2015

Year ended March 31, 2015

Profile

HAZAMA ANDO CORPORATION was launched on April 1, 2013, through the merger of
HAZAMA CORPORATION and ANDO Corporation. Amid a difficult business environment forthe construction industry, the new company is seeking to realize an expanded businessscale, a streamlined and more effective management structure, and greater earning
capacity.
ANDO Corporation was founded in 1873, and HAZAMA CORPORATION in 1889. As
general contractors, each with well over a century of history and possessing industry-leading
technological capabilities built on experience with numerous projects, these two companies
have contributed to the development of Japan and the creation of today’s enriched lifestyle.
The business scope extends beyond Japan to 30 countries and territories around the world.
The merger brings together ANDO Corporation’s strength in building construction,and HAZAMA CORPORATION’s established reputation in civil engineering. In addition to
expanding the business scale and enhancing management efficiency, the integrated
company will draw on the complementarity effect of their respective achievements, and by
generating synergies in terms of technology, marketing, and cost competitiveness, establish
a more solid management foundation, and realize further business development andgrowth.
HAZAMA ANDO CORPORATION aspires to be a “good company” for all of its
stakeholders. With solid technology and passion we will meet expectations, and contributeto the development of society through building and manufacture. Further, by looking
beyond the present, continually seeking to create new value, and enhancing sustainablecorporate development, we will seek to realize a prosperous future, and to build a new
history as HAZAMA ANDO CORPORATION.

CONTENTS

Financial Highlights.................................................................................. 1
Message from the Chairman & the President............................................ 2
Business Conditions and Outlook............................................................. 3
Topics 2015............................................................................................. 4
Review of Operations............................................................................... 6
Corporate Governance............................................................................ 8
Consolidated Financial Review................................................................. 9
Consolidated Balance Sheets.................................................................. 12
Consolidated Statements of Income....................................................... 14
Consolidated Statements of Comprehensive Income............................... 15
Consolidated Statements of Changes in Net Assets................................. 16
Consolidated Statements of Cash Flows................................................. 18
Notes to Consolidated Financial Statements............................................ 19
Independent Auditor‘s Report................................................................ 43
Global Network..................................................................................... 44
Corporate Data / Directors, Officers / Major Subsidiaries and Affiliates....... 45

Financial Highlights
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2015, 2014 and 2013

Millions of yen

2015¥369,703
18,5187,240
269,720
64,621

Consolidated
Revenues
Operating income
Net income
Total assets
Net assets

Thousands of
U.S. dollars

2014¥371,217
12,07816,414
260,646
54,381

2013¥197,899
5,613
2,293
141,880
32,8442015$3,073,942
153,971
60,1982,242,621
537,300

Yen¥

Net income per share
Net assets per share

39.17
345.56¥

U.S. dollars

96.47
290.96¥20.69
212.75

$

0.33
2.87

Notes: 1. U.S. dollar amounts in this annual report are translated from yen at the rate of ¥120.27 to US$1.00 for convenience.
2. The main reason for signiﬁcant changes in the management indicators of 2014 due to the merger with ANDO Corporation.
3. On this page and subsequent pages, ﬁgures for the ﬁscal year ended March 2013 is for the former HAZAMA CORPORATION.

Revenues

400,000

Non-Consolidated

Consolidated

Consolidated
Millions of yen

371,217369,703

Operating Income

20,000Millions of yen

18,518Orders Received

Millions of yen

399,308

400,000
333,760
300,000

15,000300,000

12,078200,000

197,899

200,000

10,000186,951

5,613

0100,000

5,000

100,000

‘13

‘14

‘15

0

‘13

‘14

‘15

0

‘13

‘14

‘15

1

Message from the Chairman & the President

Toshio Ono,
Representative Director andChairman of the Board of Directors

HAZAMA ANDO CORPORATION exceeded its plantargets for order volume, completed construction
contracts, and earnings in the fiscal year ended
March 2015. This was the result of the gradual
recovery in the economy stemming from thegovernment’s economic growth policies andreconstruction-related demand, along with our focus
on measures emphasizing profitability. We would liketo express our sincere appreciation to all stakeholders
for their understanding and support.
For the fiscal year ending March 2016, thebusiness environment for construction continues toexhibit areas for concern. Although we expect theeconomy to continue to recover on the positiveeffects of government policies and measures, weneed to remain cautious regarding supply-demand
trends for construction engineers and materials.
Under such circumstances, in order to takeadvantage of the shifts in the business environment2

Toshiaki Nomura,
Representative Director and President

and further enhance our enterprise value, we
concluded the medium-term management plan
adopted at the time of the merger a year ahead ofschedule, and launched a new business plan for the
fiscal year ending March 2016 to the fiscal year
ending March 2018.
In the new medium-term management plan,
HAZAMA ANDO CORPORATION has adopted thestrategic theme of “Transformation to an Engaging
Corporate Group” to be a company able to achievesustainable growth, and will maintain a stable
management and financial foundation, adhere to ourbasic management policy of “Safe, Reliable, HighQuality Manufacturing”, and aim to establish arelationship of mutual growth with all stakeholders,
including society, customers, shareholders, business
partners, and employees. We ask for your continuous
understanding and support.

Business Conditions and Outlook

1

Summary of Business Activities

The Japanese economy during the fiscal year ended March 2015, despite the rebound decline from the demand rush
preceding the April 2014 consumption tax hike, continued to recover at a moderate pace with signs of improvement incorporate earnings and employment conditions amid the government’s steady implementation of measures forovercoming deflation and long-term economic growth. Looking ahead, while there are continued risks that an overseas
downturn could depress the Japanese economy, we anticipate moderate recovery in the economy overall.
In the construction industry, the principal business of HAZAMA ANDO CORPORATION Group, demand remained
firm on a steady rise in public sector construction investment with disaster recovery-related projects firmly under way,along with a recovery in private-sector capital investment. However, the supply-demand trends for construction engineers
and materials continue to require close attention, with the business environment presenting areas for concern.
Under such conditions, HAZAMA ANDO CORPORATION Group recorded consolidated revenues of ¥369.7 billion(-0.4% year on year) for the fiscal year ended March 2015, with operating income of ¥18.5 billion (+53.3%), ordinary
income of ¥18.1 billion (+60.9%), and net income of ¥7.2 billion (-55.9%).

Results by business segment are as follows.
•Civil Engineering
Revenues amounted to ¥121.5 billion (+9.6% year on year), with operating income of ¥9.5 billion (+7.2%).
•Building Construction
Revenues amounted to ¥225.9 billion (-4.3% year on year), with operating income of ¥10.3 billion (+125.6%).
•Group Business
Revenues amounted to ¥18.4 billion (-11.6% year on year), with operating income of ¥1.3 billion (-1.3%).
•OtherRevenues amounted to ¥3.7 billion (+10.7% year on year), with operating income of ¥0.7 billion (-7.5%).

2

Outlook for the Next Fiscal Year (ending March 2016)

The Japanese economy is expected to remain on a recovery track amid continued improvement in corporate earnings andemployment conditions, stemming from the positive effects of government policies and measures. In the constructionindustry, we expect reconstruction-related business and other public sector construction investment to remain firm, alongwith a steady rise in private sector investment with the economic recovery.
Under such circumstances, HAZAMA ANDO CORPORATION implemented its medium-term management plan for
the fiscal year ending March 2014 to the fiscal year ending March 2016, and achieved results that exceeded plan figures.
We formulated a new business plan for the fiscal year ending March 2016 to the fiscal year ending March 2018 in
response to changes in the market environment, and to further enhance our enterprise value.

2nd Medium-Term Management Plan
Summary of the Medium-Term Management
Plan
1.Period
The fiscal year ending March 2016 through thefiscal year ending March 2018
2.Strategic Theme“Transformation to an Engaging Corporate Group”
3.Priority Measures
1) Measures for sustainable growtha. Enhance construction capabilities
b. Expand business scopec. Procurement measuresd. Secure management resources2) Measures for work satisfaction and personal
growtha. Improve the work environmentb. Promote career formation with a sense ofsatisfaction3) Measures for coexistence with society
a. Measures for safety and quality
b. Measures to address issues in the constructionindustryc. Measures to respond to changes in the social
environment4) Measures to stabilize and strengthen management
and financial foundations
a. Stabilize and strengthen management andfinancial foundation
b. Returns to shareholders
4.Target Figures
The fiscal year ending March 2018 (the fiscal year end of final plan year)
Construction orders received
Revenues
Operating income
Operating profit margin
ROE
Payout ratio

Non-consolidated
Consolidated
Around ¥400bn—
Around ¥380bn Around ¥400bn
Around ¥19bn
Around ¥20bn
Stably above 5%—Over 10%—Around 20%

3Topics 2015

"HAZAMA ANDO-Style" BIM Workflow
Building Information Modeling (BIM) is a new method of
construction management that utilizes design and construction
information in 3D computer modelling to simulate theconstruction of an actual building.
Up to now, design and construction has generally utilized
two-dimensional drawings with lines and text to express theshape and size of a building, materials, and other aspects. The
ability to understand the three-dimensional composition anddetails of a building from two-dimensional drawings relied on an
imaginative power developed through many years of experience.
However, utilizing BIM from the initial design stage
provides a 3D model integrating not only design andconstruction but also facilities, allowing even non-specialists tovisualize the totality of the design, just as if they were looking at
the actual building with their own eyes.
Design and construction using BIM also allows a wide
range of information regarding the building to be linked to the
3D model, including the interior and exterior design, the steel
frame and other structural aspects, as well as electricity, airconditioning, sanitation, and other facilities. As a result, in
addition to producing a visual 3D model, previously separate
information such as the finishing and reinforcement bar
arrangement can be integrated into the BIM model, allowing it
to function as a sort of “building database.” These advantages
are broadening the utilization of BIM at various stages of theconstruction process.

Tunnel Face Tester
Face Front Exploration System Using Blasting
Excavation
System for quick face front exploration and selection of
optimal timbering
HAZAMA ANDO CORPORATION has developed the Tunnel Face
Tester (Patent No. 5587960, Fig.1), a device that utilizes the
explosive blasts in ordinary mining operations as the seismic
source of elastic waves to allow for safe and quick seismic
prospecting and face front exploration inside the tunnel, without
impacting the construction cycle.
In the construction of mountain tunnels, boring
explorations and seismic prospecting are conducted as part of
the advance geological survey, and the design for the tunnel
timbering pattern is determined based on the results. However,such geological surveys are generally conducted from thesurface, with a limited number of locations and tests. Further,
the precision of seismic prospecting is known to decline in areas
with large earth cover, or with complex geological structures.
Accordingly, visual observation-based front face evaluations are
ordinarily conducted during the tunnel excavation to confirm thesuitability of the timbering pattern design.
However, face observations have up to now been
qualitative evaluations, and results vary depending on theexperience of the observer. Further, for projects with insufficient4

HAZAMA ANDO CORPORATION is focusing on thedevelopment of a BIM Estimation System to maximize theeffectiveness of the visualization and database functions of BIM.
The distinctive feature of this system is the link between the costestimation database and the BIM database. This enhances
quantitative response and precision at the design stage, andallows for a cost-optimized design. We are making preparations
to begin utilizing the BIM Estimation System from the fiscal year
ending March 2016.
HAZAMA ANDO CORPORATION is working to enhancecustomer satisfaction by providing "HAZAMA ANDO-Style" BIM
workflow based on this BIM Estimation System.
Overview of the Estimation System

Finish Schedule

BIM Database

LinkedCost Estimation
Database

Totalization Table

Cost Simulation(Cost-Optimized Design)

Fig.1 Overview of the Tunnel Face Tester
Fragile site such as a fault
Elastic wave
(reflected wave)

Seismograph

Elastic wave
(direct wave)

Face

Tunnel Face Tester

Fig.2 System Configuration
Collector

Current sensor

RecorderSeismographadvance surveys and reduced precision noted previously, face front
explorations conducted during the excavation become important.
Survey boring has been the most reliable method for conducting
face front explorations, but when the boring is particularly longthe excavation was suspended for considerable time.
The Tunnel Face Tester (Fig.2) is an inexpensive andcompact system in which the blast signal (trigger) received fromthe current sensor (1) attached to the leading wire, and theelastic wave data received from the seismograph (2), are passed
through a collector (3) to a synchronizing recorder (4). Analysis of

the continuously received data allows engineers to grasp thevelocity of the elastic wave of the working face, and estimate thefault locations in the front face, without stopping construction
work.
HAZAMA ANDO CORPORATION is currently implementing
this system as a standard construction management tool for thenumerous mountain tunnel projects it handles. We plan to apply
the system for Shinkansen tunnels currently under construction,
expressway tunnels planned for the future, and particularly longtunnels with large earth cover.

