Annual Report 2013
Year ended March 31, 2013

CONTENTS
Operational Results
Management Policy
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Shareholders’ Equity
Consolidated Statements of Cash Flows
Basis of Presenting Consolidated Financial Statements
Independent Auditor’s Report
Corporate information
Board of Directors and Statutory Auditors

2
7
10
12
13
14
15
16
42
43
44

Operational Results2

1. Operational Results(1) Analysis of Operational Results<Summary of Operational Results for the Consolidated Fiscal Year ended March 31, 2013>
The Japanese economy in this consolidated fiscal year was occasionally facedwith signs of a recession, despite the reconstruction demand from the Great East
Japan Earthquake, due to the slowdown in overseas economies in Europe, China,
etc. However, hopes for economic recovery were significantly raised toward theend of the current fiscal year as the yen depreciation and high stock prices owing
to the economic policies, etc. put forward by the new administration.
Under these circumstances our company group made its efforts, in order tostrengthen and stabilize its corporate quality, to implement various measures forreliable profit securing and to upgrade its corporate value in medium- andlong-term perspectives which include positive promotion of overseas development.
Representative Director,
President, COO
Kazuya Takahashi

As a result, in the current consolidated fiscal year, net sales increased by 8,941
million yen (13.2%) compared with the preceding consolidated fiscal year to 76,724
million yen. As for profit and loss status, operating income reached 5,134 million yen, an improvement of 2,177
million yen (73.6%) due to the big sales improvement at the Specialty Truck Segment, our mainstay category.
Thus, the current net income reached 3,171 million yen, an improvement of 962 million yen (43.6%).
As seen in the above, we have achieved the business performance goals (67,000 million yen or more for net
sales and 3,000 million yen or more for operating income) set in our medium-term management plan “Plan2010” (three-year-plan) which we have thus far worked on
We would like to present the summary of business on a consolidated basis by segment in comparison
with the preceding fiscal year.

i) Specialty Truck Segment
While we made our efforts to secure every possible order in the domestic market, we also positively promoted
strengthening our production capacity to cope with increased demand including the resumption of large dump
truck production at our Nagoya Plant. Further, we positively promoted sales activities for an electric refuse
truck, our company’s own high-value added product and new products such as “PY135-26-H”, a high-pressureand high-capacity concrete pump (piston type) having the country’s highest level of performance.
As a result, net sales in the Specialty Truck Segment increased by 7,240 million yen (13.4%) to 61,272
million yen. Segment profit increased by 1,969 million yen (140.9%) to 3,367 million yen.
For overseas, we started production of concrete mixer trucks, etc. in October, 2012 at our Indian plant(MITHRA KYOKUTO SPECIAL PURPOSE VEHICLE CO., PVT. LTD.: Vijayawada in Andhra Pradesh)
for local sales. In Indonesia we established 2 joint venture companies for manufacture and sales of dump trucks,
etc. for starting production within the fiscal year of 2013. Furthermore, we took a stake in a Malaysian
distributor, TRANSCENDENT HEAVY MACHINERY SDN BHD for strengthening our sales structure in
the ASEAN countries. We have promoted our overseas development continuously as just described.

Operational Results

3Electric Refuse Truck
equipped with power feed system

High-pressure and High-capacity
Concrete Pomp (piston type)“PY135-26-H”

Concrete Mixer Truck
Manufactured by MKSPVIn Indiaii) Environmental Equipment and Systems Segment
In the domestic market, we made our efforts for profit securing by focusing on businesses of maintenance workand entrusted operations and also promoted sales for new plants and construction of ordered facilities. In
overseas, we installed and put in operation the first high-speed vertical type pulverizer in China.
As a result, net sales increased by 1,478 million yen (17.4%) to 9,953 million yen. Segment profit
increased by 54 million yen (4.6%) to 1,242 million yen.
Meanwhile, we co-developed with NIPPON TREX Co., Ltd., our consolidated subsidiary, a “Truck Mounted
Pulverizer” as a new product to be used for processing disaster waste, which is a high-speed vertical typepulverizer mounted on a trailer. From now on, we will proceed with tests, etc. for starting an official marketing.

“Truck Mounted Pulverizer”
Processing Disaster Waste in Tohoku
by “Truck Mounted Pulverizer”

Operational Results

4iii) Real Estate Rental Segment
The toll parking lot made an increased profit due to reduced costs and selection of locations. The multi-story
parking equipment faced continued weak market environments but managed to secure a certain level of sales
and profit by focusing continuously on renewal and maintenance services.
Besides, we installed a mega-solar power plant at a site in our Fukuoka Plant (in Iizuka City) as a new businessand started electric power selling in March, 2013. We will build our second mega-solar power plant in the
now-defunct Tohoku Plant (in Hachinohe City) with a target of starting operation in September, 2013.
As a result, net sales increased by 293 million yen (5.0%) to 6,124 million yen and segment profit increased by
238 million yen (32.1%) to 982 million yen.

“Hachinohe Mega-Solar Power Plant” (1.5MW)(under construction)<Forecast of Operations for the Next Consolidated Fiscal Year ending March 31, 2014>
The Japanese economy is generally expected to make its way providing a sense of anticipation for economic
recovery, because, besides various effective measures such as economic policies anticipated to be taken by thecurrent administration, demand for the earthquake disaster reconstruction is expected to continue. Our company
group aims at enlarging its sales and profit as well as upgrading its corporate value by ensuring steady
implementation of its new medium-term management plan “Next Step 2015” ~ to make the next step forward~.
Regarding the forecast of consolidated business performance for March 2014, the Company estimates net sales
to increase by 6,275 million yen (8.2%) over March 2013 to 83,000 million yen, mainly since the Specialty
Truck Segment is likely to increase sales. Management expects the overall operating income to increase by
1,065 million yen (20.8%) to 6,200 million yen, while net income is estimated to grow by 228 million yen(7.2%) to 3,400 million yen.

Operational Results

5(2) Analysis on Financial Conditionsi) Situations of Assets, Liabilities and Net WorthIn the current consolidated fiscal year, total assets increased by 4,023 million yen (4.3%) from the end of thepreceding fiscal year to 97,894 million yen.
Current assets increased by 1,637 million yen (3.3%) to 51,120 million yen, due to increases in accounts
receivable and trade notes, etc.
Non-current assets (property, plant and equipment, intangible assets and investments and other assets)
increased by 2,386 million yen (5.4%) to 46,774 million yen, due to investments in foreign subsidiaries andrecovery of market prices of securities, etc.
Regarding liabilities, current liabilities increased by 1,039 million yen (3.8%) to 28,315 million yen, due toincreases in trade notes and accounts payable, etc. Non-current liabilities decreased by 746 million yen(6.5%) to 10,728 million yen due to repayments of long-term bank loans, etc.
Total shareholder’s equity increased by 3,731 million yen (6.8%) to 58,850 million yen, due to posting of net
profit, etc.
As a result, the capital adequacy ratio stood at 60.1% as of the end of the current fiscal year (58.7% at the end of
the preceding fiscal year).

ii) Cash Flow Situation
Consolidated cash and cash equivalents at the end of period decreased by 3,709 million yen (36.5%) comparedwith the end of the preceding fiscal year to 6,466 million yen. Cash flow by activity type is summarized asfollows:
Cash Flow from Operating Activities
Net cash provided by operating activities amounted to 1,879 million yen (an increase of 676 million yen
compared with the preceding fiscal year). This was because of a posting of net profit, etc.
Cash Flow from Investing Activities
Net cash used in investing activities was 3,367 million yen (a decrease of 1,088 million yen compared with thepreceding fiscal year). This was because of purchases of non-current assets, etc.
Cash Flow from Financing Activities
Net cash used by financing activities was 2,245 million yen (a decrease of 439 million yen compared with thepreceding fiscal year). This was because of repayments of long-term bank loans.

