To Our Shareholders

Let me begin by thanking you for your support over the past fiscal year.
TOYO launched our four-year medium-term business plan—NEXT TOYO
2015—at the beginning of fiscal 2012. Our strategy under the plan has been
to differentiate TOYO in the marketplace by maximizing the strengths of ourgroup companies in growth regions around the world. In doing so, we havebeen guided by the plan’s basic policies: 1) integrating our global operations
system; 2) expanding our business into the upstream sector and customer
value chain; and 3) developing our global human capital.
As of March 31, 2014, two years have passed since the launch of NEXTTOYO 2015. In summary, while our global operations system has newly
expanded in Canada, Indonesia and Brazil, I feel that further stepping up
management capabilities and earning power of our group companies havebecome issues.
In fiscal 2013, new orders increased to a record high of ¥365.1 billion.
However, TOYO’s profitability fell substantially below our original fiscal
targets. As the company’s CEO, I find these business results truly regrettable,
and will strive to improve profitability going forward.
Keeping these issues in mind, in the remaining two years of the plan, I
will aim to bring out the true strengths of our group operations, developing
TOYO into a global company with competitive and earning power recognizedworldwide.
In meeting the challenges of this task, I look forward to the continued
support of our shareholders.
August 2014

Katsumoto Ishibashi
President and Chief Executive Officer

Corporate Philosophy

Mission:Engineering for Sustainable Growth of the Global Community
Vision:Global Leading Engineering Partner
Values:Integrity, Creativity, Diversity, Learning, TeamTOYO ENGINEERING CORPORATION Annual Report 2014

01

02

Consolidated Five-Year Financial Summary
Consolidated Five-Year Financial Summary
Toyo Engineering Corporation and Consolidated Subsidiaries Years ended March 31
2014

2013

2012

2011

Net sales¥230,124¥228,723¥157,881¥155,696

Gross profit

25,15524,20024,91826,573

455

1,593

5,341

6,815

Income before
income taxes

5,673

2,982

4,941

6,917

Net income

967

1,457

3,728

3,773

Total assets

257,480

240,694

222,415

198,387

Total net assets

74,831

71,091

69,26567,096Long-term loans payable

33,53526,477

24,582

15,163

756

689

1,595

542

Depreciation
and amortization

2,633

2,570

2,524

2,473

Capital stock

18,19818,19818,19818,198New orders

365,137

290,444

269,188

222,540

Backlog of contracts
at end of the year

538,023

410,492

359,120

224,693

7.60¥ 19.43¥ 19.65

Operating income

Purchase of property,
plant and equipment

Per share:

5.05

Net income¥

Total net assets

382.61363.15349.42340.43

Cash dividends

3.00

5.00

6.00

5.00

Chemical fertilizers

19.4%

16.6%

10.0%

6.9%

Petrochemicals

30.3

18.8

15.3

22.8

Refinery

13.0

7.7

11.5

23.8

Energy-related

7.2

27.0

35.2

18.7

General manufacturing facilities
and information technology

9.2

16.7

20.3

20.0

Others

20.9

13.2

7.7

7.8

(Overseas sales ratio)

(84)

(81)

(73)

(64)

4,747

4,548

4,494

3,956

¥

Net sales by sector (%):

Number of employees*U.S. dollar amounts are stated at ¥ 102.88 to U.S.$1.00, the exchange rate prevailing on March 31, 2014.

Contents
01 To Our Shareholders

Financial Section

22 Notes to Consolidated Financial Statements

02 Consolidated Five-Year Financial
Summary

16 Consolidated Balance Sheets

51 Independent Auditor’s Report

18 Consolidated Statements of Income

52 Corporate Information

04 Management’s Discussion and Analysis

19 Consolidated Statements ofComprehensive Income

55 Stock Information

10 Major Orders Received in Fiscal 201314 Corporate Governance

20 Consolidated Statements of Changes
in Net Assets

15 Business Risk and Other Risks

21 Consolidated Statements of Cash Flows

12 HSSE + Quality

TOYO ENGINEERING CORPORATION Annual Report 2014

Millions of yen

Thousands of
U.S. dollars*

2010

2014

¥173,943$2,236,819

32,983

244,508

13,0704,422

14,23655,141

7,131

9,399

190,127

2,502,721

65,295727,361

21,947

325,962

508

7,348

2,237

25,592

18,198

176,885

132,4563,549,154

168,179

5,229,617

Yen

U.S. dollars*¥ 37.12$0.04

329.54

3.71

7.00

0.02

Net sales(¥ billion)

Operating income(¥ billion)

13.0
228.7 230.1
173.9

155.6 157.8

6.8
5.3
1.5

`10

`11

`12

`14

`13

Net income(¥ billion)

`10

`11

`12

0.4
`14

`13

Total assets(¥ billion)

7.1
190.1 198.3
3.7

`11

`12

0.9
`14

`13

New orders(¥ billion)

14.0%

`10

`11

`12

`14

`13

Backlog of contracts
at end of the year(¥ billion)

365.1

23.9
27.6
269.1

14.4

257.4

3.7

1.4

`10

222.4

240.6

538.0

410.4

290.4

359.1

222.5
13.1

224.6
132.4

7.0

168.1

(71)
4,024
`10

DEFINITION OF TERMS

`11

`12

`13

CAUTION CONCERNING FORWARD-LOOKING
STATEMENTS

Fiscal 2013 means the fiscal year ended March 31,

This annual report includes certain “forward-looking

2014 (April 1, 2013–March 31, 2014).

statements.” These statements are based on

The word, mark, logo or any sign with a symbol

management’s current expectations and are subject“TM” means that it is a registered trademark of

to uncertainty and changes in circumstances. Actual

Toyo Engineering Corporation in Japan.

results may differ due to changes in economic,
business, competitive, technological, regulatory,
and other factors.

`14

`10

`11

`12

`13

`14

03

04

Management’s Discussion and Analysis
Fiscal 2013 was the second year of TOYO’s medium-term business plan NEXT TOYO 2015. During theyear under review, TOYO won several large-scale projects in its frontier markets and core businessareas. As a result, consolidated new orders reached a record high of ¥365.1 billion. In fiscal 2014,
supported by the high global demand for plants, TOYO will work to accelerate its growth by a quick
recovery in its earning capacity and by expanding orders.

Fiscal 2013 Performance Outline (Consolidated)
Net sales¥ 230.1 billion ( 0.6% up)

Operating income¥

455 million (71.4% down)

Ordinary income¥

4.9 billion (22.6% up)

Net income¥

967 million (33.6% down)

New orders¥ 365.1 billion (25.7% up)

Cash dividends (annual)¥ 3.00 per share

In fiscal 2013, ended March 31, 2014, net sales increased 0.6% year on year, to ¥230.1 billion, supported
by progress in the execution of such projects as a fertilizer plant in Indonesia, utility facilities for theComplexo Petroquímico do Rio de Janeiro (COMPERJ) in Brazil, and an oil refinery modernization
project in Russia. In terms of profitability, TOYO recorded an operating loss of ¥4.4 billion in the firsthalf of fiscal 2013. This result was caused by, among other factors, growing losses at one of our groupcompanies in connection with the fertilizer plant project in Indonesia. However, as we have madevarious efforts to improve overall profitability, operating income in fiscal 2013 was ¥455 million, adecline of 71.4% year on year. Because of income contributions by affiliates accounted for by the equity
method and other non-operating income, ordinary income rose 22.6%, to ¥4.9 billion. Net income fell
33.6%, to ¥967 million. TOYO’s management team sincerely regrets the fiscal 2013 business results
and intends to work to improve profitability going forward. In consideration of TOYO’s financial position,
performance, and other business indicators, TOYO decided to forego interim dividends, paying a yearend cash dividend of ¥3.00 per share.

New Orders in Fiscal 2103
Among new orders received in fiscal 2013 were an ethylene plant expansion project in Indonesia, apolyethylene plant in Egypt, an LNG regasification plant project in India, an ammonia plant project inBrazil, and a large gas chemical complex in Turkmenistan. In addition, TOYO also received a detailed
engineering for an ethylene plant and Front End Engineering Design (FEED) for a polyethylene plantin shale gas-related projects in the United States. Our group company Toyo-Canada won a full-scale
Engineering, Procurement and Construction (EPC) oil sands steam assisted gravity drainage facility
project, which was a goal TOYO had been aiming for since entering the Canadian market. In all of theseprojects, the orders were won based on the global operations system with TOYO’s group companies.
As a result, new orders rose to a record high of ¥365.1 billion, up 25.7% year on year. The backlog
of contracts at end of the year also hit a record high of ¥538.0 billion, an increase of 31.0% year on year.

Fiscal 2013 Performance of Equity Method Affiliates
Equity method investment gain in fiscal 2013 increased because of the income growth of TOYO’s joint
venture in Singapore. This equity-method affiliate, a 50/50 joint venture with MODEC, Inc., received
an order for topsides units for a Floating Production Storage and Offloading (FPSO) system in Brazil.
TOYO has another 50/50 joint venture in Brazil (see Topic on page 9). Backlog of contracts at end of
the year of these two joint ventures with 50% share amounted to ¥175.6 billion. TOYO has other equity
method affiliates, including Toyo-Thai Corporation Public Company Limited, which is listed on the Stock
Exchange of Thailand.

TOYO ENGINEERING CORPORATION Annual Report 2014

Net sales
Breakdown
by region(¥ billion)

250

Breakdown
by segment
details(¥ billion)

250

200

200

150

150

100

100

50

50

0

0

2011/3

2012/3

2013/3

2014/3Chemicalfertilizers

10.8

15.8

37.9

44.7

Petrochemicals

35.4

24.1

43.1

69.8

Oil refinery

37.0

18.2

17.6

29.9

Energy-related

29.1

55.6

61.8

16.6

20.1

19.8

27.2

9.1

17.7

Generalmanufacturing
facilities

42.8

IT

11.1

12.2

11.0

12.1

Real estate

2.9

2.6

2.2

2.1

Others

9.2

9.5

27.9

45.8

Total

155.6

157.8

228.7

230.1

2011/3

2012/3

2013/3

2014/3

Japan

55.4

42.3

44.4

36.2

Southeast Asia

15.3

38.7

69.3

54.5

Southwest Asia,
Middle East andAfrica

24.5

26.0

31.8

42.4

Russia andCentral Asia

1.6

5.6

6.4

10.6

North America *

-

-

-

Central andSouth America

39.0

22.6

52.8

China

17.3

18.9

17.2

13.7

Others

2.5

3.7

6.8

12.2

Total

155.6

157.8

228.7

230.1

*We disclosed the region of North America starting from 2014/3.

Backlog of contracts
Breakdown
by region(¥ billion)

600

500

Breakdown
by segment
details

500

400

400

300

300

200

200

100

100

0

(¥ billion)

600

02011/3

2012/3

2013/3

Japan

21.3

30.7

24.4

20.8

Southeast Asia

101.8

107.0

123.7

113.4

Southwest Asia,
Middle East andAfrica

30.6

71.2

90.6

117.8

Russia andCentral Asia

10.6

7.4

31.3

2011/3

2012/3

2013/3

2014/3Chemicalfertilizers

55.4

74.8

151.3

138.6

Petrochemicals

15.6

78.1

105.5

210.8

Oil refinery

20.0

11.5

51.8

109.1

Energy-related

101.0

94.1

41.5

14.9

28.1

31.4

7.2

1.1

2014/3112.9

North America *

-

-

-

86.0

Generalmanufacturing
facilities

Central andSouth America

40.5

121.5

96.0

65.9

IT

3.4

3.1

4.0

3.9

Others

1.1

66.1

49.1

59.6

Total

224.6

359.1

410.4

538.0

China

18.6

19.5

14.3

8.3

Others

1.2

1.8

30.1

12.9

Total

224.6

359.1

410.4

538.0

*We disclosed the region of North America starting from 2014/3.

05

06

Management’s Discussion and Analysis

Consolidated Performance and Financial Information
Consolidated Statement of Income Summary(Millions of yen)

Cost of sales
204,968

Gross profit
25,155

Operating Income
Despite an operating loss on the fertilizer plant inIndonesia in the first half of the fiscal year, neworders and efforts to improve the profitabilityof ongoing projects mitigated the decline inoperating income, which fell ¥1.1 billion from ayear earlier, to ¥455 million.

Selling, general andadministrative
expenses
22,606

Non-operating
income3,762
Non-operating
expenses
1,323

Selling, general andadministrative
expenses
24,699Non-operating
income5,751
Non-operating
expenses
1,264

Extraordinary
income607
Extraordinary loss
1,656
Income tax(current anddeferred)
2,140
Minority interests
in loss
614

Ordinary income
4,942

Ordinary income
4,032

Ordinary Income
Ordinary income amounted to ¥4.9 billion, up¥900 million year on year. Growth in ordinary
income can be attributed to a ¥2.0 billion increasein non-operating income, primarily because of
equity in earnings of affiliates and a reversal of
allowance for doubtful accounts.

Extraordinary
income2,020
Extraordinary loss
1,289
Income tax(current anddeferred)
4,621
Minority interests
in income84

Net income
1,457

Operating income
1,593

Net Income
The major components of extraordinary income
were a ¥501 million gain on sales of investment
securities and a ¥1.5 billion gain on change inequity. The chief component of extraordinary
loss was an impairment loss of ¥1.2 billion.
After deducting income taxes and making otheradjustments, net income amounted to ¥967
million, down ¥490 million from the previous
fiscal year.

Net sales
230,124

Cost of sales
204,523

Gross profit
24,200Net Sales
Based on progress in the execution of projects
in such fields as petrochemical, fertilizer and oil
refining, net sales increased 0.6%, to ¥230.1
billion.

Consolidated Statement of Income Summary(Millions of yen)
Net sales
228,723

Sales were up while profits were down year on
year.

Operating Net
incomeincome967455Previous fiscal year

Current fiscal year

(April 1, 2012 to March 31, 2013)(April 1, 2013 to March 31, 2014)

Consolidated Statement of Cash Flows Summary
Cash and cash equivalents at end of period
increased ¥25.2 billion from the beginning of theperiod, to ¥96.9 billion.
Cash flows from operating activities
Net cash provided by operating activities was¥21.2 billion. The cash inflow resulted from,among other factors, an increase in advances
received on uncompleted construction contracts
and the collection of accounts receivable fromcompleted construction contracts.
Cash flows from investing activities
Net cash used in investing activities amounted to¥1.6 billion, principally as a result of the purchaseof intangible assets, such as investments in IT
system development.

Cash flows from financing activities
Net cash provided by financing activities amounted
to ¥3.1 billion. The net cash inflow comprised
proceeds from long-term loans payable of ¥10.8
billion to ensure stable capital reserves less ¥4.5
billion in expenses for repayment of loans payableand ¥959 million in cash dividends paid.
(Millions of yen)
Cash and cash
equivalents at
beginning of
Cash flows fromperiodoperating activities
71,675
21,244

Cash flows fromfinancing activities
3,167

Cash flows used ininvesting activities(1,638)Current fiscal year

Effect ofexchange ratechange on
cash and cash
equivalents
2,486(April 1, 2013 to March 31, 2014)

Cash and cash
equivalents at endof period
96,934

TOYO ENGINEERING CORPORATION Annual Report 2014

Consolidated Balance Sheet Summary
Total assets increased ¥16.7 billion year on year,to ¥257.4 billion.
Total assets: ¥257.4 billion
Overall, total current assets rose ¥13.5 billion
from a year earlier. The main factor in theincrease was a ¥21.4 billion increase in cash anddeposits because of the collection of advances
received on uncompleted construction contracts
and of notes and accounts receivable. This
substantial amount offset the ¥6.0 billion decline
in notes receivable, accounts receivable fromcompleted construction contracts. Fixed assets
expanded ¥3.2 billion, primarily because of theincrease in the valuation of investment securities
resulting from income contributions by affiliates
accounted for by the equity method.

