2018

Annual ReportFinancial Highlights

Contents

Founder Tsunekichi Takuma invented the ﬁrst boiler to be produced entirely in Japan by bringing expertise andtechnology to a product that had to be imported until that time.
By passing down this philosophy over time and augmenting it with Takumaʼs technology, we continue to create

Message from Top Management

05

Takuma Group 12th Medium-Term
Management Plan ̶ An Overview

09

Corporate Information

Going forward, we will provide that value to customers through plants that take advantage of the proprietary
technologies we have developed since our founding in areas such as combustion, waste treatment, and water

Company OutIine

19

treatment.

The History of Takuma

20

The Takuma Group Network

21■ Municipal solid waste treatment plants
Waste to solid fuel conversion
plant● Transition and intermediate
processing plant● Raw fuel (biogas) recovery plant● Various types of pollution
prevention equipment

Using advanced incineration technologies, we can eventreat toxic substances suitably and we are supporting theenvironmental protection efforts of industry.

●

As the convergence of Takumaʼs combustion technologies,
our boilers are a reliable brand that has earned the support
of a wide range of industries.
Once-through boiler (EQOS, Super EQOS)
Vacuum-type water heater (Vacotin Heater)● Package water-tube boiler● Smoke tube boiler (RE Boiler)● Heat-transfer oil boiler (Thermoheater)● Radiation heating equipment (Strip Heater)● Various equipment for ships●●

Industrial waste treatment plant●

Vacotin Heater
Industrial waste treatment plant
Energy from Waste plant

Bulky garbage crushing plant■ Water treatment plants

Takumaʼs core technologies are utilized in various types ofboilers, starting with biomass boilers, as well as total
systems.
Biomass boiler● Fossil fuel boiler●

Plant that generates power fromindustrial waste and provides
heat to a plantation

Waste heat boiler● Power plant●

TAKUMA 2018 ANNUAL REPORT

Waste heat boiler

Sewage sludge-fueled power
plant● Plant to process water thatinﬁltrates ﬁnal disposal sites

Sewage and wastewater
treatment plant● Various types of advanced
sewage treatment plant● Sludge treatment plant●Upﬂow moving-bed ﬁltration
systemSewage sludge-fueled power plant●

Super EQOS

RE Boiler■ Air-conditioning equipment and clean systems
We provide comfortable, clean environments to customers
in the semiconductor industry as well as many locations
such as universities, research institutions, and hospitals.
Building equipment● Air-conditioning equipment● Cleaning and drying devices

Chemical ﬁlters

Clean room
● Clean devices● Chemical ﬁlters●

Clean oven

2. Energy Plant Business27

3. Water Treatment Plant Business31

4. Activities of Our Overseas Business

33

Corporate GovernanceNote: These products are handled by Nippon Thermoener Co., Ltd., which
is one of our group companies.

●

23

Directors and Executive Ofﬁcers

35

Corporate Governance

36Internal Control /Compliance & CSR Promotion Structure

37

Risk Management Structure

38

Business Continuity Plan(BCP) /CSR Activities

39

IR Activities / Stock Information

40

FinanciaI Information
Status of Business Activities

42

Financial Statement

49

Financial Information

Biomass power generation boiler

We are working to purify wastewater with a holistic
perspective through a “dialogue with water.”

Thermoheater

1. MunicipaI SoIid Waste
Treatment Plant BusinessCorporate Governance■ Energy plants

Introduction to Takuma's Businesses■ General-purpose boilers

Introduction to
Takumaʼs Businesses

Energy from Waste plant● Pyrolysis gasiﬁcation andmelting plant● Resource recycling andcollection plant● Bulky garbage crushing plant● Incineration ash and ﬂy
ash melting plant●■ Industrial waste treatment plants

Corporate Information

We support the realization of a recycling-oriented society
using advanced waste treatment technologies that meetthe needs of local communities.

1

03

Takuma Group 12th MediumTerm Management Planproducts with new value today.

FinanciaI HighIights

Message fromTop Management

Bringing new value tosociety with TAKUMA

Clean booths

TAKUMA 2018 ANNUAL REPORT

2

8,030

¥
¥

9,646
7,817

¥ 11,606¥

8,551¥ 10,670
¥

7,847

$
$

100,433
73,8650
Fiscal year
year
●

¥

6,712

¥ 34,653¥

9,935¥ 43,889¥

9,398¥ 52,516¥

7,149¥ 58,809¥

9,937¥ 67,727¥ 10,177¥ 76,726$$

95,797

177,116

191,026
109th
'13

110th
'14

111th
'15

112th
'16

113th
'17

●

( in ofmillions
yen )722,193¥ 527.50¥ 631.53

Net income per share（JPY or USD）

¥

74.32

¥ 106.86¥

Diluted net income per share（JPY or USD）

97.12

¥ 708.18¥ 815.77¥ 924.25

$

8.70

94.55

¥ 103.43

¥

94.93

$

0.89

¥

8,000
6,000
4,000

0
Fiscal year
year

109th
'13

110th
'14

111th
'15

-

-

-

-

Capital adequacy ratio (%)

32.2

40.2

42.4

44.1

48.1

50.3

50.3

Trend by Segment

Return on equity (%)

19.7

22.7

16.8

14.1

13.6

10.9

10.9

●

)

140,000

Cash ﬂows fromoperating activities¥ 17,465¥

8,270¥ 21,727

¥

6,728

¥

9,590

¥

5,141

$

48,38870,000Cash ﬂows frominvesting activities

¥

(59)

¥ (1,430)¥

Cash ﬂows fromﬁnancing activities¥ (8,887)¥ (5,867)¥ (3,707)¥ (2,900)¥ (1,787)¥ (1,670)$ (15,720)

End-of-year balance of
cash and cash equivalents¥ 26,005¥ 27,030¥ 45,008¥ 48,335¥ 57,132¥ 60,283$

Number of employees

3,288

3,315

(160)

3,266

¥

(445)

3,366

¥

143

3,447

¥

(328)

3,609

$

(3,088)567,425
3,609

0
Fiscal year
year●

Value of orders received

11,727
9,834
90,643in millionsof yenNet sales

75,609

12.3

12.3

10.5

(

112th
'16

113th
'17

112th
'16

Operatingincome10,488113th'17

in millionsof yen3

TAKUMA 2018 ANNUAL REPORT) Value of orders received
Net sales

0
Fiscal year
year

Operatingincome17,696

17,321

16,724

17,165

16,45016,39010,000

896

917

1,015

112
'16

113
'17

114
'18

th

●

in millionsof yen

)

2.9%
76.0%

th

th

Overseas Environment and Energy Business( in ofmillions
yen )10,000

5,000

5,000

2,500

Net sales

OperatingincomeValue of orders received

0

0
Fiscal year
year(

in millionsof yen)2,000

10,000

1,000

5,000

0

(223)

112th
'16

(154)

113th
'17

114th
'18

Equipment and Systems Business( in ofmillions
yen )0
Fiscal year
year

( in ofmillions
yen )
500

78

●

20,000Note:
1. U.S. dollar amounts are shown solely for the convenience of readers and are translated at the rate of ¥106.24 to U.S.$1.00,
the exchange rate prevailing at March 31, 2018.
2. Ordinary proﬁt is a measure of accounting proﬁt that equals operating income plus other income minus other expenses,
except for extraordinary items under Japanese GAAP.

(

114th
'18

Package Boiler Business

(

14.6%

114th
'18

Domestic Environment and Energy Business

88,494

10.7

9.7

Overseas Environment
and Energy Business

Equipment and Systems
Business-

6.9

Net sales composition ratios

Domestic Environment
and Energy Business

2,000

-

7.4

114th
'18

Package Boiler Business-Price-to-earnings ratio

9,189$ 1,429,420

8,223¥ 151,862

148,892¥ 415.92¥ 140,201

90,075

Net assets per share（JPY or USD）

¥ 132,614

113th
'17

6.5%

163,505¥ 123,127

112th
'16

12,0008,424¥ 108,520

111th
'15

(FY2017)6,241¥ 106,754

0Fiscal year
year

114th
'18

Operating income

10,000Total assets

110th
'14

118,199¥

9,116

116,309

8,835

¥

3,873

¥

9,449

Net sales
Value of orders received

Operatingincome0-500( in ofmillions
yen )
1,000

351

322

112th
'16

113th
'17

7,141

Net assets

6,145

¥

10,030Comprehensive income

¥

7,168

10,974

Proﬁt attributable toowners of parent

¥

109th
'13

30,00030,000Ordinary proﬁt

113,088

94,4083,401$

60,0007,697¥ 10,030

60,000103,875¥ 10,974

90,000$ 1,112,562

90,000

3,070

9,189

120,000

8,041¥

March 2018

120,000

96,3348,223

150,000( in ofmillions
yen )

2,222

¥

¥ 118,199

)

6,666

8,424

¥ 116,309

March 2018)(

Net sales

96,384¥¥ 113,088

March 2017

) (Thousands of
U.S. dollars

in millionsof yen861

6,241¥ 103,875

March 2016

) (Millions of
yen

114th

7,331

¥

¥ 96,334

March 2015

) (Millions of
yen

114th

830

¥ 96,384

March 2014

) (Millions of
yen

113th

7,663

Operating income

March 2013

) (Millions of
yen

112th

●

99,919Net sales) (Millions of
yen

111th

Value of orders received

113,763

End of ﬁscal year(

Millions of
yen

110th

●

148,025

Fiscal year

109th

Trend in Principal Management Indicators

109,237

Trend in Principal Management Indicators and Other Financial Data

Financial Highlights

Financial Highlights

229
114th
'18

500

0

TAKUMA 2018 ANNUAL REPORT

4

Message from Top Management
We are working to achieve sustained growth
together with society through the policies outlined

In the corporate vision adopted in 2012, the Takuma
Group embraced the goal of continuing to play an essential
role for society as a leading company in the utilization ofrenewable energy and in the ﬁeld of environmental
protection and of achieving ordinary proﬁt of JPY 10.0
billion in FY2020. Under our 11th Medium-Term
Management Plan (FY2015 to FY2017), which identiﬁed
the realization of sustained growth as a top priority, we
worked to expand our businesses in terms of both quality
and quantity in order to achieve that corporate vision
through the six policies set forth in the plan, including
maintaining and expanding our market position in the
EPC* business and expanding businesses that generatebase proﬁts.

In our EPC business, we ﬁrmly harnessed robust demand
to drive orders, allowing us to secure a certain position in
the various markets we serve while building a foothold to
expand that position by capturing orders for multiple large
biomass power plants and sludge-fueled power plants. In
businesses that generate base proﬁts, we pursued
initiatives to expand those proﬁts in an effort to maintainand increase proﬁtability, for example by developing abusiness foundation and strengthening our maintenancecapabilities. As the result of these initiatives, we were able
to steadily expand our business in terms of both quality
and quantity, and to achieve our targets for consolidated
order value and consolidated ordinary proﬁt under ourquantitative plan.

This April, the Group embarked on the 12th
Medium-Term Management Plan (FY2018 to FY2020),
which embodies the ﬁnal stage of its current medium- andlong-term vision (corporate vision). Although we expect
demand to remain robust during the years covered by theplan, we also anticipate that the business environment will
undergo major changes as Japanese policy and social
structure continue to evolve over the medium and longterm. The plan identiﬁes ﬁve policies to boost the Groupʼsstrength so that we can achieve our corporate vision andsubsequently realize steady growth in light of the futurechanges we expect to see in the business environment.
The ﬁrst policy is to strengthen and expand our revenue
foundation. The Groupʼs products̶that is, waste treatment
plants, water treatment plants, and boiler plants̶serve associal infrastructure and as a base for companiesʼ businessactivities. Most products remain in use for a long time
following their delivery to customers, often 20 or 30 years,
and our ability to provide sustained, high-quality
after-sales service to ensure that those products function
longer and more effectively contributes to our customersʼ
proﬁts as well as our own, providing a basis for stable,
long-term proﬁts. By supplying high-quality solutions
throughout the plant and product life cycle in order toprecisely meet customersʼ diversifying needs, we will work
to further strengthen and enhance our revenue base.
The second policy is to achieve sustained growth. Overthe approximately 80 years since its founding, the Group
has supplied products built around a core of technologythat have earned recognition for their high value, giving it
an essential role in society. Drawing on strengths including
the technology, track record, experience, and expertise
accumulated through our business activities to date, wewill achieve sustained growth by continuing to develop
unique technologies, services, and business models;creating value for customers; and securing and creatingcompetitive advantages by rapidly accommodating changes
in the business environment, for example in the form ofevolving needs and the emergence of new social issues.
The third policy is to increase productivity, for example
by reforming business processes. The Groupʼs businesses
are changing dramatically in response to changes in thebusiness environment, including structural changes such as
the aging and shrinking of Japanʼs population and atendency for customersʼ needs and social issues to become
more sophisticated and diverse. To address these changes,
we will seek to more effectively utilize human resources
and to provide higher value to customers by boostingproductivity by radically reviewing and rebuilding businessprocesses that have become more complex and focusing on
higher-added-value operations.

The fourth policy is to use human resources more
effectively. In addition to hiring and training the morediverse workforce that will be essential for the future
development of our businesses, we will work to put in placean environment that allows each and every employee to dotheir jobs in an energetic and engaged manner so that they
can take full advantage of their skills and abilities.
The ﬁfth policy is to continue to pursue compliancemanagement. The Group has consistently considered
compliance to be a key basis for corporate activities, andthe last several Medium-Term Business Plans have included
policies that address this area in an effort to ensure thepenetration and implementation of associated measures. A
sustained program of awareness-raising and educational
activities has helped compliance awareness to take root
throughout our organization, and we will continue topursue improvements so the trust that our quality andother accomplishments inspires will remain unshaken. In
addition, we will work to ensure that enhanced awarenessof the importance of compliance permeates the company
even more deeply by effectively implementing andutilizing mechanisms such as our in-house reporting
system and CSR awareness questionnaire survey.

Message fromTop Managementby our new Medium-Term Management Plan.

■ About the new Medium-Term Management Plan

■ Responsible corporate management
Through the current Medium-Term Management Plan
the Group is working to build business and management
platforms that will be resistant to future changes in thebusiness environment. In order for us to achieve thosepriorities, I believe that it will be important for us to live up
to the trust placed in us by all stakeholders, including
customers, shareholders and investors, business partners,
employees, and local communities, in a spirit of good faith.
To that end, we will work aggressively to implement
corporate governance, compliance, and risk management
in a way that serves as a basis for our corporate activities
going forward.

*EPC business: A business in which Takuma offers turnkey service extending from plant design to procurement and construction.

5

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

6

Message from Top Management
Company Motto■ Achieving sustained growth together with society

The Takuma Group has joined the United Nations Global Compact (UNGC), which is a voluntary effort to create
a global framework for implementing sustainable growth by having companies and groups exercise responsible
and creative leadership while acting as good members of society.
Reference: UN Global Compact http://www.unglobalcompact.org/

Management Principles
Takuma will strive for social contribution, corporate value enhancement, long-term corporate development and thesatisfaction of all stakeholders by providing goods and services that are needed and recognized as valuable in society.
The founding spirit of Takuma was “Service to the nation through boiler manufacturing,”* which in present-day languagemeans “contribution to society by supplying goods and services that we yield.” This spirit can also be applied to the concept ofCorporate Social Responsibility (CSR) that in recent years has become a vital issue for corporate management. The management
principles of the Takuma group companies are all based on the said founding spirit.

Message fromTop Management

Takuma has been a signatory to the United Nations Global Compact since 2006, and we support its 10 fundamental
principles in the 4 areas of human rights, labour, environment, and anti-corruption. We will work to develop our businesswhile understanding and respecting these globally shared principles. In addition, concerning the implementation of the
Sustainable Development Goals (SDGs) adopted by the United Nations and the provisions of the Paris Agreement adopted at
COP21, the Group is helping resolve social issues with technologies for reducing emissions of the greenhouse gas carbon
dioxide through high-efﬁciency generation of electricity using waste and biomass.

Value Technology, Value People, Value the Earth* Service to the nation through boiler manufacturing
It was the Company Motto of Takuma, then Takuma Boiler Manufacturing Co., Ltd., founded by Mr. Tsunekichi Takuma, one of the ten great
inventors of Japan during the Meiji and Taisho periods (1868‒1926).

July 2018

Takaaki Kato

President and CEO
Takuma Co., Ltd.

Sustainable Development Goals (SDGs)
The Sustainable Development Goals (SDGs) are a series of international goals covering the time period of 2016 to 2030 as
described in “Transforming Our World: The 2030 Agenda for Sustainable Development,” which was adopted at a UN summit in
September 2015. The SDGs were intended to pick up where the Millennium Development Goals (MDGs), which were
formulated in 2001, left off. They consist of 169 targets organized around 17 goals for achieving a sustainable world, built
around the pledge of leaving no one behind. Intended to be implemented not only by developing nations, but also by
advanced nations, they are universal in scope, and Japan is working actively to implement them.
Takuma, too, is working to further progress toward the SDGs through its business activities. (The “Introduction to Takumaʼs
Businesses” section on pages 23 to 34 of this report includes icons representing the SDGs that are related to each business.)

Takuma Group Ethics Charter
Takuma and the Takuma Group companies believe that it is essential for the sound development of the groupthat all of the directors and employees remain aware of our social responsibilities and the circumstances
surrounding us as well as act in response to social ethics complying with applicable related laws and ordinances.
Bearing the above in mind, we have established and will promote this ethics charter as our code of conduct,aiming to realize our management principles.
1. We shall strive for proactive social contribution while establishing a harmonious coexistence with the global environment as good
corporate citizens.
2. We shall act in good faith in accordance with sound business custom, while complying with applicable laws and regulations andcommitting ourselves to fair, transparent and free competition, as well as conducting lawful business activities.
3. We shall never have any relationship with antisocial forces or organizations, which may pose a threat to the social order and security ofcivil society.
4. We shall respect fundamental human rights and never practice discrimination.
5. We shall strive to provide high quality products and services, based on our advanced technologies, to attain high acclaim and conﬁdence
from our customers.
6. We shall strive to disclose corporate information to shareholders and investors through investor relations (IR) and other activities on atimely and equitable basis.
7. We shall strive to protect corporate properties as well as information, while never using either for improprieties or any unjustiﬁable
purpose other than normal business operations.

Takuma Group Code of Conduct
Harmony with society
1. Coexistence with the global environment
2. Coexistence with international society
3. Practice of social contribution activities

Practice of customer satisfaction
12. Safety of products and services as well as
ensuring reliability
13. Policies concerning advertising

Practice of compliance with laws and ordinances as well
as sound economic activities
4. Free competition and fair trade
5. Relationship with politics and public
administration
6. Policies concerning business entertainmentand gift-giving
7. Prohibition of involvement in anti-social activities
8. Appropriate export and import transactions

Making appropriate disclosure of information
14. Transmission of corporate information
15. Ensuring reliability of ﬁnancial reporting
16. Prohibition of insider trading

Respect for basic human rights
9. Prohibition of discriminatory actions
10. Respect for individuality, personal quality, andprivacy
11. Safe work environment

7

TAKUMA 2018 ANNUAL REPORT

Protection of corporate properties and information
17. Management and proper use of corporate
properties
18. Handling of conﬁdential information
19. Intellectual property protection

TAKUMA 2018 ANNUAL REPORT

8

Takuma Group 12th Medium-Term Management Plan ‒ An Overview (FY 2018 to 2020)

1. Reﬂections on the 11th Medium-Term Management Plan
1 Initiatives to implement policies

Creation ofcustomer value

Build upon our previous results to further improve our business in termsof both quantity and quality in order to achieve sustained growth.

●

Accommodation ofenvironmental changes
and risk management

We expect to see continued robust demand in the Groupʼs principal business domains.
At the same time, the business environment is expected to undergo major changes over the medium and long term,
including changes in demand in response to evolving national policies and the structure of society, increased reliance oncomprehensive contracts due to a trend to outsource government services, and increasing sophistication and diversity incustomer needs.

Waste treatment
plants(Japan)●●●Water treatment
plants(Japan)●●●Boiler plants(Japan)Creation of customer value ● Ongoing innovation● Accommodation of environmental changes and risk management
●

●

●

●

Boiler plants(overseas)

Results and issues●●

Waste treatment
plants(overseas)

In our EPC business, we established a certain position in the markets we serve bysteadily harnessing robust demand to drive orders.
● We built a foothold to expand our presence by capturing orders for multiple large
biomass power plants and sludge-fueled power plants.
● Businesses that generate base proﬁts allowed us to generally achieve the proﬁttargets outlined in the plan, contributing to stable consolidated earnings.
● Preparing a stage for overseas expansion and developing human resources continue
to be important issues.
● We maintained a certain level of equity ratio thanks to continued proﬁtability.
● Efforts to secure adequate manpower, for example through midcareer hires, as a way
to accommodate growth in orders faced difﬁculty due to a shortage of workers. Tightlabor conditions persisted.
● Compliance and CSR awareness spread throughout the Group thanks to ongoing
initiatives.
●

Package boilers(general-purpose
boilers)

Biomass Power Plant

Equipment andsystems●●

There will continue to be demand from FIT projects.
The number of plants targeted for maintenance will continue to growas more plants come online.
Demand for plant operational management and O&M will grow.
Demand for biomass power plants in Southeast Asia will remain robust.
Our ﬂagship bagasse-ﬁred boiler plants will continue to face intensecompetition, especially from manufacturers in countries such as India
and China.
Demand for Waste to Energy will grow in Southeast Asia due to
growing urbanization, and an increase in, and diversiﬁcation of, waste.
Market development will be gradual due to institutional and ﬁnancial
issues, amongst others.
A certain level of demand will continue due to factors such as renewal
demand even as the Japanese market matures.
Demand for energy-conserving boilers will grow overseas particularlyin emerging nations.
A certain level of demand will continue for both building equipment
and semiconductor manufacturing equipment as construction demandrises and investment in the semiconductor industry expands.