(3) Principal policy for return of profits to shareholders and payment of dividends for the current
year and next year
The Kyokuto Kaihatsu Kogyo Group regards the return of profits to shareholders as one of the most importantmanagement’s policies. Taking the development of business in the future and business environments into
account, management has been striving to meet investors’ expectations through the improvement of businessOperational Results

6

performance and the strengthening of its financial position.
The Meeting of Shareholders on June 26th, 2013 resolved and passed to pay a dividend of 9 yen per share at theend of March 2013 as originally proposed by management, making its annual dividend 16 yen per shareincluding an interim dividend.
For the year ending March 2014, management plans to pay an annual dividend of 18 yen per share (including
an interim dividend of 9 yen).

Management Policy

7

2. Management Policy(1) Basic Management Policy of the Company
The management philosophy of the Kyokuto Kaihatsu Group is "Value technology and trust, make concerted
efforts to develop the company, and widely contribute to the society."
Our ultimate goal in the management policy is to implement corporate policy recognizing a social role andresponsibility as a public company in a strong relationship with various stakeholders such as customers,
business partners, shareholders, employees, and local societies. In addition, by providing safe, effective andhigh quality products and services through our fair and sound business activities, the Kyokuto Kaihatsu Groupseeks to bring about greater contribution to our society and maximize corporate value.
With this management policy, we devote ourselves to three major business domains including Specialty Truck,
Environmental Equipment and Systems, and Real Estate Rental.
(2) Targeted management index
For the last consolidated fiscal year for “Next Step 2015” ~ to make the next step forward ~ (three-year-plan)
ending March 31, 2016, our management target is 89,000 million yen for net sales and 7,000 million yen for
operating income , both on a consolidated basis.
(3) Mid-to-Long Term Management Strategy and Major Challenges
Our group’s previous medium-term management plan "Plan 2010" (three-year plan) completed in March 2013.
In this plan, we successfully achieved our initial targets in sales, profits and other priority themes. To make thenext step forward, we have established a new three-year plan "Next Step 2015" ~ to make the next step forward~ (April 1, 2013 to March 31, 2016). We will work together as a group to achieve this plan. Summary of thisplan is as follows:
Basic policies
Kyokuto Kaihatsu Kogyo Group will celebrate its 60th anniversary in the final year of this medium-term
management planning.
Positioning this three-year range as an important term to make our structural reforms to make the next step
forward, we will try to restructure our management foundation and improve our corporate values as wellas promote the formation of attractive corporate culture as a trusted and loved group based on thefollowing basic policies.
"Step" to survive in the domestic market
For the core businesses (specialty truck, environmental equipment and systems and parking businesses),
we will construct a firm earning system to survive in the matured domestic market.
"Step" to the global development
Positioning the overseas business as a key for the future profits, we will strengthen the foundation for
global development.
We will energetically promote the early profit contribution of the overseas sites and new market
development.
"Step" to the strengthening of total monozukuri (manufacturing) power
We will establish core technologies, develop human resources and ensure high quality in order tostrengthen the total monozukuri power as a company and develop our domestic/overseas business basedon the power.

Management Policy

8"Step" to improve the brand value
We will provide high quality to various needs in the product development, production, sales and service
fields to improve customer satisfaction as well as develop effective PR strategies proactively in order toimprove our brand value in both Japan and abroad.
"Step" to get new sources of earnings
We will energetically promote business collaboration, M&A and entry in new fields in order to expand ourbushiness chances and create future core business so that we will be able to become a company that earns
100 billion yen.
Key Strategies(1) Establishing a firm earning system for the existing businesses
Specialty truck business[1] Securing orders by securely receiving domestic demands for earthquake disaster reconstruction
and recovery and land toughening.
[2] Expanding the shares of key products for sales expansion (dump trucks, refuse trucks, tailgate
lifters, trailers).
[3] Improving the production efficiency by measures such as reviewing the production process
drastically, promoting the automation and standardizing product specifications.
[4] Establishing the procurement system aiming at the best price and best quality.
[5] Establishing a firm earning foundation as a stock business by improving the after-sales service.
Environmental equipment and systems business[1] Participating in joint venture with other companies for recycle facilities and securing orders taking
advantage of competitive prices.
[2] Securing long-term stable earnings by after-sales service and accepting operation.
Parking business[1] Securing our competitiveness by promoting the product development in the fields whose markets
are expected to expand, overseas production and improving quality for mechanical multistory
parking equipment.
[2] Promoting the selection of business locations focusing on the profitability in the pay-by-the-hourparking lot.
(2) Strengthening the foundation for global development[1] Realizing the early stable operation of the plants in India and Indonesia and their contribution to
the group performance.
[2] For the Kunshan plant in China, enhancing the sales in the South-East Asia and the parts supply
function to the group companies.
[3] Strengthening the business development in the specialty truck, environmental equipment andsystems and parking businesses in the China and the ASEAN region.
[4] Strengthening the development of human resources who support global development.
[5] Strengthening the collaboration of domestic and overseas development sites of the group anddeveloping products that are competitive in the overseas markets.
(3) Enhancing the total power as a monozukuri company[1] Ensuring quality that is the top in the specialty truck business by measures such as promotion ofinternal manufacturing, skill tradition for monozukuri and improvement of technical skills andManagement Policy

9

production technology.
[2] Establishing the lineup of only one and number one products that are accepted in the world andkeep leading the industry.
[3] Promoting the product development in new fields powerfully by using existing technologies.
(4) Improving the brand value[1] Improving the reliability by company-wide collaboration in the development, production, sales
and service for quality improvement.
[2] Sharing the awareness in the group that the brand is an important management resource andinputting management resources aggressively.
[3] Establishing systems for continuous brand value improvement activities and a system to evaluate
such activities.
(5) Creating future core businesses
Exploiting new needs in the existing businesses, inputting new products and creating "the fourthpillar" as a new core business in order to keep developing in the future. (E.g. entering in promisingmarkets that are not influenced by the existing businesses)(6) Company-wide activities for corporate value improvement[1] Strengthening the law observance and impropriety prevention system and social contribution by
powerful promotion of CSR activities.
[2] Strengthening the environmental management by taking measures such as energy-saving
promotion and reduction of substances of concern.
[3] Improving the satisfaction level of stockholders by implementing effective stockholder returnmeasures.

