TODA Corporate Report

2016
Year ended March 31, 2016

The Value Creation Process
The Toda Group aims to achieve sustainable growth of corporate value
with stakeholders and become a corporate group that makes your successpossible by means of the following value creation processes.
Reinvest in businessWe strive to keep anaccurate grasp on a variety
of different business risks
and social issues, and takethem into consideration inpursuing our businessactivities.

Main capital invested

Strategy

Toda engages in business activities with adiversity of capital (resources) allocatedstrategically and appropriately.
Financial capitalFunds from shareholders and investors,
financing from financial institutions, etc.

Manufacturing capital
Manufacturing facilities and various
infrastructure, bases, etc.

Intellectual capital
Main business risks
Investment in construction,
prices, and other trends
Construction risk, etc.

Intellectual property, know-how, related
technology and other such resourcesthat provide the foundation for creating
safe and comfortable social infrastructure

Human capital

Disaster risk

The highly developed motivation of
directors and employees foundedon our corporate philosophy,
expertise, skills, etc.

Country riskSocial capital

Supplier credit risk
Legal and compliance risks

Main social issues
Global environmental problems(Disposal of waste material
generated during construction,
dust, noise, vibration, etc.)
Energy saving and CO2
reduction in the project
construction and operation
stagesDisaster management(seismic isolation, vibration
control, earthquake resistancetechnology, reconstruction
assistance in disaster areas, etc.)
Construction of social
infrastructure that people canuse with a sense of security

The trust of our clients and ourstrong relationships with suppliers
and other stakeholders

Value creation strategy

Recognition ofbusiness risks andsocial issues

Natural capital
Natural resources such as water, airand earth; the energy resources
used in production, etc.

Contribute to society throughconstruction

We implement business activities in accordance withthe priority measures given in the Medium-Term
Management Plan. By engaging in dialogue withstakeholders, we grasp needs and expectations
regarding buildings that are becoming more diverseand more complex, and we offer solutions for theentire range of the construction lifecycle.

We share the value created through our business activities withstakeholders and also reinvest it in future business. In this way
we will realize sustainable growth.

Planning andproposals
Fair and appropriate
transactions
Grasp required quality
Propose environmental
consideration

Maintenance andmanagement
Increasing thesatisfaction of ourclients
Facility management

DesignImplementation

Quality control
activities
Environmentallyconsiderate design
Propose optimal
construction
methods

Quality control activities
Environmentally considerate
implementation
Safety management activities
Cooperation with business partners
Social contribution inneighboring regions

Foundation for business activities
Taking the corporate philosophy, corporate governance, and other such statements of principle as thefoundation for Toda business activities, we are moving forward with value-creating activities that we applyin earning further trust.
TODA CORPORATION corporate philosophy

Dialogue with stakeholders

Our future vision for the
Toda Group and its value

Result of business activities− We provide high-quality structures and services− We support business continuity in times of disaster− We develop infrastructure with safety and a senseof security

To our clients

Renovation
Facility diagnosis, design
and implementation
Environmentallyconsiderate
implementation

Implementation of
Global Vision

Provide value to stakeholders

To our shareholders
and investors− We disclose appropriate information− We return profits equitably− We maintain and enhance corporate value− We conduct fair and appropriate transactions− We form partnerships− We pursue thoroughgoing safety and sanitation
management

To local communities− We contribute to local communities− We support neighboring areas in times of disaster− We provide employment and skill development− We offer worthwhile work

Fiscal 2017 target

Consolidated net sales

445 billion yen

480 billion yen

Consolidated
operating income

18.5 billion yen

20 billion yen

For work we can be proud of

For future generations
and our planet

Increase in Toda Group corporate value
Fiscal 2016 forecast

We will build strong, reliable partnerships
with our clients by delivering our precise
technical expertise and comprehensive
human resources.

All of us at TODA work together to create asuccessful environment that allows us tobring passion and a strong sense of
responsibility to each project we undertake.

− We seek to prevent global warming− We conserve resources and ecosystems

To the global
environment

A corporate group thatmakes your success possible
For the satisfaction of our clients

To our business
partners

To our employees

Management Policy
Charter of Corporate Behavior and the President's
Precepts for the Field
CSR Policy

1 2016_TODA Corporate Report

Value creation activities[Business activities]

We will create an environment-friendly
society that is both safe and secure by
aggressively tackling challenges posed bychanging times and social circumstances.

Credibility earned with a history of 135 years
An accumulation of credibility
Base for value creation
Corporate governance
CSR management
Compliance and related matters

Contents
The Value Creation Process
Financial and Non-Financial Highlights
Message from Management
Business Review by Segment
Research and Development
Board of Directors, Corporate Auditors and Managing Officers
Corporate Governance
CSR Management
Social Contribution Activities
The Environment
Human Rights / Labor Practices

1
3
5
9
13
14
15
17
18
19
21

Financial Section
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Independent Auditor’s Report
Corporate Information / History

23
25
25
26
27
28
41
42

2016_TODA Corporate Report 2

Financial and Non-Financial Highlights: Key performance indicators

Toda Corporation and Consolidated Subsidiaries—Fiscal year

Toda Corporation and Consolidated Subsidiaries—Fiscal year

Orders received (non-consolidated)

Net sales

Sales by business and as percentage of
total sales(millions of yen)(millions of yen)

Real estate business, etc.

600,000

600,000

Thousands of U.S.
dollars (Note)

Millions of yen

Data on economic aspect (consolidated)

FY2011FY2012FY2013

FY2014FY2015FY2015450,000

Consolidated
Net sales

489,385

497,048448,987

420,324492,621

4,371,864

Ordinary income (loss)(6,690)(45,581)

6,584

14,81323,723

210,539

Profit（loss）for the year attributable to owners of the parent(19,872)(65,285)

10,22814,026

20,039177,844

Comprehensive income (loss)(17,167)(41,516)

16,874

46,192(3,381)(30,011)

Total net assets

171,537

128,095

141,880

182,988

177,417

1,574,529

Total assets

487,160

500,199473,510495,442548,711

4,869,642

Net assets

537.53397.18443.32587.83569.92

5.057

Profit (loss) for the year attributable to owners of the parent(64.28)(209.70)

32.87

45.42

65.25

0.579

Cash dividends applicable to the year

6.00

5.00

5.00

7.00

10.00

0.088

Net cash provided by (used in) operating activities(48)(17,757)

12,171(947)(8,863)(78,659)

Net cash provided by (used in) investing activities(7,837)(445)

11,441

1,982(6,099)(54,130)

Net cash provided by (used in) financing activities(1,557)

13,834(10,248)(4,576)

11,14898,937

Cash and cash equivalents at end of period

52,02448,01562,061

59,24554,650485,007

Per share of common stock (in yen and U.S. dollars):

Non-Consolidated

462,626 455,516

411,691

420,769

346,775

450,000

300,000

300,000

150,000

150,000

0

2011

2012

2013

2014

Ordinary income (loss)(millions of yen)

23,723411,691

346,775

462,626

455,516

420,769

3,734,200

Note: The rate of ¥112.68=US$1.00, the foreign exchange rate on March 31, 2016, has been used for translation.

FY2013

FY2014FY2015

Number of employees (consolidated)(Persons)

5,101

5,091

4,912

4,817

4,742

Number of employees(Persons)

4,072

4,028

3,918

3,861

3,823

Men

(Persons)

3,617

3,570

3,468

3,397

3,364

Women

(Persons)

455

458

450

464

459

Average age(Years)

44.8

44.9

44.6

44.9

45.0

Average years of continuous employment(Years)

20.3

20.4

20.1

20.1

20.2

0.92

1.02

1.17

1.26

0.56

Occupational accident frequency*1
Number of occupational accidents resulting in fouror more days’ absence from work

(Frequency)(Accidents)

43 (3)

52 (1)

46 (4)

43 (1)

20 (1)(t-CO2)

87,862

89,24973,18576,70974,510SCOPE 1*2

(t-CO2)

66,70170,30255,36657,292

52,336*3(t-CO2)

23,79821,146

20,877

19,41725,504SCOPE 2

*4SCOPE 3CO2 emissions basic unit (workplace)
Construction waste generated
Percentage of construction waste disposed of as
landfill(t-CO2)-

9,615,865

7,921,923

13,860,683

10,597,058(t-CO2/100 million yen)

19.6

19.7

18.3

20.3

16.4

(10,000 t)

66.3

77.1

78.8

70.8

66.6

(%)

4.2

6.9

5.1

6.7

5.0

*1 Frequency: An index showing the incidence of occupational accidents in every million man-hours of work.
*2 Scope 1: Greenhouse gases that are direct emissions resulting from corporate activity.
*3 Scope 2: Greenhouse gases that are indirect emissions resulting from energy use for corporate activity.
*4 Scope 3: Greenhouse gases that are indirect emissions excluding Scope 1 and Scope 2.
Up to fiscal 2013, categories 2, 3, 5, 6, 7, and 11 were calculated, but from fiscal 2014, categories 1, 4, and 12 were added to the calculation. From fiscal 2015, category 13 was added to the calculation.

3 2016_TODA Corporate Report

Total net assets

600,000

14,02620142015 (FY)

171,537
150,000–70,000 2011

2012

2014

CO2 emissions / Basic unit (workplace)CO2 emissions

1.0

0.92

1.02

60

90,0000.56
0.560,00089,24973,185

19.6

19.7

18.3

76,70974,510

20.3

0

0
2011

2012

2013

2014

2015 (FY)An organizational reform of safety management was carried out
in fiscal 2015, and the Administrative Group, Construction Group,and Civil Engineering Group were each integrated into single
organizations. As a result, there was a decrease in the numberof occupational accidents resulting in four or more days’
absence from work, and accident frequency improved to 0.56.
The frequency target for fiscal 2016 has been set
to under 0.4, with the aim of having the top safety in theconstruction industry. For that purpose, we are striving toheighten the safety awareness and knowledge of eachindividual member. Taking respect for human life as the basic
principle, we will continue to press forward with activities toprevent fatal accidents from occurring.

2011

2012

2013

2014

2014

2015 (FY)(10,000 t)

45

60

30

40

15

20

0

0

2015 (FY)Both CO2 emissions and CO2 emissions basic unit in fiscal 2015
are lower than in the previous fiscal year. The fact that both
figures declined in building construction was a major factor inthis. The reason for it is that excavations of soil for large-scalebuilding construction projects had ended the previous fiscal
year, so that many projects in fiscal 2015 were at the stage ofbuilding frame construction and finishing work, which emits
less CO2.
In fiscal 2016, there will be an increase in excavation
work for large-scale construction projects. Therefore, the CO2
basic unit is expected to increase over fiscal 2015.

(%)

80

16.4

30,0002013

Construction waste generated
Percentage disposed of as landfill

Basic unit

120,000

87,862

2012

Although there was growth in net income, total net assets
were influenced by the current price of shareholdings toshow a decrease of 3.0% year on year to 177.4 billion yen (adecrease of 5.5 billion yen). Total net assets were buoyed byvigorous business activity in construction and showed a 10.7%
increase year on year to 548.7 billion yen.

Construction waste generated/
Percentage disposed of as landfill(t-CO2/100 million yen)（t-CO2）

20112015 (FY)

Occupational accident frequency

1.26

182,988 177,417

128,095 141,880

02013

As a result of steadily growing profit from construction, werecorded a 42.9% increase year on year to 20.0 billion yen (anincrease of 6.0 billion yen).

1.17

548,711300,000

The increase in sales and the significant improvement inconstruction profitability yielded a 60.1% increase year on year
to 23.7 billion yen (an increase of 8.9 billion yen).

1.5

487,160 500,199 473,510 495,442

450,000–65,2852013

Total assets(millions of yen)

20,03920,000–25,0002012(19.1%)

Total net assets/Total assets–19,872

Figures in parentheses ( ) indicate number of accidents involving fatalities

CO2 emissions (workplace)2015 (FY)Profit (loss) for the year attributable toowners of the parent–6,690–50,000 2011

FY2012

2014

0–15,000

Units FY2011

2013

As before, Toda’s sales by business segment show thatbuilding construction makes up 70% or more of the total figure.
No significant change in this is expected in the future, but ourbusiness strategy for the medium to long term calls for steps
to reinforce the civil engineering construction and real estatebusinesses.

–45,581

Data on social and environmental aspects(non-consolidated)2012

10,0006,584(77.7%)

95.5 billion yen
2011

10,22814,81315,000384.0 billion yen(3.2%)

420,324(millions of yen)

30,00017.2 billion yen

492,621

Growth in private sector building construction expanded
significantly over the previous year, greatly exceeding thedecrease in overseas construction, which experienced aharsh business climate. Total sales showed a 17.2% increase
year on year to 492.6 billion yen (an increase of 72.2 billion
yen).

0

Orders received

448,987

Civil engineering business02015 (FY)

Thoroughgoing concentration on profitability-oriented
construction orders, even in a business climate that wasfavorable in terms of orders received, brought year on year
decreases of 6.9% in building construction and 11.9% in civilengineering construction. Results like these, combined withthe real estate business, yielded a 7.6% decrease for a total of
420.7 billion yen (a decrease of 34.7 billion yen).

489,385 497,048

Building construction business

77.1

78.8

66.3

6.9

70.8

66.6

12
8

6.7
5.0

5.1

4.2

16

4
0

2011

2012

2013

2014

2015 (FY)The amount of waste generated and the amount disposed ofas landfill both diminished. In the case of waste generated,
one factor was the decrease in the amount generated bycivil engineering construction. For the amount disposed of as
landfill, the result was influenced by the overall progress madein recycling.
The figures for amount of waste generated andpercentage disposed of as landfill are determined by theamount of construction done and the amount of concrete
debris generated (the amount of demolition work done) in that
fiscal year. We will continue making every effort to limit theamounts generated and to sort the waste more thoroughly sothat we can maintain the levels from fiscal 2015.

2016_TODA Corporate Report 4

Message from Management● Financial Highlights - Toda Corporation and Consolidated Subsidiaries

Unceasing business reform tobecome a company that grows
sustainably

Net sales(100 million yen)

1,000

50

5 2016_TODA Corporate Report

150

2013

2014

2015

129

100

102

50

47

0

2016 (FY)(planned)

140

148

65

2013

2014

2015

0

2016 (FY)(planned)

2013

2014

2015

2016 (FY)(planned)●Performance by business (fiscal 2015 results and fiscal 2016 planned)
Building construction in Japan Civil engineering in Japan Investment and development(100 million yen)

Significant improvement in fiscal 2015
performance
While the business climate in Japan in fiscal 2015 was affected by
growing concern about slowing growth in the developing countries
and other economic downturns, employment and corporate earnings
tended to remain rock solid so that moderate growth has continued.
The construction industry has seen public sector construction turndownward, but at the same time, private sector construction orders
have remained firm, especially in the manufacturing industry. Overall,therefore, levels have stayed on a par with the previous fiscal year.
Under these circumstances, consolidated results for the Toda
Group have been as follows. Largely because of an increase inconstruction completion in our company, sales reached 492.6 billion
yen (17.2% increase year on year). In terms of operating income
and loss, thoroughgoing implementation of a policy to focus on
profitability in the construction business, which is our main business,
was among the factors that raised the gross profit margin on
completed construction contracts. As a result, the gross profit margin
on sales rose to 9.7%, a year on year increase of 1.1 points, and grossprofit on sales rose to 47.8 billion yen (year on year increase of 32.4%).
Meanwhile, selling, general, and administrative expenses rose to
26.1 billion yen, a year on year increase of 13.2%, so that operating
income reached 21.6 billion yen (year on year increase of 66.7%).
Under ordinary income and loss, factors including interest income
and dividend income from investment securities brought ordinary
income to 23.7 billion yen (year on year increase of 60.1%). Regarding
net income belonging to shareholders of the parent company, an
impairment loss of 1.2 billion yen and other extraordinary losses
resulted in a figure of 20.0 billion yen (year on year increase of 42.9%).
Toda Group plans for fiscal 2016 results call for consolidated salesof 445.0 billion yen (year on year decrease of 9.7%), operating incomeof 18.5 billion yen (year on year decrease of 14.5%), ordinary incomeof 20.3 billion yen (year on year decrease of 14.4%), and net income
belonging to parent company shareholders of 17.3 billion yen (yearon year decrease of 13.7%).

