tax assets (Note 10) 		
33 		
- 			
		 Other 		
352 			373 			 3,965
		 Allowance for doubtful accounts 		 (206) 		
(61) 		
(648)Total investments and other assets 		

3,111 			3,337 			 35,481

Total noncurrent assets 		 18,691 			 17,045 			 181,233
Total assets¥ 65,838 		

The accompanying notes are an integral part of these financial statements.

- 15 -¥ 71,927 		

$ 764,774					 Thousands of
					
				

			

U.S. dollars

Millions of yen(Note 2)

2013

2013

2012

Liabilities
Current liabilities:
Notes payable, accounts payable for construction
contracts and other (Notes 4 and 7)¥ 38,482¥ 43,390$ 461,350
Current portion of bonds (Note 14) 		
560 		
- 		
Short-term loans payable (Notes 4, 7 and 15) 		 5,030 		 6,450 		 68,580
Income taxes payable 		174 		
772 		
8,208
Advances received on uncompleted construction contracts 		 5,351 		 4,337 		 46,113
Provision for warranties for completed construction 		
Provision for loss on construction contracts (Note 4) 		
Provision for bonuses 		
Other (Note 15) 		

108 		
951 		
223 		
1,359 		92 		266 		
167 		
1,201 		

978
2,828
1,775
12,769Total current liabilities 		 52,241 		 56,677 		 602,626
Noncurrent liabilities:
Long-term loans payable (Notes 4, 7 and 15) 		
Deferred tax liabilities (Note 10) 		
Provision for retirement benefits (Note 9) 		
Negative goodwill 		
Other (Note 15) 		

1,975 		224 		
918 		
57 		710 		

1,525 		390 		
1,012 		- 		756 		

16,214
4,146
10,7608,038

Total noncurrent liabilities 		

3,886 		3,684 		39,170Total liabilities 		 56,127 		 60,362 		 641,807
Net assets
Shareholders’ equity:
Capital stock¥ 5,061		¥ 5,061		$ 53,811
Capital surplus 		 1,400 			 1,400 			 14,885
Retained earnings 		 4,961 			 5,511 			 58,596
Treasury stock 		(27) 		
(28) 		
(297)Total shareholders’ equity 		 11,395 			 11,944 			 126,996
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities 		
140 			336 			 3,572
Foreign currency translation adjustment 		 (2,211)(1,292) 		 (13,737)
Total accumulated other comprehensive income 		 (2,071) 		
Minority interests:

386 		

Total net assets 		
Total liabilities and net assets¥ 71,927

			- 16 -

576 		

6,124

9,710 		 11,565 		 122,966¥ 65,838

The accompanying notes are an integral part of these financial statements.

(956) 		 (10,164)$ 764,774

CONSOLIDATED STATEMENTS OF INCOME							NAKANO CORPORATION and its subsidiaries							For the years ended March 31, 2012 and 2013									
			Thousands of					Millions of yen

U.S. dollars(Note 2)

2013

2013

2012

Net sales:					Net sales of completed construction contracts¥ 108,464 		
¥ 115,363$ 1,226,613
Sales on real estate business (Note 11) 		
1,847 			1,861 		19,787
Sales on other business 		
32 			
29 		
308
Total net sales 		 110,344 			

117,254 		

1,246,719

Cost of sales:							
Cost of sales of completed construction contracts (Note 5) 		 104,180 		 110,188		 1,171,589
Cost of sales on real estate business (Note 11) 		
1,066 			1,050 		11,164
Cost of sales on other business 		
24 			
23 		
244
111,262 		

1,183,009

Gross profit:					
Gross profit on completed construction contracts 		
4,284 			5,175 		Gross profit-real estate business 		
780 			810 		
Gross profit-other business 		
8 			
5 		

55,0238,612
53

5,073 			5,992 		63,710 	

4,844 			4,470 		47,527

Operating income 		229 			

1,522 		16,182Non-operating income:					Interest income 		86 			
119 		
Dividends income 		26 			
59 		Foreign exchange gains 		
41 			
112 		
Amortization of negative goodwill 		
57 			
57 		Other 		14 			
69 		

1,265
627
1,190
606
733

418 		

4,444

Non-operating expenses:
					Interest expenses 		161 			172 		
Other 		18 			
12 		

1,828
127

Total cost of sales 		 105,271 			

Total gross profit 		Selling, general and administrative expenses (Note 5)

Total non-operating income 		

226 			

Total non-operating expenses 		179 			

185 		

1,967

Ordinary income 		275 			

1,755 		18,660Extraordinary income:					Gain on sales of noncurrent assets (Note 5) 		
11 			
1,400 		14,8851,400 		14,885Extraordinary loss:					Impairment loss (Note 5) 		
27 			
877 		
Loss on disaster 		
191 			
- 		Loss on construction 		
67 			
- 		
Other 		142 			
33 		

9,324
350

Total extraordinary income 		11 			

Total extraordinary losses 		428 			

911 		

9,686

Income (loss) before income taxes and minority interests 		

(141 ) 		

2,245 		23,870

Income taxes:					Income taxes-current 		
480 			1,373 		Income taxes-deferred (Note 10) 		
1,317 			141 		

14,598
1,499

Total income taxes 		

1,797 			1,514 		16,097

Income (loss) before minority interests 		

(1,939 ) 		731 		

7,772

Minority interests in income 		Net income (loss)

The accompanying notes are an integral part of these financial statements.

¥

85 			
(2,024 )¥				- 17 -

77 		
653

$

818
6,943

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME				NAKANO CORPORATION and its subsidiaries							For the years ended March 31, 2012 and 2013																
			Thousands of					Millions of yen

U.S. dollars(Note 2)

2013

2013

2012
Income (loss) before minority interests¥ (1,939)

¥

731

$

7,772

Other comprehensive income:
Valuation difference on available-for-sale securities		
Foreign currency translation adjustment		

43 			
(100) 		196		1,030		

2,08310,951

Total other comprehensive income	 	(57) 	 	1,227	 	13,046Comprehensive income

 	 (1,997) 	 	

Comprehensive income attributable to:Comprehensive income attributable to owners of the parent		 (2,076) 		
Comprehensive income attributable to minority interests		
79 			

1,958	 	 20,818

1,768 		189		The accompanying notes are an integral part of these financial statements.					- 18 -

18,7982,009

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSNAKANO CORPORATION and its subsidiaries

For the years ended March 31, 2012 and 2013																			Millions of yen
Shareholders’ Equity

Accumulated other comprehensive income								
Valuation		
Total									
difference
Foreignaccumulated
					
Total on available
currency
other
CapitalCapitalRetained
Treasuryshareholders’-for-saletranslation comprehensive
Minority
Total netstock
surplusearnings
stock
equitysecurities
adjustment
incomeinterests
assetsBalance as at March 31, 2011

¥

5,061

¥

1,400

¥

7,192		

¥

(27)

¥

13,626		

¥96¥(2,116)¥(2,019)¥307¥

11,914

Dividends from surplus 		

- 		

- 		

(206) 		

- 		(206) 		

- 		

- 		

- 		

-		

(206)

Net loss 		- 		-		 (2,024)		

-			(2,024) 		

- 		

- 		

- 		

-		

(2,024)Purchase of treasury stock 		

- 		

- 		

- 		

(0) 		

(0) 		

- 		

- 		

- 		

- 		

(0)

- 		

- 		

- 		

- 		

- 		

43 		

(94) 		

(51) 		

79 		

27

- 		

- 		 (2,231) 		

(0) 		

(2,231) 		

43 		

(94) 		

(51) 		

79 		

(2,204)(27)

11,395		

386

¥

9,710

Net changes of items other thanshareholders’ equity 		Total changes of items during theperiod 		Balance as at March 31, 2012