Consolidated Balance Sheets10

Consolidated Balance Sheets11

Consolidated Statements of Income

12Consolidated Statements of Comprehensive Income

13Consolidated Statements of Changes 14
in Shareholders’ Equity

Consolidated Statements of Cash Flows15

Basis of Presenting
Financial Statements

Consolidated 16

1. Basis of Presenting Consolidated Financial
Financial Statements
The accompanying consolidated financial statements of Kyokuto Kaihatsu Kogyo
Co., Ltd. (the “Company”) and its consolidated subsidiaries (collectively the“Group”) have been prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Act and its related accounting
regulations, and in conformity with accounting principles generally accepted inJapan, which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
In preparing the accompanying consolidated financial statements, certain
reclassifications have been made to the consolidated financial statements issued
domestically, in order to present them in a form which is more familiar to readers
outside Japan.
In addition, the notes to consolidated financial statements include additional
information which is not required under generally accepted accounting principles
and practices in Japan.
The financial statements presented herein are expressed in Japanese yen and,solely for the convenience of the readers, have been translated into U.S. dollars
at the rate of ¥94.01=US$1, the approximate exchange rate on March 31, 2013.
These translations should not be construed as representations that the Japanese
yen amounts actually are, have been or could be converted into U.S. dollar
amounts.

2. Summary of Significant Accounting Policies(a) Consolidation
The consolidated financial statements include the accounts of the Company andits 9 significant subsidiaries. Investments in 1 nonconsolidated subsidiary and 1
affiliate are accounted for by the equity method.
Under the concept of control or significant influence, those companies in which
the Company, directly or indirectly, is able to exercise control over operations are
fully consolidated, and those companies which the Group has the ability to
exercise significant influence (affiliated companies) are accounted for by theequity method.
There are 5 nonconsolidated subsidiaries and affiliates which are not accounted
for by the equity method, because these companies are not material in terms of
net income and retained earnings and do not have any significant impact on the
consolidated financial statements, if excluded from the scope of application by
the equity method.

Basis of Presenting
Financial Statements

Consolidated 17

All significant inter-company balances and transactions have been eliminated in
the consolidated financial statements. All material unrealized gains resulting frominter-company transactions have been eliminated.
Assets and liabilities of the consolidated subsidiaries at the time of investment
are all valued at fair value. The goodwill or negative goodwill is being amortizedon a straight-line basis over estimated useful lives not exceeding 20 years, or 5
years in situations in which the useful lives cannot be estimated. However,insignificant goodwill or negative goodwill is charged to expenses (income) whenincurred.

(b) Cash Equivalents
Cash equivalents are short-term investments that are readily convertible into
cash and exposed to insignificant risk of changes in value. All of cash equivalentsmature or become due within three months from the date of acquisition.

(c) Short-term Securities and Investment Securities
The Group classifies their securities as held-to-maturity debt securities oravailable-for-sale securities, depending on management’s intent.
(Held-to-maturity debt securities)
Held-to-maturity debt securities are stated at amortized cost.
(Available-for-sale securities)
Marketable available-for-sale securities are stated at fair value, with unrealized
gains and losses, net of applicable taxes, and reported in a separate component ofshareholders’ equity. The cost of available-for-sale securities sold is determinedbased on the moving average method.
None-marketable available-for-sale securities are stated at cost determined by themoving average method.
(d) Inventories
Merchandises are stated at cost determined by the specific identification method,or if lower, the net realizable value.
Raw materials, finished goods and work in process are stated at cost determinedby the periodic average method, or if lower, the net realizable value.
Supplies are stated at cost determined by the last purchase cost method, or if
lower, the net realizable value.

Basis of Presenting
Financial Statements

Consolidated 18(e) Depreciation
Depreciation is principally computed under the straight-line method, using rates
based on the estimated useful lives of the assets. The useful lives are principally
ranging from 7 to 60 years for buildings and structures, and 4 to 17 years formachinery, equipment and vehicles.
Amortization of intangible assets is computed by the straight-line method.
(Accounting change)
Prior to April 1, 2012, depreciation of property, plant and equipment, except forbuildings, was computed by the declining-balance method. However, effective from
April 1, 2012, the straight-line method has been applied to all property, plant andequipment.
This change was triggered by the introduction of new management systems in thisfiscal year. The fact became evident that most long-lived assets were used continuallyand consistently throughout their useful lives as a result of and review of
cost-behavior. This change aims to carry out more appropriate cost allocation.
Additionally, the Group expects to increase its overseas capital expenditures in theefforts to capitalize on the acceleration of global business development. This change
also aims to unify the Group’s accounting methods.
Due to this change, operating income and income before income taxes and minority
interests increased by ¥ 246 million ($ 2,622 thousand), compared to the amount thatwould have been under the previous accounting method.

(f) Liabilities for Retirement Benefits
Liabilities for retirement benefits are recorded for employees’ pension andseverance payments based on the projected benefit obligations and the fair valueof plan assets at the balance sheet date.

(g) Allowance for Doubtful Accounts
The allowance for doubtful accounts is provided against potential losses oncollections at an amount determined using a historical bad debt loss ratio and an
amount individually estimated on the collectability of receivables that are
expected to be uncollectible due to bad financial condition or insolvency of the
debtor.

(h) Asset Retirement Obligations
Asset retirement obligations are defined as a statutory or similar obligation withregard to the removal of tangible fixed assets and are incurred when tangible
fixed assets are acquired, constructed, developed or used in an ordinary way. The
asset retirement obligation is recognized as the sum of the discounted cash flow

Basis of Presenting
Financial Statements

Consolidated 19

required for the future asset retirement and is recorded in the period in which
the obligation is incurred if a reasonable estimate can be made.

(i) Revenue from Construction Contracts
Revenues from construction contracts and the related costs are recorded under thepercentage-of-completion method, if the outcome of the construction contract can be
estimated reliably. Otherwise, the completed-contract method is applied if theoutcome cannot be reliably estimated.

(j) Allowance for Losses on Construction Contracts
Estimated losses on construction contracts are charged to income in the period inwhich they are identified.

(k) Leases
Finance lease transactions, except for immaterial or short-term finance leases
transactions which are accounted for as operating leases, are capitalized torecognize lease assets and lease obligations in the balance sheet. Suchcapitalized lease assets are depreciated by the straight-line method over thelease terms assuming no residual value.
As permitted, finance leases which commenced prior to April 1, 2008 and havebeen accounted for as operating leases, have been accounted for as operatingleases with the note of certain “as if capitalized” information (Note 9).

(l) Income Taxes
The asset and liability approach is used to recognize deferred tax assets andliabilities for the expected future tax consequences of temporary differences
between the carrying amount and tax bases of assets and liabilities, andoperating loss carry-forwards.

(m) Derivatives
All derivatives, except for certain foreign exchange forward contracts andinterest rate swap contracts described below, are stated at fair value. If
derivative financial instruments are used as hedges and meet certain hedging
criteria, the Group defers recognition of gains or losses resulting from a change
in the market value of the derivative financial instruments until the related
gains or losses on the hedged items are recognized. Accounts payable hedged byforeign exchange contracts which meet certain hedging criteria are translated attheir contracted rates. Interest rate swaps which meet certain hedging criteria
are accounted for as if the interest rate applied to the swaps had originallyapplied to the underlying debt.

Basis of Presenting
Financial Statements

Consolidated 20(n) Per Share Information
Basic net income per share is computed based on net income available to common
stockholders and the weighted average number of shares of common stock
outstanding during each period. The average numbers of shares used in thecomputations are 39,731 thousand shares for 2013 and 39,732 thousand sharesfor 2012.
Diluted net income per share is not disclosed because the Company had nopotentially dilutive shares outstanding at these balance sheet dates.
Cash dividends per share shown in the statements of income are the amounts
applicable to the respective years.