173

203
185

150

100

200

200

216
200

2,000

(100 million yen)

237

4,450

4,203

3,000

0

Fiscal 2015 outlook and statusof management plan progress

250

4,000

Profit for the year attributable to owners of the parent

Operating income
Ordinary income(100 million yen)

4,926

5,000

4,489

Operating income/ Ordinary income

200(100 million yen)(100 million yen)

45

179

160

36

37

Overseas

Group companies in Japan(100 million yen)(100 million yen)

4

0

16

3

-4

13

-8

14

40

140

11

120

27

2

80

18

1

Operating income

1

–7

-12

10

6

–14
40

0

Sales (100 million yen)
Profit margin (%)

0

9

2015

2016 (FY)(planned)

FY2015FY2016 (planned)

3,614
5.0

3,090
4.5

0

2015

2016 (FY)(planned)

FY2015FY2016 (planned)

920
4.0

980
4.1

-1

-16

–0.5
2015

2016 (FY)(planned)

FY2015FY2016 (planned)

79
–0.6

45
2.2

-20

3

2015

2016 (FY)(planned)

FY2015FY2016 (planned)

139
–9.8

0

2015

2016 (FY)(planned)

FY2015FY2016 (planned)

148
–4.7

346
4.1

340
3.2

Group companies in Japan 7.4
Fiscal 2016 projectedcomponent
percentages of sales (%)

Building construction in Japan 67.1

Civil engineering in Japan
21.3
Investment and development 1.0
Overseas 3.2

Status of management plan progress: Resetting fiscal 2017 performance targets toward sustainable growth
For the coming construction market, increasing construction

1 in productivity" Promotion Committee that we established in July

investment looking ahead to the Tokyo Olympics and Paralympics

2015 has made progress in conducting measures that cut acrossto be held in 2020 is anticipated. Meanwhile, there are also

sectors, and labor productivity (the amount of added value perconcerns about rising construction costs and related issues due toemployee) rose to 14.55 million yen (previous period 11.54 million

the uncertain outlook for private-sector industry and resurgenceyen). On the other hand, there is still room for improvement in theof the labor crunch and other such factors.

speed and volume of operations that can be handled, and we are

The Toda Group will address these circumstances by aiming toaware that continuing measures have to be taken to move forward

epitomize "a corporate group that makes your success possible" aswith reforms of production systems and operational processes as welldeclared in the Toda Group Global Vision. The entire Group is joining

as with development of new technology and other such measures.

together to act as one for this initiative.

In terms of improving the “Foundation for Growth,” we have

What we are aiming for is growth for the Toda Group at the same

positioned investment and development, business in other countries,

time that we pursue prosperity for our stakeholders as a whole. Thisand operation of our group companies in Japan as strategic businesses.

includes customers, shareholders, investors, business partners, local

We are proceeding with development and reinforcement ofcommunities, the global environment, Toda employees, and others.

structures and systems in those areas. However, the liquidation of

Toda positions the Medium-Term Management Plan 2017,assets in the investment and development business in fiscal 2015

which is currently under way, as Phase I leading to realization of thisresulted in a loss on valuation of real estate that was recorded as a

global vision. We are pursuing implementation with achieving "No.

decrease in profit. As to Toda businesses in other countries, growth

1 in productivity" and realizing a "Foundation for Growth" as key

in the economies of Brazil and other developing countries has

directions. In fiscal 2015, which is the initial fiscal year of the plan, we

flattened out and the future outlook is extremely uncertain.

have succeeded not only in improving profits from the construction

Taking these recent circumstances into consideration, webusiness, but also in achieving ahead of schedule the indicators thathave decided to take steps to further strengthen our initiatives by

we initially declared as performance targets for fiscal 2017. The "No.

resetting performance targets for fiscal 2017.

2016_TODA Corporate Report 6

●Positioning and orienting the plan
Phase I in concrete implementation of our global vision
Phase I

Phase II

FY2015-2017

FY2018-2020

Break throughstereotypes and create
new value and systems

TODA Group Global Vision

A corporate group thatmakes your successpossible

Sustain and deepen reform

No. 1 in productivity
Foundation for growthNo. 1 in robust resilience
Establish new business models● Reorganize production systems and operational flow to pursue improvements in productivity.
● Promote enlargement of our areas of business with a view to the future.
● Take steps to diversify our personnel and values, and build a new corporate climate.

●Results and issues
Relating to performance

Results

Relating to policies and measures● Profit improvement● Achieved medium-term targets

ahead of schedule● Increasing profits from strategic

Issuesbusinesses● Advancing measures foradded-value improvement● Improve implementation

capabilities, operational speed

Further reinforce measures for achieving "No. 1 in productivity"(Reset targets for continuing promotion of implementation)●Reset fiscal 2017 performance targets
Fiscal 2017

Initial targets

Revised targets

Consolidated sales

Approx. 480 billion yen

Approx. 480 billion yen

Operating income

17 billion yen or more

20 billion yen or more

3.5% or higher

4.2% or higher

Operating margin
Labor productivity(non-consolidated)*1

13 million yen or more 13.2 million yen or more

*1 Labor productivity=Amount of added value per employee (operating
income + total personnel expenses) ÷ number of employees (average forthe period, including temporary employees, etc.)

Growth strategy to assure
sustainable growth
Priority measures in fiscal 2016
The keyword for future management in the Toda Group is"sustainable growth." Improvement of the climate for business has
been accompanied by a rise in profit levels. However, forecasts tell us
even harsher conditions will prevail in the years from 2020 onward.
Accordingly, we must ceaselessly review our present situation andcontinue carrying out reforms to achieve sustainable growth anddramatic advances.
As the second year of the "Medium-Term Management Plan,"therefore, fiscal 2016 is positioned as "the year for establishing a deeprooted profit structure and for taking measures to gain footholds formoving toward a new stage of growth." First of all, in connection withproduction system reform, we will make use of "Building Information
Modeling (BIM)"*2 and other such means of promoting front loading*3.
Where operational reform is concerned, one result of fiscal 2015
activities was the presentation of improvement proposals that would
contribute to a 25% reduction in total working hours. In the current
fiscal year, results of this kind will be deployed horizontally acrossthe whole company, and we will make efforts to standardize thesemeasures. In the area of research and development, too, we will makeevery effort to heighten productivity and move forward with thedevelopment of unmanned and automated implementation systems.
So far as actual results are concerned, we have already established labor-saving technology, such as our automated system for measurement
and adjustment of plumbing in steel columns. We are committed todeveloping this kind of technology, refining it, and creating safer andmore efficient product management systems. From fiscal 2016, we
will be starting on improvement of our Tsukuba Technical ResearchInstitute (Tsukuba City, Ibaraki Prefecture), and we are taking measures
to strengthen our R&D systems.
In our strategic business areas, we will concentrate ourcapabilities to achieve progress on the Kyobashi 1-Chome East District
Development Project (reconstruction of the Toda headquarters
building), scheduled for completion in 2024, and on the floating
offshore wind power generation project. In April 2016, we brought thiselectric power generation facility to commercial feasibility by means ofour 100% subsidiary, Goto Floating Wind Power LLC. We are collecting
data on power generation and accumulating knowledge on operation,
maintenance, and management with the intention of developing thisinitiative into a future profit-making business.
Measures of this kind are promoted by the Group as a whole.
This realizes a sustainable improvement in productivity that makes it
possible to reassign and optimize our human resources. Using that ascapital, we seize differentiated value from competing corporations
and further increase the profitability of our strategic businesses. The
resulting profits are shared with our stakeholders as a whole, leading
to success for all.

Conceptual approach to management

A corporation that grows sustainably
Sustainable growth in productivity(Reform of production systems and operational processes,
rebuilding ICT, mechanized construction, etc.)

Reassignment and optimization ofhuman resources
Acquire differentiated value

Make strategic businesses
more profitable

Secure and distribute appropriate profit(Realizing stakeholder success and contributing to the growth of society)*2 BIM: A method of integrating and managing a variety of different information indesign and implementation by using a three-dimensional building model createdwith a computer.
*3 Front loading: This means advancing operations ahead of schedule for the early
resolution of problems so as to reduce the cost and manpower needed in the eventof problems or failures that occur during later processes.

To Our Stakeholders

Block B

Becoming a corporate group that makes your success possible
Kyobashi 1-Chome East Side Development Project
Block AThe Kyobashi district near Tokyo Station is the site of a development
project with three blocks and an area of 1.6 ha. Areas adjoining thedevelopment are the sites of numerous art museums, antique art
shops, and art galleries. Toda is the project implementer for block B(reconstruction of the Toda head office building), and we will work witharea landowners to improve facilities in the lower floors of buildings. By
taking advantage of the site, we will transform the area into a new center
for arts and culture. Through these and related activities, we will continue
measures to create a prosperous, bustling atmosphere in the Kyobashi
area and bring further growth to the area.

Block A

Rendering of completed project

7 2016_TODA Corporate Report

Block B

Our creed since Toda Corporation was founded in 1881 has beencommitment to the best in quality, construction time frames, andsafety. Our management policy is to contribute to the advancementof society’s welfare through construction, to develop the company
business on the basis of society’s trust, and to seek stability in thecompany business on the basis of appropriate profit earned throughsound management. With that as our declared foundation, and withbacking from our provision of a wide range of services to our clientsand our many years of results, we have won recognition for building
relationships of trust with our stakeholders.
The main sources of corporate value in the Toda Group, as we seeit, include our provision of high-quality buildings by the technologicalcapabilities and know-how we have accumulated, the relationships oftrust we have with stakeholders, and the employees who will support
the corporate culture of the Toda Group in times to come. There arealso the fine cooperative relationships we have with partner companies
we have been working with over the course of many years.
Our efforts in maintaining and developing these sources of value
will also contribute to the Toda Group's realization of corporate value tothe maximum extent.
In 2021, the year following the Tokyo Olympics and Paralympics, Toda
will celebrate the 140th anniversary of the company's founding. Until thenwe will pursue our aim of improvement to make Toda Corporation the mostproductive and financially most robust of the construction companies sothat we can continue making an enduring contribution to society.

President and Representative Director

Rendering of art event held by two blocks together

2016_TODA Corporate Report 8

Business Review by Segment

Business Review by Segment

Building Construction

Civil Engineering

To remain as a valuable corporation, we will

We aim to become a valuable corporation
underpinned by the continuing creation of
profit. That cannot be without persistent andflexible policies with future prospects, andtrust of society.

continue to take on challenges that break thestatus quo.
Representative Director

Executive Managing Officer
Hiroyuki Miyazaki Senior
Executive General Manager of Building Construction Group

Representative Director

Executive Managing Officer
Shunichi Akiba Senior
Executive General Manager of Civil Engineering Group

Looking back at fiscal 2015

Looking back at fiscal 2015

Business climate

Fiscal 2015 results (Building Construction in Japan: non-consolidated)

Business climate

Fiscal 2015 results (Civil Engineering in Japan: non-consolidated)

Public sector investment tended to diminish in the building
construction business, but private sector construction demand haveremained ﬁrm, especially in the manufacturing industry. Overall,levels have stayed on a par with the previous ﬁscal year. Meanwhile,
the outlook remains uncertain amid persistent concerns over rising
personnel costs and the labor crunch. Toda will continue accepting
orders with an emphasis on implementation capabilities andproﬁtability.

Fiscal 2015 sales amounted to 361.4 billion yen (year-on-year increaseof 26.0%). Due to an increase in income from completed construction,
this segment recorded operating income of 17.9 billion yen (previous
period: 8.9 billion yen).
As to orders received, we recorded a figure of 309.0 billion yen(year-on-year decrease of 6.6%) due to our thoroughgoing emphasis
on profitability.

In the civil engineering business, we have been through a cycle of orders
related to Great East Japan Earthquake reconstruction, and public sector
investment as a whole has tended to diminish. Meanwhile, there isalso a trend toward larger-scale orders. Reliable large-scale orders andexpanded private sector construction orders are issues in terms of futuresustainable growth.

Sales in fiscal 2015 reached 92.0 billion yen (year-on-year increase of
1.0%). Due to an increase in income from completed construction, thissegment recorded operating income of 3.7 billion yen (previous period:
3.0 billion yen).
As to orders received, we exceeded forecasts at the start of theperiod with 103.5 billion yen (year-on-year decrease of 8.8%).

Strategy for realization of the Medium-Term Management Plan

Strategy for realization of the Medium-Term Management Plan

Sales
(100 million yen)
5,000

Prospects for the next period (Building Construction in Japan: non-consolidated)
Regarding prospects for performance in fiscal 2016, our plan calls for sales of 309.0 billion yen (year-on-year
decrease of 14.5%) and operating income of 14.0 billion yen (operating margin: 4.5%).
The planned figure for orders is 350.0 billion yen (including overseas, year-on-year increase of 13.2%).

4,000
3,000

3,300

1,000

FY2015(Planned)

In the time ahead, various changes will take place in the business environment, such as the decline in building
construction demand in Japan that is anticipated from 2020 onwards. We will respond to such changes flexibly
and will continue to take on the challenges of reform and improvement so that we can take steps towardsustainable improvement of our corporate value.
Specifically, this means that we will upgrade our value-creation capabilities and expand our speciallynegotiated contracts by conducting solution-oriented sales with a grasp of our customers' true needs as well
as utilizing and evolving our technological holdings, while at the same time improving our procurement
methods to strengthen our cost competitiveness. We will also use such means as adopting front loading indesign and implementation projects, making effective use of ICT, and expanding our cooperative work withpartner companies in order to enhance our productivity and take steps to enhance our worksite-centeredimplementation capabilities and operational speed. Additionally, we will expand our operational foundation
by creating strategic sales sectors through collaboration with companies in other kinds of business. We willfurther measures and policies to create value in our human resources, which will be the foundation of the
future building construction business.

3,090

2,000

0

Medium to long-term strategy

3,186

3,614

FY2015FY2016FY2017(Planned) (Medium-term plantarget value)

Operating income(100 million yen)
200

179

150
100

140

140

73

50
0

FY2015(Planned)

FY2015FY2016FY2017(Planned) (Medium-term plantarget value)

Operating margin
(%)
10
8

5.0

6
4
2
0

2.3

4.5

4.2

Yamawaki Gakuen (Educational Institution)

9 2016_TODA Corporate Report

In performance forecasts for fiscal 2016, the plan is for sales of 98.0 billion yen (year-on-year increase of 6.4%)
and operating income of 4.0 billion yen (operating margin: 4.1%).
For orders received, the plan is for 90.0 billion yen (including overseas, year-on-year decrease of 13.1%).

920

FY2015FY2015(Planned)

FY2015FY2016FY2016FY2017200(Planned) (Medium-term plantarget value)

Operating income(100 million yen)
45
30

24

37

40

45

15
0

FY2015(Planned)

FY2015FY2016FY2017(Planned) (Medium-term plantarget value)

Operating margin
(%)
10
8
6
4

2.7

4.0

4.1

4.5

FY2016FY20172

FY2015(Planned)

FY20151,000

400(Planned)

With public sector business expected to shrink in the time ahead, the Tokyo Metropolitan Area branch offices
established in fiscal 2015 will handle large-scale projects such as the Metropolitan Area ring roads. We will
strengthen our measures in new fields, with the floating offshore wind power generation project and otheractivities in the renewable energy sector; for instance, the sixth sector industrialization of agriculture, theinfrastructure renewal field, and other such fields. As such, we will take steps to obtain profits.
We also intend to continue pursuing measures to assure (make visible) a sense of security and safety bymeans of quality measures. Moreover, we provide customer value by means of technology development, toimprove productivity by utilizing ICT, and to advance the value of our human resources by employee training
and active promotion. By these and other measures, we will aim to be a valuable corporation with trust ofsociety and sustainable growth.

980

600

0

Medium to long-term strategy

885

800

0

FY2017FY2015(Planned) (Medium-term plantarget value)(Planned) (Medium-term plantarget value)

Main results in fiscal 2015

Yamawaki Gakuen Junior HighSchool and High School

Sales(100 million yen)
1,000

Prospects for the next period (Civil Engineering in Japan: non-consolidated)

Main results in fiscal 2015

Chigasaki Municipal Oﬃce Building
Chigasaki City, Kanagawa Prefecture

Comprehensive Support Center for
the Elderly and Kudanzaka Hospital

Kinki Regional Development Bureau, Kisei
Line Wabukagawa Tunnel construction

Yamoto Ishinomaki Highway
substructure construction

Kochi City Enokuchi shield tunnelingconstruction

Federation of National Public Service Personnel
Mutual Aid Associations

Kinki Regional Development Bureau, Ministry ofLand, Infrastructure, Transport and Tourism

Tohoku Regional Development Bureau, Ministry ofLand, Infrastructure, Transport and Tourism

Kochi City, Kochi Prefecture

2016_TODA Corporate Report 10

Business Review by Segment

Overseas Business

Main results in fiscal 2014-2015

We will prepare for future contraction of thebuilding construction business in Japan by
expanding our profit base in other countries
as strategic business, thereby contributing tosustainable Group growth.

| Brazil| Brazil| Thailand

Stanley Electric do Brasil Ltda. Limeira Plant

Honda Automoveis do Brasil Ltda.
New Itirapina Plant

Bridgestone Asia Pacific Technical Center
Co., Ltd. New Research Center

HONDA AUTOMOVEIS DO BRASIL LTDA.

BRIDGESTONE ASIA PACIFIC TECHNICAL CENTER
CO., LTD.

STANLEY ELECTRIC DO BRASIL LTDA.

Officer
Takamitsu Koga Managing
Overseas Division

TOPICS

Looking back at fiscal 2015
Business climate

Fiscal 2015 results

In fiscal 2015, stagnation in the Chinese economy and active capital

Fiscal 2015 sales were 13.9 billion yen (year-on-year decrease of 34.0%).

investment in Japan were among the factors that curtailed investment

Operating income, influenced by such factors as sluggishness in ordersin other countries by Japanese-affiliated corporations. The competition

received and construction completion and the sudden drop in thefor orders grew more intense, and in combination with political unrest

value of the real in Brazil, recorded a loss of 1.4 billion yen (previous

and economic stagnation in Brazil and other deployment destinations,period loss of 300 million yen).

this has resulted in an extremely harsh business climate.