BBB+ Rating from Rating and Investment Information

earnings capacity, and improved financial discipline andsoundness, as well as creditworthiness and a strong financial baseto support sustainable growth.
We believe that the BBB+ Stable reflects HAZAMA ANDOCORPORATION’s firm revenue base in both the civil engineeringand building construction sectors, along with our strict
management of construction and investment, which limits thefactors that could damage the financial base.
Going forward, HAZAMA ANDO CORPORATION will
steadily implement its medium-term management plan ending
in the fiscal year ending March 2018, maintain a profitabilityoriented business structure centered on construction (both civilengineering and building construction, including overseas), andwork to stabilize and strengthen its financial base.

HAZAMA ANDO CORPORATION received a new rating from
Rating and Investment Information, Inc. (R&I) on April 24, 2015.
The rating type and rating are as follows.
Rating Type

Issuer Rating

RatingBBB+ (Triple B Plus)

Rating Outlook

StableThe reasons for the rating received, based on objective
evaluation from a third-party perspective, included strong

First Japanese Construction Company to Receive a
Carbon Footprint Declaration Certiﬁcation
Calculation method established for CO2 emission frombuilding materials (framework and ﬁnishing materials)
HAZAMA ANDO CORPORATION became the first construction
company in Japan to receive a Carbon Footprint Declaration
Certification (“CFP Declaration Certification”) for building
materials (building framework and finishing materials), throughthe Carbon Footprint Communication Program (“CFP Program”)
administered by the Japan Environmental Management
Association for Industry.
A “carbon footprint” (CFP) is a figure representing as CO2
the volume of greenhouse gas emissions throughout the entire
lifecycle of a product or service, from procurement of raw
material through the disposal or recycling stage. The CFP
Program is a system for “visualizing” this figure, and indicatingproducts and services in an easy-to-understand way.
For the CFP calculation, based on the individual item
contract method used in the construction industry, we
designated a “HAZAMA ANDO building” as a typical reinforced
concrete structure. Based on this design information weestablished a calculation method for CFP, and acquired the CFP
Declaration Certification.
We set the scope of the CFP calculation as the building
framework and finishing for new constructions or renovations.
Limiting the scope of the calculation allowed us to more
effectively identify points for CO 2 reductions, and to offer
customers construction materials and methods from an eco-friendly perspective.
Following the acquisition of this CFP Declaration
Certification, HAZAMA ANDO CORPORATION will pursue
research and development on eco-friendly materials andconstruction methods, apply the results to its design andconstruction work, and through comprehensive measuresencompassing the entire lifecycle of a structure, contribute to therealization of a low-carbon society.
CFP Program
Per square meter of ﬂoor space,
60 years of service life
4%
Material manufacturing stage
21%

Construction stage
50%

25%

Repair and refurbishment stage
Disposal and recycling stage“Visualization” of CO2
Carbon footprint

Calculations are based on design information. Assessment
does
not include aretransportof equipment
or construction
Calculations
based
on design
information.
materials.
Assessment does not include transport ofequipment or construction materials.

5Review of Operations

Major Orders Received● Tokyo Contour Belt Highway Main Tunnel (North Bound)
Oizumi Minami Construction Work / Central Nippon
Expressway Company Limited (Japan)● Sukagawa Cit y Government Office Building Main
Construction Work/City of Sukagawa, Fukushima Prefecture(Japan) ❶● Apporo Dam Main Construc tion Work / Hokkaido
Government Iburi General Subprefec tural Bureu(Japan) ❷● Topre ( Thailand ) Co.,LT D. (A sia Industrial Estate
Suvarnabhumi) New Factory project/ Topre (Thailand)
Co.,LTD. (Thailand) ❸● JA M X N ew Fac tor y Cons truc tion Proje c t / J T EK T
Automotive Mexico, S.A. de C.V. (Mexico)● The Project for Construction of Paso Real Bridge/Ministryof Transport and Infrastructure, Republic of Nicaragua/
JICA Grant Aid (Nicaragua) ❹

❶

❷

❸

❹

Major Projects in Progress● Tsugaru Dam Main Construction Work/Tohoku Regional
Bureau, Ministry of Land, Infrastructure, Transport andTourism (Japan)● Kitakokubun Area Box Culvert Work Phase2/ Kanto
Regional Development Bureau, Ministr y of L and,Infrastructure, Transport and Tourism (Japan)● Nagoya Castle Hommaru Palace Restoration Work/City of
Nagoya, Aichi Prefecture (Japan)● Kinjyono Tunnel Work ( Year 2012 – 2015) / Shikoku
Regional Development Bureau, Ministr y of L and,Infrastructure, Transport and Tourism (Japan)● Tozai Line and Hibiya Line Kayabacho Station Civil
Improvement Work/Tokyo Metro Co., Ltd. (Japan)

6● Oarai Research & Development Center Solid Waste Volume
Reduction Processing Facility Building Construction Work/
Japan Atomic Energy Agency (Japan)

Major Projects Completed● Central Circular Shinagawa Route Ohashi Junction Tunnel/
Metropolitan Expressway Co., Ltd. (Japan) ❺● LaLaport Fujimi New Construction Work/Mitsui FudosanCo., Ltd. (Japan) ❻● 4EM-TM project/Honda de Mexico S.A. de C.V./Hondade Mexico S.A de C (Mexico) ❼● The Project for Construction of Sindhuli Road Section Ⅲ/
Department of Roads, Ministry of Physical Infrastructure
and Transport/ JICA Grant Aid (Nepal) ❽● Mini-Hydropower Development Project/Ministry of Energy
and Mines, the Lao People’s Democratic Republic/JICA
Grant Aid (Laos) ❾● ROKI MEXICO S.A. de C.V. New Factory Construction Project/
ROKI MEXICO S.A.de C.V. (Mexico) ❿

❺

❻

❼

❽

❾

❿

7

Corporate Governance● Basic Policy
HAZAMA ANDO CORPORATION recognizes the need for transparency and fairness in management oversight and flexibility in decision-making.
We consider it a management priority to maintain and implement a management system, rooted in the current organizational structure centeredon the Board of Directors and the auditing system, which is able to respond quickly to changes in the business environment.
● Matters Regarding Corporate Functions including Business Execution, Auditing/Supervision, Nominating and Determination of Compensation
To strengthen its corporate governance, HAZAMA ANDO CORPORATION maintains a clear distinction between the decision-making andoperational oversight functions of the directors and Board of Directors, and the business execution function of the Management Meeting,executive officers and the Meeting of Executive Officers. The specific functions are as follows.
1. Revisions related to the directors
The term for directors is fixed at one year to further clarify the management responsibility of directors, and to establish an optimal
management structure to respond to changes in the business environment. Further, directors are classified into those with businessexecution responsibility and those without. HAZAMA ANDO CORPORATION does not have the position of “executive director,” and only
makes a distinction between “representative director” and “director.” Non-business execution directors conclude contracts with theCompany that limit liability for damages to an amount prescribed by law.
2. Board of Directors
The Board of Directors had 12 members as of June 30, 2015 (including two external directors, one of whom is a woman), comprising into
directors with business execution directors and non-business execution directors. External directors, who are non-business execution
directors, serve in roles based on their experience and insights, including supervision and providing advice on management. The Board of
Directors meets monthly to render decisions on important matters regarding management, and to supervise the status of businessexecution.
3. Management Meeting
The Management Meeting meets monthly to discuss policies for management strategies and other matters, to confirm the progress ofbusiness plans, and to diversify and strengthen policy-proposing capabilities.
4. Executive officer system
The number of executive officers as of June 30, 2015, totaled 38 (including 10 executive officers who concurrently serve as directors).
HAZAMA ANDO CORPORATION has established the six officer categories of “chairman,” “president,” “vice president,” “senior managing
executive officer,” “managing executive officer” and “executive officer.” We have clarified the responsibilities for the operations executive
officers manage, and limited the term to one year to enhance the mobility and flexibility of the executive officer system. In addition, weclarified through a resolution of the Board of Directors the rights and responsibilities regarding operations managed, and implemented acompensation system that reflects the performance of operations managed.
5. Meeting of Executive Officers
The Meeting of Executive Officers meets monthly in accordance with the executive officer system, to enhance the efficiency of consensual
decision-making and strengthen operational execution, as well as to ensure that management information is conveyed promptly andaccurately along the management line, and to provide for the sharing of information among departments.
6. Board of Auditors System
The Board of Auditors comprised 4 members as of June 30, 2015 (including 2 non-regular external directors). Auditors (including external
auditors), in accordance with auditing standards established by the Board of Auditors, and in line with the auditing policies for each fiscal
period, division of duties and other rules, maintains communication with directors, the Internal Auditing Department and other employees.
Auditors attend meetings of the Board of Directors and other important meetings, receive reports and explanations from directors andemployees regarding the status of the execution of their duties, review important documents and other papers, and conduct audits at thehead office and other major business locations. External auditors conclude contracts with the Company that limit liability for damages to an
amount prescribed by law.
7. Various Committees
HAZAMA ANDO CORPORATION has established various committees that contribute to the streamlining of management operations. These
include the Compliance Promotion Committee, which deliberates and provides advice regarding compliance matters, and the Central Safety
and Health Committee, which deliberates and provides advice regarding health and safety matters.
●

Corporate Governance and Internal Control Structure
Shareholders’ Meeting

Management
Appoint /Dismiss
Directors
Board of Directors

Audit

Board of Auditors
Secretariat
Business
Execution

ReportReport/Recommend

Audit

Coordinate

Consult

ReportManagement Meeting

Executive Officer
Meeting of Executive Officers

Compliance Promotion Committee

ReportDirectAudit Department
Audit
Business Divisions

8

Audit

ReportReportDirectCoordinate

Coordinate

ChairmanPresident

ReportAccounting Auditor

Committees
Supervise

DirectAppoint/Dismiss

Appoint/Dismiss
Audit
ReportAuditors
Board of Auditors

DirectSafety and Health Committee

DirectCoordinate
CSR Promotion Department
ReportImplement

ReportAudit

ImplementGroup Companies(Subsidiaries)

Consolidated Financial Review
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2015, 2014, 2013, 2012 and 2011

Summary
Thousands of
U.S. dollars

Millions of yen
2015

2014

2013

2012

2011

2015

Construction¥355,069¥357,474¥182,740¥169,256¥184,630$2,952,266

Other activities

14,634

13,74315,15912,794

12,072

121,676

Total

369,703371,217

197,899

182,050

196,7023,073,942

333,691

342,810

182,271

166,630

182,692

2,774,515

36,012

28,407

15,62815,42014,010299,427

17,494

16,32910,015

9,505

10,031

145,456

Operating results:
Revenues

Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating income

18,51812,078

5,613

5,915

3,979

153,971

7,240

16,414

2,293

1,767

1,560

60,198

Total assets¥269,720¥260,646¥141,880¥133,177¥141,150$2,242,621

Total liabilities

205,099

206,265

109,036

102,620

112,085

1,705,321

Net assets

64,621

54,381

32,84430,55729,065537,300¥15,716¥7,464¥7,934¥(3,158)¥2,880$130,673

(134)

3,593

(723)

562

1,260

(1,114)(7,490)(54)(4,347)(3,076)

1,636(62,277)

Net income (loss)
Financial position:

Cash flows:
Cash flows from operating
Activities
Cash flows from investing
Activities
Cash flows from financing
Activities

Yen

U.S. dollars

Per share amounts:
Net income (loss)
Basic¥ 39.17¥ 96.47¥ 20.69¥ 15.38¥ 13.16$0.33

Diluted

39.12

88.59

14.74

11.51

10.50

0.33

Dividends
8.00

5.00

3.00

1.50

―

0.07

Class I preferred stock

―

―

78.40

78.80

83.28

―

Class II preferred stock

―

―

88.40

88.80

93.28

―

Class III preferred stock

―

―

98.40

98.80

103.28―Class IV preferred stock

―

―

―

93.80

98.28

―

345.56290.96212.75194.75179.62

2.87

Common stock

Net assets

Note: 1. U.S. dollar amounts in this annual report are translated from yen at the rate of ¥120.27 to US$1.00 for convenience.
2. The dividend per share for 2014 includes a ¥2 commemorative dividend.
3. The main reason for significant changes in the management indicators of 2014 due to the merger with ANDO
Corporation.

