Annual Report

4, Kojimachi 5-chome, Chiyoda-ku, Tokyo 102-8539, Japan
Telephone: +81 3 3238 8027 Facsimile: +81 3 3238 8326

2013•

http://www.n-koei.co.jp E-mail: info@n-koei.co.jp

Year ended
March 31, 2013

Printed in Japan

Company Profile

Nippon Koei Co., Ltd. established in 1946, specializes in engineering
consulting and electric power engineering. Since its foundation, the Company
has adhered to a policy of contributing to society through technology.
Our engineering consulting services, provided by the Consulting
Administration Group, draws on the technical expertise of specialists indiverse fields. Since our first overseas venture, a hydroelectric power projectin Myanmar in 1954, we have participated in a broad variety of sophisticateddevelopment projects worldwide.
The Engineering Administration Group spearheads the Company's electric
power engineering business. Here, we provide a complete engineering
package, from surveys and designs to the installation of a wide range ofequipment, including power stations and substations, transmission lines, and
end-user equipment. We are active both in Japan and overseas.
Committed to responsible corporate citizenship, Nippon Koei and its
employees dedicate their efforts to creating comfortable living environmentsfor people around the world.

CONTENTS
Financial Highlights .................................................................................................................. 1
Consolidated Business Report for Fiscal Year Ended March 31, 2013 ....................................... 2
Consolidated Balance Sheet .................................................................................................... 10
Consolidated Statement of Income and Comprehensive Income ......................................... 12
Consolidated Statement of Changes in Equity ....................................................................... 13
Consolidated Statement of Cash Flows .................................................................................. 14
Notes to Consolidated Financial Statements ......................................................................... 15
Nonconsolidated Balance Sheet .............................................................................................. 40
Nonconsolidated Statement of Income .................................................................................. 42
Nonconsolidated Statement of Changes in Equity ................................................................ 43
Notes to Nonconsolidated Financial Statements ................................................................... 44
Corporate Information ............................................................................................................ 54
Major Nippon Koei Group Companies ................................................................................... 56

Financial Highlights

Consolidated
Thousands of
U.S. Dollars

Millions of Yen
Years Ended March 31

2013

2012

2013

Net sales ................................................................

¥72,412¥65,945$769,931

Net income ...........................................................

2,850

1,420

30,303

Net income per share (Yen/Dollars) ....................

37.76

18.39

0.40

Total assets ...........................................................

84,79579,372

901,595

Equity ������������������������������������������������������������������

46,92943,505498,979

As of March 31

Nonconsolidated
Thousands of
U.S. Dollars

Millions of Yen
Years Ended March 31

2013

2012

2013

Net sales ................................................................

¥55,507¥49,852$590,186

Net income ...........................................................

2,154

1,203

22,903

Net income per share (Yen/Dollars) ....................

28.54

15.58

0.30

Total assets ...........................................................

75,51071,601

802,871

Equity ������������������������������������������������������������������

42,49539,921

451,834

As of March 31

Notes: 1. Per share amounts are based on the weighted average number of shares outstanding during each period.
2.	The dollar amounts in this report represent translations of yen, for convenience only, at the rate of ¥94.05=US$1, the rate ofexchange at March 31, 2013.

1

Consolidated Business Report for Fiscal Year Ended March 31, 2013
1. Overview of Performance and Cash Flow
(1) Performance
During the fiscal year under review (April 1, 2012, through March 31, 2013), the Japanese economy struggled tostage a full-fledged recovery. Strong public investment projects were buoyed by demand related toreconstruction efforts from the Great East Japan Earthquake. This was offset, however, by lower exports andcapital expenditure due to the slowdown in the global economy amid growing concern about the future external
economic environment, triggered by sovereign debts in a number of European countries and a slowdown in theemerging economies.
On the other hand, following the Liberal Democratic Party’s return to power and the formation of a newadministration in December, the yen retreated from its excessively high level on the back of expectations ofmonetary easing and improved economic and fiscal policies, with signs of economic recovery seen at the end of
the year.
The Nippon Koei Group’s domestic consulting operations remained healthy thanks to increased public projects
related mainly to post-quake reconstruction work, as well as large supplementary budgets consisting
implemented by the Abe administration, which consisted chiefly of reconstruction projects and disasterprevention measures.
Our overseas operations also benefited from an increase in the Official Development Assistance (ODA) budget
and growing demand for infrastructure projects in developing countries.
Our electric power engineering operations remained weak due to a reduction in budgets for new capital
expenditure and repair works in response to calls for cost cutting from electric power companies whose businessconditions remained under pressure. Concurrently, signs of recovery began to emerge following the resumptionof maintenance and updating works of existing facilities.
Against this backdrop, the Group as a whole focused on continuing to assist with post-quake reconstruction
efforts in the disaster-hit regions. The fiscal year under review was the first year of our Medium-Term
Management Plan (FY2013−FY2015), which sets as its basic principles (1) enhancement of global operations,and (2) exploration and formulation of new business domains, we sought to bolster our existing business bases,
explore new business models and enter into new businesses.
In addition, we launched an initiative designed to enhance the work-life balance, in an effort to improve ourworking environment and raise productivity.
As a result, consolidated orders received increased 2.7% year on year to total ¥71,135 million, while consolidated
sales grew 9.8% to ¥72,412 million.
Operating income jumped 53.2% on a year-on-year basis to ¥4,642 million, and net income ballooned 100.7% to¥2,850 million, buoyed by higher sales and continued efforts to improve profitability by reviewing cost items.
The performance for each segment is outlined below.

Domestic Consulting Operations
Orders were fueled by a host of projects including post-quake recovery and reconstruction, national disaster
preparedness against tsunami and earthquakes and extending the life and preserving the functions of public
facilities. As a result, orders rose 2.2% year on year to ¥38,423 million, while sales expanded 3.3% to ¥35,547
million. Segment profit totaled ¥1,195 million, up ¥317 million.

Overseas Consulting Operations
Orders remained firm for projects to be financed by Japan’s ODA budget, as demand grew for infrastructuredevelopment in emerging countries and orders expanded for the development and improvement of urban
infrastructure. We also stepped up sales efforts in Sub-Saharan African countries, Myanmar and other emerging

2

countries and sought to win orders for a feasibility study of industrial parks to be funded by private capital. As aresult, orders climbed 2.5% year on year to total ¥20,147 million, while sales rose 14.2% to ¥18,638 million.
Segment profit came to ¥1,440 million, up ¥465 million.

Power Engineering Operations
Electric power companies, our main clients, cut back on capital investments and maintenance budgets. In thisharsh environment, we concentrated on proposition-style activities for upgrades of their dated facilities andsuccessfully secured a higher order total than in the previous year. We also saw orders increase for digital public
safety ratio communications systems and post-quake recovery projects in our key mechatronics consulting
operations. Orders rose 4.6% year on year to ¥12,542 million, while sales soared 23.2% to ¥15,930 million.
Segment profit was up ¥1,088 million to ¥1,925 million.

Real Estate Leasing Operations
Sales from our real estate leasing operations declined by 5.2% year on year to reach ¥1,131 million, while
segment profit grew ¥26 million to ¥848 million.

(2) Cash Flows
Cash and cash equivalents at the end of the fiscal year under review totaled ¥6,579 million, increasing ¥656
million over the previous year. The factors behind this increase included the following.
Net cash provided by operating activities totaled ¥3,373 million (versus a net outflow of ¥1,195 million during
the prior year). This was due primarily to an increase of ¥3,033 million in trade accounts receivable while
income before income taxes and minority interests totaled ¥5,086 million, an increase of ¥2,096 million.
Net cash provided by investing activities totaled ¥237 million (versus a net inflow of ¥1 million a year earlier).
This was due primarily to proceeds from sales and redemption of investment securities.
Net cash used in financing activities amounted to ¥3,084 million (versus a net inflow of ¥1,950 million theprevious year). This was due primarily to repayments of short-term borrowings.
The table below shows trends in cash flow-related indicators for the Group.
Reference: Trends in Cash Flow-related Indicators

Capital-to-asset ratio (%) .....................
Capital-to-asset ratio
on market value basis (%) ................
Interest-bearing
debt-to-cash flow ratio (times) .........
Interest coverage ratio (times) ...........

Fiscal Year
Ended March2009

Fiscal Year
Ended March2010

Fiscal Year
Ended March2011

Fiscal Year
Ended March2012

Fiscal Year
Ended March
2013

52.2

53.8

58.1

54.5

55.0

22.7

27.5

32.0

27.4

34.5

2.5
28.0

9.5
9.8

1.6
52.3

—
—

3.1
73.7

Capital-to-asset ratio: stockholders’ equity / total assets
Capital-to-asset ratio on market value basis: market capitalization / total assets
Interest-bearing debt-to-cash flow ratio: interest-bearing debts / cash flow
Interest coverage ratio: cash flow / interest payment
Notes: 1. All figures are calculated on the basis of consolidated financial figures.
2. Market capitalization is computed on the basis of the number of shares issued, excluding treasury stocks.
3. Cash flow here means operating cash flow.
4. Interest-bearing debt here comprises all debts included in the balance sheet on which interest is paid.
5.	The interest-bearing debt-to-cash flow and interest coverage ratios for the fiscal year ended March 2012, were negative as
indicated by “—.”3

2. Production, New Orders and Sales(1) New Orders
This Consolidated
Fiscal YearBusiness Category

Change onPrevious Year(%)

(Millions of yen)

New Orders
Domestic consulting operations ..............................
Overseas consulting operations (Note. 1) ...............
Power engineering operations .................................
Other business operations .......................................
Total new orders ..................................................
Outstanding orders
Domestic consulting operations ..............................
Overseas consulting operations ..............................
Power engineering operations .................................
Other business operations .......................................
Total orders on hand ...........................................

¥38,423
20,147
12,542
23
71,135

2.2
2.5
4.6
-29.2
2.7

13,24734,3055,453
4¥53,009

6.7
1.1
-19.4
-78.9
-0.3

Notes: 1.	The figure of new orders of Overseas consulting operations includes ¥639 million ($6,794 thousand) outstanding orders of
NIPPON KOEI INDIA PVT. LTD. (“NKI”) when it was consolidated. The Company consolidated NKI from this fiscal year.
2. Figures above do not include consumption tax.
3.	The above figures are related to transactions with non-Group organizations: They do not include internal transactions
between Group segments or the transfer amounts involved.

(2) Sales PerformanceThis Consolidated
Fiscal YearBusiness Category

Change onPrevious Year(%)

(Millions of yen)Domestic consulting operations ..............................
Overseas consulting operations (Note. 1) ...............
Power engineering operations .................................
Real estate leasing operations .................................
Other business operations .......................................
Total sales ..............................................................

¥35,547
18,63815,9301,131
1,166¥72,412

3.3
14.2
23.2
-5.2
8.8
9.8

Notes: 1. Production status is not stated due to difficulties in defining consolidated group production performance.
2. Transactions between business segments are offset and eliminated.
3. Amounts above do not include consumption tax.
4. Sales to major customers as a proportion of total sales are given as follows.

Customer
Ministry of Land, Infrastructure,
Transport and Tourism .....................
Japan International
Cooperation Agency ..........................
Tokyo Electric Power Co., Ltd. ...........

4

This Consolidated
Fiscal Year
Amount(Millions of yen)

Proportion(%)

Previous Consolidated
Fiscal Year
Amount(Millions of yen)

Proportion(%)¥12,97317.9¥12,976

19.7

8,474

11.7

6,701

10.2

8,470

11.7

6,092

9.2

3. Future Challenges(1) Management Policy
The Nippon Koei Group takes the management philosophy “Contributing to society through technology withsincerity.” Guided by the slogan “Challenging mind, Changing dynamics,” the Group is aiming to realize its
management philosophy.
Looking ahead, under this management philosophy and slogan, we see that reconstruction demand related to theGreat East Japan Earthquake is merely temporary and that the growth of emerging markets in Asia and otherparts of the world is expected to fuel demand for overseas infrastructure construction. Working against thisbackdrop, we will continue to make further inroads into the global market. Accordingly, while maintaining asecure technical foundation in Japan (construction consulting and engineering businesses), the NK Group will
focus on the expanding infrastructure development market in developing countries to significantly expand its
businesses. On the other hand, to attain sustainable growth, the overseas office and/or group companies shouldtake the initiative of exploring and forming new business domains. In line with this long-term goal, the NK Grouphas been addressing the key challenges listed below, based on the three-year Medium-Term Management Plan
started in FY2013. In FY2014, to the list of key challenges we added “(4) Enhancement of the work-life balance.”(1)	Development and management of overseas offices and/or group companies (introduction of multi-domestic
management)(2) Enhancement of the existing business sectors and expansion of business domains(3) Exploration of new business models including new initiatives in project management(4) Enhancement of the work-life balance
In view of the Medium-Term Management Plan, we will address the key challenges in the next fiscal year thatcovers a 15-month period from April 1, 2013, through June 30, 2014, due to a change in our fiscal year-end.
1) Development and management of overseas offices and/or group companies (introduction of multidomestic management)
Overseas offices and/or group companies will be established and/or enhanced in the four major markets (Asia,
the Middle East and North Africa, Latin America, and Sub-Saharan Africa). The sales structure will be built
around region-based marketing with appropriate levels of responsibility and authority granted to local bases, inan effort to aggressively engage the non-ODA market in addition to the current ODA market.
2) Enhancement of the existing business sectors and expansion of business domains
In response to drastic changes occurring in the existing business sectors where the NK Group operates, we
intend to identify business domains to expand each business operation, develop technologies, and employ, train
and strengthen human resources, in a bid to steadily expand our businesses. Specifically, our domestic
consulting operations will focus on disaster recovery projects and infrastructure management operations, while
overseas consulting operations will concentrate on urban development projects in emerging countries and powerengineering operations will direct efforts to expanding the mechanical and electrical consulting operation.
3) Exploration of new business models including new initiatives in project management
We have designated water power generation as our key new business model and will promote this businessthrough increased cross-departmental cooperation.
4) Enhancement of the work-life balance
We will review the current working environment through company-wide initiatives led by the Work-Life Balance
Promotion Committee to improve the balance between work and other aspects of employees’ lives. Based on5these policies, the Nippon Koei Group will proactively engage in business operations and address these issues inan effort to improve our performance further.