As to orders received, sluggishness in overseas investment by
Japanese-affiliated corporations and other such factors resulted in a
figure of 9.9 billion yen (year-on-year decrease of 52.9%).

Senko Global Logistics (Thailand) Co., Ltd. Laem Chabang Distribution Center
Overview of construction
This project is for the construction of warehouse buildings A, B, and C
at the Laem Chabang Distribution Center operated by Senko Global
Logistics (Thailand) Co., Ltd., the local affiliate of Senko Co., Ltd.
This affiliate was established for the purpose of initiating a fullfledged warehouse business in addition to the existing transportation
business in Thailand. The aim is to develop a total distribution service.
The affiliate is located near Laem Chabang Port, a center for Thai
trade. Consideration is also being given to handling the demand forstorage of frozen and refrigerated cargo, which is growing rapidly

Strategy for realization of the Medium-Term Management Plan
Prospects for the next period
Regarding prospects for performance in fiscal 2016, our plan calls for sales of 14.8 billion yen (year-on-yearincrease of 6.7%) and in operating income, a loss of 700 million yen (operating margin of -4.7%).
For orders received, our plan calls for 20.0 billion yen (year-on-year increase of 101.9%).

distribution services geared to their customers' business styles.
Sales(100 million yen)
200

197
139

150

200
148

FY2015FY2015(Planned)

Influenced by sudden changes in international economic conditions and by political and economic

FY2016FY2017(Planned) (Medium-term plantarget value)

Operating income(100 million yen)
8

Group is moving ahead with improvement of human resources and business foundations in other countries

4

while businesses in Japan are steady. In this way we are building strategic sources of stable earnings.

0

In order to realize this objective, we are working to enhance value for our customers by handling business-4

with the same sense of speed we have in Japan as well as by an insistence on quality. At the same time, we are-8

improving productivity by establishing improvement activities, taking steps to secure and train global human-12

resources, and continuing measures toward development of new businesses in order to expand our profit

-16

5

-7

-8
-14

FY2015FY2016FY2017

Operating margin

2.5

0

-4.1

-4.7
-9.8

-12

FY2015(Planned)

11 2016_TODA Corporate Report

The large eaves above the truck berths were built on a curve continuous with the building
structure. In addition to giving a rich and impressive appearance to the building exterior,which tends to look uniform, the ends of the curved beams supporting the large eavesof the appropriate curvature of skylights (FRP) positioned on the roof.

(Planned) (Medium-term plantarget value)

(%)
4

-8

The building exterior was made to look rich and impressive while achieving
structural stability with reduced use of steel framing.

structural stability and reduced use of steel frame material. Field tests were also conducted

FY2015-4

Chonburi Province, Kingdom of Thailand
Senko Global Logistics (Thailand) Co., Ltd.
One story above ground, reinforced concrete structure witha portion of steel construction, total floor area 22,359 m2
Construction period: June 2014 to March 2015

were connected to the building by horizontal beams. Thus, they achieve a balance between(Planned)bases. By these means we will aim for sustainable Group growth.

Location:
Implementer:Size:client's demand for high quality.

50
0Main measures taken in design and implementation

Construction overview

Advanced technological capability with Japanese quality was used to meet the100

Medium to long-term strategy
circumstances in deployment destinations, the outlook ahead is uncertain. Under these conditions, the Toda

Full viewin the ASEAN region. Senko is aiming to provide a wide range of

FY2015FY2016FY2017(Planned) (Medium-term plantarget value)

Field test of eaves (truck berth portions) with curved shape.

VOIC E

Cooperative work with local staff members made it possible to provide a high-quality structure.
Japan and Thailand do not have differences in terms of the required functions in building. This is even more
so in the case of a client that is a Japanese corporation. People connected with the client would come fromJapan and China to observe the worksite while construction was under way. It made me truly happy when
they commented that the work was no different from Japan in quality.
After construction was finished, we took steps to build friendly relations with staff members andworkers. We gathered together to enjoy playing futsal, for instance, and in respect for Thai culture, we went
on visits to temples with the families of Thai staff members.
If the start of the ASEAN Economic Community brings about thoroughgoing unification of ASEAN, we
will probably see an increase in new deployment to the area by Japanese corporations. Going forward, I will
work together with our staff members to continue making buildings that earn the trust of our customers.

Takanori Hashimoto
THAI TODA CORPORATION LTD.
(temporary assignment)

2016_TODA Corporate Report 12

Research and Development

Board of Directors, Corporate Auditors, and Managing Oﬃcers
As of June 29, 2016
Directors

Our aim is to discover new possibilities inbuilding structures in response to changes
in the times and in society, so as to provide
our customers with valuable technology
to open the way.
Morimichi Toda

Director
Senior Executive Managing Officer
Director of Promotion Office for Value Creation

Masanori Imai

Yushi Kikutani

Shunichi Akiba

Hiroyuki Miyazaki

President and Representative Director

Representative Director

Representative Director

Representative Director

Executive Officer and President
Director of Human Resources Strategy OfficeSenior Executive Managing Officer
Executive General Manager of
Administrative Group

Senior Executive Managing Officer
Executive General Manager of Civil
Engineering Group

Senior Executive Managing Officer
Executive General Manager of Building
Construction Group

Research and development system
At Toda Corporation, we seek to exceed the expectations of society
and our customers by creating astonishing new value. To that end,
we established a Promotion Office for Value Creation in January 2014.

Organizational structure (as of end April 2016)
Promotion Office for Value Creation
Research and Development Center

Management and Operations Unit

Operational Process Reconstruction Unit

Social Infrastructure Unit

Morimichi Toda

Makoto Hayakawa

Yutaka Nishizawa

Toshihiro Otomo

Hiroshi Uekusa

with the aim of creating value for customers, research and development to

ICT Strategy Unit

Technology Creation Unit

Director

Director

Director

Director

Director

contribute to rationalization of production systems, research and development

Planning Unit

Environmental Creation Unit

Setsuhiro Shimomura

Shunsuke Amiya

Outside Director

Outside Director

The Research and Development Center, one of its divisions, engages in a wide
range of activities from basic research to new product development. These
include research and development cognizant of changes in social structure

on new businesses in the Blue Ocean*1, and so on. We also engage in technicalexchange with public agencies, universities, corporations pursuing other typesof business, and competing corporations in the same industry, we actively

Senior Executive Managing Officer
Director of Promotion Office for Value
Creation

Executive Managing Officer
General Manager of Building Construction
General Manager of Safety Management
Division

Executive Managing Officer
General Manager of Sales Promotion
Division for Building Construction

Executive Managing Officer
General Manager of Administrative Division
Manager of Risk Management Office

Executive Managing Officer
General Manager of Sales Promotion
Division for Civil Engineering

Energy Unit
Value Creation Strategy Unit

promote joint research, and we conduct research and development in a variety
of different fields.

*1 Blue Ocean: An undeveloped market where there is no competition

Fiscal 2015 results
Main results of technology research and development in fiscal 2015
(1) Automated steel column measurement and plumbing adjustment
system(5) Granular damping material for ceiling to reduce heavy-weight floor
impact sound(2) "Pair Lock Clip®" earthquake-resistant ceiling clips(6) On-site management system utilizing head-mounted display(3) "Yure Kanchi (tremor detector)" earthquake health evaluation system(7) "Automated control system for integrated management" to maintainproper working environment in tunnel portals(4) "Frozen pile head treatment process" utilizing water freezing pressure

Corporate Auditors

Technology research and development trends and medium to long-term strategy
In our Medium-Term Management Plan (2015-2017), we aim to achieve"No. 1 in productivity" in the construction industry and to build asolid foundation for growth. We are pursuing development with theemphasis on achieving these objectives and determining themes fortechnology research and development that take the needs of society
into consideration. Specifically, we are working to assure a sense of
security and safety by development and popularization of earthquake
damping technology and the "Yure Kanchi (tremor detector)" forinstantly determining the magnitude of a building's shaking and theextent of damage to it during an earthquake. Beyond that, we areengaging in initiatives for mechanization and automation technology
to improve productivity and production management rationalization
technology utilizing ICT, as well as technology development in the healthand welfare fields, where Toda has particular strengths. With a view tovalue creation based on perception of future needs in society, we arealso focusing resources on development and dissemination of zero net

13 2016_TODA Corporate Reportenergy building (ZEB)*2 technology and floating offshore wind power
generation in the environment and energy field. We are improving our
Tsukuba Research and Development Center facilities so that we canhave technology to deal with future sudden changes in society. We
took a major first step in this effort in May 2016 by starting construction
on an Environmental Technology Demonstration Building intended
for use in realizing ZEB
application.

Takeshi Nishimaki

Keiichi Ebihara

Kazuhiko Kamiya

Hisatoshi Adachi

Keiichiro Maruyama

Standing Corporate Auditor

Standing Corporate Auditor

Outside Corporate Auditor

Outside Corporate Auditor

Outside Corporate Auditor

Executive Oﬃcers
Executive Officer President

Masanori Imai

Senior Executive Managing Officers Yushi Kikutani
Executive Managing Officers

Makoto Hayakawa

Shunichi Akiba

Hiroyuki Miyazaki

Morimichi Toda

Yutaka Nishizawa

Toshihiro Otomo

Hiroshi Uekusa

Katsuaki Fukushima

Kaoru Mitsumochi

Yoshihiko Yamamoto Kouichi Takahashi
Managing Officer

Environmental Technology Demonstration Building(conceptual view of exterior)

Hiroyuki Yamada

Yuji Yokomizo

Toshio Hirata

Kenichi Okabe

Takao Fukashiro

Takanori Matsushima

Yoshinori Shibuya

Atsushi Ouchi

Toshiaki Gunji

Masato Miyake

Kouichi Kubota

Hitoshi Asano

Shinichi Nagata

Ken Fujita

Toshiaki Agata

Hidemi Wakabayashi Toshihiro Yamazaki

Takamitsu Koga

Takanobu Tateno

Mitsuhiko Tokuhisa*2 ZEB: A conceptual approach for reducing the energy used in a building to a level as close as possible to zero.

2016_TODA Corporate Report 14

Corporate Governance
We take the view that active engagement in corporate governance*1 measures to achieve continuing enhancement of

Enhancement of auditing systems

Instituting thoroughgoing compliance

Our company has adopted a system of corporate auditors underThis initiative is led by a Compliance Committee that is chaired bywhich auditors, through seats on the board of directors and otherthe president. The committee develops the Toda Group Corporatemeans, audit the legality and propriety of operations.

Code of Conduct and other related regulations, establishes

The Corporate Auditor Office is a unit that aids corporate

and operates a contact point for reporting and consultation

corporate value is a crucial issue for management. With a view to the efficient execution of corporate business, the creation

auditors in their duties. Our rules call for personnel and organizational(the corporate ethics help line), and continuously implementsof supervisory structures, the assurance of sound, transparent management and the strengthening of compliance, we arechanges in this office to be determined in advance by the board ofeducational activities (training by e-learning, group training ofcorporate auditors or in accordance with advice sought from auditors

various kinds, etc.).

putting in place the needed management structures and arrangements and enacting the measures required.

Formulation of Basic Policy for Corporate GovernanceIn order to achieve sustainable corporate value improvement, we are

The board of directors and reinforcing the functionalityof business operations

required to put in place a foundation for corporate governance andOur company has adopted the executive officer system, which

realize a more rational, more efficient management environment. In

separates management decision-making by directors from business

December 2015, we enacted a Basic Policy for Corporate Governance

operations by executive officers. This clearly delineates the scope ofwith approval from the board of directors. This sets forth ourbasic conceptual approach to corporate governance and gives a❶ Capital policy• We understand that capital policy is expected to clearly state theconceptual approach to management.
• However, we took into consideration ways of having our investors gaina grasp of our orientation as a first step.
• As a result, the Medium-Term Management Plan that was announced in
May 2015 presented a target level of 20%-30% for the dividend payout
ratio.
❷ Shares held for strategic reasons• Toda has large holdings of securities and we are often asked by ourinvestors to explain the reasons for this and the advantages of it.
• The current policy does not go so far as to define explicit rules forholding shares, but in future, we will have the board of directors
determine once a year whether or not to continue holding shares.

to compliance, such as conducting a compliance awarenessexecutive officers.

questionnaire survey of all Group companies as a way of further

We also maintain the effectiveness of audits by arranging forheightening objective awareness of the effects of those measuresand activities, and improving on them. We also hear the views of

directors and accounting auditors and providing opportunities for

all the affiliates and partner companies to check on their degree ofattendance at the various corporate meetings.

understanding.

roles and responsibilities, and we are making every effort to reinforce

Enhancement of internal controls
In March 2014, Toda established a Risk Management Office for

Thoroughgoing risk management

functionality in those respective areas.
The board of directors has 11 members (as of June 29, 2016).

the direct control of the president, coordinate and collaborate to grasp

As a rule, the board meets once a month to deliberate on importanton a company-wide basis, and for institution of more advanced

risks that may have serious negative impact on the achievement ofmanagement matters and oversee the execution of corporate

management. Through this office, we are promoting the rearrangement

management objectives as well as on business activities. To that end,

business. Since fiscal 2014, we have been appointing two directorsof internal control groups and crisis management systems. We havethey formulate and execute risk reduction measures, and implementfrom outside the company as a measure to further strengthen

also established an Audit Office as an internal audit unit that conducts

lateral measures across divisions to be prepared to mitigate as muchtransparency, objectivity, and propriety, and the accountability of

regular audits of the state of operations in the various corporate

as possible any damage or harm that may result in the unlikely eventthe board of directors. Important personnel matters regarding thedepartments and divisions. Audit results are reported to the board ofthat a risk surfaces.

board of directors and directors in the operating divisions together

directors and the president, and additionally to the board of corporate

We have developed a system whereby each division identifies

with compensation for officers and other such executives are to beauditors, while various other steps are also taken for collaboration andrisks at the beginning of the period every year. Those risks arereviewed in the Personnel and Compensation Advisory Committee

coordination by means of regular exchanges of views with accounting

organized in lists, and the serious management risks that are

chaired by an outside director and reported to the board of directors.

auditors regarding their vision for internal auditing. Internal audits ofcritical for the Toda Group are selected from among them and are

The executive officers execute Toda corporate business inGroup companies are also conducted as required, in accordance withprioritized for handling. We have also declared September to be risk

the management rules of the companies concerned.

management month. During that period we hold meetings that all

directors. We also hold regular meetings of the Management Committee,

In March 2006, a corporate resolution was passed regarding

personnel attend to conduct a comprehensive inspection of risks

Strategy Committee, and Executive Committee to deliberate on

basic policies on building internal control systems as provided in thethat exist in day-to-day operations. We then take steps to prevent

important matters of management and company business and make

Companies Act, and we have taken measures accordingly to further

the crises in advance.

their findings known. These bodies also assign responsible executives,

strengthen our management foundation. We also took measures inestablish the scope of their responsibilities, prescribe procedures, andfiscal 2010 to develop and improve our Group companies, including

Promoting constructive dialogue with shareholders

determine other such matters regarding company organization, division

local affiliates in other countries. In May 2015, we revised the above

Toda has established basic policies to promote constructive dialogueof duties, management authority, and formal approval procedures

basic policies and took steps to enhance the internal controls of thewith our shareholders, and we are making every effort to develop

according to their respective rules and regulations.

Toda Group as a whole.

systems and implement measures accordingly. The views expressed*1 Corporate governance: Arrangement made for disciplining corporate management.

Compensation for directors

by shareholders and investors at IR activities as well as the substanceCompensation Standards for Directors, etc. were formulated
regarding compensation for directors and executive officers. Relevant

Corporate governance structure (as of June 29, 2016)

matters are reviewed by the Personnel and Compensation Advisory
General Meeting of Shareholders

Appointment

Appointment
Audit

Board of Directors
Appointment/
Oversight

ReportingPresident (Representative Director)

Appointment/
Oversight

Coordination

ReportingExecutive Officers (Managers of Headquarters, Supervisory Department and Branch Officers)
Reporting

15 2016_TODA Corporate Report

In fiscal 2016, a performance share system was adopted for

Accounting audit

directors and executive officers for the purpose of improving
medium to long-term performance, increasing corporate value, andAccounting Auditors
Coordination

heightening shareholder-oriented management awareness.

Executive Committee

ReportingDirection

Audit Department

ReportingGroup Control Office

Coordination

Internal audit

Risk Management
OfficeCompliance
Committee
Training

Departmentsboard of directors.

Strategic Meeting
Committees

Direction

Appointment

Corporate Auditor Office

Management Meeting
Direction

Committee chaired by an outside director and then decided by the

Coordination

Board of Corporate Auditors

Reporting

Reporting

The Compliance Committee and the Risk Management Office, under

the purpose of risk awareness and reform of corporate culture

accordance with basic management policy decided by the board of❸ Directors and board of directors-related (appointment procedures,independent outside directors, board of directors evaluations)• It has been recognized from before that it would be necessary for theboard of directors to adopt an independent perspective (since fiscal
2014, two independent outside directors have been appointed).
• For important personnel matters in the board of directors and key
executives in the operating divisions, a Personnel and Compensation
Advisory Committee chaired by an outside director has been
established (after deliberating on suitability and other such matters, itwill report to the board of directors).
• As to board of directors evaluations, the policy is for directors to
perform self-evaluation.