9

Financial Review
Revenues
Revenues in fiscal 2015 totaled ¥369,703 million (US$3,073,942 thousand), of which ¥355,069 million (US$2,952,266
thousand) came from construction projects and ¥14,634 million (US$121,676 thousand) from other activities. These two businesssegments accounted for 96.0% and 4.0%, respectively, of total revenues.
Costs and Expenses
Cost of sales amounted to ¥333,691 million (US$2,774,515 thousand), which is equivalent to 90.3% of revenues. Selling, generaland administrative expenses amounted to ¥17,494 million (US$145,456 thousand), which is equivalent to 4.7% of revenues.
Operating income reached ¥18,518 million (US$153,971 thousand), and the operating margin was 5.0%. Net income amounted
to ¥7,240 million (US$60,198 thousand). Basic net income per share was ¥39.17 (US$0.33). We paid dividend of ¥5 per sharefor the fiscal year ended March 31, 2014 on June 30, 2014, and paid interim dividend of ¥3 per share for the fiscal year ended
March 31, 2015 on December 8, 2014.
Financial Position and Analysis
Total assets amounted to ¥269,720 million (US$2,242,621 thousand), total liabilities amounted to ¥205,099 million(US$1,705,321 thousand), and total net assets amounted to ¥64,621 million (US$537,300 thousand) at the end of fiscal 2015.
Net worth to total assets ratio was 23.7%. Net assets per share amounted to ¥345.56 (US$2.87).
Cash Flows
Cash and cash equivalents at the end of the year increased by ¥9,533 million (US$79,263 thousand) to ¥79,558 million(US$661,495 thousand).
Net cash provided by operating activities amounted to ¥15,716 million (US$130,673 thousand) mainly as the result of income
before income taxes amounting to ¥15,519 million (US$129,035 thousand), increase in advances received on uncompleted
construction contracts amounting to ¥4,907 million (US$40,800 thousand) and income taxes paid amounting to ¥4,532 million(US$37,681 thousand).
Net cash provided by investing activities amounted to ¥(134) million (US$(1,114) thousand) mainly as a result of purchase ofinvestment securities.
Net cash used in financing activities amounted to ¥(7,490) million (US$(62,277) thousand) mainly as a result of repayment oflong-term loans payable greater than the borrowing.
Construction Business (Non-Consolidated Construction Projects)
As HAZAMA ANDO CORPORATION’s construction business accounts for a large percentage of consolidated group business,
the financial performance of the business is presented below for reference.
Thousands of
U.S. dollars

Millions of yen
Revenues

2015

2014

2013

2012

2011

2015

¥ 77,095¥ 80,092¥59,343¥54,942¥60,962$ 641,016

36,75723,32325,442

19,03815,976

305,621

7,721

6,695

6,275

7,223

8,188

64,197

121,573

110,110

91,06081,20385,126

1,010,834

Civil engineering
Domestic
Government sector
Private sector
Overseas
Subtotal
Building construction
Domestic
Government sector

25,713

21,590

3,613

4,487

8,638

213,794

Private sector

169,524

183,281

62,82868,59576,724

1,409,529

30,74631,14921,881

11,688

9,452

255,641

Subtotal

225,983

236,020

88,322

84,77094,814

1,878,964

Total construction projects¥347,556¥346,130¥179,382¥165,973¥179,940$2,889,798

Overseas10Revenue from the civil engineering category accounted for ¥121,573 million (US$1,010,834 thousand), or 35.0% of total revenue
from construction projects, with domestic projects contributing ¥113,852 million (US$946,637 thousand), or 93.7%.
The government sector contributed ¥77,095 million (US$641,016 thousand), or 67.7%, of total domestic civil engineering
revenue, while private-sector civil engineering revenue amounted to ¥36,757 million (US$305,621 thousand), or 32.3% of total
domestic civil engineering revenue. Overseas civil engineering revenue reached ¥7,721 million (US$64,197 thousand),equivalent to 6.3% of total revenue in the civil engineering category.
Revenue from the building construction category totaled ¥225,983 million (US$1,878,964 thousand), or 65.0% of total
construction revenue. Domestic projects accounted for ¥195,237 million (US$1,623,323 thousand), or 86.4%.
The government sector contributed ¥25,713 million (US$213,794 thousand), or 13.2%, of total domestic building
construction revenue, while private-sector building construction revenue amounted to ¥169,524 million (US$1,409,529 thousand),or 86.8%, of total domestic building construction revenue. Overseas building construction revenue reached ¥30,746 million(US$255,641 thousand), equivalent to 13.6% of total revenue in the building construction category.
Total overseas construction revenue reached ¥38,467 million (US$319,838 thousand) and accounted for 11.1% of total
construction revenue. Civil engineering projects accounted for 20.1% of this total, and building construction for 79.9%.
Thousands of
U.S. dollars

Millions of yen
Orders Received
Civil engineering

2015

2014

2013

2012

2011

2015

¥167,060¥107,666¥ 92,395¥ 87,212¥ 61,521$1,389,041

Building construction

232,248

226,094

94,55689,51380,133

1,931,055

Total construction projects¥399,308¥333,760¥186,951¥176,725¥141,654$3,320,096

Orders received for construction projects during fiscal 2015 amounted to ¥399,308 million (US$3,320,096 thousand). Overseas
work contributed 9.1% of orders in the construction category. Civil engineering orders amounted to ¥167,060 million(US$1,389,041 thousand), or 41.8% of total construction orders. Building construction orders amounted to ¥232,248 million(US$1,931,055 thousand), which is equivalent to 58.2% of total construction orders.
Thousands of
U.S. dollars

Millions of yen
Year-end Backlog
Civil engineering

2015

2014

2013

2012

2011

2015

¥166,623¥121,099¥114,655¥113,278¥107,382$1,385,408

Building construction

184,297

177,794

69,65263,45458,887

1,532,361

Total construction projects¥350,920¥298,893¥184,307¥176,732¥166,269$2,917,769

Order backlog for construction projects at the end of fiscal 2015 amounted to ¥350,920 million (US$2,917,769 thousand), withcivil engineering work accounting for ¥166,623 million (US$1,385,408 thousand), or 47.5%, and building construction for¥184,297 million (US$1,532,361 thousand), or 52.5%.

11

Consolidated Balance Sheets
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
March 31, 2015 and 2014

Thousands of
U.S. dollars(Note 1)Millions of yen
2015

2015

2014

AssetsCurrent assets:
Cash and time deposits (Notes 4 and 24)¥ 79,661¥ 70,774$ 662,351

Marketable securities (Notes 7 and 24)

0

0

2

Receivables (Note 24):
7,920

6,999

65,852

101,068

104,298

840,342

Inventories (Notes 5 and 8)

10,918

9,919

90,778Advances paid

5,874

5,713

48,840

Deferred tax asset (Note 18)

1,695

4,095

14,093

Other (Note 7)

8,739

4,226

72,662

(11)

(55)

(91)

215,864

205,969

1,794,829

Land

18,89819,576

157,130

Buildings and structures

17,487

18,156145,398

Machinery and equipment

8,464

8,306

70,375

274

594

2,278

45,123

46,632375,181Less accumulated depreciation(17,995)(17,921)(149,622)

Net property and equipment

27,12828,711

225,559

20,247

15,361

168,346

Investments in unconsolidated subsidiaries and affiliates

217

197

1,804

Long-term loans receivable (Note 7)

638

744

5,305

Deferred tax asset (Note 18)

1,503

3,836

12,497

Other (Note 7)

6,134

6,084

51,002

Notes
Accounts

Less allowance for doubtful accounts
Total current assets

Property and equipment (Notes 7 and 13):

Other

Investments and other assets:
Investment securities (Notes 3, 7 and 24)

Less allowance for doubtful accounts(2,011)(256)(16,721)

Total investments and other assets

26,72825,966222,233¥269,720¥260,646$2,242,621

Total assets
See accompanying notes.

1212Thousands of
U.S. dollars(Note 1)Millions of yen
2015

2014

2015

¥ 12,654¥ 17,480$ 105,213

7,097

8,822

59,009

351

326

2,918

Notes

28,162

29,764

234,156

Accounts

70,326

72,264

584,734

Income taxes payable

3,856

2,651

32,061

Advances received (Note 16)

31,426

26,527261,296

Liabilities and Net Assets
Current liabilities:
Short-term loans payable (Notes 6 and 24)
Current maturities of long-term loans payable (Notes 6 and 24)
Current portion of bonds (Notes 6 and 24)
Payables (Note 24):

Accrued expenses
Provision for losses on construction contracts (Note 8)
Other
Total current liabilities

408

327

3,393

4,408

3,053

36,651

19,99017,229166,210

178,678

178,443

1,485,641

Long-term liabilities:
833

846

6,926

Long-term loans payable, less current maturities (Notes 6 and 24)

12,753

11,945106,036

Net defined benefit liability (Note 17)

11,95013,94499,360

Provision for environmental spending

295

322

2,453

Deferred tax liability (Note 18)

72

74

599

Other

518

691

4,306

26,421

27,822

219,680

12,00012,00099,776

Capital surplus

15,001

15,010124,728

Retained earnings

33,366

27,604277,426

(68)

(95)

(565)

60,29954,519501,365
33,392

Bonds (Notes 6 and 24)

Total long-term liabilities

Net assets (Notes 20 and 21):
Shareholders’ equity:
Common stock

Authorized - 400,000,000 shares
Issued – 185,209,189 shares

Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income:

4,016

954

Deferred gains or losses on hedges

(7)

2

(58)

Foreign currency translation adjustment

270

130

2,245

Accumulated remeasurements of defined benefit plans(691)(1,855)(5,746)

Total accumulated other comprehensive income

3,588

(769)

29,833

15

22

124

Valuation difference on available-for-sale securities

Share subscription rights
Minority interests

719

609

5,978

Total net assets

64,621

54,381

537,300¥269,720¥260,646$2,242,621

Total liabilities and net assets

13

13

Consolidated Statements of Income
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

Thousands of
U.S. dollars(Note 1)Millions of yen
2015

2014

2015

Construction¥355,069¥357,474$2,952,266

Other activities

14,634

13,743

121,676369,703371,217

3,073,942

Construction

321,466

331,365

2,672,869

Other activities

12,225

11,445

101,646

333,691

342,8102,774,515

36,012

28,407

299,427

17,494

16,329145,456

18,51812,078

153,971

Interest and dividends income

286

322

2,378

Foreign exchange gain

658

429

5,471

Interest expense

(884)

(980)

(7,350)Commission fee

(159)

(198)

(1,322)―

10,090

―

(216)

(292)

(1,796)

Revenues (Notes 10 and 22):

Cost of sales (Notes 11 and 22):

Gross profit
Selling, general and administrative expenses (Notes 12 and 22):
Operating income
Other income (expenses):

Gains on bargain purchase
Dividends distribution from overseas business interest
Gain on sales of noncurrent assets (Note 14)

18

13

150

Loss on sales of noncurrent assets (Note 15)

(489)

(262)

(4,066)

(319)

(5)

(2,652)(1,750)―(14,551)―

Loss on retirement of noncurrent assets
Provision for allowance for doubtful accounts
Impairment loss (Note 13)

―

(72)

Merger expenses

―

(150)

―

(144)

(222)

(1,198)Other, net(2,999)8,673(24,936)

15,51920,751129,035

Current

5,472

3,440

45,498Deferred

2,784

852

23,148

8,256

4,292

68,646

7,263

16,45960,389

Income before income taxes
Income taxes (Note 18):

Income before minority interest
Minority interests in income of consolidated subsidiaries
Net income

23

45

191

¥7,240¥16,414$60,198
U.S. dollars

Yen
2015

(Note 1)
2015

2014

Per share amounts (Note 23):
Net income
Basic¥39.17¥96.47$0.33

Diluted

39.12

88.59

0.33

8.00

5.00

0.07

Cash dividends applicable to the year
Common stock
See accompanying notes.

1414

Consolidated Statements of Comprehensive Income
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

Thousands of
U.S. dollars(Note 1)Millions of yen
2015
Income before minority interest

2015

2014

¥ 7,263¥16,459$60,389

25,460

Other comprehensive income
3,062

710

Deferred gains or losses on hedges

(8)

2

(67)

Foreign currency translation adjustment

227

208

1,887

Remeasurements of defined benefit plans

1,164

―

9,678

Valuation difference on available-for-sale securities

4,445

920

36,958

11,70817,37997,347

Comprehensive income attribute to owners of the parent

11,59817,25796,433Comprehensive income attribute to minority interests

110

122

914

Total other comprehensive income (Note 19)
Comprehensive income
Comprehensive income attribute to:

See accompanying notes.