¥

5,061

¥

1,400

¥

4,961		

¥

¥

¥ 140

¥

(2,211)¥(2,071)¥Dividends from surplus 		

- 		

-		

(103) 		- 		(103) 		

- 		

- 		

- 		

- 		

(103)

Net income 		

- 		

- 		

653 		

- 		

653 		

- 		

- 		

- 		

- 		

653

Purchase of treasury stock 		

- 		

- 		

- 		

(0) 		

(0) 		

- 		

- 		

- 		

- 		

(0)

shareholders’ equity 		

- 		

- 		

- 		

- 		

- 		 196 		

919 		

1,115 		 189 		

1,304

Total changes of items during the 		

- 		

- 		

550 		

(0) 		

549 		 196 		

919 		

1,115 		 189 		

1,854

Net changes of items other thanperiodBalance as at March 31, 2013
¥ 5,061¥ 1,400 ¥ 5,511¥ (28) ¥ 11,944¥ 336¥ (1,292)¥(956) ¥ 576¥ 11,565																						Thousands of U.S. dollars (Note 2)
Shareholders’ Equity

Accumulated other comprehensive income							Valuation		
Total										difference
Foreignaccumulated						
Total on available
currencyother		CapitalCapitalRetained
Treasuryshareholders’-for-saletranslation comprehensive
Minority
Total net		
stock
surplusearnings
stock
equitysecurities
adjustment
incomeinterests
assetsBalance as at March 31, 2012

$ 53,811$ 14,885$ 52,748 		

$ (287)$ 121,158 		

$ 1,488		$ (23,508)$ (22,020)$ 4,104$ 103,242

Dividends from surplus 		- 		-		 (1,095) 		

-			 (1,095)		

- 		- 			- 			-		

(1,095)

Net income 		- 		- 		 6,943 			

- 		

6,943			

- 		- 			- 			- 		6,943

Purchase of treasury stock 		

- 		

- 		

- 			

(0) 		

(0) 		

- 		- 			- 			- 		

(0)

- 		

- 		

- 			

- 			- 		 2,083			

9,771 		 11,855 		 2,009 		

13,864- 		- 		 5,847 			(0) 		

9,771 		 11,855 		 2,009 		

19,712

Net changes of items other thanshareholders’ equity 		Total changes of items during theperiod 		Balance as at March 31, 2013

$ 53,811$ 14,885$ 58,596 		$ (297)

5,837 			 2,083 		

$ 126,996 		$ 3,572$ (13,737)$ (10,164)$ 6,124$ 122,966																					The accompanying notes are an integral part of these financial statements.									- 19 -

CONSOLIDATED STATEMENTS OF CASH FLOWS							NAKANO CORPORATION and its subsidiaries							For the years ended March 31, 2012 and 2013						

Thousands of										 U.S. dollars				 Millions of yen(Note 2)
			

2012

2013

2013

Net cash provided by (used in) operating activities:					Income (loss) before income taxes and minority interests¥(141)¥ 2,245 		 $Adjustments for:		 Depreciation and amortization 		
371 			317 					 Impairment loss 		
27 			
877 					 Amortization of negative goodwill 		(57) 		
(57) 				 Increase in allowance for doubtful accounts 		
11 			
8 					 Increase in provision for retirement benefits 		
72 			
82 			
		 Decrease in provision for loss on construction contracts 		
(71) 		
(684) 				 Interest and dividends income 		(113) 		(179) 				 Interest expenses 		161 			172 					 Gain on sales of noncurrent assets 		
(11) 		 (1,400) 		
		 Decrease (increase) in notes and accounts receivable-trade 		 (6,579) 		
23 			
		 Decrease in costs on uncompleted construction contracts 		
987 			559 					 Decrease (increase) in other inventories 		(80) 		562 					 Increase in notes and accounts payable-trade 		 2,264 			 2,207 			
		 Increase (decrease) in advances received on uncompleted		 construction contracts 		
759 			 (1,142) 		
		 Other, net 		375 			
(792) 		

(12,142)(8,421)2,800 			179 			
(172) 		(639) 		29,771
1,903(1,828)(6,794)

Net cash provided by (used in) operating activities 		 (2,462) 		 2,167 			
		
Net cash provided by (used in) investing activities:
Payments into time deposits 		 (3,233) 		 (3,503) 		
Proceeds from withdrawal of time deposits 		 2,052 			 3,760 			
Purchase of property, plant and equipment 		(269) 		(426) 		Proceeds from sales of property, plant and equipment 		
37 			 2,613 			
Other, net 		42 			
58 			

23,040(37,426)
39,978(4,529)27,783616

Net cash provided by (used in) investing activities		 (1,371)		

2,502			26,602

Net cash provided by (used in) financing activities:
Net increase in short-term loans payable 		 1,175 			Proceeds from long-term loans payable 		300 			Repayment of long-term loans payable 		 (1,256) 		
Redemption of bonds 		
(560) 		Cash dividends paid 		(206) 		Other, net 		(56) 		

1,320 			150 			
(500) 		(560) 		(103) 		(32) 		

14,035
1,594(5,316)(5,954)(1,095)(340)

		 Subtotal 		 (2,024) 		
Interest and dividends income received 		
113 			Interest expenses paid 		(154) 		Income taxes paid 		(397) 		23,870
3,370
9,324
(606)
85
871
(7,272)(1,903)
1,828(14,885)
244
5,943
5,975
23,466

Net cash provided by (used in) financing activities 		(603) 		274			
2,913
Effect of exchange rate change on cash and cash equivalents 		
(88) 		 2,182 			 23,200
Net increase (decrease) in cash and cash equivalents 		 (4,525) 		 7,126 			 75,768
Cash and cash equivalents at beginning of period 		 19,552 			 15,026 			 159,766
Cash and cash equivalents at end of period (Note 6)¥ 15,026 		
¥ 22,153 		 $ 235,544									The accompanying notes are an integral part of these financial statements.
				- 20 -NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NAKANO CORPORATION and its subsidiaries

1. Basis of Presenting
Consolidated Financial
Statements

The consolidated financial statements presented herein of NAKANO CORPORATION (the “Company”)
and its consolidated subsidiaries (together, the “Companies”) are prepared in accordance with theprovisions set forth in the Corporation Law of Japan and the Financial Instruments and Exchange
Law of Japan, and in conformity with accounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to application and disclosure requirements ofInternational Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements
have been made to the consolidated financial statements issued domestically in order to present
them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications
have been made in the 2012 financial statements to conform to the classifications used in 2013.

2. U.S. Dollar Amounts

The accounts of consolidated financial statements presented herein are expressed in Japanese
yen by rounding down to the nearest million. The U.S. dollar amounts shown in the accompanying
consolidated financial statements and notes thereto have been translated from Japanese yen into
U.S. dollars on the basis of ¥94.05 to U.S.$1, the rate of exchange prevailing at March 29, 2013,and have been then rounded down to the nearest thousand. These U.S. dollar amounts are notintended to imply that the Japanese yen amounts have been or could be converted, realized or
settled in U.S. dollars at this or any other rate.