●

Ordinary proﬁt
Line indicating ordinary proﬁt of
JPY 10 billion

●

●

●

●

●
●

●

●

●

●

●

●

Renewal and service life elongation demand will eventually fall off.
The market will contract due to the aging and shrinking of Japanʼs
population.
The trend to outsource government services (by making use of theprivate sector) will gain momentum.
Comprehensive contracts for plant construction and operation,such as PPP/PFI arrangements, will become more common.
There will continue to be demand for energy conservation, energy
creation, and resource use.
Demand for renewable energy will continue as society works toachieve a new energy mix by 2030.
Use of regional distributed biomass will continue.
There will continue to be a certain level of demand for renewal andfuel conversion of existing plants.
There will continue to be a certain level of demand against the
backdrop of rich biomass resources.
Demand for using a variety of fuels such as EFB will grow.

The market will expand as economies grow.

The Japanese market will contract due to the aging and shrinkingof the countryʼs population.
The market will expand further as emerging nationsʼ economies
grow.
A certain level of demand will continue for both building equipment
and semiconductor manufacturing equipment.

The plan represents the ﬁnal stage of the current medium- and long-term vision (corporate vision), for which FY2020 is the target year.
During its three years, we will achieve the vision and boost our corporate capabilities to prepare for steady growth in the
future in response to future changes that are forecasted to occur in the business environment.

Previous medium-and
long-term vision

Next medium- andlong-term vision

Current medium- and long-term vision (corporate vision)

Aim to maintain our role of being an indispensable presence in society as a leading company in the ﬁeld of renewable energy utilization and environmental protection.
Ordinary proﬁt of JPY 10 billion in FY2020 (Build structures capable of consistently earning ordinary
proﬁt of at least JPY 10 billion even as the business environment undergoes major changes.)

2009

2010

2011

2012

2013

2014

2015

2016

12th Medium-Term Management Plan
(FY2018 to FY2020)2017

11 Medium-Term Management Plan
(FY2015 to FY2017)th(Billion JPY)

9●

Sewage Sludge-Fueled Power Plant

Sales
Business volume expanded steadily against a
backdrop of robust demand. Order value
signiﬁcantly exceeded the plan, while the orderbacklog grew to the JPY 200 billion level.
● In terms of quality, we achieved the level of
proﬁt outlined in the plan and made smooth
progress toward our goal of reaching ordinary
proﬁt of JPY 10 billion in FY2020.

●

Renewal demand will increase as sewage treatment plants age.
Demand for converting sewage sludge into energy will grow.
PPP arrangement (that make use of the private sector) will beembraced by the sewer industry.

●

3. Positioning of the 12th Medium-Term Management Plan

Order value●●

Renewal and service life elongation demand will continue as facilities age.
There will continue to be demand for more efﬁcient energy use andadditional functionality (development of disaster prevention andperipheral facilities, etc.).
Comprehensive contracts for plant operation, for example in the formof DBO and O&M arrangements, will become more common.

*DBO : Design Build Operate / O&M : Operation & Maintenance / PPP : Public Private Partnership / PFI : Private Finance Initiative / FIT : Feed-in Tariff /EFB : Empty Fruit Bunch●

2 Quantitative results

Future (medium and long term)

Current 3-year period(12th Medium-Term Management Plan)●

9th Medium-Term
Management Plan results(2009 to 2011)

10th Medium-Term
Management Plan results(2012 to 2014)

Order value

257.8

371.0

99.9

191.0

177.1

468.0

400.0

11th Medium-Term Management Plan results

2015

2016

2017

Total

11th Medium-Term
Management Plan
targets

Sales

285.2

296.5

113.0

116.3

118.1

347.5

360.0

Ordinary proﬁt

13.7

25.7

9.6

11.6

10.6

31.9

27.0

Order backlog

78.1

152.5

139.4

214.1

273.0

−

−

10th Medium-Term Management Plan
(FY2012 to FY2014)
9th Medium-Term Management Plan
(FY2009 to FY2011)
Proﬁtability throughselection andconcentration of resources

Reinforcement of businessfoundation for stability
and proﬁtability
Cumulative ordinary proﬁt results

Steady expansion interms of both quantityand quality
Cumulative ordinary proﬁt results

Strengthening ofcorporate capability tofacilitate steady growth

Consistently secure annual
ordinary proﬁt of at least JPY
10 billion.

Cumulative ordinary proﬁt target

JPY 33.0 billion

JPY 31.9 billion

JPY 25.7 billion*Order backlog ﬁgures are provided for the last year of each Medium-Term
Management Plan and for the end of each ﬁscal year.

TAKUMA 2018 ANNUAL REPORT

Takuma Group 12th MediumTerm Management Plan

Further enhancement of thecompanyʼs ﬁnancial strength● Human resources management● Cultivation of a robust
organizational culture●●

Management base

Maintenance and expansion ofmarket position in the EPC business● Expansion of businesses thatgenerate base proﬁts● Initiatives that target growthmarkets●

Ongoinginnovation

Leveraging the companyʼs total capabilities

Initiatives of the 11th Medium-Term Management Plan (2015 to 2017)

2. Business Environment

TAKUMA 2018 ANNUAL REPORT

10

Takuma Group 12th Medium-Term Management Plan ‒ An Overview (FY 2018 to 2020)

4. Policies of the 12th Medium-Term Management Plan●

By undertaking ﬁve new policies in line with the three perspectives continued from the 11th Medium-Term Management
Plan, we will strengthen proﬁtability and competitiveness while working to strengthen our management foundation, with afocus on effective use of human resources. In this way, we will strive to achieve our medium- and long-term vision whilebuilding a robust business and management foundation in response to future changes in the business environment.

■ Policies■ Perspectives for achieving our policies

Strengthening and expanding ourrevenue foundation

Creation of customer value
Strive to create new value from the customersʼ perspective andavoid price competition by working closely with, anddeveloping a deep understanding of, customers.

Achieving sustained growthOver the 80 years since the Groupʼs founding, we have built a reputation as an essential part of society by providing productsthat are recognized for their value utilizing our technologies which are the core part of our company.
We will create customer value by continually developing unique technologies, services, and business models based on
Takumaʼs strengths such as the technologies, track record, experience, and expertise that weʼve accumulated through ourbusiness activities to date. In addition, we will work to secure sustained growth by securing and creating competitive
advantages as we respond quickly to changes in the business environment, such as evolving customer needs and emerging
social issues.

Ongoing innovation

Increasing productivity, for example byreforming business processes

Achieve sustained differentiation by pursuing innovation interms of both technologies and business models, and leveragethat differentiation to create the value demanded by customers.

Using human resources effectively

Accommodation of environmental changes andrisk management

Continuing to pursue compliancemanagement

Adapt to changes of the business environment in which thecompany operates (e.g., changes in the economic climate,revisions to applicable laws, and changes in customer needs)
and strengthen initiatives to treat such changes as business
opportunities.

Takuma Group 12th MediumTerm Management Plan

Many of the Groupʼs products are used for a long period of time, for example for 20 or 30 years from the time of delivery.
Offering high-quality after-sales service in an ongoing manner so that customers can use those products more effectively andover a longer period of time contributes to both customersʼ and the Groupʼs proﬁts, helping to create a foundation for stable,
long-term earnings.
We will work to further strengthen and expand our revenue foundation by continuing to provide high-quality solutions
throughout the plant and product life cycle as we meet customersʼ diversifying needs in an individualized manner.

Achieving our vision
Building a business and management foundation that is resilient during change

5. Financial Target
The nature of the Groupʼs businesses is undergoing major evolution as the business environment changes, for example due
to changes in social structure such as the shrinking and aging of Japanʼs population and the emergence of more advanced anddiverse customer needs as well as social issues.
We will strive to improve productivity, make effective use of human resources, and further increase the level of value we
provide by fundamentally reviewing and rebuilding business processes that have become increasingly complex in order toaccommodate these changes while focusing on businesses with higher added value (which will help us create and provide
value).

We will work to hire and train the diverse workforce that will be essential as we develop the Groupʼs businesses going
forward. At the same time, we will strive to create an environment that keeps individual employees engaged in their work andable to make full use of their skills and abilities (by cultivating a healthy workplace culture, reforming individual awareness,and facilitating fulﬁlling workstyles).

Target: 3-year cumulative consolidated ordinary proﬁt of JPY 33 billion
500

The 12th Medium-Term Management Plan, which
represents the ﬁnal stage of our current mediumand long-term vision, establishes the above targets
to guide our achievement of the visionʼs goal of
consistently earning ordinary proﬁt of JPY 10 billion
while simultaneously directing the company toutilize all its resources to build a robust businessand management foundation in response to futurechanges in the business environment.
Order value (left scale)
Sales (left scale)
Ordinary proﬁt (right scale)

The Group considers compliance to be a key foundation of its corporate activities, and weʼve worked to spread awarenessand foster adoption of good practices by including compliance as a policy in the last several Medium-Term Management Plans.
Awareness of the importance of compliance has steadily taken root among our employees thanks to ongoingawareness-raising and educational activities, and we will continue to pursue such initiatives to ensure that the trust weʼve built
up in our quality and integrity remains unshakable. In addition, we will work to further spread and improve complianceawareness throughout the Group by effectively implementing and utilizing mechanisms such as our internal reporting system
and CSR awareness survey.

11

TAKUMA 2018 ANNUAL REPORT(Billion JPY)

50

400

40

300

30

200

20

100

10

0

10th Plan

11th Plan

0

12th Plan(Billion JPY)
10th Medium-Term Management Plan results

11th Medium-Term Management Plan results

12th Medium-Term
Management Plan

2012

2013

2014

Total

2015

2016

2017

Total

FY2018 to FY2020

Order value

109.2

148.0

113.7

371.0

99.9

191.0

177.1

468.0

Sales

96.3

96.3

103.8

296.5

113.0

116.3

118.1

347.5

JPY 400 billion (approx.)(3-year cumulative total;reference value)

Ordinary proﬁt

7.1

9.4

9.1

25.7

9.6

11.6

10.6

31.9

Target: JPY 33 billion(3-year cumulative total)

TAKUMA 2018 ANNUAL REPORT

12

Takuma Group 12th Medium-Term Management Plan ‒ An Overview (FY 2018 to 2020)

6. Core Business Units and Emphasis of Future Activities
Municipal Solid Waste Treatment Plant Business
As facilities age, there is ongoing robust demand for renewal
and service life elongation.
● Volume is growing for DBO projects as well as O&M services
for existing facilities.
●

Strengthen the proﬁtability of our plant operation business.
● Further strengthen initiatives to prolong the service life of facilities.
●

Waste Treatment Plant Business (Overseas)

Waste-to-Energy Plant(DBO Project)
Treatment capacity: 174 tons per day
Generating capacity: 3,800 kW

Waste-to-Energy Plant(Primary equipment improvement project)
Treatment capacity: 810 tons per day
Generating capacity: 17,200 kW●●●

There is a growing need for proper waste management and energy
utilization against a backdrop of growing urbanization, increase ofwaste volume, and diversiﬁcation of waste characteristics.

Build structures to facilitate collaboration with partner companies.
Build schemes for entering new markets.

Waste-to-Energy Plant (UK)
Treatment capacity: 1,370 tons per day
Generating capacity: 36,650 kW

Waste-to-Energy Plant (China)
Treatment capacity: 1,600 tons per day
Generating capacity: 30,000 kW

Takuma Group 12th MediumTerm Management Plan

Package Boiler Business

Water Treatment Plant BusinessWe are continuing to see a certain level of demand in Japan,
particularly in terms of renewal demand.
● The need for energy-conserving boilers is increasing overseas,
particularly in developing nations.
●

There is growing demand for sludge incineration plants thatconserve and create energy.
● There is increasing use of PPP/PFI arrangements in thesewer business.
●●●

Strengthen the competitiveness of our sludge-fueled power system.
Scale our waste management expertise horizontally to otherbusinesses.

Sludge-Fueled Power System
Demonstration Plant
Treatment capacity: 35 wet tons per day(with moisture content of about 70%)
Generating output: About 100 kWh/hMoving Bed Upﬂow Continuous
Sand Filtration System (high-speed)
Treatment capacity: 29,500 m3 per day

Boiler Plant Business ( Japan)

Super EQOS EQi Series
Super Vacotin Heater
GTL Series

Maintain and expand our domestic business.
● Expand our overseas business.
●

Perspectives on 12th Medium-Term Management Plan
This section introduces how Takuma's management and the management of major Group companies view their social
responsibilities and how they are working to fulﬁll them as they strive to pursue their respective missions under the 12th
Medium-Term Management Plan, which began in FY2018.

FIT demand remains robust.
The number of plants targeted for maintenance is increasing as
facilities are completed and transferred to customers.
● There is growing demand for plant operational management
and O&M.
●●

Capture new orders for FIT biomass plants.
Strengthen our maintenance structures.
● Scale our waste management expertise horizontally to otherbusinesses.

Wood Chip Biomass Power Plant
Generating capacity: 22,100 kW●●

Wood Chip Biomass Power Plant
Generating capacity: 1,990 kW

Koji Tanaka Executive Manager, Corporate Services Division
The Corporate Services Divisionʼs mission is to help boost proﬁts throughout the Group by providing services to its
various departments, for example so they can more effectively utilize information and other management resources andpractice legal risk management. To that end, it is called upon to provide higher-quality services to help achieve steady
growth and to enhance the Groupʼs capabilities.
Due to the extensive scope of these operations, the Divisionʼs activities encompass a variety of CSR issues, including withregard to strengthening relationships with shareholders, BCP, information security, and reducing risk. Particularly importantpriorities under the current Medium-Term Management Plan address human resources, an area that plays an essential role as
the basis of all business activities, including hiring practices and training programs as well as the development of anenvironment that will allow each and every employee to do his or her job in an energetic and engaged manner and to takeadvantage of his or her skills and abilities, while simultaneously facilitating improvements in productivity.

Boiler Plant Business (Overseas)
Tsuyohito Nishiyama Executive Manager, Corporate Planning & Administration Division
Demand for biomass power plants in Southeast Asia remains robust.
● Our ﬂagship bagasse-ﬁred boiler plants continue to experience
intense competition.
●

●
●

13

Capture orders continually by creating competitive advantages.
Strengthen the ability of our local subsidiary (SIAM TAKUMA) tocarry out its business operations.

TAKUMA 2018 ANNUAL REPORT

Bagasse-Fired Boiler Plant(Thailand)

Bagasse-Fired Boiler Plant (Thailand)

The current Medium-Term Management Plan sets forth ﬁve policies to address the theme of strengthening corporate
capability to facilitate steady growth.
Strengthening the Groupʼs corporate capabilities encompasses the meaning of transforming Takuma so that it will beuniversally recognized as a good company, and the only way to do that is not only to pursue performance metrics, forexample by increasing sales and proﬁts, but also to participate actively in the process of addressing social needs.
We are seeing a shift in how the world determines corporate value in the form of a move from tangible assets tointangible assets, and one key area of risk that the world recognizes now is the environment.
The Group is keenly attuned to these social trends, and as we pursue a range of initiatives to make Takuma a better
company, we will be fulﬁlling our responsibilities by working to resolve social issues in the areas of renewable energy
utilization and environmental protection.

TAKUMA 2018 ANNUAL REPORT

14

Takuma Group 12th Medium-Term Management Plan ‒ An Overview (FY 2018 to 2020)

Perspectives on 12th Medium-Term Management Plan
Corporate Marketing GroupEngineering Group

Kengo Numata Executive Manager, Corporate Marketing Group & Business Administration Division & Environmental Plant Division

Hiroaki Nanjo Executive Manager, Engineering Group & Management CenterWe are seeking to increase Takumaʼs corporate value and to achieve sustained growth by formulating and executing abusiness strategy that will earn us the trust of a broad range of customers and other stakeholders.
For example, our ability to consistently supply high-quality solutions throughout the plant life cycle while responding
precisely to changes in the market environment and evolving customer needs yields mutual proﬁts for both customers
and the Group over the long term.
At the same time, maintaining and expanding our market position in such EPC markets as waste treatment plants andbiomass power plants will allow us to make a signiﬁcant contribution to the resolution of a variety of current social
issues.
By formulating and executing these business strategies, I believe we will be able to build a business platform that is
resistant to change so that we can continue to develop as a company that plays an essential role in society.

The Paris Agreement, which seeks to eliminate the worldʼs dependence on fossil fuels, entered into force in 2016, andTakuma, too, has an obligation to pursue corporate activities to help achieve its goals. The Environmental Plant Division
will help bring about a recycling-based society through the current Medium-Term Management Plan. We will reduce
environmental impacts by working to eliminate and reduce greenhouse gases, speciﬁcally through advanced thermal
recovery with high-efﬁciency power generation in waste treatment plant construction, through the reduction of CO2
emissions in core facility improvement projects at existing plants, and through power generation using incineration heatat sewage sludge incineration plants. In addition, we will coexist alongside local residents through our DBO business byutilizing waste treatment facilities as places of environmental awareness-raising and as disaster prevention facilities intimes of large-scale disasters, and by performing daily maintenance in an appropriate manner. Finally, we in theEnvironmental Plant Division look forward to fulﬁlling our social responsibility to help realize a recycling-based society
by providing high-quality products and services.

Mitsuaki Adachi Executive Manager, Energy Plant Division
Takumaʼs energy business has utilized the FIT scheme to deliver numerous biomass power plants, and we continue todo so today. Under the current Medium-Term Management Plan, we will prioritize a permanent approach to plant
operation, including by continuing to accept orders and by enhancing maintenance business structures for operational
plants, so that these facilities can serve as the foundation for clean energy.
We see our role with regard to a sustainable society as contributing to society by resolving issues through ourbusinesses, for example by contributing to environmental protection by reducing CO2 emissions through the use ofrenewable energy in response to speciﬁc measures by governmental agencies to achieve the Sustainable Development
Goals (SDGs), including by promoting use of renewable energy, addressing climate change, and building a
recycling-based society.

Takashi Manabe Executive Manager, International Operations Division
The International Operations Division has identiﬁed a number of priorities as it works to implement the current
Medium-Term Management Plan.
First, reﬂecting our belief that addressing compliance, safety, and environmental issues is a given, we are working todevelop our overseas businesses in a way that accords with local practices while understanding and respecting thecommercial customs, religion, culture, and values in the countries where we do business.
Next, we will help address environmental and energy issues and realize a recycling-based society by working to create
renewable energy and to improve the local waste treatment environment through the supply of biomass boilers such as
bagasse-ﬁred boilers and waste incineration plants that incorporate exceptional technologies.
Finally, we will strengthen our solutions-based sales initiatives, which are conceived to offer high added value basedon customer needs.
We will fulﬁll our social responsibility by contributing to the sustained development of other countries through these
initiatives.

15

TAKUMA 2018 ANNUAL REPORT

Akira Taguchi Executive Manager, Technology Center
The Technology Center is responsible for a swath of operations ranging from the development of Takumaʼs coretechnology products to design while surveying and monitoring the latest social needs.
In recent years, we have seen a trend toward proper processing of waste and hazardous materials in the environmental
sector, along with a growing focus on reducing waste generation, reusing waste, and reducing waste volume. In theenergy sector, the trend is toward making use of fuels and energy sources that have gone unutilized in the past, and on
creating new types of energy. Against this backdrop, Takuma will continue to consistently ship environmentally friendly
products while making use of, and further developing, its stable of core technologies in areas such as combustion,
incineration, boilers, and exhaust gas treatment.

Takuma Group 12th MediumTerm Management Plan

Hidetoshi Tomita Deputy Executive Manager, Environmental Plant Division

The Management Center is responsible for cost management and overall process management. Even as we continue to
see robust demand for products such as biomass boilers and municipal solid waste treatment plants, the businessenvironment is changing along with the structure of society. We will work to achieve a competitive cost structure by
optimizing costs to facilitate sustained growth. To that end, we will monitor pricing trends as they relate to supplies,
equipment, construction, and other costs and apply that information precisely to the processes we use to establish
quotation costs and manage working budgets. We will also work to limit risk by focusing on process management andcost progress management, including for civil engineering construction work.
In our overseas businesses, we will work to differentiate our offerings from those of our competitors by increasing thecompetitiveness of our boiler plants. With regard to waste treatment plants, we will study structures for facilitating
cooperation with partner companies and work to develop schemes for entering new markets.

Hideki Takeguchi Executive Manager, Project Center
The equipment and plants that Takuma provides effectively utilize waste products and byproducts from human life andproduction activities, including municipal waste, industrial waste, sewage sludge, and biomass, to create the utilities̶
electricity and heat̶that people need to live and that economies need to grow. In this way, we are able to givesomething back to society.
Today, as we ﬁnd ourselves faced with the need to further increase use of renewable energy as one way to protect the
Earthʼs environment, the Project Center is working to help build a society where future generations can enjoy rich andfulﬁlling lifestyles, including by supplying plants designed to further the realization of a recycling-based society and to
reduce CO2 emissions, for example by generating power from municipal solid waste, sewage sludge, and biomass, and bycreating and developing the technologies and processes that will help expand the markets for such plants.

Norito Uchiyama Executive Manager, Engineering Center
The Engineering Center will promote the streamlining of speciﬁcations and design work in a way that takes life cycle
cost into account and provides technologies with value in terms of equipment and control by analyzing plant data andutilizing information and communications technology (ICT). We will also realize stable operation and management overthe long term by promoting energy savings at all types of facilities and providing solutions that deliver exceptional
economic performance at a high level of efﬁciency.
We will also pursue open innovation in an effort to fulﬁll our social responsibility as a corporation by adopting a global
perspective and working in partnership with Group companies, afﬁliates, and other organizations to accommodatechanges in the business environment.
To help realize a low-carbon society, we will strive to bring innovation to processes and products and to develop
products that satisfy all stakeholders.

