Toyo Engineering Corporation Annual Report 2007

A

2-8-1 Akanehama,Narashino-shi, Chiba 275-0024, Japan
Tel: 81-47-451-1111
Fax: 81-47-454-1800
http://www.toyo-eng.co.jp/

e
R
por t
l
a
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nn

2007
20
Year ended March 31, 2007

PRINTED WITH

SOY INK

TMThis report was printed with soy ink and was produced with waterless printing methods.

©2007 Toyo Engineering Corp.
Printed in Japan

Corporate Profile

Toyo Engineering Corporation (TOYO) is a plant engineering contractor founded in 1961. Since
its inception, TOYO has deployed Engineering, Procurement and Construction (EPC) solution
businesses actively and successfully implemented projects in many countries. Consequently, TOYO
is now recognized as a leading world-class engineering contractor.
TOYO performs comprehensive engineering businesses with information technology (IT) andother cutting-edge technologies added to and integrated with its reliable engineering proficiency
and project management capabilities. TOYO’s major activities comprise overseas and domestic
EPC solutions and business solutions, which solve the complex problems of clients.
Our corporate philosophy is “providing total solutions that ensure the satisfaction and successof our clients”. We provide total solutions with five strengths: (1) comprehensive engineering
technology based on experience accumulated worldwide; (2) project management capabilities
promising safety, quality and delivery schedule; (3) cutting-edge technology application capabilities in various product fields; (4) advanced global response capabilities connecting our hubs inthe worldwide networks; and (5) alliance formation capabilities creating an optimal structure ofcollaboration with world partners.
The Toyo Group consists of TOYO and 27 subsidiaries and 11 affiliates, holding 5,500 people,
forming Global Toyo. Under the Global Toyo structure, we would like to maintain and strengthen
the high reliability in the “Toyo Brand”, which assures clients that projects are completed withsafety and high quality on schedule.

Contents
Consolidated Financial Highlights ...........................................................1
To Our Shareholders .................................................................................2
Management System ................................................................................8
HSSE＋Quality .........................................................................................10
Review of Operations
EPC Solutions (Overseas)........................................................................12
EPC Solutions (Domestic) .......................................................................14
Business Solutions..................................................................................16
Financial Section
Consolidated Five-Year Summary ...........................................................18
Management’s Discussion and Analysis ..................................................20
Business Risk and Other Risks.................................................................21
Consolidated Balance Sheets .................................................................22
Consolidated Statements of Income.......................................................24
Consolidated Statements of Changes in Net Assets................................25
Consolidated Statements of Cash Flows.................................................26
Notes to Consolidated Financial Statements...........................................27
Independent Auditors’ Report................................................................41
Worldwide Network ...............................................................................42
Corporate Data .......................................................................................43

DEFINITION OF TERMS• Fiscal 2006 means the fiscal year ended March 31, 2007 (April 1,
2006-March 31, 2007).
• The word, mark, logo or any sign with a symbol “TM” means that it
is a registered trademark of Toyo Engineering Corporation in Japan.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This annual report includes certain “forward-looking statements”.
These statements are based on management’s current expectations
and are subject to uncertainty and changes in circumstances. Actual
results may differ due to changes in economic, business, competitive,
technological, regulatory and other factors.

Consolidated Financial Highlights

Financial Summary
Thousands of
U.S. dollars*Millions of yen

Years ended March 31,

2007

2006

2007

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

¥223,844¥195,584 $1,895,536

New orders............................................................................................

354,984

257,840

3,006,045

Backlog of contracts at end of the year..................................................

499,237

373,518

4,227,597

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

5,294

3,350

44,828

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

282,814202,6622,394,905

Total net assets ......................................................................................

51,55935,649436,610Per share data (in yen and U.S. dollars):
Net income.........................................................................................

¥Cash dividends ...................................................................................

27.90
3.00

¥

19.11 $

0.24

3.00

0.03

* U.S. dollar amounts are stated at ¥118.09 to $1, the exchange rate prevailing on March 31, 2007.

Operational Summary•••••
Net income marked a record high. Revenues and earnings increased compared withthe previous fiscal year, and targets were cleared.
•••••
New orders reached ¥355.0 billion, the highest level in the past two fiscal years.
•••••
Zero net debt was achieved. (Cash and cash equivalents are more than adequate to coverinterest-bearing debt.)