(2) Basic Policy Governing Corporate Decision-Makers on Financial Affairs andOperations
Our basic policy governing corporate decision-makers on financial affairs and operations (GovernancePrinciples) is as detailed below.
1) Governance Principles
As a publicly listed company allowing its shares to be traded freely, we believe that whether or not we will sell sharesin response to a particular person’s attempt to acquire a large number of shares (an attempt to acquire a large
number of shares) should be determined ultimately by our shareholders.
However, we are proud of our company’s track record as a good corporate citizen. Nippon Koei has been charged
with fulfilling a social mission and public works projects, including construction consulting. The power of our brandis backed by a wide range of technological expertise, years of experience, and a rock-solid performance record. It
would be impossible to manage Nippon Koei, improve its corporate value, or bring profit to its shareholders without
a good understanding of everything the brand stands for or without the relationship of mutual trust that has been
built between Nippon Koei and its customers, employees, suppliers, and other stakeholders in Japan and abroad.
We believe that, in the event of a takeover bid, any party attempting to acquire a large number of shares (thebidder) should provide shareholders with all the information necessary for them to make a sound decision.
2) Special measures for realization of the Basic Policy
At Nippon Koei, we implement the following special measures in line with the Governance Principles describedin 1) above.
(i) Medium-term goals
Our medium-term goals and specific measures under our Medium-Term Management Plan are as described in
the section entitled “(1) Management Policy.”(ii) Enhancing corporate governanceWorking to boost the corporate value of Nippon Koei and the Nippon Koei Group as a whole, we are continually
improving corporate governance by strengthening management oversight, ensuring transparency, andestablishing a system that will enable us to quickly perform our operations. We also focus on compliance as wellas risk management to enhance the effectiveness of internal controls and have adopted a corporate auditor
system. The Board of Directors provides oversight of our operations, while the Board of Corporate Auditors
audits the directors’ activities.
3) Preventing an undesirable takeover in accordance with the Basic Policy
In line with the Governance Principles described in 1) above, we maintain an anti-takeover policy (hereinafter
the “Policy on Substantial Acquisition of Shares”) that is intended to prevent undesirable control over decisions
on our financial and operational policies. The Policy on Substantial Acquisition of Shares generally applies toany bidder attempting to acquire a large number of Nippon Koei shares in a bid to control 20% or more of thevoting rights held by a certain group of shareholders or acquiring enough shares to change the balance of power
to ensure that a certain group of shareholders has 20% or more of the voting rights. The Policy requires thebidder to (1) provide the Board of Directors with all relevant information including written notification
declaring his/her exact intentions in advance, and (2) begin purchasing shares only after the elapse of a tenderassessment period to be specified by the Nippon Koei Board of Directors.
The Policy on Substantial Acquisition of Shares was first introduced upon resolution by the Board of Directors in
May 2006, after which the Board voted to partially revise and continue it in June 2007. The Policy was later partially6revised upon approval of shareholders at the 63rd general shareholders’ meeting held in June 2008, and was again
partially revised upon approval of shareholders at the 66th general shareholders’ meeting held in June 2011.
The details of the Policy on Substantial Acquisition of Shares have been made available on the Nippon Koei
Group website (http://www.n-koei.co.jp/).
4) Board of Directors’ decision concerning the measures described in 2) and 3) above and the reason
The measures described in 2) above are in line with the Governance Principles described in 1) above, since they
were implemented for the purpose of enhancing corporate value and carried out in the common interests of ourshareholders. These measures emphasize protecting the interests of our shareholders over protecting thecorporate directors from being replaced.
The measures described in 3) above (the Policy on Substantial Acquisition of Shares) are in line with theGovernance Principles described in 1) above. It protects the interests of our shareholders over protecting thecorporate directors from being replaced in the following ways:a. The Policy on Substantial Acquisition of Shares meets the three basic requirements set forth in the Guidelines
Regarding Takeover Defense for the Purposes of Protection and Enhancement of Corporate Value andShareholders’ Common Interests published by the Ministry of Economy, Trade and Industry (METI) and theMinistry of Justice on May 27, 2005. It also incorporates a June 30, 2008, report entitled “Proper Role of
Takeover Defense Measures in Light of Changes in Various Environments” published by METI’s Corporate
Value Study Group.
b. The Policy enables our shareholders to make an informed decision on whether a takeover would be beneficial,prevents any apparent infringement on Nippon Koei’s corporate value and is in the best interest of Nippon
Koei and its shareholders.
c. The Rules on Substantial Acquisition of Shares and the necessary conditions for taking countermeasures arereasonable in light of our aim to maintain and enhance Nippon Koei’s corporate value and protect theinterests of its shareholders.
d. The Rules on Substantial Acquisition of Shares and the necessary conditions for taking countermeasures areconcrete and clear enough to make it possible for the shareholders, investors and potential bidders to makefair predictions about the future.
e. The policy was enacted by a vote of the shareholders at a shareholders’ meeting. Nippon Koei’s Board of
Directors can convene a shareholders’ meeting to verify the shareholders’ intentions to implement a
countermeasure or not. Decisions about whether to maintain, rescind or alter the policy, made in the form ofa resolution to be voted on at a general meeting of shareholders, will ensure that the wishes of theshareholders are reflected in company policy.
f. The policy establishes objective and clear conditions for taking countermeasures. It also establishes priorconditions needed to implement countermeasures, requiring that Nippon Koei’s Board of Directors consult its
independently established ad hoc committee in advance concerning the initiation of countermeasures. Only
after carefully considering the recommendations of the committee will the Board make its final decision on
implementing counter-takeover measures. The Policy on Substantial Acquisition of Shares ensures that all
decisions of the Board regarding countermeasures are objective and reasonable.
g. The policy empowers the ad hoc committee to seek the advice of independent experts at Nippon Koei’s
expense. The policy goes to such great lengths that it leaves no room for doubt about the fairness andobjectivity of the ad hoc committee’s recommendations.
h. The Policy on Substantial Acquisition of Shares is not intended to be a dead-hand takeover defense and may
be abolished subject to a vote at the Company’s general meeting of shareholders or at a Board of Directors’
meeting comprised of directors elected at a general meeting of shareholders. It is not a slow-hand takeover
defense either, since the term of Nippon Koei’s Board members is one year.

74. Business Risks
The following are deemed to be risks that could affect Nippon Koei’s future financial status or corporate
performance as of the date this report was submitted. These risks listed here are not intended to be allencompassing or exhaustive.

Uneven Annual Distribution of Performance Results
The primary operations of the Nippon Koei Group include domestic and overseas construction consultancy andpower engineering and equipment manufacturing. In particular, the domestic construction consultancy
operations entail national and local government projects whose orders come in as a cluster toward the end of
the fiscal year (March). As a result, approximately 70% of Group sales tend to occur during the period fromJanuary through March.

Dependence on Major Customers
Our domestic and overseas construction consultancy operations rely on national and local government contracts
and projects based on the Japanese ODA budget for some 90% of sales. Sales performance on the domestic front
tends to be affected by trends in government spending, while our international orders are a reflection of theJapanese ODA budget.
Since about 50% of our power engineering operations are for the Tokyo Electric Power Company (TEPCO), oursales performance is largely dictated by capital investments by TEPCO.

5. Operationally Significant Contracts
The Group reports no operationally significant contracts.

6. Analysis of Financial Status and Management Performance
Below is an analysis of the Nippon Koei Group’s financial status and management performance as well as its
cash flow status for the fiscal year under review.

(1) Analysis of Financial Status
Group consolidated assets at the end of the fiscal year under review amounted to ¥84,795 million, up ¥5,423
million over the previous year.
The main causes for this increase were a rise of ¥5,345 million in current assets and a ¥161 million increase ininvestments and other assets, despite a ¥83 million decrease in net property, plant and equipment.
The increase in current assets was due primarily to a ¥656 million increase in cash and cash equivalents, a ¥3,161
million increase in trade notes and trade accounts receivable as well as a ¥894 million increase in inventories.
The decrease in property, plant and equipment was due primarily to a ¥354 million increase in accumulated
depreciation, despite a rise of ¥360 million in buildings and structures.
The increase in investments and other assets was due primarily to a ¥301 million expansion in investment securities.
Consolidated liabilities at the end of the fiscal year under review rose ¥1,999 million compared to the previous
year, to ¥37,866 million.
This increase was due to a ¥1,160 million increase in current liabilities and a ¥839 million increase in long-term
liabilities.
The increase in current liabilities was due primarily to a ¥1,200 million increase in trade notes and trade accounts
payable and a ¥913 million rise in income taxes payable despite a ¥3,000 million decrease in short-term borrowings.
The increase in long-term liabilities was due primarily to a ¥428 million increase in long-term debt, a ¥112 million
increase in liability for retirement benefits and a ¥505 million increase in deferred tax liabilities.

8Equity (net assets) at the end of this fiscal year rose ¥3,424 million above last year’s total to reach ¥46,929 million.
The main cause behind this uptick was an increase of ¥2,388 million in retained earnings, and an unrealized
gain on available-for-sale securities of ¥615 million (compared with an unrealized loss on available-for-sales
securities of ¥517 million the previous year), despite an increase of ¥81 million in treasury stock.

(2) Performance Analysis
Net sales for the increased ¥6,467 million (9.8%) over the previous year to ¥72,412 million.
Operating income increased by ¥1,612 million (53.2%) over the previous year to ¥4,642 million. The cost of sales
ratio was 72.8%, down 0.8 percentage points from the previous year, while the ratio of SG&A expenses to net
sales was 20.8%, a decrease of 1.0 percentage point over the previous year. These results brought the ratio of
operating income to net sales up 1.8 percentage points year on year to 6.4%.
Other income—net amounted to ¥444 million, up ¥484 million from a year earlier, due mainly to a ¥179 million
increase in foreign currency exchange gain.
As a result, income before taxes and minority interests totaled ¥5,086 million, and net income reached ¥2,850
million, up ¥1,430 million or 100.7% from the previous year.
Net income per share came to ¥37.76, up ¥19.37 year on year from ¥18.39.

(3) Analysis of Cash Flow Status
An analysis of cash flow status for the fiscal year under review is provided in the section entitled “(2) Cash flow”
under “1. Overview of Performance and Cash Flow” in the Consolidated Business Report.

Noriaki Hirose
President:

9Co n s ol i d ated B a lanc e S h eet
Nippon Koei Co., Ltd. and Consolidated Subsidiaries
March 31, 2013

Thousands of
U.S.Dollars (Note 1)

Millions of Yen

ASSETS

2013

2013

2012

CURRENT ASSETS:¥ 6,579¥ 5,923$ 69,952

Trade notes .........................................................

43

51

457

Trade accounts ...................................................

33,20330,034353,036

Allowance for doubtful accounts ......................

(38)

(42)

(404)

Inventories (Note 4) .............................................

7,465

6,571

79,373

Deferred tax assets (Note 10) ..............................

1,423

1,248

15,130Prepaid expenses and other current assets ........

1,757

1,302

18,681

Total current assets ............................................

50,43245,087536,225

Land.......................................................................

13,956

13,962

148,389

Buildings and structures......................................

20,393

20,033

216,831

Machinery and equipment...................................

2,613

2,511

27,783

Furniture and fixtures..........................................

2,688

2,692

28,581

Lease assets...........................................................

246

252

2,616

Construction in progress......................................

3

178

32

Total.....................................................................

39,89939,628424,232

Accumulated depreciation....................................

(16,651)(16,297)(177,044)

Net property, plant and equipment....................

23,24823,331

247,188

7,423

7,122

78,926and associated companies (Note 13(5)(b)).........

684

623

7,273

Long-term loans receivable..................................

22

26

234

Goodwill................................................................

619

928

6,582

Receivables in bankruptcy....................................

123

123

1,308

Deferred tax assets (Note 10)...............................

282

324

2,998

Other assets...........................................................

2,142

1,990

22,775

Allowance for doubtful accounts.........................

(180)

(182)

(1,914)

Total investments and other assets....................

11,115

10,954

118,182

TOTAL ....................................................................

¥84,795¥79,372$901,595

Cash and cash equivalents (Note 13) ..................
Receivables (Note 13):PROPERTY, PLANT AND
EQUIPMENT (Notes 5, 6 and 8):

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3 and 13)...............
Investments in unconsolidated subsidiaries

See notes to consolidated financial statements.

10Thousands of
U.S.Dollars (Note 1)

Millions of Yen

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term borrowings (Notes 6 and 13) ...........
Current portion of long-term debt (Notes 6) ......
Payables (Note 13):
Trade notes .........................................................
Trade accounts ...................................................
Income taxes payable ...........................................
Advances received ................................................
Accrued bonuses ..................................................
Allowance for anticipated project loss ................
Allowance for loss from a disaster ......................
Other current liabilities .......................................
Total current liabilities ....................................
LONG-TERM LIABILITIES:Long-term debt (Note 6) ......................................
Liability for retirement benefits (Note 7) ...........
Allowance for environmental measures .............
Asset retirement obligations ................................
Deposits received (Note 8) ...................................
Deferred tax liabilities (Note 10) .........................
Negative goodwill .................................................
Total long-term liabilities ................................

2013

2013

2012

¥9,000
244¥12,000
157$95,694
2,594

695
6,357
1,947
6,180
1,749
61
2
5,078
31,313

391
5,461
1,034
5,530
1,733
91
12
3,744
30,153

7,390
67,592
20,70265,71018,596649
21
53,992332,940

567
3,584
34
54
1,741
573

6,029
38,107362
574
18,511
6,093

6,553

139
3,472
57
52
1,911
68
15
5,714

69,6767,393
6,209
36,018

7,393
6,132
33,63078,60766,018382,967(3,468)(3,387)(36,874)

COMMITMENTS AND CONTINGENT
LIABILITIES (Notes 12, 14 and 15)
EQUITY (Notes 9 and 17):
Common stock,authorized, 189,580,000 shares; issued,
86,656,510 shares in 2013 and 2012 .................
Capital surplus .....................................................
Retained earnings ................................................
Treasury stock—at cost
11,185,920 shares in 2013
and 11,170,244 shares in 2012 ..........................
Accumulated other comprehensive income:Unrealized gain (loss) on
available-for-sale securities .............................
Deferred loss onderivatives under hedge accounting ...............
Foreign currency translation adjustments .......
Total ....................................................................
Minority interests .................................................
Total equity .......................................................

615

(517)

6,539

(132)
3
46,638291
46,929(1)(1)
43,249256
43,505(1,404)32
495,885
3,094
498,979

TOTAL ....................................................................

¥84,795¥79,372$901,59511Consolidated Statement of Income and Comprehensive Income
Nippon Koei Co., Ltd. and Consolidated Subsidiaries
Year Ended March 31, 2013

Thousands of
U.S.Dollars (Note 1)

Millions of Yen

2013
NET SALES ...........................................................
COST OF SALES ...................................................
Gross profit ......................................................
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES (Note 11) .....
Operating income ............................................
OTHER INCOME (EXPENSES):Interest and dividend income .............................
Interest expense ...................................................
Foreign currency exchange gain (loss) ...............
Gain on sales of investment securities ...............
Loss on sales of investment securities ................
Loss from a natural disaster ................................
Other-net ...............................................................
Other income (expenses)-net ..........................
INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS ...................................
INCOME TAXES (Note 10):
Current .................................................................
Deferred ................................................................
Total income taxes ...........................................
NET INCOME BEFOREMINORITY INTERESTS ...................................
MINORITY INTERESTS IN NET
INCOME (LOSS) ................................................
NET INCOME .......................................................
MINORITY INTERESTS IN NET
INCOME (LOSS) ................................................
NET INCOME BEFORE MINORITY
INTERESTS ........................................................
OTHER COMPREHENSIVE INCOME (Note 16) :Unrealized gain on
available-for-sale securities ...............................
Deferred loss onderivatives under hedge accounting .................
Foreign currency translation adjustment ...........
Total other comprehensive income .....................
COMPREHENSIVE INCOME .............................
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of the parent ...........................................
Minority interests .................................................