Ryoji Tani Executive Manager, Construction Center
The current Medium-Term Management Plan calls on us to reliably fulﬁll a large order backlog and to accommodate arobust ﬂow of new projects, signaling an environment in which we are fortunate to be able to do business. At the sametime, that environment raises concerns about waning job enthusiasm due to a heavy workload, the unfortunate
occurrence of occupational accidents, and a tendency for human resources training measures to take a back seat to otherpriorities since most projects involve long lead times. Based on these facts, I see our most signiﬁcant issue as the need toensure employee health and safety, to facilitate enthusiasm, and to build solid operational structures that will position us
to take the next step once the current plan is complete. As we work to overcome these challenges, veterans andnewcomers alike will do well to remember and draw encouragement from one of the motivations that drove them to join
Takuma in the ﬁrst place: love for a job involving protecting the environment and utilizing energy effectively.

TAKUMA 2018 ANNUAL REPORT

16

Takuma Group 12th Medium-Term Management Plan ‒ An Overview (FY 2018 to 2020)

Perspectives on 12th Medium-Term Management Plan
Group Companies
Masahiko Izumi, President and Representative Director

Audit & Supervisory Committee Members
Yasushi Enomoto Audit & Supervisory Committee Member (Director)
Having identiﬁed maintaining its role of being indispensable presence in society as a leading company in the ﬁeld of
renewable energy utilization and environmental protection as its corporate vision, Takuma has contributed toenvironmental protection by realizing a diverse range of customer needs and by improving technology through researchand development. We also work to protect the environment via a range of activities that includes limiting energy
consumption and waste emissions and community service programs.
In addition, we are achieving steady results through ongoing initiatives to promote compliance management.
Going forward, we believe that cultivating increased awareness of global needs as our overseas businesses develop, forexample in the form of ESG investment and the UNʼs Sustainable Development Goals (SDGs), and bringing thosepriorities to bear in our businesses will help us contribute to society while increasing our corporate value.

Kazunori Tsuji, President
With 68 ofﬁces, worksites, and other facilities around Japan, we operate and manage facilities under contract. In recent
years, the number of DBO and O&M facilities that we serve in partnership with Takuma Co., Ltd., is increasing, and themanner in which we operate those facilities is changing from the past.
However, our mission of providing safety and stability to customers at each facility we manage and of supervising theoperations with which we are entrusted in a way that inspires customersʼ peace of mind has not changed. To fulﬁll thatmission, all of our employees must come together to harness the full potential of each facility without accident or disasterso that waste products can be treated properly and ever-more-demanding requirements satisﬁed. We will do everything
we can going forward under the current Medium-Term Management Plan to fulﬁll our companyʼs social responsibility.

Hiromichi Satake Audit & Supervisory Committee Member (Outside Director)

Takuma Group 12th MediumTerm Management Plan

Reﬂecting our philosophy of “Service to the nation through boiler manufacturing,” we strive to contribute to society
through corporate activities in the package boiler segment of the market, and we consider our corporate activities
themselves to be CSR activities.
The current Medium-Term Management Plan sets forth two basic goals in order to increase corporate value: increasing
the size of the company and developing a more advanced level of quality. To achieve these goals, we will develop andsupply safe, high-quality products and services; increase customer and business partner satisfaction; and improve
employee satisfaction in the process while boosting organizational trust. If our products and services enter into evenmore widespread use in society, our contribution in the environmental and energy sectors will grow, helping to increase
our corporate value.
Going forward, we will fulﬁll our CSR by striving to serve as a high-value company for all stakeholders throughcorporate activities such as these.

This page introduces the views of members of our Audit & Supervisory Committee on the policies, priority measures, andother provisions of the current Medium-Term Management Plan, including with regard to initiatives to increase the Groupʼs
corporate value and their expectations and wishes for the future.

The Takuma Group built structures to deliver results on a stable basis through the previous 11th Medium-Term
Management Plan. Under the 12th Medium-Term Management Plan, I expect to see the company strengthen risk
management and develop into an organization that is even more resistant to changes in the business environment.
We are seeing results from our efforts to contribute to society, and it is desirable that we work to ensure those efforts
penetrate every aspect of the Groupʼs operations so that they do not lose their viability. Encouraging all employees tocontinuously think about what they should do and how they should act will allow us to increase our corporate value. Asan outside director, I will work from an independent, fair perspective to strengthen the Groupʼs management andsupervisory functions and to establish CSR management with the goal of precisely understanding stakeholder
expectations and increasing stakeholder satisfaction.

Syusuke Suzuki, President
Our philosophy revolves around helping protect the regional environment by utilizing air-conditioning and sanitaryequipment design and installation technologies.
It is widely recognized that overwork is an issue in the construction industry, of which we are a part. We recognize thisissue as a life-or-death challenge for our company, and we are working to create an environment in which employees canbalance their jobs with their private lives, for example by actively participating in the Work-Life Balance campaign led by
the Tokyo Metropolitan Government. We also continue to run the company in a fair and just manner, with an absolute
focus on compliance. Going forward, we will strive to increase CSR awareness, for example by offering internal classes
designed to foster employeesʼ understanding of Japanʼs legal system.

Osamu Iwahashi Audit & Supervisory Committee Member (Outside Director)
I have served as an auditor and director (as a member of the Audit & Supervisory Committee) at Takuma for six years,
during which time I have drawn on experience I gained during my involvement with law enforcement policy for many
years. I have pursued auditing and other operations primarily from a corporate governance and compliance perspective,
and I believe that an emphasis on CSR is an essential part of corporate management.
Takumaʼs Energy from Waste plants and biomass-fueled power plants make up its core businesses, and the company isfortunate in that these businesses themselves help it fulﬁll its corporate social responsibility. In addition, the company
has actively pursued a broad array of CSR activities, including through solar power installations, research into how waste
gas and heat can be used in crop cultivation, and participation in, and contribution to, regional activities.
Going forward, Iʼm conﬁdent that Takuma will be able to effectively pursue activities that achieve the aims of CSR in its
primary businesses and associated operations.

Yoshiki Kita, PRESIDENT
For half a century, we have created highly clean environments for production processes in the semiconductor andelectronic precision fabrication industries, and we have made broad contributions to society by making possible
improvements in rational production that have helped maintain rich and safe lifestyles while solving environmental andenergy issues by supplying clean equipment and systems. At the same time, we believe that efforts to maintain andpromote compliance provide a crucial basis for the operation of our businesses, and going forward, we will strive on an
ongoing basis to enhance compliance by assessing our operations from an ESG standpoint.
In addition, we will work to help achieve the SDGs through cooperation, contribution, and partnership involving
customers and other stakeholders, both in Japan and overseas.

17

TAKUMA 2018 ANNUAL REPORT

Minoru Murata Audit & Supervisory Committee Member (Outside Director)
We contribute to society by creating value through maintenance of social infrastructure that underpins human
lifestyles and of industrial equipment. The products and services that are the ultimate result of our corporate activities
live up to the standards set by societyʼs expectations, and we have built a track record of success through our efforts toincrease social satisfaction.
At the same time, an increasingly diverse society demands a more sophisticated type of value, and attention now
encompasses not only deliverables, but also the processes that create them (i.e., production processes). To take CSR tothe next level, it will be necessary to increase the satisfaction of the people that participate in the processes that give rise
to deliverables. It will be important to reduce environmental impacts in manufacturing and construction processes, andto improve worker safety and the work environment. Going forward, I believe that taking into consideration stakeholders
such as employees and local residents will help us pursue an even higher level of CSR.

TAKUMA 2018 ANNUAL REPORT

18

Corporate Information

Company Outline

The History of Takuma

Name:
Head ofﬁce location:

TAKUMA CO., LTD.
2-2-33 Kinrakuji-cho, Amagasaki, Hyogo 660-0806, Japan
TEL +81-6-6483-2609 FAX +81-6-6483-2751 (operator)
Representative Director: Takaaki Kato, President and CEO
Established:
June 10, 1938
Capital:JPY 13,367,457,968 (as of March 31, 2018)
Main business areas:
The design, construction and superintendence of a wide variety of boilers, plant machinery,pollution prevention plants, environmental equipment plants, and heating and cooling equipment
and feed-water / drainage sanitation equipment and facilities
The design, construction and superintendence of civil, architecture and other works
Number of employees (non-consolidated): 837 (as of March 31, 2018)
Number of employees (consolidated):
3,609 (as of March 31, 2018)

Permits and registrations
●

1912

1920
Tsunekichi Takuma

1930
Takuma Boiler ManufacturingCo., Ltd. founded1938 Company Motto instituted:“Service to the nation throughboiler manufacturing”

The venerable Tsunekichi Takuma
commended as one of the ten great
1930
inventors of Japan during the Meiji andTaisho periods (1868‒1926)

Amagasaki Factory

1940

Head Ofﬁce, branch ofﬁces and other business ofﬁces
1949

Company listed on the Osaka andTokyo stock exchanges
Harima Factory under construction

1949

1950

ISO 14001

JQA-1952
ISO 9001
certiﬁcation

JQA-EM0313
ISO 14001
certiﬁcation

Head Oﬃce, Osaka Oﬃce,
Tokyo Branch, Chubu Branch,
Kyushu Branch, Hokkaido Branchand Harima Factory

Harima Factory

Business expanded into the environmental
1958 facility sectors, including waste incineration
and water treatment plants

1960
Operation begins at Kyoto Factory
1962 (Current: Nippon Thermoener
Co., Ltd. Kyoto Factory)

Japanʼs ﬁrst waste incineration plant1963 delivered
Sewerage treatment facility delivered
Japanʼs ﬁrst waste incineration plant1970
1972 Company renamed Takuma Co., Ltd.

Bulk production begins on
1975 “Vacotin Heater”, the worldʼs ﬁrst
vacuum-type hot water heater
Vacotin Heater

1980
Internal Audit Dept.
New Company Motto instituted:
1992“Value Technology, Value People, Value the Earth”

Corporate Services Div.
Corp. Planning & Administration Div.

President

Audit & Supervisory Committee
Audit & Supervisory Committeeʼs Ofﬁce

The ﬁrst overseas delivery of a waste treatment facility
completed (U.S.A.)

1992

The ﬁrst delivery of a waste energy treatment facility
completed in Taiwan(Nei-Hu, Taipei City)

1998

Japanʼs largest Energy from
Waste plant delivered(Tokyo Shinkoto Waste Treatment
Plant capacity: 1,800 tons per day)1995 Amagasaki Head Ofﬁce Building completed

Corporate Marketing Group

1997 ISO9001 certiﬁcation obtained

Business Administration Div.
Environmental Plant Div.

1986

1990

Compliance & CSR Promotion Div.

Board of Directors

Head Ofﬁce

1999 ISO14001 certiﬁcation obtained for Harima Factory

Energy Plant Div.

Engineering GroupManagement Center

The ﬁrst delivery of a waste energy
2005 treatment facility completed
in China(Tianjin City)

2010

2010

Technology Center
Project Center

2013

Engineering Center

TAKUMA 2018 ANNUAL REPORT

Installation and operation of temporary
incinerators to process disaster waste
2013 from the Great East Japan Earthquake
Takuma Solar Power Plant

Construction Center
Harima Factory

Energy from Waste plantdelivered in Europe (U.K.)

2012

Operation of the Takuma Solar Power
Plant began (Harima Factory)

ご支給ください。
Energy from Waste plant

2000

Takuma Hanyokikai Co., Ltd., a subsidiary
involved in the manufacture and sale of small
2005
boilers, and Ebara Boiler Co., Ltd., merged
and renamed Nippon Thermoener Co., Ltd.

International Operations Div.

Harima Factory

Corporate Information

ISO 9001

Corporate structure (as of June 27, 2018)

Committee of Executive Ofﬁcers

Bagasse ﬁred boiler, the ﬁrst product ofits kind in the industry, exported

1953 Head Ofﬁce moved to Osakaʼs Kita-ku District

Harima Factory
ISO 9001 quality management system certiﬁcation
ISO 14001 environmental management systems certiﬁcation
Manufacture of thermal equipment for power generation (Ministry of Economy, Trade and Industry)
Permission to manufacture boilers and pressure vessels, permission to manufacture cranes(Ministry of Health, Labour and Welfare)
Manufacture of speciﬁc high-pressure gas facilities (Ministry of Economy, Trade and Industry)
Manufacture of refrigerators (Governor of Hyogo Prefecture)

19

The ﬁrst “Takuma boiler” introduced by our
founder, the venerable Tsunekichi Takuma

1942 Operation begins at Harima Factory

Construction license (Minister of Land, Infrastructure, Transport and Tourism license,
Special 27-6129, Special 29-6129)
Construction consultant registration (Minister of Land, Infrastructure, Transport andTourism registration, Construction 26-10202)
First-class architect ofﬁce registration (01A02903)
ISO 9001 quality management system certiﬁcation
●

1912

2017

Lakeside EfW Plant

Order received for a 50,000 kW biomass
power plant (FIT-approved facility)
Biomass Power Plant

TAKUMA 2018 ANNUAL REPORT

20

Corporate Information

The Takuma Group Network■ Takumaʼs business ofﬁces(as of June 27, 2018)

Takumaʼs business ofﬁces

Overseas group companies

Group companies in Japan

1 Head Ofﬁce

6 Chubu Branch

2 Osaka Ofﬁce

7 Kyushu Branch

2-2-33 Kinrakuji-cho, Amagasaki, Hyogo
660-0806, Japan
TEL +81-6-6483-2609 FAX +81-6-6483-2751
Hanahara 6th Bldg., 6-8-31 Nishinakajima,
Yodogawa-ku, Osaka 532-0011, Japan
TEL +81-6-4805-7600 FAX +81-6-4805-7601

3 Tokyo Branch

Nomura Higashi-nihonbashi Bldg., 1-1-7
Higashinihonbashi, Chuo-ku, Tokyo 103-0004,
Japan
TEL +81-3-5822-7800 FAX +81-3-5822-7888

4 Hokkaido Branch

Daigo Bldg., 5-11, Ohdori Nishi, Chuo-ku, Sapporo,
Hokkaido 060-0042, Japan
TEL +81-11-221-4106 FAX +81-11-241-0523

10 1

5 Tohoku Branch

NMF Sendai Aoba-dori Bldg., 2-1-2 Ichibancho,
Aoba-ku, Sendai, Miyagi 980-0811, Japan
TEL +81-22-222-3042 FAX +81-22-225-6759

1 Nippon Thermoener Co., Ltd.

Manufacture and sale of a wide range of boilers andrelated equipment
Shirokanedai Bldg., 3-2-10 Shirokanedai, Minato-ku,
Tokyo 108-0071, Japan
TEL +81-3-6408-8251 FAX +81-3-6408-8278
http://www.n-thermo.co.jp

2 Takuma Technos Co., Ltd.

3 Hokkaido Sanitary Maintenance Co., Ltd.

Operation and maintenance of sewage treatment facilities
Daigo Bldg., 5-11, Ohdori Nishi, Chuo-ku, Sapporo,
Hokkaido 060-0042, Japan
TEL +81-11-221-8398 FAX +81-11-221-8542

25

2
9

8
14

13

4 3 4

4 Takuma Technos Hokkaido Co., Ltd.

5

1

26 16

Design, construction and superintendence of
air-conditioning equipment, feed-water/drainage
sanitation equipment, and electrical equipment
Nomura Higashi-nihonbashi Bldg., 1-1-7
Higashinihonbashi, Chuo-ku, Tokyo 103-0004, Japan
TEL +81-3-5825-0921 FAX +81-3-5825-1631
http://www.sunplant.co.jp

28

6 Takuma Engineering Co., Ltd.

Design of environmental equipment plants and energy plants
Takuma Bldg., 2-2-33 Kinrakuji-cho, Amagasaki,
Hyogo 660-0806, Japan
TEL +81-6-6487-4820 FAX +81-6-6487-4829
http://www.takuma-eng.co.jp

20

5
29

7 Takuma System Control Co., Ltd.

Design of electrical instrumentation equipment, including
environmental equipment plants and energy plants
Takuma Bldg., 2-2-33 Kinrakuji-cho, Amagasaki,
Hyogo 660-0806, Japan
TEL +81-6-6487-4830 FAX +81-6-6487-4839
http://www.takuma-sc.co.jp

76Operation and maintenance of waste treatment facilities
Daigo Bldg., 5-11, Ohdori Nishi, Chuo-ku, Sapporo,
Hokkaido 060-0042, Japan
TEL +81-11-221-4128 FAX +81-11-221-1030

5 Sun Plant Co., Ltd.

15

19

3

9 10

22

12

27

1 6 7 11 18

8 Dan-Takuma Technologies Inc.

2

23

24

Manufacture and sale of clean equipment, cleaning
equipment, chemical ﬁlters, clean rooms, drying
equipment and thermal chambers
3-12-16 Iwadokita, Komae, Tokyo 201-0004, Japan
TEL +81-3-3488-1111 FAX +81-3-3488-1118
http://www.dan-net.com

9 Kyoritsu Setsubi Co., Ltd.

17

21

TAKUMA 2018 ANNUAL REPORT

Yakuin Business Garden, 1-1-1 Yakuin, Chuo-ku,
Fukuoka 810-0022, Japan
TEL +81-92-717-2828 FAX +81-92-717-2830

8 Okinawa BranchCommons Bldg., 1-11-12 Mashiki, Ginowan,
Okinawa 901-2224, Japan
TEL +81-98-898-6650 FAX +81-98-898-6657

9 Harima Factory

1 Taiden Environtech Co., Ltd.

Maintenance of waste treatment and other facilities
7F., No. 16, Lane 35, Jihu Rd., Neihu District, Taipei
114-92, Taiwan
TEL +886-2-2659-7137 FAX +886-2-2656-0584

2 Siam Takuma Co., Ltd.

Sale of energy and environment-related plants,
sales of parts for the same plants and after-sales
service
77/53 Sinn Sathorn Tower, 15th Floor,
Krungdhonburi Road, Klongtonsai, Klongsarn,
Bangkok 10600, Thailand
TEL +66-2438-5616 FAX +66-2440-0114

1-2-1 Shinhama, Arai-cho, Takasago, Hyogo
676-8540, Japan
TEL +81-79-443-6511 FAX +81-79-443-6599

10 Taipei Branch

7F., No.16, Lane 35, Jihu Rd., Neihu District, Taipei
114-92, Taiwan
TEL +886-2-8752-3838 FAX +886-2-2656-0584

Design, construction and superintendence of waste
treatment facilities, mechanical equipment of sewage
treatment facilities, and boiler plants for general industries
5-1-38 Yurigahara, Kita-ku, Sapporo, Hokkaido
002-8081, Japan
TEL +81-11-770-2811 FAX +81-11-770-2822

10 Kankyo Sol-Tech Co., Ltd.

Analyzing and measurement for environment-related issues,
including water quality, exhaust gas and soil pollution
1-2-1 Shinhama, Arai-cho, Takasago, Hyogo 676-0008, Japan
TEL +81-79-443-6508 FAX +81-79-443-6510
http://www.k-soltech.co.jp

11 Takuma Plant Service Co., Ltd.

20 Hokutan High Trust Co., Ltd.

Operation and maintenance management of amunicipal solid waste treatment facilities
943 Booka, Takeno-machi, Toyooka, Hyogo
669-6331, Japan
TEL +81-796-21-9111 FAX +81-796-21-9112
http://hokutan-ht.com

Maintenance of a wide variety of boilers andenvironmental facilities
2-2-27 Kinrakuji-cho, Amagasaki, Hyogo 660-0806, Japan
TEL +81-6-6488-8434 FAX +81-6-6488-0300
http://www.takuma-ps.com

21 Suwako High Trust Co., Ltd.

Municipal solid waste and industrial waste
treatment services
1 Takayanishitani, Sonobe-cho, Nantan, Kyoto 622-0032, Japan
TEL +81-771-68-3636 FAX +81-771-68-3639
http://www.c-rp.co.jp

22 Imabari High Trust Co., Ltd.

Facility upgrading, operation and maintenance ofmunicipal solid waste ﬁnal disposal sites
374-12 Higashino, Nagaizumi-cho, Suntou-gun,Shizuoka 411-0931, Japan
TEL +81-55-989-2268 FAX +81-55-987-9935
http://www.nagaizumi-ht.jp

23 Energy Mate Co., Ltd.

12 Campo Recycle Plaza Co., Ltd.

13 Nagaizumi High Trust Co., Ltd.

14 Fujisawa High Trust Co., Ltd.

Operation and maintenance management ofmunicipal solid waste treatment facilities
2168 Ishikawa, Fujisawa, Kanagawa 252-0815, Japan
TEL +81-466-45-5411 FAX +81-466-45-5454

15 Iwate-Kenpoku Clean Co., Ltd.

Municipal solid and industrial waste treatment services
48-34, Dai 20 Chiwari, Esashika, Kunohe-mura,
Kunohe-gun, Iwate 028-6505, Japan
TEL +81-195-42-4085 FAX +81-195-42-4550
http://www.iwate2cln.co.jp

16 Hitachinaka-Tokai High Trust Co., Ltd.

Operation and maintenance management of amunicipal solid waste treatment facilities
4769-14 Uchiyama, Okaya, Nagano 394-0055, Japan
TEL +81-266-78-1590 FAX +81-266-78-1591
http://www.suwako-ht.jp
Operation and maintenance management of amunicipal solid waste treatment facilities
394 Machiyakou, Imabari, Ehime 799-1514, Japan
TEL +81-898-35-5181 FAX +81-898-35-5182
http://bariclean.jp
Sale of cogeneration systems and systems for thegeneration equipment of the same and total service
for onsite energy systems for consumer use
Midosuji Daiwa Bldg., 3-6-8 Kyutaromachi,
Chuo-ku, Osaka 541-0056, Japan
TEL +81-6-6241-6200 FAX +81-6-6241-6210
http://www.energy-mate.co.jp