Total liabilities: ¥182.6 billion
Total current liabilities increased ¥7.0 billion year
on year because of the ¥12.0 billion growth inadvances received on uncompleted construction
contracts. Noncurrent liabilities rose ¥6.0 billion,
mainly because of the increase in long-term loans
payable. As a result, total liabilities were up ¥13.0
billion from fiscal 2012.
Total net assets: ¥74.8 billion
Total net assets grew ¥3.7 billion from theprevious fiscal year, principally becauseof an increase in total accumulated othercomprehensive income arising from foreign
currency translation adjustment related to thedepreciation of the yen.

Consolidated Balance Sheet Summary(Millions of yen)

Total liabilities
and net assets
240,694

Total assets
257,480

Total assets
240,694

March 31, 2014

Previous fiscal year
March 31, 2013

Net assets
74,831

Current fiscal year

Shareholders’ equity
70,111
Accumulated othercomprehensive
income(449)
Minority interests
1,429

Net assets
71,091

Property,plant and equipment
30,363
Intangible assets
5,085
Investments
and other assets
19,990Noncurrent liabilities
42,484

Noncurrent liabilities
36,472

March 31, 2013

Fixed assets
55,439Fixed assets
52,177

Previous fiscal year

Current liabilities
140,164

Current liabilities
133,130

Current assets
202,041

Current assets
188,517
Property,plant and equipment
31,187
Intangible assets
5,489
Investments
and other assets
15,500Total liabilities
and net assets
257,480(Millions of yen)

Shareholders’ equity
70,095
Accumulated othercomprehensive
income3,277
Minority interests
1,458

Current fiscal year
March 31, 2014

07

08

Management’s Discussion and Analysis

Fiscal 2014 Performance Forecast Outline (Consolidated)
Net sales¥ 290.0 billion

Operating income¥

Ordinary income¥ 10.0 billion

Net income¥

New orders¥ 330.0 billion

Cash dividends¥ 8.00 per share (¥4.00 interim and ¥4.00 year-end dividends)

7.0 billion
6.0 billion

In fiscal 2014, capital investment in TOYO’s core plant market is robust. In North America, there aremany plant projects based on the use of shale gas and oil being planned in the energy, petrochemicaland fertilizer fields. In Brazil, there is ongoing active energy development investment, particularly inoffshore oil and gas fields. Strong need for plant construction remains in India, Russia and other CIS
countries, and Indonesia and other Southeast Asian countries, to meet expanding demand for energy,materials, food and water. And the Middle East region continues to see high levels of investment
against the backdrop of continued high oil prices. Moreover, Iraq is planning large-scale energy
development projects.
In general, therefore, business conditions are considered favorable in the global plant market.
However, there are many factors in play that require careful monitoring of changes in market conditions.
These concerns include European and U.S. sanctions on Russia, unrest in Iraq and the impact of theUnited States’ reduction in quantitative easing on the emerging economies. Furthermore, the full-scale
entrance of Chinese engineering contractors into the large-scale petrochemical plant market will further
alter the business climate.
In consideration of the above, TOYO has set its goal for new orders in fiscal 2014 at ¥330.0 billion,
the same as in the previous fiscal year.
With steady contributions to sales from large-scale projects acquired over the past two years, suchas those in Brazil, Egypt, Nigeria and Indonesia, TOYO expects net sales to increase by about ¥60.0
billion compared with fiscal 2013, to ¥290.0 billion. Consequently, we anticipate operating income of¥7.0 billion, ordinary income of ¥10.0 billion and net income of ¥6.0 billion. Annual cash dividends will
total ¥8.00 per share, the sum of interim and year-end dividends of ¥4.00 per share each.

Specific Strategies Aimed at Profitability and GrowthBased on the results so far and the issues that have emerged, TOYO plans to prioritize the following
measures to achieve a rapid return to profitability and growth:

I. Strengthen Group Operations
We will implement the following measures with a sense of urgency:
1. Establish a seamless project operation system linking Toyo-Japan, its global group companies andproject sites.
2. Improve project management on a group-wide basis led by Toyo-Japan.
3. Develop human resources for projects at group companies.

II. Reinforce Measures to Increase New Orders
1. Focus on frontier markets (North America, Russia/CIS and Iraq)
Robust capital investments are being made in frontier markets in addition to existing prioritizedmarkets, such as Southeast Asia, Latin America, India and the Middle East. We intend to further
strengthen our sales activities in frontier markets and work to expand the scope of our business
operations with emphasis on the following fields:a) North America: Petrochemicals and fertilizer plants using shale gas and oil as feedstockb) Russia/CIS: Energy (oil and gas), petrochemicals, fertilizers, electric power generationc) Iraq: Energy development

TOYO ENGINEERING CORPORATION Annual Report 2014

2. Expand operations in the energy development field
We will strengthen our ability to respond to market demand for business by expanding TOYO’s
business alliances with clients and collaborative companies, participating in such projects as oil andgas redevelopment businesses employing enhanced oil recovery technology and other measures.
In the FPSO business, we will continue to expand orders and plan business development using themodule fabrication and integration yard facilities currently being constructed in Brazil.
3. Expand operations in the infrastructure fieldIn fiscal 2013, TOYO participated in a project to simultaneously construct seven electric power
plants at several locations in Thailand and completed them on schedule. Based on the experienceand recognition gained from this project, we are globally expanding our sales activities in electric
power generation in order to win more projects. Among other infrastructure business areas, weare targeting more large-scale solar power generation projects in Japan by participating in projectplanning right from the first stage of project formation.

III. Improving Overall Competitiveness of Core Products (Urea, ethylene and ammonia)
For core products, TOYO is strengthening its services for all stages of its clients’ value chains, and isappropriately responding to changes in the business environment, such as the effects of the shale gas
revolution. The scope of our core product services extends from initial planning to final operation andmanagement.

Topic: TSPI Expanding Orders in Brazil
In 2012, TOYO established TS Participações e Investimentos S.A. (TSPI) as a 50/50 joint venture with
the Brazilian engineering company SOG - Óleo e Gás S.A. (SOG). Since then, two wholly owned groupaffiliates were established under TSPI: TOYO-SETAL Empreendimentos Ltda. (TSE) and Estaleiros
do Brasil Ltda. (EBR). TSE focuses on onshore EPC projects, while EBR mainly targets offshore EPC
projects for facilities such as FPSO systems.
Even before establishing TSPI, TOYO was strongly positioned in the Brazilian market because of
its extensive record with plant projects that goes back to the 1990s. However, TOYO decided to forma joint venture with a local company because of the growing demand for localization in the Brazilian
market.
Both TSE and EBR are off to successful starts, winning several large projects in fiscal 2013, theirsecond year of operations. TSE was awarded a contract by Petróleo Brasileiro S.A. (PETROBRAS) forthe construction of hydrogen production facilities. The scope of work on the project encompasses
detailed design, procurement of equipment and materials, installation and commissioning support.
In a consortium with leading Brazilian engineering firm Engevix, TSE also won a contract for theBelo Monte hydroelectric power station being constructed on a site near a tributary of the Amazon
River. The contract covers installation of turbines, penstocks and substation equipment, as well as
commissioning assistance. TSE will also participate in the ammonia plant project awarded to TOYO andSOG (see page 10). As for EBR, the company was awarded an engineering, procurement, construction
and installation contract from a subsidiary of PETROBRAS to install topsides for an FPSO system. And
EBR is constructing yard facilities in the State of Rio Grande do Sul, located in the southernmost part ofBrazil, to be used to assemble the modules of the topsides and to integrate them on the hull.
TSPI and its two subsidiaries aim to continue expanding orders in the steadily growing Brazilian
market. Endeavoring to smoothly execute projects, the companies plan to further enhance TOYO’srecord and recognition in Brazil.

EBR yard construction site

TSE gas project construction site

09

10

Major Orders Received in Fiscal 2013
Orders Over
¥50 Billion

Orders Over
¥20 Billion

Large Gas Chemical Complex in Turkmenistan——

TOYO is building a large gas chemical complex
for State Concern “Turkmengas” in collaboration
with Hyundai Engineering Co., Ltd., Hyundai
Engineering & Construction Co., Ltd., and LG
International Corporation of Korea. TOYO is
responsible for the engineering, procurement
and commissioning of the gas separation unit
and ethylene and polypropylene production units.
For the gas separation unit, TOYO’s technology,
COREFLUX®, is being used to achieve effective
recovery of ethane and liquefied petroleum gas.
The complex is scheduled to be completed in 2018.

Through Toyo-Canada, TOYO received a contractfrom Japan Canada Oil Sands Limited (JACOS),a Canadian subsidiary of Japan Petroleum
Exploration Co., Ltd. (JAPEX), for TOYO’s firstoil sands project. TOYO is responsible for theengineering, procurement, and construction ofa bitumen processing facility using the steam
assisted gravity drainage (SAGD) method.
Located in Alberta, Canada, it is scheduled forcompletion in 2016. The initial daily production
capacity goal is 20,000 barrels per stream day.

Ethylene Plant Expansion Project in Indonesia

TOYO and ENPPI are executing the EPC project
under a lump-sum turnkey contract. With anannual production capacity of 400,000 tons, thepolyethylene plant will be supplied with feedstockby an ethylene plant currently being built by
TOYO as part of the same complex. When thepolyethylene plant is completed in 2015, it will be
the largest polyethylene plant in Egypt.

—

TOYO is expanding the production capacity ofan existing naphtha cracking plant it built in the
1990s, from the current 600,000 tons per year
to 860,000 tons per year. The EPC contract isbeing executed on a lump-sum turnkey basis forIndonesia’s PT. Chandra Asri Petrochemical Tbk.
The client awarded TOYO the contract based on
its appreciation of TOYO’s record in constructing
the existing plant and the various proposals
during the execution of FEED. The project isscheduled for completion at the end of 2015.
Polyethylene Plant in Egypt—

Jointly with Egyptian engineering company
ENPPI, TOYO is constructing a polyethylene plantin Alexandria, Egypt, for The Egyptian Ethylene
and Derivatives Company (ETHYDCO), whichis affiliated with Egypt’s Ministry of Petroleum.

Other
OrdersCanadian Oil Sands SAGD Facility Project

LNG Regasification Plant Project in India—

TOYO won consecutive orders for regasification
plants in India: one from Petronet LNG Ltd. toexpand LNG receiving capacity from 10 million
to 15 million tons per year at Dahej, and anotherfrom GSPC LNG Limited to construct a newplant with a receiving capacity of 5 million
tons per year at Mundra, both in the State ofGujarat. Toyo-India will take the lead on bothprojects, from engineering to construction andcommissioning. Completion is scheduled for the
beginning of 2017 at Dahej, and for the end of2016 at Mundra.
Basic Engineering Design for U.S. Polyethylene
Plant (FEED)—TOYO is providing FEED for a 450,000 ton per

Ammonia Plant Project in Brazil—

In cooperation with SOG, a leading Brazilian
engineering company, TOYO is constructing
an ammonia plant (UFN-5) with a production
capacity of 1,500 tons per day for PETROBRAS,
the Brazilian state-run oil company. The
project scope covers licensing, engineering,procurement of equipment and materials,
installation, commissioning and operation
assistance. The plant is scheduled to becompleted in 2017.

year linear low-density polyethylene plant to bebuilt by Sasol North America, Inc., in the State ofLouisiana. The new plant will use the UNIPOLTM
PE Process of Univation Technologies, LLC.
This project marks the twenty-second project in
TOYO’s UNIPOLTM PE Process track record.
Topsides Units for FPSO in Brazil—

MODEC and TOYO Offshore Production Systems
Pte. Ltd. (MTOPS), a Singapore joint company
and equity-method affiliate of TOYO, wasawarded a contract from MODEC, Inc., to install
topsides units for an FPSO system with a daily
production capacity of 100,000 barrels of oil and
177 million cubic feet of gas. It will be deployed
to an offshore oil field south off the coast of Riode Janeiro, Brazil. This order is MTOPS’s fourth
FPSO project to be delivered for PETROBRAS.

11

TOYO ENGINEERING CORPORATION Annual Report 2014

Major Projects

9

2
15

6
1

14

4
10

7

13

8

12
3
5
11

New Orders
		
1

Type

Location

Scope

Large Gas Chemical Complex

Turkmenistan

EP

2

Oil Sands SAGD Facilities

CanadaEPC

3Ethylene Plant Expansion ProjectIndonesia

EPC

4

Polyethylene Plant

Egypt

EPC

5

Ammonia Plant Project

BrazilEPC

6

LNG Regasification Plant Project

India

EPC

7

Polyethylene Plant

U.S.A.

FEED

Nigeria

EP

Ongoing8

Ammonia and Urea Plant

9

Oil Refinery Modernization Project (Heavy Residue Conversion Complex)

RussiaEP

10Ethylene Plant and Butadiene Extraction Unit

Egypt

EPC

11

Refinery Utility Complex

BrazilEPC

12

Gas Processing Plant Rejuvenation Project

Malaysia

EPC

Thailand

EPC

Completed13
14

Small Power Producer Cogeneration Plant (All seven projects completed)
Oxychlorination Process of Nr.3.VCM Plant

Japan

EPC

15
		

Oil Sands Refinery Project(Sulfur Recovery Unit, Light Ends Recovery Unit, Sour Water Stripper Unit and Amine Treatment Unit)

CanadaEDS

EP: 		
EPC:
FEED:
EDS:

Engineering and Procurement
Engineering, Procurement and Construction
Front End Engineering Design
Engineering Design Specification

12

HSSE + Quality
Quality

Commitment to Health, Safety, Security
and Environment (HSSE) and Quality
TOYO has stipulated the Basic Policies on Health, Safety, Security and Environment (HSSE) andQuality, which puts safety, quality and environmental management into practice. Through sharing andrigorously implementing these policies, TOYO strives to gain the trust of our clients and society.

Companywide Safety, Quality and Environment (SQE) Management Structure
TOYO has set up the SQE Committee, which report directly to the President, to review companywide
SQE management activities. The Committee establishes the operating policies and assesses andapproves the results of SQE activities. The SQE Promotion Committee promotes companywide
activities in line with the basic policy of the SQE committee, and also promotes specific SQE activities
of individual Operating Divisions and individual Project Execution Divisions. The SQE Promotion
Committee and the SQE Management Unit cooperate systematically on the axis of the SQE Committee,
which is connected directly to the management, to implement the PDCA cycle of the individual
Operating Divisions and individual Project Execution Divisions, for continual improvement of the SQEmanagement system and performance.

Companywide SQE Management Structure
President
Direct

SQE Management Unit●●

SQE Committee（Management review）

HSE Management Division
Quality Management Division
Reporting about workrelated issues and theirsolutionsSQE Promotion
Committee

SQE monitoring and audit

Units, divisions, departments and sections(Engineering, Procurement, Construction,and HQ management)

Project Execution Divisions

Safety & Environmental Report 2014
TOYO’s Safety & Environmental Report 2014 is available on our website. 		
It introduces our various activities on safety and the environment during 2013.