15

15

Consolidated Statements of Changes in Net Assets
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

Millions of yen

Balance at April 1, 2013

Shareholders’ equity

Common stockandpreferred stock

CapitalsurplusRetainedearnings¥12,000¥ 9,007¥11,665

TreasuryStock¥ (98)

16,414

Net income(475)

Cash dividends paid
(3,114)

Disposal of treasury stock

3,125
(2)

Acquisition of treasury stock
Redemption of fractional(0)

preferred stock

9,117

Increase by merger(3,120)Net changes in items otherthan shareholders’ equity
Balance at April 1, 2014

¥12,000¥15,010¥27,604

¥(95)

7,240

Net income(1,478)Cash dividends paid
(9)

Disposal of treasury stock

31(4)

Acquisition of treasury stock
Net changes in items otherthan shareholders’ equity
Balance at March 31, 2015

¥12,000¥15,001¥33,366¥(68)

Millions of yen
Accumulated other comprehensive income
Accumulated
Valuation
Foreign
Deferred gains
remeasurements ofdifference on
currency
or losses on
defined benefit
available-for-saletranslation
hedgesplans
securities
adjustment¥244

Balance at April 1, 2013

―

―

―

Share
subscription
rights¥26

Minority
interests―¥32,844
16,414

Net income(475)

Cash dividends paid
Disposal of treasury stock

11

Acquisition of treasury stock(2)

Redemption of fractional(0)

preferred stock

5,997

Increase by merger
Net changes in items otherthan shareholders’ equity
Balance at April 1, 2014

¥

710

2

130

(1,855)

(4)

609

(408)

954

¥2

¥130

¥(1,855)

¥22

¥609

¥54,381Net income

7,240

Cash dividends paid

(1,478)

Disposal of treasury stock

22

Acquisition of treasury stock(4)

Net changes in items otherthan shareholders’ equity
Balance at March 31, 2015

16

Total

3,062

(9)

140

1,164

(7)

110

4,460

¥4,016¥(7)¥270¥(691)¥15¥719¥64,621

16

Thousands of U.S. dollars (Note 1)
Shareholders’ equity

Balance at April 1, 2014

Common stock

CapitalsurplusRetainedearnings$99,776$124,802$229,517

Net income

60,198Cash dividends paid

(12,289)(74)

Disposal of treasury stock

Treasurystock$(790)

258(33)

Acquisition of treasury stock
Net changes in items otherthan shareholders’ equity
Balance at March 31, 2015

$99,776$124,728$277,426$(565)

Thousands of U.S. dollars (Note 1)
Accumulated other comprehensive income
Accumulated
Valuation
Foreign
Deferred gains
remeasurements
difference on
currencyorlossesonof defined
available-for-saletranslation
hedgesbenefit planssecurities
adjustment
Balance at April 1, 2014

$7,932$17$1,081$(15,424)

Share
subscription
rights$183

Minority
interests$5,064

Total$452,158

Net income

60,198Cash dividends paid

(12,289)

Disposal of treasury stock184

Acquisition of treasury stock(33)

Net changes in items otherthan shareholders’ equity
Balance at March 31, 2015

25,460

(75)

1,164

9,678

(59)

914

37,082$33,392$(58)$2,245$ (5,746)$124$5,978$537,300

See accompanying notes.

17

17

Consolidated Statements of Cash Flows
HAZAMA ANDO CORPORATION and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

Millions of yen
2015

2014

Thousands of
U.S. dollars(Note 1)
2015

Cash flows from operating activities:
Income before income taxes
Adjustment to reconcile income before income taxes to net
cash provided by operating activities:
Depreciation and amortization
Impairment loss
Gain on bargain purchase
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in retirement and severance benefits
Increase (decrease) in net benefit defined liability
Decrease (increase) in prepaid pension cost
Interest and dividends income
Interest expense
Foreign exchange loss (gain)
Loss (gain) on valuation of investment securities
Loss (gain) on sale of property, plant and equipment
Changes in assets and liabilities:
Increase (decrease) in provision for merger expenses
Decrease (increase) in notes and accounts receivable
Decrease (increase) in costs on uncompleted construction contracts
Decrease (increase) in other inventories
Decrease (increase) in advances paid
Increase (decrease) in notes and accounts payable
Increase (decrease) in advances received
Increase (decrease) in deposit received
Increase (decrease) in consumption tax payable
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Purchase of marketable securities and investment securities
Proceeds from sales of marketable securities and investment securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments of loans receivableCollection of loans receivable
Proceeds from withdrawal of investments in silent partnership
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of convertible bonds
Cash dividends paid
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase cash and cash equivalents resulting from merger
Increase cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at end of year (Note 4)
See accompanying notes.

18

18¥15,519¥20,751$129,035

1,081
―
―
1,711
―
(2,000)―(286)
883(1,254)
1
471

1,212
72
(10,090)(1,120)(14,477)
13,944
3,165
(322)
980
(219)
70
249

8,988
―
―
14,226―(16,629)―(2,378)
7,342(10,427)
8
3,916

―
2,386
(1,337)338(161)(3,575)
4,907
2,245(2,845)
2,690
20,774271(797)(4,532)
15,716(1,111)
2,476
3,195
2,274
(2,186)(11,053)
1,729
(213)
2,642
(1,527)
10,441257(949)(2,285)
7,464―
19,839(11,117)
2,811(1,339)(29,725)40,80018,666(23,655)
22,367
172,7282,253(6,627)(37,681)130,673(1,034)
22
(514)
335
(6)
112
401
550
(134)

(54)
159
(753)
2,478
(38)
104
1,792
(95)
3,593

(8,597)183(4,274)
2,785
(50)
931
3,334
4,574
(1,114)(4,826)
8,831(9,749)375(364)(1,478)(279)(7,490)1,441
9,533
70,025――¥79,558

1,301
10,121(10,935)
780
(598)
(475)
(248)
(54)
678
11,681
32,65922,441
3,244¥70,025(40,126)
73,426(81,059)
3,118(3,027)(12,289)(2,320)(62,277)
11,981
79,263582,232――$661,495

Notes to Consolidated Financial Statements
HAZAMA ANDO CORPORATION- and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of HAZAMA ANDO CORPORATION (“the Company”) and its
consolidated subsidiaries have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments
and Exchange Law and its related accounting regulations, and in conformity with accounting principles generally accepted inJapan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements of International
Financial Reporting Standards.
The accompanying consolidated financial statements have been restructured and translated into English with some expanded
descriptions from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP and filedwith the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange
Law. Some supplementary information included in the statutory Japanese language consolidated financial statements, but notrequired for fair presentation, is not presented in the accompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside
Japan, using the prevailing exchange rate at March 31, 2015, which was ¥120.27 to U.S. $1.00. The convenience translations
should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be,converted into U.S. dollars at this or any other rate of exchange.
2. Summary of Significant Accounting Policies(1) Consolidation
The consolidated financial statements include the accounts of the Company and its significant subsidiaries (“the Companies”).
All significant intercompany transactions and unrealized profits and losses among the Companies have been eliminated inconsolidation.
All companies are required to consolidate all significant investees, which are controlled through substantial ownership ofmajority voting rights or existence of certain conditions. Investments in affiliates over which the Company has the ability to
exercise significant influence over operating and financial policies of the investees, are accounted for by the equity method.
Investments in remaining unconsolidated subsidiaries and affiliates, which have immaterial effect on the consolidated
financial statements, are accounted for at cost. Such investments are adjusted for any non-recoverable diminution in value, andincome from these unconsolidated subsidiaries and affiliates is recognized only when the Companies receive dividends
therefrom.
(2) Revenue and cost recognition
When the outcome of construction contracts can be estimated reliably, the percentage-of-completion method (cost-to-cost method
for the estimated progress) is mainly applied. Otherwise the completed-contract method is applied.
(3) Foreign currency translation
Revenues and expenses are translated at the rates of exchange prevailing when transactions are made. Assets and liabilities
denominated in foreign currencies are generally translated at the rates of foreign exchange prevailing at the balance sheet date
and the resulting translation gains or losses are included in earnings.
(4) Cash and cash equivalents
Cash and cash equivalents include cash on hand, highly liquid investments with maturity of three month or less from the purchasedate. See Note 4 as to a reconciliation of cash and cash equivalents reported in the consolidated statements of cash flows withcash and time deposits reported in the consolidated balance sheets.
(5) Allowance for doubtful accounts
To prepare for credit loss on receivables, collectability of normal receivables is estimated by applying the historical overall credit
loss rates, and collectability of doubtful receivables is analyzed individually and the estimated uncollectible amount is recorded.
(6) Inventories
Inventories are stated at cost as determined on a specific project basis.

19

(7) Securities
Securities of the Companies are classified into one of the following categories based on the intent of holding, and are accounted
for as follows:(a) Debt securities that are intended to be held to maturity (“held-to-maturity debt securities”) are stated at amortized cost.
(b) Securities other than trading securities, held-to-maturity debt securities and shares issued by unconsolidated subsidiaries andaffiliated companies not on the equity method (“available-for-sale securities”) are stated at fair market values, if their fair market
values are readily available. Unrealized gains and losses on these securities are reported, net of applicable income taxes, as aseparate component of net assets. Realized gains and losses on sale of these securities are computed using moving-average costs.
Available-for-sale securities with no available fair market values are stated at moving-average cost.
(8) Derivatives and hedging transactions
Derivative financial instruments are stated at fair value and changes in the fair value are recognized as gains or losses unlessderivative financial instruments are used for hedging purposes.
If derivative financial instruments are used as hedges and meet certain hedging criteria, the Companies defer recognition ofgains or losses resulting from changes in fair value of derivative financial instruments until the related losses or gains on thehedged items are recognized.
If a forward foreign exchange contract is executed to hedge an existing foreign currency receivable or payable,(a) the difference, if any, between the Japanese yen amount of the hedged foreign currency receivable or payable translated using
the spot rate at the inception date of the contract and the book value of the receivable or payables is recognized in the
consolidated statements of operations in the period which includes the inception date, and(b) the discount or premium on the contract (that is the difference between the Japanese yen amount of the contract translatedusing the contracted forward rate and that translated using the spot rate at the inception date of the contract) is recognized over
the term of the contract.
Also, if interest rate swap contracts are used as hedge and meet certain hedging criteria, the net amount to be paid or received
under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities for which the swap
contract was executed.
The Companies use forward foreign currency contracts and interest rate swap contracts as derivative financial instruments
only for the purpose of mitigating future risks of fluctuation of foreign currency exchange rates and interest rate increases.
The Companies evaluate hedge effectiveness by comparing the cumulative changes in cash flows from or the changes in fairvalue of hedged items and the corresponding changes in the hedging derivative instruments.
(9) Property and equipment, depreciation
Property and equipment are carried at cost. Depreciation of building is mainly provided on the straight-line method, anddepreciation of other property and equipment is provided on the declining-balance method over estimated useful lives, exceptthat the declining-balance method is applied to buildings of one consolidated subsidiary.
Expenditures for significant renewals and betterments are capitalized, while expenditures for normal repairs and maintenanceare charged to expense when incurred.
(10) Provision for losses on construction contracts
To prepare for future losses related to construction contracts, the amount of estimated losses is recorded for the construction
when losses are probable to occur and such losses can be reasonably estimated.
(11) Provision for environmental spending
To prepare for the treatment of Polychlorinated Biphenyl waste, which is obligated by the “Act on Special Measures Concerning
Promotion of Proper Treatment of PCB Waste,” the estimated cost for treatment is recorded.

20

(12) Retirement and severance benefits
The retirement benefit obligation is calculated by allocating the estimated retirement benefit amount to periods until the end of
the current fiscal year on a benefit formula basis. Differences arising from changes in accounting standards have been amortizedin equal amounts over 15 years. Prior service costs are recognized in expenses using the straight-line method over period lessthan the average of the estimated remaining service lives (3 years) commencing with present period. Actuarial differences arerecognized in expenses using the straight-line method over period less than the average of the estimated remaining service lives(9 years) commencing with the succeeding period.
Upon the split-up, the Company succeeded differences arising from changes in accounting standards and actuarial
differences, and the above periods of amortization include the periods before split-up.
The Company has calculated retirement and severance benefits and retirement benefit costs under certain lump-sum payment
plans using simplified method.
(13) Lease transactions(a) Finance leases which transfer ownership of leased assets
Leased assets arising from finance lease transactions which transfer ownership to the lessee are depreciated by the same method
as the depreciation of fixed assets.
(b) Finance leases which do not transfer ownership of leased assets
Leased assets arising from finance lease transactions which do not transfer ownership to the lessee are depreciated to a residual
value of zero by the straight-line method using the contract term as useful life.
(14) Income taxes
The Companies recognize tax effects of temporary differences between the carrying amounts of assets and liabilities for tax andfinancial reporting purposes. The provision for income taxes is computed based on the pretax income included in the
consolidated statements of operations. The asset and liability approach is used to recognize deferred tax assets and liabilities forthe expected future tax consequences of temporary differences.
(15) Appropriations of retained earnings
Appropriations of retained earnings are reflected in the accompanying consolidated financial statements for the following year
upon the shareholders’ meeting approval.
(16) Amounts per share
Basic net income per share is based on the weighted average number of common stock outstanding during the period, and diluted
net income per share reflects the potential dilution that could occur if preferred stock were converted into common stock or sharesubscription rights were exercised.
Cash dividends per share represent amounts applicable for the respective years on accrual basis.
A net asset per share is reported at the amounts of ¥345.56 (US$2.87) and ¥290.96 at March 31, 2015 and 2014, respectively.
(17) Change in accounting policies with amendment of respective law or regulation that are not distinguishable from change inaccounting estimates
The company adopted article 35 of the “Accounting Standard for Retirement Benefits” (ASBJ Statement No.26, May 17,
2012(hereinafter “Statement No.26”)) and article 67 of the “Guidance on Accounting Standard for Retirement Benefits”(ASBJ
Guidance No.25 , March 26 , 2015 (hereinafter , “Guidance No.25”)) from the current fiscal year , and have changed thedetermination of retirement benefit obligations and current service costs.
In addition, the Company has changed the method of attributing expected benefit to periods from a straight-line basis to a benefit
formula basis and the method of determining the discount rates from the discount rate based on the approximate number of yearsof the average remaining service period of employees to a single weighted average discount rate that reflects the expected
payment period and the amount for each expected payment period of retirement benefits.
This change has no impact on the consolidated financial statements.