(o) Accounting Standards issued but not yet applied“Accounting Standard for Retirement Benefits (ASBJ Statement No.26, May 17,2012) and “Guidance on Accounting Standard for Retirement Benefits (ASBJ
Guidance No.25, May 17, 2012)(1) Summary
The accounting standard was revised, from the viewpoint of improvements tofinancial reporting and international trends, mainly focusing on how unrecognizedactuarial gain and loss and unrecognized prior service cost should be accounted for,how benefit obligation and service cost should be determined, and enhancement of
disclosures.
(2) Scheduled date of adoption
The Company expects to apply the revised accounting standard from the end of the
fiscal year ending March 31, 2014. However, the amendment of the calculation
method for present value of defined benefit obligation and service cost will be adopted
from the beginning of the fiscal year ending March 31, 2015.
(3) The effect of adoption of this revised accounting standard
The effect of adoption of this revised accounting standard is now under assessment at
the time of preparation of the accompanying consolidated financial statements.

Basis of Presenting
Financial Statements

Consolidated 21

3. Securities
The following is a summary of held-to-maturity securities and available-for-salesecurities at March 31, 2013 and 2012:
Millions of yen

Held-to-maturity securities

March 31, 2013

Carrying
amountDebt securities,
whose fair value exceeds
carrying amountwhose fair value does
not exceed carrying
amountTotal

Gross
unrealized
gains

Gross
unrealized
losses

¥

－

¥

－
－

¥

632

¥

0

¥

－
632

－
¥ 0

Fair value

¥

632

¥

－
632

Millions of yen

Held-to-maturity securities

March 31, 2012

Carrying
amountDebt securities,
whose fair value exceeds
carrying amountwhose fair value does notexceed carrying amount
Total

Gross
unrealized
gains

Gross
unrealized
lossesFair value

¥

634

¥

1

¥

－

¥

635

¥

－
634

¥

－
1

¥

－
－

¥

－
635

Thousands of U.S. dollars

Held-to-maturity securities

March 31, 2013
Debt securities,
whose fair value exceeds
carrying amountwhose fair value does notexceed carrying amount
Total

Carrying
amountGrossunrealized
gains

Gross
unrealized
lossesFair value

$

6,728

$ 11

$ －

$

6,739

$

－
6,728

－
$ 11

－
$ －

$

－
6,739

Basis of Presenting
Financial Statements

Consolidated 22

Millions of yen

Available-for-sale securities

March 31, 2013Market value available:
Equity securities
Other securities
SubtotalMarket value not available:
Total

Cost

¥
¥

4,409
732
5,141

Gross
unrealized
gains

¥
¥

2,731
12
2,743

Gross
unrealized
losses¥¥Book Value(Estimated fairvalue)

(96)
(3)
(99)

¥
¥
¥

7,044
741
7,785
1,195
8,980

Millions of yen

Available-for-sale securities

March 31, 2012
Market value available:
Equity securities
Other securities
SubtotalMarket value not available:
Total

Cost

¥
¥

4,085
132
4,217

Gross
unrealized
gains

¥
¥

1,268
0
1,268

Gross
unrealized
losses

¥
¥

(151)
(2)
(153)

Book Value(Estimatedfair value)

¥
¥
¥

5,202
130
5,332
660
5,992

Thousands of U.S. dollars

Available-for-sale securities

March 31, 2013Market value available:
Equity securities
Other securities
SubtotalMarket value not available:
Total

Cost

Gross
unrealized
gains

Gross
unrealized
lossesBook Value(Estimatedfair value)$ 46,894
7,786$ 54,680$ 29,047
135$ 29,182$ (1,018)(36)$ (1,054)$ 74,923
7,885$ 82,808
12,711$ 95,519

Basis of Presenting
Financial Statements

Consolidated 23

4. ShortShort-term Bank Loans and LongLong-term Debts
The annual average interest rates applicable to short-term bank loans at March
31 2013 and 2012 were 0.66% and 0.68%, respectively.
Long-term debts at March 31, 2013 and 2012 consisted of the following:
Millions of yen

Thousands of
U.S. dollars

Bonds

2013
¥ 641

2012
¥ 1,1352013$ 6,819

Long-term bank loans

3,829

4,939

40,733

261

352

2,775

Other

1,998

2,216

21,254

Total¥ 6,729¥ 8,642$ 71,581

Lease obligations

Aggregate annual maturities of long-term debts subsequent to March 31, 2013
were as follows:
Thousands ofYear ending March 31

Millions of yen

U.S. dollars

2014

¥

2,544

$ 27,056

2015

1,844

19,6192016

947

10,071

2017

251

2,673

1,143

12,162

6,729$ 71,581

2018 and thereafter
¥

Total

To set up a commitment line by multiple finance institutions, the Company
renewed an agreement with a syndicate of 7 banks for the years ended March 31,
2013 and 2012, respectively.
The unexecuted balance of lending commitments of the Company at March 31,
2013 and 2012 were as follows:
Millions of yen
Total lending commitments
Less amounts currently executed
Unexecuted balance

Thousands of
U.S. dollars

2013

2012

2013

¥ 3,000¥ 3,000$ 31,911---¥ 3,000¥ 3,000$ 31,911

Basis of Presenting
Financial Statements

Consolidated 24

5. Pledged Assets
The following assets were pledged as collateral for the following borrowings at
March 31, 2013 and 2012:
Millions of yen
2013
Land

¥

Buildings

2012

5,755

¥

$

61,214

3,537

36,276

449

619

4,780

¥ 9,614¥ 9,911$ 102,270

Millions of yen

Thousands of
U.S. dollars

2013
Short-term bank loans

5,755

2013

3,410

Investment securities
Total

Thousands of
U.S. dollars

¥

2012

100

¥

2013

100

$

1,064

Current portion of long-term bank loans

482

658

5,128

Long-term bank loans

693

541

7,374

Other

2,952

3,185

31,396Total¥ 4,227¥ 4,484$ 44,962

6. Liabilities for Retirement Benefits
The following table sets forth the changes in benefit obligations, plan assets andfunded status of the Group at March 31, 2013 and 2012:
Millions of yen
2013
Benefit obligation at end of year¥

Fair value of plan assets at end of year

Thousands of
U.S. dollars

2012

6,533

¥

6,572

2013
$

69,496

4,135

3,593

43,985

2,398

2,979

25,511

-

20

-

(526)

(987)

(5,593)Funded status:
Benefit obligation in excess of plan assets
Unrecognized prior service cost
Unrecognized actuarial loss
Liabilities for Retirement Benefits

¥

1,872

¥

2,012

$

19,918

Basis of Presenting
Financial Statements

Consolidated 25

Severance and pension costs of the Group included the following components forthe years ended March 31, 2013 and 2012:
Millions of yen
Service cost

2013

2012

¥

¥

376

Thousands of
U.S. dollars
2013

341

$

4,002

Interest cost

112

125

1,189

Expected return on plan assets

(62)

(67)

(658)

Prior service cost

(20)

(20)

(212)

Actuarial losses

203

160

2,162

25

21

261

Amortization:

Other
Net periodic benefit cost

¥

634

¥

560

$

6,744

Assumptions used in the accounting for the defined benefit plans for the years
ended March 31, 2013 and 2012 were as follows:
2013