We also take steps for various measures and activities relatedpreserves the independence of auditors from the directors andregular sharing of management information with representative

framework and guidelines for operation.

Status of main measures in response to
the Corporate Governance Codedesignated by the board of corporate auditors. This arrangement

Training

Reporting(internal contacts)

Internal audit
Direction

Reporting(internal contacts)

Affiliates

ReportingTotal compensation paid to directors and corporate auditors(fiscal 2015)
Director categoryof question and answer sessions and other such information that isjudged to contribute to our company management is all presented
as feedback in an appropriate manner to the board of directors orother regular meetings attended by management leaders.
Toda has announced its acceptance of a Japanese versionof stewardship code*2. It is our policy to attach importance toinstitutional investors that seek to realize long-term sustainablegrowth for the company, and to actively seek dialogue with them.
*2 Stewardship code: Regulations (code) regarding the way that institutional investors shouldact. It was applied before the corporate governance code. Steward is used in the sense of an
administrator or curator of property.

Total compensation amount

Directors (12 persons)

288 million yen

Corporate auditors (6 persons)

57 million yen

2016_TODA Corporate Report 16

CSR Management

Social Contribution Activities

Toda Group Global Vision calls for us to become "a corporate group that makes your success possible." In order to realize

By taking steps to enter active dialogue with our stakeholders, we pursue two-way communication that deepens trustthat vision, we promote CSR activities under four CSR policies. Toda engages seriously with each one of these so as toand sympathy. The Toda Group acts as a good corporate citizen in implementation of social contribution activities

take measures to resolve social issues by means of our core business, and we will go on contributing to the creation of amatched with the characteristics of our business. We also promote measures to transmit the appeal and the joy of skilledsustainable society that is secure, safe, and comfortable.

manufacturing to succeeding generations.
As part of this initiative, we took steps in December 2015 to establish a new system of recognizing and commending

CSR policy and KPI selection

CSR promotion system

In recent years there has been a wide variety of social issues such

The concept of corporate social responsibility (CSR) is becoming an

as environmental problems and social infrastructure that are related

essential element in upholding the competitiveness of a business. In

to the construction industry and for which solutions are anticipated.

order to promote CSR as a function integral with business throughout

social contribution activities in the Toda Group.
Basic Toda Group policy for social contribution

Out of the various issues involved with our business activities, thethe entire Group, executive officers in charge of CSR have beenGroup has identified four topics in which society has shown a highappointed under the president and a CSR Liaison Conference has

degree of concern and which we think the Group should address inalso been created to formulate CSR policy, approve programs, and

The Toda Group, as a good corporate citizen, is committed to the active promotion ofsocial contribution activities that fulfill our responsibility to society in accordance with thecharacteristics of our company business and management environment.

the interest of achieving sustainable growth with society. We havemanage progress in these and related areas.

Basic activity guidelines

designated these as our four CSR policies: soundness and fairness,

In order to promote the more widespread awareness andskilled manufacturing, job satisfaction, and communication. Under

adoption of CSR activities, we conduct a questionnaire survey ofthese four CSR policies we have designated priority program items andemployee awareness of these matters (a separate Group survey isselected key performance indicators (KPI), and we are taking steps toalso conducted). Issues identified by comparative analysis of surveys

manage the status of our progress and pursue ongoing improvement

and other sources are included in factors considered for our efforts toby implementing the Plan-Do-Check-Action (PDCA) cycle.

improve and promote CSR activities.

In determining priority program items and KPI, we have taken
into consideration the GRI* Guidelines (4th edition) and ISO 26000* ,12which are international CSR standards. We have also engaged in

President

dialogue with stakeholders inside and outside the company andtaken their views into account.

Presidents of Group companies
Executive officer in charge of CSR

Coordination andcollaboration

CSR Liaison ConferenceSoundness andfairness

Skilled manufacturing

Four CSR policies

Communication

Comment from the Executive
Officer in Charge of CSR

Yoshinori Shibuya
Executive Officer in Chargeof Public Relations and CSR
General Manager ofSecretariat Division

Job satisfaction

Membership: Related head office divisions;secretariat situated in the Public Relations andCSR Division

It has become important for corporations in recent years to be aware that the business activities
they engage in have various effects on society and to engage in responsible behavior; forexample, by disclosing information to stakeholders. We could even say that corporate activities
are themselves CSR activities. We grasp the CSR initiative from four sides, assigning activity
objectives to each one, and we are engaging in active measures accordingly.
Our Global Vision is to aim to become "a corporate group that makes your success possible."This also expresses our resolve to present our stakeholders with the value that the company
creates, and in so doing to contribute to a resolution of social issues and fulfill our responsibility
to society as a corporation. For example, Toda has developed an automated system formeasurement and adjustment of plumbing in steel columns that also addresses social issuesof labor shortages caused by declining birth rates and the aging population, and of eliminating
industrial accidents on the construction worksite by reducing the need for work in high places.
There is also the floating offshore wind power generation project that has been positioned asa strategic business for the company. This business actively engages the issue of developing
technology for renewable energy sources in order to curb global warming.
We are committed to striving for further improved and expanded CSR activities in the futureso that we may realize our philosophy of contributing to society through our construction work.

Activities
contributing
to localcommunities

Activeparticipationby company
personnel

Main social contribution activities in fiscal 2015
Installing a rest station for pilgrims on
the Shikoku pilgrimage route

Conducting evacuation drills(Towa Kanko Kaihatsu Co., Ltd.*)

Toda is the only construction company participating
and cooperating with the "Tsukuba Chibikko Hakase"(Tsukuba Little Kid Professors) program organized
by Tsukuba City and the Tsukuba City Board of
Education. At the Toda Institute of Construction
Technology, we introduced a variety of construction
technologies to the participating elementary andjunior high school students so they would take aninterest in the construction industry.

A Toda worksite faced a road where pilgrims
walking the 88-station Shikoku pilgrimage routewere coming and going day after day. We therefore
installed a rest station where pilgrims could takea break from the heat of the summer or the coldof the winter. We received many comments fromthe people who used the rest station; thanking us,
cheering us on with our construction work, and soon.

At Towa Kanko Kaihatsu, we hold fire evacuation
drills and earthquake and tsunami evacuation drills
envisioning a Tonankai and Nankai earthquake
in June and December every year. Held with Fire
Department guidance, these drills are to assure thesecurity and safety of our guests. The drills include
training in how to use fire extinguishers and AED
devices, and we also make the effort to maintainthe functionality to serve as an emergency aid
station for the area in the event that becomes
necessary.

Demonstrating sound reverberation in a reverberationchamber

We installed a rest room exclusively for women, and also put
up information signs in English

Evacuation drills are intended mainly to assure the security
and safety of our guests*1 GRI: (Global Reporting Initiative): a non-profit organization with the mission of creatinginternational guidelines for sustainability reporting. It is a United Nations Environment
Programme (UNEP) Collaborating Center with headquarters in the Netherlands.
*2 ISO 26000: international guidelines for the social responsibility of organizations, published by
the international Organization for Standardization (ISO) in November 2010.

We are contributing to society by means of construction

Disasterprevention anddisaster relief

Priority fields

In accordance with our basic philosophy, we declare "consideration for the global
environment," "disaster prevention and disaster relief," "activities contributing to local
communities," and "active participation by company personnel" to be priority fields. The
Toda Group as a whole will promote concrete activities in these fields.

Cooperating with "Tsukuba Chibikko
Hakase" (Tsukuba Little Kid Professors)

CSR promotion system

Consideration
for the global
environment

Basic philosophy

At the construction project for the new Dazaifu
Municipal Fitness and Sports Facility in Fukuoka
Prefecture, we invited children from an elementary
school near the worksite to come with their guardiansfor hands-on worksite study tours. About 200 peoplecame on the tours, which included soap bubble art
creation and other activities. During summer vacation,
we also held study tours for the families of our workers,
giving parents and children opportunities to experience
construction with concrete and other activities.

Making donations to local elementary
schools

Providing assistance to Kanto andTohoku areas affected by heavy rainfall

Volunteer members of Thai Toda Corporation, Ltd.
visited elementary schools in the Bangkok area togive gifts of stationery and other items. There is
still a large gap in income levels in the Kingdomof Thailand, so there are many families that are
unable to buy stationery, and this kind of welfare
activity occurs widely. Going forward, we intend to
expand our social contribution activities in the local
community with volunteer employee participation.

In September 2015, Joso City in Ibaraki Prefecture
suffered extremely heavy damage during the Kanto
and Tohoku rainstorm. On request from the city, 88
employees from Toda and partner companies went
to the Misakashinden district and the Okishinden
district for a four-day period starting September
20. We sent 28 trucks and other heavy equipment
to provide disaster relief by transporting wastematerial and conducting other support activities.

Parent and child experience construction with concrete

We received thank-you letters from the schools

We also provided support in the form of goods toemergency evacuation areas

Holding hands-on study tours* Towa Kanko Kaihatsu is a Toda Group company that manages the Hotel & Resort Sunshine Sazanseto (Suo-Oshima Town, Yamaguchi Prefecture).

17 2016_TODA Corporate Report

2016_TODA Corporate Report 18

The Environment
At a construction site, building materials are transported in and then assembled using heavy construction equipment

Status of environmental measures over building lifecycles

and cranes. Not only does this result in CO2 emissions, but it also generates a certain amount of construction waste.

Manufacturing and building stage

Operation of the building after completion also consumes energy, and that also emits CO2. Toda actively engages inPlanning and design*1 3Rs (reduce, reuse, and recycle)

Environmental management measures

Promote the Eco First*2 commitment

In light of the Toda Group Global Vision, which was formulated in

We were recognized as an "Eco First" company by the Ministry of theJanuary 2015, we reviewed our environmental policies in April 2016.

Environment in 2010. Thus, we are mobilizing the entire company

We will make every effort to restore and protect the global

to move forward with environmental activities. As part of thisenvironment by "implementing environmental protection activities

recognition, we made an "Eco First Commitment to the Minister ofthrough all our business activities." With the aim of leaving a betterthe Environment," and we submit annual progress reports to theglobal environment to be inherited by the next generation, we will

Ministry of the Environment to show that we are taking positive

continue to promote environmental management.

action to execute our commitment.

At present we are taking steps for a wide-ranging review of oursystems in order to build an environmental management system incompliance with ISO 14001, which was revised in 2015. (The new
system is scheduled to enter operation in fiscal 2017.)

Environmental policy
Implementing environmental protection activities
through all our business activities

1. We will promote environmental impact mitigation activities
relating to prevention of global warming, prevention of pollution,effective use of resources, maintenance and protection of
biodiversity, and so on.
2. We will engage in environment-related business and technology
development, and we will implement environmental protection
activities in all aspects of building design and execution as well as inmanagement of facilities and other such matters.
3. In addition to complying with laws, regulations, andagreements regarding the environment, we will
also strive to disclose information and take steps forcommunication with society.
Instituted on April 1, 2016

Presentation of our follow-up report*3 to the Minister of theEnvironment (March 30, 2016)*2 Eco First Commitment: This is a program involving commitment by the corporation to the
Ministry of the Environment to engage in measures to combat global warming, measures withregard to waste material and recycling, and other such measures for environmental protection.
*3 Follow-up report: Periodic confirmation for the Ministry of the Environment that positive action
is being taken to execute the commitment.

Evaluation from outside the company: Second-highest
CDP*4 score in the industry
Measures by Toda to counter global warming have steadily beenyielding results. In fiscal 2014, the CO2 emissions basic unit for
construction work was reduced 28.8% relative to the 1990 level.
In addition, the CDP information disclosure score has also been
improving year by year, and in fiscal 2015 we received the high score

Framework for Promotion of Environmental Protection
Activities
Chairman: Promotion Office for
Value Creation Director

Environmental Protection
Committee

AdministrativeGroup

Head office divisions
and departments

Building
Construction Group19 2016_TODA Corporate Report

Maintenance, diagnosis, renovation

21

Toda's ZEB concept

Construction of Environmental Technology
Demonstration Building starts

Construction was started on the Environmental Technology Demonstration
Building where we will verify technology for application to the Head Office building
reconstruction plan (Kyobashi 1-chome East District) and for realization of ZEB.

Energy-saving design

Earth-friendly
construction
systems

Demolitionbuildings

CO2 visualization vision
CO2 MPAS

Low-carbon construction
system (TO-MINICA)

Total fiscal 2015 emissions

74,510t-CO2Reduced61.3%(from 1990 base year level)

Eco First Commitment target: 50% reduction in total emissions already achieved

Fiscal 2015 emissions basic unit

16.43

t-CO2/
100 million yen

42.4%
Reduced(from 1990 base year level)

Eco First Commitment target: 40% reduction in total emissions already achieved

72 worksites achieved zero emission status
Promote waste reduction and recycling

High-quality and long-life design(cumulative for 2000 to 2015)

Proposal of energy-saving measures inrenovation work

Promote recycling byseparation and disassembly

Achieved fiscal 2015 target percentage of 9% or lower for construction waste disposed of as landfill Limited to 5.0% or lower
Manufacture and use of biodiesel fuel (BDF)• Amount of BDF used by worksites in 2015: 13,000 kL• Fuel for Matsudo City waste collection vehicles

Use of natural energy from photovoltaic(solar power) generation
Mega Solar construction and business participation

Natural energy utilization
through floating offshore
wind power generation
Practical application of Japan's first
floating offshore wind power
generation facility

Participation in Mega Solar power generation
project

3 cases in Kyushu region, 1 case in Tohoku region
Total

21.6

MW

Consideration for biodiversity through network for rooftop greening,
biotope, and wall surface greening
Ecosystem monitoring study
and management
Measures to prevent noise during construction

Toda Active Noise Control System "TANC"
High-performance sound-proof wall "Edge Silencer"of 99 points. This rates ours as the second-highest evaluation in theconstruction industry.
*4 CDP: An NPO for international environmental evaluation with offices located in London. The
CDP sends questionnaires to leading corporations worldwide seeking disclosure of information
on measures regarding climate change and specifics on greenhouse gas (GHG) emissions. The
responses are analyzed and evaluated, and the results are announced. (In Japan, the CDP
covers the 500 companies with the highest aggregate market value.)

Independent third-party assurance of CO2 emissions data
Toda underwent verification by the Sustainability Accounting Co., Ltd. to assure the fairness, reliability, andtransparency of CO2 emissions data for fiscal 2015, and received an assurance report. This was carried out inaccordance with ISAE 3000 and ISAE 3410.
By receiving independent third-party assurance, we obtain recognition that the computation methods weuse and their results are valid. We intend to continue advancing our measures to pursue further reduction of CO2

Secretariat

Value Creation Promotion Office
Value Creation Strategy Unit

Pollution
prevention

We will make every effort to restore and protect the global environment
and will continuously implement the following activities in order to leavea better global environment to be inherited by the next generation.

Resource recycling and effective use

energy saving and resource conservation (promotion of 3Rs*1 and other initiatives).

Execution, completion, delivery

Of the buildings that underwent CASBEE
evaluation of design and execution in fiscal 2015,
received rankings of A or higher.

Use of renewable energy

the Toda Group conducts business activities with constant awareness of global environmental problems as well as ofProtection of biodiversity

promote environmental protection activities in our day-to-day operations. In order to pass on a healthy Earth to the future,

Global warming prevention (Eco First Commitment)

the development of environmentally friendly technology in order to reduce this impact on the environment. We also

Maintenance stage

Civil EngineeringGroup

Branch office divisions,departments, and worksites

emissions in the future.
Verification coverage: Scope 1 and 2 (energy-derived CO2 emissions), Scope 3 (emissions from downstream leased assets), and CO2 emissions
basic unit during construction

2016_TODA Corporate Report 20

Human Rights / Labor Practices
It is our working employees and the personnel in partner companies that powerfully support skilled manufacturing. We
are implementing measures to build a workplace environment that will enable all of our employees, and every single
person involved on-site, to work to the maximum of their own talents and capabilities. It also gives a strong sense of
responsibility and enthusiasm to their job and to do their job with a strong sense of responsibility and enthusiasm. We
are also actively promoting measures for the future growth of our business, including training young engineers andpromoting active participation by women.
Human rights measures

Outstanding technician system

The Toda Group Charter of Corporate Behavior declares our respect for

Toda revised the outstanding technician system in October 2015,

human rights and the individual, and prohibits discrimination. We areraising the allowance amounts and expanding the range of personnel

making every effort to build a workplace environment that respects

covered. One feature of this system is that allowances are disbursed

the capabilities and individuality of every individual employee andto primary partner companies so that the allowances are then paidthat promotes mutual improvement of all, regardless of gender, age,by the partner companies to the technicians. Primary contractors

nationality, race, ethnicity, creed, religion, social status, handicap,

and partner companies therefore join as one in the aim of raisingor other such attributes. The Charter also provides that we will not

wages. We expect the current improvement in compensation to

engage in harassment or any such behavior that devalues the person.

contribute to the development of strong partnerships between

In addition to taking measures for the enlightenment and awarenessToda, our partner companies, and foremen in the workplace. Goingof our employees, we areforward, we intend to continue our measures to improve our hiringalso establishing contact

and retention of skilled workers.

pointsfor

consultation

Maintaining and improving employee health

Measures to improve operations

Toda has declared the promotion of health management to be an

At Toda, we conduct comprehensive inspections of operations

important measure for the company. For physical health, we conduct

by the participation of all employees, with a focus on managers,

two regular medical examinations annually, which exceeds the legal

in order to do away with wasted time, effort, and resources in ourrequirement. For mental and emotional health, we have industrial

operations. We provide division managers with training to give them

psychiatrists conduct regular mental health lecture workshops in

the knowledge and skills needed to improve operations, and also

small groups. We are also taking steps to incorporate provision forprovide them occasions for sharing information, and we have begun

adequate follow-up in our stress checking system.

the labor of reviewing operational processes and the application ofsystems to operations. Improvement activities conducted in fiscal

TOPICS2015 included a proposal for operational improvement that could

Recipient of the Minister of Health, Labour andWelfare Award for Excellence
In the fiscal 2015 recognition for safety and health by the Ministerof Health, Labour and Welfare, a business represented by the Toda
Group was commended for achieving an extremely high safety
record in its work on construction of expanded continuous grade
separated crossings on the Odawara Line of the Odakyu Electric
Railway. The No. 2 Construction Section worksite between Yoyogi
Uehara Station and Umegahara
Station (Setagaya Ward, Tokyo)
was recognized as an outstanding
business establishment thatserves as a model for other suchenterprises and was presented
Employees who received the award
with an award for excellence.

so that, if issues do arise,
it will be possible to deal
with them promptly.
Human rights education given during training forincoming employees

Human resource development
Basic policies for human resource development"Create human resources that possess advanced capabilities
and that have autonomy and creativity."
Our company's greatest resource, of which we are justly proud,is our employees. In order to continue providing something ofvalue to society over the long term, we aim to properly apply thecycle of training, utilization, evaluation, and compensation in our
personnel system and build up a workplace environment in which
our employees can acquire advanced specialized capabilities andgain a sense of satisfaction in their work by applying their capabilities.
Career course change and appointment system

continue to vitalize our activities for operational improvement andaim for efficient organization-building with higher productivity andwithout waste.