2013

2012

¥72,41252,742
19,670¥65,945
48,56017,385$769,931
560,787
209,144

15,028
4,642

14,355
3,030

159,787
49,357

359
(44)
111
53
(128)

3,817
(468)
1,180
564
(1,361)

93
444

319
(56)
(68)
33
(372)
(20)
124
(40)

5,086

2,990

54,078

2,352
(151)
2,201

1,457
115
1,572

25,008(1,605)23,403

2,885

1,418

30,675

35
2,850

(2)
1,420

372
30,303

35

(2)

372

2,885

1,418

30,675

1,132

296

12,036

(131)
6
1,007
¥3,892(27)2
271¥1,689(1,393)64
10,707$41,382¥3,855¥37¥1,690¥(1)$40,989$393
U.S.Dollars(Note 1)Yen

PER SHARE OF COMMON STOCK (Note 2. t.):Basic net income ..................................................
Cash dividends applicable to the year ................
See notes to consolidated financial statements.

12¥37.76
7.50

989
4,721

¥ 18.397.50$0.400.08

Co n s ol i d ated S t atemen t o f C h an ges i n E q u i t y
Nippon Koei Co., Ltd. and Consolidated Subsidiaries
Year Ended March 31, 2013

Thousands

Millions of Yen
Accumulated Other Comprehensive Income

BALANCE, APRIL 1, 2011 ��������������������������������
Net income ���������������������������������������������������������Cash dividends, ¥7.50 per share ������������������������
Purchase of treasury stock ��������������������������������
Net change in the year ���������������������������������������
BALANCE, MARCH 31, 2012 ���������������������������
Net income ���������������������������������������������������������Cash dividends, ¥7.50 per share ������������������������
Change of scope of consolidation �������������������������
Purchase of treasury stock �����������������������������������
Disposal of treasury stock ���������������������������������
Net change in the year ���������������������������������������
BALANCE, MARCH 31, 2013 ���������������������������

Outstanding
Number of
Shares ofCommon Stock

Common Stock

Capital Surplus

79,486¥7,393¥6,132Retained
Earnings¥33,005

Unrealized Gain
(Loss) on
Available-for-Sale
Securities

TreasuryStock¥(2,304)

DeferredGain (Loss) on
Derivatives
under Hedge
Accounting¥(812)¥Foreign
Currency
Translation
Adjustments

26

Total

¥(3)

1,420

¥43,437

75,486(1,083)
7,393

6,132

33,630(3,387)75,471¥6,209¥43,698

1,420

(795)

(795)

(1,083)(1,083)

295

(27)

2

270

(5)

265

(517)

(1)

(1)

43,249256

43,505

2,850

2,850

(566)

(566)

(566)

104

104

104

(87)

(87)

(87)

6

83

83

77
¥7,393

Total Equity

2,850

(32)
17

¥261

1,420

(795)
(4,000)Minority Interests¥36,018¥(3,468)

1,132

(131)

4

1,005

35

1,040

¥615

¥(132)¥ 3¥46,638¥291¥46,929

Thousands of U.S. Dollars (Note 1)
Accumulated Other Comprehensive Income

BALANCE, MARCH 31, 2012 ���������������������������
Net income ���������������������������������������������������������Cash dividends, $0.08 per share ������������������������
Change of scope of consolidation ���������������������
Purchase of treasury stock �����������������������������������
Disposal of treasury stock ������������������������������������
Net change in the year ���������������������������������������
BALANCE, MARCH 31, 2013 ���������������������������

Common Stock

Capital Surplus$78,607$65,199

Retained
Earnings$357,576

Unrealized Gain
(Loss) on
Available-for-Sale
Securities

TreasuryStock$(36,013)$(5,497)

DeferredGain (Loss) on
Derivatives
under Hedge
Accounting

$

(11)

Foreign
Currency
Translation
Adjustments$(11)$459,850$2,723

Total Equity$462,573

30,30330,303(6,018)(6,018)(6,018)

1,106

1,106

(925)

(925)

(925)
819
$66,018

Minority Interests

30,303
1,106$78,607Total

64$382,967$(36,874)

883

883

12,036(1,393)

43

10,686371

11,057$ 6,539$(1,404)$ 32$495,885$3,094$498,979

See notes to consolidated financial statements.

13

Co n s ol i d ated S t atemen t o f C as h Fl ow s
Nippon Koei Co., Ltd. and Consolidated Subsidiaries
Year Ended March 31, 2013

Thousands of
U.S.Dollars (Note 1)

Millions of Yen

OPERATING ACTIVITIES:
Income before income taxes andminority interests ....................................................
Adjustments for:
Income taxes – paid ..............................................
Depreciation and amortization ............................
Gain on sales of property, plant and equipment .......

2013¥5,086(1,535)906(1)Loss on disposal of property, plant andequipment ...........................................................
Loss on sales of investment securities .................

FINANCING ACTIVITIES:

2013

2012

¥2,990(894)
946$54,078(16,321)
9,633
(11)

37
49

339

521

Changes in assets and liabilities, net of effects
from a newly consolidated subsidiary:
Increase in trade accounts receivable ....................

(Increase) decrease in inventories .....................
Increase in trade accounts payable ....................
Increase in liability for retirement benefits ............
Increase (decrease) in advanced received .........
Other – net .............................................................
Net cash provided by (used in)operating activities .....................................

(3,033)
(895)
1,190
111
618
877
3,373

(5,730)
292
746
103
(285)
261
(1,195)(32,249)(9,516)
12,653
1,180
6,571
9,325
35,864INVESTING ACTIVITIES:
Proceeds from sales of property,
plant and equipment ...............................................

10

24

106

Purchases of property, plant and equipment ..........

(592)

(514)

(6,295)

Proceeds from sales and redemption of
investment securities ..............................................

1,842

1,749

19,585Purchases of investment securities ..........................
Increase in other assets ............................................
Net cash provided by investing activities ........

(737)
(286)
¥237

(1,161)(97)¥1(7,836)(3,040)$2,520

See notes to consolidated financial statements.

14

Thousands of
U.S.Dollars (Note 1)

Millions of Yen

2013

2013

2012

Net (decrease) increase in short-term borrowings ......
Proceeds from long-term debt ..................................
Repayments of long-term debt .................................
Repayments of lease obligations ..............................
Purchase of treasury stock .......................................
Dividends paid ..........................................................
Other – net .................................................................

¥(3,000)
650
(118)
(43)
(10)
(565)
2

¥4,000
(118)
(52)
(354)
(789)
(737)

$(31,898)
6,911(1,255)(457)(106)(6,007)21

Net cash (used in) provided by financing
activities ..........................................................

(3,084)

1,950(32,791)

FOREIGN CURRENCY
TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS ................

93

10

989

NET INCREASE (DECREASE)IN CASH AND CASH EQUIVALENTS ..................

619

766

6,582

CASH AND CASH EQUIVALENTS OF
A NEWLY CONSOLIDATED SUBSIDIARY,
BEGINNING OF YEAR ..........................................

37

CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR ..........................................

5,923

5,157

62,977

CASH AND CASH EQUIVALENTS,
END OF YEAR .........................................................

¥6,579¥5,923$69,952

393

N o tes to C on solid ated Fi n an c i al S t atemen t s
Nippon Koei Co., Ltd. and Consolidated Subsidiaries
Year Ended March 31, 2013

1.	B A S I S O F P R E S E N TAT I O N O F C O N S O L I D AT E D F I N A N C I A L
STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the provisions set
forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations and inaccordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different incertain respects as to the application and disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been
made to the consolidated financial statements issued domestically in order to present them in a form which ismore familiar to readers outside Japan. In addition, certain reclassifications have been made in the 2012
consolidated financial statements to conform to the classifications used in 2013.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Nippon
Koei Co., Ltd. (the “Company”) is incorporated and operates. The translations of Japanese yen amounts into
U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at therate of ¥94.05 to $1, the rate of exchange at March 31, 2013. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.	Consolidation — The consolidated financial statements as of March 31, 2013, include the accounts of theCompany and its 11 significant (10 in 2012) subsidiaries (together, the “Group”).
Under the control concept, those companies in which the Company, directly or indirectly, is able to exercise
control over operations are fully consolidated.
Investments in unconsolidated subsidiaries and associated companies are stated at cost. If the equity methodof accounting had been applied to the investments in these companies, the effect on the accompanying
consolidated financial statements would not be material.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets of theacquired subsidiaries at the date of acquisition.
Goodwill and negative goodwill which occurred before March 31, 2010, are amortized using the straight-line
method over 5 to 10 years.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profit included in assets resulting from transactions within the Group is also eliminated.

b.	Cash Equivalents — Cash equivalents are short-term investments that are readily convertible into cash andthat are exposed to insignificant risk of changes in value.
Cash equivalents include time deposits and investment trusts, all of which mature or become due within
three months of the date of acquisition.

c.	Inventories — Work in process is stated at the lower of cost, mainly determined by the specificidentification cost method or net selling value.

d.	M arketable and Investment Securities — Marketable and investment securities are classified andaccounted for, depending on management's intent, as follows:(1) held-to-maturity debt securities, which are expected to be held to maturity with the positive intent andability to hold to maturity are reported at amortized cost and (2) available-for-sale securities, which are notclassified as the aforementioned securities, are reported at fair value, with unrealized gains and losses, net of
applicable taxes, in a separate component of equity.
Nonmarketable available-for-sale securities are stated at cost determined by the moving-average method. For
other-than-temporary declines in fair value, investment securities are reduced to net realizable value by acharge to income.

15

e.	Property, Plant and Equipment — Property, plant and equipment are stated at cost. Depreciation ofproperty, plant and equipment is computed substantially by the declining-balance method at rates based on
the estimated useful lives of the assets, while the straight-line method is applied to buildings acquired after
April 1, 1998, and lease assets as well as other equipment for rent. The range of useful lives is principallyfrom 3 to 50 years for buildings and structures, from 2 to 15 years for machinery and equipment and from 2
to 20 years for furniture and fixtures. The useful lives for lease assets are the terms of the respective leases.
Change in Accounting Policy which is difficult to distinguish from Change in Accounting Estimate —Due to an amendment of the Corporation Tax Act, from the reporting fiscal year, the Company and its
domestic consolidated subsidiaries have applied a new depreciation method in accordance with the new
Corporation Tax Act with respect to property, plant and equipment obtained after April 1, 2012.
The influence on profit and loss in the reporting fiscal year due to this change is minor.

f.	Long-Lived Assets — The Group reviews its long-lived assets for impairment whenever events or changes incircumstance indicate the carrying amount of an asset or asset group may not be recoverable. An impairment
loss would be recognized if the carrying amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result from the continued use and eventual disposition of theasset or asset group. The impairment loss would be measured as the amount by which the carrying amountof the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from thecontinued use and eventual disposition of the asset or the net selling price at disposition.

g.	A llowance for Doubtful Accounts — The allowance for doubtful accounts is stated in amounts
considered to be appropriate based on the Group’s past credit loss experience and an evaluation of potential
losses in the receivables outstanding.

h.	R etirement and Pension Plans — The Group has contributory defined benefit pension plans andunfunded retirement benefit plans for the benefit of its employees.
Effective April 1, 2000, the Group adopted a new accounting standard for employees’ retirement benefits andaccounted for the liability for retirement benefits based on the projected benefit obligations and plan assets
at the balance sheet date. The transitional obligation of ¥2,016 million for the subsidiaries, determined as ofApril 1, 2000, is being amortized over mainly 15 years.
Unrecognized actuarial gain or loss is recognized by the straight-line method over mainly 13 years.
Unrecognized prior service costs are recognized by the straight-line method over mainly 13 years.
Retirement benefits for directors and Audit & Supervisory Board members are provided at the amount which
would be required if all directors and Audit & Supervisory Board members retired at the balance sheet date.

i.	Allowance for Anticipated Project Loss — The Group has made a provision for anticipated losses on
uncompleted project contracts.

j.	Asset Retirement Obligations — In March 2008, the Accounting Standards Board of Japan (the “ASBJ”)
published ASBJ Statement No. 18, “Accounting Standard for Asset Retirement Obligations” and ASBJ
Guidance No. 21, “Guidance on Accounting Standard for Asset Retirement Obligations.” Under thisaccounting standard, an asset retirement obligation is defined as a legal obligation imposed either by law orcontract that results from the acquisition, construction, development and the normal operation of a tangible
fixed asset and is associated with the retirement of such tangible fixed asset. The asset retirement obligationis recognized as the sum of the discounted cash flows required for the future asset retirement and is recordedin the period in which the obligation is incurred if a reasonable estimate can be made. If a reasonableestimate of the asset retirement obligation cannot be made in the period the asset retirement obligation isincurred, the liability should be recognized when a reasonable estimate of asset retirement obligation can be
made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is
capitalized by increasing the carrying amount of the related fixed asset by the amount of the liability. The
asset retirement cost is subsequently allocated to expense through depreciation over the remaining useful lifeof the asset. Over time, the liability is accreted to its present value each period. Any subsequent revisions to
the timing or the amount of the original estimate of undiscounted cash flows are reflected as an adjustment
to the carrying amount of the liability and the capitalized amount of the related asset retirement cost.

16

k. Research and Development Costs — Research and development costs are charged to income as incurred.
l.	Leases — In March 2007, the ASBJ issued ASBJ Statement No. 13, “Accounting Standard for Lease
Transactions,” which revised the previous accounting standard for lease transactions. The revised accounting
standard for lease transactions was effective for fiscal years beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other finance leases were permitted to be accounted for as
operating lease transactions if certain “as if capitalized” information was disclosed in the note to the lessee’s
financial statements. The revised accounting standard requires that all finance lease transactions becapitalized by recognizing lease assets and lease obligations in the balance sheet. In addition, the revised
accounting standard permits leases which existed at the transition date and do not transfer ownership of theleased property to the lessee to be measured at the amount of obligation under finance leases less interest
expense at the transition date and recorded as acquisition cost of lease assets.
The Group applied the revised accounting standard effective April 1, 2008. In addition, the Group accounted
for leases which existed at the transition date and do not transfer ownership of the leased property to thelessee as acquisition cost of lease assets measured at the amount of obligation under finance leases at thetransition date.
All other leases are accounted for as operating leases.

m.	Accrued Bonuses — Bonuses to employees, directors and Audit & Supervisory Board members are accruedat the end of the year to which such bonuses are attributable.

n.	A llowance for Environmental Measures — The Group has made a provision for treatment of the
Polychlorinated Biphenyl (PCB) Wastes based on the Act on Special Measures concerning Promotion of
Proper Treatment of PCB Wastes.

o.	Allowance for Loss from a Disaster — The Group has made a provision for rehabilitation of property,
plant and equipment which were damaged by the Great East Japan Earthquake.

p.	Income Taxes — The provision for income taxes is computed based on the pretax income included in the
consolidated statement of income and comprehensive income. The asset and liability approach is used torecognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured byapplying currently enacted tax laws to the temporary differences.

q.	Foreign Currency Transactions — All short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese yen at the exchange rates at the balance sheet
date. The foreign exchange gains and losses from translation are recognized in the consolidated statements ofincome and comprehensive income.

r.	Revenue Recognition — If the outcome of a construction contract can be estimated reliably, the contract
revenue is recognized by the percentage-of-completion method which is measured by reference to thepercentage of total cost incurred to date to estimated total cost.
All other construction projects, except the aforementioned, are recorded using the completed-contract
method (including the partially completed-contract method).