21

3. Securities(1) The following tables summarize book values and fair values of held-to-maturity debt securities at March 31, 2015 and 2014.
Millions of yen
Book values
Type
Securities with fair values exceeding book values

2015
Fair values

DifferenceBook values

2014
Fair values

Difference

Bonds

¥389

¥437

¥48

¥426

¥461

¥35

Sub total

389

437

48

426

461

35
¥0

Securities with fair values not exceeding book values
Bonds

¥―

¥―

¥―

¥7

¥7

Sub total

―

―

―

7

7

0

¥389

¥437

¥48

¥433

¥468

¥35

Total

Thousands of U.S. dollars
Book values
Type
Securities with fair values exceeding book values

2015
Fair values

Difference

Bonds$3,234$3,633$399

Sub total

3,234

3,633

399
$―

Securities with fair values not exceeding book values
Bonds

$―

$―

Sub total―――$3,234$3,633

$399

Total

(2) The following tables summarize book values and acquisition costs of available-for-sale securities at March 31, 2015 and2014:
Millions of yen
Book values
Type
Securities with book values exceeding acquisition costs

2015
Acquisition
costs

DifferenceBook values

2014
Acquisition
costs

Difference

Equity securities¥15,502¥ 9,388¥6,114¥8,948¥7,064¥1,884

Sub total

15,502

9,388

6,114

8,948

7,064

1,884
¥(436)

Securities with book values not exceeding acquisition costs
Equity securities¥963¥1,315¥(352)¥2,184¥2,620Sub total

963

1,315

(352)

2,184

2,620

(436)

¥16,465¥10,703¥5,762¥11,132¥9,684¥ 1,448

Total

Thousands of U.S. dollars
Book values

Type
Securities with book values exceeding acquisition costs

2015
Acquisition
costs

Difference

Equity securities$128,893$78,057$50,836

Sub total

128,893

78,05750,836$(2,927)

Securities with book values not exceeding acquisition costs
Equity securities$8,007$10,934

Sub total

8,007

10,934(2,927)$136,900$88,991$47,909

Total

22

(3) Total sales, related gains and losses of available-for-sale securities are as follows:
Thousands of
U.S. dollars
2015

Millions of yen
Type

2015

2014

Equity securities
¥22

¥14

$183

Related gains

1

5

8

Related losses

0

0

0

Sales

(4) Impairment losses on securities recognized for the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars
2015

Millions of yen
Type

2015

2014

Available-for-sale securities

¥1

¥70

$8

Total

¥1

¥70

$8

4. Cash and Cash Equivalents(1) Cash and cash equivalents reported in the consolidated statements of cash flows at March 31, 2015 and 2014 were reconciledwith cash and time deposits reported in consolidated balance sheets as follows:
Thousands of
U.S. dollars
2015

Millions of yen
2015
Cash and time deposits¥70,774$662,351

(103)

(749)

(856)

¥79,558¥70,025$661,495

Time deposits with maturities of exceeding
3-month from the date of acquisition
Total: Cash and cash equivalents

2014¥79,661

5. Inventories
Inventories at March 31, 2015 and 2014 consisted of the following:
Millions of yen
2015

2014

Thousands of
U.S. dollars
2015

Accumulated Costs on uncompleted construction contracts¥6,528¥ 5,191

Others

4,390

4,728

$54,278
36,500Total¥10,918¥ 9,919$90,778

23

6. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans are represented mainly by loan on deed. The average interest rates of short-term loans were 1.8 % and1.9% at March 31, 2015 and 2014.
Bonds at March 31, 2015 and 2014 are summarized below:
Thousands of
U.S. dollars
2015

Millions of yen
2015

2014

Long-term debt from bonds, insurance companies and others due serially through 2021:¥1,184¥1,172Less current maturities

(351)

(326)

(2,918)

Total

¥ 833

¥ 846

$6,926

Unsecured 0.5 %$9,844Long-term loans payable at March 31, 2015 and 2014 are summarized below:
Thousands of
U.S. dollars
2015

Millions of yen
2015

2014

Long-term debt from banks, insurance companies and others due serially through 2021:
Secured 2.3 % to 2.9 %¥15,810¥4,282

Unsecured 1.2 % to 2.9 %

4,040

16,485$131,454
33,591Less current maturities(7,097)(8,822)(59,009)

Total¥12,753¥11,945$106,036

Repayment schedules for bonds are summarized below:

2016

¥ 351

Thousands of
U.S. dollars$2,918

2017

351

2,918

2018

291

2,420

2019

153

1,272

2020

38

316

2021~

0

0

Total

¥1,184$9,844Years ending March 31,

Millions of yen

Repayment schedules for the long-term loans payable are summarized below:

2016¥ 7,097

Thousands of
U.S. dollars$ 59,009

2017

4,430

36,834

2018

3,175

26,399

2019

2,287

19,015

2020

2,204

18,325

2021~

657

5,463

Total

¥19,850$165,045

Years ending March 31,

Millions of yen

As is customary in Japan, long-term and short-term bank loans are made under general agreements which provide that additional
security and guarantees for present and future indebtedness will be given under certain circumstances at the request of the banks,
and that any collateral furnished will be applicable to all indebtedness due to that bank.
In addition, the agreements provide that the bank has the right to offset cash deposited against any long-term and short-term
debt that become due and in case of default and certain other specified events, against all other debts payable to the bank. Suchrights have never been exercised by the bank.

24

7. Pledged Assets
The following assets were pledged to secure short-term bank loans, long-term debt and certain other obligation at March 31, 2015
and 2014:
Thousands of
U.S. dollars

Millions of yen
2015

2015

2014
¥0

¥0

$2

Property and equipment

15,993

16,737

132,976

Investment securities

750

733

6,235

Other assets

151

158

1,256

¥16,894¥17,628$140,469

Marketable securities

Total

8. Estimated loss on uncompleted construction contracts
Amount of costs on uncompleted construction contracts for which a construction loss is anticipated and reserve for expected
losses on construction contracts in process are presented without being offset.
Thousands of
U.S. dollars

Millions of yen
2015

Amount of costs on uncompleted construction contracts for which aconstruction loss is anticipated, matching with reserve for expected
losses on construction contracts in process

2015

2014
¥887

¥167

$7,375

9. Contingent Liabilities
At March 31, 2015 and 2014, the Companies had the following contingent liabilities for loan guaranteed:
Thousands of
U.S. dollars
2015

Millions of yen
2015

2014

Guarantees for loan
¥ ―

¥94

Loans of employees

3

3

25

Total

¥3

¥97

$25

Pressance Corporation Co.,Ltd.

$ ―10. Revenues from construction contracts recognized by the percentage-of-completion method
Revenues from construction contracts recognized by the percentage-of-completion method for the fiscal year ended March 31,
2015 and 2014 were ¥327,354 million (US$2,721,826 thousand) and ¥323,156 million, respectively.
11. Provision for losses on construction contracts included in cost of sales of construction contracts
Provision for losses on construction contracts included in cost of sales of construction contracts for the fiscal year ended March
31, 2015 and 2014 were ¥2,543 million (US$21,144 thousand) and ¥2,340 million, respectively.
12. Research and Development Expenses
Research and development expenses included in manufacturing costs, and selling, general and administrative expenses amounted
to ¥1,829 million (US$15,207 thousand) and ¥1,345 million for the years ended March 31, 2015 and 2014, respectively.

2513. Impairment Loss
No impairment loss is recognized for the year ended March 31, 2015.
Impairment loss for the year ended March, 31, 2014 is as follows:
Location

Use

Type of assets

Ibaraki prefecture

Idle asset

Land

Other

Idle asset

Land

Millions of yen
¥70
2

Total

¥72

The Companies generally conduct grouping of its business assets by location and idle assets by each property unit to measure
impairment loss. As the above assets become idle assets in the subject fiscal year, the book value was reduced to recoverable
amount, and such reduction was recorded as an impairment loss in the extraordinary loss caption. The recoverable amounts ofthese assets were measured based on net selling price, and were mainly evaluated based on appraisal value.
14. Gain on Sales of Noncurrent Assets
Gain on sales of noncurrent assets for the year ended March 31, 2015 and 2014 is as follows:
Thousands of
U.S. dollars

Millions of yen
Type of assets

2015

2015

2014

Land and Buildings

¥9

¥7

Other

9

6

$75
75

Total

¥18

¥13

$150

15. Loss on Sales of Noncurrent Assets
Loss on sales of noncurrent assets for the year ended March 31, 2015 and 2014 is as follows:
Thousands of
U.S. dollars

Millions of yen
Type of assets

2015

2015

2014
¥489

¥262

Other

0

―

0

Total

¥489

¥262

$4,066

Land and Buildings$4,066

16. Advances Received
As is customary in Japan, the Companies normally receive payments from customers on a progress basis in accordance with theterms of the respective construction contracts.

2617. Net Defined Benefit Liability
The Company and its consolidated subsidiaries have adopted the lump-sum payment plan and the retirement benefit pension planas their defined benefit plan.
The Company has set up a retirement benefit trust fund due to its merger with ANDO Corporation.
The Company and its consolidated subsidiaries have calculated net defined benefit liability and retirement benefit costs undercertain lump-sum payment plans using simplified method.
Although the Company had adopted a multiple of retirement benefit plans due to its merger with ANDO Corporation as at
April 1, 2013, the Company integrated these retirement benefit plans and migrated into defined benefit plans as at April 1, 2014.
(a)Defined benefit plans

Thousands of
U.S. dollars
2015

Millions of yen
2015

2014

(1) Movement in retirement benefit obligations¥30,596¥17,599―

13,304―Service cost

1,362

1,391

11,325Interest cost

306

294

2,544

Actuarial loss (gain)

49

977

407

Past service cost―

(1,205)―

Benefits paid

(2,001)(1,764)(16,637)

Balance at March 31, 2015 and 2014

¥30,312¥30,596$252,033$149,597

Balance at April 1, 2014 and 2013
Increase by merger$254,394(2) Movement in plan assets¥17,992¥9,427

Increase by merger

―

7,542

―

Expected return on plan assets

205

194

1,704

Balance at April 1, 2014 and 2013

Actuarial loss (gain)

1,532

588

12,738Contributions paid by the employer

1,256

1,312

10,443

Benefits paid

(1,202)(1,071)(9,994)

Balance at March 31, 2015 and 2014

¥19,783¥17,992$164,488$11,133(3) Movement in simplified method¥1,339¥1,140

Increase from newly consolidated subsidiary

―

44

―

Retirement benefit costs

267

284

2,220

Benefits paid

(196)

(126)

(1,630)

11

(3)

92

¥1,421¥1,339$11,815

Balance at April 1, 2014 and 2013

Other
Balance at March 31, 2015 and 2014

(4) Reconciliation from retirement benefit obligations and plan assets to liability (asset) for retirement benefits
Funded retirement benefit obligation¥30,312¥30,596$252,033

Plan assets(19,783)(17,992)(164,488)

10,52912,60487,545

Unfunded retirement benefit obligation

1,421

1,340

11,815

Total net liability (asset) for retirement benefits at March 31, 2015 and 2014

11,95013,94499,360Net defined benefit liability

11,95013,94499,360Total net liability (asset) for retirement benefits at March 31, 2015 and 2014

¥11,950¥13,944$99,360(Note) Retirement benefit obligation under the lump-sum payment plan is included in funded retirement benefit obligation because a retirement
benefit trust has been established for lump-sum payment plans. In addition, the retirement benefit trust that has been established for the lump-sum
payment plan is included in plan assets.

27

Thousands of
U.S. dollars
2015

Millions of yen
2015

2014

(5) Retirement benefit costs
Service cost

¥1,362¥1,391

Interest cost

306

294

2,544

Expected return on plan assets

(205)

(194)

(1,704)

Transition obligations amortization

335

334

2,785

Net actuarial loss amortization

468

436

3,891

Past service costs amortization

(426)

(665)

(3,542)Retirement benefit expenses by simplified method

267

285

2,220

¥2,107¥1,881$17,519

Transition obligations

¥336

¥ ―

$ 2,794

Net actuarial loss

1,951

―

16,222

Past service costs

(426)

―

(3,542)¥1,861¥ ―$15,474

¥ ―

¥ 336

$ ―

¥1,345

3,296$11,183

Total retirement benefit costs for the fiscal year ended March 31, 2015 and 2014

$11,325(6) Remeasurements of defined benefit plans

Total adjustments for retirement benefit(7) Accumulated remeasurements of defined benefit plans
Transition obligations that are yet to be treated
Actuarial gains and losses that are yet to be recognized

(323)

(750)

(2,685)¥1,022¥ 2,882$8,498

Past service costs that are yet to be recognized
Total accumulated adjustments for retirement benefit(8) Plan assets
1. Plan assets comprise:
Bonds

38%

Equity securities

24

General account assets

16

Cash and deposits

3

Other

19

Total

100%

(Note) The retirement benefit trust that has been established for the corporate pension plan accounts for 13% and 12% of the total plan assets forthe year ended March 31, 2015 and 2014.
2. Long-term expected rate of return:Current and target asset allocations, historical and expected returns on various categories of plan assets have been considered in determining
the long-term expected rate of return.
(9) Actuarial assumptions
The principal actuarial assumptions at March 31, 2015 (expressed as weighted averages) follow:
Discount rate

1.0%

Long-term expected rate of return

1.1%(10) The Contributions required to be made to the defined contribution plan of consolidated subsidiaries, which amount is ¥3 million (US$29
thousand) for the previous fiscal year ended March 31, 2014, has become not applicable as a result of the integration of the defined contribution
plan by the merger between consolidated subsidiaries for the fiscal year ended March 31, 2015.