TOYO ENGINEERING CORPORATION Annual Report 2014

“Safety First” is not simply a slogan. “Safety” is an integral part of the TOYO brand.
In 2013, in terms of TOYO’s safety record as defined by ILO, Lost Time Incident Rate (LTIR) was 0.07
and Total Recordable Incident Rate (TRIR) was 0.22. Although our LTIR is slightly improved from 0.09,
our TRIR remains the same as in 2012. We are not satisfied with this result, and shall strive to complete
all jobs with no accidents and no harm to people.
We are aware that humans make mistakes, therefore it is important to enhance the quality ofsafety training to facilitate proactive safety actions and to raise sensitivity toward risk and hazards
that might lead to accidents. With the recognition that “Safety takes priority over everything else,” wecontinuously implement safety training programs to foster the safety culture.
TOYO’s group companies have applied unified standards for safety management and moreover,through promoting standardization, TOYO is making its best effort to maintain and improve quality as
well as safety.
TOYO’s Safety Record over the Past 5 Years (ILO base)
Year(Jan. to Dec.)

EmployeeWorked
Man-Days(Thousands)

EmployeeWorked
Man-Hours(A)(Thousands)

Number of Incident
Fatalities

Lost Time
Incidents

MedicalLTI Total
Treatment(B)(No Lost Time)

Recordable(C)

Lost Time
Incident Rate
(Note 1)

Total
Recordable
Incident Rate
(Note 2)

2009

16,769164,344

4

9

156

13

169

0.08

1.03

2010

12,012

117,295

1

5

56

6

62

0.05

0.53

2011

8,521

80,783

1

6

12

7

19

0.09

0.24

2012

12,739120,760

3

8

16

11

27

0.09

0.22

2013

10,790105,164

0

7

16

7

23

0.07

0.22

Note 1 : Lost Time Incident Rate (LTIR) = (B) × 1,000,000 / (A)Note 2 : Total Recordable Incident Rate (TRIR) = (C) × 1,000,000 / (A)Feedback Knowledge Management System (FKMS)
As part of the continual improvement of the Quality Management System, TOYO has been
accumulating feedback and knowledge for about 30 years from executed projects in the FKMS. The
FKMS accepts and shares the feedback and knowledge from TOYO group companies. Thereby the
feedback and knowledge can be extended and utilized among all TOYO group companies immediately
for suggestions and preventive actions in all subsequent projects and proposals.

ISO Approval
TOYO acquired ISO approval, which is the international standard, and acts for further safety, quality,and environmental management.

ISO 9001 Certificate of Approval

ISO 14001 Certificate of Approval

ISO / IEC 27001 Certificate of Approval

13

14

Corporate GovernanceInternal Control System
The Auditing Department of TOYO, which is under the direct control of the President, performs audits
concerning the execution of business activities by all divisions and verifies the appropriateness andeffectiveness of the internal management structure, including compliance and risk management. In
addition, there are specialized units to perform other internal audits, such as the SQE (Safety, Quality
and Environment) Management Unit.
In order to promote the Internal Control System of the Group, TOYO is making efforts to ensure
proper operations across TOYO’s group companies by establishing corporate procedures to strengthen thecorporate administrative functions of each company.
Risk Management System
For risk management concerning project profitability and financial matters within TOYO, all business
operations are constantly monitored and supervised, and reports are submitted to the Board of
Directors, the Executive Committee and the Board of Corporate Auditors. In addition, matters ofparticular importance concerning individual bidding and projects undergo a risk analysis overseen by
the Project Risk Management Committee, and reports are submitted to the Executive Committee.
TOYO has drawn up the Crisis Management Policy to clearly set forth risk management
procedures to forestall serious risks (crises) that have the potential to seriously affect the operations of
the Company. The Crisis Management Team is constantly prepared for potential crises.

Corporate Governance Structure (As of April 2014)&&

Sales Committee

Chief Security Trade Control Officer
SQE Management
Unit

Legal Unit
Security
Trade Control
Audit/
Guidance
General Affairs Division

Audit/Guidance

Operation Units

Corporate Planning Division

Audit/GuidanceBusiness Risk andand Other
OtherRisks
Risks

TOYO ENGINEERING CORPORATION Annual Report 2014

The following is a list of potential risks associated with the information concerning TOYO’s operating
results and financial condition in this annual report that may have a significant bearing on investors’decisions. This is not intended to be a complete list of these potential risks.
Business risk
The nature of our business activities, which mainly involve conducting projects worldwide, is exposedto the risks listed below. Any interruption or suspension in work due to these risks could have an
adverse effect on our operating results and financial condition. We are aware of the possibility thatthese risks may occur and are taking actions to reduce exposure to these risks by using export credit
insurance, maintaining a Risk Management System, Risk Control Structure and taking other steps.
War, civil commotion, riots, revolutions, coup d’état, terrorism and other unusual events in the
country where the project is carried out or in the neighboring countries.
Regional risks that occur particularly in an area near a project site, such as a surge of politicalunrest and a serious outbreak of an epidemic disease.
Extraordinary natural phenomenon, such as earthquakes, floods, typhoons and other storms aswell as unusual weather, such as extreme heat or cold.
Notable changes in a country’s commerce, trade, manufacturing and financial policies, such as
license approvals, customs clearance, export and export controls, foreign exchange systems,
communications and taxes.
A major and global contraction in capital investment activities in the Company’s business fields ora sharp decrease in opportunities to win orders due to intensified competition.
●

●

●

●

●

Foreign exchange fluctuation
For overseas plant construction contracts denominated in foreign currencies, the appreciation of
the yen relative to the applicable foreign currency causes a reduction in the yen equivalent amountreceived. In addition, the yen’s appreciation makes us less price competitive when competing for neworders in foreign currencies. This could have an adverse effect on our operating results and financial
condition. In response, the group uses foreign exchange forward contracts, procures materials andequipment in foreign currencies, utilizes the resources of its overseas companies and takes all otherpossible steps to minimize exposure to foreign exchange risk.
Sudden increases in prices of equipment, materials and construction
In turnkey lump-sum contracts, the possibility exists of sudden and steep rises in the cost of equipment
and materials, transportation, construction, labor and other items associated with a project, or of
problems caused by tight demand and supplies of these items, due to rapid change in the internationalsituation. The possibility also exists of cost increase caused by a supplier becoming insolvent or failureof quality control or delivery schedule delay by suppliers/sub-contractors. These events may deteriorate
the profitability of a project affected by soaring cost, delivery delay and other problems. Such events
may therefore have a detrimental effect on our operating results and financial condition. To reduce our
exposure to these risks, we, developing our accountability system to clients and project management
system in project execution, utilize our experience to enter into contracts that incorporate measures tooffset these risks and gather information on market trends. To avoid an undue reliance on a particularsupplier, we work on placing orders with a large number of suppliers and stringently monitor thefinancial condition of suppliers. We also diversify contract conditions such as cost reimbursable basis
to reduce our risks.

15

16

Financial Section
Consolidated Balance Sheets
Toyo Engineering Corporation and Consolidated Subsidiaries

March 31, 2014 and 2013

Thousands of U.S.
dollars (Note 1)

Millions of yen

2014

2013

¥ 73,814¥ 52,328$ 717,476

Notes receivable, accounts receivable fromcompleted construction contracts

48,36254,423470,081

Short-term investment securities (Note 16)

25,025

21,376

243,244

Costs on uncompleted construction contracts

34,46233,308334,972

Deferred tax assets (Note 19)

2,977

3,010

28,936

Accounts receivable—other

12,931

22,478125,690

Other

7,434

5,849

72,258(2,969)(4,258)(28,858)

202,041

188,517

1,963,851

Buildings and structures (Note 4)

26,762

26,525

260,128

Machinery, vehicles, tools, furniture and fixtures (Note 4)

5,708

5,219

55,482Land (Note 4)

17,506

17,378170,159

Lease assets

1,824

1,852

17,729Assets2014

Current assets:
Cash and deposits (Note 13)

Allowance for doubtful accounts
Total current assets

Property, plant and equipment:

7

75

68

(21,447)(19,864)(208,466)

30,36331,187295,130

Goodwill

1,619

2,570

15,736

Other

3,466

2,918

33,689

5,085

5,489

49,426

Investment securities (Notes 3, 16)

16,533

11,642

160,701

Long-term loans receivable

4,576

4,578

44,479Deferred tax assets (Note 19)

443

1,034

4,305

3,288

3,137

31,959(4,851)(4,892)(47,152)

Total investments and other assets

19,99015,500

194,304

Total noncurrent assets

55,43952,177

538,870¥257,480¥240,694$2,502,721

Construction in progress
Accumulated depreciation and impairment loss
Total property, plant and equipment

Intangible assets:

Total intangible assets

Investments and other assets:

Other (Note 3)
Allowance for doubtful accounts

Total assets
See notes to consolidated financial statements.

TOYO ENGINEERING CORPORATION Annual Report 2014

Thousands of U.S.
dollars (Note 1)

Millions of yen

Liabilities and Net Assets

2014

2013

2014

¥ 55,764¥ 60,370$ 542,029

10,58012,712

102,838

Current liabilities:
Notes payable, accounts payable for construction
contracts and other
Short-term loans payable (Note 4)
Income taxes payable

1,164

2,297

11,314

Advances received on uncompleted construction contracts

56,51944,487549,368

Provision for bonuses

1,124

1,103

10,925

79

80

767

Provision for loss on construction contracts

3,497

4,422

33,991

Other

11,433

7,656

111,129

140,164

133,130

1,362,402

33,53526,477

325,962

Lease obligations

488

670

4,743

Deferred tax liabilities (Note 19)

360

7

3,499

—

5,202

—

3,677

—

35,740

Provision for warranties for completed construction

Total current liabilities
Noncurrent liabilities:
Long-term loans payable (Note 4)

Provision for retirement benefits (Note 18)
Net defined benefit liability (Note 18)

808

705

7,853

3,613

3,408

35,11842,48436,472412,947

182,649

169,603

1,775,359

Capital stock (Note 12)18,19818,198

176,885

Capital surplus

20,75920,759201,778

Retained earnings

31,546

31,537

306,629

(408)

(383)

(3,965)70,095

70,111

681,327

Provision for repairs
Other
Total noncurrent liabilities
Total liabilities
Net assets:
Shareholders’ equity

Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities

1,288

665

12,519Deferred gains or losses on hedges(1,133)(647)(11,012)

Foreign currency translation adjustment

2,427

(468)

23,590Remeasurements of defined benefit plans

695

—

6,755

3,277

(449)

31,852

Minority interests

1,458

1,429

14,171

Total net assets

74,831

71,091

727,361¥257,480¥240,694$2,502,721

Total accumulated other comprehensive income

Contingent liabilities (Note 5)
Total liabilities and net assets

17

18

Financial Section
Consolidated Statements of Income
Toyo Engineering Corporation and Consolidated Subsidiaries

Years ended March 31, 2014 and 2013

Thousands of U.S.
dollars (Note 1)

Millions of yen

2014

2013

Net sales¥230,124¥228,723$2,236,819

Cost of sales (Note 7)

204,968

204,523

1,992,301

Gross profit

25,15524,200244,508

24,69922,606240,075

455

1,593

4,422

Interest income

824

685

8,009

Dividends income

209

553

2,031

Foreign exchange gains

649

1,297

6,308

Equity in earnings of affiliates

2,232

690

21,695

Reversal of allowance for doubtful accounts

1,398

—

13,588

437

535

4,247

5,751

3,762

55,900

1,008

1,110

9,797

Selling, general and administrative expenses (Notes 6, 7)
Operating income

2014

Non-operating income:

Miscellaneous income
Total non-operating income
Non-operating expenses:
Interest expenses
Miscellaneous expenses
Total non-operating expenses
Ordinary income

256

212

2,488

1,264

1,323

12,286

4,942

4,032

48,036Extraordinary income:Gain on sales of property, plant and equipment
Gain on sales of investment securities
Gain on change in equity
Total extraordinary income

—

607

—

501

—

4,869

1,518

—

14,7552,020

607

19,634Extraordinary loss:
1,289

79

12,529Amortization of goodwill (Note 9)

—

915

—

Loss on valuation of investments securities

—

660

—

Loss on valuation of investments in capital of subsidiaries andaffiliates

—

0

—

Total extraordinary loss

1,289

1,656

12,529

Income before income taxes

5,673

2,982

55,141

Impairment loss (Note 10)

Income taxes—current

4,439

3,949

43,147

Income taxes—deferred

181(1,808)

1,759

Total income taxes

4,621

2,140

44,916

1,051

842

10,215

Income before minority interests

84

Minority interests in income (loss)
Net income (Note 23)
See notes to consolidated financial statements.

¥

967

816

(614)
¥

1,457

$

9,399

TOYO ENGINEERING CORPORATION Annual Report 2014

Consolidated Statements of Comprehensive Income
Toyo Engineering Corporation and Consolidated Subsidiaries

Years ended March 31, 2014 and 2013

Thousands of U.S.
dollars (Note 1)

Millions of yen

2014
Income before minority interests

2013¥1,051

2014

¥ 842

$10,215

Other comprehensive income:
Valuation difference on available-for-sale securities

623

439

6,055

Deferred gains or losses on hedges

463

(601)

4,500

Foreign currency translation adjustment

2,195

2,214

21,335

Share of other comprehensive income of associates accounted forusing equity method
Total other comprehensive income
Comprehensive income (Note 11)

(244)

283

(2,371)

3,036

2,335

29,510¥4,088¥3,178$39,735

Comprehensive income attributable to:
Owners of the parent

4,000

3,759

38,880Minority interests¥¥ (580)$See notes to consolidated financial statements.

88

855

19

20

Financial Section
Consolidated Statements of Changes in Net Assets (Note 12)
Toyo Engineering Corporation and Consolidated Subsidiaries

Years ended March 31, 2014 and 2013

Millions of yen

Balance at April 1, 2012

Capitalstock

CapitalsurplusRetainedearnings

Treasurystock

Valuationdifference
on availablefor-salesecurities¥18,198¥20,759¥31,203¥(363)¥ 225

Deferred
gains orlosses onhedges¥(45)

Foreigncurrencytranslation
adjustment

Minority
interests

Total
net
assets¥(2,931)¥2,219¥69,265

Dividends from surplus(1,151)(1,151)

Net income

1,457

1,457

Purchase of treasury stock
Disposal of treasury stock(0)

Change in scopeof consolidation

(21)

(21)

0

0

27

27

Net changes of items
other than shareholders’equityBalance at March 31, 2013¥18,198¥20,759¥31,537

440

(601)

2,463

(789)

1,512

¥(383)¥ 665¥ (647)¥ (468)¥1,429¥71,091

Deferred
gains orlosses onhedgesForeigncurrency Remeasurementsof definedtranslation
benefit plansadjustment

Minority
interests

Total
net
assets¥ (647)¥ (468)¥1,429¥71,091

Millions of yen

Balance at April 1, 2013

Capitalstock

CapitalsurplusRetainedearnings

Treasurystock

Valuationdifference
on availablefor-salesecurities¥18,198¥20,759¥31,537¥(383)¥ 665¥ —Dividends from surplus

(959)

(959)

Net income

967

967

Purchase of treasury stock0

Disposal of treasury stock

(24)

(24)

0

0

Net changes of items
other than shareholders’equityBalance at March 31, 2014

¥18,198¥20,759¥31,546¥(408)

623

(486)

2,895

695

28

3,756

¥1,288¥(1,133)¥2,427¥695¥1,458¥74,831

Total
net
assetsThousands of U.S. dollars (Note 1)

Balance at April 1, 2013

Valuationdifference
on availablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrency Remeasurementsof definedtranslation
benefit plansadjustment

Minority
interests$ (6,288)$ (4,548)$13,889 $691,008

Capitalstock

CapitalsurplusRetainedearnings

Treasurystock$176,885$201,778$306,541$(3,722) $ 6,463

Dividends from surplus(9,321)

Net income

9,399

Purchase of treasury stock
Disposal of treasury stock0

Net changes of items
other than shareholders’equityBalance at March 31, 2014 $176,885 $201,778 $306,629
See notes to consolidated financial statements.