Realizing a safe and comfortable workplace environment
In 2003, we introduced the TODA-OHSMS* occupational health andsafety management system, and we are working with our partnercompanies to implement voluntary health and safety activities. At
Toda, we consider safety to be a core value that is essential for thecontinued existence and growth of the corporation. We put safety
first in our actions at all times and under all circumstances. We aremaking every effort to develop a safe and comfortable working
environment. In addition to our aim of earning the warm trust ofsociety as a corporation rated "No. 1 in safety," we will also contribute

Active participation by diverse human resources

and making arrangements

lead to a 25% reduction in total work hours. Going forward, we will

to making the construction industry more attractive.

Our Charter of Corporate Behavior calls for the realization of a

Improvement of work-life balance

workplace environment in which people understand diversity andJapan's business world announced a "Declaration of Working Style

can make maximum use of their qualities and capabilities. This is

Reform by Management" (issued July 2016 by 61 organizations

achieved by realizing ample latitude and prosperity for the people

including the Keidanren, or Japan Business Federation). Realization

who are involved with the Toda Group and our partner companies,

of a working environment with enthusiasm is being promoted.

or who are involved in other such ways. It also requires to ensure

At Toda, we seek to pursue this intent by developing a healthfultheir security and work and work friendly environment and respect

workplace environment where every single employee can maketheir personalities. We are engaged in measures to these ends.

good use of their capabilities in good health, greater motivation, andPromoting active participation by womenwith a sense of security. To that end, we are implementing measures

We are taking measures to seek the active participation of womenfor improvement of work-life balance not only by achieving a

as fully qualified management-track employees so that employees

balance between work and personal lives, but also, for example,

will be able to make use of their capabilities in their work regardlessby continuously providing for a well-modulated working style thatof gender. In April 2016, we hired 26 new employees on the building

allows employees a sense of fulfillment in their personal lives, as well.

Reforming the health and safety management organization
In fiscal 2015, we reformed our organization for health and safety
management. Deterioration of the construction work environment
had been accompanied by an absence of comprehensive health andsafety management. This contributed to deterioration in accident
frequency. We have, therefore, made health and safety management
a division that is independent of the implementation divisions as away of increasing the management functionality of the management
units as well as heightening safety awareness in the implementation
divisions.
* Occupational health and safety management system (OHSMS): This is a system for defining theprocess of health and safety activities and engaging in voluntary activities in order to raise thestandard of health and safety management at work and business locations.

construction technology track, seven on the civil engineering track,and 14 on the administrative track. We look forward to the active

Related data

participation of these employees at the construction managementlevel at our worksites and other such levels in other workplaces, andAverage training and lecture time per person (hours)

we will also devote attention to developing these employees by

Number of personnel qualified for career course change and appointment

means of their training, assignments, and so on.

Number of new hires*Management track

Fiscal 2011

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

26.2

26.2

25.6

24.9

24.3

8

11

8

31

88

Men

106

105

68

73

173

Women

11

11

6

10

47

Technology track

10

10

4

7

33

Administrative track

1

1

2

3

14

steps to heighten employee motivation and vitalize the organization

Employment rate for persons with disabilities (%) *As of June 1 of each year

1.40

1.52

1.56

1.47

1.90

by utilizing human resources that have a will to work. The career

Number of personnel rehired

We have put in place a system for career course changes andappointments and a system for self-assessment so that we can takecourse change and appointment system as a rule makes selections
once a year. In fiscal 2015, we revised the system criteria to makethem more broadly applicable to capable employees, and careercourse changes and appointments were therefore made for 88
employees.

Number of women hired on management track

Number of personnel using the system of reduced
working hours for childcare
Number of personnel using the system of childcare leave

82

55

44

45

68

Men

0

0

0

1

2

Women

18

25

25

32

37

Men

1

0

0

0

2

Women

20

22

23

25

30

Number of personnel taking leave for family care and sick or injured childcare

2

0

3

1

20

Number of personnel taking leave for volunteer activities

4

2

2

34

26

Safety-related data can be found in the Financial and Non-Financial Highlights on page 3.

21 2016_TODA Corporate Report

2016_TODA Corporate Report 22

Consolidated Balance Sheets
Toda Corporation and consolidated Subsidiaries - As of March 31, 2015 and 2016
Thousands of
U.S. dollars

Millions of yen
2015

2016

2016

ASSETSLIABILITIESCurrent assets:

Current liabilities:

Cash and deposits (Notes 10 and 12)¥

43,488¥54,768$ 486,050

Notes and accounts receivable-trade (Note 12)

121,009211,237

1,874,667

Short-term investment securities (Notes 6.3), 12 and 13)

10,235119

1,063

Real estate for sale(Note6.8))

20,903

15,830140,486

Costs on uncompleted construction contracts (Note6.7))

Thousands of
U.S. dollars

Millions of yen

Notes and accounts payable-trade (Note 12)
Short-term loans payable (Note 12)
Income taxes payable (Note 12)

2015

2016

2016

¥ 107,216¥ 149,638$ 1,327,993

32,597

34,588306,961

651

2,774

24,626

Advances received on uncompleted construction contracts

26,76338,455341,282

Provision for bonuses

3,905

6,320

56,096

Provision for warranties for completed construction

2,316

2,237

19,857

Provision for loss on construction contracts (Note 6.7))

7,576

2,421

21,49010,806

16,120143,063

Other inventories

424

990

8,792

Deferred tax assets (Note 16)

230

195

1,731

22,08814,093125,077

Other

11,992

13,497

119,783

Total current liabilities

208,769

268,069

2,379,030

Other
Allowance for doubtful accounts(1,114)(1,608)(14,274)

Total current assets

228,072

311,747

2,766,657

Provision for loss on litigation
Deposits received

Property, plant and equipment: (Notes 6.1) and 18)
Buildings and structures, net (Note6.8))
Machinery, vehicles, tools, furniture and fixtures, net
Land (Notes 6.6), 8))

12,17911,560102,594

709

625

5,553

60,36759,743

530,207

Lease assets, net

182

159

1,412

Construction in progress

122

255

2,269

73,561

72,344642,036

Total property, plant and equipment--

18,134160,938

Noncurrent liabilities:
Bonds payable (Note 12)

Noncurrent assets:

435
15,314-10,00088,746Long-term loans payable (Note 12)33,73535,131

311,781Deferred tax liabilities (Note 16)

36,252

24,224

214,983

Deferred tax liabilities for land revaluation (Note 16)

8,268

7,708

68,413

133

149

1,322

Provision for directors' retirement benefits
Provision for loss on liquidation of subsidiaries and affiliates
Net defined benefit liability (Note 15)
Asset retirement obligations

532

400

3,557

21,466

22,515

199,822

167

182

1,623

3,126

2,910

25,830103,684

103,224

916,081

312,454371,293

3,295,112

Capital stock

23,001

23,001

204,132

Capital surplus

25,50425,587227,079

Retained earnings

59,15576,825681,804

Treasury stock(8,212)(8,236)(73,093)

Total shareholders' equity

99,449117,178

1,039,922

74,94255,038488,453

Other
Total noncurrent liabilities
Total liabilities
NET ASSETS

Intangible assets

2,969

6,075

53,917

Investments and other assets:
Investment securities (Notes 6.2), 3) , 12 and 13)

185,476

154,840

1,374,159

Long-term loans receivable (Notes 6.3) and 12)

765

614

5,454

2,296

240

2,130

176

389

3,454

Other

2,630

2,923

25,941

Allowance for doubtful accounts

(506)

(463)

(4,111)

Total investments and other assets

190,839

158,544

1,407,030

Net defined benefit assets (Note 15)
Deferred tax assets (Note 16)

Total noncurrent assets

267,370

236,964

2,102,984

Shareholders' equity:

Accumulated other comprehensive income (Note 8)
Valuation difference on available-for-sale securities
Deferred gains on hedges
Revaluation reserve for land (Note 6.6))

23 2016_TODA Corporate Report¥ 495,442¥ 548,711$ 4,869,642

(25)

(229)

6,665

59,156

Foreign currency translation adjustments

40

(545)

(4,844)Remeasurements of defined benefit plans

91(3,292)(29,218)

81,09557,840513,317

2,443

2,398

21,289

182,988

177,417

1,574,529¥ 495,442¥ 548,711$ 4,869,642

Total accumulated other comprehensive income
Non-controlling interests
Total net assets

Total assets

3
6,017

Total liabilities and net assets

2016_TODA Corporate Report 24

Consolidated Statements of Income

Consolidated Statements of Changes in Net Assets

Toda Corporation and Consolidated Subsidiaries - For the years of March 31, 2015 and 2016

Toda Corporation and consolidated subsidiaries - For the years ended March 31, 2015 and 2016

Millions of yen
Net sales:
Net sales of construction contracts
Net sales of real estate business and otherTotal net sales
Cost of sales:
Cost of sales of construction contracts (Notes 7.1) and 4))
Cost of sales of real estate business and other (Note 7.2))
Total cost of sales
Gross profit:
Gross profit on construction contracts
Gross profit on real estate business and otherTotal gross profit
Selling, general and administrative expenses (Notes 7.3) and 4))
Operating income
Non-operating income:Interest income
Dividend income
Dividend income of insurance
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Commission fee
Other
Total non-operating expenses
Ordinary income
Extraordinary income:Gain on sales of noncurrent assets (Note 7.5))
Gain on sales of investment securities (Note 13)
Reversal of provision for loss on litigation
Gain on negative goodwill
Other
Total extraordinary income
Extraordinary loss:
Loss on sales of noncurrent assets (Note 7.6))
Loss on abandonment of noncurrent assets (Note 7.7))
Impairment loss (Note 7.8))
Loss on sales of investment securities (Note 13)
Loss on valuation of investment securities (Note 13)
Provision for loss on liquidation of subsidiaries and affiliates
Other
Total extraordinary losses
Profit before income taxes and non-controlling interests
Income taxes-current
Income taxes-deferred
Total income taxes (Note 16)
Profit for the year
Profit for the year attributable to non-controlling interests
Profit for the year attributable to owners of the parent (Note 22)

2015

2016

¥ 407,650
12,673
420,324¥ 475,433
17,188492,621$ 4,219,320
152,543
4,371,864

374,595
9,619
384,215

430,601
14,214444,815

3,821,457
126,145
3,947,602¥

33,055
3,054
36,10923,13012,97844,831
2,974
47,805
26,176
21,629397,863
26,398424,261
232,304
191,956

416
2,097
173
346
3,033

389
2,306
224
379
3,299

3,459
20,466
1,991
3,365
29,284

902
193
103
1,198
14,813

963
179
62
1,205
23,723

8,549
1,593
558
10,701
210,539

307
1,051
480
1
1,842

277
563
281
21
1,144

2,465
5,000
2,500
190
10,156

13
186
802
532
12
1,548
15,107
930
(219)
711
14,395369
14,026

11
573
1,271
17
64
0
1,937
22,929
3,058
(314)
2,744
20,185145
20,03997
5,088
11,280157
571
2
17,199203,496
27,146(2,786)24,359179,137
1,292$ 177,844¥

Consolidated Statements of Comprehensive Income
Toda Corporation and Consolidated Subsidiaries - For the years of March 31, 2015 and 2016

Profit for the year
Other comprehensive income (Note 8)
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Revaluation reserve for landRemeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of the parent
Non-controlling interests

2015¥ 14,395

2016¥ 20,185

29,467
3
867
844
613
31,79646,192(19,902)
(29)
(679)
428
(3,383)(23,566)(3,381)(176,631)(259)(6,030)3,800(30,028)(209,148)(30,011)25 2016_TODA Corporate Report¥

45,694498¥(3,434)53

Capitalstock$

CapitalsurplusRetainedearnings

Valuationdifference on
Total
availableshareholders'for-saleequitysecurities

Treasurystock

Deferred
gains orlosses onhedges

Revaluation
reserve for
land

Total
Foreign
Remeasure- accumulated
currency
ments ofothertranslation
definedcomprehensive
adjustments benefit plansincomeNoncontrollinginterests

Total net
assets¥23,001 ¥25,504 ¥45,472 ¥(6,007) ¥87,971 ¥45,477
662
662
-

-

¥5,722-¥(700)-¥(522) ¥49,977-¥3,930 ¥141,880
662

23,00125,504

46,135(6,007)

88,63445,477

-

5,722

(700)

(522)

49,9773,930 142,542

Dividends from surplus--(1,555)-(1,555)

-

-

-

-

-

-

-

(1,555)

Profit for the year attributableto owners of the parent--

14,026-

14,026

-

-

-

-

-

-

-

14,026

Purchase of treasury stock

-

-

-

(2,205)-(2,205)
-

-

-

-

-

-

-

-

(2,205)-

Reversal of revaluation
reserve for land

-

-

549

-

549

-

-

-

-

-

-

-

549

Net changes of items otherthan shareholders' equity

-

-

-

-

-

29,465

3

294

740

613

31,117(1,487)

29,630Total changes of items
during the period--

13,020(2,205)

10,81529,465

3

294

740

613

31,117(1,487)40,445¥23,001 ¥25,504 ¥59,155 ¥(8,212) ¥99,449 ¥74,942-¥3-¥6,017-¥40-¥91 ¥81,095-¥2,443 ¥182,988-

23,00125,504

59,155(8,212)99,44974,942

3

6,017

40

91

81,0952,443 182,988--(2,149)20,039-(2,149)20,039

-

-

-

-

-

-

-

(2,149)20,039

-

82

-

(23)
-

(23)
82

-

-

-

-

-

-

-

(23)
82

Reversal of revaluation
reserve for land

-

-

(219)

-

(219)

-

-

-

-

-

-

-

(219)

Net changes of items otherthan shareholders' equity

-

-

-

-

- (19,903)

(29)

647

(586)

(3,383) (23,254)(44) (23,299)

Total changes of items
during the period-

82

17,669(23)

17,729 (19,903)

(29)

647

(586)

(3,383) (23,254)(44)¥23,001 ¥25,587 ¥76,825 ¥(8,236) ¥117,178 ¥55,038¥(25)¥6,665

Balance at March 31, 2014
Cumulative effects ofchanges in accounting policies
Restated balance
Changes during period

Equity transactions with
non-controlling interests

Balance at March 31, 2015
Cumulative effects ofchanges in accounting policies
Restated balance
Changes during period
Dividends from surplus
Profit for the year attributableto owners of the parent
Purchase of treasury stock
Equity transactions with
non-controlling interests

Balance at March 31, 2016¥(545) ¥(3,292) ¥57,840(5,570)¥2,398 ¥177,417

Thousands of U.S. dollars

Capitalstock

Balance at March 31, 2015
Cumulative effects ofchanges in accounting policies
Restated balance
Changes during period
Dividends from surplus
Profit for the year attributableto owners of the parent

CapitalsurplusRetainedearnings

Total
shareholders'equityTreasurystock

Valuationdifference on
availablefor-salesecurities$204,132 $226,344 $524,988 $(72,882) $882,582 $665,094
-

-

-

-

-

Deferred
gains orlosses onhedges

Revaluation
reserve forland$29 $53,406

Total
Foreign
Remeasure- accumulated
currency
ments ofothertranslation
definedcomprehensive
adjustments benefit plansincome

$357

-

-

-

-

204,132 226,344 524,988 (72,882) 882,582 665,094- (19,080)- (19,080)- 177,844- 177,844-