28

28

18. Income Taxes
The Companies were subject to a number of taxes based on income, which, in the aggregate, indicate statutory rate in Japan ofapproximately 35.6% and 38.0% for the years ended March 31, 2015 and 2014.
The following table summarizes the significant differences between the statutory tax rate and the effective tax rate forfinancial statement purposes for the year ended March 31, 2015 and 2014.

Statutory tax rate

2015

2014

35.6%

38.0%

Permanent non-deductible expenses

0.8

2.2

Permanent non-taxable income

(0.7)

(0.7)

Gain on bargain purchase―(18.5)Per capita inhabitant taxes

1.1

0.8

Change in valuation allowance

12.9

(1.1)

Decrease in deferred income tax assets due to tax rate changes

2.5

0.9

Others1.0(0.9)

Effective tax rate

53.2%

20.7%

Significant components of the Companies’ deferred income taxes at March 31, 2015 and 2014 are as follows:
Millions of yen
2015
Deferred income tax assets:
Non-deductible construction costs under thepercentage-of-completion method
Net defined benefit liability

2014

Thousands of
U.S. dollars
2015

¥ ―

¥ 1,505

$ ―

5,023

6,193

41,764

6,875

6,532

57,163Gross deferred income tax assets

11,898

14,23098,927

Less: Valuation allowance(4,461)(2,965)(37,092)

Total deferred income tax assets

7,437

11,26561,835

OthersDeferred income tax liabilities:
Valuation difference on available-for-sale securities

1,743

490

14,492Others

2,568

2,918

21,352

Total deferred income tax liabilities

4,311

3,408

35,844

Net deferred income taxes¥3,126¥7,857$25,991

On March 31, 2015, amendments to the Japanese tax regulations were enacted into law. Based on the amendments, the statutory
income tax rates utilized for the measurement of deferred tax assets and liabilities expected to be settled or realized from April 1,2015 to March 31, 2016 and on or after April 1, 2016 are changed from 35.6% for the fiscal year ended March 31, 2015 to 33.1%
and 32.3%, respectively, at March 31, 2015.
Due to these changes in statutory income tax rates, net deferred tax assets (after deducting the deferred tax liabilities) decreasedby ¥ 244 million ($2,029 thousand) at March 31, 2015, deferred gains or losses on hedges decreased by ¥0 million ($2 thousand),and accumulated adjustments for retirement benefit decreased by ¥34 million ($283 thousand), deferred income tax expense
increased by ¥388 million ($3,226 thousand) and valuation difference on available-for-sale securities increased by ¥178 million($1,480 thousand).

29

19. Comprehensive Income
Amounts reclassified to net income (loss) for the fiscal year ended March 31, 2015 and 2014 that were recognized in othercomprehensive income in the current or previous periods and tax effects for each component of other comprehensive income areas follows:
Thousands of
U.S. dollars
2015

Millions of yen
2015

2014

Valuation difference on available-for-sale securities:¥4,321

¥976

(1)

69

(8)

Sub-total, before tax

4,320

1,045

35,919Tax (expense) or benefit(1,258)(335)(10,459)

Sub-total, net of tax

3,062

710

25,460¥(16)¥4$(133)

3

0

25

(13)

4

(108)

Tax (expense) or benefit

5

(2)

41

Sub-total, net of tax

(8)

2

(67)
$1,887

Increase (decrease) during the year
Reclassification adjustment$35,927

Deferred gains or losses on hedges:
Increase (decrease) during the year
Reclassification adjustment
Sub-total, before tax

Foreign currency translation adjustment:
¥227

¥208

Reclassification adjustment

―

―

―

Sub-total

227

208

1,887

¥1,483―$12,331

378

―

3,142

Sub-total, before tax

1,861

―

15,473Tax (expense) or benefit

(697)

―

(5,795)

Increase (decrease) during the year

Remeasurements of defined benefit plans
Increase (decrease) during the year
Reclassification adjustment

Sub-total, net of tax

1,164

―

9,678

Total other comprehensive income¥4,445¥920$36,958

20. Net Assets
Under the Japanese Corporate Law (“the Law”), the entire amount paid for new shares is required to be designated as common
stock (or preferred stock). However, a company may, by a resolution of the Board of Directors, designate an amount notexceeding one-half of the price of the new shares as additional paid-in capital, which is included in capital surplus in theaccompanying consolidated balance sheets.
Under the Law, in cases where dividend distribution of surplus is made, the smaller of an amount equal to 10% of thedividend or the excess, if any, of 25% of common stock and preferred stock over the total of additional paid-in capital and legal
earnings reserve must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included inretained earnings in the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital could be used to eliminate or reduce a deficit or could becapitalized generally by a resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Law, all additional
paid-in capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings, respectively, which
are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial
statements of the Company in accordance with the Law.

30

21. Consolidated Statements of Changes in Net Assets(1) Common stock and preferred stock issued
Commonstock

Class I
preferredstock
750,000

Number of sharesClass IIpreferredstock
151,224

Class III
preferredstock
875,000

Class IV
preferredstock
250,000

Balance at April 1, 2013

116,356,517

Increase during the year

68,852,672

0

0

0

0

Decrease during the year0

750,000

151,224

875,000

250,000

Balance at April 1, 2014

185,209,189

0

0

0

0

Increase during the year

0

0

0

0

0

0

0

0

0

0

185,209,189

0

0

0

0

Decrease during the year
Balance at March 31, 2015

Detail of increase or decrease during the year ended March 31, 2015 and 2014 was as follows:(Common stock)
Number of shares
2015

Increase by exercising the call option ofClass II preferred stock
Increase by merger
Increase by exercising the call option ofpreferred stock
Total

2014
―

―

―

43,833,139―

25,019,533―

68,852,672(Class I preferred stock)
Number of shares
2015

2014
―

Decrease by retirement of treasury stock

750,000(Class II preferred stock)
Number of shares
2015

2014
―

Decrease by retirement of treasury stock

151,224(Class III preferred stock)
Number of shares
2015

2014
―

Decrease by retirement of treasury stock

875,000(Class IV preferred stock)
Number of shares
2015
Decrease by retirement of treasury stock2014―

250,00031

(2) Treasury stock outstanding(Common stock)
Commonstock

Class I
preferred
stock

Number of sharesClass IIpreferred
stock
0
0

Balance at April 1, 2013

939,23900Increase during the year

10,007,432

750,000

151,224

875,000

250,000

Decrease during the year

10,476,790

750,000

151,224

875,000

250,000

Balance at April 1, 2014

469,881

0

0

0

0

Increase during the year

5,631

0

0

0

0

Decrease during the year

149,836

0

0

0

0

Balance at March 31, 2015

325,676

0

0

0

0

(Details of increase or decrease)(Common stock)
Number of shares
2015

Increase by merger
Increase by purchase of shares less than one unit
Decrease by delivery of treasury stock2014―

10,000,000

5,631

7,432

149,836

10,475,198

―

1,592

Decrease by adding of shares less than one unit

(Class I preferred stock)
Number of shares
2015

2014

Increase by exercising the call option―

750,000

Decrease by retirement of treasury stock―

750,000(Class II preferred stock)
Number of shares
2015

2014

Increase by exercising the call option―

151,224

Decrease by retirement of treasury stock―

151,224(Class III preferred stock)
Number of shares
2015

2014

Increase by exercising the call option―

875,000

Decrease by retirement of treasury stock―

875,000(Class IV preferred stock)
Number of shares
2015

32

Class IV
preferredstockClass III
preferred
stock

2014

Increase by exercising the call option―

250,000

Decrease by retirement of treasury stock―

250,000

22. Segment Information
Effective April 1, 2010, the Company adopted the “Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 17 on March 27, 2009) and the “Guidanceon Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20,
issued on March 21, 2008).
(1) General information about reportable segments
Each reportable segment of the Companies is the business unit of the Companies, which discrete financial information is able toobtain. Reportable segments are reviewed periodically at the Board of Directors meeting in order to determine distribution ofmanagement resources and evaluate business results by each reportable segment.
The Companies mainly operate the construction and construction-related business. Among them the Company, the general
constructor, operates their businesses that is composed of the civil engineering and building construction, and each headquarter
plans and executes on their business strategy of production systems and sales process in Japan and overseas.
Furthermore, consolidated subsidiaries respectively develop their business by cooperating with the Company.
Accordingly, the Companies classify their business operating segments, identified by product and services, into threereportable segments as “Civil engineering segment”, “Building construction segment” and “Consolidated subsidiaries segment”.
The major products and services of each segment are as follows:
Reportable segments

Major products and services

Civil engineering
Building construction
Consolidated subsidiaries

Civil engineering of the Company in Japan and overseas
Building construction of the Company in Japan and overseas
Constructions and sales of construction materials of consolidated subsidiaries(2) Basis of measurement about reported segment profit or loss, segment assets, segment liabilities and other material items
Accounting methods of reported segment are the same as that set forth in “Summary of Significant Accounting Policies”. The
segment profits or losses for each reportable segment are in conformity to the operating income of consolidated statements ofincome. Intersegment transactions and transfers are based on fair market prices.
Assets are not allocated to Civil engineering segment and Building construction segment, since the chief operating decision
maker have no financial information on assets in these segments. However, corresponding depreciation expenses including
amortization of intangible fixes assets are allocated to Civil engineering segment and Building construction segment according to
the reasonable criterion measured by depending on the degree on benefit.

33

(3) Information about reported segment profit or loss, segment assets, segment liabilities and other material items(a) Segment information as of and for the fiscal year ended March 31, 2015 is as follows:
Millions of yen
CivilengineeringYear ended March 31, 2015:

Reportable segments
Building
Consolidated
construction subsidiaries

Sub total

Other

Total

Reconciliations Consolidated

Revenues:¥121,555¥225,975¥18,471¥366,001¥3,702¥369,703

¥ ―

―

0

37,08537,085

105

37,190(37,190)―

121,555

225,975

55,556

403,086

3,807

406,893(37,190)369,703

Segment profit

9,575

10,365

1,393

21,333774

22,107(3,589)18,518Assets

Note 4Note 429,076

173,430

10,084

183,514

86,206

269,720

197

365

201

763

71

834

225

1,059

Note 4Note 4

204

737

77

814

20

834

Outside customers
Intersegment
Total

Other material items:
Depreciation
and amortization
Capital expenditures¥369,703

Thousands of U.S. dollars
Civil
engineeringYear ended March 31, 2015:

Reportable segments
Building
Consolidated
construction subsidiaries

Sub total

Other

Total

Reconciliations Consolidated

Revenues:$1,010,684$1,878,898$153,579$3,043,161$30,781$3,073,942

$ ―

―

―

308,348308,348873

309,221(309,221)―

1,010,684

1,878,898

461,927

3,351,509

31,654

3,383,163(309,221)

3,073,942

Segment profit

79,61386,181

11,582

177,376

6,435

183,811(29,840)

153,971

Assets

Note 4Note 4

241,756

1,442,005

83,845

1,525,850

716,771

2,242,621

Other material items:
Depreciation
and amortization
Capital expenditures

1,638

3,035

1,671

6,344

590

6,934

1,871

8,805

Note 4Note 4

1,696

6,128

640

6,768

166

6,934

Outside customers
Intersegment
Total$3,073,942

Notes:
1. “Other” consisted of mainly research and other activities, which are not included in reportable segment.
2. Reconciliations amounts were as follows:(i) Reconciliations amount of segment profit was to ¥(3,589) million (US$(29,840) thousand), which included ¥(6) million (US$(49)thousand) of intersegment eliminations and others, and ¥(3,583) million (US$(29,791) thousand) of corporate expenses. Corporate
expenses were mainly general and administrative expenses, which are not attributed to reportable segments.
(ii) Reconciliations amount of segment assets was to ¥86,206 million (US$716,771 thousand), which included ¥(15,834) million(US$(131,654) thousand) of intersegment eliminations and others, and ¥102,040 million (US$848,425 thousand) of corporate assets.
Corporate assets were mainly cash and time deposits, investment securities and others, which are not attributed to reportable segments.
3. Segment profit was adjusted to operating income of consolidated statement of operations.
4. As discussed in Note 22. (2), assets are not allocated to Civil engineering segment and Building construction segment, since the chief
operating decision maker have no financial information on assets in these segments. However, for your information, segment assets ofCivil engineering segment and Building construction segment are amounted to ¥144,354 million (US$1,200,249 thousand), and capital
expenditures of these segments are amounted to ¥533 million (US$4,432 thousand).