2012

straight–line

straight–line

basis

basis

Discount rate

1.3 to 2.0 %1.3 to 2.0 %Long-term rate of return on plan assets

1.3 to 2.0 %2.0 %Amortization period for prior service cost

10 years

10 years

Amortization period for actuarial losses

10 years

10 years

Method of attributing benefit to periods ofservice7. Contingencies
At March 31, 2013 and 2012, the Group was contingently liable as follows:
Millions of yen

Thousands of
U.S. dollars

2013

2012

2013

¥ 3,786¥ 4,082$ 40,276

32

37

338

¥ 3,818¥ 4,119$ 40,614

As a guarantor of indebtedness of :Affiliated companies
Other
Total

Basis of Presenting
Financial Statements

Consolidated 26

8. Cash and cash equivalents
Cash and cash equivalents at March 31, 2013 and 2012 were as follows:

Cash and deposits

Millions of yen

Thousands of
U.S. dollars

2013

2012

2013

¥ 3,861¥ 4,223$ 41,074

3,222

5,953

34,277(617)－(6,568)¥ 6,466¥ 10,176$ 68,783

Short-term securities
Government bonds with original
maturities more than three months
Cash and cash equivalents

9. Leases
The Group leases certain machinery and equipment, and other assets. Total lease
payments under these leases were ¥ 25 million ($ 264 thousand) and ¥ 95 million
for the years ended March 31, 2013 and 2012, respectively.
Pro forma information relating to acquisition costs, accumulated depreciationand future minimum lease payments for property held under finance leases
which do not transfer ownership of the leased property to the lessee on an “as if
capitalized” basis for the years ended March 31, 2013 and 2012, were as follows:
Millions of yen

2013
Acquisition costs

Machineryandvehicles
¥ 22

Other
¥
-

Total
¥ 22

20

-

20

Accumulated Depreciation
Net leased property

¥

2

¥

-

¥

2

Millions of yen

2012
Acquisition costs

Machineryandvehicles¥ 201
179

Accumulated Depreciation
Net leased property

¥

¥

22

¥

Other
19

Total
¥ 220

16

195

3

¥

25

Thousands of U.S. dollars

2013
Acquisition costs

Machineryandvehicles
$ 235

Other
$-

Total
$ 235

219

-

219

16

$-

Accumulated Depreciation
Net leased property

$

$

16

Basis of Presenting
Financial Statements

Consolidated 27

Future minimum lease payments under finance leases at March 31, 2013 and2012 were as follows:
Thousands ofMillions of yen

2013
Due within one year¥

Due after one year
Total

2

¥

¥

2

¥

U.S. dollars

2012

2013

23

$ 16

2

-

25

$ 16

Depreciation expenses, which are not reflected in the accompanying consolidated
statements of income, computed by the straight-line method, would have been
¥ 25 million ($ 264 thousand) and ¥ 95 million for the years ended March 31,
2013 and 2012, respectively.

10. Financial Instruments and Related Disclosures(1) Policy for financial instruments
The Group manages funds by utilizing short-term deposits, etc. The Group
raises money by borrowing from financial institutions and by issuing bonds.
Derivatives are used, not for speculative nor trading purpose, but to hedge
the exposure to interest rate risks associated with certain interest payments
on borrowings.
(2) Types of financial instruments and related risk, and risk management for
financial instruments
Trade notes and accounts receivable are exposed to credit risk in relation tocustomers. In order to monitor credit risk, the Group manages, according to
the credit management guideline of the Group, the due date and the balanceof operating receivables from customers.
Investment securities consist of mainly held-to-maturity securities andequity securities issued by the Group’s business partners and these securities
are exposed to market risk.
The Group periodically monitors the fair value of such equity securities,
which is reported to the board meeting.
Trade notes and accounts payable have payment due dates mainly within one
year. Trade notes and accounts payable denominated in foreign currencies are
exposed to the market risk of fluctuation in foreign currency exchange rate.
Such risk is hedged principally by forward foreign currency contract.
Short-term bank loans are raised mainly in connection with businessactivities and long-term bank loan and bonds payable, which are due mainly
within five years, are raised principally for the purpose of making capital
investments.

Basis of Presenting
Financial Statements

Consolidated 28

Long-term debts with variable interest rates are exposed to interest rate
fluctuation risk, so the Group enters into interest rate swap transactions tomanage such interest rate exposure.
Derivatives are managed in accordance with policies and procedures for risk
assessment (see Note 12 “Derivatives”) and also the Group enters into
derivative transactions only with financially stable financial institutions to
reduce institutions’ credit risk.
Based on a report from the Company and consolidated subsidiaries, theGroup prepares and updates its cash flow plans on a monthly basis to manage
the Group’s liquidity.

(3) Supplementary explanation of the estimated fair value of financial
instruments
With regard to the below mentioned contract prices etc. of derivatives, thecontract prices themselves do not present the market risk on the derivativetransactions.
Summarized in the table below are the carrying amounts and the estimated fairvalue of financial instruments outstanding at March 31, 2013 and 2012.
Financial instruments for which it is extremely difficult to determine the fairvalue are not included in the table below.
Millions of yen
Carrying
March 31, 2013
Cash and deposits

amount¥3,861

Unrecognized
Fair value
¥

3,861

gain/loss¥─

Trade notes and accounts receivable

33,62933,629─

Short-term securities

3,222

3,222

0

Investment securities

7,800

7,800

0

Trade notes and accounts payable(17,680)(17,680)─

Short-term bank loans(2,620)(2,620)─Long-term bank loans(3,829)(3,829)

0

(641)

(645)

(4)

(1,998)(2,156)

(158)

─

─

─

Bonds payable
Long-term deposits
Derivatives

Basis of Presenting
Financial Statements

Consolidated 29

Millions of yen
Carrying
March 31, 2012
Cash and deposits

account¥

4,223

Unrecognized
Fair value¥

gain/loss

4,223

¥

─

Trade notes and accounts receivable

29,28529,285

─

Short-term securities

5,953

5,953

─

Investment securities

5,966

5,967

1

Trade notes and accounts payable(16,796)(16,796)─

Short-term bank loans(2,620)(2,620)─Long-term bank loans(4,939)(4,931)

8

Bonds payable(1,135)(1,145)(10)Long-term deposits(2,216)(2,351)

(135)

─

─

─

Derivatives

Thousands of U.S. dollars
Carrying
March 31, 2013
Cash and deposits$

Unrecognizedaccount

Fair value

41,074$

41,074

gain/loss$─

Trade notes and accounts receivable

357,717357,717

─

Short-term securities

34,27734,2781

Investment securities

82,96882,97810

Trade notes and accounts payable(188,068)(188,068)―

Short-term bank loans(27,869)(27,869)─Long-term bank loans(40,733)(40,727)

6

Bonds payable(6,819)(6,863)(44)

Long-term deposits(21,254)(22,938)(1,684)───

Derivatives

Methods to determine the estimated fair value of financial instruments and othermatters related to securities and derivative transactions:(a) “Cash and deposits” and “Trade notes and accounts receivable”
Their carrying amounts approximate fair value because of their short maturity.
(b) “Short-term securities”
The fair values of held-to-maturity debt securities are based on quotes provided
by the financial institutions.
The carrying amounts of the other securities than the above debt securities
approximate fair value because of their short maturity.