3. Summary of Significant
Accounting Policies

a. Consolidation
1) Scope of Consolidation
The Company had 12 subsidiaries as of March 31, 2013. The consolidated financial statements
for the year ended March 31, 2013 include the accounts of the Company and all subsidiaries.
NAKANO VIETNAM CO., LTD. was newly consolidated since the company was newly incorporated
during the year ended March 31, 2013. The Company had 2 affiliates as of March 31, 2013. As of
March 31, 2013, the equity method was not applied to all affiliates, as these companies were notsignificant in terms of retained earnings or net income of the consolidated financial statements.
2) Financial Statements of Subsidiaries
The financial year-end of an overseas subsidiary is December 31.
Consolidation of the subsidiary is therefore performed by using the provisional financial statements
prepared as of March 31. Other subsidiaries’ financial year-end is March 31.
3) Difference between the Cost of Investment and Equity in the Net Assets of a Subsidiary
Excess of the cost of investment in a subsidiary over the amount of the underlying equity in the
net assets of the subsidiary is principally amortized over a five-year period on a straight-line basis.
Negative goodwill recognized on, or before April 1, 2010 is amortized over a five-year period on astraight-line basis as permitted as a transitional measure by the revised accounting standard.
b. Investment Securities
Investment securities are classified and accounted for, depending on management’s intent, as follows:i) held-to-maturity debt securities, which are expected to be held to maturity with the positive intent
and ability to hold to maturity are reported at amortized cost and ii) available-for-sale securities,
which are not classified as the aforementioned securities, are reported at fair value, with unrealized
gains and losses, net of applicable taxes, reported in a separate component of net assets, while thecost of securities sold is computed using the moving- average method.
Non-marketable available-for-sale securities are stated at cost determined by the moving-averagemethod. For other than temporary declines in fair value, investment securities are reduced to net
realizable value by a charge to income.
c. Inventories
Costs of uncompleted construction contracts are determined by the specific identification method.
Real estate for sale, costs on real estate business and raw materials and supplies are stated atcost determined by the specific identification method for real estate for sale and costs of real estatebusiness and by the last purchase price method for raw material and supplies, while the net bookvalue of these inventories in the balance sheet is written down if the net realizable value declines.

- 21 -

d. Property, Plant and Equipment (excluding lease assets)
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment of
the Company and its domestic consolidated subsidiaries is computed by the declining-balancemethod, while buildings (excluding building fixtures) acquired on or after April 1, 1998 are depreciatedusing the straight-line method. The useful lives and residual values of the assets are determinedbased on the regulations of the Corporate Income Tax Law.
Foreign consolidated subsidiaries use primarily the straight-line method.
Additional Information:
Pursuant to the tax reform, the Company and its domestic consolidated subsidiaries changed
the depreciation method for property, plant and equipment acquired on or after April 1, 2012 to
the depreciation method provided by the amended Corporate Income Tax Law. The effect of
this change on the net income for the year ended March 31, 2013 is not material.
e. Intangible Assets (excluding lease assets)
Intangible assets are amortized by the straight-line method. Useful lives of the assets are determinedbased on the regulations of the Corporate Income Tax Law.
Software for internal use is amortized over a period of the internal available years (5 years) using
the straight-line method.
f. Lease Assets
Depreciation of lease assets under finance leases that do not transfer ownership of the lease assets
to the lessee is calculated by the straight-line method over the lease term of the lease assets withno residual value.
g. Allowance for Doubtful Accounts
The allowance for doubtful accounts provided by the Company and its domestic consolidated
subsidiaries is stated in amounts considered to be appropriate based on each company’s past credit
loss experience and an evaluation of potential losses in the receivables and others outstanding.
Foreign consolidated subsidiaries provide for such possible losses based on the estimateduncollectible amounts of the specific accounts.
h. Provision for Warranties for Completed Construction
The provision for warranties for completed construction is provided by the Company and its domestic
consolidated subsidiaries to cover expenses for defects claimed concerning completed work basedon the estimated amount of compensation to be paid in the future for the work completed during
the fiscal year.
i. Provision for Loss on Construction Contracts
The provision for loss on construction contracts is provided by the Company with respect toconstruction projects for which eventual losses are reasonably estimated.
j. Provision for Bonuses
The provision for bonuses provided by the Company and its domestic consolidated subsidiaries is
accrued at the year end to which such bonuses are attributable.
k. Provision for Retirement Benefits
The provision for retirement benefits for employees provided by the Company and its someconsolidated subsidiaries is calculated based on estimated amounts of retirement benefit obligations
and pension assets as of the consolidated fiscal year-end.
Actuarial differences are amortized commencing in the following year after the difference isrecognized primarily by the straight-line method over a period (12 years) which is shorter than the
average remaining years of service of the employees.

- 22 -

l. Revenue and Cost of Construction Contracts
Revenue of construction contracts is recorded by the percentage-of-completion method for thecompleted portion of the contracts at the balance sheet date, if the outcome of the construction
contract can be reliably estimated and the completed-contract method is applied to other contracts
whose outcome cannot be reliably estimated. The percentage of completion is calculated based on
the cost incurred to date as a percentage of the estimated total cost.
Construction revenue recognized based on the percentage-of-completion method for the year
ended March 31, 2013 was ¥105,221 million ($1,118,777 thousand).
m. Cash and Cash Equivalents in the Consolidated Statements of Cash Flows
In preparing the consolidated statements of cash flows, cash and cash equivalents include cash on
hand, readily-available deposits and short-term highly liquid investments with maturities less than
three months at the time of acquisition that are exposed to insignificant risk of changes in value.

4. Notes to Consolidated
Balance Sheets

1) The assets pledged as collateral and collateralized liabilities are as follows:				

Thousands of			 Millions of yen

U.S. dollars

2013

As of March 31

2012

2013

Cash and deposits¥
Notes receivable 		
Buildings 		
Land 		Investment securities 		

202¥799 		
1,864 		8,365 		853 		

202 $
2,147801 		
8,516
1,792 		 19,053
8,365 		 88,942
1,070 		 11,376

Total

12,085¥

Short-term loans payable¥
Long-term loans payable 		

¥

3,530
¥
1,675 		12,233$ 130,069

4,750 $ 50,505
1,325 		 14,088

The following investments securities included in the above are deposited as security for dealing:				

Thousands of			 Millions of yen

U.S. dollars

2013

2013

2012

As of March 31

Investment securities

¥

24

¥

25

$

265

2) The Companies are contingently liable for the following:				 Thousands of			 Millions of yen

U.S. dollars

2013

As of March 31

2012

2013

Guarantees of completion of construction contracts¥
Guarantee on employees’ housing loan		

5,941
¥
0		

5,411 $
0		

57,533
0

Total

5,941

5,411

57,533¥- 23 -¥$

3) “Costs on uncompleted construction contracts” which are estimated to recognize losses and“Provision for loss on construction contracts” are recorded on a gross basis without offsetting.
				

Thousands of			 Millions of yen

U.S. dollars

2013

2013

2012

As of March 31

Costs on uncompleted construction contracts covered
by “Provision for loss on construction contracts”

¥

67

¥

-

$

-

4) The following notes receivable and payable matured on March 31, 2012 and 2013 are includedin the respective accounts, since March 31, 2012 and 2013 fall on a bank holiday:

5. Notes to Consolidated
Statements of Income				Thousands of			 Millions of yen

U.S. dollars

2013

As of March 31

2012

2013

Notes receivable¥
Notes payable		28¥
2,813		

31 $3292,766		 29,409

1) Provision for loss on construction contracts included in “Cost of sales of completed construction
contracts” was as follows:				 Thousands of			 Millions of yen

U.S. dollars

2013

2013

2012

For the year ended March 31

Provision for loss on construction contracts

¥

896

¥

16

$

170

2) The major components of “Selling, general and administrative expenses” were as follows:				

Thousands of			 Millions of yen

U.S. dollars

2013

For the years ended March 31

2012

2013

Depreciation¥
Provision for bonuses 		
Retirement benefit expenses 		
Employees’ salaries and allowances 		

130
¥
92 		
295 		
2,390 		

107 $
1,137
68 		
723
296 		
3,147
2,185 		 23,232

3) Research and development costs included in selling, general and administrative expenses wereas follows:				