34

(b) Segment information as of and for the fiscal year ended March 31, 2014 is as follows:
Millions of yen
CivilengineeringYear ended March 31, 2014:

Reportable segments
Building
Consolidated
construction subsidiaries

Sub total

Other

Total

Reconciliations Consolidated

Revenues:
Outside customers¥110,951¥236,027¥20,896¥367,874¥ 3,343¥371,217

¥ ―

―

―

35,57335,573307

35,880(35,880)―

110,951

236,027

56,469403,4473,650

407,097(35,880)

371,217

Intersegment
Total¥371,217

Segment profit

8,171

4,595

1,412

14,178836

15,014(2,936)

12,078Assets

Note 4Note 4

27,625

173,951

10,485

184,436

76,210260,646

197

422

246

865

136

1,001

186

1,187

Note 4Note 4

2,493

6,108

5,943

12,051

3,266

15,317

Other material items:
Depreciation
and amortization
Capital expenditures
Notes:

1. “Other” consisted of mainly research and other activities, which are not included in reportable segment.
2. Reconciliations amounts were as follows:(i) Reconciliations amount of segment profit was to ¥(2,936) million, which included ¥3 million of intersegment eliminations and others,and ¥(2,939) million of corporate expenses. Corporate expenses were mainly general and administrative expenses, which are not
attributed to reportable segments.
(ii) Reconciliations amount of segment assets was to ¥76,210 million, which included ¥(15,352) million of intersegment eliminations andothers, and ¥91,563 million of corporate assets. Corporate assets were mainly cash and time deposits, investment securities and others,
which are not attributed to reportable segments.
3. Segment profit was adjusted to operating income of consolidated statement of operations.
4. As discussed in Note 22. (2), assets are not allocated to Civil engineering segment and Building construction segment, since the chief
operating decision maker have no financial information on assets in these segments. However, for your information, segment assets of Civil
engineering segment and Building construction segment are amounted to ¥146,326 million, and capital expenditures of these segments areamounted to ¥3,615 million.

(4) Related information(a) Information about products and services
Disclosure of information about products and services is omitted, since reportable segments of the Companies areclassified by their products and services.
(b) Information about geographic areas(Revenues)
Revenues information about geographic areas for the year ended March 31, 2015 and 2014 are as follows:
Millions of yen

Geographic Areas
Japan
Other
Total

Thousands of
U.S. dollars
2015

2015

2014

¥328,439¥325,964

41,26445,253343,095¥369,703¥371,217$3,073,942$2,730,847(Tangible fixed assets)
Disclosure of tangible fixed assets information about geographic areas is omitted, since the proportion of tangible fixed
assets in Japan to total tangible fixed assets is over 90%.

35

(c) Information about major customers
Disclosure of information about major customers is omitted, since net sales to no single customer represented 10% or moreof total net sales of the Companies’ consolidated statement of income for the year ended March 31, 2015 and 2014.
(d) Information about impairment loss of fixed assets by reported segment
No impairment loss is recognized for the year ended March 31, 2015.
Impairment loss of fixed assets by reported segment of year ended March 31, 2014 is as follow.
Millions of yen
2014

Impairment loss

Reportable segments
Building
Consolidated
Civil engineering
construction
subsidiaries
¥ ―
¥ ―
¥70

Other
¥ ―

Eliminations
and others
¥2

Total
¥72

23. Amounts per Share of Common Stock
Basis of calculation of basic and diluted net income per share (the “EPS”) for the year ended March 31, 2015 is as follows:
Net income
Year ended March 31, 2015:
Net income

Millions of yen

Weightedaverage
sharesThousands ofsharesEPS
Yen

U.S. dollars¥39.17$0.33¥39.12$0.33¥7,240Net income not available to common shareholders
Cash dividends on preferred stock
Basic EPS-Net income available to common shareholders―¥7,240184,835

Effect of dilution
Cash dividends on preferred stock―

Shares adjusted by share subscription rights―

224¥7,240185,059

Diluted EPS-Net income for computation

Basis of calculation of basic net loss per share (the “EPS”) for the year ended March 31, 2014 is as follows:
Net income
Year ended March 31, 2014:
Net income

Millions of yen

Weightedaverage
sharesThousands ofsharesEPS
Yen¥16,414

Net income not available to common shareholders
Cash dividends on preferred stock
Basic EPS-Net income available to common shareholders―¥16,414170,142

Cash dividends on preferred stock―

14,838

Shares adjusted by share subscription rights―

297¥16,414

185,277¥96.47

Effect of dilution

Diluted EPS-Net income for computation

36¥88.5924. Financial Instruments(1) Status of financial instruments(a) Policies for using financial instruments
The Companies raise funds mainly by borrowings from bank, and restrict temporary surplus funds to the lower risk assets such as
deposits. Derivative transactions are employed for hedging of the risk described below, and never use for speculation.
(b) Detail of financial instruments and the related risks
Notes and accounts receivable are exposed to the credits risks in relation to customers. Foreign currency-dominated notes andaccounts receivable are also exposed to foreign exchange risk.
Investment securities which are mainly share held for keep the relationship with business partners are exposed to market pricefluctuation risk.
Notes and accounts payable are mostly settled within one year.
Borrowing is primarily for working funds. With variable interest rates, it is exposed to interest-rates risk.
Borrowing, notes and accounts payable are also exposed to liquidity risk.
Derivative transactions entered into by the Companies are forward currency exchange contracts to hedge foreign exchange
risk involving oversea business and interest rate swap contracts to hedge interest-rates risk involving borrowing.
Refer to Note 2(8) “Derivatives and hedging transactions” for information about the hedging instruments and hedging items,
hedging policy and method of evaluating hedging effectiveness concerning the hedge accounting methods adopted by theCompanies.
(c) Policies and processes for risk management
In order to control customer’s credit risk, each business and sales management division within the Companies conduct periodic
monitoring of key transaction partners and attempt to find out deterioration of the financial situation at the initial stage under theinternal credit policies.
For the purpose of hedging foreign exchange risk, the Companies conduct forward exchange contracts. The Companies also
conduct interest rate swap contracts to avert interest-rate risk by each long-term borrowing.
Fair value of investment securities are periodically reported to the Directors and Executive Officers. The possession situationof securities is also continually reviewed, taking into consideration of the Companies’ relationship with respective business
partners.
Derivative transactions are treated by the Finance Department in accordance with the established policies. The Companies
deal with credible banks to reduce the credit risk.
In order to manage the liquidity risk, the Companies update financial plan monthly.
(d) Supplementary explanation on fair value of financial instruments
The fair value of financial instruments is based on market value or reasonable estimate if there is no market value. Since certain
assumptions are used for estimating values, values could be different if different assumptions are applied. In addition, thederivative contract amounts described in Note 25 “Derivative Financial Instruments” are not indicative of actual market risk
involved in derivative transactions.

37

(2) Fair value of financial instruments
The following tables summarize book values and fair values of financial instruments at March 31, 2015:
Millions of yen
TypeAssets(a) Cash and time deposits

Thousands of U.S. dollars

Book values

Fair values

DifferenceBook values

Fair values

Difference¥ 79,661¥ 79,661¥ ―$662,351$662,351$ ―(b) Receivables:
Notes
Accounts

7,920

7,920

―

65,85265,852―

101,068

101,038(30)

840,342840,093

(249)

399

(c) Marketable securities andInvestment securities:
389

437

48

3,234

3,633

16,465

16,465―

136,900

136,900―¥205,503¥205,521¥18$1,708,679$1,708,829

$150

Notes

¥28,162¥28,162¥ ―$234,156$234,156$ ―Accounts

70,32670,326―584,734

584,734―

12,654

12,654―105,213105,213

―

7,097

7,097

―

59,00959,009

―

351

351

―

2,918

2,918

―

833

833

0

6,926

6,926

0

12,753

12,688(65)

106,036

105,496(540)¥132,176¥132,111¥(65)$1,098,992$1,098,452$(540)

¥(16)

¥(16)

¥ ―

$(133)$(133)$ ―Held-to-maturity debt securities
Available-for-sale securities
Total assets
Liabilities(a) Payables:(b) Short-term bank loans
Current maturities oflong-term debt
Current portion of bonds(c) Bonds(d) Long-term debt,
less current maturities
Total liabilities
Derivative transactions

The following tables summarize book values and fair values of financial instruments at March 31, 2014:
Millions of yen
TypeAssets(a) Cash and time deposits

Book values

Fair values

Difference¥70,774¥70,774¥ ―(b) Receivables:
Notes
Accounts

6,999

6,999

―

104,298

104,271(27)(c) Investment securities:
Held-to-maturity debt securities

433

467

34

11,132

11,132―¥193,636¥193,643

¥7

Notes

¥29,764¥29,764¥ ―Accounts

72,26472,264―

17,48017,480

―

8,822

8,822

―

Available-for-sale securities
Total assets
Liabilities(a) Payables:(b) Short-term bank loans
Current maturities oflong-term debt
Current portion of bonds(c) Bonds(d) Long-term debt,
less current maturities
Total liabilities
Derivative transactions

38

326

326

―

846

845

(1)

11,945

11,903(42)¥141,447¥141,404

¥(43)

¥(3)

¥(3)

¥ ―

Notes:1. Method of measurement of financial instruments and matters concerning securities and derivatives(Assets)(a) Cash and time deposits
The fair values of this account are equivalent to the book value, since this account is settled in a short period of time.
(b) Notes and accounts receivables
The fair values of these accounts are based on the present value of discounted cash flows using the interest rate determined by the factors of
the remaining terms and credit risks, with respect to each receivable categorized by collection terms.
(c) Marketable securities and Investment securities
The fair values of this account are based on the quoted market value.
(Liabilities)(a) Notes and accounts payables and (b) Short-term bank loans, Current maturities of long-term debt and Current portion of bonds
The fair values of these accounts are equivalent to the book value, since these accounts are settled in a short period of time.
(c) Bonds
The fair value of bonds issued by the Company is based on the price on bond markets or present value of the total principal and interest
discounted by an interest rate determined taking into account the remaining period of bond and current credit risk.
(d)Long-term debt, less current maturities
The fair values of this account are based on the present value of discounted cash flows using the interest rate which may be applicable when
the same kinds of borrowings are made.
(Derivative transactions)
See Note 25 “Derivative Financial Instruments”.
2. Financial instruments which are difficult to estimate the fair value
Non-marketable securities (book values of ¥3,610 million (US$30,016 thousand) and ¥3,994 million at March 31, 2015 and 2014,
respectively) are not included in the above “Assets (c) Marketable securities and investment securities”; since it is difficult to estimate the fairvalues thereof because neither market quoted value is available nor future cash flows can be estimated.
3. Redemption schedules for cash and time deposits, receivables and held-to-maturity debt securities at March 31, 2015 and 2014 are as
follows:
Millions of yen
2015
Within1 yearCash and time deposits¥79,661Over
1 yearless than
5 years
¥ ―

2014
Over
5 yearsless than
10 years¥ ―Over
10 yearsWithin1 year¥ ―¥70,774Over
1 yearless than
5 years¥ ―Over
5 yearsless than
10 years¥ ―Over
10 years¥ ―Receivables:
Notes

7,920

―

―

―

6,999

―

―

Accounts

91,421

9,646

―

―

97,554

6,744

―

―

5

42

96

246

45

5

137

246

¥179,007¥ 9,688¥96¥246¥175,372¥ 6,749

¥137

¥246

Held-to-maturity debt securities
Total

―

Thousands of U.S. dollars
2015
Within1 yearCash and time deposits$662,351Over
1 yearless than
5 years$ ―Over
5 yearsless than
10 years$ ―Over
10 years$ ―Receivables:
Notes

65,852――

Accounts

760,131

80,203

―

―

42

349

798

2,045

$1,488,376$80,552$798$2,045

Held-to-maturity debt securities
Total

―

39

25. Derivative Financial Instruments
Derivative transactions accounted for by the hedge accounting at March 31, 2015 and 2014 are as follows:(Interest-related transactions)
Millions of yen
2015
Type ofderivative transactions

Main items
hedged2014

Contract amount
Settled overTotal
1 yearFair
value

Contract amount
Settled overTotal
1 yearFair
value

Benchmark method:

Interest swap contract:
To pay fixed, to receive variable

Long-term debt

¥937

¥865

Note 2¥293¥267

Note 2Long-term debt

¥10,398¥6,792

Note 2¥5,860¥3,561

Note 2

Short-cut method:

Interest swap contract:
To pay fixed, to receive variable

Thousands of U.S. dollars
2015Type ofderivative transactions

Main items
hedgedContract amount
Settled overTotal
1 yearFair
value

Benchmark method:

Interest swap contract:
To pay fixed, to receive variable

Long-term debt

$7,791$7,192

Note 2Long-term debt

$86,455$56,473

Note 2

Short-cut method:

Interest swap contract:
To pay fixed, to receive variableNote:

1. Fair value is based on the prices obtained from counterparty financial institutions.
2. The fair values of special case interest swap treatment are included in the fair value of long-term debt since such interest swap is treated
together with long-term debt being hedged.