Basis of Presenting
Financial Statements

Consolidated 30(c) “Investment securities”
The fair values of marketable securities are based on quoted market prices. The
fair values of debt securities are based on quotes provided by the financial
institutions. For information on securities classified by holding purpose, pleaserefer to Note 3 “Securities”.
(d) “Trade notes and accounts payable” and “Short-term bank loans”
Their carrying amounts approximate fair value because of their short maturity.
(e) “Long-term bank loans”
The fair value of long-term bank loans is estimated based on present value of thetotal of principal and interest discounted by an assumed current interest rate forloans with similar terms and remaining maturities.
(f) “Bonds payable”
The fair value of bonds payable is estimated based on present value of the total ofprincipal and interest discounted by an assumed interest rate based on debt’s
maturity and credit risk.
(g) “Long-term deposit”
The fair value of long-term deposit is estimated based on present value of thetotal of principal and interest discounted by an assumed interest rate, if possible,
based on debt’s maturity and credit risk.
(h) “Derivatives”
Please refer to Note 12 “Derivatives”.
Financial instruments for which it is extremely difficult to determine the fairvalue at March 31, 2013 and 2012 consist of the following:

Non-listed equity securities
Long-term deposit

Millions of yen

Thousands of
U.S. dollars

2013

2012

2013

¥ 1,195¥ 660$ 12,711

1,054

1,055

11,211

Basis of Presenting
Financial Statements

Consolidated 31

The annual maturities of financial assets and investment securities with
contractual maturities subsequent to March 31, 2013 and 2012 were as follows:
Millions of yen
Due in one year
March 31, 2013
Cash and deposits

or less¥

Trade notes and accounts receivable

3,861

Due after one

Due after five

year throughyears throughfive years

ten years

¥

─

¥

─

33,629──

Short-term securities

617

─

─

Investment securities

─

15

─

Total

¥ 38,107

¥

15

¥

─

Millions of yen
Due in one year
March 31, 2012
Cash and deposits

or less¥

Trade notes and accounts receivable

4,223

Due after five

year throughyears throughfive years

ten years

¥

─

¥

─

29,284

1

─

─

619

15

Investment securities
Total

Due after one¥ 33,507

¥

620

¥

15

Thousands of U.S. dollars
Due after one

Due after fiveDue in one year

year throughyears throughMarch 31, 2013or less

five years

ten years

Cash and cash equivalents$$

Trade notes and accounts receivable

41,074―$―

357,717──

Short-term securities

6,568

─

─

Investment securities

─

160

─

Total

$ 405,359

$

160

$

―

11. Investment Property
The company and certain subsidiaries hold some rental properties including landin Tokyo and other areas (“investment properties”). The amounts of net income
related to investment properties (rental income is recognized in operating
revenue and rental expense is principally charged to operating expenses) were
¥ 833 million ($ 8,863 thousand) and ¥ 822 million for the year ended March 31,
2013 and 2012, respectively. The amounts of loss on impairment of investment
properties was ¥ 234 million ($ 2,493 thousand) for the year ended March 31,

Basis of Presenting
Financial Statements

Consolidated 32

2013 (Note 15). There was no loss on impairment of investment properties for theyear ended March 31, 2012.
The carrying amount, changes in such balances and market prices of investment
properties were as follows:
Millions of yen

Carrying amount

Fair value

Increase/
April 1, 2012
¥ 9,170(decrease)¥ 131

March 31, 2013

March 31, 2013

¥ 9,301¥ 11,294

Millions of yen

Carrying amount

Fair value

Increase/
April 1, 2011
¥ 9,533(decrease)¥ (363)

March 31, 2012

March 31, 2012

¥ 9,170¥ 11,914

Thousands of U.S. dollars

Carrying amount

Fair value

Increase/
April 1, 2012
$ 97,551(decrease)$ 1,388

March 31, 2013

March 31, 2013

$ 98,939$ 120,137(1) Carrying amount is net of accumulated depreciation and accumulated
impairment losses, if any.
(2) Increase during the year ended March 31, 2013 was mainly due to the change
in holding purpose of Haneda office in an amount of ¥ 621 million ($ 6,602
thousand).
Increase during the year ended March 31, 2012 was mainly due to the site
preparation in Nagoya Plant in an amount of ¥ 56 million.
Decrease during the year ended March 31, 2013 was mainly due todepreciation in an amount of ¥ 213 million ($ 2,269 thousand) and
impairment loss in an amount of ¥ 234 million ($ 2,493 thousand).
Decrease during the year ended March 31, 2012 was mainly due todepreciation in an amount of ¥ 222 million.
(3) Fair value at March 31, 2013 and 2012 was principally measured based on thereal estate appraisal assessed by the external real estate appraiser.

Basis of Presenting
Financial Statements

Consolidated 33

12. Derivatives
Derivative financial instruments are utilized by the Company principally to
reduce interest rate risk and foreign exchange rate risk. The Company has
established a control environment which includes policies and procedures for risk
assessment and for the approval, reporting and monitoring of transactions
involving derivative financial instruments. The Company does not hold or issue
derivative financial instruments for trading purposes.
The notional amounts and the estimated fair value of derivative financial
instruments, for which deferred hedge accounting has been applied were as
follows:
Millions of yen
March 31, 2013

Hedged item

Contract
amountContract amountdue after one year

Long-term debt¥¥

Fair value

Interest rate swap:(Fixed rate payment/floating
rate receipt)

1,329

811

Note

Millions of yen
March 31,
31, 2012

Hedged item

Contract
amountContract amountdue after one year

Long-term debt¥¥

Fair value

Interest rate swap:(Fixed rate payment/floating
rate receipt)

1,865

1,329

Note

Thousands of U.S. dollars
March 31, 2013

Hedged item

Contract
amountLong-term debt$

Contract amountdue after one year

Fair value

Interest rate swap:(Fixed rate payment/floating
rate receipt)

14,137

$

8,627

Note

Fair value of swap contracts assigned for Long-term debt is included in the fairvalue of Long-term debt disclosed at Note 10 “Financial Instruments and Related
Disclosures”.

Basis of Presenting
Financial Statements

Consolidated 34

13. Shareholders’ Equity
Changes in common stock and additional paid-in capital have resulted from thefollowing:
Millions of yen

Balance at March 31, 2011Retirement of stock during 2012
Balance at March 31, 2012Retirement of stock during 2013
Balance at March 31, 2013

N u m be r o f
Sh are s
42 , 73 7, 6 68－
42 , 73 7, 6 68－
42 , 73 7, 6 68

Co mmo n
S to c k
11, 9 00－
11, 9 00－
11, 9 00

Cap i ta l
Su r p lu s
11, 7 19－
11, 7 19－
11, 7 19

Thousands of U.S. dollars

Balance at March 31, 2012Retirement of stock during 2013
Balance at March 31, 2013

Co mmo n

Cap i ta l

S to c ksu r p lu s

12 6 ,5 8 1－
12 6 ,5 8 1

12 4 ,6 5 4－
1 24 , 65 4

The Company adopted 100 shares of common stock as “unit amount of shares”. A
holder of shares representing less than one unit cannot exercise any voting rights
with respect to such shares. However, the holder is entitled to receive dividends
and other distributions. A holder of a fraction of a unit may at any time request
the Company to purchase such shares at the prevailing market price. Shares sopurchased must be sold or otherwise transferred to a third party within areasonable time.