s.	Derivatives and Hedging Activities — The Group uses derivative financial instruments to manage its
exposures to fluctuations in foreign exchange. Foreign exchange forward contracts are utilized by the Groupto reduce its exposures to fluctuations in foreign currency exchange rates. The Group does not enter into
derivatives for trading or speculative purposes.
Derivative financial instruments are classified and accounted for as follows: (1) all derivatives are recognized
as either assets or liabilities and measured at fair value, and gains or losses on derivative transactions arerecognized in the consolidated statement of income and comprehensive income and (2) for derivatives used
for hedging purposes, if such derivatives qualify for hedge accounting because of high correlation and17effectiveness between the hedging instruments and the hedged items, gains or losses on derivatives aredeferred until maturity of the hedged transactions.
Foreign exchange forward contracts are measured at fair value but the unrealized gains / losses are deferred
until the underlying transactions are completed.

t.	Per-Share Information — Basic net income per share is computed by dividing net income available toshareholders of common stock by the weighted-average number of shares of common stock outstanding forthe period. The weighted-average numbers of shares of common stock for the years ended March 31, 2013
and 2012, were 75,469,721 and 77,190,579, respectively.
Diluted net income per share of common stock is not disclosed because the Group had no securities
outstanding which might dilute the per-share information for the years ended March 31, 2013 and 2012.
Cash dividends per share presented in the accompanying consolidated statements of income andcomprehensive income are dividends applicable to the respective years including dividends to be paid after
the end of the year.

u.	Accounting Changes and Error Corrections —In December 2009, the ASBJ issued ASBJ Statement No.
24 “Accounting Standard for Accounting Changes and Error Corrections” and ASBJ Guidance No. 24“Guidance on Accounting Standard for Accounting Changes and Error Corrections.” Accounting treatments
under this standard and guidance are as follows:(1) Changes in Accounting Policies:
When a new accounting policy is applied following revision of an accounting standard, the new policy isapplied retrospectively unless the revised accounting standard includes specific transitional provisions, inwhich case the entity shall comply with the specific transitional provisions.
(2) Changes in Presentation:
When the presentation of financial statements is changed, prior-period financial statements are reclassified
in accordance with the new presentation.
(3) Changes in Accounting Estimates:
A change in an accounting estimate is accounted for in the period of the change if the change affects that period
only and is accounted for prospectively if the change affects both the period of the change and future periods.
(4) Corrections of Prior-Period Errors:
When an error in prior-period financial statements is discovered, those statements are restated.

v. New Accounting Pronouncements
Accounting Standard for Retirement Benefits — On May 17, 2012, the ASBJ issued ASBJ Statement No.
26, “Accounting Standard for Retirement Benefits” and ASBJ Guidance No. 25, “Guidance on AccountingStandard for Retirement Benefits,” which replaced the Accounting Standard for Retirement Benefits that had
been issued by the Business Accounting Council in 1998 with an effective date of April 1, 2000, and the otherrelated practical guidance, and followed by partial amendments from time to time through 2009.
Major changes are as follows:(a) Treatment in the balance sheet
Under the current requirements, actuarial gains and losses and past service costs that are yet to berecognized in profit or loss are not recognized in the balance sheet, and the difference between retirement
benefit obligations and plan assets (hereinafter, “deficit or surplus”), adjusted by such unrecognizedamounts, is recognized as a liability or asset.
Under the revised accounting standard, actuarial gains and losses and past service costs that are yet to berecognized in profit or loss shall be recognized within equity (accumulated other comprehensive income),
after adjusting for tax effects, and the deficit or surplus shall be recognized as a liability (liability for
retirement benefits) or asset (asset for retirement benefits).

18

(b) Treatment in the statement of income and comprehensive income
The revised accounting standard does not change how to recognize actuarial gains and losses and past
service costs in profit or loss. Those amounts would be recognized in profit or loss over a certain period nolonger than the expected average remaining working lives of the employees. However, actuarial gains andlosses and past service costs that arose in the current period and have not yet been recognized in profit orloss shall be included in other comprehensive income, and actuarial gains and losses and past service costs
that were recognized in other comprehensive income in prior periods and then recognized in profit or loss
in the current period shall be treated as reclassification adjustments.
This accounting standard and the guidance are effective for the end of annual periods beginning on or after
April 1, 2013, with earlier application being permitted from the beginning of annual periods beginning on orafter April 1, 2013. However, no retrospective application of this accounting standard to consolidated
financial statements in prior periods is required.
The Group expects to apply the revised accounting standard from the end of the annual period beginning on
April 1, 2013, and is in the process of measuring the effects of applying the revised accounting standard forthe year ending June 30, 2013.

w. Additional Information
Employee Stock Ownership Plan Trust — The Group has introduced an employee incentive plan,“Employee Stock Ownership Plan Trust” (“ESOP”). Acquisition and sales of the Group’s shares are accounted
for under the assumption that the Group and ESOP are the same entity, and its liabilities are guaranteed by
the Group. Accordingly, assets, including the Group’s shares owned by ESOP, and liabilities, and profits andloss of ESOP are included in the Group’s consolidated balance sheet, consolidated statement of income andcomprehensive income and consolidated statement of changes in equity.

3. INVESTMENT SECURITIESInvestment securities as of March 31, 2013 and 2012, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

2013
Non-current:
Marketable equity securities ...............................
Government and corporate bonds ......................
Other .....................................................................
Total .................................................................

2013

2012

¥6,115780
528¥7,423¥5,941745
436¥7,122$65,0198,293
5,614$78,926

The carrying amounts and aggregate fair values of investment securities at March 31, 2013 and 2012, were as
follows:
Millions of Yen

March 31, 2013
Securities classified as:
Available-for-sale:
Equity securities ..................................
Debt securities ......................................
Other .....................................................
Total ...................................................

Cost¥4,875550624¥6,049Unrealized
Gains¥1,06396
9¥1,168

Unrealized
Losses

¥116
12
104
¥232

Fair
Value

¥5,822634
529¥6,98519

Millions of Yen

March 31, 2012

Unrealized
Gains

Cost

Securities classified as:
Available-for-sale:
Equity securities ..................................
Debt securities ......................................
Other .....................................................
Total ...................................................

¥6,274550
624¥7,448

Unrealized

Losses

¥312
72
¥384

¥963
22
187
¥1,172

Fair
Value¥5,623600
437¥6,660Thousands of U.S. Dollars
Unrealized
Gains

March 31, 2013

Cost

Securities classified as:
Available-for-sale:
Equity securities ..................................
Debt securities ......................................
Other .....................................................
Total ...................................................

$51,834
5,848
6,635$64,317

Unrealized

Losses$11,3021,021
96$12,419$1,233128
1,106$2,467

Fair
Value$61,903
6,741
5,625$74,269

The proceeds, realized gains and realized losses of the available-for-sale securities which were soldduring the years ended March 31, 2013 and 2012, were as follows:
Millions of Yen

March 31, 2013
Securities classified as:
Available-for-sale:
Equity securities ................................................
Debt securities ....................................................
Other ...................................................................
Total .................................................................

Proceeds

Realized Gains

Realized Losses¥1,970¥49¥100¥1,970¥49¥100Millions of Yen

March 31, 2012
Securities classified as:
Available-for-sale:
Equity securities ................................................
Debt securities ....................................................
Other ...................................................................
Total .................................................................

20

Proceeds¥1,054426
73¥1,553

Realized Gains

¥162
28
¥190

Realized Losses

¥309
61
¥370

Thousands of U.S. Dollars

March 31, 2013

Proceeds

Securities classified as:
Available-for-sale:
Equity securities ................................................
Debt securities ....................................................
Other ...................................................................
Total .................................................................

Realized Gains

Realized Losses$20,946$521$1,063$20,946$521$1,063The carrying values of debt securities and other by contractual maturities for securities classified as availablefor-sale at March 31, 2013, were as follows:
Millions of Yen

Thousands of
U.S. Dollars

¥550
¥550

Due after 10 years ..................................................
Total .................................................................

$5,848$5,848

4. INVENTORIESInventories at March 31, 2013 and 2012, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

Merchandise ...........................................................
Work in process ......................................................
Raw materials and supplies ...................................
Total .................................................................

2013
¥42
7,271
152
¥7,465

2012
¥42
6,380
149
¥6,571

2013$447
77,3101,616$79,373

5. INVESTMENT PROPERTYOn November 2008, the ASBJ issued ASBJ Statement No. 20, “Accounting Standard for Investment Property and
Related Disclosures” and issued ASBJ Guidance No. 23, “Guidance on Accounting Standard for Investment
Property and Related Disclosures.”
The Group owns some rental properties such as office buildings and land in the metropolitan area. The net ofrental income and operating expenses for those rental properties was ¥848 million ($9,016 thousand) and ¥822
million for the fiscal years ended March 31, 2013 and 2012, respectively.
In addition, the carrying amounts, changes in such balances and market prices of such properties are as follows:
Millions of Yen
Carrying Amount
April 1, 2012

¥7,284

Decrease

Fair Value
March 31, 2013¥(151)¥7,133

March 31, 2013¥13,586

Millions of Yen
Carrying Amount
April 1, 2011¥8,158Decrease¥(874)

Fair Value
April 1, 2012

¥7,284

April 1, 2012¥13,64221

Thousands of U.S. Dollars
Carrying amount
April 1, 2012

$77,448

Decrease

Fair value
March 31, 2013$(1,605)

March 31, 2013

$75,843$144,455

Notes:
1. Carrying amount recognized in the consolidated balance sheets is net of accumulated depreciation andaccumulated impairment losses, if any.
2. Decrease during the fiscal year ended March 31, 2013, represents net amount of the recognition ofdepreciation and the acquisition of investment property.
3. Fair value of properties was measured by the Group in accordance with its Real-Estate Appraisal Standard.

6. SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings at March 31, 2013 and 2012, consisted of notes to banks. The annual interest rates
applicable to the short-term borrowings ranged from 0.485% to 0.770% and 0.505% to 0.780% at March 31, 2013
and 2012, respectively.
Long-term debt at March 31, 2013 and 2012, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

2013
Unsecured loan from bank due seriallyto 2018 with interest rate of 0.860% ...................

2013

2012

¥650

Loan from bank due seriallyto 2013 with interest rate of 1.250% .......................

$6,911

79
82
811
(244)
¥567

Obligation under finance leases ............................
Total .................................................................
Less current portion ..............................................
Long-term debt, less current portion ....................

840
872
8,623
(2,594)$6,029

¥197
99
296
(157)
¥139

Annual maturities of long-term debt at March 31, 2013, for the five years and thereafter were as follows:Year Ending March 31

2014 .........................................................
2015 .........................................................
2016 .........................................................
2017 .........................................................
2018 and thereafter .................................
Total ..................................................

Thousands of
U.S. Dollars

Millions of Yen
Long-Term Debt

Lease Obligations

Long-Term Debt

Lease Obligations

¥209
130

¥35
26
16
3
2
¥82

$2,222
1,382

$372
276
170
32
21
$871

130
130
130

¥729

1,382

1,382
1,382

$7,750

The Group had a commitment-line contract of ¥8,000 million ($85,061 thousand) over three years with financial
institutions in order to secure the stability of long-term funding. The contract included a restrictive financial
covenant. At March 31, 2013, the Group had utilized ¥4,000 million ($42,531 thousand) of the commitment line.
In addition, the Group had overdraft contracts of ¥10,200 million ($108,453 thousand) in total. At March 31,
2013, the Group had utilized ¥4,000 million ($42,531 thousand) of the overdraft.

22

Financial covenants
Short-term borrowings of ¥4,000 million include financial covenants, with which the Group is in compliance.
The major financial covenants are as follows:
If the Group fails to comply with the following covenants, creditors may require repayment of all debt.
(1) Shareholder’s equity of each fiscal year will not fall below 75% of the higher of the following:a. Shareholder’s equity of fiscal year immediately preceding the fiscal year; orb. Shareholder’s equity of fiscal year ending on March 31, 2011
(2) Ordinary income for each fiscal year will not be negative for two consecutive fiscal years.
At March 31, 2013, land and building of ¥1,990 million ($21,159 thousand) were pledged as collateral for longterm debt of ¥79 million ($840 thousand).

7. RETIREMENT AND PENSION PLANS
The Group has severance payment plans for employees, directors and Audit & Supervisory Board members.
Under most circumstances, employees terminating their employment are entitled to retirement benefits
determined based on the rate of pay at the time of termination, years of service and certain other factors. Suchretirement benefits are made in the form of a lump-sum severance payment from the Company or from its
consolidated subsidiaries and annuity payments from a trustee. Employees are entitled to larger payments if thetermination is involuntary, by retirement at the mandatory retirement age, by death or by voluntary retirement
at certain specific ages prior to the mandatory retirement age.
In addition, the Group completely transitioned from the approved pension plan to the defined benefit corporate
pension plan in October 2010.
The liabilities for retirement benefits at March 31, 2013 and 2012, for directors and Audit & Supervisory Board
members were ¥65 million ($691 thousand) and ¥92 million, respectively. The retirement benefits for directors
and Audit & Supervisory Board members are paid subject to the approval of the shareholders.
The liability for employees’ retirement benefits at March 31, 2013 and 2012, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

Projected benefit obligation ..................................
Fair value of plan assets ........................................
Unrecognized actuarial loss ..................................
Unrecognized transitional obligation ...................
Unrecognized prior service cost ............................
Prepaid pension cost ..............................................
Net liability .........................................................

2013¥(14,506)
9,795
1,282
270
270
(630)
¥(3,519)

2012¥(13,984)
8,373
2,087
408
291
(555)
¥(3,380)

2013$(154,237)
104,147
13,631
2,871
2,871(6,699)$(37,416)

23

The components of net periodic benefit costs for the years ended March 31, 2013 and 2012, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

Service cost .............................................................
Interest cost ............................................................
Expected return on plan assets .............................
Amortization of prior service cost ........................
Recognized actuarial loss ......................................
Amortization of transitional obligation ................
Net periodic benefit costs ..................................

2013
¥960
262
(167)
21
428
138
¥1,6422012¥ 920
302
(195)
40
414
135
¥1,6162013$10,207
2,786(1,776)
223
4,552
1,467
$17,459

Note:
The net periodic benefit costs above exclude required funding for the multiemployer pension plan amounting to¥857 million ($9,112 thousand) and ¥849 million at March 31, 2013 and 2012, respectively, for which plan assets
could not be allocated to each participating employer.
Assumptions used for the years ended March 31, 2013 and 2012, were set forth as follows:

Discount rate ..........................................................
Expected rate of return on plan assets .................
Amortization of prior service cost ........................
Recognition period of actuarial gain / loss ...........
Amortization period of transitional obligation ....

2013
1.50%
2.00%
13 years
13 years
15 years

2012
2.00%
2.50%
13 years
13 years
15 years

Funded status of the multiemployer pension plan at March 31, 2012 (available information as of March 31,2013), to which contributions were recorded as net periodic retirement benefit costs, was as follows:
Millions of Yen

Fair value of plan assets ........................................
Pension benefit obligation recordedby pension fund ....................................................
Difference ..............................................................

2012¥145,345
176,729¥(31,384)

The Groups’ contribution percentage for multiemployer pension plan........12.5%
Note:
1. The difference mainly resulted from prior service cost of ¥(24,984) million, adjustment of asset valuation of¥(8,337) million and surplus of ¥1,937 million.
2. Prior service cost is amortized over 15 years.
3. The Group expensed special contributions of ¥329 million in the consolidated statement of income andcomprehensive income in the fiscal year ended March 31, 2013.
4. The above contribution ratio does not conform to the actual ratio applied to the Group.