26. Asset Retirement Obligations
Disclosures about asset retirement obligations are omitted, since the amount of asset retirement obligations is immaterial for theyear ended March 31, 2015 and 2014.
27. Fair Value of Investment and Rental Property
Disclosures about fair value of investment and rental property are omitted, since the total amount of investment and rental
property is immaterial for the years ended March 31, 2015 and 2014.

40

28. Stock Option Plans(1) No cost for stock options is recognized for the years ended March 31, 2015 and 2014.
(2) The stock options outstanding at March 31, 2015 are mainly as follows:(a) Content
The first series
The first seriesof shareof sharesubscription rights (A)subscription rights (B)June 27, 2008
Persons granted
Class and number ofsharesDate of grantCondition of
settlement rights

Length of service
Exercisable period

Directors of the company: 8
Executive officers: 13

The second seriesof sharesubscription rights (A)The second seriesof sharesubscription rights (B)June 27, 2008

June 26, 2009

June 26, 2009

Executive employees: 76

Directors of the company: 9
Executive officers: 12

Executive employees: 9110,400 sharesof common stock
July 15, 2008
The person who exercises
stock purchase rights shallbe a director, or executive
officer of the Company,
who has continued towork at the Company
from the fifth
stockholders’ meeting to
the sixth stockholders’meeting.
However, this condition
is invalid in case of deathor loss of position due toCompany circumstances.
From July 15, 2008
to July 14, 2009
From July 15, 2009
to July 14, 2019

722,000 sharesof common stock
July 15, 2008
The person who exercises
stock purchase rights shallbe an employee of theCompany who has
continued to work at theCompany from July 15,
2008 until July 15, 2010.
However, this condition
is invalid in case of death,retirement age or loss of
position due to Company
circumstances.

The third seriesof sharesubscription rights (A)The fourth seriesof sharesubscription rights (A)From July 15, 2008
to July 15, 2010
From July 16, 2010
to July 15, 2015

June 29, 2010

June 29, 2011

Persons granted

Directors of the company: 8
Executive officers: 8

Directors of the company: 9
Executive officers: 13

Class and numberof shares

90,000 sharesof common stock

85,800 sharesof common stock

July 16, 2010
The person who exercises
stock purchase rights shallbe a director, or executive
officer of the Company,
who has continued to workat the Company from theseventh stockholders’meeting to the eighth
stockholders’ meeting.
However, this condition
is invalid in case of deathor loss of position due toCompany circumstances.
From July 16, 2010
to July 15, 2011
From July 16, 2011
to July 15, 2021

July 15, 2011
The person who exercises
stock purchase rights shallbe a director, or executive
officer of the Company,
who has continued to workat the Company from theeighth stockholders’meeting to the ninth
stockholders’ meeting.
However, this condition
is invalid in case of deathor loss of position due toCompany circumstances.
From July 15, 2011
to July 14, 2012
From July 15, 2012
to July 14, 2022

Date of grantCondition of
settlement rights

Length of service
Exercisable period

115,000 sharesof common stock
July 14, 2009
The person who exercises
stock purchase rights shallbe a director, or executive
officer of the Company,
who has continued towork at the Company
from the sixth
stockholders’ meeting to
the seventh stockholders’meeting.
However, this condition
is invalid in case of deathor loss of position due toCompany circumstances.
From July 14, 2009
to July 13, 2010
From July 14, 2010
to July 13, 2020

86,400 sharesof common stock
July 14, 2009
The person who exercises
stock purchase rights shallbe an employee of theCompany who has
continued to work at theCompany from July 14,
2009 until July 14, 2011.
However, this condition
is invalid in case of death,retirement age or loss of
position due to Company
circumstances.

From July 14, 2009
to July 14, 2011
From July 15, 2011
to July 14, 201641

(b) Number and price

The first
series of sharesubscription
rights (A)The first
series of sharesubscription
rights (B)The second
series of sharesubscription
rights (A)The second
series of sharesubscription
rights (B)The third
series of sharesubscription
rights (A)The fourth
series of sharesubscription
rights (A)At the beginning of the year

―

―

―

―

―

―

Granted during the year

―

―

―

―

―

―

―

―

―

―

―

―

Vested during the year

―

―

―

―

―

―

At the end of the year

―

―

―

―

―

―
60,700Non-vested shares

Forfeited and expired during theyear

Vested shares
At the beginning of the year

17,600104,500

41,40048,00063,000

Vested during the year

―

―

―

―

―

―

Exercised during the year

4,400

85,5004,600

33,8009,000

11,900

―

―

―

―

―

―

Forfeited or expired during theyear

13,20019,00036,80014,20054,00048,800Exercise priceUnexercised at the end of the year

¥ 1

¥125

¥ 1

¥120

¥ 1

¥ 1

Average stock price at exercise

¥626

¥570

¥626

¥722

¥458

¥522

Fair value price at the grant date

¥107

¥ 30

¥101

¥ 28

¥ 72

¥111

(3) Method to estimate fair value of stock options
It does not give employees stock options for the current fiscal year.
(4) Method to estimate number of vested stock options
As a rational estimate of the forfeited number of stock options in the future is generally difficult, the company adopts a method whereby only
forfeited numbers are reflected.

29. Subsequent Event
On June 26, 2015, the shareholders of the Company approved the appropriations of retained earnings to pay cash dividends in theamount of ¥924 million (US$7,683 thousand).

42

Independent Auditor’s Report

To the Board of Directors of HAZAMA ANDO CORPORATION:
We have audited the accompanying consolidated financial statements of HAZAMA ANDOCORPORATION and its consolidated subsidiaries, which comprise the consolidated balance sheets as at
March 31, 2015 and 2014, and the consolidated income statements, statements of comprehensive
income, statements of changes in net assets and statements of cash flows for the years then ended, and asummary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with auditing standards generally accepted in Japan.
Those standards require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated financial statements. The procedures selected depend on our judgement, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due tofraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, while the objective of the financial statement audit
is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of HAZAMA ANDO CORPORATION and its consolidated subsidiaries as at March 31, 2015 and2014, and their financial performance and cash flows for the years then ended in accordance withaccounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2015 are presented solely for convenience. Our audit also included the translation of yen
amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 1 to the consolidated financial statements.

August 7, 2015
Tokyo, Japan43

Global Network
Japan
Head Office6-1-20, Akasaka, Minato-ku, Tokyo 107-8658, Japan

Branches

Sapporo, Tohoku, Hokuriku, Metropolitan Area Building,Kanto Civil, Shizuoka, Nagoya, Osaka, Shikoku,
Hiroshima, Kyushu

International Division

6-1-20, Akasaka, Minato-ku, Tokyo 107-8658, Japan

Branches

81-3-6234-3600

81-3-6234-3640

Asia, North America

Technical Research Institute515-1, Karima, Tsukuba-shi, Ibaraki 305-0822, Japan

81-29-858-8800

Overseas

TurkeyU.S.A.
Vietnam
Laos

Nepal

Cambodia

Myanmar

MexicoHonduras

Singapore

ThailandPeru

Malaysia
Indonesia

OfficesThailand

AddressPhone

159 Serm-Mit Tower Building, 15th Floor, Sukhumvit Road 21 (Soi Asoke), North Klongtoey,
Wattana, Bangkok 10110, Thailand

66-2-665-7041

Vietnam

18th Floor, Harbour View Tower, 35 Nguyen Hue Street, District 1, Ho Chi Minh City, Vietnam

84-8-38299533

Malaysia

Suite 13.4, Level 13, Menara IMC, Letter Box No.9, No.8, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia

60-3-2031-4902

Indonesia

Menara Thamrin, 14th Floor, Suite 1405, JL. M.H. Thamrin Kav. 3, Jakarta, 10250, Indonesia

62-21-3140392

Laos

Ban Sibounheung Unit No.3 House No.030 Chanthabouly District Vientiane Capital, LAO.P.D.R

856-21-250-872

MyanmarRoom No.513, YANGON INTERNATIONAL HOTEL, No.330, Ahlone Road, Dagon Township, Yangon, Myanmar

95-1-216002 (Ext.513)

Cambodia

Office NO.19, HOTEL CAMBODIANA 313 Sisowath Quay, Phnom Penh, Cambodia

855-23-992-914

Nepal

P.O.Box No.4137 Ward No.4 Baluwatar, Kathmandu, Nepal

977-1-4438032

TurkeyATATURK MAHALLESI GIRNE CADDESI, NO:27, D:2-3, Atasehir, Istanbul, Turkey

90-216-456-5047

MexicoPaseo de la Reforma N° 373 1-B Col. Cuauhtémoc C.P. 06500 Del. Cuauhtémoc Mexico D.F.

52-55-5525-9311

U.S.A.

500 West Wilson Bridge Road, Suite 130 Worthington, Ohio 43085, U.S.A.

1-614-985-4906

Peru

AV. Javier Prado Este 1104, Edificio San Agustin Of.603, San Isidro, Lima, Peru

51-1-225-7553

Honduras

Colonia Lomas de Miraflores Sur 3ra. Calle, Casa No. 4310, Tegucigalpa M.D.C., Honduras, C.A

504-2271-1283

44

Corporate DataName

(As of March 31, 2015)

Authorized Shares

HAZAMA ANDO CORPORATION

Issued Shares

Common stock
397,250,000
Preferred stock
2,750,000

Established
October 1, 2003

Common stock
185,209,189

Number of Shareholders
42,980
Number of Employees
3,349

Capital¥12,000 million

Directors, Officers
Board Directors
Representative Director andChairman of the Board of
Directors
Toshio Ono
Representative Director andPresident
Toshiaki Nomura
Representative Directors andVice Presidents(As of July 1, 2015)

Board Directors / Senior
Managing Executive Officers

Corporate Auditors(External Auditors)

Hikari Yamazaki
Hidekazu Kojima

Yuji Onuki
Shigeo Kamimura

Board Directors / Managing
Executive Officers

Executive Officers

Yasushi Kikuchi
Fumio Sugimoto
Kiyoka Fukunishi
Board Directors(External Board Directors)

Senior Managing Executive
Officers
Toshioki Nishida
Mamoru Iwao
Managing Executive Officers

Board Director andVice President

Auditors

Hidetoshi Yoichi
Toshihiko Kitano
Masato Fukutomi
Kazuya Ozawa

Hisanori Ueno

Auditors

Executive Officers

Yoshihiko Baba
Kimihiro Hirata

Toshimitsu Ueno
Daizo Yoshikawa
Takamitsu Takeuchi

Mitsuaki Higo
Haruyuki Kaneko

Yuzuru Fujita
Shoko Ikeda

Major Subsidiaries and Affiliates
Name
Stated Capital			

Shinkichi Komatsubara
Katsuhiko Tabuchi
Katsuhiko Kosaka
Yoshihiro Nasu
Shozo Tsuji
Tatsumi Asao
Hideo Hosobuchi
Hajime Tsukizu
Toshiaki Iimura
Yoichi Matsuura
Masaaki Tomita
Toru Ikegami
Muneo Gomi
Ken Moriyasu
Kazutaka Miyazaki
Hiroshi Ono
Hideo Matsumoto
Masanobu Shiga
Takeshi Komatsu(As of April 1, 2015)

Principal Business

Address / Phone

Hazama Ando Kogyo
152.5 million JPY
Sales of Construction Materials
Co., Ltd.			

1-38-4, Kameido, Koto-ku, Tokyo 136-0071, Japan
81-3-5626-7130

Aoyama Kiko Co., Ltd.
80 million JPY
Construction, Procurement			2-45, Yamanaka, Kitamoto-shi, Saitama 364-0004, Japan
81-48-591-9770

Ryoko Kaihatsu Co., Ltd.
80 million JPY
Real-estate			

1-8-20, Marunouchi, Naka-ku, Nagoya-shi, Aichi 460-0002, Japan
81-52-232-2171

HAZAMA ANDO (THAILAND)
16 million THB
Construction
CO., LTD.			
			

159 Serm-Mit Tower Building, 15th Floor, Sukhumvit Road 21(Soi Asoke), North Klongtoey, Wattana, Bangkok 10110, Thailand
66-2-665-2980

HAZAMA ANDO SINGAPORE
6.5 million SGD
Construction
PTE. LTD.			

168 Jalan Bukit Merah #03-07 D&E, Tower C, Singapore 150168
65-6270-9498

HAZAMA ANDO MALAYSIA
800,000 MYRConstruction
SDN. BHD.			

No. 84B, Jalan Sutera Tanjung 8/4, Taman Sutera Utama, 81300
Skudai, Johor, Malaysia
60-7-557-3833

			

45

Printed in Japan