14. Research and Development
Research and development expenditure which is included in “Selling, generaland administrative expenses” were ¥ 1,163 million ($ 12,369 thousand) and¥ 1,013 million for the years ended March 31, 2013 and 2012, respectively.

15. Loss on impairment of long
long-lived assets
The Group recognized loss on impairment of long-lived assets as follows:
Use

Type of assets

location

Idle property

Land

Chino-shi, Nagano

Idle propertyLand

Ota-ku, Tokyo

Property for sale

Buildings,

structures,

machinery,equipment, tools, furniture and fixtures

Atsugi-shi, Kanagawa

Basis of Presenting
Financial Statements

Consolidated 35

With regard to the property, plant and equipment of the Group, business assets wereclassified into groups based on the management accounting categories. For rental
properties, idle properties and properties for sale, each property is considered toconstitute a group. Headquarters and welfare facilities were classified as corporate
assets.
Since return of investments in certain idle properties was judged to be difficult due tofalling land prices, the book values of such assets were written down to recoverable
values or net sales values, and the resulting decrease was recognized as loss on
impairment of long-lived assets of ¥234 million ($2,493 thousand), comprising ¥190
million ($2,023 thousand) for land, ¥42 million ($447 thousand) for buildings and ¥2
million ($23 thousand) for other assets. There was no impairment loss of long-lived
assets for the year ended March 31, 2012.
The recoverable values of the above idle properties were determined using net sales
values based on appraisal values for road rating or fixed asset tax.

16. Income Taxes
The Company and its domestic subsidiaries are subject to several taxes based on
income, which in the aggregate resulted in a statutory tax rate of approximately
37.96% and 40.64% for the years ended March 31, 2013 and 2012, respectively.
Foreign subsidiaries are subject to income taxes of the countries in which they
operate.

Basis of Presenting
Financial Statements

Consolidated 36

The tax effects of significant temporary differences which resulted in deferred
tax assets and liabilities at March 31, 2013 and 2012 were as follows:
Millions of yen

2013
Deferred tax assets:
Accrued expenses
Liabilities for retirement benefits
Depreciation
Fixed assets – elimination ofintercompany profits
Allowance for doubtful accounts
Net operating loss carry-forwards
Other
Sub-total
Less valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Deferred gain on sales of fixed assets
for income tax purposes
Unrealized gain on investment
securities
Special depreciation reserve
Unrealized gain on subsidiaries’ fixed
assets by revaluation at the
beginning of consolidation
Total
Net deferred tax assets (liabilities)

Thousands of
U.S. dollars

2012

2013

488
711
424

$ 5,572
6,964
5,189

663

639

7,049

612
140
917
3,999
(1,317)
2,682

539
1,102
1,008
4,911
(1,195)
3,716

6,512
1,489
9,771
42,546(14,010)28,536(1,741)(1,763)(18,522)

(942)

(395)

(10,023)

(174)

(14)

(1,848)(1,283)(1,283)(13,644)(4,140)¥ (1,458)(3,455)¥ 261(44,037)$ (15,501)

¥

524
655
488

¥

The reconciliation between the statutory tax rate and the effective income tax
rate for the year ended March 31, 2013 and 2012 were as follows:
2013
2012
Statutory tax rate
37.96%
40.64%
Non-deductible expenses for income tax purpose
0.87
1.43
Non-taxable dividend income(0.41)(0.59)
Inhabitant per capita tax
1.52
2.69
Effect of tax rate change－(3.95)
Change in valuation allowance
2.46(10.13)
Amortization of negative goodwill(2.68)(5.16)
Equity in earnings of affiliated companies
0.14
0.91
Loss on impairment of long-lived assets
0.81－(0.27)
Other(0.21)
25.57%
Effective tax rate
40.46%

Basis of Presenting
Financial Statements

Consolidated 37

17. Comprehensive Income

The components of other comprehensive income for the year ended March 31,
2013 and 2012 were as follows:
Millions of yen
Unrealized gain on available-for-sale securities:
Gains arising during the year
Reclassification adjustments for loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation adjustments:
Adjustments arising during the year
Total
Share of other comprehensive income in affiliate:
Gains arising during the year
Total
Total other comprehensive income

Thousands of
U.S. dollars

2013

2012

2013

¥ 1,535
1,535
(549)
¥ 986

¥ 451
47
498
(145)
¥ 353

$ 16,329
16,329(5,836)$ 10,493

¥ 77
¥ 77

¥ (17)¥ (17)

$ 811
$ 811

¥ 14
¥ 14

¥0
¥0

$ 152
$ 152

¥ 1,077¥ 336$ 11,456

18. Trade Note Maturities
The following trade notes, which matured but were not settled on March 31, 2013 and2012 because that day fell on a bank holiday, were included in the balance sheet as ofMarch 31, 2013 and 2012, respectively.
Millions of yen

Trade notes receivable
Trade notes payable

Thousands of U.S.
dollars

2013

2012

2013

¥ 840

¥ 800

$ 8,939

932

942

9,913

19. Provision of reserve for Losses on Construction Contracts
Provision of reserve for losses on construction contracts included in Cost of Sales
were ¥ 4 million ($ 41 thousand) and ¥ 31 million for the years ended March 31,
2013 and 2012, respectively.

Basis of Presenting
Financial Statements

Consolidated 38

20.
20. Segment Information
a. Description of reportable segments
The Group’s reportable segments are those for which separately financial
information is available and regular evaluation by the Board of Directors is being
performed in order to decide how resources are allocated among the Group. The
Group conducts several types of businesses including specialty truck business,environmental equipment and systems and real estate rental business. The
Company and its consolidated subsidiaries are engaged in each business as anindependent management unit. The Group consists of three reportable segments,
which are “Specialty truck business” (Industry A), “Environmental equipment
and systems business” (Industry B) and “Real estate rental business” (Industry
C). Industry A manufactures and distributes specialty trucks such as dump
trucks, tailgate lifters, tank trucks, refuse trucks, trailers, etc. Industry B
manufactures and distributes recycle facilities, including maintenance andconsignment business. Industry C manufactures multistory parking equipment
and offers operating services for toll parking and real estate rental services.
b. Methods of measurement for the amounts of sales, profit (loss), assets,
liabilities and other items for each reportable segment
The accounting policies of each reportable segment are consistent to those
disclosed in Note 2, “Summary of Significant Accounting Policies”. Intersegment
sales or transfers are based on the market prices.
c. Information about sales, profit (loss), assets and other items for the years
ended March 31, 2013 and 2012 are as follows:
Millions of yen
Reportable segments
Reconciliations(Note 1)

Consolidated(Note 2)

¥ 76,724－¥ 76,724

600

627

(627)

－

9,953

6,125

77,351(627)

76,724

3,368

1,242

983

5,593

(459)

5,134

64,150

5,735

12,696

82,581

15,314

97,895

Depreciation

1,061

59

260

1,380

－

1,380

Increase in tangible andintangible fixed assets

1,261

23

702

1,986

－

1,986

IndustryA

IndustryB

IndustryC

Total¥ 61,246¥ 9,953¥ 5,525

27－

61,273

Segment profit (loss)
Segment assets

2013
Net sales:
External customers
Intersegment sales ortransfers
Total

Other items:

Basis of Presenting
Financial Statements

Consolidated 39

Millions of yen
Reportable segments
Reconciliations(Note 1)

Consolidated(Note 2)