Net sales

Net income (loss)

New orders

Backlog of contracts(¥ billion)(¥ billion)(¥ billion)(¥ billion)

499.2
5.3

223.8

355.0

197.9 195.6
179.2

3.6

170.5

3.4
241.5
195.2

350.6 337.8

257.8

373.5

307.8

192.6

(0.9)
(6.5)

’03

’04

’05

’06

’07

’03

’04

’05

’06

’07

’03

’04

’05

’06

’07

’03

’04

’05

’06

TOYO ENGINEERING CORPORATION’07

Annual Report 2007

1

To O u r S h a r e h o l d e r s

In fiscal 2006, the Toyo Group recorded its
highest profitability since it began reporting consolidated financial statements. The
group recorded increased revenue andearnings compared with the previous year
and achieved the initial targets for sales
and profit for the whole year. We received
new orders of the highest-ever amount,renewing the record for the second consecutive year on a consolidated basis. Ourconsistent efforts to reduce debt resulted inzero net debt as of March 2007. In April
2006, we launched a new three-year medium-term corporate strategic plan under
our corporate vision “Global Toyo for
Client Value Enhancement”. Our achievements for the first year exceeded the initial
targets.
Furthermore, we determined to advancetoward the goal of the plan. As part of ourefforts, we carried out safety training for
all employees and management, including
myself. The Toyo Group will implement all
projects by putting the first priority on
safety and will make efforts to boost its
corporate value, capitalizing on its total
engineering proficiency and project
management skills.
August 2007

Yutaka Yamada
President and Chief Executive Officer

2

TOYO ENGINEERING CORPORATION

Annual Report 2007

Operating Environment and Results in Fiscal 2006
The Toyo Group achieved its third consecutive year of profitability and received
a record-high amount of new orders.

Operating Environment

Revenues and Earnings

Japan’s economy remained robust, supported by a healthy

Net sales increased 14.4% year on year to ¥223.8 billion,

performance by corporations, high levels of exports,

comprising ¥146.7 billion in overseas sales and ¥77.1 bil-machinery orders and production, as well as active capitallion in domestic sales. Operating income and net income

investment despite soaring prices of crude oil and otherincreased to ¥6.9 billion (64.2% year on year) and ¥5.3

materials and a drop in personal consumption. Outsidebillion (58.0% year on year), respectively. The Toyo Group

Japan, the EU economy was on a recovery track, China

achieved its third consecutive year of profitability andand India maintained high growth, and Southeast Asianzero net debt. Interest-bearing debt as measured by thecountries also enjoyed favorable economic conditions

debt-equity ratio fell to 0.8 times, from 1.4 times in thewhile the U.S. economy decelerated slightly. The Middle

previous year.

East enjoyed a continued active economy due to highlevel petroleum revenue and skyrocketing world energy

New Orders

prices. In Central and South America, some nations
enjoyed favorable conditions.
On the basis of the worldwide increase in demand for

New orders totaled ¥355.0 billion, comprising ¥286.8
billion in overseas orders and ¥68.2 billion in domesticenergy and materials as well as the increase in capitalorders. This was a record high, 61.4% higher than ourinvestment backed by clients’ earnings recovery, the plant

initial target. Major new orders included such overseas

market showed a continuous high demand level.

projects as a gas to liquid (GTL) / liquid processing unit

Although the operating environment surrounding theplant in Qatar, ethylene plants in India, Thailand andToyo Group generally improved, the plant engineering

Singapore, and chemical plants for Japan-based and U.S.-

industry faced such negative factors as price hikes andbased corporations in China, as well as many domestic

shortages of steel material and nonferrous metals andprojects awarded mainly by petroleum and petrochemical

worldwide tightness in the workforce supply. In addition,

producers. New orders covered a wide range of productwe had to cope with such adverse elements as thecategories and regions, including the Middle East, Asia

prolonged uncertainty in the Middle East and new

and South America. As of March 31, 2007, the Toyocontractors.

Group had a backlog of orders amounting to ¥499.2
billion.

TOYO ENGINEERING CORPORATION

Annual Report 2007

3

To O u r S h a r e h o l d e r s

Medium-Term Corporate Strategic Plan for Fiscal 2006 to 2008
The results we achieved for fiscal 2006 exceeded the initial targets. We will advance toward theachievement of the medium-term corporate strategic plan with firm determination.

The Toyo Group initiated on April 1, 2006, a new

Financial Targets

medium-term corporate strategic plan under the newcorporate vision “Global Toyo for Client Value

We will work over the next two years to achieve theEnhancement”. The concept underpinning “Client Value

medium-term corporate strategic plan. Results of fiscal

Enhancement” is to promote projects with clients to2006 were ¥223.8 billion in net sales, above the target.

create new value for them. Global Toyo is a structure in

For fiscal 2007, net sales are expected to rise to ¥330

which the group companies worldwide work

billion, achieving the target in the plan.

autonomously as profit centers and develop businesscollaboratively within the Toyo Group.

The result in fiscal 2006 was ¥22.2 billion in gross profit,
clearing the target, with a gross profit margin of 9.9%.
For fiscal 2007, gross profit is expected to achieve thetarget in the plan.