Thousands of			 Millions of yen

U.S. dollars

2013

2013

2012

For the years ended March 31

Research and development costs- 24 -

¥

27

¥

23

$

244

4) “Gain on sales of noncurrent assets” consisted of the following:
				
					

Thousands of				 Millions of yen

U.S. dollars

2013

2013

460 $
939 		
0 		

4,891
9,984
0

2012

For the years ended March 31

Land¥
Buildings 		
Other 		

7
¥
1 		
1 		

Total

11

¥

¥

1,400

$

14,885

5) The Companies recognized impairment loss on the following assets:
				
					
		
			

Use

LocationType

Thousands of		 Millions of yen

U.S. dollars

2013

2013

2012

Operating assets
Tokyo
Land
¥
		
(and 2 others) Buildings 		
			
Other 		

¥
- 		
- 		

760 $
87 		
7 		

8,080
925
74

			

Total 		

- 		855 		

9,090

Rental properties
Hyogo Pref.
			Land		
Buildings		

14		
13

9		
12		

95
127

			

Total

¥

27

¥

21

$

223

¥

27

¥

877

$

9,324

Total			The Companies review long-lived assets for impairment by grouping the construction businessassets based on each profitability management unit and rental properties and other businessassets by an individual asset.
With respect to the above operating assets of construction business and rental properties ofreal estate business, since there is an indication that the above operating assets of domestic
construction business may be impaired and there is a decline of profitability of above rental
properties owned by a certain consolidated subsidiary, the Companies reduced those carrying
amounts to recoverable amounts and such reduced amounts were recorded as impairment loss
under extraordinary loss in the accompanying consolidated statements of income.
The recoverable amounts of these assets are measured at the net selling value, which isdetermined based on the real estate appraisal value.

6. Notes to Consolidated
Statements of Cash
Flows

The reconciliation between “Cash and cash equivalents” reported in the consolidated statementsof cash flows and “Cash and deposits” reported in the consolidated balance sheets is as follows:				

Thousands of			 Millions of yen

U.S. dollars

2013

2013

2012

As of March 31

Cash and deposits per consolidated balance sheets¥ 17,102 		 ¥ 24,203 		 $ 257,341
Less: Time deposits maturing over three months		 (2,076)		 (2,049)		 (21,786)
Cash and cash equivalents per consolidated
statements of cash flows¥ 15,026 		 ¥ 22,153 		 $ 235,544- 25 -

7. Financial Instruments

1. Overview
1) Policy for financial instruments
The Companies raise operating funds primarily through bank loans and bond issues. Temporary
fund surpluses are managed principally through short-term deposits with little risk. Under thepolicy of the Companies, the Companies use derivatives only for the purpose of reducing foreignexchange fluctuation risks associated with foreign currency denominated transactions and interest
rate fluctuation risks associated with loans payable, and not for speculative purposes.
2) Types of financial instruments, risk and risk management
The Companies control risks by type of financial instruments in accordance with the risk management
policy.
Regarding credit risk associated with notes receivable and accounts receivable from completed
construction contracts, the Companies identify major customers’ credit status by monitoring thepayment terms and credit balances by each customer.
Regarding investment securities principally consisting of equity securities, the Companies
regularly identify the quoted market price of the listed securities to manage the risks arising frommarket value fluctuations.
The Companies manage liquidity risk associated with loans payable by appropriately planningfor fund raising based on monthly cash flow projections.
Regarding derivative transactions, the Companies execute and control the transactions basedon the internal control rules which define the transaction authority and limits and enter into contracts
with only the high credit rating financial institutions to reduce credit risk.
3) Supplementary explanation on fair value of financial instruments
The fair value of financial instruments is determined based on the market price or reasonableestimated amount if there is no market price. Certain assumptions are used for calculation of suchfair value, and accordingly, the result of such calculation may vary, if different assumptions are used.

- 26 -

2. Fair value of financial instruments
The carrying amount, fair value and difference of the financial instruments as of March 31, 2012
and 2013 are as follows:		 Note that the financial instruments whose fair value is extremely difficult to determine are notincluded in the following table (See (Notes): 2):
					March 31, 2012

Carrying amount

Fair value

Millions of yen
Difference(1) Cash and deposits¥
17,102¥
17,102 ¥(2) Notes receivable, accounts receivable from 					
completed construction contracts and other
25,97725,977		(3) Investment securities
Held-to-maturity securities
24
25		0
Available-for-sale securities
1,129
1,129		Assets total

44,233

44,234		
0(1) Notes payable, accounts payable for 				
construction contracts and other
38,482(2) Short-term loans payable
5,030(3) Long-term loans payable
1,975

38,482		
5,030		1,975		-		

45,48745,487		---		-Liabilities total

Derivative transactions

Millions of yen
March 31, 2013

Carrying amount(1) Cash and deposits(2) Notes receivable, accounts receivable from		completed construction contracts and other(3) Investment securities		
Held-to-maturity securities
		
Available-for-sale securities
		¥

Assets total

Fair value

Difference

24,203¥24,203 ¥		
27,89627,896		
24
1,434

25		
1,434		

0-53,55753,558		0(1) Notes payable, accounts payable for		construction contracts and other(2) Short-term loans payable(3) Long-term loans payable		
43,39043,390		
6,450
6,450		1,5251,525		-

		51,365

Liabilities total-

Derivative transactions

51,365		--		-

Thousands of U.S. dollars
March 31, 2013

Carrying amount(1) Cash and deposits(2) Notes receivable, accounts receivable from		completed construction contracts and other(3) Investment securities		
Held-to-maturity securities
		
Available-for-sale securities
		

Assets total$

Fair value

Difference

257,341$ 257,341 $		
296,608
296,608		
255
15,247265		
15,247		

0-569,452

569,463		

0(1) Notes payable, accounts payable for		construction contracts and other(2) Short-term loans payable(3) Long-term loans payable		
461,350
461,350		
68,58068,580		
16,214
16,214		
-		

546,145

Liabilities total-

Derivative transactions- 27 -

546,145		--		-(Notes): 1. Method used for determining the fair value of the financial instruments and matters regarding		securities and derivative transactions:		
Assets:			 (1) Cash and deposits and (2) Notes receivable, accounts receivable from completed construction			
contracts and other.
				 The carrying amount is presented as the fair value, since the fair value approximates the			 carrying amount because they will be settled within a short period of their maturity.
		 (3) Investment securities.
				 The fair value of equity securities is determined based on the quoted price of the exchanges,
			 the fair value of investment trust is determined based on the published standard quotation
			 price and the fair value of debt securities is determined based on the published price by the			Japan Securities Dealers Association. Notes regarding investment securities classified by the			management’s intent of holding are described in Note 8 “Investment Securities”.
			 Liabilities:			 (1) Notes payable, accounts payable for construction contracts and other and (2) Short-term loans
			 payable.
				 The carrying amount is presented as the fair value, since the fair value approximates the carrying
			amount because they will be settled within a short period of their maturity.
		 (3) Long-term loans payable.
			 The carrying amount is presented as the fair value, since the fair value approximates the carrying
			amount because their interest rates will be reset within a short period of their maturity.
		