29-

53,406-357-

Noncontrollinginterests

Total net
assets$809 $719,697 $21,686 $1,623,966--

809 719,697---

21,686 1,623,966- (19,080)- 177,844

-

735

-

(210)
-

(210)
735

-

-

-

-

-

-

-

(210)
735

Reversal of revaluation
reserve for land--

(1,949)-(1,949)

-

-

-

-

-

-

-

(1,949)Net changes of items otherthan shareholders' equity

-

-

-

-

- (176,640)

(259)

5,749

(5,201) (30,028) (206,379)(397) (206,777)

Total changes of items
during the period-(210) 157,339 (176,640)

(259)

5,749

(5,201) (30,028) (206,379)(397) (49,437)

Purchase of treasury stockThousands of
U.S. dollars
2016$ 179,137

Millions of yen

Millions of Yen

Thousands of
U.S. dollars
2016

Equity transactions with
non-controlling interests

Balance at March 31, 2016

735 156,815$204,132 $227,079 $681,804 $(73,093) $1,039,922 $488,453$(229) $59,156 $(4,844) $(29,218) $513,317 $21,289 $1,574,529(30,484)473
2016_TODA Corporate Report 26

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Toda Corporation and consolidated subsidiaries - For the years ended March 31, 2015 and 2016

Toda Corporation and Consolidated Subsidiaries

Millions of yen
2015
Net cash provided by (used in) operating activities:
Profit before income taxes and non-controlling interests
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability
Increase (decrease) in net defined benefit asset
Increase (decrease) in other provision
Gain on negative goodwill
Loss on valuation of investment securities
Loss (gain) on sales of investment securities
Loss (gain) on sales of property, plant and equipment
Loss on abandonment of noncurrent assets
Interest and dividend income
Interest expenses
Decrease in notes and accounts receivable-trade
Decrease (increase) in costs on uncompleted construction contracts
Decrease in real estate for sale
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in advances received on uncompleted construction contracts
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities¥

15,107
1,667
802
(435)
(245)
(1,444)(6,898)(480)(1,051)(294)
186(2,514)902
3,237
11,828
1,663(10,697)(10,715)(1,801)(1,183)
2,515(892)(1,386)
(947)

2016
¥

Thousands of
U.S. dollars
2016

22,929
2,002
1,271
470
1,051
2,056
(3,345)
64
(545)
(266)
573
(2,696)963(90,459)(5,318)
5,668
42,695
11,776
1,223(9,885)
2,693
(938)
(732)
(8,863)$ 203,496
17,775
11,280
4,173
9,327
18,248(29,685)571(4,842)(2,367)
5,088(23,926)8,549(802,804)(47,201)
50,304
378,911
104,516
10,854(87,729)
23,904(8,330)(6,504)(78,659)

Net cash provided by (used in) investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities

(200)
193
(2,439)1,845(525)(3,124)
6,013
(1)
232
(11)
1,982

(179)
270
(3,819)2,078(4,099)(2,590)
2,484
(0)
151
(395)
(6,099)(1,591)
2,404(33,894)
18,441(36,380)(22,990)
22,046(4)
1,344(3,506)(54,130)

Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Cash dividends paid
Cash dividends paid to non-controlling interests
Payments for acquisition of shares of subsidiaries not affecting the scope of consolidation
Purchase of treasury stock
Payments for purchase of treasury stock by consolidated subsidiaries
Other, net
Net cash provided by (used in) financing activities(7,236)24,470(16,459)(1,555)(17)(2,205)(1,494)(75)(4,576)(3,031)
10,280(3,862)
10,000(2,149)
(6)
(8)
(23)
(49)
11,148(26,899)
91,231(34,275)
88,746(19,080)
(57)
(77)
(210)
(439)
98,937

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of current period
Cash and cash equivalents at the end of current period (Note 10)725(2,815)62,061
59,245(780)(4,595)59,24554,650(6,930)(40,781)525,789
485,00727 2016_TODA Corporate Report

1. Basis of Presenting Consolidated Financial Statements
The consolidated financial statements presented herein of Toda Corporation (the“Company”) and its consolidated subsidiaries (together, the “Companies”) areprepared in accordance with the provisions set forth in the Financial Instruments
and Exchange Law of Japan, and in conformity with accounting principles
generally accepted in Japan.
These consolidated financial statements incorporate certain modifications informat so as to make the financial statements more meaningful to readers outside Japan.
These modifications have no effect on total assets, net sales, retained
earnings or profit for the year.

(U.S.Dollar Amounts)
The U.S.dollar amounts are included solely for convenience and have beentranslated, as a matter of arithmetical computation only, at the rate of ¥112.68= US$1, the exchange rate prevailing on the Tokyo foreign exchange market on
March 31,2016, and have been then rounded down to the nearest thousand. Thistranslation should not be construed as a representation that the yen amounts
actually represent, have been or could be converted into U.S. dollars at this or
any other rate.

2. Summary of Significant Accounting Policies							1) Scope of consolidation
The accompanying consolidated financial statements include the accounts of
Toda Corporation and 15subsidiaries, namely Toda Road Co., Ltd., Toda Bldg.
Partners Co., Ltd., Chiyoda Kenkou Co., Ltd., Chiyoda Staff Service Co., Ltd.,APEC Engineering Co., Ltd., Toda Finance Co., Ltd., Towa Kanko Kaihatsu Co.,
Ltd., Goto Floating Wind Power LLC., Toda America, Inc., Construtora Toda do
Brasil S/A, Toda Construction(Shanghai)Co.,Ltd., Thai Toda Corporation Ltd.,
Toda Vietnam Co., Ltd., ABTD, INC. and Toda Philippines, INC.
Other subsidiaries were not consolidated, as they were notsignificant in terms of the effect on total assets, net sales, profit for the year
or retained earnings of the consolidated financial statements.

(b) Intangible fixed assets (excluding lease assets)
The straight-line method is used.
Standards identical to regulations in the Corporate Income Tax
Law are utilized to determine expected lifetime and residual value.
However, the amortization of software used by the companies iscomputed using the straight-line method based on the estimated useful life.
(c) Lease assets
Leased assets under finance leases other than those that are deemed totransfer ownership to lessees
Depreciation is based on the straight-line method over the leaseterm of the leased assets with no residual value.

2) Application of the equity method
All non-consolidated subsidiaries and affiliates were not accounted for using theequity method, as these companies were not significant in terms of the effect on
profit for the year or retained earnings of the consolidated financial statements.

6) Allowances and provisions(a) Allowance for doubtful accounts
The allowance for doubtful trade receivables and loans has been provided
based on historic loss experience for general accounts and also includes
the aggregate amount of the estimated loss for the accounts for which
concern actually exists for collectability.
(b) Provision for bonuses
This is provided for the payment of bonuses for employees, based on
expected payment amount.
(c) Provision for warranties for completed construction
To cover expenses for defects claimed concerning completed work, thisis provided based on the estimated amount of compensation in the future
for the work completed during the consolidated fiscal year.
(d) Provision for loss on construction contracts
The provision for loss on construction contracts is provided at theestimated amount for the future losses on contract backlog at the fiscal
year-end which will be probably incurred and which can be reasonably
estimated.
(e) Provision for directors’ retirement benefits
To prepare for the payment of retirement benefits for executive officers andsubsidiaries’ directors, the provision is provided at the amount to be paid according
to internal regulations if they had retired at the consolidated fiscal year-end.
(f) Provision for loss on litigation
The provision for loss on litigation is provided at the estimated amountfor a possible future loss arising from litigation.
(g) Provision for loss on liquidation of subsidiaries and affiliates
The provision for loss on liquidation of subsidiaries and affiliates is provided
at the estimated amount for a possible future loss arising from liquidation.

3) Fiscal year of consolidated subsidiaries
Of the consolidated subsidiaries, Toda America, Inc., Construtora Toda do
Brasil S/A, Toda Construction (Shanghai)Co., Ltd., Thai Toda Corporation Ltd.,
Toda Vietnam Co., Ltd., ABTD, INC. and Toda Philippines, INC. close their fiscal
year on December 31 each year.
In preparing the consolidated financial statements, the Company
used financial statements as of December 31 of all these subsidiaries.
However, adjustments necessary for the purpose of consolidation
have been made for fiscal year-end.
The fiscal year-end of all other consolidated subsidiaries is thesame as the consolidated fiscal year-end.
4) Standards and evaluation methods for important assets(a) Short term investment securities and investment securities
Held-to-maturity debt securities
Amortized cost method (straight-line method)
Available-for-sale securities∙ Securities with a fair value:
Stated at fair value, determined by the market price at the consolidated
fiscal year-end date (the difference between the book value and thefair value is recorded as a component of net assets, while the cost of
securities sold is computed using the moving-average method)∙ Securities with no fair value:
Stated at cost, determined by the moving-average method(b) Inventories
Costs on uncompleted construction contracts
Stated at cost, determined by the specific identification cost method
Real estate for saleStated at cost, determined by the specific identification cost method (Thebook value on the consolidated balance sheets is presented after writedown for decline in profitability.)5) Methods of depreciation and amortization
depreciable assets(a) Property, plant and equipment (excluding lease assets)
The declining-balance method is primarily used. However, the straightline method is used for buildings (excluding building fixtures) acquired on
and after April 1, 1998.
Standards Identical to regulations in the Corporate Income Tax
Law are utilized to determine expected lifetime and residual value.

7) Accounting Policies of retirement benefits
The provision for retirement benefits for employees is calculated based on
estimated amounts of retirement benefit obligations and pension assets asof the consolidated fiscal year-end.
Regarding lump-sum severance indemnity plan for the consolidated
subsidiaries, the amount is calculated based on simplified method (method
to assume required payment amount based on voluntary termination of
employment on the closing date as retirement benefit obligations).
The estimated amount of retirement benefit is allocated to periodsof service based on the benefit formula.
Actuarial differences are amortized commencing the following year
after the difference is recognized primarily by the straight-line method overa period of five years.
Prior service cost is amortized by the straight-line method over a
period of five years.
2016_TODA Corporate Report 28

8) Recognition of net sales from construction
contracts and related costs
The Companies apply the percentage of completion method to thosecontracts in which the percentage of completion at the consolidated fiscal
year-end can be reliably estimated, and other contracts are recorded under
the completed contract method.
9) Translation of foreign currency assets and liabilities
All monetary assets and liabilities denominated in foreign currencies
are translated into Japanese yen at the exchange rates prevailing at theconsolidated fiscal year-end.
The resulting gains and losses are included in net income or loss
for the consolidated fiscal year.
Assets and liabilities accounts of foreign consolidated subsidiaries aretranslated into Japanese yen at the exchange rate prevailing at the fiscal year-end.
Income and expense accounts of foreign consolidated subsidiaries
are translated into Japanese yen at the average annual exchange rate.
The resulting translation adjustments are included in foreign
currency translation adjustment and minority interests in the net assets ofthe consolidated balance sheets.
10) Hedge Accounting
The Companies apply hedge accounting as follows:(a) Method of hedge accounting adopted
Deferral hedge accounting
If the interest rate swap contracts are used as hedge and meet certain
hedging criteria, net amounts to be paid or received under the interest
rate swap contracts are added to or deducted from the interest or
liabilities for which the swap contract were executed.

(b) Measure and objects
1. Measures: Forward foreign exchange contracts
Objects: Transactions to be paid in foreign currencies in cases of overseas
construction of work and overseas procurement of materials
2. Measures: Interest rate swap
Objects: Borrowings(c) Hedging principles:
Based on internal regulations which stipulate the execution authority
regarding on derivative transactions and those for transaction limits, theCompanies utilize hedges to minimize the risk of currency exchange rateand interest rate fluctuations associated with the hedge objects.
(d) Evaluation method of effectiveness of hedging:
During the period from the time when the hedging first started until
the consolidated fiscal year-end, the Companies have been assessing
the hedge effectiveness primarily by comparing, in terms of variation
amounts, (1)cumulative cash flow changes or exchange rate changes of
the hedge objects and (2)cumulative cash flow changes or exchange ratechanges of the hedge measures.
However, the evaluation of hedge effectiveness is omitted forinterest swaps as they meet certain hedging criteria for the exceptional
treatment.
11) Cash and cash equivalents
For the consolidated statements of cash flows, cash and cash equivalents
are defined as cash on hand, deposits that can be withdrawn at any timeand highly liquid short-term investments with a maturity date within threemonths after acquisition.

(c) Treatment related to future deductible temporary differences whichcannot be scheduled in companies that qualify as (category 2)(d) Treatment related to the reasonable estimable period of future preadjusted taxable income in companies that qualify as (Category 3)(e) Treatment in cases that companies that satisfy the category
requirements for (Category 4) but qualify as (Category 2) or(Category 3)2) Planned date of adoption
From the beginning of the fiscal year ending March 31, 2017.
3) Effect of adoption of the guidance
The effect is under assessment at the time of preparation of theaccompanying consolidated financial statements.

5. Change in accounting estimates
In the fiscal year ended March 31, 2016, the Board of the Company decided torebuild the headquarters.
The Company shortened the estimated useful life of propertiesof the headquarters due to the reason that it is impossible to use suchproperties as initially estimated. Due to the change of the useful life, gross
29 2016_TODA Corporate Report

As of March 31
1) Accumulated depreciation of property, plant and equipment2) ‌Investments in Non-consolidated subsidiaries and affiliates
included in investment securities
3) Assets pledged as collateral:
Short-term investment securities
Investment securities
Long-term loans receivable
Total4) Contingent liabilities (guarantee liabilities)
5) Loan commitment agreement:
Maximum limit under the agreement
Loan balance outstanding
Difference (unused portion)2015¥ 32,772

2016¥ 32,390¥ 1,445¥ 1,841

235
397
509
¥ 1,141¥267¥ 30,000¥ 30,000Thousands of
U.S. dollars

2016$ 287,454$

16,341

119
739
466¥ 1,326
¥
417

$
$

1,063
6,566
4,141
11,7703,706¥ 30,000¥ 30,000$ 266,240$ 266,240

6) Land revaluation

Based on the Land Revaluation Law, the Company has revaluated land held for business use and has recorded any discrepancies in the consolidated balance sheets
as revaluation reserve for land.

7) Provision for loss on construction contracts included in costs on uncompleted construction contracts
Millions of yen

2015
¥
37

2016
¥
178

Thousands of
U.S. dollars

2016
$
1,585

8) Change in holding purpose of assets

The consolidated financial statements for the previous fiscal year
have been reclassified to reflect these changes in presentation.
In accordance with the transitional treatment prescribed in
Clause 58-2 (4) of the “Accounting Standard for Business Combinations,”in Clause 44-5 (4) of the “Accounting Standard for Consolidated Financial
Statements” and in Clause 57-4 (4) of the “Accounting Standard for Business
Divestitures,” the aforementioned accounting standards have been adopted
from the beginning of the fiscal period ended March 31, 2016.
In the consolidated statement of cash flows for the fiscal year
ended March 31, 2016, cash flows related to acquisition or sale of sharesof subsidiaries not affecting the scope of consolidation are classified into
“Net cash provided by (used in) financing activities,” while cash flows related
to expenses arising from acquisition of shares of subsidiaries affecting thescope of consolidation or expenses arising from acquisition or sale of sharesof subsidiaries not affecting the scope of consolidation are classified into
“Net cash provided by (used in) operating activities.”
The effects of these changes on the consolidated financial
statements were negligible.

4. Accounting standards issued but not yet adopted(Implementation Guidance on Recoverability of Deferred Tax Assets (ASBJ
Guidance No.26 issued on March 28, 2016)
1) Overview
Regarding the treatment of the recoverability of deferred tax assets, anecessary review was conducted following the framework of JapaneseInstitution of Certified Public Accountants Audit Committee
Report No.66 “Audit Treatment on Determining the Recoverability ofDeferred Tax Assets,”whereby companies are categorized into fivecategories and deffered tax assets are caluculated based on each ofthese categories.
(a) Treatment of companies that do not satisfy any of the category
requirements for (Category1) through (category 5)(b) Category requirements for (Category 2) and (Category 3)

Millions of yen

As of March 31
Costs on uncompleted construction contracts

3. Change in accounting method
The Company has adopted the “Accounting Standard for Business
Combinations” (Accounting Standards Board of Japan (ASBJ) Statement
No. 21, September 13, 2013), the “Accounting Standard for Consolidated
Financial Statements” (ASBJ Statement No. 22, September 13, 2013) andthe “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7,
September 13, 2013) effective from the fiscal period ended March 31, 2016.
Under the adopted accounting standards, differences arising from the change
in the Company’s ownership interest in subsidiaries are accounted for as
capital surplus as long as the Company retains control over its subsidiaries,
and acquisition-related costs are accounted for as expenses in the fiscal
period in which such costs are incurred. Furthermore, effective for businesscombinations occurring on or after the beginning of the fiscal period ended
March 31, 2016, adjustments of the provisional allocation of acquisition
costs for a business combination due to the completion of measurement are
retrospectively reflected as if the accounting for the business combination
had been completed at the acquisition date. In addition, the title “netincome” has been changed to “profit for the year attributable to owners of
the parent,” and the title “minority interests” has been changed to “noncontrolling interests.”

6. Notes to Consolidated Balance Sheets

profit decreased ¥132 million (US$1,178thousand) and operating income,ordinary income and profit before income taxes and non-controlling interests
for the fiscal year ended March 31, 2016 decreased each by ¥321 million(US$2,853thousand) .