8. DEPOSITS RECEIVED
Deposits received from tenants amounted to ¥1,543 million ($16,406 thousand) at March 31, 2013, and ¥1,710
million at March 31, 2012.
At March 31, 2013, land, building and structures for rent of ¥1,362 million ($14,482 thousand) were pledged ascollateral for these deposits.

249. EQUITY
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant
provisions in the Companies Act that affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain criteria such as(1) having a Board of Directors, (2) having independent auditors, (3) having a Board of Audit & Supervisory
Board members, and (4) the term of service of the directors is prescribed as one year rather than two years ofnormal term by its articles of incorporation, the Board of Directors may declare dividends (except for dividends
in kind) at any time during the fiscal year if the Company has prescribed so in its articles of incorporation. The
Company meets all the above criteria.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if thearticles of incorporation of the Company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury stock. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained at
no less than ¥3 million.
(b) Increases / Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve(a component of retained earnings) or as additional paid-in capital (a component of capital surplus) dependingon the equity account charged upon the payment of such dividends until the aggregate amount of legal reserve
and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount ofadditional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides
that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can betransferred among the accounts under certain conditions upon resolution of the shareholders.
(c) Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stockby resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amountavailable for distribution to the shareholders which is determined by a specific formula. Under the Companies
Act, stock acquisition rights are presented as a separate component of equity. The Companies Act also provides
that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stockacquisition rights are presented as a separate component of equity or deducted directly from stock acquisitionrights.

10. INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, inthe aggregate, resulted in statutory tax rates of approximately 36.8% for the year ended March 31, 2013, and39.5% for the year ended March 31, 2012.

25

The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax
assets and liabilities at March 31, 2013 and 2012, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013
Deferred tax assets :Unrealized loss on available-for-salesecurities .............................................................
Accrued bonuses ..................................................
Tax loss carryforwards .........................................
Liability for retirement benefits for directors
and Audit & Supervisory Board members .......

2013

2012

¥1,103
111

¥ 273
811
1,368

$11,728
1,180

24

34

255

Liability for retirement benefits
for employees .....................................................
Allowance for anticipated project loss ................
Loss on impairment of long-lived assets ............
Other .....................................................................
Less valuation allowance .....................................
Total .................................................................

1,317
23
73
1,176
(1,913)¥1,914

1,265
34
80
809
(2,727)¥1,947

14,003245
776
12,504(20,340)$20,351

Deferred tax liabilities:
Reserve for deferred gains on saleof property ..........................................................

¥175

¥ 179

$1,861

Unrealized gain on available-for-salesecurities .............................................................
Prepaid pension cost ............................................
Other .....................................................................
Total .................................................................

214
75
¥783

188
76
¥ 443

3,392
2,275
797
$8,325

Net deferred tax assets .......................................

¥1,131¥1,504$12,026

319

A reconciliation between the statutory tax rate and the actual effective tax rate reflected in the accompanying
consolidated statement of income and comprehensive income for the years ended March 31, 2013 and 2012,were as follows:

Statutory tax rate ...................................................
Per capita levy of local tax .....................................
Expenses not deductible for tax purposes ............
Valuation allowance ...............................................
Other – net ..............................................................
Actual effective tax rate .........................................

26

2013
36.8%
2.6
0.9
(13.5)
16.5
43.3%

2012
39.5%
4.3
1.6
(4.6)
11.8
52.6%

As of March 31, 2013, certain subsidiaries have tax loss carryforwards aggregating approximately ¥328 million($3,488 thousand) which were available to be offset against taxable income of these companies in future years.
These tax loss carryforwards, if not utilized, will expire as follows:
Years Ending March 31

Millions of Yen

2015 ........................................................................
2016 ........................................................................
2018 ........................................................................
2019 ........................................................................
Total .................................................................

Thousands of
U.S. Dollars

¥105
98
35
90
¥328

$1,116
1,043
372
957
$3,488

11. RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥422 million ($4,487 thousand) and ¥413 million forthe years ended March 31, 2013 and 2012, respectively.

12. LEASES(1) Lessee
The minimum rental commitments under noncancellable operating leases at March 31, 2013 and 2012, were as
follows:
Thousands of
U.S. Dollars

Millions of Yen

2013
Due within one year ...............................................
Due after one year ..................................................
Total .................................................................

2013

2012
¥2
5
¥7

¥1
2
¥3

$21

53
$74

(2) Lessor
The minimum rental commitments under noncancellable operating leases at March 31, 2013 and 2012, were as
follows:
Thousands of
U.S. Dollars

Millions of Yen

Due within one year ...............................................
Due after one year ..................................................
Total .................................................................

2013
¥693
1,372
¥2,065

2012
¥ 695
2,065
¥2,7602013$7,368
14,588$21,956

13. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group uses financial instruments (mainly bank loans) based on its capital financing plan. Cash surpluses, ifany, are invested in low-risk financial assets. Derivatives are used, not for speculative purposes, but to manage
exposure to financial risks as described in (2) below. To clarify the accountability for transactions, the Group set
up the investment committee and it examines basic principles of transactions and each financial instrument.

27

(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables such as trade notes and trade accounts are exposed to customer credit risk. Although receivables inforeign currencies are exposed to the market risk of fluctuation in foreign currency exchange rates, the position,
net of a portion of payables in foreign currencies, is hedged by using forward foreign currency contracts.
Marketable and investment securities, mainly held-to-maturity securities and equity instruments of customers
and suppliers of the Group, are exposed to the risk of market price fluctuations.
Payment terms of payables, such as trade notes and trade accounts, are less than one year.
Derivatives mainly include forward foreign currency contracts, which are used to manage exposure to market
risks from changes in foreign currency exchange rates of receivables and payables and investment securities.
Please see Note 14 for more detail about derivatives.
(3) Risk Management for Financial Instruments
Credit Risk Management
Credit risk is the risk of economic loss arising from counterparty’s failure to repay or service debt according to
the contractual terms. The Group manages its credit risk from receivables on the basis of internal guidelines,
which include monitoring of payment term and balances of major customers by each business administration
department to identify the default risk of customers at an early stage. With respect to held-to-maturity financial
investments, the Group manages exposure to credit risk by limiting investments to high credit rating bonds inaccordance with its internal guidelines.
The maximum credit risk exposure of financial assets is limited to their carrying amounts as of March 31, 2013.
Market risk management (foreign exchange risk and interest rate risk)
Foreign currency trade receivables and payables are exposed to market risk resulting from fluctuations inforeign currency exchange rates. Such foreign exchange risk is hedged principally by forward foreign currency
contracts.
Marketable and investment securities are managed by monitoring market values and the financial position ofissuers on a regular basis.
The basic principles of derivative transactions are approved by the investment committee based on the internal
guidelines which prescribe the authority and the limits for each transaction by the corporate treasury
department. Reconciliation of the transaction and balances with customers is made, and the transaction data isreported to the chief financial officer on a monthly basis.
Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual obligations in full on its maturity
dates. The Group manages its liquidity risk by concluding the commitment-line and overdraft contracts, alongwith adequate financial planning by the corporate treasury department.
(4) Concentration of Credit Risk
41.3% of total receivables are from three major customers of the Group as of March 31, 2013.
(5) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If a quoted price is notavailable, another rational valuation technique is used instead.

28

(a) Fair value of financial instruments
Millions of Yen

March 31, 2013

Carrying
AmountFair Value¥6,579

Investment securities
Total¥6,579
33,246(39)
33,207
6,985¥46,771

Short-term borrowings
PayablesTotal¥9,000
7,052¥16,052¥9,000
7,052¥16,052

Cash and cash equivalents
Receivables
Allowance for doubtful accounts

Unrealized
Gain/Loss

33,207
6,985¥46,771

Millions of Yen

March 31, 2012
Cash and cash equivalents
Receivables
Allowance for doubtful accounts

Carrying
AmountFair Value

Investment securities
Total¥5,923
30,085(42)
30,043
6,659¥42,625

30,043
6,659¥42,625

Short-term borrowings
PayablesTotal¥12,000
5,852¥17,852¥12,000
5,852¥17,852

Unrealized
Gain/Loss¥5,923

Thousands of U.S. Dollars

March 31, 2013

Carrying
AmountFair Value$69,952

Investment securities
Total$69,952
353,493(415)
353,078
74,269$497,299

Short-term borrowings
PayablesTotal$95,694
74,981$170,675$95,694
74,981$170,675

Cash and cash equivalents
Receivables
Allowance for doubtful accounts

Unrealized
Gain/Loss

353,078
74,269$497,299

Cash and cash equivalents, receivables, payables and short-term borrowings
The carrying values of these financial instruments approximate fair values because of their short maturities.

29

Investment securities
The fair values of investment securities are measured at the quoted market price of the stock exchange for theequity instruments and at the quoted price obtained from the financial institution for certain debt instruments.
The information of the fair value for the investment securities by classification is included in Note 3.
Derivatives
Fair value information for derivatives is included in Note 14.
(b) Carrying amount of financial instruments whose fair values cannot be reliably determined
Thousands of
U.S. Dollars

Millions of Yen

March 31, 2013 and 2012
Investments in equity instruments that do nothave a quoted market price in an active market
Investments in debt instruments that do nothave a quoted market price in an active market

2013

2013

2012

¥977

¥940

$10,388

¥145

¥145

$1,542(6) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Millions of Yen

March 31, 2013
Cash and cash equivalents
Receivables
Investment securities
Available-for-sale securities with
contractual maturities
Total

Due in 1
Year or Less

Due after 1 Yearthrough 5 Years

Due after 5 Years
through 10 Years

Due after
10 Years¥6,579
33,246¥550¥550¥39,825
Millions of Yen

March 31, 2012
Cash and cash equivalents
Receivables
Investment securities
Available-for-sale securities with
contractual maturities
Total

30

Due in 1
Year or Less

Due after 1 Yearthrough 5 Years

Due after 5 Years
through 10 Years

Due after
10 Years¥ 5,923
30,085¥36,008¥550¥550

Thousands of U.S. Dollars

March 31, 2013
Cash and cash equivalents
Receivables
Investment securities
Available-for-sale securities with
contractual maturities
Total

Due in 1
Year or Less

Due after 1 Yearthrough 5 Years

Due after 5 Years
through 10 Years

Due after
10 Years$69,952
353,493$5,848$5,848$423,445

Please see Note 6 for annual maturities of long-term debt.

14. DERIVATIVESThe Group uses derivative financial instruments to manage its exposures to fluctuations in foreign exchange.
Foreign exchange forward contracts are utilized by the Group to reduce foreign currency exchange.
It is the Group’s policy to use derivatives only for the purpose of reducing risks, not for trading or speculative
purpose.
Because the counterparties to these derivatives are limited to domestic banks having high reputations, theGroup does not anticipate any losses arising from credit risk.
Derivative transactions entered into by the Group have been made in accordance with internal policies which
regulate the authorization and credit limit amount.

Derivative Transactions to Which Hedge Accounting Is Not Applied
Millions of Yen

March 31, 2013
Foreign currency forward contracts:
Selling EURO .....................................

Contract
Amount¥416

Contract
Amount Due after
One Year

¥416

Fair
Value

Unrealized
Gain

¥(63)

¥(56)

Thousands of U.S. Dollars

March 31, 2013
Foreign currency forward contracts:
Selling EURO .....................................

Contract
Amount$4,423Contract
Amount Due after
One Year$4,423

Fair
Value

Unrealized
Gain$(670)$(595)

Millions of Yen

March 31, 2012
Foreign currency forward contracts:
Selling EURO .....................................

Contract
Amount

¥416

Fair
Value

Unrealized
Gain

¥(7)

¥(7)

31

Derivative Transactions to Which Hedge Accounting Is Applied
Millions of Yen
HedgedItem

March 31, 2013

Contract
AmountContract
Amount Due after
One Year

Fair
Value

Foreign currency forward contracts:
Selling U.S.$ .......................................

Investment
securities

¥755

¥755

¥(125)

Foreign currency forward contracts:
Selling EURO .....................................

Investment
securities

¥521

¥521

¥(77)

Thousands of U.S. Dollars
HedgedItem

March 31, 2013

Contract
AmountContract
Amount Due after
One Year

Fair
Value

Foreign currency forward contracts:
Selling U.S.$ .......................................

Investment
securities$8,028$8,028$(1,329)

Foreign currency forward contracts:
Selling EURO .....................................

Investment
securities$5,540$5,540$(819)The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
The contract amounts of derivatives which are shown in the above table do not represent the amounts
exchanged by the parties and do not measure the Group’s exposure to credit or market risk.

15. CONTINGENT LIABILITIESAt March 31, 2013, the Group had the following contingent liabilities:
Thousands of
U.S. Dollars

Millions of Yen

Guarantees of bank loans related to employees ...................

¥108$1,148

16. COMPREHENSIVE INCOME
The components of other comprehensive income for the years ended March 31, 2013 and 2012, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

2013

2012

Unrealized gain on available-for-salesecurities:

Gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total

32

¥1,673
51
1,724
(592)
¥1,132

¥377
180
557
(261)
¥296

$17,788543
18,331(6,295)$12,036

Deferred loss on derivatives under hedge
accounting:

Gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal¥ (200)¥ (44)$ (2,127)(200)
69¥ (131)(44)
17¥ (27)(2,127)734$ (1,393)¥¥$

Foreign currency translation adjustments:
Adjustments arising during the year

6

Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total

¥

Total other comprehensive income¥1,007

6

2

64

64

2

6

¥

2

¥271

$

64

$10,707

17. SUBSEQUENT EVENTSAppropriations of Retained Earnings
On May 17, 2013, the following appropriation of retained earnings at March 31, 2013, was resolved by the Boardof Directors:
Millions of Yen

Year-end cash dividends, ¥7.5 ($0.08) per share ..................

¥566

Thousands of
U.S. Dollars$6,018The total amount of the dividends above does not include ¥14 million ($149 thousand) dividends to the ESOP
because the Group’s shares owned by the ESOP are included in the Group’s treasury stock.

18. SEGMENT INFORMATION
Under ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures” and ASBJ Guidance
No. 20, “Guidance on Accounting Standard for Segment Information Disclosures,” an entity is required to reportfinancial and descriptive information about its reportable segments. Reportable segments are operating
segments or aggregations of operating segments that meet specified criteria. Operating segments arecomponents of an entity about which separate financial information is available, and such information isevaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing
performance. Generally, segment information is required to be reported on the same basis as is used internallyfor evaluating operating segment performance and deciding how to allocate resources to operating segments.

(1) Description of Reportable Segments
The Group’s reportable segments are those for which separate financial information is available and regular
evaluation by the Company’s management is being performed in order to decide how resources are allocatedamong the Group. Therefore, the Group’s reportable segments consist of the Domestic, Overseas, PowerEngineering and Real estate leasing segments. Domestic consists of consulting services in public and private
sectors related to mainly infrastructure development. Overseas consists of consulting services related to mainly
ODA-funded development projects. Power Engineering consists of manufacturing of products and appliances
related to electric production and distribution systems and engineering services related to construction and33

maintenance of public and private electric power facilities. Real estate leasing consists of sales of our Group's
real estate leasing operation.