2. Carrying amounts of financial instruments for which it is extremely difficult to identify the fair value were		 as follows:								 Thousands of			 Millions of yen
U.S. dollars
As of March 31

Unlisted equity securities

¥

2012

2013

2013

1,236

¥ 1,210$ 12,865

Above financial instruments are not included in “(3) Investment securities” in the above table, since there is nomarket price and their fair value is extremely difficult to identify.
3. Redemption schedule for monetary assets and investment securities with contractual maturities		 after balance sheet dateMillions of yen
					
				
Due in one
As of March 31, 2012
year or lessDue after one
year throughfive years

Cash and deposits¥ 17,102¥
Notes receivable, accounts receivablefrom completed construction
contracts and other		 25,977		
Investment securities:		
Held-to-maturity securities
			(Japanese government bonds)		
-		
		 Available-for-sale securities with			contractual maturities		-		Total		¥

43,080¥-Due after five
years throughten years

¥

¥

-

-		

-		

-

14		

9		

-

2		

-		

-

17

9

-

¥

-

Due after
ten years¥

Millions of yen
					
				
Due in one
As of March 31, 2013
year or lessDue after one
year throughfive years

Due after five
years throughten years

Due after
ten years

Cash and deposits¥ 24,203¥¥¥
Notes receivable, accounts receivablefrom completed construction
contracts and other		 27,896		 -		-		Investment securities:		
Held-to-maturity securities
			(Japanese government bonds)		
-		
14		
9		
		 Available-for-sale securities with			contractual maturities		
-		
2		
-		
¥

Total		

- 28 -

52,099

¥

17

¥

9

¥

-

Thousands of U.S. dollars						
					Due in one
As of March 31, 2013
year or lessDue after one
year throughfive years

Due after five
years throughten years

Due after
ten years

Cash and deposits$ 257,341$$$
Notes receivable, accounts receivablefrom completed construction
contracts and other		 296,608		-		-		Investment securities:		
Held-to-maturity securities
			(Japanese government bonds)		
-		 148		
95				 Available-for-sale securities with			contractual maturities		-		 21		-		$Total		

553,950

$ 180

$

95

$

-

		
		

4. Repayment schedule of short-term loans payable and long-term loans payable after balance sheet dateMillions of yen

Due after												 Due after one Due after two
three years				
Due in one
year through years throughthrough four		
As of March 31, 2012
year or lesstwo years
three years
years

		
		
		
		

Due after
four years
through fiveyears

Due after
five years

Short-term loans
payable¥5,030 ¥
- ¥- ¥¥¥Long-term loans
payable		-		1,110		 734		 131		 -		-Millions of yen												 Due after one Due after two				
Due in one
year through years through		
As of March 31, 2013
year or lesstwo years
three years

		
		
		
		

Short-term loans
payable			 ¥		6,450		 ¥Long-term loans
payable					-				

Due after
three years
through fouryears-		 ¥		

-		¥		500				

1,025				Due after
four years
through five
years

-		
¥		-

Due after
five years¥--				 -		-Thousands of U.S. dollars
Due after												 Due after one Due after two
three years				
Due in one
year through years throughthrough four		
As of March 31, 2013
year or lesstwo years
three years
years

		
		
		
		

Short-term loans
payable			 $		68,580		$-		 $		
-		 $		Long-term loans
payable					-				 5,316				 10,898				

- 29 -

Due after
four years
through five
years

-		
$		-

Due after
five years$--				 -		-

8. Investment Securities

Investment securities as of March 31, 2012 and 2013 consisted of the following:							 Millions of yen

Thousands of
U.S. dollars

2013

2013

2012

As of March 31

Held-to-maturity securities
¥
24 ¥
24 $
255
Available-for-sale securities with market value		 1,129		 1,434		
15,247
Total

¥

1,153

¥

1,458

$

15,502The carrying amount and fair value of held-to-maturity debt securities as of March 31, 2012 and2013 are as follows:
Millions of yen
		
As of March 31, 2012

Carrying
amountJapanese government bonds¥

24

Unrealized
gain

Unrealized
loss

¥

¥

0

-

Fair value¥

25

Millions of yen
		
As of March 31, 2013

Carrying
amount¥Japanese government bonds

24

Unrealized
gain

Unrealized
loss

¥

¥

0

-

Fair value¥

25

Thousands of U.S. dollars
		
As of March 31, 2013

Carrying
amount$Japanese government bonds

255

Unrealized
gain

Unrealized
loss

$

$

0

-

Fair value$

265

The carrying amount (fair value) and acquisition cost of available-for-sale securities as of March
31, 2012 and 2013 are as follows:
Millions of yen
		
As of March 31, 2012

Carrying
amountUnrealized
gain

Unrealized
loss

Acquisition
cost

Equity securities¥ 1,126¥339¥ (121)¥
909
Other		 2		 0		 -			 1
Total

¥

1,129

¥

339

¥

(121)

¥

911

Millions of yen
		
As of March 31, 2013

Carrying
amountUnrealized
gain

Unrealized
loss

Acquisition
cost

Equity securities¥ 1,431
¥
594
¥
(72)
¥
Other		
2		
0		
-			

909
1

¥

911

Total

1,434

¥

595

¥

(72)

¥

Thousands of U.S. dollars
		
As of March 31, 2013

Carrying
amountUnrealized
gain

Unrealized
loss

Acquisition
cost

Equity securities$ 15,215$ 6,315$ (765)$
Other		
21		
0		
-			
$ 15,247

Total- 30 -

$

6,326

$

(765)

$

9,665
10
9,686

Available-for-sale securities which were sold during the years ended March 31, 2012 and 2013 are as
follows:						Millions of yen

Thousands of
U.S. dollars

2013

2013

		

2012

Sales proceeds¥
Gain on sales		
Loss on sales		

9. Retirement Benefits

6
¥
22
$
233
-		 -		2		 3		 311) Outline of the Company’s retirement benefit plans
The Company has defined benefit plans that consist of a defined benefit corporate pension plan anda lump-sum retirement benefit plan and also defined contribution pension plans. Certain consolidated
subsidiaries have lump-sum benefit plans. Furthermore, the Company may pay additional retirement
benefits upon the retirement of certain employees.
In addition, the Company participates in Tokyo Construction Welfare Pension Fund.
2) Projected benefit obligations
						 Millions of yen

Thousands of
U.S. dollars

2013

2013

2012

As of March 31(4,882)¥
2,723			

(5,182)$ (55,098)
2,988			 31,770

Unfunded benefit obligations		 (2,159)		
Unrecognized actuarial differences		 1,240			

(2,193)		
(23,317)
1,181			 12,557

Projected benefit obligations¥
Plan assets		

Provision for retirement benefits

¥

(918)

¥

(1,012)$ (10,760)

3) Retirement benefit expenses
			

				
Millions of yen

Thousands of
U.S. dollars

For the years ended March 31

2012

2013

2013

Service cost (Note)¥
Interest cost		
Expected return of plan assets		
Amortization of actuarial differences		

279
¥
85		
-		
65		

308
$ 3,27447		
499-		 108		
1,148

Subtotal		430		 465		
4,944
Contribution to Welfare Pension Fund		
226		
213		
2,264
Contribution to the defined contribution pension plan		
54		
57		
606
Total

¥

711

¥

735

$

7,814

Note: Retirement benefit expenses of consolidated subsidiaries which adopt a short-cut method areincluded in “Service cost”.
4) Assumption and policies used in computing projected benefit obligations
			

2012

2013

Inter-period allocation method of projected
benefit obligations
Discount rate
Expected rate of return on plan assets
Amortization periods for actuarial differences
			
			
			
			
			
			
			
			
			
			

Straight-line basis
1.0%
0.0%
12 years(amortized by thestraight-line method
over a defined period
within the range of
average remaining
service years of
employees at the timeof occurrence fromthe following year ofoccurrence)

Straight-line basis
1.0%
0.0%
12 years(amortized by thestraight-line method
over a defined period
within the range of
average remaining
service years of
employees at the timeof occurrence fromthe following year ofoccurrence)- 31 -

10. Deferred Tax
		Accounting

1) The significant components of deferred tax assets and liabilities as of March 31, 2012 and 2013
are as follows:				

Thousands of			 Millions of yen

U.S. dollars

2013		 2013
As of March 31		 2012		
Deferred tax assets:
		 Provision for bonuses
¥
89
¥
63
$
669
		