24 Kashihara High Trust Co., Ltd.

Operation and maintenance management of municipal
solid waste treatment facilities
1038-2 Kawanishi-cho, Kashihara, Nara 634-0826, Japan
TEL +81-744-26-6227 FAX +81-744-26-6228

25 Tochigi High Trust Co., Ltd.

Industrial waste treatment services
18-3 Kinugaoka, Moka, Tochigi 321-4367, Japan
TEL +81-285-83-3966 FAX +81-285-83-6500
http://www.t-hitrust.co.jp

Operation and maintenance management ofmunicipal solid waste treatment facilities
103-2 Shinkocho, Hitachinaka, Ibaraki 312-0005, Japan
TEL +81-29-265-5371 FAX +81-29-265-5372
http://hitachinaka-tokai-ht.com

26 Katsuta Co., Ltd.

Operation and maintenance management ofmunicipal solid waste treatment facilities
1-5 Kokatsu, Tachibana-cho, Anan, Tokushima779-1631, Japan
TEL +81-884-49-5823 FAX +81-884-49-5824
http://www.ecopark-anan.com

27 R.B.N. Co., Ltd.

17 Anan High Trust Co., Ltd.

18 Takuma Energy Co., Ltd.

Power retail business
Takuma Bldg., 2-2-33 Kinrakuji-cho, Amagasaki,
Hyogo 660-0806, Japan
TEL +81-6-6487-4870 FAX +81-6-6483-2794

19 Kurume High Trust Co., Ltd.

Operation and maintenance management of amunicipal solid waste treatment facilities
2225 Hacchojima, Miyanojin-machi, Kurume,
Fukuoka 839-0805, Japan
TEL +81-942-27-7515 FAX +81-942-27-7491
http://www.kurume-ht.com

Corporate Information

Maintenance, management and operation of waste treatment
facilities, water treatment facilities and other facilities, as wellas the design, installation and management of various typesof boilers, environmental equipment and other equipment
10th Chuo Bldg., 1-5-6 Nihonbashi-honcho, Chuo-ku, Tokyo
103-0023, Japan
TEL +81-3-3231-2911 FAX +81-3-3231-2917
http://www.takumatechnos.co.jp

21

Daitokai Bldg., 3-22-8, Meieki, Nakamura-ku,
Nagoya, Aichi 450-0002, Japan
TEL +81-52-571-5211 FAX +81-52-581-3005■ Group companies in Japan2

8■ Overseas group companies

Industrial waste and municipal solid waste
treatment services
1968-2 Koya, Hitachinaka, Ibaraki 312-0002, Japan
TEL +81-29-270-3711 FAX +81-29-270-3712
http://www.eco-katsuta.com
Municipal solid waste, including waste home
appliances and ofﬁce automation equipment, andindustrial waste treatment services
3059-20 Nakajima, Shikama-ku, Himeji, Hyogo
672-8035, Japan
TEL +81-79-243-1200 FAX +81-79-243-1202
http://rbn.jp

28 Ichihara New Energy Co., Ltd.

Industrial and municipal solid waste treatment services
733 Mandano, Ichihara, Chiba 290-0549, Japan
TEL +81-436-50-8300 FAX +81-436-50-8400
http://www.ichihara-new.com

29 Ecos Yonezawa Co., Ltd.

Final disposal of industrial waste
7028-1 Yanazawa, Yonezawa, Yamagata 992-0077, Japan
TEL +81-238-39-4050 FAX +81-238-39-4051
http://www.ecos-y.co.jp

TAKUMA 2018 ANNUAL REPORT

22

Introduction to Takumaʼs Businesses

1. Municipal Solid Waste Treatment Plant Business(Related SDGs)

Completion and acceptanceSeeing municipal solid waste treatment plants through to completion

Order receipt

32

Bidding

Planning and cost estimation

1
Sales
During the sales stage, we precisely
assess the needs of the local governmentthat is our customer. Working with our
in-house planning team, we develop a
proposal that will satisfy the customer
and work to earn an order.

During the planning and cost estimation
stage, we plan plant systems (including
equipment ﬂow, speciﬁcations, and layout)
to satisfy the customerʼs needs. We thenfocus our technological capabilities on thoseneeds and offer the proposal along with an
optimally priced quotation.

DesignDuring the design stage, we develop adetailed design through a series ofmeetings with the customer based on thebasic plan. Specialists in technologies suchas combustion, exhaust gas treatment, andelectric instrumentation systems work
together to create a speciﬁc solution
for the customer.
ectity
nt Facilemtaeaste Tr
New W
i
r
a
b
a
the Imked onrowoDesign
wh
s
e
e
y
o
l
m emp
ions fro
s
s
e
r
p
●Im

n projperatio
o
d
n
a
nance
mainte4Construction and commissioning

Procurement and manufacturing
Waste treatment plants consist ofmultiple pieces of equipment. During the
procurement and manufacturing stage,
we manufacture this equipment at ourHarima Plant under a rigorous quality
control system while carefully choosing
the optimal manufacturers to satisfy the
projectʼs cost and lead timerequirements.

During the construction and commissioning
stage, we manage the construction process,from civil and construction work to theinstallation and commissioning of plant
equipment. This management process,which addresses safety, quality, construction
process, and cost management, culminatesin the delivery of the completed facility to
the customer.

5

Yasushi Kamei
Operation & Maintenance Services
Department 2
Environmental Plant Division

Civil & Architectural Engineering Department
Construction Center

As a salesperson, I visited the site numerous times toensure that the customer would choose to entrust the
project to Takuma. The process leading up to ourreceipt of the order was a truly challenging one.
This effort had numerous components, including
precisely assessing the customerʼs needs; proposing a
project that would satisfy those needs; building
relationships of trust with the customer, local residents,and others; coordinating and negotiating with in-houseteams and outside entities; negotiating with othercompanies; and dealing with various problems as theyarose. Our hard work was rewarded and turned into
immeasurable pleasure when the customer made thefollowing response on a customer satisfaction
questionnaire after the project was completed andhanded over: “I believe that weʼve just seen one of thebest facilities of its kind in Japan completed.”

23

TAKUMA 2018 ANNUAL REPORT

Nobuo Akae
Environmental Engineering Department 3
Engineering Center

My involvement with this project began as we sought to work out thesystem that Takuma was going to propose after we received the order forthe project while listening carefully to the customerʼs requests. As an
example, we ended up changing equipment that uses waste heat fromincinerating waste at the facility from a hot water supply system to anelectricity supply system after a series of discussions with involved
agencies and other stakeholders so that the plant could supply theelectricity it generates to nearby facilities.
After the basic design was ﬁnalized, we were able to design a facility thatearned the customerʼs approval by explaining information including thecapacity, operating methods, and maintenance methods for all machineryand participating in numerous meetings.
The process leading up to the transfer of the facility to the customer
brought one challenge after another, and Iʼll strive to take advantage of
those experiences so that we can continue to deliver facilities that makecustomers happy in the future.

Expert staff members manage operations at each construction site ona daily basis to ensure that the facility will be completed as outlined indesign drawings and in a way that satisﬁes the customer.
As many as more than 500 workers worked on this plantʼs site everyday. Daily construction management included safety patrols to ensurethat workers were doing their jobs safely and a variety of inspections toverify that the plant was being built in accordance with drawings.
We also actively promoted exchanges with local residents to ensure
they understood the construction process and to give them peace ofmind, for example by inviting them to tour the site, by cleaning up thearea around the site, and by participating in community events.
I realized that all the hard work was worth it when the customersʼ
representatives expressed their gratitude at the completion ceremony
after construction was ﬁnished.

When operating a plant, we provide optimal
maintenance and management services that utilize
POCSYS, a proprietary system designed to provide
comprehensive support for plant operation,
maintenance, and management so the plant can live
up to its concept of providing safe and stable waste
treatment.
Going forward, we will go beyond plant operation,
maintenance, and management as we work to allow
the facility to bring local residents together and toplay a disaster prevention role by offering tours,
hands-on events, and disaster prevention training
together with local residents. In this way, the facility
will protect the community and earn a place inresidentsʼ hearts while simultaneously raising
environmental awareness, facilitating hands-on
learning, and disseminating information.

TAKUMA 2018 ANNUAL REPORT

Introduction to
Takumaʼs Businesses

Kenji Fujita

Plant Sales Department 2
Environmental Plant Division

vice

les sersa
After-

ssioning

Sales

Takashi Kubo

6

We carry out periodic inspections andmaintenance after the plant has been
handed over to the customer in order toensure it will operate safely over the longterm. In recent years, an increasing
number of customers are turning to
Takuma for turnkey solutions that extend
from the construction of new facilities totheir operation.

nd commi
a
n
o
i
t
c
u
r
t
Cons

3

1

After-sales service

5

Takuma is helping protect the global environment through business activities consisting of an integrated approach that
extends from the design, manufacture, and procurement of equipment and systems to plant construction. This section
introduces the process that goes into bringing a municipal solid waste treatment plant online in one of Takumaʼs core businesses.

624Introduction to Takumaʼs Businesses

1. Municipal Solid Waste Treatment Plant Business
Main Recent Projects
The following are the main plants supplied by Takuma during FY2017.

●New construction■ Imabari City Waste Management Center■ Uwajima Public Association Environment Center●

Project nameRegional New Waste Treatment
Facility Construction Project(tentative)●

Capacity
Incineration facility: 120 tons per day(60 tons per day 2 units)
Recycling facility: 20 tons per 5 hours
Power output: 2,500 kW●

Location
Ehime Prefecture●

Project nameImabari New Waste Treatment Facility
Maintenance and Operation Project●

Capacity
Incineration facility: 174 tons per day(87 tons per day 2 units)
Recycling facility: 41 tons per 5 hours
Power output: 3,800 kW●

Location
Ehime Prefecture■ Hanno City Clean Center●

25

Project name
Hanno Waste Treatment Facility
Construction Project

TAKUMA 2018 ANNUAL REPORT●Capacity
Incineration facility: 80 tons per day(40 tons per day 2 units)
Recycling facility: 11.8 tons per 5 hours
Power output: 830 kW

Introduction to
Takumaʼs Businesses●Primary equipment improvements■ Chiyoda Clean Center●

Location
Saitama Prefecture●

Project nameOkitama Administrative Association
Chiyoda Clean Center Incineration Facility
Primary Equipment Improvement Project●

Capacity
Incineration facility: 255 tons per day(85 tons per day 3 units)
Power output: 2,150 kW●

Location
Yamagata Prefecture

TAKUMA 2018 ANNUAL REPORT

26

Introduction to Takumaʼs Businesses

2. Energy Plant Business(Related SDGs)

Completion and acceptanceSeeing energy plants through to completion

4

Order receipt

1
Sales

During the sales stage, we gather
information about the business being
planned by the customer, conduct a
series of discussions and studies withinternal departments, develop a
proposal that precisely meets thecustomerʼs needs, and work to earn anorder.

ression●Imp
1s fromDesignPlanning and cost estimation
During the planning and costestimation stage, we plan a plantsystem (ﬂow, layout, equipment
speciﬁcations, etc.) that will satisfy
the customerʼs needs and create acompetitive proposal.

nt
orked o
w
o
h
w
ee s
employieshnologce
Tre
ass Pow
he Biom3

During the design stage, specialists
from various ﬁelds, including
combustion technology, exhaust gas
treatment, and electrical control
systems, work together to develop adetailed plan.

Y20
uring F
d
d
e
r
e
v
li
ject (deInc. pro

Construction and commissioning

Procurement and manufacturing

3
2

17)

The procurement and manufacturing
stage consists of manufacturing
equipment and systems whose
speciﬁcations have been ﬁnalized at ourHarima Plant under a rigorous quality
control system and of choosing andprocuring equipment from optimal
venders in Japan and overseas to satisfy
speciﬁcations and quality requirements.

During the construction and commissioning
stage, we work to ensure construction
proceeds smoothly while carefully managing
safety, quality, and construction processes.
Once the plant has been completed, we carryout tests and inspections to assess whether
equipment and systems are operating as
designed and to speciﬁcations, and then weverify the plantʼs performance.

5

Fumitoshi Takahashi
Section 2,
Plant Service Department 2
Energy Plant Division

Design27

TAKUMA 2018 ANNUAL REPORT

Hiroyuki Hikita
Section 2,
Energy Engineering Department 2
Project Center
We reﬁne each plantʼs plan through repeated meetings with our sales
team and with the customer. While listening to the customerʼs wishes,
we offer a proposal that incorporates our expertise and work closely withthe sales team to earn an order. Once weʼve received that order, we
proceed with the plant design process while enlisting the cooperation of
the customer, public agencies, equipment manufacturers, and others.
The completed design drawings are handed off to our construction team,and once construction is completed, the engineering staff works with thecommissioning team to carry out inspections, offer instruction on plant
operation, and perform related tasks. Seeing the customerʼs personnel
working at the operating plant following its completion always gives me
a strong sense of how weʼre contributing to the customerʼs business.

Although the plant has only been operational for ashort time, we as a maintenance team will plan
periodic inspections and maintenance and carry themout safely so that the facility can operate in a stablemanner over the long term.
Weʼll also help increase the customerʼs proﬁtability
by maintaining a high level of performance withfunctional improvements and proposals for preventive
maintenance measures and other enhancements thattake advantage of our many years of experience andby eliminating unplanned stoppages.

I was involved with this wood chip biomass-fueled power plantinstallation project, which is Takumaʼs ﬁrst 2 MW-class power plant, as asite manager from the construction planning stage through toconstruction and completion of the facility. We worked especially hard to
stick to the schedule, ﬁrst, due to the projectʼs short six-month timeline,
which included four months for construction and two months forcommissioning, and second, because it didnʼt differ from a large power
plant in terms of the number of pieces of equipment, even though it was
only a 2 MW-class facility. Thanks to the cooperation of the customer
and other involved parties, we were able to complete the project ontime. I hope the plant will be able to promote local employment andhelp revitalize the forestry industry by using unused lumber.

TAKUMA 2018 ANNUAL REPORT

Introduction to
Takumaʼs Businesses

Section 1,
Construction Department (Osaka)
Construction CenterIn this project, we proposed a plant capable ofburning and generating electricity from a variety offuels harvested from Japanʼs forested mountains in astable manner, reﬂecting our desire to achieve thecustomerʼs concept of using all the trees frommountains in order to regenerate and develop thecountryʼs forested mountains. I met with the customer
and various governmental ofﬁces, visited the planned
construction site frequently, checked on the status of
the infrastructure that would be needed for the power
plant to operate, and worked to ﬁnalize the overallplan. Going forward, I will offer assistance so that theplant we proposed can operate smoothly and thereby
contribute to the customerʼs business and to the local
community.

vice

les sersa
After-

ssioning

Naoki Hara

Section 1,
Plant Sales Department 2
Energy Plant Division

6

Once the plant has been handed overto the customer, we carry out periodic
inspections and maintenance toprevent problems and ensure that theplant will be able to operate in a safe
and stable manner.

nd commi
a
n
o
i
t
c
u
r
t
Cons

Sales

Kyohei Bunya

After-sales service

5

This section introduces the process that goes into bringing an energy plant online in one of Takumaʼs core businesses.

628

Introduction to Takumaʼs Businesses

2. Energy Plant Business
Main Recent Projects
The following are the main plants supplied by Takuma during FY2017.

●Energy plants■ Chugoku Mokuzai Co., Ltd. Head Ofﬁce Plant●●●

Project name
Chugoku Mokuzai Biomass-fueled Power Plant (Head Ofﬁce)
Construction Project
Capacity
Fuel: Wood fuelSteam conditions (normal operation):
42 tons per hour 6.0 MPaG 460 C
Power output: 9,850 kW
Location
Hiroshima Prefecture

●

●

●

29

Project name
No. 5 Biomass Power Generator Installation Project
Capacity
Fuel: Wood fuel, PKS
Steam conditions (normal operation):
85 tons per hour 6.0 MPaG 480 C
Power output: 22,100 kW
Location
Hyogo Prefecture

TAKUMA 2018 ANNUAL REPORT■ SGET Green Power Sanjo Godo Kaisha●●●

Project name
Biomass Power Plant Construction Project
Capacity
Fuel: Wood fuelSteam conditions (normal operation):
28 tons per hour 6.0 MPaG 425 C
Power output: 6,250 kW
Location
Niigata Prefecture■ DS Green Power Generation Yonezawa LLC.
●●●

Project name
Biomass Power Plant Construction Project
Capacity
Fuel: Wood fuelSteam conditions (normal operation):
28 tons per hour 6.0 MPaG 425 C
Power output: 6,250 kW
Location
Yamagata Prefecture■ Biomass Power Technologies Inc.
●

Project name
Biomass Power Technologies Inc. Matsusaka
Woody Biomass Power Plant Installation Project■ Shin nihon kaihatsu Co., Ltd.
●

●
●

●

Capacity
Fuel: Wood fuelSteam conditions (normal operation):
11.4 tons per hour 4.2 MPaG 405 C
Power output: 1,990 kW●●

Capacity
Treated waste type: Industrial waste
Incineration capacity: 93.6 tons per day
Location
Hyogo Prefecture

Location
Mie Prefecture■ Ehime Forest Generation, LLC●●

Project name
No. 5 Incinerator Construction Project

Project name
Matsuyama Biomass Power Plant Construction Project
Capacity
Fuel: Wood fuel, PKS
Steam conditions (normal operation):48.5 tons per hour 6.0 MPaG 480 C
Power output: 12,500 kW
Location
Ehime Prefecture

Introduction to
Takumaʼs Businesses■ Pultec Energy Co., Ltd.

●Industrial waste treatment plants■ Kurihalant Co., Ltd.
●●●

Project name
Daigo Biomass Power Plant Construction Project
Capacity
Fuel: Wood fuelSteam conditions (normal operation):
11.4 tons per hour 4.2 MPaG 405 C
Power output: 1,990 kW
Location
Ibaraki Prefecture

TAKUMA 2018 ANNUAL REPORT

30

Introduction to Takumaʼs Businesses

3. Water Treatment Plant Business(Related SDGs)

More than 50 years have passed since Takuma entered the water treatment business. To date, we have helped improve thewater environment by building water treatment facilities. Recently, the industry has been called upon not only to improve thewater environment, but to reduce the amount of power that treatment equipment consumes and to create energy from sludge.
Energy-saving and energy-creating products play key roles in the industry, particularly at sewage treatment plants, and weremain committed to helping realize sustainable sewage systems.

Main Recent Projects The following are the main facilities supplied by Takuma during FY2017.

●

Reaction tank

Initial setting pond
SewageintakeFinal settling pond

Sand ﬁlter

Pre-processing
equipment

Discharge●
Anaerobic tank Anoxic tank

Crude sludge

Bio Blade Mix

Anoxic tank Aerobic tank
Aeration panel
Aerobic tank

Disinfection
tank

Excess sludge

Drawn-off sludge

Dehydrated liquid treatment

Digester tanks

Sludge treatment●

Incinerator

Project name
Tarumi Sewage Treatment Plant Sand Filter
Machinery and Equipment Project(Sand Filter Machinery and Equipment Renovation Project)
Capacity
Treatment volume: 7,992 m3 per day
Treatment method: Upﬂow moving-bed ﬁltration(high-speed type)Speciﬁcations:
M40 1 unit 3 basins
Location
Hyogo Prefecture

Generator

Return water

Reaction tank facility

Saving energy【Principal equipment】
Aeration systems
Low power agitator(Bio Blade Mix)

Rapid ﬁltration facility■ Homare Sewage Relay Pumping Station

Saving energy●【Principal equipment】
Upﬂow moving-bed ﬁltration(Uniﬂow Sand Filter)●

Auxiliary
blade
Primary
blade

Saving energy【Principal equipment】
Rotating drum-type concentrator
Cleaning
nozzleDrum screen

Concentrated
sludgeIncoming
sludgeSludge-fueled power generation facility Saving energy Creating energy【Principal equipment】
Step grate stoker furnace
sewage sludge power
generation system(Step grate stoker furnace andinnovative step grate stoker
furnace)

Introduction to
Takumaʼs Businesses●

SludgetransportspiralCapacityType:

Back-raked continuous
automatic screen
Speciﬁcations: 800 (W) 1,300 (D) mm

Hole

Sludge treatment facility

Project name
Homare Sewage Relay Pump Station Screening
Equipment Renovation Project(Automatic Screen Renovation Project)

Location
Hyogo Prefecture■ Kita-Tama No.2 Water Reclamation Center
Generator
Sludge●Waste heatboilerDehydrated
liquidStep grate
Drying gratestoker furnace
Combustion
grate
Burn-out
grate

Incineration ash●●

Project nameKita-Tama No.2 Water Reclamation Center Sludge
Concentration Equipment Reconstruction Project(Sludge Concentrator Delivery)
CapacityType:
Rotating drumSpeciﬁcations: 50 m3 per hour
Location
Tokyo Prefecture

Combustion air fan

31

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

32

Introduction to Takumaʼs Businesses

4. Activities of Our Overseas Business(Related SDGs)

Biomass-fueled power plant business in the Southeast Asian market

Overseas Energy from Waste plant business

The biomass-fueled power generation boiler business in Southeast Asia is an essential part of any discussion of Takumaʼshistory. We have delivered more than 370 biomass boilers to customers overseas, and we have an especially extensive trackrecord since 1959 of delivering boilers fueled by bagasse (ﬁber remaining after sugarcane is crushed) in Thailand, where we havea local subsidiary. Takuma takes pride in having supported the Thai sugar industry for many years.
As the feed-in tariff program for renewable energy becomes increasingly well established in various industries, a growing
number of customers in Thailand are looking beyond simply gaining a source of power for plant operation and instead opting toconstruct boilers with the goal of using 10 MPa・520 C classboilers that operate at comparatively high temperature andhigh pressure levels to actively generate electricity for
resale to boost their income. In this way, demand for thistype of boiler facility is expected to continue to grow.
Under these conditions, we look forward to helping
supply environmentally friendly power from biomass,
particularly in Southeast Asia, by accommodating demand
not only in Thailand, but also in neighboring countries such
as Indonesia and Vietnam with reliable technology andﬁne-grained customer service based on our extensive
experience in the ﬁeld.
Sugarcane deliveries

Waste processing problems have been manifesting themselves in countries around the world recently due to the effects oftrends such as rapid urbanization, and there have been reports of various adverse effects of burying waste as-is on living
conditions, including soil pollution and ﬁres, especially in developing nations. Such countries are pursuing initiatives toresolve waste treatment issues, and demand for Energy from Waste plants has been growing with each passing year, seemingly
in proportion to the volume of waste being disposed of. Growth in construction of large-scale plants nonetheless remains
gradual. One cause of this mismatch between demand and construction is likely to be inadequacies in terms of programs,
ﬁnancing, and technologies as expectations concerning renewable energy combine with robust requirements with regard tosafety and environmental friendliness.
Takuma has deep experience and an extensive track record that together make it a market share leader in waste incinerationand processing equipment in Japan. The photograph below depicts a plant that we delivered to Lakeside Energy from Waste
Limited in the UK, one of a series of nine facilities we have delivered in various countries and regions, including China and theUK. Our Lakeside Plant in the UK and our Gaoantun Plant in Beijing have earned a high level of praise and trust from theirrespective customers, for example due to the facilities having achieved continuous operation for more than 8,000 hours a year.
We are conﬁdent that taking advantage of our extensive experience in the ﬁeld, working closely with stakeholders as weshare detailed information, and actively cooperating in order to solve waste treatment-related issues will allow us to better
deliver plants that operate in a safe and stable manner to bring peace of mind to the residents of those countries and regions.
We look forward to contributing to initiatives designed to encourage the adoption of waste power plants in the future bydrawing on the technological expertise that is our strength and partnerships with local companies and other entities topropose solutions to local needs.