$—(9,321)
9,399
(233)

(233)

0

0

6,055

(4,723)28,1396,755$(3,965) $12,519$(11,012)$23,590$6,755— $14,171 $727,361

272

36,508TOYO ENGINEERING CORPORATION Annual Report 2014

Consolidated Statements of Cash Flows
Toyo Engineering Corporation and Consolidated Subsidiaries

Years ended March 31, 2014 and 2013
Thousands of U.S.
dollars (Note 1)

Millions of yen

Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Impairment loss
Increase (decrease) in provision for retirement benefits
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for loss on construction contracts
Interest and dividends income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment
Equity in (earnings) losses of affiliates
Loss (gain) on change in equity
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes receivable, accounts receivable fromcompleted construction contracts
Decrease (increase) in costs on uncompleted construction contracts
Decrease (increase) in accounts receivable—other
Increase (decrease) in notes and accounts payable—trade
Increase (decrease) in advances received on uncompleted
construction contracts
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Repayments of finance lease obligations
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting fromchange in scope of consolidation
Cash and cash equivalents at end of period (Note 13)
See notes to consolidated financial statements.

2014

2013

2014

¥ 5,673
2,633
452(1,347)
1,289
—
(454)
(1,150)(1,033)
1,008
(85)
(242)
(2,232)(1,518)(501)
1¥ 2,982
2,570
1,572
625
79
(179)
—
2,918
(1,238)
1,110
34
(607)
(690)
—
(0)
661

$ 55,141
25,592
4,393(13,092)
12,529—(4,412)(11,178)(10,040)
9,797
(826)
(2,352)(21,695)(14,755)(4,869)
9

7,475
13
9,573
(6,215)(17,645)(6,469)(8,319)9,492

72,657
126
93,050(60,410)

10,307
2,945
26,5912,108(1,018)(6,437)
21,244(2,584)(1,097)(16,785)
1,456(1,119)(2,537)(18,986)

100,184
28,625
258,466
20,489(9,895)(62,568)
206,493

447
(756)
311
(1,329)(1,193)578
302(1,638)

132
(689)
1,185
(1,132)(1,854)39
730(1,587)

4,344(7,348)
3,022(12,917)(11,596)
5,618
2,935
(15,921)(2,665)
10,848(3,629)
(339)
(959)
(88)
3,167
2,486
25,25971,675(1,075)
6,331(4,115)(466)(1,151)
(54)
(532)
2,123
(18,983)
90,452(25,903)
105,443(35,274)(3,295)(9,321)(855)
30,78324,164
245,519
696,685—¥96,934206¥ 71,675—$942,20421

22

Financial Section

Notes to Consolidated Financial Statements
Toyo Engineering Corporation and Consolidated Subsidiaries

1. BASIS OF PREPARATION
Toyo Engineering Corporation (the “Company”) and its domestic consolidated subsidiaries maintain their accounting
records and prepare their financial statements in accordance with accounting principles generally accepted in Japan,
and its overseas consolidated subsidiaries maintain their books of account in conformity with those of their respective
countries of domicile. The accompanying consolidated financial statements have been compiled from the accounts
prepared by the Company in accordance with the provisions set forth in the Financial Instruments and Exchange Law
of Japan and with accounting principles generally accepted in Japan, which are different in certain respects as to theapplication and disclosure requirements of International Financial Reporting Standards. Certain reclassifications havebeen made to present the accompanying consolidated financial statements in a format which is familiar to readers
outside Japan.
For the convenience of readers, the accompanying consolidated financial statements and the relevant notes havealso been presented in U.S. dollars by translating all Japanese yen amounts at the exchange rate of ¥102.88 to U.S.$1.00
prevailing on March 31, 2014.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(a) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its significant
subsidiaries. Investment in significant affiliates is accounted for by the equity method. As of March 31, 2014, thenumbers of consolidated subsidiaries and affiliates accounted for by the equity method were 14 and 7, respectively.
Toyo Engineering Korea Limited, Toyo Engineering Corporation, China and 4 other subsidiaries are consolidated using
their financial statements as of their respective fiscal year end, which falls on December 31, and necessary adjustments
are made to their financial statements to reflect any significant transactions from January 1 to March 31. Intercompany
accounts and transactions are eliminated in consolidation. The difference between the acquisition cost and the equity inthe net assets at the time of acquisition is amortized in principle within twenty years on a straight-line basis.
(b) Securities

All debt and equity securities other than equity securities issued by subsidiaries and affiliates are classified into oneof three categories: trading, held-to-maturity, or available-for-sale securities. Trading securities are bought and heldprincipally for the purpose of selling them in the near term. Held-to-maturity securities are those securities which theCompany and its consolidated subsidiaries have the ability and intent to hold until maturity. All securities not included in
trading or held-to-maturity are classified as available-for-sale securities.
Trading securities are recorded at fair value. Held-to-maturity securities are recorded at amortized cost, adjusted
for the amortization or accumulation of premiums or discounts. Unrealized gains or losses on trading securities areincluded in earnings. Short-term investment securities classified as available-for-sale securities are recorded at fair value
with changes in unrealized holding gain or loss, net of the applicable income taxes, included directly in net assets. Nonmarketable securities classified as available-for-sale securities are recorded at cost.
Cost of securities sold is determined by the moving-average method.
(c) Derivative Financial Instruments

The Company and certain consolidated subsidiaries enter into various derivative transactions in order to manage
certain risk arising from adverse fluctuations in foreign currency exchange rates and interest rates. Derivative financial
instruments are carried at fair value with changes in unrealized gain or loss charged or credited to operations, except
for those which meet the criteria for deferral hedge accounting under which unrealized gain of loss is deferred as acomponent of net assets.
Deferral hedge accounting is adopted for derivatives which qualify as hedges, under which unrealized gain or loss isdeferred. Hedging instruments are derivative transactions such as foreign exchange forward contract and interest rateswap, and hedged items are primarily forecast sales denominated in foreign currencies, and receivables and payables
denominated in foreign currencies. Hedge effectiveness is not assessed if the substantial terms and conditions of thehedge instruments and the hedged forecasted transactions are the same. The Company and its consolidated manages its
derivative transactions in accordance with its internal “Policies and Procedures for Risk Management.”(d) Costs on Uncompleted Construction Contracts

Costs on uncompleted construction contracts is stated at cost, determined by the identified-cost method.
(e) Depreciation and Amortization

Depreciation of property, plant and equipment is principally computed by the declining-balance method based on theestimated useful lives of the assets.

TOYO ENGINEERING CORPORATION Annual Report 2014

However, buildings and rental properties acquired after April 1, 1998 are depreciated on a straight-line method.
The useful lives of property, plant and equipment are as follows:		
Buildings and structures:
3 to 50 years
		
Machinery, vehicles, tools, furniture and fixtures: 2 to 20 years
Amortization of intangible assets of the Company and its consolidated subsidiaries is calculated principally by straight-line.
Software is amortized on a straight-line method over 3 to 5 years of the estimated available period.
(f) Leases

Depreciation of assets on finance leases which do not transfer ownership of the leased assets to the lessee are calculatedby the straight-line method over the lease period with their residual value zero.
(g) Allowance for Doubtful Accounts

The Company and its consolidated subsidiaries have provided an allowance for doubtful accounts at an estimated amountof probable and reasonably possible bad debts and an estimated amount computed on the actual percentage of credit
losses.
(h) Provision for Bonuses

Provision for bonuses to employees is provided at the expected payment amount for the fiscal year.
(i) Provision for Warranties for Completed Construction

Provision for warranties for completed construction is provided based on past experience.
(j) Retirement Benefits

Net defined benefit liability at year-end is stated based on the fair value of plan assets and the projected benefit obligation.
As to calculation of the projected benefit obligation, the expected benefit payments at the year-end have been recorded
mainly at the amount calculated based on the straight-line attribution. The difference arising from the adoption of the
new standard of accounting of ¥3,695 million ($35,924 thousand) is amortized over 15 years by the straight-line method.
Actuarial gain or loss is amortized by the straight-line method over 9 years within the average of the estimated remaining
service years of the employees in the year following the year of recognition. Prior service cost is amortized as incurred over
13 years within the average of the estimated remaining service years when incurred.
(k) Provision for Loss on Construction Contracts

Provision for loss on construction contracts is provided in case the material loss is forecasted for a certain large-scale
contract work.
The amounts of loss on costs on uncompleted construction contracts of ¥1,425 million ($13,851 thousand) is included
in provision for loss on construction contracts and shown as a liability, not as a deduction from the amount of costs on
uncompleted construction contracts.
The amount of provision for loss on construction contracts included in cost of sales is ¥3,278 million ($31,862
thousand).
(l) Provision for Repairs

The Company and its consolidated subsidiaries have provided provision for repair at estimated amount for preparing theexpenditure for major repairs.
The Company provides a portion of estimated expenditure equally divided to each fiscal term from decision of repair
plan to end of repair work.
(m) Foreign Currency Translation

Both short-term and long-term receivables and payables in foreign currencies are translated at the rates of exchange in
effect at the balance sheet date and differences arising from the translation are included in the consolidated statements
of income.
The balance sheet accounts of the consolidated foreign subsidiaries are translated at the rates of exchange in effectat the balance sheet date, except for capital stock and capital surplus, which are translated at their historical exchange
rates. Revenues, expenses and net income for the year are translated at the rates of exchange in effect at the balance
sheet date. Differences arising from translation are presented as “Foreign currency translation adjustment” and “Minority
interests” in the accompanying consolidated balance sheets.
(n) Recognition of Revenues

Revenues and costs of construction contracts of which the percentage of completion can be reliably estimated, arerecognized by the percentage-of-completion method. The percentage of completion is calculated at the cost incurred asa percentage of the estimated total cost. The completed-contract method continues to be applied for contracts for which
the percentage of completion cannot be reliably estimated.

23

24

Financial Section(o) Cash and Cash Equivalents

For the purposes of the consolidated statements of cash flows, the Company and its consolidated subsidiaries consider
all highly liquid investments with insignificant risk of changes in value purchased with an original maturity of threemonths or less to be cash equivalents.
(p) Consumption Tax

Transactions subject to consumption tax are recorded at amounts exclusive of consumption taxes.
(q) Consolidated Tax Return

The Company files a consolidated tax return with certain domestic subsidiaries.
(r) Capitalization of Interest Expenses

Interest expenses incurred for real estate development projects conducted by certain subsidiaries have been capitalized
as a part of the development cost of such projects.
(s) Advances Received on Uncompleted Construction Contracts

Advances received on uncompleted construction contracts from customers are shown as a liability, not as a deduction
from the amount of costs on uncompleted construction contracts.
(t) Income Taxes

Deferred tax assets and liabilities are determined based on the differences between carrying amounts of existing assets
and liabilities in the financial statements and their respective tax bases. Deferred tax assets and liabilities are measured
using the enacted tax rates and laws which will be in effect when the differences are expected to be reversed.
(u) Per Share Information

Net income per share is computed based on the weighted average number of shares outstanding during each year. Diluted net
income per share is not presented since there was no potential for dilution by the issuance of common stock.
Total net assets per share is computed based on outstanding shares at the balance sheet date.
(v) Research and Development Costs

Research and development costs are charged to income when incurred.
(w) Impairment of Fixed Assets

The Company and its consolidated subsidiaries have grouped their fixed assets into each company for EPC Business,each object for Real Estate and Idle Assets.
The recoverable amounts of the asset groups were measured by applying net selling prices which were assessed
based on the current market price of land and other salable prices or value in use which was computed by using realestate appraisal value, etc., for the year ended March 31, 2014.
(Accounting change)

The Company has applied the “Accounting Standard for Retirement Benefits” (Accounting Standards Board of Japan(“ASBJ”) Statement No. 26 of May 17, 2012) and “Guidance on Accounting standard for Retirement Benefits” (ASBJ
Guidance No. 25 of May 17, 2012) since the current fiscal year end (except for the main clause of Article 35 of the standard
and the main clause of Article 67 of the guidance).
Under the new standard, pension assets are deducted from retirement benefit obligations and the net amount isrecognized as net defined benefit asset/liability, including unrecognized actuarial gains and losses, unrecognized past
service cost and obligation at transition.
In accordance with transitional accounting as stipulated in Article 37 of the standard, the effect of the changes
on accounting policies arising from initial application is recognized as remeasurements of defined benefit plans inaccumulated other comprehensive income at the current fiscal year end.
As a result, a net defined benefit liability was recognized in the amount of ¥3,677 million ($35,740 thousand) andaccumulated other comprehensive income in the consolidated balance sheet has increased by ¥695 million ($6,755
thousand) at the current fiscal year end.
(Accounting standards issued but not yet effective)“Accounting Standard for Retirement Benefits” (ASBJ Statement No.26) and “Guidance on Accounting Standard for
Retirement Benefits” (ASBJ Guidance No.25) were revised on May 17, 2012. However, these accounting standards have
not yet been adopted as of March 31, 2014.
Under these revised accounting standards, accounting treatment of unrecognized actuarial gain or loss and priorservice cost, calculation method of retirement benefit obligations and service cost and disclosures were mainly revised.
These revisions were made considering the viewpoint of enhancing financial reporting and international convergence ofaccounting standards.

TOYO ENGINEERING CORPORATION Annual Report 2014

The Company and its domestic subsidiaries will adopt these accounting standards effective from April 1,2014.
At present, the Company is in the process of evaluating the impact on the consolidated financial statements from theadoption of these revised accounting standards.
(Changes in Presentation)(Consolidated Statements of Cash Flow)
Loss (gain) on sales of investment securities, which had previously been included in other under Cash flows fromoperating activities, is separately presented under Cash flows from operating activities from the fiscal year ended March
31, 2014, because its materiality has increased.
The Cash Flow which had previously been included in other under Cash flows from operating activities as of March
31, 2014, is ¥(0)million.