IndustryA

IndustryB

IndustryC

Total¥ 54,015¥ 8,475¥ 5,293¥ 67,783

－

18

0

538

556

(556)

－

54,033

8,475

5,831

68,339(556)

67,783

Segment profit (loss)

1,398

1,188

744

3,330

(373)

2,957

Segment assets

62,381

4,691

11,777

78,84915,022

93,871

Depreciation

1,339

64

210

1,613

－

1,613

Increase in tangible andintangible fixed assets

2,171

31

97

2,299

－

2,299

2012
Net sales:
External customers
Intersegment sales ortransfers
Total¥

67,783

Other items:

Thousands of U.S. dollars
Reportable segments
Reconciliations(Note 1)

Consolidated(Note 2)

$ 816,130－$ 816,130

6,378

6,667

(6,667)－

105,879

65,149822,797(6,667)816,130

35,824

13,216

10,45359,493(4,878)54,615682,373

61,007135,045878,425

162,900

1,041,325

Depreciation

11,284630

2,765

14,679－14,679

Increase in tangible andintangible fixed assets

13,416

241

7,473

21,130－21,130IndustryB

IndustryC

Total$ 651,480 $ 105,879$ 58,771

289－

651,769

Segment profit (loss)
Segment assets

2013
Net sales:
External customers
Intersegment sales ortransfers
Total

IndustryA

Other items:

1.

Reconciliations of segment profit in an amount of ¥(459) million ($(4,878)
thousand) which consists of elimination of intersegment transactions in an
amount of ¥14 million ($154 thousand) and corporate expenses which are notallocated to each reportable segment in an amount of ¥(473) million ($(5,032)
thousand). Corporate expenses are mainly general administrative expenses
not attributable to any other reportable segments.
Reconciliations of segment assets are surplus fund (cash and deposits andsecurities) and long-term investment fund (investment securities) of theCompany.

Basis of Presenting
Financial Statements

Consolidated 40

2.

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

3.

As described in Note 2 “Summary of Significant Accounting Policies”, prior to
April 1, 2012, depreciation of property, plant and equipment, except for buildings,
was computed by the declining-balance method. However, effective from April 1,
2012, the straight-line method has been applied to all property, plant andequipment. The effect of this change was to increase operating income for theyear ended March 31, 2013 of “Industry A,” “Industry B” and “Industry C” by¥ 204 million ($ 2,177 thousand), ¥ 13 million ($ 138 thousand) and ¥ 29 million($ 307 thousand), respectively.

Information about impairment loss on fixed assets by reportable segment
Millions of yen
Reportable segments

2013
Loss on impairment

IndustryA¥－

IndustryB¥－

Industry
C
¥

234

Total

¥

Reconciliations¥

234

Consolidated

－

¥

234

of long-lived assets

There was no impairment loss for the years ended March 31, 2012.
Thousands of U.S. dollars
Reportable segments

2013

IndustryA

IndustryB

Industry
C

Total

$ －

$ －

$ 2,493$ 2,493

Loss on impairmentof long-lived assets

Reconciliations

Consolidated$ －$ 2,493

Information about amortization of goodwill and unamortized balance
Millions of yen
Reportable segments
IndustryA

IndustryB

IndustryC

Total

Reconciliations

Consolidated

Amortization for the year

377

－

－

377

－

377

Unamortized balance

－

－

－

－

－

－

2013
Negative goodwill:Basis of Presenting
Financial Statements

Consolidated 41

Millions of yen
Reportable segments
IndustryA

IndustryB

IndustryC

Total

Reconciliations

Consolidated

Amortization for the year

377

－

－

377

－

377

Unamortized balance

377

－

－

377

－

377

2012
Negative goodwill:

Thousands of U.S. dollars
Reportable segments

2013

IndustryA

IndustryB

IndustryC

Total

Reconciliations

Consolidated

4,005

－

－

4,005

－

4,005

－

－

－

－

－

－

Negative goodwill:
Amortization for the year
Unamortized balance

21. Subsequent Event
The following appropriations of the Company’s retained earnings in respect of
the year ended March 31, 2013 were as proposed by the Board of Directors andapproved by the shareholders at the annual general meeting held on June 26,
2013.
Appropriations
Cash dividends of ¥ 9 ($ 0.10) per share

Millions of yen¥

358

Thousands of
U.S. dollars
$

3,804

Independent Auditor’s Report

42Corporate Information

43

CORPORATE INFORMATION
Kyokuto Kaihatsu Kogyo Co., Ltd.
Established: June 1, 1955
Paid-in Capital: 11,899,867,400 yen (as of March 31, 2013)
Number of Shares Issued: 42,737,668 shares (as of March 31, 2013)
Number of Employees: consolidated 2,206; non-consolidated 840(as of March 31, 2013)
Headquarters:
6-1-45, Koshienguchi, Nishinomiya-shi, Hyogo, 663-8545 Japan
Tel.+81-798-66-1000, Fax.+81-798-66-8146
Tokyo Office (Overseas Business Department):
3-15-10, Higashi-shinagawa, Shinagawa-ku, Tokyo, 140-0002, Japan
Tel.+81-3-5781-9828, Fax+81-3-5781-3431
Plants:Yokohama Plant
Occupies 78,158 ㎡
Located in Yamato, Kanagawa (Japan)
Nagoya Plant
Occupies 132,537 ㎡
Located in Komaki, Aichi (Japan)
Miki Plant
Occupies 98,274 ㎡
Located in Miki, Hyogo (Japan)
Fukuoka Plant
Occupies 66,832 ㎡
Located in Iizuka, Fukuoka (Japan)
Plant of KYOKUTO KAIHATSU (KUNSHAN) MACHINERY CO., LTD.
Occupies 83,140 ㎡
Located in Kunshan, Jiangsu (China)
Plant of MITHRA KYOKUTO SPECIAL PURPOSE VEHICLE CO., PVT. LTD.
Occupies 60,405 ㎡
Located in Veerapanenigudem, Andhra Pradesh (India)
Head Plant of NIPPON TREX Co., Ltd.
Occupies 125,285 ㎡
Located in Toyokawa, Aichi (Japan)
Otowa Plant of NIPPON TREX Co., Ltd.
Occupies 20,889 ㎡
Located in Toyokawa, Aichi (Japan)

Board of Directors and Statutory Auditors

BOARD OF DIRECTORSDIRECTORS AND STATUTORY AUDITORS
Takaaki Fudetani,
Representative Director, Chairman, CEO
Kazuya Takahashi,
Representative Director, President, COO
Harumi Sugimoto,Director, Executive Officer
Tokumasa Hayashi,
Director, Executive Officer
Takashi Yoneda,
Director, Executive Officer
Haruhiro Kondo,
Director, Executive Officer
Ikuya Sakai,
Director, Executive Officer

Ryuichiro Nishikawa, Associate Senior Executive Officer
Toshihisa Nakanishi,

Executive Officer

Takeo Norimitsu,

Executive Officer

Noboru Horimoto,Executive Officer

Sadanobu Kato,

Executive Officer

Akira Sakurai,

Executive Officer

Souichiro Ochi,

Executive Officer

Tatsuya Nunohara,

Executive Officer

Yoshinori Takashima, Standing Auditor
Tomoki Ueyama,

AuditorAkira Michigami,

Outside Corporate Auditor

Morio Kusunoki,

Outside Corporate Auditor

44