Main Recent Project●

Bagasse boiler delivered in FY2017
Steam capacity:
170 tons per hour
Steam pressure:
4.2 MPa
Steam temperature: 485 C
Number of boilers: 2●

MessageI oversaw my ﬁrst overseas project in FY2017. Overseas projects pose unique challenges because
they tend to have larger boilers than domestic Japanese projects and because all interactions withthe customer during the design process must be carried out in English. I was relieved that we wereable to deliver this boiler plant to the customer without any issues. Iʼm looking forward to taking
advantage of the experience Iʼve gained from this project so that I can embrace the challenges ofsimilar projects in the future.

33

Lakeside Energy from Waste Plant
Processing capacity: 1,370 tons per day(685 tons per day 2 units)
Steam capacity:
95 tons per hour per unit
Steam pressure:
4.5 MPa
Steam temperature: 400 C
Power output:
36,650 kW

Introduction to
Takumaʼs Businesses

Message

Main Recent Project

Recently, I've noticed a big increase in awareness around waste issues, be it in developed ordeveloping countries. But already for over half-a-century, Takuma has been providing environmental
technology solutions by designing and building hundreds of household waste treatment facilities. As
one of the few foreigners in Takuma, I'm working to bring our technology and expertise overseas andwhile these projects are very difﬁcult and complicated, the resulting facilities undoubtedly help
towards creating a cleaner environment for ordinary people and their communities.

Yasuyuki Kawabe

Marc Nyhan

Section 3, Energy Engineering Department 2
Project Center

Sales Section, Environmental Plant Sales Department
International Operations Division

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT34

Corporate GovernanceCorporate GovernanceDirectors and Executive Ofﬁcers(as of June 27, 2018)

Corporate Governance
As of June 27, 2018, the Board of Directors was comprised of six
directors (excluding directors who are members of the Audit &Supervisory Committee) and four directors (of whom three wereoutside directors). The Board of Directors meets regularly once amonth as a rule and whenever else it is necessary to make decisions
about important issues related to business management and issues
established by law and ordinances, as well as to oversee theexecution of the directorsʼ duties.
In order to accelerate management decision-making and clarify
where management responsibilities are placed, we have adopted an
operating ofﬁcer system in which we appoint operating ofﬁcers whoare entrusted with the responsibility of executing our businessactivities. As of June 27, 2018, there were 14 operating ofﬁcers(including those who also serve as directors). Moreover, we have alsoestablished a Committee of Executive Ofﬁcers, which is chaired by
the president/chief operating ofﬁcer, as an organization that
deliberates matters that are brought up at meetings of the Board of
Directors and other important issues related to the execution of ourbusiness activities. This committee communicates and provides
direction about items decided by the Board of Directors and otherimportant items related to the execution of our business activities
appropriately to the divisions that are to execute them.

■ Directors

An Audit & Supervisory Committee that consists of four members,of whom three are outside directors, is responsible for accounting
and operational audits. Members of the committee attend important
meetings, including those of the Board of Directors and theCommittee of Executive Ofﬁcers, and they strive to understand andobserve the status of business execution in a timely and appropriatemanner. Drawing on their professional background and experience,
they express their opinions as necessary from an objective
perspective, and they conduct strict auditing of the businessexecution performed by the directors.
To facilitate the effectiveness of audits carried out by the Audit &Supervisory Committee, the president holds regular meetings withcommittee members to ensure good communication, and we haveestablished an Audit & Supervisory Committeeʼs Ofﬁce to provide
staff to help carry out the committeeʼs work.
In addition to the above, we have established a Human Resources& Remuneration Advisory Committee comprised of independentofﬁcers, representative directors, and the ofﬁcer in charge of humanresources. The committee works to increase transparency andobjectivity in the selection of candidates for director and operatingofﬁcer positions and in the determination of compensation as well as
to enhance the supervisory function of the Board of Directors.

General Meeting of Shareholders
Appointment
and removal

Appointment
and removal

Reporting

Reporting andstatement of views

Appointment
and removal

Reporting

Reporting
Auditingandsupervision

Board of Directors

AdviceSelection,
dismissal,
andsupervision(Back row, from the left)

Hiromichi Satake Koji Tanaka

Osamu Iwahashi Yasushi Enomoto

Outside Director(Audit & Supervisory
Committee Member)

Outside Director(Audit & Supervisory
Committee Member)

Outside Director(Audit & Supervisory
Committee Member)

Director
Executive Ofﬁcer

Director(Audit & Supervisory
Committee Member)(Front row, from the left)

Tsuyohito Nishiyama

Kengo Numata

Takaaki Kato

Hiroaki Nanjo Hideki Takeguchi

Director
Managing Executive Ofﬁcer

Director
Executive Vice President

Representative Director
President andChief Executive Ofﬁcer

Director
Senior Managing
Executive Ofﬁcer■ Managing Executive Ofﬁcers■ Executive Ofﬁcers

Takashi Manabe

Mitsuaki Adachi

Ryoji Tani

Akira Taguchi

Norito Uchiyama

Hidetoshi Tomita

Director
Managing Executive Ofﬁcer

Recommendations

Advisory Committee

Representative
Directors
Committee of Executive Ofﬁcers(Deliberation of important matters)

Issuance of
instructions andcommunicationof information

Cooperation

Audit & Supervisory
Committeeʼs Ofﬁce
Cooperation

Auditing of accounts

Auditing

Reporting

Various committees

Reporting

ReportingDiscussion of andreporting onimportant matters

Executive Ofﬁcers

Accounting Auditors

Assistance

Discussion
Human Resources &andRemuneration
reportingAppointment
and removal

Reporting

ReportingInternaI Audit
Department

Internal Auditing

Compliance & CSR
Promotion DivisionInternal auditing

Observing andguidance

Corporate Governance

Minoru Murata

Audit & Supervisory
Committee

Education,
instructions, andreportingExecution of
responsibilities

Divisions and centers

Norio Maeda
Kunio Hamada
35

TAKUMA 2018 ANNUAL REPORT

Corporate governance structure(As of June 27, 2018)

TAKUMA 2018 ANNUAL REPORT36

Corporate GovernanceRisk Management StructureInternal Control
Takuma has adopted a Basic Policy for Establishment ofan Internal Control System (the full text is available on our
website) in accordance with the Companies Act. We
continue to review and improve this policy in response tochanging circumstances.
Working towards thorough compliance, Takuma built acompliance promotion organization in FY2006 in order tocontinuously implement enlightenment and educational
activities that make corporate ethics, related laws andordinances, and internal rules fully understood. To control
the danger of loss, we have also prepared a “RiskManagement Code” that determines the person in charge ofeach risk, and we set up our risk management organizationaccording to that Code. When the unexpected occurs,

emergency headquarters are established with the company
president as the director in charge of risk management, andan organization is put in place in order to minimize andprevent further damage through prompt action.
Internal control, constructed and evaluated in order toreport on and prevent misstatements in our ﬁnancial
reporting, is based on the Financial Instruments andExchange Act. This internal control on ﬁnancial reportingfor the Group has resulted in reports that indicate thissystem has been effective.
In this way, we will continue to work in the future toensure thorough compliance while carrying out businessproperly and efﬁciently while also deepening risk
management.

Compliance & CSR Promotion Structure
Led by the department in charge of compliance and CSR
promotion (CSR Department), Takuma aims at
encouraging that activity through the Compliance & CSR
Promotion Organization that was installed for the purposeof enabling compliance and CSR to concretely permeate
company-wide through an in-house organization.
This organization is composed of a chairman (theExecutive Manager of the Compliance & CSR Promotion
Division), a secretariat (positioned in the CSR
Department), and an executing organization in eachdivision, center, and department.
As the person in charge of promoting compliance andCSR in his or her division, each division or center manager
is appointed as a Compliance and CSR Promotion
Administrator. As persons who implement awareness andeducation in compliance and CSR in their respective
departments, department managers are appointed as
Compliance and CSR Promoters.
The meetings conducted within this mechanism include
regular meetings and departmental meetings.

Regular meetings are held once a year. The person in
charge of promotion receives reports on the status ofcompliance and CSR promotion company-wide, as well ason the status of the implementation of compliance and CSR
promotion education for the past year, etc., and participantsdeliberate on a promotion plan for the current ﬁscal year.
Promotion members convene departmental meetings oncea quarter, with educational training aiming at the permeationof compliance and CSR in each department. After
departmental meetings, promotion members implement
compliance and CSR promotion education in their respective
departments using training materials or in-house educational
materials and report the result to the Secretariat.
We are also pursuing awareness-raising and educational
activities targeting Group companies through our Takuma
Group Coordinating Committee for Compliance & CSR
Promotion to ensure thorough compliance and risk
management throughout the Group.

Secretariat (CSR Department)
Each division and center
Each department

Compliance & CSR Promotion Administrator (division or center manager)

Compliance & CSR Promoters (department manager)
Enlightenment/education

Staff members

Compliance & CSR promotion structure
37

TAKUMA 2018 ANNUAL REPORT［Risk management action guidelines］
1. The president and CEO is responsible for risk management at Takuma.
2. All ofﬁcers and employees participate in risk management activities.
3. Risk management activities are carried out in accordance with applicable guidelines such as the Risk Management
Rules.
4. Risk management activities are carried out in line with the Medium-Term Management Plan and annual plan, and wework to make improvements on an ongoing basis.
5. When risk manifests itself, we respond by taking responsible action quickly to minimize any damage and creating
provisional organizational entities as necessary.
6. Group companies carry out risk management activities in accordance with their own policies and plans, with support
from Takuma.

Reporting

Request for
decision/
reportingPresident

Committee of Executive Ofﬁcers
Request for
decision/
reporting

Takuma Group
Coordinating Committee forCompliance & CSR Promotion

Report oninternal
controlevaluation
concerning
ﬁnancial
reporting

Reporting

Reporting

Risk Management Department

InternaI Audit
Department

Planning/
reporting

Risk Management Code, Crisis Management Code
Project Risk Management CodeDBO Project Risk Management CodeRisk Management Code for DBO Project Operation,
Maintenance and Management
Project risk
DBO Project risk
DBO Project operation,
maintenance and management risk

Risks
concerning
corporate
activities

Actualized risk
Potential risk

Eachdivision

Financialreportingrisks

Evaluation

Evaluation

Takuma Group Coordinating
Committee for Compliance & CSR
Promotion (including risk matters)

Corporate Governance

Chairman (Executive Manager of the Compliance & CSR Promotion Division)［Basic purpose of risk management］
Risk refers to all phenomena that interfere with the groupʼs ability to achieve its business objectives or cause losses orharm to the interests of stakeholders.
The Takuma Group practices risk management with the goal of increasing its corporate value by working to maximize
returns while minimizing the negative impacts of risk.

Evaluation

Committee of Executive Ofﬁcers

Compliance & CSR Promotion Organization

Risk Management Policy

Board ofDirectors

Board of Directors
President

Takuma follows a “Risk Management Policy” that connects company-wide risks and separately classiﬁes them into “projectrisks” related to our core business, i.e., plant construction; “DBO project risks” and “DBO project operation, maintenance andmanagement risks” related to our DBO business; and “potential risks,” “actualized risks,” and “ﬁnancial reporting risks” related
to other corporate business activities.
We are also building a risk management organization and constructing a system of risk management and promoting thestrengthening of management for group companies as well through our Takuma Group Coordinating Committee forCompliance and CSR Promotion.

Group
companies

Risk management structure
TAKUMA 2018 ANNUAL REPORT

38

Corporate GovernanceBusiness Continuity Plan (BCP)IR Activities

Takuma has formulated a “Business Continuity Plan” based on the following policies to ensure proper and appropriate
continuity of business operations in the event of a large-scale disaster, pandemic, or other emergency:

In keeping with the “Takuma Group Code of Conduct,” we provide our shareholders and investors with accurate corporate
information in a timely and fair manner. As a part of this, we provide notiﬁcations on the convening of General Meetings ofShareholders, balance sheet information, timely disclosure information, marketable securities reports, annual reports in English
and other business information, all on our website.

1. In addition to implementing disaster-related measures to secure the safety of corporate ofﬁcers and employees,
maintain structures so as to enable continuity of business operations while minimizing damage in an emergency.
2. Strive to respond to customer needs and recover from damage quickly by working closely with suppliers and partnercompanies to continue business operations.
3. Earn the trust of numerous stakeholders, including employees, their families, shareholders, and nearby residents, andfulﬁll social needs by continuing business operations.

[Takuma website > IR information]
https://www.takuma.co.jp/english/investor/index.html
Treasury stock:
0.1％
Individuals, others:
9.3％【Disaster rule system diagram】
Risk Management Policy

Financial institutions andstock brokerages:
44.7％

Corporations in Japan:
14.9％

Risk Management CodeCrisis Management Code

Foreign individuals:
31.0％

Overseas Risk Management CodeDisaster Prevention Management CodeShareholders Report* Based on Fire Service Act
Enforcement Regulations

Fire Prevention Plan

Earthquake Countermeasure Manual
Storm and Flood Damage Countermeasure Manual
Novel Inﬂuenza Countermeasure Manual

BCP activation

Composition of shareholders(as of March 31, 2018)

Stock Information
1. Total number of authorized shares: 321,840,000

Business Continuity Plan
(BCP)

Safety Conﬁrmation System Administration Rules

2. Total number of outstanding shares: 83,000,000
3. Total number of shareholders: 4,162 (as of March 31, 2018)
4. Major shareholders (top 10)(as of March 31, 2018)
Shareholder

CSR Activities
Please refer to our "CSR Report 2018" for more details on our CSR activities.

CSR-related Contents:

39

TAKUMA 2018 ANNUAL REPORT●

Takuma and Group Company CSR Activity Reports and Future Issues●

Human Rights and Labor Practices●

The Environment●

Fair Business Practices●

Activities Involving Product Quality●

Participation in the Community●

Contribution to Society

Stake

The Master Trust Bank of Japan, Ltd. (Trust Account)

7,760,000

9.4%Japan Trustee Services Bank, Ltd. (Trust Account)

5,611,000

6.8%

4,022,000

4.8%

Nippon Life Insurance Company

3,593,282

4.3%

Japan Trustee Services Bank, Ltd. (Trust Account 9)2,710,800

3.3%

J.P. MORGAN BANK LUXEMBOURG S.A. 380578

2,383,400

2.9%

THREADNEEDLE INVESTMENT FUNDS ICVC-JAPAN FUND

2,103,600

2.5%

TAKUMA CO., LTD. Kyoueikai

1,739,143

2.1%

Sumitomo Mitsui Banking Corporation

1,621,875

2.0%

JP MORGAN CHASE BANK 380055

1,312,745

1.6%Mizuho Trust & Banking Co., Ltd. (Retirement Beneﬁts Trust, Mizuho Bank, Ltd. Acoount)
Trust & Custody Services Bank, Ltd. (Re-entrustment)

5. Dividend Policy
Takuma returns proﬁts to investors in line with a comprehensive assessment of business performance and other factors
based on a policy of maintaining stable dividends while working to enhance the quality of its business. Our overriding goal isto remain competitive in an increasingly challenging marketplace.
Two dividends are paid each ﬁscal year: an interim dividend offered by resolution of the Board of Directors and a year-end
dividend offered by resolution of the annual meeting of shareholders.
In keeping with this policy, the year-end dividend for the consolidated ﬁscal year under review was 9 yen per share, which,combined with the interim dividend, brought the annual dividend to 16 yen per share.
We plan to continue to build internal reserves to strengthen our ﬁnancial foundation and to use funds to increase corporate
value through capital investment, R&D investment, and other avenues in order to lay the groundwork for the future growthand expansion of our businesses.
TAKUMA 2018 ANNUAL REPORT

Corporate Governance[Takuma Website > CSR]
https://www.takuma.co.jp/english/csr/index.html

Number of shares

40

Status of Business Activities
1. Management Analysis of Financial Position, Business Performance, and Cash Flows(1) Overview of Business Performance and Related Information
This section provides an overview of the Groupʼs ﬁnancial position, business performance, and cash ﬂows during theconsolidated ﬁscal year under review.

① Business Performance
The Japanese economy continued a gradual recovery during the consolidated ﬁscal year under review as corporate
earnings grew along with employment and incomes. Despite gradual economic expansion overseas, uncertainty
remained in the form of the UKʼs exit from the EU and actions by the administration in the U.S., clouding the outlook forthe future.
Against this economic backdrop, the Takuma Group expects to see continued demand for its principal businesses
thanks to increased environmental awareness; progress in initiatives to prevent global warming and conserve resourcesand energy; planned replacement of, and updates to, outdated waste treatment facilities; and energy policies that are

Financial Information

favorable for biomass power facilities, for example in the form of feed-in tariff programs for power.
During the consolidated ﬁscal year under review, we received orders for projects including construction of biomass
power facilities and sewage sludge-fueled power generation facilities in addition to construction of waste treatment
facilities, primary improvement work, and facility operation, maintenance, and management. As a result, order volume
totaled 177,116 million yen. Although volume fell 13,910 million yen (7.3%) from the previous consolidated ﬁscal year,
performance remained strong.
Sales rose 1,890 million yen (1.6%) from the previous consolidated ﬁscal year to 118,199 million yen on steadyprogress in construction projects such as waste treatment facilities and biomass power facilities. As a result, the backlog
totaled 273,060 million yen.
Operating income was 10,030 million yen, ordinary proﬁt was 10,670 million yen, and proﬁt attributable to owners ofparent was 7,847 million yen, down 944 million (8.6%), 936 million yen (8.1%), and 704 million yen (8.2%), respectively,from the previous consolidated ﬁscal year, when performance beneﬁted from cost reductions.

Results by Business Segment■ Domestic Environment and Energy Plant BusinessIn addition to construction, primary equipment upgrades, operation, maintenance, and management of waste
treatment facilities, we received orders for projects including construction of biomass power plants as well as sewage
sludge incineration and power plants, resulting in order volume of 148,892 million yen. Although that number represents
a decline of 14,613 million yen (8.9%) from the previous consolidated ﬁscal year, order volume remained strong. Net
sales fell 568 million yen (0.6%) from the previous consolidated ﬁscal year to 90,075 million yen despite steady progressin the construction of waste treatment facilities, biomass power plants, and other facilities.
Operating income fell 1,239 million yen (10.6%) from the previous consolidated ﬁscal year to 10,488 million yen.

■ Overseas Environment and Energy Plant Business
Order volume grew 802 million yen (26.1%) from the previous consolidated ﬁscal year to 3,873 million yen thanks toorders for biomass power boilers and maintenance of overseas plants. Net sales rose 1,179 million yen (53.1%) from theprevious consolidated ﬁscal year to 3,401 million yen.
Performance recovered as the previous consolidated ﬁscal yearʼs operating loss of 154 million yen turned into an
operating proﬁt of 78 million yen.

■ Package Boiler Business■ Equipment and Systems Business
Order volume fell 900 million yen (11.2%) from the previous consolidated ﬁscal year to 7,141 million yen on orders for
products including building equipment and semiconductor-related equipment. Net sales rose 1,031 million yen (15.5%)
from the previous consolidated ﬁscal year to 7,697 million yen.
Operating income fell 93 million yen (29.0%) from the previous consolidated ﬁscal year to 229 million yen.

41

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

Financial Information

Efforts to secure demand for upgrades to higher-efﬁciency once-through boilers and vacuum-type water heaters andmaintenance demand for parts sales and repairs pushed order volume up 971 million yen (5.8%) from the previous
consolidated ﬁscal year to 17,696 million yen. Net sales rose 156 million yen (0.9%) to 17,321 million yen.
Operating income rose 98 million yen (10.8%) from the previous consolidated ﬁscal year to 1,015 million yen.