3. INVESTMENTS and other assets
Among investment securities and other in investment and other assets, the amounts of shares of unconsolidated
subsidiaries and affiliates as of March 31, 2014 and 2013 are as follows:
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,
Investments and other assets
Investment securities
Other

2014

2013

2014

¥ 9,577552¥ 5,549673$ 93,089
5,365

4. Short-Term LOANS PAYABLE and Long-term LOANS PAYABLE
The following assets at March 31, 2014 and 2013 were pledged as collateral principally for long-term loans payable:
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,
Collateral
Buildings
Land
Total

2014

2013

2014

¥ 1,292
1,150¥ 2,442¥ 1,135945¥ 2,081—$ 12,558
11,178$ 23,736
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,
Debts with collateralLong-term debts
Current portion of long-term debts

2014

2013

¥

¥

323
161

2014
488
162

$

3,139
1,564

In the pledged asset, buildings of ¥1,196 million ($11,625 thousand) and ¥1,034 million, and land ¥1,150 million($11,178 thousand) and ¥945 million, as of March 31, 2014 and 2013 were pledged for issuing the performance bonds.
There were not any corresponding obligation as of March 31, 2014.
The following schedule shows the maturities of long-term loans payable subsequent to March 31, 2014:
Years ending March 31,
2015
2016
2017
2018
2019
2020 and thereafter

Millions of yen

Thousands of
U.S. dollars¥ 3,940
5,418
10,245
3,952
10,9302,988$ 38,297
52,663
99,582
38,413106,240
29,04325

26

Financial Section

In order to maintain access to a stable and effective source of operating capital, the company has entered into
commitment-line contracts with eight trading banks.
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,
Commitment Line
Amount of commitment line contract
Used amount
Balance of unused commitment line

2014

2013

2014

¥22,716
9,016¥13,699¥22,050
4,820¥17,230$220,800
87,636$133,155

The balances of unused commitment-line based on these contracts at the end of the consolidated reporting periods
are ¥13,699 million ($133,155 thousand) in 2014 and ¥17,230 million in 2013.

5. CONTINGENT LIABILITIESThe Company and its subsidiaries were contingently liable as guarantors of loans to others in the aggregate amount of¥4,116 million ($40,007 thousand) and ¥393 million at March 31, 2014 and 2013, respectively.

6. Selling, General and Administrative Expenses
The main components of selling, general and administrative expenses for the year ended March 31, 2014 and 2013 are as
follows:
Millions of yen

Years ended March 31,
Salaries
Provision for bonuses
Retirement benefit expenses
Depreciation
Research and development costs
Provision of allowance for doubtful accounts

2014¥10,182
451
671
632
912
—

2013
¥8,161
353
675
600
1,001
1,141

Thousands of
U.S. dollars

2014$98,969
4,383
6,522
6,143
8,864
—

7. RESEARCH AND DEVELOPMENT COSTS
Research and development costs included in cost of sales and selling, general and administrative expenses for the years
ended March 31, 2014 and 2013 amounted to ¥912 million ($8,864 thousand) and ¥1,001 million, respectively.

8. Gain on sales of property, plant and equipment
Major components of gain of property, plant and equipment are as follows:
Millions of yen

Years ended March 31,
Building
Land

2014
¥
—
—

2013
¥ 383
223

Thousands of
U.S. dollars

2014
$
—
—

9. AMORTIZATION OF GOODWILL
In accordance with Section 32 of “Practical Guidelines on Accounting Standard for Capital Consolidation Proceduresin Preparing Consolidated Financial Statements” (JICPA Accounting Practice Committee Statement No.7, January 12,2011), in recognizing a write-down of its investment in an affiliate, the Company recognized a one-time amortization of
goodwill of an affiliate for the year ended March 31, 2013.

TOYO ENGINEERING CORPORATION Annual Report 2014

10. IMPAIRMENT LOSS
(1) Impairment losses on long-lived assets for the fiscal year ended March 31, 2014 for each asset group are as follows:
Millions of yen

Location
India
Chiba, Japan

Used States
Other
Rental commercial facilities

Category of assets
Goodwill
Land, Buildings and Other

Thousands of
U.S. dollars

2014

2014

Impairment Loss
¥695
594

Impairment Loss
$6,755
5,773(2) The recognition of impairment loss
The book values of goodwill were reduced to their recoverable amounts and the reduction amounts were recorded as
impairment loss in extraordinary loss on consolidated statement of income ended March 31, 2014, because of the lower
performance of consolidated subsidiary in India than expected at the additional purchase of the stock.
The book values of land, buildings and other were reduced to their recoverable amounts because of the performanceof rental commercial facilities.
The reduction amounts were recorded as impairment loss in extraordinary loss on consolidated statement of income
ended March 31, 2014.
(3) The method of assets grouping
Long-lived assets concerning to EPC business are grouped by companies individually and long-lived assets concerning toreal estate leasing and management are grouped by properties individually.
(4) The calculation of recoverable amounts
About the recoverable amounts of calculation, the future cash flow of amortization is discounted by 4.7%. Concerning
to land, buildings and other, the net sale value is determined by values based on the Japanese Real Estate Appraisal
Standards.

11. OTHER COMPREHENSIVE INCOME
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,
Valuation difference on available-for-sale securities:
Amount arising during the year
Reclassification adjustments for gains and losses realized in net income
The amount of valuation on available-for-sale securities before tax effectTax effect
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges:
Amount arising during the year
Reclassification adjustments for gains and losses realized in net income
The amount of deferred gains or losses on hedges before tax effect:
Tax effect
Deferred gains or losses on hedges
Foreign currency translation adjustment:
Amount arising during the year
Reclassification adjustments for gains and losses realized in net income
The amount of foreign currency translation adjustment before tax effect:
Tax effectForeign currency translation adjustment
Share of other comprehensive income of associates accounted
for using equity method
Amount arising during the year
Total other comprehensive income

2014

2013

2014

¥ 900
—
900
(277)
623

¥ 140
449
589
(149)
439

$ 8,748—
8,748(2,692)
6,055

711
—
711
(248)
463

(910)
—
(910)
308
(601)

6,910
—
6,910
(2,410)
4,500

2,195
—
2,195
—
2,195

2,214
—
2,214
—
2,214

21,335—
21,335—
21,335(244)¥3,036283¥2,335(2,371)$29,51027

28

Financial Section

12. SUPPLEMENTARY INFORMATION FOR CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended March 31, 2014(a) Type and number of outstanding shares
Number of shares
Balance at beginningof yearType of shares

Issued stock:
Common stock
Total
Treasury stock:
Common stock
Total

Increase in shares
during the year

Decrease in shares
during the year

Balance at end ofyear

192,792,539
192,792,539

—
—

—
—

192,792,539
192,792,539

965,838
965,838

58,96858,968690
690

1,024,116
1,024,116

Notes: 1. Treasury stock increased by 58,968 shares due to the repurchase of shares less than one unit.
		 2. Treasury stock decreased by 690 shares due to the sale of shares less than one unit.
(b) Dividends(b-1) Dividends from surplus
Date ofapproval

Resolution
approved byType ofsharesAnnualgeneralJune 26, meeting of Common
2013shareholders
stock

AmountAmount(Millions of yen)(Thousands of
U.S. dollars)

959

9,321

Amount per
share
(Yen)

5.0

Amount per
Shareholders’share
cut-off date
(U.S. Dollars)

Effective
date

March 31,2013

June 27,
2013

0.04

(b-2) Dividends with a shareholders’ cut-off date during the current fiscal year but an effective date subsequent to thecurrent fiscal year
Date ofapproval

Resolution
approved byType ofsharesAmountAmount(Thousands of
U.S. dollars)

575

5,589

Paid from (Millions of yen)

AnnualgeneralJune 25, meeting of Common Retained
2014
shareholders
stock
earnings

Amount per
share
(Yen)

3.0

Amount per
Shareholders’share
cut-off date
(U.S. Dollars)

Effective
date

March 31,2014

June 26,
2014

0.02

For the year ended March 31, 2013(a) Type and number of outstanding shares
Number of shares
Type of shares

Issued stock:
Common stock
Total
Treasury stock:
Common stock
Total

Balance at beginningof yearIncrease in shares
during the year

Decrease in shares
during the year

Balance at end ofyear

192,792,539
192,792,539

—
—

—
—

192,792,539
192,792,539

910,542
910,542

56,98656,986

1,690
1,690

965,838
965,838

Notes: 1. Treasury stock increased by 56,986 shares due to the repurchase of shares less than one unit.
		 2. Treasury stock decreased by 1,690 shares due to the sale of shares less than one unit.

TOYO ENGINEERING CORPORATION Annual Report 2014(b) Dividends(b-1) Dividends from surplus
Date ofapproval

Resolution
approved byType ofsharesAnnualgeneralJune 27, meeting of Common
2012shareholders
stock

Amount per
Shareholders’share
cut-off date(Millions of yen)
(Yen)

Effective
date

March 31,2012

June 28,
2012

Amount1,151

6.0(b-2) Dividends with a shareholders’ cut-off date during the current fiscal year but an effective date subsequent to thecurrent fiscal year
Date ofapproval

Resolution
approved byType ofsharesPaid from

AnnualgeneralJune 26, meeting of Common Retained
2013
shareholders
stock
earnings

Amount per
Shareholders’share
cut-off date(Millions of yen)
(Yen)

Effective
date

March 31,2013

June 27,2013

Amount959

5.0

13. CONSOLIDATED STATEMENTS OF CASH FLOWS
A reconciliation between the balance of cash and deposits reflected in the accompanying consolidated balance sheets andthat of cash and cash equivalents in the accompanying consolidated statements of cash flows as of March 31, 2014 and2013 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Cash and deposits
Time deposits with maturities over three months
Short-term investments with maturities within three months
included in securities
Cash and cash equivalents

2014¥73,814(1,572)

2013¥52,328(1,651)

2014$717,476(15,279)

24,692¥96,934

20,998¥71,675

240,007$942,204

14. LEASESThe Company and its consolidated subsidiaries have adopted “Accounting Standard for Lease Transactions.”(a) Finance Leases
Finance leases are capitalized, and recorded on the balance sheet based on finance lease contracts.
(b) Operating Leases
Operating leases are not capitalized, but future minimum lease payments and receivables are as follows:(b-1) Operating Leases (as Lessee)
Future minimum lease payments subsequent to March 31, 2014 and 2013 for noncancelable operating leases are
summarized as follows:
Millions of yen

Years ended March 31,
Within one year
Over one year
Total

2014
¥ 705
550
¥1,256

2013
¥ 718
1,207
¥1,925

Thousands of
U.S. dollars

2014$ 6,852
5,346$12,208

29

30

Financial Section(b-2) Operating Leases (as Lessor)
Future minimum lease receivables subsequent to March 31, 2014 and 2013 for noncancelable operating leases are
summarized as follows:
Millions of yen

Years ended March 31,
Within one year
Over one year
Total

2014
¥ 768
2,424
¥3,192

2013
¥ 827
3,159
¥3,987

Thousands of
U.S. dollars

2014$ 7,465
23,561$31,026(c) Operating Sub-leases
Future minimum lease payments for noncancelable operating sub-leases are summarized as follows:(c-1) Lease Investment Assets and Lease Receivables
Millions of yen

Years ended March 31,
Current assets
Investment and other assets

2014
¥
37
112

2013
¥ 80
48

Thousands of
U.S. dollars

2014
$
359
1,088

(c-2) Lease Obligations
Millions of yen

Years ended March 31,
Current liabilities
Noncurrent liabilities

2014
¥
37
112

2013
¥ 80
48

Thousands of
U.S. dollars

2014
$
359
1,088

15. FINANCIAL INSTRUMENTS
For the year ended March 31, 2014
1. Condition of Financial Instruments
The Company and its consolidated subsidiaries hold their temporary cash surplus through low-risk financial assets and raise
funds through borrowing from banks.
Derivative financial instruments are utilized for reducing the risk of exchange rate fluctuations, interest rate fluctuations, andcredit. Therefore, there are no derivatives for speculative purpose.
Notes receivable, accounts receivable from completed construction contracts are exposed to credit risks of customers
and risks of exchange rate fluctuations. The Company deals with these risks by organizing careful reviews on being awarded
contracts, letters of credit, and export credit insurance. The Company minimizes exchange fluctuation risks by organizing theircorresponding forward-exchange contracts, in principle.
Short-term investment securities and investment securities are exposed to volatility risks of market price. The Company
deals with these risks by periodic monitoring, as they mainly consist of short-term held-to-maturity bonds and stocks of ourbusiness partner.
Notes payable, accounts payable for construction contracts and other are mostly due within one year.
Borrowings from banks are raised mainly for capital investment or working capital. For some long-term loans payable, theCompany entered into interest swap agreements to minimize risks of interest rate fluctuations.
Regarding derivatives, forward-exchange contracts are used to minimize exchange fluctuation in foreign-currency
operations, and interest-swap contracts are used to minimize interest rate fluctuations.
The fair value of financial instruments is based on their quoted market prices, if available, or reasonably estimatedamounts if there is no market price. Since various assumptions and factors are reflected in estimating the fair value, different
assumptions and factors could result in different fair value. In addition, the notional amounts below are not necessarily
indicative of the actual market risk involved in derivative transactions.

TOYO ENGINEERING CORPORATION Annual Report 2014

2. Fair Value of Financial Instruments
Book value, fair value, and net unrealized gain or loss of financial instruments consist of the following:
It does not include items for which it is extremely difficult to determine the fair value.
Millions of yen

At March 31, 2014
(1) Cash and deposits(2) Notes receivable, accounts receivable fromcompleted construction contracts
Less: Allowance for doubtful accounts
Notes receivable, accounts receivable fromcompleted construction contracts, net

Fair value¥ 73,814¥ 73,814¥ —48,04548,030(14)

12,931(1)
12,92912,929(0)

24,692
5,378
164,860
55,7646,640
37,47599,88024,692
5,378
164,846
55,754
6,640
37,741
100,136

(0)
—
(14)
(10)
—
266
255

135
(235)
(99)

135
(235)
(99)

—
—
¥ —

48,362(317)(3) Accounts receivable—otherLess: Allowance for doubtful accounts
Accounts receivable—other, net(4) Short-term investment securities and investment securities
Held-to-maturity securities
Available-for-sale securities
Total of assets(1) Notes payable, accounts payable for construction contracts and other(2) Short-term loans payable(3) Long-term loans payable (including current portion)
Total of liabilities
Derivatives
not designated as hedging instruments
designated as hedging instruments
Total derivatives

Unrealized
gain / loss

Book value¥¥

Notes receivable, accounts receivable from completed construction contracts and accounts receivable—other listed
above are offset by the corresponding figures of allowance for doubtful accounts listed above. Net receivables and payables
derived as a result of derivative transactions are presented. Values in parentheses show contra-asset account, net liabilities andunrealized loss.