The following real estate held for sale was reclassified as noncurrent assets due to change in holding purpose.
Thousands of
U.S. dollars

Millions of yen

As of March 31
Land

2015

-

2016

47

2016

424

The following noncurrent assets were reclassified as real estate held for sale due to change in holding purpose.
Thousands of
U.S. dollars

Millions of yen

As of March 31
Buildings and structures
Land

2015

771
398

2016

36
600

7. Notes to Consolidated Statements of Income
Millions of yen

For the years ended March 31
1) Provision for loss on construction contracts included in costs of sales
2) Valuation loss on real estate for sale included in costs of sales
3) Principal components of selling, general and administrative expenses:
Employees' salaries and allowances
Provision for bonuses
Retirement benefit expenses
Provision (reversal) of allowance for doubtful accounts
4) R esearch and development expenditures included in selling, generaland administrative expenses and construction costs5) Gain on sales of noncurrent assets:
Buildings and structures
Land
Other
Total
6) Loss on sales of noncurrent assets:
Buildings and structures
Land
Other
Total
7) Loss on abandonment of noncurrent assets:
Buildings and structures
Other
Dismantlement cost
Total

2016

328
5,327

Thousands of
U.S. dollars

2015¥ 2,719
¥
53

2016
¥
815
¥
655

¥ 10,165
2,337
730
(24)

¥ 10,200
3,680
753
514

$

90,526
32,662
6,687
4,569¥ 1,066¥ 1,049

$

9,311

¥

0
284
22
307

¥

138
133
5
277

$

1,233
1,183
48
2,465

0
13
0
13

¥

5
5
11

$

143
2
40
186

¥

330
1
242
573

$

¥
¥

¥
¥

¥

¥

¥

¥

2016
$
7,233
$
5,816

$

$

$

49
47
97
2,931
9
2,147
5,088

2016_TODA Corporate Report 30

9. Notes to Consolidated Statements of Changes in Net Assets

8) Impairment loss on fixed assets

The group puts its assets for business purposes, primarily into main office and branch office. And other assets are put each properties.
Impairment loss on fixed assets was as follows.

Type and number of outstanding shares
Number of shares

For the fiscal year ended March 31, 2015
Location

Chuo Ward , Tokyo,
and other

PurposeRental locations

Impairment loss
(Millions of Yen)Type

Buildings, structuresand land¥802

Chuo Ward , Tokyo,
and otherType

Rental locations

Buildings, structures,fixtures, land,
intangible assets(land lease rights
and other)

Impairment loss
(Millions of Yen)

Impairment loss
(Thousands of U.S. dollars)¥1,271$11,280

The recoverable value is mainly the net sale value. The net sale value is computed by withholding the cost of disposal from the sale value.

8. Notes to Consolidated Statements of comprehensive income
Thousands of
U.S. dollars

Millions of yen
Reclassification and tax effect of comprehensive income for the years ended March 31

Valuation difference on available-for-sale securities:
AccrualReclassification
Before adjust tax effectTax effect
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges:
AccrualReclassification
Before adjust tax effectTax effect
Deferred gains (losses) on hedges
Foreign currency translation adjustments:
Accrual
Revaluation reserve for land:Tax effectRevaluation reserve for landRemeasurements of defined benefit plans:
AccrualReclassification
Before adjust tax effectTax effectRemeasurements of defined benefit plans
Total of other comprehensive income

31 2016_TODA Corporate Report

2015

2016

2016

¥

40,934(1,051)
39,882(10,415)¥ 29,467¥ (30,629)(503)(31,133)
11,230¥ (19,902)$(271,831)(4,467)(276,299)
99,667$(176,631)

¥

¥

¥

(6)
(24)
(30)
1
(29)

$

¥

8
(3)
4
(1)
3

$

(57)
(216)
(273)
14
(259)

¥

867

¥

(679)

$

(6,030)

¥
¥

844
844

¥
¥

428
428

$
$

3,800
3,800

¥

1,076
(287)
789
(175)
613
31,796¥

Common stock

322,656,796--

322,656,796

Treasury stock

Common stock

11,482,089

4,038,545-

15,520,634

For the fiscal year ended March 31, 2016

For the fiscal year ended March 31, 2016
PurposeClass of shares

Issued stock

April 1, 2014

Increase

Decrease

March 31, 2015

Number of shares

The recoverable value is mainly the net sale value. The net sale value is computed by withholding the cost of disposal from the sale value.

Location

For the fiscal year ended March 31, 2015

¥ (4,267)
91(4,176)792(3,383)¥ (23,566)$ (37,874)
812(37,061)
7,033(30,028)$(209,148)

Class of shares

April 1, 2015

Increase

Decrease

March 31, 2016

Issued stock

Common stock

322,656,796--

322,656,796

Treasury stock

Common stock

15,520,634

40,686-

15,561,320

Dividends
For the fiscal year ended March 31, 2015

Class of shares

Total Dividends

Dividends per share

Record date

Effective dateJune 27, 2014 Resolution by Annual
General Meeting of Shareholders

Common stock¥1,555million¥5.00

March 31, 2014

June 30, 2014

June 26, 2015 Resolution by Annual
General Meeting of Shareholders

Common stock¥2,149million¥7.00

March 31, 2015

June 29, 2015

For the fiscal year ended March 31, 2016

Class of shares

Total Dividends

Dividends per share

Record date

Effective dateJune 26, 2015 Resolution by Annual
General Meeting of Shareholders

Common stock¥2,149million($19,080thousand)¥7.00

March 31, 2015

June 29, 2015

June 29, 2016 Resolution by Annual
General Meeting of Shareholders

Common stock¥3,070million($27,253thousand)¥10.00March 31, 2016

June 30, 2016

10. Notes to Consolidated Statements of Cash Flows
Thousands of
U.S. dollars

Millions of yen
Reconciliation between cash and deposits on the consolidated balance sheets
and cash and cash equivalents at the fiscal year-end:

2015

2016

2016

Cash and deposits of the consolidated balance sheets(Less) time deposits with maturities of more than three months
Short-Term investment securities
Current assets: Other
Cash and cash equivalents of the consolidated statements of cash flows¥¥$ 486,050(1,043)$ 485,007

43,488(241)
10,0005,999
59,245¥54,768(117)
54,650¥

11. Lease Transactions
Thousands of
U.S. dollars

Millions of yen
As of March 31

Future minimum lease payments under non-cancelable operating leases:
Due within one year
Due after one year
Total
Future minimum lease income under non-cancelable operating leases:
Due within one year
Due after one year
Total

2015
¥
¥

2016
94
153
248

¥ 2,195
5,629¥ 7,824

¥
¥

2016
114
226
340

¥ 2,144
11,152¥ 13,296

$
$

1,013
2,011
3,025

$ 19,028
98,973$ 118,002

2016_TODA Corporate Report 32

12. Fair value of Financial Instrument

13. Marketable Securities and Investment Securities
Millions of yen

As of March 31, 2015
(1) Cash and deposits(2) Notes and accounts receivable - trade(3) Short-term investment securities,
investment securities (Note)(4) Long-term loans receivable
Assets total

Book value(1) Notes and accounts payable - trade(2) Short-term loans payable(3) Income taxes payable(4) Long-term loans payable
Liabilities total
Derivative transactions (Note)

Fair value

Held-to-maturity debt securities:

Difference

Millions of yen¥ 43,488
121,009¥ 43,488
120,939(70)

188,230

188,462232

765¥ 353,494

818¥ 353,709

52
¥ 214

¥ 107,216
32,597651
33,735¥ 174,201¥
2¥ 107,216
32,597651
33,790¥ 174,256
¥
2

¥ 54
¥ 54
-

As of March 31, 2015
Securities with a fair value that exceeds
the book value
Securities with a fair value that does notexceed the book value
Total

¥

Millions of yen

109
281
1,055

(2)

¥ 3,300¥ 3,532¥ 232

Book value

Acquisition cost

¥ 172,793¥ 62,494¥ 110,298

1,617
174,4101,529
64,02487
110,386519
10,00010,519¥ 184,930

598
10,00010,598¥ 74,623(79)(79)¥ 110,307

Sales amount Total gain on sales Total loss on sales¥ 3,286

DifferenceBook value

Fair value

Difference¥ 54,768
211,237¥ 54,768
211,228¥(8)$ 486,050
1,874,667$ 486,050
1,874,589$

147,378

147,649271

1,307,934

1,310,341

2,407

614
¥ 413,998

685¥ 414,332

71
¥ 333

5,454
$ 3,674,106

6,086$ 3,677,068

632$ 2,961(1) Notes and accounts payable - trade(2) Short-term loans payable(3) Income taxes payable(4) Bonds payable(5) Long-term loans payable
Liabilities total
Derivative transactions (Note)

149,638
34,5882,774
10,00035,131¥ 232,133¥(18)

149,638
34,588
2,774
10,11435,291¥ 232,407
¥
(18)

114
159
¥ 274
¥
-

1,327,993
306,961
24,62688,746
311,781$ 2,060,110$(161)

1,327,993
306,961
24,62689,763
313,198$ 2,062,542
$
(161)

1,016
1,416
$ 2,432$-(78)

Note: 1. The fair value of unlisted stocks is considered to be extremely difficult to calculate, as there are no market prices and no valuations of future cash flow.
Therefore, these stocks are not included in "Short-term investment securities and investment securities."
2. Net receivables/payables arising from derivatives are shown. Items that are net payables are shown in parenthesis.

¥

82
207
1,551

¥ 5,289140300
11Thousands of
U.S. dollars

$

728
1,844
13,768$ 46,941
1,243
2,662
99

¥ 1,051-

Millions of yen

Thousands of U.S. dollars

Millions of yen

Difference

Held-to-maturity debt securities:

Fair value

33 2016_TODA Corporate Report240

Millions of yen

Book value

Stocks of non-consolidated subsidiaries and affiliated companies
which are not accounted for by the equity method:
Stocks of subsidiaries
Stocks of affiliated companies
Unlisted preferred equity securities
Other investment securities
Unlisted stocks
Unlisted preferred equity securities
Investments in silent partnerships
Others242

Bonds
OthersSubtotal
Securities with a book value that does notexceed the acquisition cost:
Stocks
Bonds
OthersSubtotal
Total

For the fiscal year ended March 31, 2015
Available-for-sale securities sold

As of March 31, 2016
(1) Cash and deposits(2) Notes and accounts receivable - trade(3) Short-term investment securities,
investment securities (Note)(4) Long-term loans receivable
Assets total

As of March 31, 2016(stated at book value)¥ 234

Note: The Companies recognized no loss on write-down.

5,384
140
500
9

Unlisted stocks

Difference¥ 3,292

Millions of yen

As of March 31, 2015
Securities with a book value that exceeds
the acquisition cost:
StocksMillions of yen¥

Fair value¥ 3,057

Available-for-sale securities with a fair value:

Note: 1. The fair value of unlisted stocks is considered to be extremely difficult to calculate, as there are no market prices and no valuations of future cash flow.
Therefore, these stocks are not included in "Short-term investment securities and investment securities."
2. Net receivables/payables arising from derivatives are shown. Items that are net payables are shown in parenthesis.

Unlisted stocks
As of March 31, 2015(stated at book value)
Stocks of non-consolidated subsidiaries and affiliated companies
which are not accounted for by the equity method:
Stocks of subsidiaries
Stocks of affiliated companies
Unlisted preferred equity securities
Other investment securities
Unlisted stocks
Unlisted preferred equity securities
Investments in silent partnerships
OthersBook value

As of March 31, 2016
Securities with a fair value that exceeds
the book value
Securities with a fair value that does notexceed the book value
Total

Book value

Fair value¥ 3,223¥ 3,496

202

199¥ 3,425¥ 3,696

Book value

Acquisition costThousands of U.S. dollars
Difference¥¥Book value

Fair value

Difference273$ 28,603$ 31,034$ 2,431

(2)

1,795

1,772

(23)

271

$ 30,399$ 32,806$ 2,407

Available-for-sale securities with a fair value:
Millions of yen

As of March 31, 2016
Securities with a book value that exceeds
the acquisition cost:
Stocks
Bonds
OthersSubtotal
Securities with a book value that does notexceed the acquisition cost:
Stocks
Bonds
OthersSubtotal
Total¥ 134,087
208
2,420
136,716

7,236
7,236
¥ 143,952¥¥

54,234200
2,259
56,694

8,084
8,084
64,778

Thousands of U.S. dollars
DifferenceBook value¥

79,8538
160
80,022$ 1,189,989
1,850
21,477
1,213,317$ 481,314
1,774
20,052
503,141$ 708,674
75
1,425
710,175

(848)
(848)
79,17364,21764,217$ 1,277,534

71,751
71,751$ 574,893(7,533)(7,533)$ 702,641¥

Acquisition cost

Difference

Note: The Companies recognized losses on write-down of ¥64 million (US$571 thousand) for available-for-sale securities.
Write-down losses are recognized in each of following cases.
Case of securities with a fair value● Fair value of fiscal year end and quarter settlement day in a row decline more than 30% compared to book value in succession.
● Fair value declined more than 50% compared to book value.
Case of securities without a fair value● Net worth of equivalent of Equity declines more than 50% compared to acquisition cost.

For the fiscal year ended March 31, 2016
Available-for-sale securities soldMillions of yen

Thousands of U.S. dollars

Sales amount Total gain on sales Total loss on sales

Sales amount Total gain on sales Total loss on sales

1,746

563

17

15,502

5,000

157

2016_TODA Corporate Report 34

14. Derivative Transactions

The schedule of the pension assets

For the year ended March 31, 2015

Derivative transactions to which the hedge accounting method is applied:(1) Currency-related transactions
Method of processing

Method in principle

Measures

Objects

Forward foreignexchange contracts
Buy USD

Total

2015
22,293
267
847
1,184
(1,802)¥ 22,790¥

Balance at the beginning of the fiscal year
Expected return on pension assets
Actuarial losses
Contributions by the employer
Benefit paid
Balance at the end of the fiscal year

Derivative transactions to which the hedge accounting method is not applied:None

Millions of yen
more than 1 year

Contract amount

Forecasted purchasingtransaction¥ 1,329¥ 17¥ 2¥ 1,329¥ 17¥ 2

Net amount of liabilities and assets recognized in consolidated balance sheet

2015
41,960(22,790)
19,17019,170Net defined benefit liability
Net defined benefit asset
Net amount of liabilities and assets recognized in consolidated balance sheet

21,466(2,296)
19,170¥Funded defined benefit obligations
Pension assets

Objects

Interest rate swaps
Exceptional treatment
Payment fixed ,of interest rate swaps
Receive floating

Long-term loans
payableContract amountMillions of yen
more than 1 year

Estimated fair value¥ 4,360¥ 4,100*(*) These interest rate swaps, subject to the exceptional treatment are treated en bloc with the relevant long-term loans payable.
Therefore, the fair value of the contracts is included in the fair value of the relevant long-term loans payable.

The breakdown of items in retirement benefit costs

For the year ended March 31, 2016
Derivative transactions to which the hedge accounting method is not applied:
None
Derivative transactions to which the hedge accounting method is applied:(1) Currency-related transactions
Method of processing

Method in principle

Measures

Forward foreignexchange contracts
Buy USD

Total

Objects

Forecasted purchasing¥ 304
transaction¥ 304

Millions of yen
more than Estimated
1 yearfair value

Thousands of U.S. dollars
Contract more than Estimatedamount1 yearfair value¥ 20¥ (18)$ 2,702$ 180$ (161)¥ 20¥ (18)$ 2,702$ 180$ (161)

2016
44,889(22,613)
22,27522,2752016$ 398,381(200,690)
197,691
197,691

22,515(240)
22,275

199,822(2,130)$ 197,691¥

Thousands of
U.S. dollars

Millions of yen

2015
1,783
503
(267)
9
(296)
¥
1,731

¥

Service cost
Interest cost
Expected return on pension assets
Amortization of actuarial differences
Amortization of prior service costs
Retirement benefit costs
Contract
amount¥¥Remeasurements of defined benefit plans

2016
1,716
489
(273)
91
¥
2,023

¥

2015
(296)
1,086
¥
789

Prior service cost
Actuarial loss
Total

2016
15,2294,341(2,427)812$ 17,955$

Thousands of
U.S. dollars

Millions of yen¥

2016$ 202,256
2,427(1,486)
10,305(12,812)$ 200,690
Thousands of
U.S. dollars

Millions of yen

The reconciliation of the defined benefit obligations and pension assets to the liabilities
and assets on retirement benefits recognized in the consolidated balance sheet(2) Interest-related transactions
Measures2016
22,790
273
(167)
1,161
(1,443)¥ 22,613¥

Estimated fair value

Estimated fair value was calculated based on price information provided by the counterparty financial institution.

Method of processing

Thousands of
U.S. dollars

Millions of yen

2016
¥

2016

(4,176)¥ (4,176)$(37,061)$ (37,061)

Estimated fair value was calculated based on price information provided by the counterparty financial institution.