Steady According to the Medium-Term Plan

250

25

15

100

10

50

5

0

9.1

0
FY2005
Actual

FY2006
Medium-Term
Plan

FY2006
Actual

FY2007
FY2008
Medium-Term Medium-Term
Plan
Plan

FY2005
Actual

FY2006
Medium-Term
Plan

FY2006
Actual

FY2007
FY2008
Medium-Term Medium-Term
Plan
Plan

•— Gross profit margin

4

TOYO ENGINEERING CORPORATION

29 •—

26 •—

9.9
22.2 •—

9.5
21 •—

20

11.2
10.4

17.8 •—

150

195.6

200

260

30

250

(¥ billion)

300

223.8

Gross Profit(¥ billion)

220

Net Sales

Annual Report 2007

Key Initiatives

The Global Toyo Structure

The Toyo Group implements the following five key

In fiscal 2006, the first year of the new medium-term cor-

initiatives to ensure its sustainable growth by improving

porate strategic plan, the framework of Global Toyo was

profitability and stabilizing the operating performance.

established. A manpower mobilization simulation was
carried out at the time of proposal planning, and, as a

1. We will strengthen our business development ability

result, three ethylene projects for India, Thailand andand global marketing network to intensify the rela-Singapore and a Polyethylene project in Thailand weretionship with clients and our existence in regions weawarded under the Global Toyo structure.

are focusing on as well as to develop key products.

Several measures are being implemented for the technology transfer, such as reappraisal of the Global Toyo

2. We will build the Global Toyo structure in which

manuals and standards and common implementation

TOYO, as the core company of the group, will focus

procedures for projects and proposals, which enable

on large-scale and complex projects and social infra-

smooth sales promotion and project execution.

structure projects and our overseas operating bases
will take leading roles in all tasks for medium-sized

The Global Toyo Network

EPC projects.
3. To achieve client satisfaction, we will place an emphasis on HSSE as well as the three core goals of eachproject—quality, delivery schedule and cost.

Toyo-EU

Toyo-China

AmericasToyo-Korea

Middle East &South Asia

Toyo-Japan

4. We will reinforce our human capital in both quantityand quality. Human resources are undoubtedly the

Toyo-Canada
Toyo-U.S.A.

East Asia
Toyo-Malaysia

Toyo-India

Toyo-Brazil

most valuable capital for an engineering contractor.
Toyo-Thai

5. Along with these actions, we will upgrade and enlarge
our infrastructure, including information technology(IT), to ensure smooth execution of the Global
Toyo operations.

TOYO ENGINEERING CORPORATION

Annual Report 2007

5

To O u r S h a r e h o l d e r s

Human Resources Augmentation Status(Personnel)

7,000
6,000
5,000

4,800
2,000

5,300
2,400

5,500
2,600

5,700
2,700

6,000
3,000

4,000

We are now reinforcing the staff of the Global Toyocompanies in accordance with the plan. As of March 31,

3,000with March 31, 2006. Our plan is to raise the overseas
group companies’ workforce to 3,000 and the totalgroup workforce to 6,000 by March 31, 2009, when theplan is to be finished.

1,300

1,350

1,400

1,400

1,500

1,600

1,550

1,600

1,600

FY2005
Actual

FY2006Plan

FY2006
Actual

FY2007Plan

FY2008Plan

2,000

2007, our overseas group companies have 2,600 employees, achieving the target ahead of the plan as compared

1,300

1,000
0

■ Overseas Subsidiaries (India, Korea, Thailand, Malaysia, China, etc.)■ Domestic Subsidiaries (Toyo Business Engineering Corporation, etc.)■ Toyo-Japan

Outlook for Fiscal 2007
The Toyo Group aims to ensure achieving the targeted profits for the next term to makeits profit structure sustainable.

Challenges for the Toyo Group

2. We will advance into new fields. Our efforts will befocused on business development in social infrastructure

For the next term, which is the second year of the

fields, such as power generation, water and transporta-

medium-term corporate strategic plan and is defined astion; on technology development in energy fields, suchthe “step-up year”, we will focus on the three points

as GTL, dimethyl ether (DME) and heavy oil upgrading;described below to step up to a higher level.

and on deepening of project management skills.

1. We will implement ongoing projects, mitigating risk

3. We will strengthen the foundation of the Global Toyoand problems. We will endeavor to successfully man-structure. The Global Toyo structure, where individual

age increasing risks caused by growth of scale andbases in India, Korea, Thailand, Malaysia, China andcomplexity of plants, steel and nonferrous material

other countries autonomously work as profit centers

price hikes, delivery delay of equipment and materials

and perform business in concert with others, will be

and shortage of manpower. Management will continue

promoted in a more definite form. In order that we will

to take a role in individual project execution. We will

be able to continuously develop, we should establish

reinforce our project management system and improvethe business methodology of Global Toyo. Furthermore,

the interaction among information systems to locate

the Toyo Group will intensify its governance structure.

risks and take actions as early as possible to ensureprofitability.