31

32

Financial Section

Thousands of U.S. dollars

At March 31, 2014
(1) Cash and deposits(2) Notes receivable, accounts receivable fromcompleted construction contracts
Less: Allowance for doubtful accounts
Notes receivable, accounts receivable fromcompleted construction contracts, net

Book value

Fair value

Unrealized
gain / loss

$ 717,476$ 717,476$

470,081(3,081)(3) Accounts receivable—otherLess: Allowance for doubtful accounts
Accounts receivable—other, net(4) Short-term investment securities and investment securities
Held-to-maturity securities
Available-for-sale securities
Total of assets(1) Notes payable, accounts payable for construction contracts and other(2) Short-term loans payable(3) Long-term loans payable (including current portion)
Total of liabilities
Derivatives
not designated as hedging instruments
designated as hedging instruments
Total derivatives—

467,000

466,854(136)

125,690(9)125,670

125,670(0)240,00752,274
1,602,449
542,02964,541
364,259
970,839240,00752,274
1,602,313
541,932
64,541
366,844973,328

(0)
—
(136)
(97)
—
2,585
2,478

1,312
(2,284)
(962)

1,312
(2,284)
(962)

—
—
—

$

$

$

Millions of yen

At March 31, 2013
(1) Cash and deposits(2) Notes receivable, accounts receivable fromcompleted construction contracts
Less: Allowance for doubtful accounts
Notes receivable, accounts receivable fromcompleted construction contracts, net

Book value¥ 52,328

Unrealized
gain / loss

¥ 52,328¥ —54,28954,280(8)

22,478(1)
22,47622,476—20,998
4,552
154,647
60,3709,081
30,107
99,56020,998
4,552
154,638
60,367
9,081
30,44299,890

0
—
(8)
(3)
—
334
330

34
(980)
(945)

34
(980)
(945)

—
—
¥ —

54,423(133)(3) Accounts receivable—otherLess: Allowance for doubtful accounts
Accounts receivable—other, net(4) Short-term investment securities and investment securities
Held-to-maturity securities
Available-for-sale securities
Total of assets(1) Notes payable, accounts payable for construction contracts and other(2) Short-term loans payable(3) Long-term loans payable (including current portion)
Total of liabilities
Derivatives
not designated as hedging instruments
designated as hedging instruments
Total derivatives

Fair value¥¥

Notes receivable, accounts receivable from completed construction contracts and accounts receivable—other listed
above are offset by the corresponding figures of allowance for doubtful accounts listed above. Net receivables and payables
derived as a result of derivative transactions are presented. Values in parentheses show contra-asset account, net liabilities andunrealized loss.

TOYO ENGINEERING CORPORATION Annual Report 2014

(Note 1) Computational method and related issues
Assets(1) Cash and deposits
Book values are used as fair values because they are nearly equal to such book values.
(2) (3) N otes receivable, accounts receivable from completed construction contracts and accounts
receivable—otherBook values for items which are settled in a short-term used as fair values of these items because they are nearly equal tosuch book values. Fair values of other items are based on the present value discounted by the proper discount rate coupledwith period for settlement and credit risks.
(4) Short-term investment securities and investment securities
Fair value of stock items are based on the market prices and bond items are based on the market prices or their priceprovided by the financial institution.
Liabilities(1) Notes payable, accounts payable for construction contracts and otherBook values for items which are settled in a short-term are used as fair values of these items because they are nearly equal tosuch book values. Fair values of other items are based on the present value discounted by the proper discount rate coupledwith period for settlement and credit risks.
(2) Short-term loans payable
Book values are used as fair values because they are nearly equal to such book values.
(3) Long-term loans payable (including current portion)
The present values of the principal and total interest, discounted by the rate assumed to be applied to the new borrowings
under the same conditions, are used as the fair values.
Derivative Transactions
See “17. DERIVATIVE TRANSACTIONS.”(Note 2) Financial instruments of which it is extremely difficult to determine the fair value
Unlisted securities that amounted to ¥2,455 million ($23,862 thousand) as of March 31, 2014 and ¥2,468 million as ofMarch 31, 2013 are excluded from the above table because they are deemed extremely difficult to determine the fairvalues; they do not have market prices and it is not possible to conduct alternative methods such as the estimation of
their future cash flows.
(Note 3) Redemption schedule for monetary assets with maturity date and short-term investment andinvestment securities
At March 31, 2014
Cash and deposits
Notes receivable, accounts receivablefrom completed construction contracts
Accounts receivable—otherHeld-to-maturity securities
Available-for-sale securities
Total

At March 31, 2014
Cash and deposits
Notes receivable, accounts receivablefrom completed construction contracts
Accounts receivable—otherHeld-to-maturity securities
Available-for-sale securities
Total

Within one year

Millions of yen
After one year
After five years
through five years
through ten years

After ten years¥ 73,814

¥

—

¥—

¥—

41,403
12,884
24,692333¥153,129

6,959
46
—
—
¥7,006

—
—
—
—
¥—

—
—
—
—
¥—

Within one year

Thousands of U.S. dollars
After one year
After five years
through five years
through ten years

After ten years$ 717,476

$

—

$—

$—

402,439
125,233
240,007
3,236$1,488,423

67,641447——$68,098

—
—
—
—
$—

—
—
—
—
$—

33

Financial Section

34

Millions of yen

At March 31, 2013
Cash and deposits
Notes receivable, accounts receivablefrom completed construction contracts
Accounts receivable—otherHeld-to-maturity securities
Totalv

Within one year

After one year
through five years

After five years
through ten years¥ 52,328

¥

—

¥—

¥—

47,66522,47620,998¥143,469

6,758
1—¥6,760

—
—
—
¥—

—
—
—
¥—

After ten years(Note 4) Schedule for repayment of bonds and long-term loans payable
See “4. SHORT-TERM LOANS PAYABLE AND LONG-TERM LOANS PAYABLE.”

16. INVESTMENT SECURITIESThe book value, unrealized gain and loss and the related fair value of held-to-maturity securities at March 31, 2014 aresummarized as follows:
Millions of yen

At March 31, 2014
Securities whose fair value exceeds their carrying value:
Government bonds
Securities whose fair value does not exceed their carrying value:
Government bonds
Other
Total

Book
Value

Fair
Value

¥13,999¥13,999

9,999
693¥24,692

9,999
693¥24,692

Unrealized
Gain

¥

0

¥

(0)
—
(0)

Thousands of U.S. dollars

At March 31, 2014
Securities whose fair value exceeds their carrying value:
Government bonds
Securities whose fair value does not exceed their carrying value:
Government bonds
Other
Total

Book
Value

Fair
Value

$136,071$136,071

97,1906,736$240,007

97,1906,736$240,007

Unrealized
Gain

$

0

$

(0)
—
(0)

The cost, unrealized gain and loss and the related book value of available-for-sale securities with available fair values
at March 31, 2014 are summarized as follows:
Millions of yen

At March 31, 2014
Securities whose carrying value exceeds their acquisition costs:
Equity securities
Subtotal
Securities whose carrying value does not exceed their acquisition
costs:
Other
Subtotal
Total

Book
Value

Acquisition
Cost

Unrealized
Gain¥ 5,045¥ 5,045¥ 2,875¥ 2,875¥2,169¥2,169

¥

¥

¥

333
333
¥ 5,378333
333¥ 3,209——¥2,169

TOYO ENGINEERING CORPORATION Annual Report 2014

Thousands of U.S. dollars

At March 31, 2014
Securities whose carrying value exceeds their acquisition costs:
Equity securities
Subtotal
Securities whose carrying value does not exceed their acquisition
costs:
Other
Subtotal
Total

Book
Value

Acquisition
Cost

Unrealized
Gain$49,037$49,037$27,945$27,945$21,082$21,082$ 3,2363,236$52,274$ 3,236
3,236$31,191$——$21,082

Millions of yen

Thousands of
U.S. dollars

2014
¥577
501

2014
$5,608
4,869

Selling amount and gain on sales of securities at March 31, 2014 are as follows:

Selling amount
Gain on sales of securities

The book value, unrealized gain and loss and the related fair value of held-to-maturity securities at March 31, 2013 aresummarized as follows:
Millions of yen

At March 31, 2013
Securities whose fair value exceeds their carrying value:
Government bonds
Securities whose fair value does not exceed their carrying value:
Government bonds
Total

Book
Value

Fair
Value

Unrealized
Gain¥15,998¥15,999

¥

0

4,999
¥20,998

4,999¥20,998¥(0)0

The cost, unrealized gain and loss and the related book value of available-for-sale securities with available fair values
at March 31, 2013 are summarized as follows:
Millions of yen

At March 31, 2013
Securities whose carrying value exceeds their acquisition costs:
Equity securities
Subtotal
Securities whose carrying value does not exceed their acquisition
costs:
Equity securities
Other
Subtotal
Total

Book
Value

Acquisition
Cost

Unrealized
Gain¥ 3,844¥ 3,844¥ 2,478¥ 2,478¥1,365¥1,365

¥

¥

¥

330
378
708
¥ 4,552

397
378
775
¥ 3,254

(67)
—
(67)
¥1,29835

36

Financial Section

17. DERIVATIVE TRANSACTIONS
For the year ended March 31, 2014
1. Derivatives not designated as hedging instruments(1) Currency-related
Millions of yen
All notionalamounts

Non-market transaction:
Foreign exchange forward contracts
Buying
USD
EUR
Total

¥

63
1,279
¥ 1,342

Notional
amounts due
over one year

¥
¥

—
381
381

Fair value

¥

2
132
135

¥

Unrealized
gain / loss

¥

2
132
¥135

Thousands of U.S. dollars
All notionalamounts

Non-market transaction:
Foreign exchange forward contracts
Buying
USD
EUR
Total

$

Notional
amounts due
over one year612
12,431$13,044$—
3,703$3,703All notionalamounts

Millions of yen
Notional
amounts due
over one year

¥44,449
414
391
1,722
256

¥10,257
153
154
1,106
256

19,592
14,027
1

2,501
440
—

7,494

—

911
830
42
¥90,134———¥14,868

Fair value

$

19
1,283
$1,312

Unrealized
gain / loss

$
19
1,283
$1,312

2. Derivatives designated as hedging instruments(1) Currency-related

Main hedged
items

Deferral hedge accounting method:
Foreign exchange forward
contracts
Selling
USD
EUR
SGD
CAD
JPY
BuyingUSD
EUR
GBP
Alternative method:
Foreign exchange forward
contracts
Selling
USD
Buying
USD
EUR
SEK
Total

Accounts
receivable andaccounts
payableAccounts
receivable andaccounts
payableFair value

Computational
method of fairvalues¥(2,644)(0)(16) Based on prices
4
offered by(8) the financial
institution
690
1,740
0

N/A

Based onforwardexchange
contract prices

TOYO ENGINEERING CORPORATION Annual Report 2014

Main hedged
items

Deferral hedge accounting method:
Foreign exchange forward
contracts
Selling
USD
EUR
SGD
CAD
JPY
BuyingUSD
EUR
GBP
Alternative method:
Foreign exchange forward
contracts
Selling
USD
Buying
USD
EUR
SEK
Total

Thousands of U.S. dollars
Notional
All notionalamounts due
amountsover one year
Fair value$432,047
4,024
3,800
16,7372,488$ 99,698
1,487
1,496
10,7502,488

190,435
136,343
924,3094,276—

72,842

—

8,854
8,067
408
$876,108———$144,517

Main hedged
items

All notionalamounts

Millions of yen
Notional
amounts due
over one year

Long-termloans payable¥17,150¥15,270¥17,150¥15,270

Accounts
receivable andaccounts
payableAccounts
receivable andaccounts
payableComputational
method of fairvalue$(25,699)(0)(155) Based on prices
38
offered by(77) the financial
institution
6,706
16,9120

N/A

Based onforwardexchange
contract prices(2) Interest-related

Special method for interest rate
swaps:
Interest swap contracts
floating-for-fixed rate swap

Total

Main hedged
items

Special method for interest rate
swaps:
Interest swap contracts
floating-for-fixed rate swap

Total

Long-termloans payable

Fair value

N/A

Thousands of U.S. dollars
Notional
All notionalamounts due
amountsover one year
Fair value$166,699$148,425$166,699$148,425

N/A

Computational
method of fairvalue

Based on prices
offered by thefinancial
institution

Computational
method of fairvalue

Based on prices
offered by thefinancial
institution

37

38

Financial Section

For the year ended March 31, 2013
1. Derivatives not designated as hedging instruments(1) Currency-related
Millions of yen
All notionalamounts

Non-market transaction:
Foreign exchange forward contracts
Selling
USD
EUR
Buying
USD
EUR
Total

¥

787
0

526
5
¥ 1,319

Notional
amounts due
over one year

Fair value

¥

¥

¥

—
—
—
—
—

¥

Unrealized
gain / loss

0
0

¥ 0
0

34
0
34

34
0
¥34

2. Derivatives designated as hedging instruments(1) Currency-related

Main hedged
items

Deferral hedge accounting method:
Foreign exchange forward
contracts
Selling
USD
BuyingUSD
EUR
Alternative method:
Foreign exchange forward
contracts
Selling
USD
EUR
SEK
CAD
SGD
Buying
USD
EUR
SEK
THB
BRL
CHF
SGD
Total

Accounts
receivable andaccounts
payableAccounts
receivable andaccounts
payableAll notionalamounts

Millions of yen
Notional
amounts due
over one year

¥16,687¥ 3,956

1,944
5,953

855
3,262

33,565
13
717
146
74

9,550
—
—
—
74

7,435
5,351
428
74
19,301280
35¥92,009

173
6
—
—
7,744
—
—
¥25,623

Fair value

Computational
method of fairvalues¥(1,576) Based on prices
offered by thefinancial
57
institution
538

N/A

¥ (980)

Based onforwardexchange
contract prices

TOYO ENGINEERING CORPORATION Annual Report 2014(2) Interest-related

Special method for interest rate
swaps:
Interest swap contracts
floating-for-fixed rate swap

Main hedged
items

All notionalamounts

Millions of yen
Notional
amounts due
over one year

Long-termloans payable¥11,410¥11,150¥11,410¥11,150

Total

Fair value

N/A

Computational
method of fairvalue

Based on prices
offered by thefinancial
institution

18. RETIREMENT BENEFITS
For the year ended March 31, 2014
The Company and a number of consolidated subsidiaries have either funded or unfunded defined benefit plans and lumpsum payment plans and the defined contribution plans.
The Company and a number of consolidated subsidiaries provide lump-sum or pension which is based on salary andservice time in the defined contribution plans and introduce cash balance-style pension plans in a part of defined benefit
plans. In this institution, hypothetical individual employee accounts which are equal to the source of deposit and pension
by each buyer are established. In this account, the interest credit which is based on the movement of market interest rate
and the contribution credit which is based on the salary level are accumulated.
In lump-sum payments plans, the lump-sum based on the salary and service time as retirement benefits is provided.
Defined contribution plans and lump-sum payments for a number of consolidated subsidiaries adopt the simplified
method which calculates retirement benefit liabilities and retirement benefit expenses.
(1) Changes in defined benefit obligations
Millions of yen

Thousands of
U.S. dollars

2014

2014

April 1, 2013

¥ 15,735$ 152,945

Service cost

776

7,542

Interest cost

366

3,557

162

1,574

(1,330)(12,927)11106¥ 15,721$ 152,809

Millions of yen

Thousands of
U.S. dollars

2014

2014

¥ 11,013$ 107,047

Expected return on plan assets

265

2,575

Actuarial gains and losses

550

5,346

1,338

13,005

Actuarial gains and losses
Benefit paid
OthersMarch 31, 2014
(2) Changes in plan assets

April 1, 2013

Contributions by the employer
Benefits paid

(1,123)(10,915)

March 31, 2014

¥ 12,044$ 117,068

39

40

Financial Section(3) Reconciliation of defined benefit obligations and plan assets
The reconciliation of the defined benefit obligations and plan assets to net defined benefit liability recognized in the
consolidated balance sheet as of March 31, 2014 is as follows:
Millions of yen

Thousands of
U.S. dollars

2014

2014

Funded defined benefit obligations¥ 14,015$ 136,226

Plan assets(12,044)(117,068)