42

Status of Business Activities② Orders Received② Financial Position
Total assets at the end of the consolidated ﬁscal year under review increased 11,661 million yen from the end of theprevious consolidated ﬁscal year to 151,862 million yen thanks primarily to an increase of 5,333 million yen in notes andaccounts receivable and of 3,724 million yen in equity securities.
Liabilities rose 2,662 million yen from the end of the previous consolidated ﬁscal year to 75,136 million yen as anincrease of 5,657 in advances received offset a decrease of 3,205 in allowance for losses on sales contracts.
Net assets rose 8,999 million yen from the end of the previous consolidated ﬁscal year to 76,726 million yen as
increases of 7,847 million yen in retained earnings due to the posting of proﬁt attributable to owners of the parent and of
2,275 million yen in valuation difference on available-for-sale securities offset a decrease of 1,156 million yen in retained
earnings due to the payments of dividends.
As a result, the equity capital ratio rose 2.2 points from the end of the previous consolidated ﬁscal year to 50.3%, andnet assets per share rose 108.48 yen from the end of the previous consolidated ﬁscal year to 924.25 yen.

The following table summarizes orders received by the Group during the consolidated ﬁscal year under review bybusiness segment:
Segment

Orders received(millions of yen)

Year-on-year(%)

Backlog(millions of yen)

Year-on-year(%)

Domestic Environment and Energy Plant Business

148,892(8.9)

262,388

28.9

Overseas Environment and Energy Plant Business

3,873

26.1

2,783

20.4

Package Boiler Business

17,696

5.8

3,350

12.6

Equipment and Systems Business

7,141(11.2)

4,770(10.4)

177,603(7.2)

273,292

27.6

(486)

54.0

(231)

464.0

177,116(7.3)

273,060

27.5

Subtotal③ Status of Cash Flow

Inter-segment transactions

Cash and cash equivalents at the end of the consolidated ﬁscal year under review rose 3,151 million yen from theprevious consolidated ﬁscal year to 60,283 million yen.

■ Cash Flows from Operating Activities
Net cash provided by operating activities totaled 5,141 million yen (compared to net cash provided by operating
activities of 9,590 million yen during the previous consolidated ﬁscal year). Principal factors included net income before
taxes of 10,811 million yen and an increase of 1,959 million yen in accounts payable, which offset decreases of 3,753
million from corporate tax and other payments and 3,205 million from allowances for losses on sales contracts.

■ Cash Flows from Investing Activities
Net cash used in investing activities totaled 328 million yen (compared to net cash provided by investing activities of
143 million yen during the previous consolidated ﬁscal year). Expenditures of 561 million yen on the purchase ofinvestment securities and of 343 million yen on the purchase of property, plant and equipment offset income of 550
million yen from collection of loans receivable.

Total

Notes:
1. Amounts do not include consumption tax or other taxes.
2. Package Boiler Business ﬁgures include some speculative production. In addition to order-driven production, the orders
received and the backlog ﬁgures in the above table include that portion of speculative production for which delivery to a
speciﬁc customer has been ﬁnalized.

③ Sales
The following table summarizes the Groupʼs sales results during the consolidated ﬁscal year under review by businesssegment:
Segment

Sales amount(millions of yen)

Year-on-year(%)

Domestic Environment and Energy Plant Business

90,075(0.6)■ Cash Flows from Financing Activities

Overseas Environment and Energy Plant Business

3,401

53.1

Net cash used in ﬁnancing activities totaled 1,670 million yen (compared to net cash used in ﬁnancing activities of
1,787 million yen during the previous consolidated ﬁscal year). Principal factors included payment of 1,156 million yen
on dividends and expenditures of 468 million yen on repayment of long-term debt.

Package Boiler Business

17,3210.9

Equipment and Systems Business

7,697

15.5

118,494

1.5

(295)

(23.7)

118,199

1.6

Subtotal(2) Production Output, Orders Received and Sales

Inter-segment transactions① Production Results

Total

The following table summarizes the Groupʼs production results during the consolidated ﬁscal year under review bybusiness segment:
Production output(millions of yen)

Year-on-year(%)

Domestic Environment and Energy Plant Business

62,5780.6

Overseas Environment and Energy Plant Business

2,761

30.7

Package Boiler Business

11,3340.7

Equipment and Systems Business

6,382

18.9

83,057

2.6(252)(27.2)

82,804

2.7

SubtotalInter-segment transactions
Total

Financial Information

Segment

Note:
Amounts do not include consumption tax or other taxes.

Notes:
1. Amounts are expressed as total manufacturing expenses.
2. Amounts do not include consumption tax or other taxes.

43

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

44

Status of Business Activities(3) Management Analysis of Operating Results and Issues for Future Study■ Overseas Environment and Energy Plant BusinessThis section sets forth awareness and analysis of the Groupʼs operating results from the perspective of management as well as
issues for future study. The information included represents the Groupʼs best judgment as of the end of the consolidated ﬁscal
year under review.

The Overseas Environment and Energy Plant segmentʼs principal business consists of building and maintaining
biomass power plants and energy-from-waste plants overseas. Overseas bases are located in Thailand and Taiwan, where
it has local subsidiaries and from which it is expanding its business with a focus on Southeast Asia.
Demand for biomass power plants is expected to continue to grow against the backdrop of the regionʼs rich endowmentof biomass resources, and the market exhibits a high level of potential over the medium and long term; however, theenvironment will remain highly competitive due to intense rivalry with Indian and Chinese manufacturers for orders forthe bagasse-ﬁred plants that are Takumaʼs ﬂagship product in the region. In addition, although demand forenergy-from-waste facilities is growing due to urbanization, a stable market has not yet developed in Southeast Asia dueto the lack of programs and standards as well as fund shortages being experienced by governments.
Order volume during the consolidated ﬁscal year under review rose 26.1% from the previous consolidated ﬁscal year as
we built on last yearʼs legacy by adding new orders for bagasse-ﬁred plants in Thailand thanks to initiatives to secureorders for biomass power plants as well as new orders for maintenance for energy-from-waste plants in Taiwan. Net salesrose 53.1% from the previous consolidated ﬁscal year as that yearʼs operating loss turned into an operating proﬁt of 78
million yen thanks to an increase in orders as well as progress in the construction of previously ordered bagasse-ﬁred
plants.
Going forward, we will continue to build structures to secure orders for energy-from-waste plants while simultaneously
pursuing orders for biomass power plants on an ongoing basis.

① Operating Results
The Groupʼs operating segments consist of the following four businesses, of which the ﬂagship Domestic Environment
and Energy Plant segment accounts for most net sales: Domestic Environment and Energy Plant, Overseas Environment
and Energy Plant, Package Boiler, and Equipment and Systems business. (During the consolidated ﬁscal year underreview, Domestic Environment and Energy Plant segment accounted for 76% of total net sales before excludinginter-segment sales and 88% of total operating income before excluding adjustments.)■ Domestic Environment and Energy Plant Business
The Domestic Environment and Energy Plant segmentʼs principal business consists of construction of waste treatment
plants for local government, sewage treatment plants, biomass power plants for private-sector companies, and otherfacilities (as part of the EPC business) as well as after-sales service for those facilities, including maintenance, operational
management, and operation.
Demand in the EPC business tends to ﬂuctuate signiﬁcantly over the medium and long term because it is susceptible
to factors such as government policy, for example in the form of environmental regulations and other laws and subsidies
for local government and private-sector businesses, as well as trends in public and private-sector investment. By contrast,
demand for after-sales businesses such as maintenance is forecast to remain stable over the 20 to 30 year life cycle
following the start of plant operation.
Current robust demand in the EPC business is expected to continue in the near future, with waste treatment plants
generating update and service life extension demand due to superannuation, with sewage treatment driving demand fortransition to energy-saving and -creating equipment during updates to sludge incineration plants, and with private
industry fueling demand for construction of new biomass power plants utilizing feed-in tariff programs for power.
Demand is expected to grow in the future in the after-sales service business due to factors such as increased turnkey
outsourcing of waste treatment plant management, a trend toward turnkey outsourcing of sewage projects, and anincrease in the number of plants covered by after-sales service agreements due to growth in the number of plants
delivered by the company to private industry.
During the consolidated ﬁscal year under review, order volume remained strong at 148,892 million yen as we secured
a strong position in the markets in which weʼre active thanks to initiatives to maintain and expand our market position in
the EPC business and to expand businesses that generate base revenue in after-sales service along with other businesses
under the 11th Medium-Term Management Plan in the face of strong demand. Net sales generally tracked the previous
consolidated ﬁscal year (falling 0.6%) thanks to progress in construction of previously ordered plants, although operating
proﬁt fell 10.6% from the previous consolidated ﬁscal year due to changes in project mix.
In addition to pursuing initiatives to secure sustained growth, for example by earning new orders for biomass power
plants and strengthening the competitiveness of our sewage sludge incineration and power generation systems, we will
work to strengthen and expand our revenue base by enhancing the after-sales service business, for example bystrengthening the proﬁtability of our waste treatment plant operation business, applying operational expertise
horizontally to water treatment and biomass facilities, and strengthening maintenance structures.

■ Package Boiler Business
The Package Boiler segmentʼs principal business consists of the manufacture, sale, and maintenance of generalpurpose boilers such as small once-through boilers, which are used as heat sources in commercial and manufacturing
facilities, and vacuum-type water heaters.
Although the domestic general-purpose boiler market has already matured, it is expected to yield a certain level ofprimarily replacement demand going forward, and demand is expected to grow overseas, primarily in Southeast Asia.
Order volume during the consolidated ﬁscal year under review rose 5.8% from the previous year thanks to initiatives
designed to secure replacement demand and growth in maintenance orders. Although net sales remained on par with theprevious consolidated ﬁscal year (up 0.9%) for reasons related to the timing of project deliveries, cost-cutting initiatives
improved the cost rate to yield a 10.8% rise in operating proﬁt from the previous consolidated ﬁscal year.
We will continue to maintain and expand the domestic business with a focus on replacement demand while striving to
expand the overseas business through efforts centered on our local subsidiary in Thailand.

■ Equipment and Systems Business
The Equipment and Systems segmentʼs principal business consists of the design and installation of building equipment
such as air-conditioning equipment and water and sewage equipment as well as the manufacture, sale, and maintenanceof equipment like clean devices and cleaning systems for the semiconductor industry.
Demand is trending up thanks to growth in building demand and increased capital investment in the semiconductor
industry, and we expect strong demand to continue for the time being based on the outlook for building demand and theelectronic device market.
Order volume during the consolidated ﬁscal year under review fell 11.2% from the previous consolidated ﬁscal year due
to delays in the timing at which orders for major projects were received in the building equipment industry. Although net
sales rose 15.5% from the previous consolidated ﬁscal year on steady progress in construction of building equipment that
had already been ordered, operating proﬁt fell 29.0% from the previous consolidated ﬁscal year due to changes in projectmix.
Going forward, we will continue to work to secure stable proﬁts by working steadily to capture robust demand.

45

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

Financial Information

The Takuma Group has worked diligently to implement its 11th Medium-Term Management Plan, which ended withthe consolidated ﬁscal year under review. Thanks to those efforts, we achieved cumulative order volume of 468.0 billion
yen, net sales of 347.5 billion yen, and ordinary proﬁt of 31.9 billion yen during the three-year period covered by the plan,versus targets of 400.0 billion yen, 360.0 billion yen, and 27.0 billion yen, respectively. In this way, we were able to meetour goals in terms of the key indicators of order volume and ordinary proﬁt.
During the 12th Medium-Term Management Plan, which began this April, we will work diligently to achieve a target of
33.0 billion yen in cumulative consolidated ordinary proﬁt during the three-year period covered by the plan.

46

Status of Business Activities(1) Environment and Energy Plant Business② Sources of Capital and Capital Liquidity
During the consolidated ﬁscal year under review, net cash provided by operating activities totaled 5,141 million yen(compared to net cash provided by operating activities of 9,590 million yen during the previous consolidated ﬁscal year)
due to factors including a reduction in allowance for losses on sales contracts. Due to the low balance for this accountduring the consolidated ﬁscal year under review, we expect the impact of this change to be temporary in nature.
The Takuma Group obtains working capital as well as funds for use in capital investment and research and development
to expand its businesses in the future from group funds, advances from customers, and lending from ﬁnancial institutions.
Going forward, we do not expect to encounter difﬁculty in procuring the funds necessary to pursue our business activities.

2. Contracts of Major Importance in the Groupʼs Business(1) Technology In-licensing Contracts
Contractee

Contract target

Takuma Co., Ltd.

Continuous bed ﬁltrationof liquids

Takuma Co., Ltd.

Process for the organic andanaerobic treatment of waste

Contract date

Name of other party

Contract term

April 1979

Nordic Water Products AB(Sweden)

Until December 2018

December 2011

Hitachi Zosen Inova AG(Switzerland)

For 10 years, then automaticallyrenewed every year

① In the area of waste treatment, we are constructing a demonstration incinerator with a next-generation stoker at one of ourplants with the principal goal of developing proprietary technology to aid in reducing life cycle cost and boosting energy
recovery. We are utilizing this demonstration incinerator in a program of ongoing development of such aspects of equipment
operation as the reduction of harmful substances (e.g., nitrogen oxides, dioxins, and mercury) through combustion
improvements and increases in power generation efﬁciency. In addition, weʼre pursuing a project known as “Development of a
Next-generation Low-carbon High-efﬁciency Biogas Power System and Combined System Using CO2 Separation Membranes,”
which was adopted as an Evaluation and Demonstration Project for Advanced Waste Treatment Systems at Small andMedium-size Waste Treatment Facilities by the Ministry of the Environment in FY2017. Weʼre working to stabilize combustion
and to develop technologies for remote monitoring using AI and IoT, for example by utilizing POCSYS, a comprehensive
support system for operation, maintenance, and management that enables integrated use of a range of data that facilities
previously managed and evaluated independently.
② In the area of energy, we continue to develop constituent technologies for burning a variety of fuels including unutilized
wood biomass to generate power, an area in which we are receiving many inquiries in connection with Japanʼs feed-in tariff
program for power generated from renewable sources.

Note:
Most of the above contracts entail payment of a ﬁxed percentage of sales in addition to a one-time payment at the time thecontract was entered into.

③ In the area of water treatment, we continue to develop a sewage sludge incineration and power generation system as well as
technologies related to a new system for eliminating nitrogen by means of the anammox process. For sewage sludge
incineration and power generation, we continue to develop combustion technology to allow stable incineration of sludge
with varying water content. We also continue to develop technologies for expanding the range of wastewater with which the
anammox process can be used.
The research and development budget for this segment of our business was 804 million yen.

(2)Technology Out-licensing Contracts(2) Package Boiler BusinessContractee

Contract target

Contract date

Name of other party

Contract term

Takuma Co., Ltd.

N-type palm wastes ﬁred
water-tube boiler

September 1982

P.T. Super Andalas Steel(Indonesia)

For 15 years, then automaticallyrenewed every year

Takuma Co., Ltd.

Auxiliary agent for ﬁlter-type
dust collector

July 1993

MITSUI MINING & SMELTING
CO., LTD. (Japan)

For 10 years, then automaticallyrenewed every year

Takuma Co., Ltd.

Dust elimination technology inexhaust gas treatment systems
using impulse waves

November 2005

Nihon Spindle ManufacturingCo., Ltd. (Japan)

For 10 years, then automaticallyrenewed every year

Takuma Co., Ltd.

Coal ﬁring boiler

June 2007

P.T. Panca Mandiri Essencia(Indonesia)

Until May 2017 (See Note 2.)

Notes:
1. Most of the above contracts entail receipt of payment of a ﬁxed percentage of sales in addition to a one-time payment at thetime the contract was entered into.
2. Contract ended during the consolidated ﬁscal year under review.

In the once-through boiler category, we launched the EQOS Links EQRH-1001KM/AM, an oil-fueled high-efﬁciency simple
boiler that delivers dramatically improved operating efﬁciency. The product features a newly developed oil burner with reduced
minimum output, realizing wider-range load control, or operation among four stages of output instead of the previous three.
This innovation reduces the number of times combustion has to be started and stopped, improving efﬁciency when operating
under conditions of low load. The model also delivers improved efﬁciency during rated operation, for example thanks to theimproved thermal efﬁciency provided by its multi-pass ﬂow body.
In the vacuum-type water heater category, we worked together with the East Japan Railway Company to develop a Vacotin
Heater designed to deliver excellent energy-saving performance in conjunction with a new control system for water-sprinklingsystems used on Shinkansen train lines to melt snow, and the new model was chosen for use at the companyʼs Joetsu Shinkansen
Nakajima Snow-melting Station. The product utilizes a larger-capacity heat exchanger and a more compact boiler body todeliver higher output in the same footprint as previous units. It also features a burner with reduced minimum output to allow
greater control over output. These changes make possible more efﬁcient operation by implementing load-based combustion
control.
The research and development budget for this segment of our business was 41 million yen.

(3) Equipment and Systems Business

3. Research and Development Activities

47

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

Financial Information

Having identiﬁed the ﬁelds of environmental protection and renewable energy utilization as its principal business domains inan effort to achieve a sustainable, recycling-oriented society that is not excessively dependent on nuclear power or fossil fuels,
the Takuma Group is focusing its management resources on business in these domains as it pursues research and developmentin keeping with the corporate vision it has set forth of being an indispensable presence in society as a leading company.
The Takuma Group has consolidated its technology-related departments into the Engineering Group, through which it isactively working to strengthen and pass on its technological capabilities and develop new technologies, products, and services
through collaboration between the Takuma Group companies and joint research with outside research institutions anduniversities.
Expenditures on research and development during the consolidated ﬁscal year under review totaled 929 million yen. Principal
research and development activities by business segment were as follows:

In washing systems for semiconductor plants, we are working to develop products that utilize micro-bubble washingtechnology that boosts washing effectiveness with ﬁne bubbles while reducing cleaning agent use. Weʼre developing andevaluating the technology with the goal of using it not only for wafers, but also a variety of electronic components such as harddisks.
In the area of chemical ﬁlters for clean rooms at semiconductor plants, weʼre developing ﬁlters that will deliver advanced
functionality and longer service life.
Going forward, we will continue to improve our washing systems and chemical ﬁlters as we work to develop products thatmeet customer needs.
The research and development budget for this segment of our business was 82 million yen.

48

Financial Statement
Consolidated Balance Sheets
TAKUMA CO., LTD. and Consolidated Subsidiaries
As of March 31, 2018 and 2017
Thousands of
U.S. dollars(Note 1)Millions of yen
ASSETS

2018

2017

2018

Current assets:

Thousands of
U.S. dollars(Note 1)Millions of yen
LIABILITIES AND NET ASSETS

2018

2018

2017

Current liabilities:

Cash and time deposits (Notes 4, 6 and 8)¥

60,864¥57,719$ 572,888

Notes and accounts receivable (Note 6):

Short-term loans payable (Notes 6 and 9)¥

Current portion of long-term debt (Notes 6 and 9)
50,049Trade44,716

471,092

Unconsolidated subsidiaries

7,675

¥

7,675

$

72,242

470

468

4,422

34,91332,569328,625
2,204

Notes and accounts payable (Note 6):
Trade

and afﬁliated companies

380

391

Other

381

242

3,590

and afﬁliated companies

234

344

Less allowance for doubtful accounts

(38)

(27)

(358)

Other

979

931

9,214

50,77245,322477,90236,12633,844340,043

Inventories (Note 5)

4,307

3,897

40,538

Accrued income taxes

281

2,532

2,644

Deferred tax assets (Note 15)

1,669

2,471

15,708Advances received

13,592

7,935

127,936

Allowance for guarantees on completed work

86

177

808

Allowance for losses on sales contracts

373

3,578

3,508

Total

Other
Total current assets

3,578

1,372

766

12,917

118,984

110,175

1,119,953

Unconsolidated subsidiaries

Total

Other
Property, plant and equipment:

Total current liabilities

5,709

5,734

53,74164,312

61,943605,344

4,319

Land (Note 8)

3,011

3,018

28,344

Buildings and structures (Note 8)

12,287

12,225

115,647

Machinery, equipment, lease assets and construction in progress

10,653

11,119100,275

Long-term debt (Notes 6 and 9)

459

929

(Note 8)25,951

26,362

244,266

Allowance for directorsʼ and executive ofﬁcersʼ retirement beneﬁts

183

152

1,728

(17,450)(17,434)(164,245)

9,406

9,011

88,535

8,501

8,928

80,021Less accumulated depreciation
Total property, plant and equipment
Investments and other assets:
Investment securities (Notes 6, 7 and 8)

16,885

13,161

158,932

5,015

4,950

47,204Long-term liabilities:

Net deﬁned beneﬁt liability (Note 10)
Other

776

439

7,301

Total long-term liabilities

10,824

10,531

101,883

Total liabilities

75,136

72,474707,227

13,367

13,367

125,823

Contingent liabilities (Note 11)

Investments in:
Net assets (Note 12):

Unconsolidated subsidiaries
and afﬁliated companies

Common stock

Other

1,823

938

17,155Less allowance for doubtful accounts

(471)

(461)

(4,433)

6,367

5,427

59,926

Capital surplus

3,768

3,768

35,469Deferred tax assets (Note 15)

785

2,210

7,388

Retained earnings

52,94946,258498,386

Other

340

300

3,200

Treasury stock, at cost

(235)

(234)

(2,214)

24,37721,098229,446

140,201$ 1,429,420

Total

Total investments and other assets

Authorized: 321,840,000 shares
Issued: 83,000,000 shares

331,385 shares in 2018 and
331,201 shares in 2017

Total assets¥

151,862¥

69,84963,159657,464

Unrealized gains on securities

7,161

4,886

67,407

Deferred gains and losses on hedges

(46)

(21)

(438)

Foreign currency translation adjustments

2

6

22

Remeasurements of deﬁned beneﬁt plans

Total shareholders' equity(591)(5,265)

6,558

4,280

61,726

Non-controlling interests in consolidated subsidiaries

319

288

3,003

76,72667,727722,193140,201$ 1,429,420

Total net assets
Total liabilities and net assets¥

151,862¥

See accompanying notes.