(2)	Methods of Measurement for the Amount of Sales, Profit (Loss), Assets,
Liabilities and Other Items for Each Reportable Segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of
Significant Accounting Policies.”(3) Information about Sales, Profit (Loss), Assets, Liabilities and Other Items
Millions of Yen

2013
Reportable Segment
Consolidated

Total¥71,246694¥1,1665¥72,412699

1,256

71,9401,171

73,111(699)

72,412¥1,925¥848¥5,408¥(323)¥5,085¥1¥5,086¥13,975¥10,536¥9,827¥63,901¥34,152¥98,053¥(13,258)¥84,795

¥

¥

¥208

¥677

¥229

¥906

¥906

309

309

Overseas

Intersegment sales ...............

¥35,547393¥18,638
3¥15,930
173¥1,131
125

Total sales ......................

35,94018,641

16,103

Segment profit (loss) ............

¥1,195¥1,440

Segment assets .....................

¥29,563

Other:
Depreciation .........................

¥166

Sales
Sales to customers ...............

Reconciliations

OthersPower
Real EstateEngineering
Leasing

Domestic

52

251

Total

309

¥72,412¥(699)Amortization of Goodwill ....
Amortization of Negative
Goodwill .............................
Interest income ....................

309
14
35

15

5

18

14
73

197

14
270

¥(191)

14
79Interest expense ...................

42

62

46

18

168

67

235

(191)

44

Increase in property, plantand intangible assets ..........

144

205

403

74

826

161

987

987

Millions of Yen

2012
Reportable Segment

Sales
Sales to customers ...............
Intersegment sales ...............
Total sales ......................

OthersTotal¥64,874640¥ 1,0714¥ 65,945
644

1,316

65,514

1,075

66,589

Power
Real EstateEngineering
Leasing

Domestic

Overseas¥34,423343¥16,326
2¥12,932
172¥1,193
123

34,766

16,328

13,104878

975

Consolidated¥65,945
¥

(644)
(644)

65,945

¥

837

¥ 822

¥ 3,512¥ (183) ¥ 3,329¥(3)¥ 3,326

Segment assets .....................

¥28,628¥11,248¥ 9,726¥9,917¥59,519¥41,793¥101,312¥(21,940)¥79,372

Other:
Depreciation .........................

¥

¥

¥

¥ 160

¥

¥

¥

58

¥

Reconciliations

Segment profit (loss) ............

177

¥

Total

240

635

311

¥ 946

310

310

310
14
21

12

2

19

14
54

201

14
255

Interest expense ...................

44

54

43

22

163

77

240

Increase in property, plantand intangible assets ..........

64

227

252

3

546

73

619

34

310

946

Amortization of Goodwill
Amortization of Negative
Goodwill..............................
Interest income ....................

¥

(183)

14
72

(184)

56
619

Thousands of U.S. Dollars

2013
Reportable Segment

Sales
Sales to customers ...............
Intersegment sales ...............

Domestic

Overseas$377,958
4,179$198,171
32

Power
Real EstateEngineering
Leasing$169,378
1,839$12,026
1,329

Total

$757,533
7,379

OthersTotal$12,398 $769,931
53
7,432
12,451

Reconciliations

Consolidated$769,931$(7,432)

Total sales ......................

382,137

198,203

171,217

13,355764,912

777,363(7,432)769,931

Segment profit (loss) ............
Segment assets .....................

$12,706$314,333$15,311$148,591$20,468$112,025$9,016$104,487$57,501$679,436$(3,434) $54,067$363,127 $1,042,563$11$(140,968)$54,078$901,595

Other:
Depreciation .........................

$1,765$553$2,669$2,211$7,198$2,435 $9,633$ 9,633

3,285

3,285

3,285

Amortization of Goodwill ....
Amortization of Negative
Goodwill .............................
Interest income ....................

3,285
149
372

160

53

191

149
776

2,095

149
2,871

$(2,031)149
840

Interest expense ...................

447

659

489

191

1,786

713

2,499

(2,031)

468

Increase in property, plantand intangible assets ..........

1,531

2,180

4,285

787

8,783

1,711

10,494

10,494

Notes:The differences between total amounts for reportable segments and amounts in the consolidated balance sheets
or consolidated statements of income and comprehensive income and the main details of these differences,which are related to difference adjustments at March 31, 2013 and 2012, are as follows:

Net sales
Thousands of
U.S. Dollars

Millions of Yen

Reportable segment total .......................................
Other net sales ........................................................
Elimination of intersegment transactions ............
Net Sales in the consolidated statements
of income and comprehensive income .........

2013¥71,940
1,171
(699)

2012
¥65,514
1,075
(644)

2013
$764,912
12,451(7,432)¥72,412¥65,945$769,931

ProfitThousands of
U.S. Dollars

Millions of Yen

Reportable segment total .......................................
Other loss ................................................................
Elimination of intersegment transactions ............
Non-operating items ..............................................
Operating income in the consolidated
statements of income and comprehensive
income ............................................................

2013¥5,408
(323)
1

2012
¥3,512
(183)
(3)

2013
$57,501(3,434)
11

(444)

(296)

(4,721)¥4,642¥3,030$49,357

35

Assets
Thousands of
U.S. Dollars

Millions of Yen

Reportable segment total .......................................
Other property ........................................................
Elimination of intersegment transactions ............
Total assets in the consolidated balance
sheet ................................................................

2013¥63,901
34,152(13,258)

2012¥59,519
41,793(21,940)2013$679,436
363,127(140,968)¥84,795¥79,372$901,595

Other items
Millions of Yen

2013
Reportable
Segment

Depreciation ........................................
Amortization of Goodwill ...................
Amortization of Negative Goodwill ...
Interest income ...................................
Interest expense ..................................
Increase in property, plant andintangible assets ................................

OthersReconciliations

¥677
309
14
73
168

¥229

826

161

197
67

¥(191)
(191)

Total

¥906
309
14
79
44
987

Millions of Yen

2012
Reportable
Segment

Depreciation ........................................
Amortization of Goodwill ...................
Amortization of Negative Goodwill ...
Interest income ...................................
Interest expense ..................................
Increase in property, plant andintangible assets ................................

OthersReconciliations

¥635
310
14
54
163

¥311

546

73

201
77

¥(183)
(184)

Total

¥946
310
14
72
56
619

Thousands of U.S. Dollars

2013
Reportable
Segment

Depreciation ........................................
Amortization of Goodwill ...................
Amortization of Negative Goodwill
Interest income ...................................
Interest expense ..................................
Increase in property, plant andintangible assets ................................

36$7,198
3,285

OthersReconciliations$2,435$ 9,633
3,285

149

149

1,786

2,095
713

8,783

1,711

776

Total

$(2,031)840(2,031)

468

10,494

Note:The main reconciling items of interest income and expense are eliminations of corporate interest in accounting
for control.
The information about geographical areas at March 31, 2013, was as follows:

Sales
Millions of Yen

2013
Japan

Asia

Middle East

¥52,425¥12,140¥1,467

LatainAmerica

Africa¥2,599Other¥3,034

Total

¥747

¥72,412

Thousands of U.S. Dollars

2013
Japan

Asia

Middle East

$557,416$129,080$15,598

LatainAmerica

Africa$27,634

Other$32,259

Total$7,944$769,931

The information about major customers at March 31, 2013, was as follows:
Millions of Yen

2013
Name of Customers

Sales

Related Segment Name

¥12,973
8,474
8,470

Ministry of Land, Infrastructure, Transport and Tourism ..
Japan International Cooperation Agency .............................
Tokyo Electric Power Co., Ltd. ..............................................

Domestic
Overseas
Power Engineering

Thousands of U.S. Dollars

2013
Name of Customers

Sales

Related Segment Name

$137,937
90,10190,058

Ministry of Land, Infrastructure, Transport and Tourism ..
Japan International Cooperation Agency .............................
Tokyo Electric Power Co., Ltd. ..............................................

Domestic
Overseas
Power Engineering

The information about goodwill and negative goodwill at March 31, 2013, was as follows:
Millions of Yen

2013
Reportable Segment
Domestic

Overseas

Power
Engineering

Real Estate
Leasing

OthersTotal

Elimination/
Corporate

Consolidated

Amortization of Goodwill ....

¥309

¥309

¥309

Goodwill at March 31, 2013 ...

619

619

619

Amortization of Negative
Goodwill .............................

14

14

14

Negative Goodwill at
March 31, 2013 ...................

37

Thousands of U.S. Dollars

2013
Reportable Segment
Domestic

Overseas

Power
Engineering

Real Estate
Leasing

Total

OthersElimination/
Corporate

Consolidated

Amortization of Goodwill ...

$3,285$3,285$3,285

Goodwill at March 31, 2013 ...

6,582

6,582

6,582

Amortization of Negative
Goodwill .........................

149

149

149

Negative Goodwill at
March 31, 2013 ................

38

39

Nonconsolidated Balance Sheet
Nippon Koei Co., Ltd.
March 31, 2013

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

ASSETS

2013

2013

2012

CURRENT ASSETS:¥4,758¥ 4,181$50,590

Trade notes .........................................................

40

51

425

Trade accounts ...................................................

24,65922,747262,190

Allowance for doubtful accounts ......................

(2)

(377)

(21)

Short-term loan receivables ................................

1,807

2,064

19,213Inventories ‑ work in process ..............................

5,413

4,809

57,554

Deferred tax assets (Note 9) ................................

1,143

1,021

12,153

Prepaid expenses and other current assets ........

1,625

1,284

17,279Total current assets ..........................................

39,44335,780419,383

Land ......................................................................

11,884

11,884

126,358

Buildings and structures .....................................

18,12918,106

192,759

Machinery and equipment ..................................

2,290

2,170

24,349Furniture and fixtures .........................................

2,182

2,192

23,200Construction in progress .....................................

3

Lease assets ..........................................................

143

149

1,521

Total ..................................................................

34,631

34,501

368,219

Accumulated depreciation ...................................

(15,049)(14,743)(160,011)

Net property, plant and equipment .................

19,582

19,758208,208

Investment securities (Note 3) ............................

7,282

6,997

77,427

Investments in and long-term loans to
subsidiaries and associated companies (Note 4) ......

6,474

6,402

68,836

Cash and cash equivalents ...................................
Receivables:

PROPERTY, PLANT AND
EQUIPMENT (Notes 5 and 7):

32

INVESTMENTS AND OTHER ASSETS:

Deferred tax assets (Note 9) ................................

45

Other assets ..........................................................

2,734

2,625

29,070Allowance for doubtful accounts ........................

(5)

(6)

(53)

Total investments and other assets .................

16,485

16,063

175,280

TOTAL ....................................................................

¥75,510¥71,601$802,871

See notes to nonconsolidated financial statements.

40

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term borrowings (Note 5) .........................
Current portion of long-term debt (Note 5) .......
Payables:Trade notes .........................................................
Trade accounts ...................................................
Income taxes payable ...........................................
Advances received ................................................
Accrued bonuses ..................................................
Allowance for anticipated project loss ................
Allowance for loss from a disaster ......................
Other current liabilities .......................................
Total current liabilities ....................................
LONG-TERM LIABILITIES:Long-term debt (Note 5) ......................................
Liability for retirement benefits (Note 6) ...........
Allowance for environmental measures .............
Asset retirement obligations ................................
Deposits received (Note 7) ...................................
Deferred tax liabilities (Note 9) ...........................
Total long-term liabilities ................................

2013

2013

2012

¥11,980231¥14,730
143$127,379
2,456

695
5,153
1,595
4,609
1,474
39
2
4,122
29,900

391
4,612
953
3,999
1,459
68
12
2,921
29,2887,390
54,79016,95949,006
15,673415
2143,827
317,916

548
248
25
48
1,741

107
282
49
43
1,911

3,115

2,392

5,827
2,637
266
510
18,511
5,370
33,121

7,393

7,393

78,607

6,093
115

6,093
38

64,785
1,223

1,546
30,266

1,546
28,67916,438321,808

612

(510)

6,507

505

COMMITMENTS AND CONTINGENT
LIABILITIES (Notes 11 and 12)
EQUITY (Notes 8 and 13):
Common stock,authorized, 189,580,000 shares; issued,
86,656,510 shares in 2013 and 2012 .................
Capital surplus:
Additional paid-in capital ..................................
Other capital surplus .........................................
Retained earnings:
Legal reserve ......................................................
Retained earnings - unappropriated .................
Unrealized gain (loss) on
available-for-sale securities ...............................
Deferred loss onderivatives under hedge accounting .................
Treasury stock—at cost
11,185,920 shares in 2013
and 11,170,244 shares in 2012 ..........................
Total equity .......................................................

(132)

(1)

(1,404)(3,398)42,495(3,317)39,921(36,130)
451,834

TOTAL ....................................................................

¥75,510¥71,601$802,871

41

N o n conso lida ted S t atemen t o f I n c o me
Nippon Koei Co., Ltd.
Year Ended March 31, 2013

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

2013

2013

2012

NET SALES ...........................................................
COST OF SALES ...................................................
Gross profit ..........................................................

¥55,507
40,543
14,964¥49,852
36,583
13,269$590,186
431,079
159,107

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES (Note 10) ........
Operating income ................................................

11,3403,624

10,716
2,553

120,574
38,533

440
(82)
(51)
49
(102)

372
(95)
(78)
29
(372)
(20)
10

4,678
(872)
(542)
521
(1,085)OTHER INCOME (EXPENSES):Interest and dividend income ..............................
Interest expense ...................................................
Foreign currency exchange loss ..........................
Gain on sales of investment securities ................
Loss on sales of investment securities ................
Loss from a natural disaster ................................
Gain on extinguishment of tie-in shares ............
Provision of allowance for doubtful accountsof subsidiaries and associated companies ........
Other-net ...............................................................
Other income (expense)-net ............................

152
406

(375)
312
(217)

1,617
4,317

INCOME BEFORE INCOME TAXES ................

4,030

2,336

42,850

INCOME TAXES (Note 9):
Current .................................................................
Deferred ................................................................
Total income taxes ...........................................

1,967
(91)
1,876

1,264
(131)
1,133

20,914(967)
19,947NET INCOME .......................................................

¥2,154¥ 1,203$22,903

U.S. Dollars(Note 1)Yen

PER SHARE OF COMMON STOCK (Note 2. t.):Basic net income ..................................................
Cash dividends applicable to the year ................
See notes to nonconsolidated financial statements.

42¥28.54
7.50¥ 15.58
7.50$0.300.08

N o n conso lida ted S t atemen t o f C h an ges i n E q u i t y
Nippon Koei Co., Ltd.
Year Ended March 31, 2013

Thousands

Millions of Yen

Outstanding
Number of
Shares ofCommonStock

BALANCE, MARCH 31, 2011 .........

79,486

Capital Surplus

Retained Earnings

CommonStock¥7,393

Additional

Other

Paid-in
CapitalCapitalSurplus¥6,093

Unrealized
Gain (Loss)on Available-

¥ 38

Legal
Reserve

Unappropriated¥1,546¥28,271

for-Sale
Securities¥(798)DeferredGain (Loss)on

Treasury

Total

Derivatives

Stock

Equityunder Hedge
Accounting¥ 26¥(2,234) ¥40,335

Net income ......................................