Subtotal

1,970

19,148

Unfunded defined benefit obligations

1,706

16,582

Net amount of liabilities and assets recognized in consolidated balance sheet

3,677

35,740Liabilities (net defined benefit liability)

3,677

35,740Net amount of liabilities and assets recognized in consolidated balance sheet

3,677

35,740Millions of yen

Thousands of
U.S. dollars

2014

2014

(4) Retirement benefit expenses
The retirement benefit expenses for the fiscal year ended March 31, 2014 is as follows:

Service cost

¥ 776

$ 7,542Interest cost

366

3,557

Expected return on plan assets(265)(2,575)

Recognition of obligation at transition

246

2,391

Recognition of actuarial gains and losses

151

1,467

Amortization of past service cost

(183)

(1,778)10

97¥1,102$10,711

OthersTotal(5)Remeasurements of defined benefit plans
The unrecognized past service cost, obligation at transition and unrecognized actuarial gains and losses recognized inaccumulated other comprehensive income (amount before income tax effect) for the fiscal year ended March 31, 2014
are as follows:
Millions of yen

Thousands of
U.S. dollars

2014

2014

¥ 348

$ 3,382

Obligation at transition(255)(2,478)Unrecognized past service cost

977

9,496

¥1,070$10,400

Unrecognized past service cost

Total(6)Major breakdown of plan assets

2014
Debt securities

43%

Equity securities

31%

Cash and deposits

10%

Others

16%

Total

100%

TOYO ENGINEERING CORPORATION Annual Report 2014

Expected return rate on plan assets is determined by considering the current and anticipated future portfolio of plan
assets and current and anticipated future long-term performance of individual asset classes that comprise the funds’
asset mix.
Discount rate
Expected return rate on plan assets

Mainly 2.0%
Mainly 2.0%

Defined contribution plan
The amount of contributions for defined contribution plan by the Company and its consolidated subsidiaries is ¥1 million($9.7 thousand).
For the year ended March 31, 2013
The Company and certain consolidated subsidiaries have defined benefit pension plans which provide for pension
annuity payments or lump-sum payments to eligible employees upon retirement.
The Company also has defined contribution pension plan, which was transferred from a portion of defined benefit
pension plan in May, 2003.
(1) Accrued retirement benefits for employees at March 31, 2013 consisted of the following:
Millions of yen

2013
Projected benefit obligation¥(15,599)

Plan assets

10,858Unreserved projected benefit obligation(4,741)

Unrecognized obligation at transition

501

Unrecognized actuarial loss

(432)

Unrecognized prior service cost

(530)

Net projected benefit obligation(5,202)

Prepaid pension cost
Provision for retirement benefits for employees—¥ (5,202)(2) Net periodic pension cost for the years ended 2013 consisted of the following:
Millions of yen

2013
Components of net periodic benefit cost:Service cost¥

785

Interest cost

298

Expected return on plan assets(23)

Amortization of unrecognized retirement benefit obligation attransition

246

Amortization of unrecognized actuarial loss

334

Amortization of prior service cost

(187)

Other

103

Net periodic pension cost
Total

1,556
¥ 1,556

41

42

Financial Section(3) Basis of calculation of projected benefit obligation for the years ended 2013.
Method of allocation of estimated pension cost
Discount rate
Expected rate of return on plan assets
Amortization period for unrecognized actuarial loss
Amortization period for unrecognized obligation at transition
Amortization period for unrecognized prior service cost

Straight-line method
Mainly 2.0%
Mainly 0.0%
Mainly 9 years
15 years
Mainly 13 years

19. INCOME TAXESThe statutory tax rates applicable to the Company and its domestic subsidiaries for the year ended March 31, 2014 and2013 were approximately 37.8%. Income taxes of the foreign subsidiaries are based generally on the tax rates applicablein their countries of incorporation.
(1) The effective tax rates on income before income taxes in the accompanying consolidated statements of income are
not equal to the above-mentioned statutory tax rate for the following reasons:Year ended March 31,
Statutory tax rate in Japan
Adjustments:
Permanently nondeductible expenses
Permanently nontaxable dividends received
Per capita levy on corporate inhabitant tax
Temporary differences excluded from calculation of deferred tax assets
Amortization of goodwill
Tax credit
Difference in tax rates for foreign subsidiaries
Effective tax rate in the past years
Difference in tax base between corporate income tax and enterprise tax
Operating loss carryforwards for subsidiaries
Equity in earnings of affiliates
Gain on change in equity
Decrease of deferred tax assets, net of liabilities, at fiscal year-end due tochange in statutory tax rate
Other
Effective tax rate

2014

2013

37.8%

37.8%

4.3
(19.5)
0.5
48.7
9.5
11.0
8.8
0.2
0.3
1.3
(13.0)(10.1)

7.8
(7.0)
0.9
(26.8)
20.0
(6.7)
25.8
0.8
0.6
16.4
(2.7)
—

4.8
(3.1)
81.5%

—
4.8
71.7%

TOYO ENGINEERING CORPORATION Annual Report 2014(2) Significant components of the deferred income tax assets and liabilities at March 31, 2014 and 2013 are as follows:
Thousands of
U.S. dollars

Millions of yen

2014
Deferred tax assets (gross):
Provision for retirement benefits
Net defined benefit liability
Provision for loss on construction contracts
Provision of allowance for doubtful accounts
Provision for bonuses
OthersTotal deferred tax assets (gross)
Deferred tax liabilities (gross):
Undistributed earnings of subsidiaries and affiliates
Valuation difference on available-for-sale securities
OthersTotal deferred tax liabilities (gross)
Net deferred tax assets

¥

2013

2014

—
1,116
526
767
333
1,794
4,538

¥1,666
—
846
1,049
316
1,348
5,227

$

—
10,847
5,112
7,455
3,236
17,437
44,109

694
696
96
1,487
¥3,050

627
418
143
1,190
¥4,037

6,745
6,765
933
14,453$29,649

Note: The Company and its consolidated subsidiaries had temporary differences excluded from calculation of deferred
tax assets of ¥11,676 million ($113,491 thousand) and ¥8,148 million at March 31, 2014 and 2013, respectively,
which are available to be offset against future taxable income.
(3) Net deferred tax assets at March 31, 2014 and 2013 are reflected in the consolidated balance sheets as follows:
Millions of yen

Current assets—deferred tax assets
Investments and other assets—deferred tax assets
Current liabilities—otherNoncurrent liabilities—deferred tax liabilities
Net deferred tax assets

2014¥2,977
443
(9)
(360)
¥3,0502013¥3,0101,034—(7)¥4,037

Thousands of
U.S. dollars

2014$28,936
4,305(87)(3,499)$29,649(4) The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 10 of 2014) was promulgated on March 31,
2014 and, as a result, the Company is no longer subject to the Special Reconstruction Corporation Tax effective forfiscal years beginning on or after April 1, 2014. In addition, the “Act for Partial Amendment of the Local Tax Act, etc.”(Act No. 4 of 2014) and the “Act for Partial Amendment of the Local Corporate Tax Act, etc.” (Act No. 11 of 2014) were
promulgated on March 31, 2014, and the Company is subject to the amended Local Corporate Tax effective for fiscal
years beginning on or after April 1, 2015.
As a result, the effective statutory tax rate used to measure the Company’s deferred tax assets and liabilities waschanged from 37.8% to 35.4% for the temporary differences expected to be realized or settled from fiscal years
beginning April 1, 2014. The effect of the announced reduction of the effective statutory tax rate was to decreasedeferred tax assets after offsetting deferred tax liabilities by ¥270 million ($2,624 thousand) and increase deferred income
taxes by ¥270 million ($2,624 thousand) as of and for the year ended March 31, 2014.

43

44

Financial Section

20. RENTAL PROPERTIESFor the year ended March 31, 2014
The Company and some of its consolidated subsidiaries own their commercial facilities and residences (including land)
for rent in Chiba prefecture. For the year ended March 31, 2014, the Company and some of its consolidated subsidiaries
recorded ¥720 million ($6,998 thousand) of rental revenues and ¥594 million ($5,773 thousand) of impairment loss.
Book value, increase (decrease) in value, and fair value of rental properties are listed below.
Millions of yen

Thousands of U.S. dollars

Book value
at March 31,
2013

Increase(decrease)in book value

Book value
at March 31,
2014

Fair value
at March 31,
2014Book value
at March 31,
2013

Increase(decrease)in book value

Book value
at March 31,
2014

Fair value
at March 31,
2014¥15,090¥(976)¥14,113¥17,646$146,675$(9,486)$137,179$171,520

Notes: 1. Book value is calculated by deducting accumulated depreciation and accumulated impairment loss from its
acquisition cost.
		
2. The major items in “Increase (decrease) in value” consist of ¥594 million ($5,773 thousand) of impairment lossof commercial facilities and ¥398 million ($3,868 thousand) of depreciation of buildings.
		
3. Computational method of fair value		
Mainly based on Real Estate Appraisal Standards.
For the year ended March 31, 2013
The Company and some of its consolidated subsidiaries own their commercial facilities and residences (including land)
for rent in Chiba prefecture. For the year ended March 31, 2013, the Company and some of its consolidated subsidiaries
recorded ¥760 million of rental revenues and ¥607 million of gain on sales of property, plant and equipment.
Book value, increase (decrease) in value, and fair value of rental properties are listed below.
Millions of yen
Book value
at March 31,
2012

Increase(decrease)in book value

Book value
at March 31,
2013

Fair value
at March 31,
2013¥16,152¥(1,062)¥15,090¥18,430

Notes: 1. B ook value is calculated by deducting accumulated depreciation and accumulated impairment loss from its
acquisition cost.
		
2. The major items in “Increase (decrease) in value” consist of ¥534 million of sales of rental offices and ¥435
million of depreciation of buildings.
		
3. Computational method of fair value		
Mainly based on Real Estate Appraisal Standards.

21. SEGMENT INFORMATIONThe operating segments of the group are components for which discrete financial information is available and whose
operating results are regularly reviewed by the Executive Committee to make decisions about resource allocation and toassess performance.
The Companies’ reportable operating segments consist of the following three business groups:
		 EPC Business—	Research and development, design, engineering, procurement, and construction of a variety ofplants, such as oil, gas, petrochemical, and general chemical.
		 IT Business— 	Solution business based on other companies’ ERP package products and product business basedon our subsidiary ERP package products, etc.
		 Real Estate— Rent of commercial facilities and residences, and administration.

TOYO ENGINEERING CORPORATION Annual Report 2014

Segment information for the year ended March 31, 2013 has been restated in accordance with such accounting
standards for comparative purposes.
Millions of yen

Year ended March 31, 2014
I Net sales and segment profits:
Net sales(1) Net sales to outside customers(2) Inter-segment net sales
Total
Segment profits
II Segment assets
III Others
Depreciation
Amortization of goodwill
Amount invested in equity method
affiliates
Increase of fixed assets

EPC Business

IT Business

Real Estate

Total

Adjustments

Consolidated¥215,996
167
216,163(885)¥227,927¥12,062
113
12,176453¥ 5,718¥ 2,065
180
2,245
907
¥17,202¥230,124
461
230,585475¥250,849

¥

—
(461)
(461)
(19)
¥6,631¥230,124—
230,124455¥257,480

¥

¥

¥

¥

¥

¥

1,513
463
9,103
1,643

681
—
—
681

424
—
—
18

2,619
463
9,103
2,343

(1)
—

2,618
463

—
(20)

9,103
2,322

Adjustments

Consolidated

Thousands of U.S. dollars

Year ended March 31, 2014
I Net sales and segment profits:
Net sales(1) Net sales to outside customers(2) Inter-segment net sales
Total
Segment profits
II Segment assets
III Others
Depreciation
Amortization of goodwill
Amount invested in equity method
affiliates
Increase of fixed assets

EPC Business

IT Business

Real EstateTotal$2,099,494
1,623
2,101,117(8,602)$2,215,464$117,243
1,098
118,351
4,403$ 55,579$ 20,071
1,749
21,821
8,816$167,204$2,236,819
4,480
2,241,300
4,617$2,438,267

$

$

$

$

$

$

14,7064,500
88,481
15,970

6,619
—
—
6,619

4,121
—
—
174

25,4564,500
88,481
22,774— $2,236,819(4,480)—(4,480) 2,236,819
(184)
4,422
$64,453 $2,502,721
(9) $
—
—
(194)

25,4474,500
88,481
22,569Notes: 1. “Adjustments” for Segment profits and Depreciation represent the elimination of inter-segment transactions.
		
2. “Segment profits” represents operating income from Consolidated Statement of Income.
		
3. Segment assets adjustments include (¥313) million (($3,042) thousand) of inter-segment eliminationsand ¥6,944 million ($67,496 thousand) of non-allocated corporate assets, which is chiefly the Company’s
investment securities attributed to the administrative department.

45

46

Financial Section

Millions of yen

Year ended March 31, 2013
I Net sales and segment profits:
Net sales(1) Net sales to outside customers(2) Inter-segment net sales
Total
Segment profits
II Segment assets
III Others
Depreciation
Amortization of goodwill
Amount invested in equity method
affiliates
Increase of fixed assets

EPC Business

IT Business

Real Estate¥215,505
158
215,664275¥211,554¥10,991
32
11,023344¥ 4,912

¥

¥

1,300
1,583
5,190
1,014

713
—

Total

Adjustments

Consolidated¥ 2,226
231
2,458
975
¥18,438¥228,723
422
229,146
1,596¥234,906

¥

—
(422)
(422)
(2)
¥5,788¥228,723—
228,723
1,593¥240,694

¥

¥

¥

¥

465
—

—
602

—
4

2,479
1,583
5,190
1,620

(0)
—
—
(2)

2,479
1,583
5,190
1,618

Notes: 1. “Adjustments” for Segment profits and Depreciation represent the elimination of inter-segment transactions.
		
2. “Segment profits” represents operating income from Consolidated Statement of Income.
		