49

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

Financial Information(559)

Total accumulated other comprehensive income

50

Financial Statement
Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income

TAKUMA CO., LTD. and Consolidated Subsidiaries
For tｈe years ended Marcｈ 31, 2018 and 2017

TAKUMA CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2018 and 2017
Thousands of
U.S. dollars(Note 1)Millions of yen
2018
Net sales (Note 17)¥

Cost of sales (Notes 10, 13, 14 and 17)
Gross proﬁt
Selling, general and administrative expenses (Notes 10, 14 and 17)
Operating income (Note 17)

118,199

116,309$ 1,112,562

90,693878,877

24,827

25,616

233,685

Unrealized gains on securities

2,275

1,299

21,42014,797

14,642

139,277

Deferred gains and losses on hedges

(3)

(29)

(30)

10,03010,974

94,408Foreign currency translation adjustments

(4)

23

(36)

Remeasurements of deﬁned beneﬁt plans

31

69

294

¥

Interest and dividend income

367

337

3,455

Interest expense

(66)

(76)

(621)

Foreign currency exchange loss

(157)

-

(1,478)Gain on sales of investment securities (Note 7)

111

-

1,041

Gain on liquidation of subsidiaries and associates

90

-

850

Loss on valuation of investment securities

(60)

-

(565)

Loss on disposal of property, plant and equipment

(44)

(51)

(419)

Equity in earnings of afﬁliated companies

461

280

4,344

Otｈer, net

79

142

744

781

632

7,351

10,811

11,606

101,759

Current

1,352

2,859

12,731

Deferred

1,581

172

14,879

2,933

3,031

27,610

7,878

8,575

74,149

Income before income taxes

Proﬁt
Proﬁt attributable to non-controlling interests

31

in consolidated subsidiaries
Proﬁt attributable to owners of parent

¥

7,847

Net income
Diluted net income
Cash dividends applicable to the year

¥

8,551

¥

94.93

$

73,865

U.S. dollars(Note 1)Yen

Per share:

284

24

¥

103.43

$

0.89

-

-

-

16.00

13.00

0.15

7,878

¥

Proﬁt

¥

$

8,575

74,149Other comprehensive income:

2,299

Total other comprehensive income
Comprehensive income（Note 16)

21,648

1,362¥

10,177

¥

9,937

$

95,797¥

10,125

¥

9,942

$

95,306Comprehensive income attributed to:
Owners of the parent

52

Non-controlling interests

(5)

491

Total
net
assetsConsolidated Statements of Changes in Net Assets
TAKUMA CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2018 and 2017
Millions of yen

Income taxes (Note 15):

Total income taxes

2018

2017

93,372Otｈer income (expenses):

Other income (expenses), net

Millions of yen
2018

2018

2017

Thousands of
U.S. dollars(Note 1)

Commonstock

CapitalsurplusRetainedearnings

Treasurystock,
at costTotal
shareholders'equityUnrealized
gains onsecurities

Deferred
gains andlosses onhedges

¥

¥

¥

¥

¥

Foreigncurrencytranslation
adjustments

Total
NonRemeasure- accumulated
controllingments ofotherinterests indeﬁnedcomprehensive consolidated
beneﬁt plansincomesubsidiaries¥¥

For the years ended March 31, 2018
Balance at the beginning of current period¥

13,367¥

3,768

46,258Cash dividends (¥14.00 per share)--(1,156)

Proﬁt attributable to owners of parent--

Purchase of treasury stock--

Other changes during the year, net--

Balance at the end of current period(234)

63,159

(21)

6

(591)

¥

4,280

¥

288

¥

67,727(1,156)

-

-

-

-

-

-

(1,156)

7,847

-

7,847

-

-

-

-

-

-

7,847

-

(1)

(1)

-

-

-

-

-

-

(1)

-

-

-

2,275

(25)

(4)

32

2,278

31

2,309

¥

13,367

¥

3,768

¥

52,949

¥

(235)

¥

69,849¥¥13,367

¥

3,768

¥

38,754

¥

(232)

¥

55,657

¥

7,161

¥

(46)

¥

2

¥

(559)

¥

6,558

¥

319

¥

76,726

¥

(11)

¥

(660)

¥

2,888

¥

264

¥

58,809Millions of yen

For the years ended March 31, 2017
Balance at the beginning of current period

4,886

-

3,586

¥

(27)

Cash dividends (¥12.00 per share)

-

-

(992)

-

(992)

-

-

-

-

-

-

(992)

Proﬁt attributable to owners of parent

-

-

8,551

-

8,551

-

-

-

-

-

-

8,551

Change in scope of consolidation

-

-

(55)

-

(55)

-

-

-

-

-

-

(55)

Purchase of treasury stock

-

-

-

(2)

(2)

-

-

-

-

-

-

(2)

Other changes during the year, net

-

-

-

-

-

1,300

6

17

69

1392

24

1,416

Balance at the end of current period¥

13,367

¥

3,768

¥

$ 125,823$

35,469$ 435,415$ (2,212)$ 594,495

46,258¥(234)

63,159

¥

4,886

¥

(21)

¥

6

¥

(591)

¥

4,280

¥

288

¥

$

40,285$67,727

Thousands of U.S. dollars(Note 1)

For the years ended March 31, 2018
Balance at the beginning of current period

¥

$

$

$ (5,559)

2,711$ 637,491--(10,894)-(10,894)

-

-

-

-

-

-

(10,894)

Proﬁt attributable to owners of parent--

73,865-73,865

-

-

-

-

-

-

73,865Purchase of treasury stock

-

-

-

(2)

(2)

-

-

-

-

-

-

(2)

Other changes during the year, net

-

-

-

-

-

21,420

(242)

(31)

294

21,441

292

21,73335,469$ 498,386$ (2,214)$ 657,46422$ (5,265)

3,003$ 722,193

Balance at the end of current period$ 125,823$$

45,98767,407

$

(196)

(438)

$

$

$

61,726$

See accompanying notes.

51

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

Financial Information

53

Cash dividends ($0.13 per share)

52

Financial Statement
Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

TAKUMA CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2018 and 2017

TAKUMA CO., LTD. and Consolidated Subsidiaries
Thousands of
U.S. dollars(Note 1)Millions of yen
2018

Cash ﬂows from operating activities:
Income before income taxes

¥

2018

2017

10,811¥

11,606$

101,759

Adjustments to reconcile income before income taxes
to net cash provided by operating activities:
790

851

7,433

Loss (gain) on sales of investment securities

(111)

0

(1,041)

Loss (gain) on liquidation of subsidiaries and associates

Depreciation

(90)

1

(850)

Loss (gain) on valuation of investment securities

60

-

565

Increase (decrease) in allowance for doubtful accounts

20

(18)

191

Increase (decrease) in allowance for bonuses

307

182

2,892

(3,205)(1,586)(30,168)

Increase (decrease) in allowance for losses on sales contracts
Increase (decrease) in net deﬁned beneﬁt liability
Interest and dividend income
Interest expense
Equity in losses (earnings) of afﬁliated companies

441

445

4,152

(367)

(337)

(3,455)

66

76

621

(461)

(280)

(4,344)

200

463

1,884

Decrease (increase) in inventories

(387)

148

(3,640)Decrease (increase) in other current assets

(305)

(25)

(2,875)

Net increase (decrease) in notes and accounts payable and advance money

1,959(2,143)

18,438

Increase (decrease) in other current liabilities

(426)

1,489

(4,007)

Other

(798)

148

(7,506)

8,504

11,02080,049Interest and dividend received

456

405

4,293

Interest paid

(66)

(76)

(625)

(3,753)(1,759)(35,329)

5,141

9,590

48,388Net decrease (increase) in notes and accounts receivable and advances received

Subtotal

Income taxes received (paid)
Net cash provided by operating activities
Cash ﬂows from investing activities:

4

3

40

Purchase of property, plant and equipment

(343)

(575)

(3,231)

Purchase of intangible ﬁxed assets

(125)

(65)

(1,174)Purchase of investment securities

(561)

(473)

(5,277)

Net decrease (increase) in time deposits

230

13

2,161

(151)

(171)

(1,423)

Collection of loans receivable

550

1,328

5,175

Other

68

83

641

(328)

143

(3,088)

Sale of investment securities
Disbursement for loans receivable

Net cash provided by (used in) investing activities
Cash ﬂows from ﬁnancing activities:
Net increase (decrease) in short-term bank loans
Payment of long-term debt

(75)

-

(673)

(4,403)

(1)

(2)

(2)

Payment of cash dividends(1,157)(992)(10,894)

Dividends paid to non-controlling interests

(21)

(17)

(199)

Other

(23)

(28)

(222)

(1,670)(1,787)(15,720)

8

15

78

Net increase in cash and cash equivalents

3,151

7,961

29,658Cash and cash equivalents at beginning of year

57,132

48,335

537,767-836

Effect of exchange rate changes on cash and cash equivalents

Increase in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at end of year (Note 4)

See accompanying notes.
TAKUMA 2018 ANNUAL REPORT¥

60,283¥57,132$567,425

The accompanying consolidated ﬁnancial statements have been prepared in accordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Law and its related accounting regulations and in conformity with accounting principles generally
accepted in Japan, which are different in certain respects as to application and disclosure requirements from International Financial
Reporting Standards.
The accounts of overseas subsidiaries are based on their accounting records maintained in conformity with generally accepted
accounting principles prevailing in the respective countries of domicile. However, necessary adjustments are made upon consolidation.
The accompanying consolidated ﬁnancial statements have been restructured and translated into English from the consolidated ﬁnancial
statements of TAKUMA CO., LTD. (the “Company”) prepared in accordance with Japanese GAAP and ﬁled with the appropriate Local
Finance Bureau of the Ministry of Finance as required by the Japanese Financial Instruments and Exchange Law. Some supplementary
information included in the statutory Japanese language consolidated ﬁnancial statements, but not required for fair presentation, is notpresented in the accompanying consolidated ﬁnancial statements.
The translations of the Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside
Japan, using the prevailing exchange rate at March 31, 2018, which was ¥106.24 to U.S.$1.00. The translations should not be construed
as representations that the Japanese yen amounts have been, could have been or could in the future be converted into U.S. dollars at thisor any other rate of exchange.

2. Summary of signiﬁcant accounting policies(1) Principles of consolidation
The consolidated ﬁnancial statements include the accounts of the Company and its 22 signiﬁcant subsidiaries (the “Companies”).
All signiﬁcant intercompany transactions and unrealized proﬁts among the Companies have been eliminated in consolidation.
Investments in certain signiﬁcant afﬁliates over which the Company and/or its subsidiaries are able to exert inﬂuence to a material
degree with regard to ﬁnancial and operating decision making, other than consolidated subsidiaries, are accounted for by the equity
method after the elimination of unrealized intercompany proﬁts.
Investments in the remaining unconsolidated subsidiaries and afﬁliated companies are not accounted for by the equity method
because of the immaterial effect on the consolidated ﬁnancial statements. Therefore, such investments are carried at cost, adjusted
for any substantial and non-recoverable decline in value. Income from those unconsolidated subsidiaries and afﬁliated companies isrecognized only when the Companies receive dividends therefrom.
(2) Foreign currency translation
Revenue and expense are translated at the rates of exchange prevailing on the transaction date. Assets and liabilities denominatedin foreign currencies are generally translated at the rate of exchange prevailing at the balance sheet date, and the resulting
translation gains and losses are included in earnings.
The ﬁnancial statements of a consolidated overseas subsidiary are translated into Japanese yen at the year-end rate, except that net
asset accounts are translated at historical rates and income statement items resulting from transactions with the Company aretranslated at rates used by the Company. The resulting translation adjustments are shown as “Foreign currency translation
adjustments,” a separate component of net assets.
(3) Cash and cash equivalents
In preparing the consolidated statements of cash ﬂows, cash and cash equivalents include cash on hand, readily available deposits
and short-term investments with maturities not exceeding three months from the date of acquisition and which have high liquidity
and low risk of price ﬂuctuation.
(4) Securities
Equity securities issued by subsidiaries and afﬁliated companies which are not consolidated or accounted for using the equity
method are stated at cost determined by moving average cost. Available-for-sale securities with available fair market value are stated
at fair market value, and unrealized gains and losses on these securities are reported net of applicable income taxes as a separate
component of net assets. Realized gains and losses on the sale of such securities are computed at cost using moving average cost.
Available-for-sale securities with no available fair market value are stated at cost determined by moving average cost.
If the market value of equity securities issued by unconsolidated subsidiaries and afﬁliated companies or available-for-sale securities
declines signiﬁcantly, such securities are stated at fair market value and the difference between fair market value and the carrying
amount is recognized as loss in the period of the decline. If the fair market value of such securities is not readily available, suchsecurities should be written down to net asset value with a corresponding charge in the income statement in the event the net asset
value declines signiﬁcantly. In these cases, the fair market value or the net asset value will be the carrying amount of the securities
at the beginning of the next year.
(5) Allowance for doubtful accounts
The Companies provide an allowance for doubtful accounts by estimating the uncollectible amounts of certain individual accounts
and by applying a percentage based on collection experience to the remaining receivables.

TAKUMA 2018 ANNUAL REPORT

Financial Information

Purchase of treasury stock

Net cash used in ﬁnancing activities

53

(468)

1. Basis of presenting ﬁnancial statements

54

Financial Statement(6) Inventories
Merchandise and ﬁnished goods are stated at cost using the moving average method. Work-in-process is stated at cost determined by
the identiﬁed cost method. Materials and supplies are stated at cost using the average method. For these inventories, the carrying
amounts on the balance sheet are written down to reﬂect decreases in proﬁtability.
(7) Property, plant and equipment
Property, plant and equipment are depreciated principally using the declining balance method over the estimated useful life of theasset. However, buildings acquired after March 31, 1998 and facilities attached to buildings and structures acquired after March 31,
2016 are depreciated using the straight-line method. The range of useful lives is principally from 3 to 60 years for buildings andstructures and from 2 to 20 years for machinery, equipment and other. Maintenance and repairs, including minor renewals andimprovements, are charged to income as incurred.
Lease assets under ﬁnance leases in which the ownership of the lease assets is not transferred to the lessee are depreciated using thestraight-line method over the lease term with an assumption of no residual value.
(8) Allowance for losses on sales contracts
For sales orders on hand at the balance sheet date for projects in which the estimated cost is expected to exceed the price of the orderby a wide margin, an allowance for losses on sales contracts is recognized at the estimated aggregate amount.
(9) Allowance for guarantees on completed work
Allowance for guarantees on completed work is based on estimated amounts of expenditure in the warranty period after products aredelivered.
(10) Allowance for directorsʼ and executive ofﬁcersʼ retirement beneﬁts
Directors and executive ofﬁcers are generally entitled to receive retirement beneﬁts based on the Companiesʼ internal rules. The
Companies provide an allowance for directorsʼ and executive ofﬁcersʼ retirement beneﬁts based on the amount that would be
required if all directors and executive ofﬁcers retired at the balance sheet date.
(11) Net deﬁned beneﬁt liability
In calculating retirement beneﬁt obligations, the method of attributing expected beneﬁts to periods employs principally a beneﬁt
formula basis. Actuarial gains and losses are recognized in expenses using the straight-line method principally over 10 years
commencing with the following period. Prior service costs are recognized in expenses using the straight-line method principally over
10 years.
(12) Revenue recognition
When the outcome of an individual contract can be estimated reliably, the domestic companies apply the percentage-of-completion
method to work performed during the year, otherwise, the completed contract method is applied. The degree of completion, or thepercentage of the contract performed during the period under review, is measured by the proportion of the cost incurred during theperiod to the estimated total cost.
(13) Income taxes
The Companies are subject to corporation tax, inhabitants tax and enterprise tax based on taxable income. The Companies recognize
the tax effects of the temporary differences between the carrying amounts of assets and liabilities for tax and ﬁnancial reporting. The
provision for income taxes is computed based on the pretax income of each of the Companies, with certain required adjustments. The
asset-liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary
differences.
The Companies have adopted the consolidated tax return system.
(14) Net income and cash dividends per share
Net income per share is computed based on the weighted average number of shares of common stock outstanding during eachperiod. Diluted net income per share is computed with the assumption that all convertible bonds were converted into common stockat the beginning of each period. Cash dividends per share represent interim dividends declared by the Board of Directors in each year
and year-end dividends approved by the shareholders at the annual meeting held subsequent to the end of the ﬁscal year.

The Companies use currency forward contracts to hedge accounts receivable and payable denominated in foreign currencies (mainly
U.S. dollars) against the risk of ﬂuctuation in exchange rates that comes from foreign currency transactions.
Certain foreign exchange contracts are subject to appropriation if they satisfy the requirements of appropriation treatment. Interest
rate swaps that qualify for hedge accounting and meet speciﬁc matching criteria are not re-measured at market value.
(16) Reclassiﬁcations
Certain prior year amounts have been reclassiﬁed to conform to the 2018 presentation.

55

TAKUMA 2018 ANNUAL REPORT●●“Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan Statement No. 29, March 30, 2018)“Implementation Guidance on Accounting Standard for Revenue Recognition”(Accounting Standards Board of Japan Guidance No. 30, March 30, 2018)(1) Overview
This is a comprehensive accounting standard for revenue recognition. Revenue is recognized using the following ﬁve steps.
Step 1: Identify the contract with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognize revenue when (or as) the reporting organization satisﬁes a performance obligation.
(2) Effective date
Effective from the beginning of the ﬁscal year ending March 31, 2022.
(3) Effects of application of the standard and guidance
The Company and its consolidated domestic subsidiaries are currently in the process of determining the effects of the standard andguidance on the consolidated ﬁnancial statements.

4. Cash and cash equivalents
Amounts of cash and cash equivalents as of March 31, 2018 and 2017 were reconciled with cash and time deposits as follows:

Cash and time deposits
Time deposits with maturities exceeding three months
from the date of acquisition
Total cash and cash equivalents¥¥

Millions of yen
2018
60,864¥(581)
60,283¥

2017
57,719(587)
57,132Thousands of U.S. dollars$

2018572,888$(5,463)
567,425

5. Inventories
Inventories were summarized as follows:

Merchandise and ﬁnished goods
Work-in-process
Materials and supplies
Total inventories

¥

¥

2018

Millions of yen

733
1,887
1,687
4,307

¥

¥

2017

476
1,911
1,510
3,897

Thousands of U.S. dollars

$

$

2018
6,896
17,763
15,87940,538

6.Financial instruments(1) Status of ﬁnancial instruments(a) Financial instruments policy
Under Group policy, investment in ﬁnancial instruments is limited primarily to short-term deposits and bank loans for raising funds.
Derivative transactions are used to hedge risks of ﬂuctuations in foreign exchange and interest rates.
(b) Financial instruments, risks and risk management structure
The Companies are working to reduce customer credit risk associated with notes and accounts receivable and operating receivables
through customer based due dates and other balance controls in accordance with the Companies' regulations. Investment securities
consists mainly of stocks and are periodically checked for the fair value of the listed shares.
Notes and accounts payables, or operating payables, are due within one year.
Short-term ﬁnancing is primarily for operating funds while long-term debt is for capital investment.
With ﬂoating rate loans, which are exposed to interest rate ﬂuctuation risk, Group companies use derivative transactions (interest
rate swaps) as a part of their long-term loans to hedge the risk of interest rate ﬂuctuation on bank loans and to ﬁx interest payments.
To cope with operating receivables and loans exposed to liquidity risk, each Group company manages its cash position by preparing
monthly cash-ﬂow plans and other means.
(c) Supplementary remarks on fair values of ﬁnancial instruments
The fair values of ﬁnancial instruments do not reﬂect the market risks concerning the derivative trading.

TAKUMA 2018 ANNUAL REPORT

Financial Information(15) Derivatives and hedge accounting
The Companies generally state derivative ﬁnancial instruments at fair value and recognize changes in the fair value as gains or losses
unless the derivative ﬁnancial instruments are used for hedging purposes. If derivative ﬁnancial instruments are used as hedges andmeet certain hedging criteria, the Companies generally defer recognition of gain or loss resulting from a change in the fair value ofthe derivative ﬁnancial instrument until the related loss or gain on the hedged item is recognized.

3. Accounting standards issued but not yet adopted

56

Financial Statement(2) Fair value of ﬁnancial instruments
Amounts recognized on the consolidated balance sheets, fair values and differences as of March 31, 2018 and 2017, except items forwhich no fair value was obtainable, were as follows:(3) Redemption schedule of monetary assets with contractual maturities and repayment schedule of short-term loans payable andlong-term debt

（Cash and time deposits)
The fair value of cash and time deposits is based on relevant book value because they are mostly settled within a short period of time andthe fair value is nearly equal to the book value.

As of March 31, 2018

Millions of yen

Amounts recognized on the consolidated balance sheets
Fair value
Difference

¥
¥

2018
60,86460,864-¥¥2017
57,71957,719-Thousands of U.S. dollars

$
$

2018
572,888572,888-(Notes and accounts receivable)
The fair value of notes and accounts receivable is based on the relevant book value because they are mostly settled within a short periodof time and the fair value is nearly equal to the book value.
Millions of yen

Amounts recognized on the consolidated balance sheets
Fair value
Difference

¥
¥

2018
50,35550,355-¥¥2017
44,95444,954-

Thousands of U.S. dollars

$
$

2018
473,977
473,977-（Investment securities）
The fair value of stocks is based on stock exchange prices, and the fair values of bonds are based on stock exchange prices or prices
provided by ﬁnancial institutions.