1,203

1,203

Cash dividends, ¥7.50 per share ......

(795)

(795)

Purchase of treasury stock .............

(4,000)Net change in the year ....................
BALANCE, MARCH 31, 2012 .........

75,486

7,393

6,093

38

1,546

28,679

288

(27)

(510)

(1)

(1,083)(1,083)(3,317)39,921

261

Net income ......................................

2,154

2,154

Cash dividends, ¥7.50 per share ........

(567)

(567)

Purchase of treasury stock ...............

(32)

Disposal of treasury stock ..............

1777

Net change in the year ....................
BALANCE, MARCH 31, 2013 .........

75,471¥7,393¥6,093¥115¥1,546¥30,266

(87)

(87)

6

83

1,122

(131)

¥612

¥(132) ¥(3,398) ¥42,495

991

Thousands of U.S. Dollars (Note 1)
Capital Surplus

Retained Earnings

CommonStock

BALANCE, MARCH 31, 2012 .........

$78,607

Additional
Paid-in
Capital

Other
CapitalSurplus$64,785

$404

Legal
Reserve

Unrealized
Gain (Loss)

DeferredGain (Loss)on
on AvailableDerivatives
for-Sale
Unappropriatedunder Hedge
Securities
Accounting

Treasury
Stock

Total
Equity$16,438 $304,934$(5,423) $(11) $(35,269) $424,465

Net income ......................................

22,90322,903

Cash dividends, $0.08 per share ......

(6,029)(6,029)Purchase of treasury stock .............
Disposal of treasury stock ..............

819

Net change in the year ....................
BALANCE, MARCH 31, 2013 .........

$78,607$64,785$1,223$16,438 $321,808

(925)

(925)

64

883

11,930(1,393)$6,507$(1,404) $(36,130) $451,834

10,537

See notes to nonconsolidated financial statements.

43

N o tes to No nco nso lid ated Fi n an c i al S t atemen t s
Nippon Koei Co., Ltd.
Year Ended March 31, 2013

1.	B ASIS OF PRESENTATION OF NONCONSOLIDATED FINANCIAL
STATEMENTS
The accompanying nonconsolidated financial statements have been prepared from the accounts maintained by
Nippon Koei Co., Ltd. (the “Company”) in accordance with the provisions set forth in the Companies Act ofJapan and in accordance with accounting principles generally accepted in Japan, which are different in certain
respects as to the application and disclosure requirements of International Financial Reporting Standards.
As consolidated statements of cash flows and certain disclosures are presented in the consolidated financial
statements of the Company, nonconsolidated statements of cash flows and certain disclosures are not presented
herein in accordance with accounting principles generally accepted in Japan.
In preparing these nonconsolidated financial statements, certain reclassifications and rearrangements have been
made to the Company’s nonconsolidated financial statements issued domestically in order to present them in aform which is more familiar to readers outside Japan. In addition, certain reclassifications have been made in
the 2012 nonconsolidated financial statements to conform to the classifications used in 2013.
The nonconsolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts areincluded solely for the convenience of readers outside Japan and have been made at the rate of ¥94.05 to $1, theapproximate rate of exchange at March 31, 2013. Such translations should not be construed as representations
that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Nonconsolidation — The nonconsolidated financial statements do not include the accounts of subsidiaries.
Investments in subsidiaries and associated companies are stated at cost.

b. Cash Equivalents — Cash equivalents are short-term investments that are readily convertible into cash andthat are exposed to insignificant risk of changes in value.

Cash equivalents include time deposits and investment trusts, all of which mature or become due within
three months of the date of acquisition.

c. Inventories — Work in process is stated at the lower of cost, mainly determined by the specificidentification cost method or net selling value.

d. Marketable and Investment Securities — Marketable and investment securities are classified andaccounted for, depending on management’s intent, as follows:(1) held-to-maturity debt securities, which are expected to be held to maturity with the positive intent andability to hold to maturity are reported at amortized cost; (2) available-for-sale securities, which are notclassified as the aforementioned securities, are reported at fair value, with unrealized gains and losses, net of
applicable taxes, reported in a separate component of equity and (3) investments in subsidiaries andassociated companies are reported at cost.
Nonmarketable available-for-sale securities are stated at cost determined by the moving-average method.
For other-than-temporary declines in fair value, investment securities are reduced to net realizable value by acharge to operations.

e. Property, Plant and Equipment — Property, plant and equipment are stated at cost. Depreciation ofproperty, plant and equipment is computed substantially by the declining-balance method at rates based on
the estimated useful lives of the assets, while the straight-line method is applied to buildings acquired after
April 1, 1998, and lease assets as well as other equipment for rent. The range of useful lives is principallyfrom 3 to 50 years for buildings and structures, from 2 to 15 years for machinery and equipment and from 2
to 20 years for furniture and fixtures. The useful lives for lease assets are the terms of the respective leases.
Change in Accounting Policy which is difficult to distinguish from Change in Accounting Estimate — Due to anamendment of the Corporation Tax Act, from the reporting fiscal year, the Company has applied a new
depreciation method in accordance with the new Corporation Tax Act with respect to property, plant and44

equipment which are obtained after April 1, 2012.
The influence on profit and loss in the reporting fiscal year due to this change is minor.

f. Long-Lived Assets — The Company reviews its long-lived assets for impairment whenever events orchanges in circumstance indicate the carrying amount of an asset or asset group may not be recoverable. An
impairment loss is recognized if the carrying amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result from the continued use and eventual disposition of theasset or asset group. The impairment loss would be measured as the amount by which the carrying amountof the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from thecontinued use and eventual disposition of the asset or the net selling price at disposition.

g. Allowance for Doubtful Accounts — The allowance for doubtful accounts is stated in amounts

considered to be appropriate based on the Group’s past credit loss experience and an evaluation of potential
losses in the receivables outstanding.

h. Retirement and Pension Plans — The Company has a contributory defined benefit pension plan andunfunded retirement benefit plan for the benefit of its employees.

Effective April 1, 2000, the Company adopted a new accounting standard for employees’ retirement benefits
and accounted for the liability for retirement benefits based on the projected benefit obligations and plan
assets at the balance sheet date.
Unrecognized actuarial gain or loss is recognized by the straight-line method over 13 years.
Unrecognized prior service costs are recognized by the straight-line method over 13 years.
Retirement benefits for directors and Audit & Supervisory Board members are provided at the amount which
would be required if all directors and Audit & Supervisory Board members retired at the balance sheet date.

i. Allowance for Anticipated Project Loss — The Company has made a provision for anticipated losses on
uncompleted project contracts.

j. Asset Retirement Obligations — In March 2008, the ASBJ published ASBJ Statement No. 18, “AccountingStandard for Asset Retirement Obligations” and ASBJ Guidance No. 21, “Guidance on Accounting Standard
for Asset Retirement Obligations.” Under this accounting standard, an asset retirement obligation is defined
as a legal obligation imposed either by law or contract that results from the acquisition, construction,
development and normal operation of a tangible fixed asset and is associated with the retirement of suchtangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows
required for the future asset retirement and is recorded in the period in which the obligation is incurred if areasonable estimate can be made. If a reasonable estimate of the asset retirement obligation cannot be madein the period the asset retirement obligation is incurred, the liability should be recognized when a reasonableestimate of the asset retirement obligation can be made. Upon initial recognition of a liability for an asset
retirement obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related
fixed asset by the amount of the liability. The asset retirement cost is subsequently allocated to expense
through depreciation over the remaining useful life of the asset. Over time, the liability is accreted to its
present value each period. Any subsequent revisions to the timing or the amount of the original estimate ofundiscounted cash flows are reflected as an adjustment to the carrying amount of the liability and thecapitalized amount of the related asset retirement cost.

k. Research and Development Costs — Research and development costs are charged to income as incurred.
l. Leases — In March 2007, the ASBJ issued ASBJ Statement No. 13, “Accounting Standard for Lease
Transactions,” which revised the previous accounting standard for lease transactions. The revised accounting
standard for lease transactions was effective for fiscal years beginning on or after April 1, 2008.

Under the previous accounting standard, finance leases that deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other finance leases were permitted to be accounted for as
operating lease transactions if certain “as if capitalized” information was disclosed in the notes to the lessee’s
financial statements. The revised accounting standard requires that all finance lease transactions becapitalized to recognizing lease assets and lease obligations in the balance sheet. In addition, the revised
accounting standard permits leases which existed at the transition date and do not transfer ownership of the45

leased property to the lessee to be measured at the amount of obligation under finance leases less interest
expense at the transition date and recorded as acquisition cost of lease assets.
The Company applied the revised accounting standard effective April 1, 2008. In addition, the Company
accounted for leases which existed at the transition date and do not transfer ownership of the leased property
to the lessee as acquisition cost of lease assets measured at the amount of obligation under finance leases at
the transition date.
All other leases are accounted for as operating leases.

m. Accrued Bonuses — Bonuses to employees, directors and Audit & Supervisory Board members are accruedat the end of the year to which such bonuses are attributable.

n. Allowance for Environmental Measures — The Company has made a provision for treatment of PCB
Wastes based on the Act on Special Measures concerning Promotion of Proper Treatment of PCB Wastes.

o. Allowance for Loss from a Disaster — The Company has made a provision for rehabilitation of property,
plant and equipment which were damaged by the Great East Japan Earthquake.

p. Income Taxes — The provision for income taxes is computed based on the pretax income included in thenonconsolidated statement of operations. The asset and liability approach is used to recognize deferred tax
assets and liabilities for the expected future tax consequences of temporary differences between the carrying
amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying currently
enacted tax laws to the temporary differences.

q. Foreign Currency Transactions — All short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese yen at the exchange rates at the balance sheet
date. The foreign exchange gains and losses from translation are recognized in the nonconsolidated
statements of income.

r. Revenue Recognition — If the outcome of a construction contract can be estimated reliably, the contract

revenue is recognized by the percentage-of-completion method which is measured by reference to thepercentage of total cost incurred to date to estimated total cost.
All other construction projects, except the aforementioned, are recorded using the completed-contract
method (including the partially completed-contract method).

s. Derivatives and Hedging Activities — The Company uses derivative financial instruments to manage its
exposures to fluctuations in foreign exchange. Foreign exchange forward contracts are utilized by theCompany to reduce its exposures to fluctuations in foreign currency exchange rates. The Company does notenter into derivatives for trading or speculative purposes.

Derivative financial instruments are classified and accounted for as follows: (1) all derivatives are recognized
as either assets or liabilities and measured at fair value, and gains or losses on derivative transactions arerecognized in the nonconsolidated statement of income and (2) for derivatives used for hedging purposes, if
such derivatives qualify for hedge accounting because of high correlation and effectiveness between thehedging instruments and the hedged items, gains or losses on derivatives are deferred until maturity of thehedged transactions.
Foreign exchange forward contracts are measured at fair value but the unrealized gains/losses are deferred
until the underlying transactions are completed.

t. Per-Share Information — Basic net operations per share is computed by dividing net operations available
to shareholders of common stock by the weighted-average number of shares of common stock outstanding
for the period. The weighted-average numbers of shares of common stock for the years ended March 31, 2013
and 2012, were 75,469,721 and 77,190,579, respectively.

Diluted net operations per share of common stock are not disclosed because the Company has nothing thatmight dilute the per-share information for the years ended March 31, 2013 and 2012.
Cash dividends per share presented in the accompanying nonconsolidated statements of operations are
dividends applicable to the respective years including dividends to be paid after the end of the year.

46

u. Accounting Changes and Error Corrections — In December 2009, the ASBJ issued ASBJ Statement No.
24, “Accounting Standard for Accounting Changes and Error Corrections” and ASBJ Guidance No. 24,“Guidance on Accounting Standard for Accounting Changes and Error Corrections.” Accounting treatments
under this standard and guidance are as follows:(1) Changes in Accounting Policies-When a new accounting policy is applied following revision of an
accounting standard, the new policy is applied retrospectively unless the revised accounting standard
includes specific transitional provisions, in which case the entity shall comply with the specific transitional
provisions.
(2) Changes in Presentation-When the presentation of financial statements is changed, prior-period financial
statements are reclassified in accordance with the new presentation.
(3) Changes in Accounting Estimates-A change in an accounting estimate is accounted for in the period of
the change if the change affects that period only and is accounted for prospectively if the change affects boththe period of the change and future periods.
(4) Corrections of Prior-Period Errors-When an error in prior-period financial statements is discovered, thosestatements are restated.

v. Additional Information
Employee Stock Ownership Plan Trust — The Company has introduced an employee incentive plan,“Employee Stock Ownership Plan Trust” (“ESOP”). Acquisition and sales of the Company’s shares areaccounted for under the assumption that the Company and ESOP are the same entity. Accordingly, assets,
including the Company’s shares owned by ESOP, and liabilities, and profits and loss of ESOP are included in
the Company’s nonconsolidated balance sheet, nonconsolidated statement of income and nonconsolidated
statement of changes in equity.

3. INVESTMENT SECURITIESInvestment securities as of March 31, 2013 and 2012, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

2013
Non-current:
Marketable equity securities ...............................
Government and corporate bonds ......................
Other .....................................................................
Total .................................................................

2012¥6,013742
527¥7,282¥5,844717
436¥6,997

2013$63,934
7,889
5,604$77,427

4.	INVESTMENTS IN AND Long-term loans TO SUBSIDIARIES AND
ASSOCIATED COMPANIESInvestments in and advances to subsidiaries and associated companies as of March 31, 2013 and 2012, were as
follows:
Thousands of
U.S. Dollars

Millions of Yen

Investments ............................................................
Long-term loans .....................................................
Total .................................................................

2013¥6,208266¥6,4742012¥6,097305¥6,402

2013$66,008
2,828$68,836

47

The value of the investment securities of subsidiaries and associated companies are measured at the originalacquisition costs, as their fair value cannot be reliably determined at March 31, 2013, since market value andestimated future cash flows are not available.

5. SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings at March 31, 2013 and 2012, consisted of notes to banks and subsidiaries. The annualinterest rates applicable to the short-term borrowings ranged from 0.485% to 0.860% and 0.505% to 1.475% at
March 31, 2013 and 2012, respectively.
Long-term debt at March 31, 2013 and 2012, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

2013
Unsecured loan from bank due seriallyto 2018 with interest rate of 0.860% ...................

¥650

Loan from bank due seriallyto 2013 with interest rate of 1.250% ...................
Obligation under finance leases ............................
Total .................................................................
Less current portion ..............................................
Long-term debt, less current portion ....................

79
50
779
(231)
¥548

2013

2012

$6,911
840
532
8,283
(2,456)$5,827

¥197
53
250
(143)
¥107

Annual maturities of long-term debt at March 31, 2013, for the five years and thereafter were as follows:Year Ending March 31

2014 .........................................................
2015 .........................................................
2016 .........................................................
2017 .........................................................
2018 and thereafter .................................
Total ..................................................