Provision for retirement benefits		 323		 323		 3,434
Allowance for doubtful accounts 		 122 		 67 		
712
Loss on valuation of real estate for sale 		 305 		 310 		 3,296
Provision for loss on construction contracts 		 361 		 101 		 1,073
Impairment loss 		 1,434 		1,648 		 17,522
Tax loss carryforwards 		 2,395
2,551 		 27,123
Other 		 267 		 228 		 2,424
Subtotal 		 5,295 		5,294 		 56,289
Less: valuation allowance 		(5,211)(5,294) 		 (56,289)
Deferred tax assets

¥

83

¥

0

(75)

¥

(184)

$

0

Deferred tax liabilities:		
Valuation difference on available-for-sale¥				
securities
Undistributed earnings of foreign			 consolidated subsidiaries 		(136) 		

(194) 		 (2,062)

Other 		

(12) 		

(12) 		

Deferred tax liabilities

¥

(224)

¥

(390)

$ (4,146)

Net deferred tax liabilities

¥

(140)

¥

(390)

$ (4,146)$ (1,956)(127)2) A reconciliation between the normal effective statutory tax rates and the actual effective tax
rates reflected in the consolidated statements of income for the year ended March 31, 2013is as follows:
		

2013

Normal effective statutory tax rate
Expenses not deductible income tax purposesTax rate differences in foreign consolidated subsidiaries
Undistributed earnings of foreign consolidated subsidiaries
Inhabitant per capita taxes
Valuation allowance
Other

38.0%
3.9
(5.9)
2.6
1.6
17.0
10.2

Actual effective tax rate

67.4

Information for the year ended March 31, 2012 was omitted, since net loss was recorded.

- 32 -

11. Investment and		Rental Properties

The Company and certain consolidated subsidiaries own office buildings, commercial facilities andresidual units for lease in Tokyo and other areas. Rental income from these real estate properties
for lease for the years ended March 31, 2012 and 2013 were ¥685 million and ¥695 million($7,389 thousand), respectively. Rental income and related costs are included in “Sales on realestate business” and “Cost of sales on real estate business”, respectively, in the accompanying
consolidated statements of income for the years ended March 31, 2012 and 2013.
The carrying amounts, changes in such balances during the year and fair values of suchproperties are as follows:				 Thousands of			Millions of yen

U.S. dollars

2013		 2013
As of March 31		2012		
Carrying amounts(Note 1):
Beginning balance¥				
Increase (decrease) (Note 2)						
Ending balance¥

13,889		 ¥(892)		12,997		
¥Fair value (Note 3)

16,311		

¥¥12,997		 $ 138,192(2,171)		 (23,083)
10,825		 $ 115,098
12,929		

$ 137,469(Notes): 1. The carrying amount is presented after deducting accumulated depreciation from the acquisition		cost.
2. Increase during the year ended March 31, 2012 primarily represents the acquisition of real estate		of ¥131 million and decrease is primarily due to the change in holding purpose from investment

		to internal use of ¥759 million and depreciation of ¥196 million.

		

Increase during the year ended March 31, 2013 primarily represents the acquisition of real estate		of ¥135 million ($1,435 thousand) and decrease is primarily due to sale of real estate of ¥1,368 million		($14,545 thousand), and the change in holding purpose from investment to internal use of ¥873

		

million ($9,282 thousand).

3. Fair values of properties as of March 31, 2012 and 2013 are measured as follows:		 The fair values of major properties are determined based on the real estate appraisal value
		 by independent real estate appraisers and the fair values of other properties are determined

12. Segment Information		

based on the value in accordance with “Japanese Real Estate Appraisal Standard” as well as		internal appraisal.

a. Description of reportable segments
The Companies’ reportable segments are those for which separate financial information is available
and regular evaluation by the Board of Directors is being performed in order to decide how resources
are allocated among the Companies. The Companies are active in the construction business andthe real estate business in Japan and foreign countries. Therefore, the Companies consist ofregional segments which are based on each business. Reportable segments of the construction
business are “Japan” and “Southeast Asia”, and those of the real estate business are “Japan” and“North America”.
b. Methods of measurement for the amounts of sales, profit (loss), assets and other items for eachreportable segment.
The accounting policies of each reportable segment are consistent to those disclosed in Note 3,“Summary of Significant Accounting Policies”.
c. Information about sales, profit (loss), assets and other items is as follows:- 33 -

Millions of yen
					
			
For the year ended		March 31, 2012

Reportable segments

Construction			
Real estate					Other		 Adjustments Consolidated(Note 1)		(Note 2)
Total
North						Southeast			

Japan

Asia

Total

Japan

America(Note 3)Total

Net sales:													 Customers¥

71,256

		Inter-segment¥

37,208¥108,464

¥

1,588

¥

258

¥

1,847

¥

32

¥

110,344¥-¥

110,344

-

17

17

17

-

17

-

34

(34)

-

			
Total

71,25637,226

108,482

1,605

258

1,864

32

110,379(34)

110,344

Segment income (loss)(1,645)

1,242

(403)

513

122

635

(2)

229

-

229

Segment assets

21,13518,92940,064

13,851

1,580

15,43253

55,551

10,286

65,838Other items:												 Depreciation

¥

102

		
Impairment loss		

Increase in property,		plant, and equipment

		and intangible assets

¥

71

¥

174

¥

170

¥

25

¥

196

¥

0

¥

371

¥

-

¥

371

-

-

-

27

-

27

-

27

-

27

62

86

149

118

12

130

0

280

-

280

(Notes): 1. “Other” is a business segment not included in the reportable segments and it is insurance agent business.
2. An adjustment of “Segment assets” in an amount of ¥10,286 million is corporate assets which are not allocated to each reportable		segment and consists of surplus fund (cash and deposits) and long-term investment fund (investment securities and insurance funds)		

of the Company.

3. Segment income (loss) is reconciled with operating income in the accompanying consolidated statements of income.
Millions of yen					Reportable segments

Other		 Adjustments Consolidated				Construction			
Real estate					For the year ended		March 31, 2013

(Note 1)		(Note 2)
Total
North						Southeast			

Japan

Asia

Total

Japan

America

1,613¥(Note 3)Total

Net sales:		

Customers		Inter-segment¥ 64,752¥

50,611¥

115,363

¥

248

¥

1,861

¥ 29

¥

117,254¥-¥

117,254

-

18

18

16

-

16

-

35

(35)

-

Total

64,752

50,629115,382

1,629

248

1,878

29

117,290(35)

117,254

Segment income (loss)

(669)

1,532

862

563

97

661

(1)

1,522

-

1,522

20,70627,967

48,674

11,515

2,246

13,76253

62,4899,437

71,927

			Segment assets
Other items:		

Depreciation

		Impairment loss		

Increase in property,		plant, and equipment

		and intangible assets

¥

79

¥

50

¥

130

¥

150

¥

36

¥

187

¥

0

¥

317

¥

-

¥

317

855

-

855

21

-

21

-

877

-

877

281

82

364

36

95

131

0

496

-

496

- 34 -

Thousands of U.S. dollars
					Reportable segments

Other		 Adjustments Consolidated				Construction			
Real estate					Total(Note 1)		(Note 2)
(Note 3)For the year ended		 Southeast			
North						March 31, 2013

Japan

Asia

Total

Japan

America

Total$ 688,484$ 538,128$1,226,613$ 17,150$ 2,636$ 19,787$ 308$1,246,719-$1,246,719

-

191

191

170

-

170

-

372

(372)

-

688,484

538,320

1,226,815

17,3202,636

19,968308

1,247,102(372)

1,246,719

Net sales:		

Customers		Inter-segment

			

Total

Segment income (loss)
Segment assets$(7,113)

16,289

9,165

5,986

1,031

7,028

(10)

16,182-

16,182

220,159

297,363

517,533

122,434

23,880146,326

563

664,423

100,340

764,774

Other items:		

Depreciation

		Impairment loss		

Increase in property,		plant, and equipment

		and intangible assets

$

839

$

531

$

1,382

$

1,594

$

382

$

1,988

$

0

$

3,370

$

-

$

3,370

9,090

-

9,090

223

-

223

-

9,324

-

9,324

2,987

871

3,870

382

1,010

1,392

0

5,273

-

5,273

(Notes): 1. “Other” is a business segment not included in the reportable segments and it is insurance agent business.
2. An adjustment of “Segment assets” in an amount of ¥9,437 million ($100,340 thousand) is corporate assets which are not allocated		

to each reportable segment and consists of surplus fund (cash and deposits) and long-term investment fund (investment securities and		insurance funds) of the Company.