Unrecognized remeasurements of defined benefit plans(2) Interest-related transactions
Method of processing

Measures

Objects

Interest rate swaps
Exceptional treatment
Payment fixed ,Long-term loansof interest rate swaps
Receive floating
payableContract
amount¥ 6,450

Millions of yen
more than Estimated
1 yearfair value¥ 5,890

Thousands of U.S. dollars
Contract more than Estimatedamount1 yearfair value*$ 57,241 $ 52,271(*) These interest rate swaps, subject to the exceptional treatment are treated en bloc with the relevant long-term loans payable.
Therefore, the fair value of the contracts is included in the fair value of the relevant long-term loans payable.

15. Retirement Benefits
The Company had a defined benefit plan that consists of a defined benefit pension plan and a lump-sum benefit plan.
Some of the foreign consolidated subsidiaries have defined contribution plans. And the other consolidated subsidiaries have lump-sum benefit plans.
The schedule of the defined benefit obligation
Balance at the beginning of the fiscal year
Cumulative effects of changes in accounting policies
Restated balance
Service cost
Interest cost
Actuarial losses
Benefit paid
otherBalance at the end of the fiscal year
35 2016_TODA Corporate Report

Millions of yen

2015
44,118(965)
43,152
1,783
503
(229)
(3,251)
2¥ 41,960¥

2016
41,96041,960
1,716
489
4,100
(3,374)(1)¥ 44,889¥

Thousands of
U.S. dollars

2016$ 372,389
372,389
15,2294,341
36,387(29,948)(17)$ 398,381*

Unrecognized actuarial (gain) loss
Total

Millions of yen

¥
¥

2015
(267)
(267)

¥
¥

2016
3,909
3,909

The breakdown of pension assets by major category
Bonds
Equities
General account
other
Total

2015
25%
13%
61%
1%
100%

2016
26%
11%
62%
1%
100%

The items of actuarial assumptions
Discount rate
Expected long-term return on pension assets
Expected rate of salary raise

2015
1.20%
1.20%
5.60%

2016
0.20%
1.20%
5.60%

Thousands of
U.S. dollars

$
$

2016
34,691
34,691

2016_TODA Corporate Report 36

16. Deferred Tax Accounting
The tax effects of temporary differences which gave rise to deferred
tax assets and liabilities at March 31, 2015 and 2016 are as follows:
As of March 31
Deferred tax assets:
Real estate for sale
Buildings and structures
Investment securities
Allowance for doubtful receivables
Provision for bonuses
Provision for loss on construction contracts
Net defined benefit liability
Tax loss carryforwards
Other
Subtotal
Less: valuation allowance
Deferred tax assets
Deferred tax liabilities:
Valuation difference on available-for-sale securities
Net defined benefit asset
Other
Deferred tax liabilities
Net deferred tax assets (liabilities)

Millions of yen

2015¥2) Investment in kind in consolidated subsidiary(a) Summary of transactiona) Name and businesses of the combined company

Thousands of
U.S. dollars

2016

Company nameGoto Floating Wind Power LLC.

2016

293
1,319
1,211
461
1,299
2,456
6,875
18,1142,323
34,355(33,939)
¥
416

¥

179
1,591
1,208
701
1,966
751
6,348
13,1701,950
27,867(27,230)¥636$(35,356)
(741)
(166)
(36,264)¥ (35,847)(24,125)(73)(80)(24,279)¥ (23,642)(214,104)
(652)
(715)
(215,471)$(209,820)b) Date of the business combination
March 25, 2016c) Scheme of the business combination
Investment in kind of property, plant and equipment owned by the Company in Goto Floating Wind Power LLC.
d) Name of the company after transaction
No changee) Other information related to the summary of transaction
The Company effected the investment in kind with a view to improving the efficient allocation of management resources in order to establish more robust
management bases.
(b) Accounting for the transaction
The transaction was accounted for at appropriate book value as transaction under common control, pursuant to Accounting Standard for Business Combination
and Implementation Guidance on Accounting Standard for Business Combination and Accounting Standard for Business Divestitures.
(c) Specifics on additional investment in subsidiary

1,593
14,123
10,723
6,223
17,456
6,665
56,344
116,880
17,306247,317(241,665)$
5,651

Detail of acquisition cost
Millions of yen

Value of the acquisition

2015
35.6%
3.1%
–2.5%
–1.1%
1.6%
–30.3%
–1.7%
4.7%

2016
33.1%
2.3%
–0.7%
-%
1.0%
–23.8%
0.1%
12.0%Book Value

Fair Value¥ 49,234¥ 80,751

Millions of yen

As of March 31,2016
Real estate for rent

$ 7,424

Thousands of U.S. dollars

Book Value

Fair ValueBook Value

Fair Value¥¥ 102,009$ 472,091$ 905,300

Total

Adjustments

Consolidated¥ 420,324
3,830
424,155¥ 13,041¥(3,830)(3,830)¥(62)¥ 420,324
420,324¥ 12,978¥¥¥53,195

20. Segment Information
Millions of yen

Business
Road work and pavement construction

Millions of yen

Reporting segments

Thousands of U.S. dollars

¥ 8
¥ 8

(d) Matters concerning changes in the Company's equity interest reflecting transactions with non-controlling interestsa) Primary reason for change in capital surplus
Additional investment in subsidiaryb) Increase in capital surplus due to transactions with non-controlling interests:¥82million ($735thousand)37 2016_TODA Corporate Report

836

Millions of yen

As of March 31,2015
Real estate for rentb)	Date of the business combination
June 30, 2015c) Scheme of the business combination
Stock acquisition from non-controlling interests (additional acquisition)d) Name of the company after transaction
No changee) Other information on the summary of the transaction
The Company acquired the stock held by the non-controlling interests to strengthen corporate governance, focused on the integrated business frameworkof the Group.
(b) Accounting for the transaction
The transaction was recognized as a transaction with non-controlling interests under common control, pursuant to Accounting Standard for Business
Combination and Implementation Guidance on Accounting Standard for Business Combination and Accounting Standard for Business Divestitures.
(c) Specifics on additional investment in subsidiary
Detail of acquisition cost			Cash and deposits¥

19. Investment and rental properties

1) Additional investment in subsidiary(a) Summary of transactiona) Name and businesses of the combined company

Value of the acquisition
Acquisition costThousands of U.S. dollars

The asset retirement obligations excluded in financial statement
We have the obligations for restoration to some of the assets belonging to wind generated electricity power.
Period of use of these assets are not clear and at present, the methods to dispose of these assets are not decided.
Since we cannot reasonably estimate the asset retirement obligations, we do not record the asset retirement obligations worth of the assets.

17. Business Combination (Transaction under common control)

Company nameToda Road Co., Ltd.

Structures, machineries andother

18. Asset retirement obligations

In addition to the above, the Companies recognized deferred tax liabilities of ¥8,268million and ¥7,708million( US$68,413 thousand) related to revaluation reserve for land at March 31, 2015 and 2016, respectively.

Reconciliation between the statutory tax rate and the effective tax rate
Statutory tax rate
Expenses not deductible for income tax purposes
Non-taxable income
Gain on negative goodwill
Inhabitant taxes (per capita levy)
Valuation allowance
Other
Effective tax rate

Business
Wind generated electricity

$ 78
$ 78

For the year ended
March 31, 2015
Net sales:
Customers
Inter-segment
Total
Segment profit (loss)
Depreciation andamortization

Building
construction

Civil
Engineering

Real estate¥ 313,453
902
314,355¥ 9,020¥ 94,854
886
95,741¥ 3,051¥ 11,485
1,566
13,051
¥
984

¥

¥

531
475
1,007
(14)

¥

¥

¥

¥

13

807

117

728

Other

1,667

-

1,667

Millions of yen
Reporting segments

For the year ended
March 31, 2016
Net sales:
Customers
Inter-segment
Total
Segment profit (loss)
Depreciation andamortization

Building
construction

Civil
Engineering

Real estate¥ 382,886
1,171
384,057¥ 17,215¥ 94,328
1,256
95,584¥ 3,883¥ 14,843
1,351
16,195
¥
537

¥

¥

563
486
1,049
(3)

¥

¥

¥

¥

14

1,035

177

775

Other

Total

Adjustments

Consolidated¥ 492,621
4,265
496,887¥ 21,632¥(4,265)(4,265)¥(3)¥ 492,621
492,621¥ 21,629

¥

¥

¥

2,002

-

2,002

2016_TODA Corporate Report 38

Thousands of U.S. dollars

For the year ended
March 31, 2016
Net sales:
Customers
Inter-segment
Total
Segment profit (loss)
Depreciation andamortization

Building
construction

Civil
Engineering

Real estate$ 3,397,996
10,395
3,408,392$ 152,780

$

$

$

9,189

$

837,132
11,152
848,284
34,460

$

1,576

Other

$

Total

$

131,734
11,995
143,730
4,773

$

5,000
4,313
9,314
(30)

$

6,883

$

126

Adjustments

Consolidated$$ 4,371,864
4,371,864$ 191,956$ 4,371,864
37,857
4,409,721$ 191,984$(37,857)(37,857)
(27)

$

$

-

17,775$

17,775• Adjustments of segment profit (loss) is negative ¥62million and negative ¥3million (US$27 thousand) elimination of intersegment transactions.
• Segment profit (loss) is adjusted in accordance with operating income as recorded in the consolidated statements of income.
The Companies operate in the following four reporting segments:
Building Construction.......Research, planning, design, management and execution of building construction work, and architectural and comprehensive engineeringand consulting related thereto
Civil Engineering...............Research, planning, design, management and execution of civil engineering work, such as tunnel construction, and architectural andcomprehensive engineering and consulting related thereto
Real estate.......................Resale, rent and intermediating of real estate and building management
Other business.................Worker dispatching and hotel business, and financing and leasing mainly for the group companies

21. Related Party Transactions
1. Related party transactions between the Corporation and related parties
Parent Company and major shareholders (Company, etc. only), etc., of the Corporation

Category

Related Party

Address

DaiichiChuo-ku
ShokusanTokyo
Co.,Ltd.*1

For the year ended March 31, 2015

CategoryMainshareholder

Related Party

Address

DaiichiChuo-ku
ShokusanTokyo
1Co.,Ltd.*

Capital or
Investment(Millions of Yen)

12

Type of Business

Percentage ofvoting rights held
(Held by others)

Amounts of Transaction
Relationship

Nature of Transaction

consolidated
subsidiary's stockacquisition*2
Real estate Direct: interlocking
Acquisitionbusiness (11.77%) directors
priceGain on negative
goodwill

12

Percentage ofvoting rights held
Type of Business (Held by others)

Amounts of Transaction
Relationship

Nature of Transaction

RealDirect: interlocking Purchaseestate(12.55%) directorsof land*2
business

Account

Millions of Yen¥1,494

-

-

¥461

-

-

*1 64.5% of voting rights are held by our officer(equivalent to officer) and his close family.
*2 Trading price is decided by accordance with fair appraisal prices and consultation between both parties.

For the year ended March 31, 2016
Not applicable

22. Per share information
Yen

U.S. dollars

As of March 31

2015

2016

2016

Net assets per share of common stock
Profit for the year per share of common stock¥ 587.83
45.42¥ 569.92
65.25$ 5.057
0.579

Years ended March 31
Capital or
Investment(Millions of Yen)

Balance at the end of the year

Millions of Yen

Thousands of
U.S. dollars

Millions of yen

For the year ended March 31, 2015

Main
shareholder

2. Related party transactions between subsidiaries and related parties
Parent Company and major shareholders (Company, etc. only), etc., of the Corporation

Balance at the end of the year

Millions of Yen

Account

Millions of Yen

¥820

-

-

*1 64.5% of voting rights are held by our officer and his close family.
*2 Purchase amount of the land was determined considering the valuations of independent real-estate appraisers.

Basis for calculation of net assets per share:
Total net assets
Amount attributable to items other than common stock
Net assets attributable to common stock
Number of shares of common stock outstanding at fiscal year-end

2015¥ 182,988¥ 177,417
2,443
2,398
¥ 180,544¥ 175,019
307,136,162 307,095,476
sharesBasis for calculation of profit for the year per share:
Profit for the year attributable to owners of the parent
Profit for the year attributable to owners of the parent attributable to common stock
Average number of shares of common stock outstanding during the fiscal year

For the year ended March 31, 2016
Not applicable
Directors and principal shareholders (only individual shareholders), etc., of the Corporation2016$ 1,574,529
21,289$ 1,553,240

shares¥ 14,026¥ 20,039¥ 14,026¥ 20,039
308,810,907 307,113,598
shares2016$ 177,844$ 177,844

sharesFor the year ended March 31, 2015

Category

Related Party

Officer
Hideshige(equivalent
Toda
to officer)
and his close Hidehiro
Toda
familyCapital or
Investment(Millions of Yen)

Percentage ofvoting rights held
Type of Business (Held by others)

Relationship

Nature of Transaction

Millions of Yen--

adviser
Direct:(former director) (4.79%)-

Acquisition oftreasury stock*1--

Oldest son of Direct:
Hideshige Toda (1.96%)-

Acquisition oftreasury stock*1

Address

Amounts of Transaction

Balance at the end of the year
Account

Millions of Yen

¥831

-

-

¥1,073--*1 The Company purchased through an off auction treasury stock trading at Tokyo Stock Exchange, Inc. (ToSTNeT-3) on August 11, 2014 at 547 yen which
was the closing price (including the final special bid and asked price) based on the resolution of the Board of Directors’ meeting held on June 25, 2014.

For the year ended March 31, 2016
Not applicable

39 2016_TODA Corporate Report

2016_TODA Corporate Report 40

Independent Auditor’s Report

Corporate Information

Toda Corporation and Consolidated Subsidiaries

Company overview(As of March 31, 2016)
Company NameTODA CORPORATION

Company Headquarters

7-1 Kyobashi 1-Chome, Chuo-ku, Tokyo, Japan 104-8388

FoundedJanuary 5, 1881

Capital Stock¥23.0 billion

Number of employees

4,742 (Consolidated)
3,823 (Non-consolidated)
1.Research, planning, design, management, and execution associated with all aspects ofarchitectural and civil engineering together with related comprehensive engineering and consulting

Areas of business2.Research, planning, design, management, and execution associated with local development,
urban development and other comprehensive engineering and consulting
3.Real estate sale and purchase, rental, intermediary services, management, and appraisal

History

41 2016_TODA Corporate Report

1881

Foundation: Toda-kata Construction was founded by Rihei Toda, who became its first president.

1908

Company changes its name from Toda-kata to Toda-gumi.

1910

Toda participates in the building of facilities for the Anglo-Japanese Fair in London.

1914

Company participates in the construction of facilities for the Taisho Exhibition held in Tokyo.
Company participates in the construction of facilities for the Panama-Pacific Exhibition held in San Francisco.

1936

Incorporation: Company is reorganized as Toda-Gumi Co., Ltd.

1963

Company changes its name to the Toda Corporation.

1969

The company's stock is listed on the Tokyo Stock Exchange.

1970

Company builds nine pavilions, including the Swiss pavilion, for Expo '70 in Osaka.

1972

Construtora Toda do Brasil S.A. and Toda America, Inc. are established.

1981

Company celebrates its centennial.

1988

Company participates in the construction of the Pacific Convention Plaza Yokohama, Japan's first building project
involving foreign contractors (completed in 1991).
Thai Toda Corporation Ltd. is established.

1994

Toda announces its Global Environment Charter.

1995

Toda becomes Japan's first general contractor to acquire ISO 9001 certification.

1999

Toda acquires ISO 14001 certification.

2000

Toda becomes Japan's first company to achieve zero emissions at construction sites.

2003

Toda announces its Charter of Corporate behavior.

2005

Toda introduces an executive officer system.

2009

Toda Vietnam Co., Ltd. is established.

2010

Toda is certified as an “Eco-First” company.
Company celebrates the 100th anniversary of the start of overseas operations.

2012

Toda acquires ISO 27001 certification.
Southeast Asia Regional Office is established.

2013

Jakarta Representative Office is established.

2015

The Toda Group Global Vision is unveiled.
Yangon Branch Office is established.

2016_TODA Corporate Report 42

7-1, Kyobashi 1-chome, Chuo-ku, Tokyo 104-8388, Japan
Phone: +81-3-3535-1591 Fax: +81-3-3561-5745

Overseas affiliated companies
CONSTRUTORA TODA DO BRASIL S.A.
Rua Manuel da Nobrega, 1280-3° Andar. São Paulo, Brasil
Phone: +55-11-3886-5844
THAI TODA CORPORATION LTD.
199 Column Tower 20th Floor, Ratchadapisek Road, Klongtoey, Bangkok 10110, Thailand
Phone: +66-2-261-6544 Fax: +66-2-261-6545
TODA VIETNAM CO., LTD.
10th Floor, Star Building, 33ter-33bis Mac Dinh Chi Street, Da Kao Ward, District 1, Ho Chi Minh City, Vietnam
Phone: +84-8-6291-4127 Fax: +84-8-6291-4126
TODA AMERICA, INC.
600 Townsend Street, Suite 115W, San Francisco, CA 94103, U.S.A.

Cover photographTOKYO METROPOLITAN TEIEN ART MUSEUM(Minato-ku, Tokyo, Japan)

Paper used in this report is produced using fiber sourced from well-managed forests and other forests where
unacceptable sources have been excluded, as defined by the Forest Stewardship Council.
Printed using 100% vegetable oil inks made from plants containing no volatile organic compound.
The CO2 emitted during manufacturing processes is offset by investments in actions that reduce such emissions.