6

TOYO ENGINEERING CORPORATION

Annual Report 2007

Prospects for New Orders

net income of ¥6 billion for the year ending March
2008. All of these targets are higher than the figures

Active investments are expected to continue, associatedachieved in fiscal 2006 and the goals of the second yearwith the ongoing growth in global demand for energyof the plan. As the Toyo Group received the highest-

and basic materials. We anticipate the demand forever amount of new orders during fiscal 2006, we willenergy and basic materials will continue because coun-focus on successful implementation of the projects.

tries with large populations, such as China and India, areWe expect to receive new orders totaling ¥240 billion

in the process of economic growth. Substantial invest-

in fiscal 2007, and aim to achieve the targeted profits

ments are also foreseen in Japan in the next term, inand make our profit structure sustainable.

spite of past stagnation in capital investment. We should
continue to pay close attention to the price hikes in special metals and other raw materials and to the management of equipment delivery in connection with theshortage of materials. In addition, we will continue toshield our earnings from foreign exchange rate volatility
by maintaining our policy of hedging foreign currency
exposure.
Outlook for Revenue and Earnings
In view of the orders we received in fiscal 2006, we aim
to achieve ¥330 billion in net sales for the next term. We
are also targeting operating income of ¥10.5 billion and

TOYO ENGINEERING CORPORATION

Annual Report 2007

7

Management System

Corporate Governance
TOYO is dedicated to contributing to shareholders, clients

Status of the Risk Management System

and all other stakeholders as well as to fulfilling its social
obligations in Japan and worldwide. For this purpose,

For risk management concerning project profitability andmeasures are taken to heighten management transparency

financial matters in TOYO, all business operations arefrom the standpoints of investors and the public. TOYO

constantly monitored and supervised and reports areplaces importance on building a fair management system

submitted to the Board of Directors, the Executive

and ensuring the proper operation of that system as well

Committee and the Board of Auditors. In addition, mat-as the suitable disclosure of information.

ters of particular importance concerning individual bidding and projects undergo a risk analysis overseen by the

Status of the Internal Control System

Commission for Analysis and Evaluation of Project Risks,and reports are submitted to the Executive Committee.

The Auditing Department of TOYO, which is under the

TOYO has drawn up the Crisis Management Rule todirect control of the president, performs audits concern-clearly set forth risk management procedures to forestalling the execution of business activities by all divisions asimportant risks (crises) that have the potential to seriously

well as verification of appropriateness and effectivenessaffect the continuation of the Company, and the Crisisof the internal management structure, including compli-

Management Task Team, under the Crisis Management

ance and risk management. In addition, there are special-

Headquarters, is always working to prepare forized units to perform other internal audits. The Safety,

potential crises.

Quality and Environment Management Division performs
audits concerning safety, quality and environmental pro-

Promoting the Governance Structure

tection, and the Export Control Administration Division

for Global Toyocarries out export control to verify that no prohibitedmaterials are being exported.

TOYO, a core company of the Toyo Group, is making

In fiscal 2006, TOYO established the Complianceefforts to ensure proper operations across the companies

Division and enacted a “Detailed Code of Conduct”.

within the Toyo Group by establishing the corporate pro-Compliance education was carried out for all employees.

cedures to strengthen the corporate administrative
functions of each company.

Corporate Governance Structure

We are determined to build an internal control systemfit for the new business execution structure step-by-step

General Meeting of Shareholders
Board of Directors

Auditors / Board of Auditors

as well as to adjust to the local laws and situations forfive companies in the countries, including India, Korea,
Thailand, Malaysia and China where EPC business is to be

Corporate Planning Committee

enhanced.
Auditing
Department

President & CEO

Safety,Quality andEnvironment
Management
Division

8

TOYO ENGINEERING CORPORATION

Corporate
Auditors

our Affiliate Administration Division works in concert
with the Auditing Department, auditors and Accounting
Division to enforce the structure through systematic

Executive
Committee

Commission for
Analysis and
Evaluation of
Project Risks

Operating Divisions

Legal Counsel

Compliance
Division
Export Control
Administration
Division

As for the corporate administration within the group,

Executive Officer System(Execution of Business
Operations)

Annual Report 2007

audit.