3. Segment assets adjustments include (¥293) million of inter-segment eliminations and ¥6,082 million of
non-allocated corporate assets, which is chiefly the Company’s investment securities attributed to theadministrative department.
(1) Information by Geographical Segments Based on the Location of Projects
Millions of yen

Year ended March 31, 2014
Net salesJapan

BrazilIndonesia

Other

Total

¥36,258¥34,002¥39,367¥120,495¥230,124

Thousands of U.S. dollars

Year ended March 31, 2014
Net salesJapan

BrazilIndonesia

Other

Total

$352,430$330,501$382,649$1,171,218$2,236,819

Millions of yen

Year ended March 31, 2014
Property, plant and equipment

Japan

Other

Total

¥26,148¥ 4,214¥30,363

Thousands of U.S. dollars

Year ended March 31, 2014
Property, plant and equipment

Japan

Other

Total

$254,160$ 40,960$295,130

Japan

BrazilIndonesia

Other

Total

¥ 44,414¥ 35,895¥ 34,761¥ 113,651¥ 228,723

Millions of yen

Year ended March 31, 2013
Net sales

Millions of yen

Year ended March 31, 2013
Property, plant and equipment

Japan

Other

Total

¥ 27,347¥ 3,840¥ 31,187

TOYO ENGINEERING CORPORATION Annual Report 2014(2) Information by Major Clients
Millions of yen

Year ended March 31, 2014
PETROLEO BRASILEIRO S.A. (PETROBRAS)
PT Pupuk Kalimantan TimurNet Sales

Segment¥29,184
23,505EPC
EPC

Thousands of U.S. dollars

Year ended March 31, 2014
PETROLEO BRASILEIRO S.A. (PETROBRAS)
PT Pupuk Kalimantan TimurNet Sales

Segment$283,670
228,470

EPC
EPC(3) Impairment loss on fixed assets by reportable segment
Millions of yen

Year ended March 31, 2014
Impairment loss

EPC Business

IT Business

Real Estate

¥695

¥—

¥594

Total

Adjustments

Consolidated¥—¥1,289Adjustments

Consolidated$—$12,529

Adjustments

Consolidated¥1,289Thousands of U.S. dollars

Year ended March 31, 2014
Impairment loss

EPC Business

IT Business

Real Estate$6,755$—$5,773

Total$12,529

Millions of yen

Year ended March 31, 2013
Impairment loss

EPC Business

IT Business

Real Estate

¥ —

¥—

¥ 79

Total

¥

79

¥—

¥

79

(4) Amortization and unamortized balance of goodwill by reportable segment
The following table presents the amortization and balance of goodwill as of and for the years ended March 31, 2014 and2013 by reportable segments:
Millions of yen

Year ended March 31, 2014
Goodwill
Amortization of goodwill
Balance at March 31, 2014
Negative goodwill
Amortization of negative goodwill
Balance at March 31, 2014

EPC Business

IT Business

Real Estate

Total

¥ 463
1,619

¥—
—

¥—
—

¥ 463
1,619

10
¥ 117

—
¥—

—
¥—

10
¥ 117

Thousands of U.S. dollars

Year ended March 31, 2014
Goodwill
Amortization of goodwill
Balance at March 31, 2014
Negative goodwill
Amortization of negative goodwill
Balance at March 31, 2014

EPC Business

IT Business

Real EstateTotal$ 4,500
15,736$——$——$ 4,500
15,73697$ 1,137

—
$—

—
$—

97
$ 1,137

47

48

Financial Section

Millions of yen

Year ended March 31, 2013
Goodwill
Amortization of goodwill
Balance at March 31, 2013
Negative goodwill
Amortization of negative goodwill
Balance at March 31, 2013

EPC Business

IT Business

Real EstateTotal¥ 1,583
2,570

¥—
—

¥—
—

¥ 1,583
2,570

10
¥ 128

—
¥—

—
¥—

10
¥ 128

22. RELATED PARTY TRANSACTIONS
Affiliate
For the year ended March 31, 2014
Name: N EDL CONSTRUCOES DE
DUTOS DO NORDESTE LTDA.
Address:
BrazilCapital and investments:
2,524 thousand BRL
Business:
Construction
Equity ownership percentage:
Holding 42% directly
Relation with related party:
Loan for operating fund
Summary of transactions:
Loan for operating fund
For the year ended March 31, 2013
Name: N EDL CONSTRUCOES DE
DUTOS DO NORDESTE LTDA.
Address:
BrazilCapital and investments:
2,524 thousand BRL
Business:
Construction
Equity ownership percentage:
Holding 42% directly
Relation with related party:
Loan for operating fund
Summary of transactions:
Loan for operating fundMillions of yen

Thousands of U.S. dollars

Transaction
amountTitle ofaccount

Accountbalance

Transaction
amountTitle ofaccount

Accountbalance—Long-term
loans
receivable¥3,707—Long-term
loans
receivable$36,032—¥3,707—$45,146

Millions of yen
Transaction
amount—Title ofaccount

Long-term
loans
receivable

Accountbalance¥3,707

Notes:		1. Interest rate on loan is determined by considering effective market rates.
		 2. The Company reserved ¥3,707 million ($36,032 thousand) of allowance for doubtful accounts at March 31,
2014, against the loan above.
		 3. The Company reserved ¥3,707 million of allowance for doubtful accounts at March 31, 2013, against the loan
above.

TOYO ENGINEERING CORPORATION Annual Report 2014

For the year ended March 31, 2014
Name: T OYO SETALEMPREENDIMENTOS LTDA.
Address:
BrazilCapital and investments:
38,904 thousands BRL
Business:
Construction
Equity ownership percentage:
Holding 50% indirectly
Relation with related party:
Guarantee obligation
Summary of transactions:
Guarantee obligation

Millions of yen

Thousands of U.S. dollars

Transaction
amountTitle ofaccount

Accountbalance

Transaction
amountTitle ofaccount

Accountbalance—

Guarantee
obligation¥3,382—

Guarantee
obligation$32,873—¥3,707—$45,146

Note:	The company was responsible for the guarantee obligation in the execution of project at March 31, 2014, against
the affiliate above.
Significant affiliate
The significant affiliate were Moeco Thai Oil Development Co., Ltd, TOYO-THAI CORPORATION PUBLIC COMPANY
LIMITED and Modec and Toyo Offshore Production Systems Pte. Ltd, whose condensed financial information is asfollows:
Millions of yen

Thousands of
U.S. dollars

Years ended March 31,
Total current assets
Total noncurrent assets
Total current liabilities
Total noncurrent liabilities
Total net assets

2014¥ 59,285
15,17443,703
4,073
26,6832014$ 576,253
147,492
424,795
39,589259,360

Net sales
Income before income taxes
Net income

132,30212,421¥ 7,758

1,285,983
120,732$
75,408The significant affiliate was Moeco Thai Oil Development Co., Ltd, whose condensed financial information years ended
March 31, 2013 was as follows:
Millions of yen

Years ended March 31,
Total current assets
Total noncurrent assets
Total current liabilities
Total noncurrent liabilities
Total net assets

2013¥ 7,868
5,468
1,318
1,280
10,736

Net sales
Income before income taxes
Net income

6,089
4,435
¥ 2,11349

50

Financial Section

23. AMOUNTS PER SHARE
Yen

Years ended March 31,
Net income per share
Net assets per share
Dividends per share

2014
¥
5.05
382.61
3.00

U.S. dollars

2013¥ 7.60363.15
5.00

$

2014
0.04
3.71
0.02

Net income per share is computed based on the net income available for distribution to shareholders of common stockand the weighted average number of shares of common stock outstanding during each year.
Dividends per share represent the cash dividends proposed by the Board of Directors as applicable to the respective
years.
Net assets per share are computed based on the net assets excluding minority interests and the number of common
stock outstanding at the year end.

TOYO ENGINEERING CORPORATION Annual Report 2014

51

52

Corporate Information
Corporate Data
Corporate Name:		 Toyo Engineering Corporation (TOYO)Founded:		 May 1, 1961
Number of Employees:		 4,747 (Consolidated, As of March 31, 2014)
Corporate Philosophy: 		 Mission: Engineering for Sustainable Growth of the Global Community

		 Vision: Global Leading Engineering Partner
		 Values: Integrity, Creativity, Diversity, Learning, Team
Business Activities:		 Engineering and Construction for Industrial Facilities

	R&D support, design, engineering, procurement, construction, commissioning,		 technical assistance for industrial facilities: oil, gas, oil & gas development,		 petrochemicals, chemicals, water treatment, transportation systems,
		 power generation, nuclear power, advanced production systems, pharmaceutical,
		 fine chemical, distribution systems, biotechnology, environment and others
	IT engineering services and system software supply●●

History
1961●

TOYO was established. Capital: 300 million yen

An agreement for engineering service and		 technical assistance was concluded with
		 Lummus Co. (U.S.A.).
1962●

The first overseas contract for a fertilizer plant		 with The Fertilizer Corporation of India Ltd.
		 was awarded.
1963●

Toyo U.S.A., Inc. established.
Toyo Engineering & Construction Sdn. Bhd.
		 established in Malaysia.
1986

●

●

1987

●

Toyo Engineering Korea Limited established.

1989

●

Capital: 12,219 million yen

Head Office/Engineering Center (Baytec Building)		 started operation in Narashino, Chiba.
1990●

The first urea plant contract in the former
		 Soviet Union was awarded.

1993

●

Capital: 13,017 million yen

TOYO was awarded its first ethylene plant contract		 (Osaka, Japan).

1994

●

TOYO received ISO 9001 registration.

1999

●

Toyo Business Engineering Corporation established.

2004

●

1964
1965

●

●

TOYO was awarded the contract for the first		 ammonia plant in the former Soviet Union.
1969●

TOYO was awarded the contract for two ammonia
		 plants in the former East Germany.
1970

●

1973

●

A contract for a urea plant for China was awarded.

1975

●

Capital: 1,890 million yen

1976

●

Toyo Engineering India Limited established.

1978

●

Capital: 2,970 million yen

Capital: 3,300 million yen
TOYO was listed on the second section of the Tokyo
		 Stock Exchange.
1980

●

●

Capital: 5,040 million yen
TOYO was listed on the first section of the Tokyo
		 Stock Exchange.
1985 Toyo-Thai Corporation Ltd. established.
1982

TOYO received ISO 14001 registration.
Toyo Engineering Corporation, China established.

2006

●

Capital: 18,198 million yen

2007

●

Relocation of Tokyo head office.

2008

●

TOYO invested in Atlatec, S.A. de C.V. in Mexico.

●International Procurement & Service Corporation
		 (Currently Toyo Engineering Europe, S.r.l.)		 established.
1972

●

●

●

●

TOYO formulated the Group MVV (Mission, Vision,
		 Values).
2009●

TOYO acquired Tri Ocean Engineering Limited
		 in Calgary, Alberta, Canada (Currently Toyo-Canada).
2010●

The 50th Anniversary
TOYO invested in PT. Inti Karya Persada
		 Tehnik (IKPT) in Indonesia.
2011

●

●

2012 Medium-Term Business Plan (FY2012–FY2015)
		 started.
Katsumoto Ishibashi was elected as President		 and CEO.
TS Participações e Investimentos S.A. established		 in Brazil.
Consolidated Group logo developed.
●

●

●

●

TOYO ENGINEERING CORPORATION Annual Report 2014

Board of Directors, Corporate Auditors and Executive Officers

Chairman

Senior Corporate Auditor

Executive Officers

Makoto Fusayama

Makoto Shimagaki

President & CEO

Corporate Auditors

Katsumoto Ishibashi*1

Hideaki Kinoshita
Takashi Matsuo*4
Yoshiyuki Shinohara*4

Yutaka Kita
Takayoshi Imanishi
Koji Kojima
Itsuya Yanagi
Tomohisa Abe
Masahiko Kita
Haruo Nagamatsu
Eiichi Ide
Hideki Shida
Teruhiko Inoue
Tooru Osanai
Keisuke Ishii
Shinichi Okazaki

Executive Vice President

Takaya Naito*1

Senior Executive Officers

Directors

Hideki Shiinoki*1
Keiichi Matsumoto
Kiyoshi Nakao
Masayuki Uchida
Masaaki Yamaguchi*2
Kenyu Adachi*3

Akhilesh Kumar
Masaru Takezawa
Tadashi Hori
Hisashi Osone
Shoji Koshikawa
Motoyoshi Kamoshima
Hiroshi Sato

*1 : Representative Director*2 : CFO*3 : Outside Director*4 : Outside Auditor

C

B

A

A Makoto Fusayama
B Katsumoto Ishibashi
C Takaya Naito
D Hideki ShiinokiD(As of June 25, 2014)

53

54

Corporate Information

Worldwide Network

CA
LG

O

US

Y

HO

AR

M

N

TE

TO

R

R

EY

N

TOK
CARA

YO,

CHI

BA

CAS

SEOU LSH AN GH AIU
SAO PAB E IJ IN

LO

JAKA

G

RTA

KU
A
BA LA L
NG
UM
KO
PU
R
K

M
U
M
BA

MOS COW

MI

LA

N

I

I
BA
DU
RAN
TEH HOBAR
AL K
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

●

HEAD OFFICE / ENGINEERING CENTER
Chiba, Japan■

Toyo Engineering India Limited
Mumbai, India●

TOKYO HEAD OFFICETokyo, Japan■

Saudi Toyo Engineering Company
Al Khobar, Saudi Arabia

TEC Air Service Corporation
Travel and insurance services■

Toyo Engineering Europe, S.r.I.
Milan, Italy■

Toyo Engineering Canada Ltd.
Calgary, Canada

TEC Business Services Corporation
Staffing service, contracted business service,translation and interpretation service,facility management service■

Toyo U.S.A., Inc.
Houston, U.S.A.

■

Toyo Ingeniería de Venezuela, C.A.
Caracas, Venezuela

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

Overseas Offices●

Beijing, China●

Jakarta, Indonesia●

Dubai, United Arab Emirates●

Tehran, Iran●Moscow, Russia

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

Chiba Data Center Corporation
Data entry, scanning services and commercial
printing
TEC Estate, Ltd.
Real estate business■

TS Participações e Investimentos S.A.
Sao Paulo, Brazil

Toyo Business Engineering Corporation
System consulting and solutions provider

Toyo Engineering Korea Limited
Seoul, Korea■

Toyo-Thai Corporation Public Company Limited
Bangkok, Thailand

Toyo Engineering Corporation (China)
Shanghai, China

TEC Accounting & Consulting Ltd.
Business support and consulting
for accounting and accounting system development■

Atlatec, S.A. de C.V.
Monterrey, Mexico

OVERSEAS GROUP COMPANIES■TEC Project Services Corporation
EPC and maintenance services for plants and 		
facilities, environmental technology

OTHER AFFILIATES
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

■

DOMESTIC GROUP COMPANIES■

PT. Inti Karya Persada Tehnik (IKPT)Jakarta, Indonesia■

Toyo Engineering & Construction Sdn. Bhd.
Kuala Lumpur, Malaysia

Stock Information
Information

TOYO ENGINEERING CORPORATION Annual Report 2014

(As of March 31, 2014)————————————————————————— ————————————————————————————————————————————————

Capital Stock¥18,198 million

Stock Exchange Listing

Tokyo Stock Exchange

Authorized Shares

500,000,000

Capital Stock Issued

192,792,539

Number of Shareholders

11,960Administrator of
Shareholders’ Register

Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan————————————————————————— ————————————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————

Number of shares(thousands)

Major Shareholders:

Percentage of total(%)

Mitsui & Co., Ltd.

43,77022.70

Japan Trustee Services Bank, Ltd.

25,703

13.33

The Master Trust Bank of Japan, Ltd. Trust Account

17,217

8.93

Taisei Corporation

5,000

2.59

Japan Trustee Services Bank, Ltd. Trust Account

4,623

2.39

JUNIPER

4,490

2.32

Trust and Custody Services Bank, Ltd. Pension Trust Account

3,849

1.99

The Nomura Trust & Banking Co., Ltd. Trust Account

3,194

1.65

EVERGREEN NOMINEES LIMITED

3,123

1.61

Japan Trustee Services Bank, Ltd. Trust Account 9

2,930

1.51

(Mitsui Chemicals, Inc. Retirement Benefit Trust Account re-entrusted by Chuo Mitsui Asset Trustand Banking Company, Ltd.)

Others0.92

Individuals
16.74

Financial institutions
37.96

Type of
Shareholder(%)

Foreign shareholders
16.39

Domestic companies
27.99

Stock Chart:
(Yen)
600
500

Stock Price

400
300
200
100
0

Trading Volume (Thousands of Shares)

50,00025,000

0

4

5

6

7

8

9 10 11 12 1
FY2011

2

3

4

5

6

7

8

9 10 11 12 1
FY2012

2

3

4

5

6

7

8

9 10 11 12 1
FY20132

355