Amounts recognized on the consolidated balance sheets
Fair value
Difference¥¥

Millions of yen
2018
16,795¥
16,795¥2017
13,071
13,071-Thousands of U.S. dollars

$
$

2018
158,087
158,087-(Notes and accounts payable)
The fair value of notes and accounts payable is based on the relevant book value because they are mostly settled within a short period oftime and the fair value is nearly equal to the book value.

Amounts recognized on the consolidated balance sheets
Fair value
Difference¥¥

Millions of yen
2018
35,107¥35,107¥2017
32,87132,871-Thousands of U.S. dollars

$
$

2018
330,452
330,452-(Short-term loans payable)
The fair value of short-term loans payable is based on the relevant book value because they are settled within a short period of time andthe fair value is nearly equal to the book value.

Amounts recognized on the consolidated balance sheets
Fair value
Difference¥¥

Millions of yen
2018
7,675
¥
7,675
¥

2017
7,675
7,675
-

Thousands of U.S. dollars

$
$

2018
72,242
72,242-(Long-term debt)
The fair value of long-term debt is calculated by a method that discounts total principal plus interest by an assumed interest rate for asimilar new loan. Short-term ﬁnancing is primarily for operating funds, while long-term debt is for capital investment.

¥¥

Millions of yen
929
934
5

¥
¥

2017
1,397
1,404
7

Thousands of U.S. dollars

$
$

2018
8,741
8,786
45

Items for which no fair value was obtainable(Non-listed equity securities)
Amounts recognized on the consolidated balance sheets
Equity securities issued by afﬁliates
Other

57

TAKUMA 2018 ANNUAL REPORT¥

Millions of yen
2018
4,333
¥
90

2017
4,041
90

Thousands of U.S. dollars$

201840,790845

Cash and time deposits

1 to 2 years¥

2 to 3 years¥

3 to 4 years¥

4 to 5 years¥

More than 5 years¥

47,648

2,177

530

-

-

-

Notes and accounts receivable
Investment securities

-

-

Total

¥

108,512¥

Short-term loans payable

¥

7,675

¥

Long-term debt

470

-

2,177

¥

-

¥

117

-

530

¥

-

¥

80

-

-

¥

-

¥

182

-

-

¥

-

-

¥

-

¥

-

80

-

Total

¥

As of March 31, 2017

Less than 1 year
57,719¥1 to 2 years¥

2 to 3 years¥

3 to 4 years¥

4 to 5 years¥

More than 5 years¥

43,928

1,026

-

-

-

-

8,145

¥

117

¥

80

182

¥

¥

80

Millions of yen
Cash and time deposits
Notes and accounts receivable
Investment securities

-

-

Total

¥

101,647¥

Short-term loans payable

¥

7,675

¥

Long-term debt

468

Total

¥

As of March 31, 2018

Less than 1 year

Cash and time deposits$

Notes and accounts receivable

8,143

572,888¥$-

Short-term loans payable$

72,242$

4,422
76,664

470

-

¥

$

-

¥

117

-

¥

-

¥

80

¥

-

$

-

$

$

-

$

753
$

753

¥

¥

80

182

80

¥

More than 5 years

-

-

$

-

-

-

$

-

$

1,715

-

-

-

1,715
$

¥

4 to 5 years
$

-

4,990

-

-

182

-

$

-

-

80

4,990

20,487

1,099¥

Thousands of U.S. dollars
2 to 3 years
3 to 4 years

1,099
$

-

-

117

$

$

¥

20,487$ 1,021,388

Total

-

1 to 2 years

Total

Long-term debt¥

470

448,500

Investment securities

-

1,026

-

-

$

-

-

$

-

$

-

753
$

-

753

7. Securities(1) Acquisition costs and book values of available-for-sale securities with available fair values as of March 31, 2018 and 2017 were as
follows:
As of March 31, 2018
Securities with book values exceeding acquisition costs：
Equity securities
Subtotal
Securities with book values not exceeding acquisition costs：
Equity securities
Subtotal
Total

Acquisition cost

Millions of yen
Book value¥¥

As of March 31, 2017
Securities with book values exceeding acquisition costs：
Equity securities
Subtotal
Securities with book values not exceeding acquisition costs：
Equity securities
Subtotal
Total

Acquisition cost

Millions of yen
Book value

¥

¥

¥

¥

5,923
5,923
551
551
6,474

5,954
5,954
81
81
6,035

¥

¥

16,324
16,324471
471
16,79513,00813,00863
63
13,071

Difference¥¥

10,401
10,401(80)(80)
10,321

Difference
¥

¥

7,054
7,054
(18)
(18)
7,036

TAKUMA 2018 ANNUAL REPORT

Financial Information

Amounts recognized on the consolidated balance sheets
Fair value
Difference

2018

Millions of yen
Less than 1 year
60,864¥58

Financial Statement
As of March 31, 2018
Securities with book values exceeding acquisition costs：
Equity securities
Subtotal
Securities with book values not exceeding acquisition costs：
Equity securities
Subtotal
Total

Acquisition cost$

55,75255,752
5,187
5,187
60,939$Thousands of U.S. dollars
Book value$$

153,651
153,651
4,436
4,436
158,087

Difference$$

97,89997,899(751)(751)
97,148(2) Available-for-sale securities sold for the years ended March 31, 2018 and 2017 were as follows:
Information on the available-for-sale securities sold for the year ended March 31, 2017 is not provided because there was no
signiﬁcant gain.

Total sales amount
Gains

¥

2018

Millions of yen
230
111

¥

2017

Thousands of U.S. dollars

-

$

2018
2,162
1,041

8. Pledged assets

10. Employees' retirement beneﬁts(1) Outline of adopted retirement beneﬁt scheme
The Companies provide three types of post-employment beneﬁt plans, unfunded lump-sum payment plans, funded non-contributory
pension plans and deﬁned contribution plans, under which all eligible employees are entitled to beneﬁts based on the level of wages
and salary at the time of retirement or termination, length of service and certain other factors.
(2) Deﬁned beneﬁt plans
Movement in retirement beneﬁt obligations (except plan applied simpliﬁed method) for the years ended March 31, 2018 and 2017
was as follows:

Balance at April 1, 2017 and 2016
Service cost
Interest cost
Actuarial loss (gain)
Beneﬁts paid
Balance at March 31, 2018 and 2017

¥

¥

¥

2018

Millions of yen

193
36
450
256
102
1,037

¥

¥

¥

Thousands of U.S. dollars

2017

270
48
94
450
237
73
1,172

$

$

2018
1,815
341
4,236
2,410
956
9,758

9. Short-term loans payable and long-term debt

Balance at April 1, 2017 and 2016Retirement beneﬁt costs
Contributions paid by the employer
Beneﬁts paid
Other
Balance at March 31, 2018 and 2017

Thousands of U.S. dollars

$

$

2018
79,498
5,425
429
589
(2,865)83,076¥2018

Millions of yen

7,675
7,675

¥

¥
¥

Thousands of U.S. dollars

2017

175
7,500
7,675

$
$

2018

72,242
72,242¥¥

2018

Millions of yen

565
99
(29)
(54)
(1)
580

¥

Thousands of U.S. dollars

2017

575
78
(34)
(58)
4
565

¥

$

$

2018
5,318
936
(278)
(509)
(8)
5,459

Reconciliation from retirement beneﬁt obligations and plan assets to net deﬁned beneﬁt liability as of March 31, 2018 and 2017 was asfollows:

Funded retirement beneﬁt obligations
Plan assets

Short-term loans payable as of March 31, 2018 and 2017 were as follows:

SecuredUnsecured

2017
8,093
565
44
13
(269)
8,446

Movement in net deﬁned beneﬁt liability of plan applied simpliﬁed method for the years ended March 31, 2018 and 2017 was as follows:

The following assets were pledged to secure short-term loans payable, long-term debt, and ｃontingent liabilities under guarantees forbank loans of afﬁliated companies and fulﬁllment of contracts as of March 31, 2018 and 2017:

Buildings and structures
Machinery and equipment
Land
Investment securities
Cash and time deposits
Time deposits as construction contract guarantees
Total

Millions of yen
2018
8,446
¥
576
46
62
(304)
8,826
¥

¥

Unfunded retirement beneﬁt obligations
Total net deﬁned beneﬁt liability (asset) at March 31, 2018 and 2017
Net deﬁned beneﬁt liability
Total net deﬁned beneﬁt liability (asset) at March 31, 2018 and 2017¥

Millions of yen
2018
571
¥
(415)
156
9,250
9,406
9,406
9,406

2017
602
(434)
168
8,843
9,011
9,011
9,011

¥

Thousands of U.S. dollars

$

$

2018
5,381
(3,910)1,471
87,06488,53588,53588,535Current portion of long-term debt as of March 31, 2018 and 2017 was as follows:

SecuredUnsecured

¥

2018

¥

Millions of yen
72
398
470

¥

2017

¥

Thousands of U.S. dollars

70
398
468

$
$

676
3,746
4,422

Long-term debt as of March 31, 2018 and 2017 was as follows:

SecuredUnsecured¥

Millions of yen
37
422
459

¥
¥

2017

Thousands of U.S. dollars

109
820
929

$
$

2018

345
3,974
4,319

Service cost
Interest cost
Amortization of actuarial differences
Amortization of prior service cost
Retirement beneﬁt costs based on the simpliﬁed method
Total retirement beneﬁt costs for the ﬁscal years ended March 31, 2018 and 2017¥¥

Short-term loans payable
Current portion of long-term debt
Long-term debt

59

TAKUMA 2018 ANNUAL REPORT

2017
0.6%
1.2%
2.0%

Millions of yen

576
46
157
(49)
99
829

¥

Thousands of U.S. dollars

2017

565
44
162
(49)
78
800

¥

$

$

2018
5,425
429
1,474
(461)
936
7,803

Remeasurements of deﬁned beneﬁt plans for the years ended March 31, 2018 and 2017 were as follows:

The annual average interest rate applicable to bank loans at March 31, 2018 and 2017 was as follows:
2018
0.6%
1.5%
2.4%

2018

Prior service costs
Actuarial gains and losses
Total remeasurements of deﬁned beneﬁt plans for the ﬁscal years ended
March 31, 2018 and 2017¥¥

Millions of yen
2018
(49)
¥
94
45

¥

2017
(49)
149
100

Thousands of U.S. dollars

$

2018
(462)
885

$

423

TAKUMA 2018 ANNUAL REPORT

Financial Information

¥

2018

Retirement beneﬁt costs for the years ended March 31, 2018 and 2017 were as follows:

2018

60

Financial Statement
14. Research and development expenses

Accumulated remeasurements of deﬁned beneﬁt plans as of March 31, 2018 and 2017 were as follows:

Prior service costs yet to be recognized
Actuarial gains and losses yet to be recognized
Total balance at March 31, 2018 and 2017

¥

2018

Millions of yen

10
(816)
(806)

¥

¥
¥

Thousands of U.S. dollars

2017

59
(910)
(851)

$
$

2018

91
(7,676)(7,585)

Research and development expenses are charged to income as incurred. Such expenses included in cost of sales and selling, general andadministrative expenses for the years ended March 31, 2018 and 2017 were as follows:

¥

2018

Millions of yen
929

¥

2017

Thousands of U.S. dollars

973

$

2018
8,743

The principal actuarial assumptions at March 31, 2018 and 2017 were as follows:
Discount rate
Expected rate of salary increase

2018
principally 0.64%
principally 6.6%

15. Income taxes

2017
principally 0.64%
principally 6.4%

The Companies are subject to a number of taxes based on income, which, in the aggregate, indicated a statutory rate in Japan ofapproximately 30.8% for the years ended March 31, 2018 and 2017.

(3) Deﬁned contribution plan
The amount of contribution required for the deﬁned contribution plans of the Companies for the years ended March 31, 2018 and2017 was ¥132 million ($1,240 thousand) and ¥130 million, respectively.

The signiﬁcant differences between the statutory tax rate and the Companies' effective tax rate for ﬁnancial statement purposes were set
forth in the table below.
Statutory tax rate

11. Contingent liabilities
The Companies were contingently liable under guarantees for bank loans of afﬁliated companies and other companies as of March 31,2018 and 2017 as follows:

Unsecured¥

2018

Millions of yen
239

¥

2017

Thousands of U.S. dollars

284

$

2018
2,247

12. Net assets
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However, acompany may, by a resolution of the Board of Directors, designate an amount not exceeding one half of the price of the new shares asadditional paid-in capital, which is included in capital surplus.
Under the Japanese Corporate Law (the “Law”), in cases in which a dividend distribution of surplus is made, the smaller of an amountequal to 10% of the dividend or the excess, if any, of 25% of common stock over the total of additional paid-in capital and legal earnings
reserve must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings
in the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital can be used to eliminate or reduce a deﬁcit or be capitalized by aresolution of the shareholders' meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Law, all additional paid-in capitaland all legal earnings reserve may be transferred to other capital surplus and retained earnings, respectively, which are potentiallyavailable for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the nonconsolidated ﬁnancial statements of
the Company in accordance with Japanese laws and regulations.

Nondeductible expenses
Dividend income
Equity in earnings of afﬁliated companies
Council tax
Decrease in deferred tax assets resulting from change in statutory rate
Tax credits
Valuation allowance
Other
The Companies' effective tax rate

2018
30.8%

2017
30.8%

1.1
(0.2)
(1.3)
0.6
(2.0)
(1.3)
(0.6)
27.1%

1.1
(0.2)
(0.7)
0.6
0.2
(2.4)
0.0
(3.3)
26.1%

Components of the Companies' deferred tax assets and liabilities as of March 31, 2018 and 2017 were as follows:

Deferred tax assets:
Net deﬁned beneﬁt liability
Accrued cost of sales
Impairment loss
Other
Total deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Unrealized gains on securities
Valuation difference in land of consolidated subsidiary
Other
Total deferred tax liabilities
Net deferred tax assets

2018
¥

¥
¥

¥

Millions of yen

2,876
1,483
1,262
3,721
9,342
(3,975)
5,367¥(3,143)(152)(168)(3,463)
1,904

¥

¥

¥

2017

Thousands of U.S. dollars

2018

2,782
1,348
1,262
5,671
11,063(4,112)
6,951$(2,135)(152)(168)(2,455)
4,496

$

$

$

27,068
13,958
11,87935,032
87,937(37,416)
50,521(29,586)(1,433)(1,584)(32,603)
17,918The appropriation of retained earnings with respect to a given ﬁnancial year is made by resolution of the shareholders at a general
meeting held subsequent to the close of such ﬁnancial year. The accounts for that year do not, therefore, reﬂect such appropriations.

13. Provision for losses on sales contracts
Provision for losses on sales contracts included in cost of sales for the years ended March 31, 2018 and 2017 was as follows:

61

TAKUMA 2018 ANNUAL REPORT

Millions of yen
373

¥

2017

Thousands of U.S. dollars

10

$

2018
3,507

Financial Information

¥

2018

TAKUMA 2018 ANNUAL REPORT

62

Financial Statement
16. Comprehensive income
Amounts reclassiﬁed to net income in the current period that were recognized in other comprehensive income in the current or previous
periods and the tax effects for each component of other comprehensive income were as follows:
2018

Millions of yen

Thousands of U.S. dollars

2017

2018

Unrealized gains on securities
Increase (decrease) during the year

¥

3,395

¥

1,866

$

31,952

Reclassiﬁcation adjustments

(111)

(0)

(1,041)

Subtotal, before tax

3,284

1,866

30,911(1,009)(567)(9,491)Tax (expense) or beneﬁt
Subtotal, net of tax

¥

2,275

¥

1,299

$

21,420¥Reclassiﬁcation adjustments
Subtotal, before tax
Tax (expense) or beneﬁt
Subtotal, net of tax

¥

(13)

¥

(29)

$

(122)

-

-

-

(13)

(29)

(122)

10

(0)

92

(3)

¥

(29)

$

¥

Reclassiﬁcation adjustments
Subtotal, before tax
Tax (expense) or beneﬁt
Subtotal, net of tax

¥

(4)

¥

23

$

(36)

-

-

-

(4)

23

(36)

-

-

-

(4)

¥

23

$

(36)

¥

(63)

¥

(13)

$

Year ended March 31, 2018

108

113

1,013

Subtotal, before tax

45

100

424

(14)

(31)

(130)

Tax (expense) or beneﬁt
¥

31

¥

69

Domestic
Environment
and Energy

¥

2,299

¥

1,362

$
$

Package
Boiler294
21,648Equipment
andSystem Business

Total

Adjustment

Consolidated-¥ 118,199

Sales:¥

Intersegment
Total
Reportable segment income

89,850

3,401

7,681

¥ 118,199

225

-

54

16

295

(295)

-

90,0753,401

17,321

7,697

118,494(295)

118,199¥¥

17,267¥¥¥

10,488

¥

78

¥

1,015

¥

229

¥

11,810¥(1,780)¥10,030

¥

559

¥

12

¥

170

¥

19

¥

760

¥

30

¥

790

Others:Depreciation

Millions of yen
Year ended March 31, 2017

Domestic
Environment
and Energy

Overseas
Environment
and Energy

Package
BoilerEquipment
andSystem Business

Total

Adjustment

Consolidated-¥ 116,309

Sales:
Outside customers¥

Intersegment
Total
Reportable segment income（loss）

90,311

2,222

17,1286,648¥ 116,309

332

0

37

18

387

(387)

-

90,643

2,222

17,165

6,666

116,696(387)

116,309

¥

¥

¥

¥

¥

11,727

¥

(154)

¥

917

¥

322

¥

12,812¥(1,838)¥

10,974

¥

605

¥

13

¥

179

¥

23

¥

820

¥

31

¥

851

Others:Thousands of U.S. dollars
Year ended March 31, 2018

Domestic
Environment
and Energy

Overseas
Environment
and Energy$ 845,721$

Package
BoilerEquipment
andSystem Business

Total

Adjustment

Consolidated-$ 1,112,562

Sales:
Outside customers
Intersegment

Total other comprehensive income

Overseas
Environment
and Energy(589)

Reclassiﬁcation adjustments

Subtotal, net of tax

Millions of yen

Depreciation

Remeasurements of deﬁned beneﬁt plans
Increase (decrease) during the year(3) Information about reported segment proﬁt or loss and other material items
Reportable segment information for the years ended March 31, 2018 and 2017 was as follows:(30)

Foreign currency translation adjustments
Increase (decrease) during the year

Proﬁts of reporting units are operating income. Internal revenue and transfers between reporting segments are recorded using
prevailing market prices.

Outside customers

Deferred gains and losses on hedges
Increase (decrease) during the year

(2) Basis of measurement about reported segment proﬁt or loss and other material items
Accounting methods used for reporting segments are the same those explained in the Note 2, “Summary of signiﬁcant accounting
policies.”

Total
Reportable segment income

32,014$ 162,527

72,300$ 1,112,562

2,124

-

510

148

2,782

(2,782)-

847,845

32,014

163,037

72,448

1,115,344(2,782)

1,112,562$ 111,159$ (16,751)$

94,408

278

$

7,433

$

$

98,714

$

734

$

9,558

$

2,153

$

5,262

$

111

$

1,598

$

184

$

Others:17. Segment information(Supplemental information - Accounting Standard for Disclosures about Segments of an Enterprise and Related Information)(1) General information about reportable segments
In the Group, businesses for which separate ﬁnancial information is available are grouped into the following four reporting segmentsin accordance with the similarity of products and services of the respective business. The results of each reporting segment are
reviewed periodically by the Board of Directors to assess the segment's business performance.
Domestic Environment and Energy
General waste treatment plants, industrial waste treatment plants, waste recycling plants, wastewater treatment plants, sludge
combustion plants, biomass power plants and gas-turbine cogeneration systems

Depreciation

$

7,155

$

Adjustments in reportable segment income include eliminations of transactions between segments and corporate expenses notallocated to reportable segment expenses, including selling, general and administrative expenses not attributable to reportablesegments.
Total reportable segment income is adjusted with operating income reported on the Consolidated Statements of Operations.
Disclosure of information relating to segment assets is omitted since assets are not allocated to business segments.

Financial Information

Overseas Environment and Energy
Waste combusting power plants and biomass power plants
Package Boiler
Compact through-ﬂow boilers and vacuum water heating systems
Equipment and System Business
Construction equipment, equipment for semi-conductor industry and cleaning systems

63

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

64

Financial Statement(Related information)
Reportable segment information for the years ended March 31, 2018 and 2017 was as follows:(1) Information about products and services
Disclosure of this information is omitted since similar information is disclosed in Note 17, “Segment information.”(２) Information about geographic areas
Revenues
Since over 90% of net sales reported on the Consolidated Statements of Operations were sales to outside customers within Japan,
disclosure of this information is omitted.
Tangible ﬁxed assets
Since 90% of tangible noncurrent assets reported on the consolidated balance sheet (in terms of values) were located within Japan,
disclosure of this information is omitted.
(３) Information about major customers
Since no outside customer accounted for 10% or more of net sales reported on the income statement, disclosure of this informationis omitted.
（Information related to noncurrent asset impairment loss by reporting segment）
Not applicable（Information related to amortization and unamortized balance of goodwill）
Not applicable（Information related to gain on negative goodwill by reporting segment）
Not applicable

Financial Information

65

TAKUMA 2018 ANNUAL REPORTTAKUMA 2018 ANNUAL REPORT

66

This publication features an environmentally friendly,
universal design that is made possible by the following initiatives and programs:■Printing■Paper■FontsMIX
Paper from
responsible sources

C020841
Printed using “waterlessprinting,” which does not
generate hazardous waste.

Printed using environmentallyfriendly vegetable oil ink.

Printed on FSCTM-certiﬁedpaper (made from trees from
responsibly managed forests).

This publication uses universal
design fonts that are easy to
read.

Printed in Japan