Management

綵

綮

綛

綺

綣

綏

絽

綏 Yushi Nagata
絽 Yutaka Yamada綛 Kazuhisa Marukawa
綺 Yoshitaka Ogata
綮 Takuichi Murachi綣 Kazuomi Nishihara綵 Kenji Soejima

Directors*Representative Director● Chairman
Yushi Nagata● President
Yutaka Yamada*● Directors
Kazuhisa Marukawa*Executive Officers● Chief Executive Officer
Yutaka Yamada● Executive Vice Presidents● Executive Officers
Osamu Okura
Shuji Ueki

Kazuhisa Marukawa

Akhilesh Kumar

Yoshitaka Ogata

Hidetsugu Fujii● Senior Executive Officers

Kiyoshi Nakao

Yoshitaka Ogata*

Takuichi Murachi

Kenji Niwa

Takuichi Murachi*

Kazuomi Nishihara

Makoto Shimagaki

Kazuomi Nishihara*

Kenji Soejima

Tatsuo Yasunaga

Kenji Soejima*

Ken Wakazuki

Kazundo Hayashi

Kuniaki Tsuyada

Kuniaki Tsuyada

Masaru Takezawa

Hisashi Saigo

Hisashi Saigo

Mitsutoshi Hamamura

Makoto Fusayama

Makoto Fusayama

Isao Ichikawa

Isao Ichikawa

Keiichi Matsumoto

Keiichi Matsumoto(As of June 26, 2007)

Komei Ohta

Auditors

Masahiro Suzuki● Senior Corporate Auditor

Yoshiaki Mizoguchi

Kunimichi Gamo

Osamu Kawanobe● Corporate Auditors
Keiji Suda
Masato Shiode
Koichi Sano

TOYO ENGINEERING CORPORATION

Annual Report 2007

9

Health Safety Security Environment (HSSE)＋

Quality“Safety first” is not simply a slogan.
Safety takes priority over everything else.
In 2006, TOYO‘s incidence rate for lost time injuries andillnesses (LTI), as defined by the ILO, was 0.26. Although
this rate is an improvement from 0.35 in 2005, we are
not satisfied with this result and would like to strive toimprove it toward the ultimate target of zero.
We are aware that people make mistakes, therefore it
is important to enhance the quality of safety training to

Safety training in the office

introduce safety practices, to facilitate their pro-active

In order to spread the philosophy of “safety is the first priority” among our employees, we carried out safety training
for all employees in fiscal 2006. The training is aimed at all
the employees—not only construction site workers but alsohead office staff, including management.
TOYO plans to promote a safety campaign in fiscal 2007
to enhance its safety-oriented culture and thoroughly
implement the safety criteria throughout the group.

safety actions and to raise sensitivity on risk and hazards
that might lead to accidents.
TOYO developed a touch panel computer system foreasy access to collect all information on “near misses”
from site members and will apply it as a tool for safety
training and sharing of information among all site members. From fiscal 2007, this system will be applied atdomestic construction sites and will also be available atoverseas construction sites.
TOYO will extend the unified construction HSSE standard to the group companies. In addition, TOYO is developing such a standardization of work procedures acrossthe group companies. In this manner, the Toyo Groupmakes its best effort, through the promotion of standardization, to maintain and improve quality in addition tosafety.

Safety training at the site

At each project site of the Toyo Group, we carry out,
under the command of a field manager, undertakings
including the formation of a health and safety committee,a daily toolbox meeting in the morning, the implementation of safety and health standards, safety patrols, safety
meetings, the making of safety reports, the giving ofwork permission, prognostication activities against unsafe
conditions and responses to the occurrence of accidents.

10

TOYO ENGINEERING CORPORATION

Annual Report 2007

Standards of Global Toyo

Toyo-Japan
Local
Standards
Toyo-India
Local
Standards

Toyo-Korea
Toyo-Ko
Local
Standards

The Global ToyooyoStandards
Award ceremony

TOYO has set up an institution to give awards to thosegroups and/or individuals who have committed to safety
and accident prevention and shown remarkable achievements in the promotion of safety and health activities. In
fiscal 2006, the members of the Saudi Arabia JUEG2
project received the award.

Vegetation at a pipeline project in Brazil

Toyoo-Malaysia
LocalStandards

Toyo-Chi
hina
Local
Standards
Toyo-Thai
Local
Standards

Standardization of work procedures provides the basis ofproduct and service quality. TOYO is taking the initiativeof developing the Global Toyo standards. Its conceptual
structure is shown above.

Separate collection of waste at a construction site

The Toyo Group runs its projects with due consideration
for the environment. Examples of its activities include
water-sprinkling for dust prevention and the separate collection of waste material disposed from construction, toname just a few. In each pipeline construction project, thesite is covered with vegetation after the pipeline has beenlaid underground to prevent disfigurement. We also holdpresentation meetings for residents living in the vicinityof our projects and make efforts to gain their improved
understanding of the project execution in which extra
consideration to the environment has been given.