3. Segment income (loss) is reconciled with operating income in the accompanying consolidated statements of income.

- 35 -

13. Per Share		
Information

Basic net income (loss) per share is computed based on the weighted average number of shares ofcommon stock outstanding during the year. Diluted net income (loss) per share is not presented forthe years ended March 31, 2012 and 2013 since the Company had no potentially dilutive shares
outstanding as of the balance sheet dates.
Net assets per share is computed based on the number of shares of common stock outstanding as of
the balance sheet dates.
Net assets and net income (loss) per share for the years ended March 31, 2012 and 2013 wereas follows:
				

Yen

U.S. dollars

For the years ended March 31

2013

2013

2012

Net assets per share
Basic net income per share¥271.14(58.88)¥319.60
19.01

$

3.39
0.20

(Notes): 1. Net assets per share is calculated based on the following information:									 Millions of yen

Thousands of
U.S. dollars

2013

2013

As of March 31

2012

Total net assets
Deductions from total net assets:
		
Minority interests¥

Net assets attributable to common stock
Number of shares of common stock used incomputing net assets per share(in thousand shares)

¥

			

9,710

¥

$

(576)

(386)
9,323

11,565¥

10,988122,966(6,124)$

116,831

34,381

34,386

2. Net income (loss) per share is calculated based on the following information:

				
			
Millions of yen

Thousands of
U.S. dollars

2013

2013

For the years ended March 31

2012

Net income (loss)¥
Amount not attributable to common
stock shareholders		

(2,024)

Net income (loss) attributable to¥common stock
Average number of shares of common stockduring the year (in thousand shares)		

(2,024)- 36 -¥-		34,387		

¥

653

$

-		
653

34,383

$

6,943
6,943

14. Bonds Payable

Short-term and long-term bonds payable as of March 31, 2012 and 2013 consisted of the following:						Issuer and Issue type		 Issue dateThousands ofMillions of yen

U.S. dollars

2013

2013

rate (%)

Collateral

Maturity$-(Note) 2

NoneMar. 29, 2013( - )		(-)
(Note) 2

NoneMar. 29, 2013

(Note) 2

NoneMar. 29, 2013

2012

Interest 		(Nakano Corporation)
4th unsecured bond with¥200

early redemption clause			(200)

5th unsecured bond with

Sep. 30, 2010

Sep. 30, 2010		

early redemption clause		

¥

-

200

-		-

(200)

( - ) 		(-)

Sep. 30, 2010		

160

-		
-

early redemption clause			(160)( - )		

6th unsecured bond with

¥

560

				

Total		

(560)

¥

-

(-)

$

-

( - )		(-)

		

(Notes): 1. ( ) denotes the amount expected to be redeemed within one year.
2. The interest rate of bonds from 4th to 6th unsecured bonds is 0.55% p.a. for the period from		

October 1, 2010 through March 31, 2011 and the interest rate for the subsequent interest period		

is set to be a rate computed by deducting 1.00% p.a. from the short-term prime rate on the second		

preceding banking day (“Interest rate base date”) from the starting date of the interest calculation

		

period. However, if such interest rate is less than the interest rate which is added by 0.10% p.a.

		

to 6 month TIBOR (p.a.) of Japanese yen (“Minimum interest rate”) at the interest rate base date,		the minimum interest rate will be applied.

- 37 -

15. Loans Payable and		
Other Debts

Short-term loans payable, long-term loans payable and other debts as of March 31, 2012 and2013 are as follows:				 Thousands of			Millions of yen

U.S. dollars

Average interest

2013

2013

rate (%)$

61,669

2.24

650		

6,911

1.93

obligations		 28		 15		

159-

As of March 31
Short-term loans payable

2012
¥

4,480

¥

5,800

Maturity

Current portion of
long-term loans payable		

550		

Current portion of leaseLong-term loans payable 								excluding current portion		 1,975		

1,525		 16,214

Jun. 30, 2014 -2.05

Mar. 31, 2016

Lease obligations excluding 								Apr. 30, 2014 -current portion		
Total

¥

7		
7,041

¥

54		
8,044

$

574

-

Aug. 31, 201785,528(Notes): 1. “Average interest rate” represents the weighted average interest rate on loans payable		outstanding as of the balance sheet date. “Average interest rate” of lease obligations is not shown		

since interest equivalent amounts included in the aggregated lease premiums are allocated to		each fiscal year using the straight-line method.

2. The following is a summary of annual maturities of loans payable and lease obligations subsequent		to March 31, 2013:

		

Millions of yen

		Years ending March 31

Thousands of U.S. dollars

Long-term

LeaseLong-termLeaseloans payable

obligationsloans payable

obligations

2014		¥
650
¥ 15
$ 6,911$ 1592015			500		15		5,316		1592016			1,025		15		10,898		
159
2017			
-		
12		
-		
127
2018			
-		
10		
-		
106
2019 and thereafter		-		 0		
-		 0Total		

16. Subsequent Events¥ 2,175¥

69$ 23,125$ 733

1) At the Annual General Meeting of Shareholders held on June 27, 2013, it was resolved to
distribute the year-end cash dividends of ¥3 ($0.03) per share of common stock of the Company.
		 The aggregate amount of such cash dividends is ¥103 million ($1,095 thousand).
2) The Company received the service of complaint from a Japanese company regarding a lawsuitin Japan for the payment of ¥1,723 million ($18,320 thousand) in total as compensation fordamages and other for the defect repair on August 23, 2013.
		 The Company strongly believes that the defect which the adverse party insists on does notexist and copes appropriately so that the Company’s claim will be accepted.

- 38 -

SUPPLEMENTAL INFORMATION							NONCONSOLIDATED BALANCE SHEETS							NAKANO CORPORATION							As at March 31, 2012 and 2013																				 Thousands of					 Millions of yen

U.S. dollars

2013

2013

	 	 	 	 2012
AssetsCurrent assets:
Cash and deposits¥
Notes receivable-trade 		
Accounts receivable from completed construction contracts 		
Costs on uncompleted construction contracts 		
Real estate for sale 		Costs on real estate business 		
Raw materials and supplies 		
Short-term loans receivable from subsidiaries and affiliates 		
Accounts receivable-other 		
Other 			Allowance for doubtful accounts 		

7,777¥
859 		
16,431 		
1,535 		550		201 		
23 		10 		524 		
953
(256) 		6,595
$70,122
1,401 		14,896
15,713 		 167,070
906 		
9,633
-		 191 		
2,030
24 		
255
10 		
106
530 		
5,635
439 		
4,667
(232) 		(2,466)

Total current assets 		

28,610 		

25,581 		 271,993

Noncurrent assets:
Property, plant and equipment
		 Buildings			
Accumulated depreciation

6,692(3,358)6,665(3,532)70,866(37,554)

			

Buildings, net

3,333

3,133

33,312

		 Structures			Accumulated depreciation

236
(184)

230
(189)