Thousands of
U.S. Dollars

Millions of Yen
Long-Term Debt

Lease Obligations

Long-Term Debt

Lease Obligations

¥209
130
130
130
130
¥729

¥22
14
9
3
2
¥50

$2,222
1,382
1,382
1,382
1,382
$7,750

$234
149
96
32
20
$531

The Company had a commitment line contract of ¥8,000 million ($85,061 thousand) over three years withfinancial institutions in order to secure the stability of long-term funding. The contract included a restrictive
financial covenant. At March 31, 2013, the Company had utilized ¥4,000 million ($42,531 thousand) of thecommitment line. In addition, the Company had overdraft contracts of ¥10,200 million ($108,453 thousand) intotal. At March 31, 2013, the Company had utilized ¥4,000 million ($42,531 thousand) of the overdraft.

Financial covenants

Short-term borrowings of ¥4,000 million includes financial covenants with which the Company is incompliance.
The major financial covenants are as follows:
If the Company fails to comply with the following covenants, creditors may require repayment of all debt.
(1) Shareholder’s equity of each fiscal year will not fall below 75% of the higher of the following:a. Shareholder’s equity of fiscal year immediately preceding the fiscal year; orb. Shareholder’s equity of fiscal year ending on March 31, 201248

(2) Ordinary income for each fiscal year will not be negative for two consecutive fiscal years.
At March 31, 2013, land and building of ¥1,990 million ($21,159 thousand) were pledged as collateral for longterm debt of ¥79 million ($840 thousand).

6. RETIREMENT AND PENSION PLANS
Under most circumstances, employees terminating their employment are entitled to retirement benefits
determined based on the rate of pay at the time of termination, years of service and certain other factors. Suchretirement benefits are made in the form of a lump-sum severance payment from the Company and annuity
payments from a trustee. Employees are entitled to larger payments if the termination is involuntary, by
retirement at the mandatory retirement age, by death, or by voluntary retirement at certain specific ages prior tothe mandatory retirement age.
In addition, the Company completely transitioned from the approved pension plan to the defined benefit
corporate pension plan in October 2010.
The liabilities for retirement benefits at March 31, 2013 and 2012, for directors and Audit & Supervisory Board
members were ¥27 million ($287 thousand) and ¥27 million, respectively. The retirement benefits for directors
and Audit & Supervisory Board members are paid subject to the approval of the shareholders.

7. DEPOSITS RECEIVED
Deposits received from tenants amounted to ¥1,543 million ($16,406 thousand) at March 31, 2013, and ¥1,710
million at March 31, 2012.
At March 31, 2013, land, building and structures for rent of ¥1,362 million ($14,482 thousand) were pledged ascollateral for these deposits.

8. EQUITY
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant
provisions in the Companies Act that affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to theyear-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain criteria suchas: (1) having a Board of Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board,and (4) the term of service of the directors is prescribed as one year rather than two years of normal term by its
articles of incorporation, the Board of Directors may declare dividends (except for dividends in kind) at any time
during the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all
the above criteria.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if thearticles of incorporation of the company so stipulate. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury stock. The limitation is defined as the amountavailable for distribution to the shareholders, but the amount of net assets after dividends must be maintained at
no less than ¥3 million.
(b) Increases / Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve(a component of retained earnings) or as additional paid-in capital (a component of capital surplus) dependingon the equity account charged upon the payment of such dividends until aggregate amount of legal reserve andadditional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount ofadditional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides
that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can betransferred among the accounts under certain conditions upon resolution of the shareholders.

49(c) Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stockby resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amountavailable for distribution to the shareholders which is determined by specific formula. Under the Companies
Act, stock acquisition rights, which were previously presented as a liability, are now presented as a separate
component of equity. The Companies Act also provides that companies can purchase both treasury stockacquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate
component of equity or deducted directly from stock acquisition rights.

9. INCOME TAXESThe Company is subject to Japanese national and local operations taxes which, in the aggregate, resulted instatutory tax rates of approximately 36.8% for the year ended March 31, 2013, and 39.5% for the year ended
March 31, 2012.
The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities at March
31, 2013 and 2012, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

2013

2012

Deferred tax assets :Unrealized loss on available-for-salesecurities .............................................................
Accrued bonuses ..................................................
Liability for retirement benefits for
directors and Audit & Supervisory Board
members .............................................................
Liability for retirement benefits
for employees .....................................................
Allowance for anticipated project loss ................
Allowance for doubtful accounts ........................
Loss on impairment of long-lived assets ............
Carryover of foreign tax credit limit ...................
Other .....................................................................
Less valuation allowance .....................................
Total .................................................................

78

90

829

14
1
54
406
562
(663)
¥1,353

25
138
60
221
361
(405)
¥1,438

149
11
574
4,317
5,976
(7,050)$14,386

Deferred tax liabilities:
Reserve for deferred gains onsale of property ..................................................

¥ 175

¥ 179

$ 1,861

Unrealized gain on available-for-salesecurities .............................................................
Prepaid pension cost ............................................
Other .....................................................................
Total .................................................................
Net deferred tax assets .......................................

321
214
5
¥ 715
¥ 638

188
5
¥372
¥1,066

3,413
2,275
53
$ 7,602$ 6,784

50

¥ 892

¥ 267
672

$ 9,4849996

A reconciliation between the statutory tax rate and the actual effective tax rate reflected in the accompanying
nonconsolidated statements of income for the years ended March 31, 2013 and 2012, were as follows:

2013

2012
36.8%
2.1
1.0
1.9

Statutory tax rate ...................................................
Per capita levy of local tax .....................................
Expenses not deductible for tax purposes ............
Valuation allowance ...............................................
Gain on extinguishment of tie-in shares ..............
Other – net ..............................................................
Actual effective tax rate .........................................

39.5%
3.4
1.7
(0.8)
(0.2)
4.9
48.5%

4.8
46.6%

10. RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥410 million ($4,359 thousand) and ¥406 million forthe years ended March 31, 2013 and 2012, respectively.

11. LEASES(1) Lessee

The minimum rental commitments under noncancellable operating leases at March 31, 2013 and 2012, were as
follows:
Thousands of
U.S. Dollars

Millions of Yen

2013
Due within one year ...............................................
Due after one year ..................................................
Total .................................................................

2013

2012
¥2
5
¥7

¥1
2
¥3

$21
53
$74

(2) Lessor

The minimum rental commitments under noncancellable operating leases at March 31, 2013 and 2012, were as
follows:
Thousands of
U.S. Dollars

Millions of Yen

Due within one year ...............................................
Due after one year ..................................................
Total .................................................................

2013
¥693
1,372
¥2,0652012¥ 696
2,065¥2,761

2013$7,368
14,588$21,956

12. CONTINGENT LIABILITIESAt March 31, 2013, the Company had the following contingent liabilities:
Millions of Yen

Guarantees of bank loans related to a subsidiaryand employees .....................................................................................
Refundment bonds of a subsidiary ......................................................

¥108
¥21

Thousands of
U.S. Dollars$1,148$223

51

13. SUBSEQUENT EVENTSAppropriations of Retained Earnings
On May 17, 2013, the following appropriation of retained earnings at March 31, 2013, was resolved by the Boardof Directors:
Millions of Yen

Year-end cash dividends, ¥7.5 ($0.08) per share .................................

¥566

Thousands of
U.S. Dollars$6,018The total amount of the dividends above does not include ¥14 million ($149 thousand) dividends to the ESOP
because the Company's shares owned by the ESOP are included in the Company's treasury stock.

52

53

Co rp orate In form atio n
Board of Directors, Officers and Corporate
Auditors
Chairperson
Yoshihiko Tsunoda*

Stock Information
Shares authorized

189,580,000

Shares issued

86,656,510

Stockholders of minimum tradable stock unit

President:
Noriaki Hirose*

As of March 31, 2013

Director and Executive Vice Presidents:
Shoji Nishitani*
Katsumi Yoshida
Asao Yamakawa
Director and Senior Managing Executive Officer:
Tamotsu Yoshida
Director and Managing Executive Officers:
Ryuichi Arimoto
Akira Mizukoshi
Noboru Takano
Yoshikimi Inoue
Director and Executive Officer:
Hiroyuki Akiyoshi
Director:
Masahisa Naito
Corporate Auditors:
Toshiaki Shimizu
Izumi Arai
Mineo Enomoto
Senior Managing Executive Officer:
Takashi Karasaki
Managing Executive Officer:
Hiromichi Sekine
Executive Officers:
Masanao Nishimura
Takashi Seki
Hiroyuki Kasahara
Haruyoshi Takura
Naoki Honjo
Yoshikatsu Inada
Shingo Ono
Hiroshi Tanaka
Masanobu Sakamoto
Takayasu Tsuyusaki
Syuichi Ueda
Yasushi Sugo
Akichika Ishibashi*Representative Directors

54

6,598

As of June 27, 2013

Major Shareholders
Share owned(thousands)

Percentage of
total owned

The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

3,699

4.3

Meiji Yasuda Life Insurance
Company.

3,530

4.1

The Koei Employees’
Stockholders Association

2,937

3.4

The Master Trust Bank ofJapan, Ltd. (trust a/c)

2,838

3.3

Japan Trustee Services Bank,
Ltd. (Trustee)

2,464

2.8

Japan Trustee Services Bank,
Ltd. (ESOP trust a/c)

1,911

2.2

Mizuho Corporate Bank, Ltd.

1,911

2.2

Tsukishima Kikai Co.,Ltd

1,843

2.1

CBNY DFA INTL SMALL CAP
VALUE PORTFOLIO

1,481

1.7

CREDIT SUISSESECURITIES (EUROPE)
LIMITED PB SEC INT NONTR CLIENT

1,240

1.4

As of March 31, 2013
Besides the above, the Company owns thousands of shares of treasury
stock 9,274 (10.7%)

Major Offices and Facilities

Major Businesses

Head Office
4 Kojimachi 5-chome, Chiyoda-ku,
Tokyo 102-8539, Japan

Consulting Administration

Shin-Kojimachi Office
2 Kojimachi 4-chome, Chiyoda-ku,
Tokyo 102-0083, Japan
Hanzomon Office
5 Kojimachi 2-chome, Chiyoda-ku,
Tokyo 102-0083, Japan
Domestic Branch Offices
Tokyo, Sapporo, Sendai, Fukushima, Niigata,
Nagoya, Osaka, Hiroshima, Shikoku, Fukuoka
Research Facility
Research and Development Center in Tsukuba
Science City, Ibaraki
Overseas Offices (Liaison Office)Jakarta, Manila, Hanoi(Ho Chi Minh), Bangkok(Vientiane, Phnom Penh), Yangon, New Delhi,
Colombo, Middle East(Amman, Baghdad, Tunis,
Rabat, Doha), Nairobi, Lima

Field of activity• Water Resources• Energy• Urban & Regional Development• Transportation• Agriculture & Rural Development• Environment• Climate Change• Information & Communication Technology• Geosphere Engineering• Project and Program Management•	Public Private Partnership/Private FinanceInitiative
Services•	Preliminary investigation, Planning, Feasibility
studies, Assessment, Detailed design,
Construction supervision , Operation andmaintenanceEngineering Administration
Field of activity•	Electrical and civil works for electric power
facilities (generation, transmission, substation,
distribution schemes and wiring of buildings)•	Electric power utilities (turbines, generators,
transformers, control deices andcommunications equipment)• Electric equipment and devices• Safety equipment•	Skin electric thermo-system heaters (SECTheaters)• Factory automation equipment
Services•	Surveys, Studies, Planning, Design, Construction,
Installation, Sale

55

M a j o r Nip po n Koe i Gro u p C o mp an i es
While mainly focused on engineering consulting, electrical power engineering, and power generation, the Nippon Koei
Group is also active in a wide range of related fields. The various businesses peripheral to the activities of Nippon Koei, themain company in the Group, are taken on by subsidiaries and affiliates located both at home and abroad.
These related companies, together with the principle corporation, make up the Nippon Koei Group.
The various firms maintain close cooperation based on relationships of interdependence that enhance the strength andcohesion of the Group as a whole.
As of March 2013, the total number of employees of the Group companies based in Japan came to about 2,880, of which
over 1,200 were registered engineers. The Group truly has a wealth of highly skilled technical experts.
The subsidiary companies that comprise the major Nippon Koei Group are as follows:
Tamano Consultants Co., Ltd.
This company is headquartered in the city of Nagoya and provides engineering consulting services centered on the Chubu
Region. The company boasts the most highly regarded urban and regional planning group in Japan.
Nippon Civic Consulting Engineers Co., Ltd.
This company provides consulting services centered on planning, design, and construction supervision of undergroundstructures such as urban tunnels. The company specializes in shield tunneling technology and the development of newunderground construction technology.
El Koei Co., Ltd.
This company conducts employment and staff supply for Nippon Koei Group. The company provides various fields ofqualified human resources to support the activity of the Group Companies.
KRI International Corporation
This company has been established to enhance non-engineering consulting works of the Nippon Koei Group’s activities.
KRI provides the consulting services mainly in the fields of economic and industrial development including finance andmanagement, education and human resources development, and regional and community development.
Nippon Koei U.K. Co., Ltd.
This company provides engineering consulting services to enforce Nippon Koei’s overseas operation in the primary fields ofenvironment, water supply and wastewater.
Nippon Koei Latin America-Caribbean Co., Ltd.
This company has been established to enhance Nippon Koei’s operation in Latin America and Caribbean and provides
consulting engineering and technical services for various development sectors in the region.
NIPPON KOEI LAC, INC..
This company has been incorporated in Panama in order to promote further localization of Nippon Koei’s operation in
Latin America and Caribbean region.
NIPPON KOEI LAC DO BRASIL LTDA.
This company has been incorporated in Brasil in order to promote further localization of Nippon Koei’s operation in Latin
America.
Nippon Koei India Pvt. Ltd.
This company has been established to enhance Nippon Koei’s operation in India and provides consulting engineering andtechnical services for various development sectors focusing on projects in India and other developing countries.
Nippon Koei Vietnam International LLC Co., Ltd.
This company has been established to enhance Nippon Koei’s operation in Vietnam and surrounding countries in the
Greater Mekong Subregion and provides consulting services for various development sectors in the region.
PT Indokoei International
This company has been incorporated in Indonesia by Nippon Koei Co., Ltd. and Indonesian partner company and provides
the services of engineering and management consultancy to clients in Indonesia as well as overseas.
Philkoei International, Inc.
This company has been incorporated in the Philippines by Nippon Koei Co., Ltd. and Filipino investors and providing
consulting engineering and technical services for various development sectors focusing on projects in the Philippines andother overseas countries.
Thaikoei International Co., Ltd.
This company has been incorporated in Thailand and providing consulting services for various development sectors focusing
on projects in Thailand and other countries in Greater Mekong Subregion.
Nippon Koei Africa Pty. Ltd. / Nippon Koei Mozambique, Ltda.
This company has been established to enhance Nippon Koei’s operation in Sub-Saharan Africa and provides consulting
engineering and technical services for various development sectors in the region.
Koei System Inc.
This company develops software programs used in computer control applications, dispatches personnel, and provides
support and software development for office automation systems on a consignment basis.
Nikki Corporation
This company conducts real estate management, leasing, and insurance services for Nippon Koei and other Group
companies. It also sells, imports, and exports electrical power equipment and rents and leases various goods.

56Annual Report

4, Kojimachi 5-chome, Chiyoda-ku, Tokyo 102-8539, Japan
Telephone: +81 3 3238 8027 Facsimile: +81 3 3238 8326

2013•

http://www.n-koei.co.jp E-mail: info@n-koei.co.jp

Year ended
March 31, 2013

Printed in Japan