Safety education at an elementary school in the vicinity of the site

TOYO ENGINEERING CORPORATION

Annual Report 200711

Review of Operations

EPC
on

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>>

O

VE

R

A
SE

S

EP

C

So

lu

ti

In fiscal 2006, TOYO achieved major sales andreceived orders in the Middle East, the BRICs andSoutheast Asia in oil, gas and other energy-related
fields as well as in basic chemicals, high-performanceresins and other petrochemical fields. In connection withthe worldwide economic boom, active investments in the
Middle East, the BRICs and Southeast Asia are expected tocontinue.

Results of Operations
As a result of steady progress in projects in the Middle

gas pipeline project for Petróleo Brasileiro S.A.

East and the BRICs in fiscal 2006, the Toyo Group(PETROBRAS) in Brazil; the gas processing facility

achieved net sales of ¥146.5 billion, an increase of

project for Petropars Limited in Iran; the ethylene¥14.3 billion or 10.8% from the ¥132.2 billion achieved

project for PTT Polyethylene Company Ltd. (PTTPE) inin fiscal 2005.

Thailand; the oil refinery project for PETROBRAS; theMajor projects contributing to net sales were the

FPSO topside processing unit project for BHP Billiton

LNG project for Sakhalin Energy Investment Company

Petroleum Pty Ltd and MODEC, INC. in Australia; andLtd. in Russia; the ethylene oxide and ethylene glycol

the styrene-butadiene rubber manufacturing facility(EO / EG) plant project for Saudi Basic Industries

for Bridgestone (Huizhou) Synthetic Rubber Co., Ltd.

Corporation (SABIC) in Saudi Arabia; the naturalin China.

Installation of the EO / EG washtower for SABIC

12TOYO ENGINEERING CORPORATION

Annual Report 2007

The signing ceremony for the ethylene project for PTTPE

New orders received in fiscal 2006 amounted tochlorosilane plant for Dow Corning (Zhangjiagang) Co.,

¥286.7 billion, an increase of ¥103.1 billion or 56.1%

Ltd. in China; a chemical fertilizer complex for MAN

from the ¥183.6 billion received in fiscal 2005. Major

Ferrostaal Aktiengesellschaft in Trinidad and Tobago; an

new orders included an ethylene plant for Indian Oil

ethylene plant for Shell Eastern Petroleum (Pte) Ltd. in

Corporation Limited in India; a GTL / liquid processing

Singapore; and an ethylene plant and a linear low den-unit plant for Qatar Shell GTL Limited in Qatar; asity polyethylene (LLDPE) plant for PTTPE.

Initiatives in the Overseas EPC Field
The Toyo Group will put an emphasis on alternative

Japanese companies. Under the Global Toyo structure,energy to oil and large-scale gas development in

TOYO and the group companies, such as Toyo-India,

response to the worldwide active demand for energy

Toyo-Korea and Toyo-Thai, will take the leading position

and the continuing high price of crude oil. We willin EPC projects in experienced fields, such as energy, fer-

also focus on the petrochemical market, which hastilizers, petrochemicals and others. Through this process,been booming due to the growing demand for basic

TOYO intends to increase its awards for large-scale andchemicals worldwide. In addition, the Toyo Group

complex EPC projects as well as social infrastructure

aims to respond to rising needs in the social infra-

projects. Through the Toyo Group’s dedication to achiev-

structure field, such as for water, electric power anding excellence in safety, quality, delivery schedule andtransportation, and other, backed by demand notcost in implementing projects, potential problems will be

only in oil-producing or developing countries but also

quickly identified beforehand, so that proper responses

in developed countries for replacing aging facilities.

can be taken immediately. We will achieve reliable

Regarding assistance for clients shifting to overseas

Global Toyo operations by reinforcing our management

locations, TOYO will continue to concentrate on

system, developing our human resources systematically,

China while, at the same time, preparing for theestablishing a global resource management system and“Post-China” era of overseas investments byimproving our global IT infrastructure.

Major Projects (New Orders)
Location

Name of Client

Type

Scope

Qatar

Qatar Shell GTL Limited

GTL / Liquid Processing Unit

E.P.C.

India

Indian Oil Corporation Limited

Ethylene

E.P.C.

ThailandPTT Polyethylene Company Ltd.

Ethylene

E.P.C.

Singapore

Shell Eastern Petroleum (Pte) Ltd.

Ethylene

E.Ps.Cm.

China

Dow Corning (Zhangjiagang) Co., Ltd.

Chlorosilane

E.Ps.Cm.

Trinidad and Tobago

MAN Ferrostaal Aktiengesellschaft

Urea

L.E.P.