2,445
(2,009)Structures, net

51

41

435

		 Machinery and equipment
			Accumulated depreciation

179
(175)

175
(171)

1,860
(1,818)

4

3

31

23
(21)

23
(22)

244
(233)

Vehicles, net

1

0

0

		 Tools, furniture and fixtures			Accumulated depreciation

430
(396)

433
(406)

4,603
(4,316)

33

27

287

10,259

9,707

103,211

217
(182)

52
(6)

552
(63)

34

46

489

13,71912,961

137,809						Machinery and equipment, net

		 Vehicles
			Accumulated depreciation
			

			
		

Tools, furniture and fixtures, net

Land		 Lease assets
			Accumulated depreciation					

Lease assets, net

Total property, plant and equipment

Intangible assets
		

Investments and other assets
		 Investment securities
		 Stocks of subsidiaries and affiliates
		 Long-term loans receivable from subsidiaries and affiliates
		 Claims provable in bankruptcy, claims provable in rehabilitation
		 and other		 Insurance funds
		 Other		 Allowance for doubtful accounts
		130	 1,382

Total intangible assets	 116

Total investments and other assets

Total noncurrent assets
Total assets¥- 39 -

2,324
2,670
664

2,597
2,670
653

27,612
28,389
6,943

176
148
482
(467)

32
152
437
(343)

340
1,616
4,646
(3,646)

5,999

6,199

65,911

19,835

19,291

205,11448,445¥44,872$

477,107													
Millions of yen

2013

2012

					
Liabilities
Current liabilities:
Notes payable-trade
Accounts payable for construction contracts
Current portion of bonds
Short-term loans payable
Income taxes payable
Advances received on uncompleted construction contracts
Provision for warranties for completed construction
Provision for loss on construction contracts
Provision for bonuses
Other 			

¥15,854
10,068
560
5,030
45
3,971
108
951
221
1,107

Thousands of
U.S. dollars¥

14,027
8,970
6,450
50
3,449
92
266
166
892

2013

$

149,144
95,374
68,580531
36,671
978
2,828
1,765
9,484

37,91834,363365,369

Noncurrent liabilities:
Long-term loans payable
Deferred tax liabilities
Provision for retirement benefits
Long-term deposits received
Other 			

1,975
69
849
489
185

1,525
175
907
495
223

16,214
1,860
9,643
5,263
2,371

Total noncurrent liabilities

3,568

3,328

35,385

Total liabilities

41,486

37,691

400,754

Total current liabilities

Net assets
Shareholders’ equity:
Capital stock
Capital surplus
		 Legal capital surplus¥

		 Total capital surpluses
Retained earnings
		 Other retained earnings			Retained earnings brought forward		Total retained earnings

Treasury stock
Total shareholders’ equity
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets¥- 40 -

5,061

¥

5,061

$

53,811

1,400

1,400

14,885

1,400

1,400

14,885

405

435

4,625

405

435

4,625

(27)

(28)

(297)

6,838

6,868

73,024

120

312

3,317

120

312

3,317

6,958

7,180

76,342

48,445¥44,872$

477,107

NONCONSOLIDATED STATEMENTS OF INCOME				NAKANO CORPORATION				
Thousands of
For the years ended March 31, 2012 and 2013						Millions of yen

2013	 2013

2012

		

U.S. dollars

Net sales:
Net sales of completed construction contracts¥

72,381¥65,807$

699,702

Sales on real estate business 		

1,530 		1,577 		16,767

Total net sales 		

73,911 		

67,385 		

716,480

Cost of sales of completed construction contracts 		

70,134 		

63,000 		

669,856

Cost of sales on real estate business 		

1,003 		989 		

10,515

Total cost of sales 		

71,137 		

63,990 		

680,382

Gross profit on completed construction contracts 		

2,247 		2,807 		29,845Gross profit-real estate business 		

527 		

588 		

6,251

Total gross profit 		

2,774 		3,395 		36,097

Selling, general and administrative expenses		

4,150		

3,802		

40,425

Operating loss		(1,376)		

(407)		

(4,327)

Cost of sales:

Gross profit:

Non-operating income:Interest income 		

22 		

21 		

223

Dividends income 		

644 		

1,505 		16,002Other 		27 		140 		

1,488

Total non-operating income 		

695 		

1,667 		17,724Non-operating expenses:
Interest expenses 		161 		

172 		

1,828

Other 		

16 		

7 		

74

Total non-operating expenses 		178 		

179 		

1,903

Ordinary income (loss) 		

(859) 		1,080 		11,483Extraordinary income:Gain on sales of noncurrent assets 		

9		

-		

-

Total extraordinary income 		

9		

-		

-

Extraordinary loss:
Impairment loss 		-		

Loss on disaster 		

191		

855 		
-		
-		

9,090
-

Loss on construction 		

67		

Other 		132 		

54 		574

Total extraordinary losses 		391 		

909 		

9,665

Income (loss) before income taxes 		

(1,242) 		

171 		

1,818

Income taxes-current 		

31 		

37 		

393

Income taxes-deferred 		

1,274 		0 		

0Total income taxes 		

1,305 		

37 		

393

Income taxes:

Net income (loss)¥- 41 -(2,548)

¥

133

$

1,414

CORPORATE PROFILE
As of March 31, 2013

Company Outline
		Company Name		Headquarters		Foundation
		Established		Paid-in Capital		 Employees
		
Stock Listing		Primary Business			

NAKANO CORPORATION
4-2-28 Kudan-kita, Chiyoda-ku, Tokyo 102-0073, Japan
8th February 1933
19th December 1942
¥5,061,678,686
1,293
Tokyo Stock Exchange, First Section
Domestic Construction Projects
International Construction Projects

Board of Directors
		
Honorary Chairman
		President		
Directors					Standing Corporate Auditors		
Corporate Auditors

Yoshikazu Oshima
Akira Asai
Makoto Yasuhiro
Yorinobu KatoToshihide Kurokawa
Shunichi Sato

Koichiro Nakano
Toshiyuki Taketani
Akihiko Sugaya
Kohei Yamaya

Main Affiliated Financial Institutions
		
		
		

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Corporate Bank, Ltd. 		
The Shoko Chukin Bank, Ltd.		

Mitsubishi UFJ Trust and Banking Corporation
The Bank of Yokohama, Ltd.
The 77 Bank, Ltd.

Major Shareholders
		
		
		

Oshima Scholarship Foundation		
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Kanto Kogyo Co., Ltd.		

Yoshikazu Oshima
Nakano Investment Fraternity Association
Nakano Employee Shareholder Association

Domestic Offices
		
		
		
		
		
		
		
		

Headquarters 		
Tokyo Main Office		
Civil Engineering Office 		Tohoku Regional Office		
Nagoya Regional Office		
Osaka Regional Office		
Kyushu Regional Office		
Hokkaido Branch Office

Higashi Kanto Branch Office
Kita Kanto Branch Office
Yokohama Branch Office
Ibaraki Branch Office
Taito Branch Office
Kita Tohoku Branch Office
Sales Offices (Mie, Hyogo, Kitakyushu)

International Offices
		
		
		
		

Nakano International Corporation (USA)Nakano Singapore (Pte.) Ltd. (Singapore)
Nakano Construction Sdn. Bhd. (Malaysia)
Thai Nakano Co., Ltd. (Thailand)		

PT. Indonakano (Indonesia)
PT. Nakano S Batam (Indonesia)
Nakano Consulting Shanghai Co., Ltd. (China)
Nakano Vietnam Co., Ltd.

Industry Affiliations
		
		
		

Japan Federation of Construction Contractors
The Associated General Contractors of Tokyo
The Associated General Contractors of Osaka

National General Contractors Association of Japan
Japan Association of Representative General Contractors- 42 -