E: Engineering P: Procurement C: Construction Ps: Procurement service Cm: Construction management L: Licensing

TOYO ENGINEERING CORPORATION

Annual Report 200713

Review of Operations

EPC
on

s

>>

>

DO

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ES

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The domestic market is witnessing robust
investment activity in production facilities foroverall optimization through oil refining andpetrochemical integration and fluctuation indemand. The Toyo Group achieved net sales exceeding
the amount of the previous term and also received a highlevel of new orders. Active investment by manufacturingindustries is expected to continue in fiscal 2007.

Results of Operations
Net sales achieved in Japan in fiscal 2006 wererefining category; and the active pharmaceutical¥50.6 billion, exceeding the previous term by 23.2%.

ingredient (API) project for Shiratori Pharmaceutical

The increase in net sales was due to the successful

Co., Ltd. in the industrial plant category.

progress in projects in the petrochemical and oil
refining fields. Major completed projects included the¥46.3 billion in fiscal 2006, continuing at a high level.

Aniline 蠡 project for Tosoh Corporation in the petro-

Major new orders included the revamp project of an

chemical category; the propylene splitter project for

ethyl benzene unit by liquid-phase alkylation using

Nippon Petroleum Refining Co., Ltd. and naphtha

zeolite catalyst and the packinox heat exchanger

desulfurization projects for TonenGeneral Sekiyu K.K.

installation project for Idemitsu Kosan Co., Ltd.; theand Kyokuto Petroleum Industries, Ltd. in the oilutility and fire protection facility project and reinjec-

The Chiba Plant of Shiratori Pharmaceutical Co., Ltd.

14

New orders received in Japan amounted to

TOYO ENGINEERING CORPORATION

Annual Report 2007

The naphtha desulfurization unit for Kyokuto Petroleum
Industries, Ltd.

tion project for Japan Petroleum Exploration Co., Ltd.;

Sekiyu K.K.; the polylactic acid chemical recycle

the gas processing and treatment revamp project for

demonstration facility for Musashino Chemical

Japex Offshore Ltd.; the ethylene cracking heater

Laboratory, Ltd.; and the 300-mm wafer expansion

project for Maruzen Petrochemical Co., Ltd.; the FCC

project for MEMC Japan Ltd.

expander turbine installation project for TonenGeneral

Initiatives in the Domestic EPC Field
The Toyo Group covers a wide range of fields, includ-

power field, engineering services will remain the pri-ing hydrocarbon, nuclear and electric power develop-

mary activity as the Toyo Group explores possibilities

ment, O&M, R&D and system integration. By having afor EPC projects in the future. We will also aim to cre-team comprising experts from various fields andate new business models that encompass R&D andresponding flexibly to the demands from clients, we

O&M. The Toyo Group will set out to become a diver-

have steadily increased the number of new orders.

sified player in terms of products and regions and toContinuously, in the oil refining and petrochemicalbuild trusted relationships with clients. Based on its

fields, the Toyo Group will make efforts to increase“Co-Creative” way of doing business, the Toyo Groupnew orders received. In the industrial plant field, we

is dedicated to integrating its ideas with those of its

will focus on expanding business with clients whoclients. This process will make it possible to build pro-consistently place orders with us and on raising theduction facilities of the highest quality.

number of those clients. In the nuclear and electric

Major Projects (New Orders)Name of Client

Type

Scope

Idemitsu Kosan Co., Ltd.

Ethyl Benzene unit by Liquid-Phase Alkylation using Zeolite Catalyst E.P.C.

Japan Petroleum Exploration Co., Ltd.

Reinjection

E.P.C.

Japex Offshore Ltd.

Gas Processing and Treatment Revamp

E.P.C.

Tosoh Corporation

Aniline 蠡

E.P.C.

Maruzen Petrochemical Co., Ltd.

Ethylene Cracking Heater

E.P.C.

TonenGeneral Sekiyu K.K.

FCC Expander Turbine

E.P.C.

Musashino Chemical Laboratory, Ltd.

Polylactic Acid Chemical Recycle Demonstration Facility

E.P.C.

E: Engineering P: Procurement C: Construction

TOYO ENGINEERING CORPORATION

Annual Report 200715

Review of Operations

Business
es

s

S

u
l
o

ti

s
n
o

Bu

si

n

Backed by the favorable conditions in Japan’s economy,
the information technology (IT) sector enjoyed growth inboth new orders and sales in fiscal 2006. TOYO and ToyoBusiness Engineering Corporation (B-EN-G), a Toyo Group company, received an increased amount of new orders mainly in the
supply chain management and maintenance fields and in the core
operation system (ERP) field for manufacturing industries, respectively.

Results of Operations

16

In fiscal 2006, there was an 18.1% increase in sales instores across Japan. In the maintenance field, TOYO

the IT sector to ¥23.7 billion and new orders surged

provided assistance to a nuclear power station in plan-

48.0% to ¥22.1 billion, mainly due to the completionning of maintenance and preparation data-relatedof the Okegawa Logistics Center of Tohan

maintenance with staff of the power station. As

Corporation, a large logistics center for books. TOYO

above, in response to clients’ needs to improve

implemented the installation of facilities and systems

productivity and quality, TOYO identifies problems

for the distribution of books and the collection of pro-through consulting, proposes solutions and assists the

ceeds, connecting 4,000 publishers and 16,000 book-clients with integrated solutions. Our comprehensive

Ikata visitors’ center of Shikoku Electric Power Co., Inc.

The completion ceremony of the newest Tamamura plant of
TAIYO YUDEN Co.,Ltd.

TOYO ENGINEERING CORPORATION

Annual Report 2007

engineering capabilities are highly evaluated for theirCompany Limited and Daiichi-Sankyo Company

support of clients’ corporate reformation.

Limited.

B-EN-G deployed its business activities mainly in thefield of ERP for manufacturing industries. It focused on

TOYO and B-EN-G have formed an alliance aimed atincreasing sales and profits.

the sale of MCFrame, its own ERP, in addition to system integration of SAP’s and Oracles’s ERP software. BEN-G received orders increasingly from leading pharmaceutical companies, such as Takeda Pharmaceutical

Initiatives in Business Solution Sales and Operations
The Toyo Group will continue to concentrate on offer-

the field of construction of ERP and in the field of

ing identification of problems and specific compre-

other system integration. We will also promote joint

hensive solutions through consulting. We will makeresearch with universities and research institutes toefforts to demonstrate the Toyo Group’s capabilities inenhance our technological capabilities.

Major Projects (New Orders)Name of Client

Type

Scope

TOPPAN PRINTING CO., LTD.

Production Scheduling System (KOMEI™ 7)

E.

Tohan Corporation

Book Logistics & Distribution Center

E.P.C.

NITTO DENKO CORPORATION

Design, Supply and Installation of Production Line

E.P.C.

The Tokyo Electric Power Co., Inc.

New Maintenance Consultation

E.

Shikoku Electric Power Co., Inc.

Visitor's House Renewal

E.P.C.

Mitsui Chemicals, Inc.

Knowledge Management System (Knowledge Bank™)E.

E: Engineering P: Procurement C: Construction

TOYO ENGINEERING CORPORATION

Annual Report 200717

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

Thousands of
U.S. dollars(Note 1)Millions of yen
2007

2006

2005

2004

2003

2007

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

¥223,844¥195,584¥197,945¥170,529¥179,168$1,895,536

Gross profit .....................................................................

22,236

17,825

17,7708,640

17,291

188,293

Operating income (loss) .................................................

6,890

4,195

4,540

(3,257)

5,424

58,342

Income (loss) before income taxes andminority interest ....................................................

7,372

4,360

3,698

(3,714)657

62,431

Net income (loss) ......................................................

5,294

3,350

3,598

(6,491)(923)

44,828

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

282,814202,662

209,564

201,133

199,494

2,394,905

Total net assets.........................................................

51,55935,64928,442

24,72429,694

436,610Long-term debt ........................................................

26,981

19,99036,454

39,691

41,840228,476

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

2,752

3,455

2,096

241

282

23,304

Depreciation and amortization..................................

1,995

1,701

1,453

1,315

1,347

16,891

Common stock .........................................................

18,19913,01813,01813,01813,018154,111

New orders...............................................................

354,984

257,840

192,600

241,528

195,160

3,006,045

Backlog of contracts at end of the year.....................

499,237

373,518

337,760

350,574

307,817

4,227,597
U.S. dollars(Note 1)Yen

Per share:
Net income (loss) ...................................................

¥27.90¥19.11¥20.51¥(37.00)¥(5.27)

Cash dividends.......................................................

3.00

3.00

3.00

—

—

$

0.24
0.03

“Total net assets” is newly provided section to conform to Japanese accounting standard revisions. The figures until the year
ended March 31, 2005 have been stated as “Total shareholders’ equity” under the previous standards.

Gross Profit

Operating Income (Loss)Net Income (Loss) Per Share(¥ billion)(¥ billion)

(¥)

22.2
27.90
6.9

17.8 17.8

17.3

20.51 19.11

5.4
4.5

4.2

8.6
(5.27)(3.3)(37.00)’03

18

TOYO ENGINEERING CORPORATION

’04

’05

Annual Report 2007

’06

’07

’03

’04

’05

’06

’07

’03

’04

’05

’06

’07

2007

2006

2005

2004

2003

Net sales by sector (%):
Chemical fertilizers ....................................................................

2.9%

7.8%

15.8%

9.3%

7.1%

Petrochemicals............................................................................

25.6

24.9

27.4

30.8

32.9

Refinery.....................................................................................

12.3

3.0

7.7

13.3

21.3

Energy-related ...........................................................................

36.9

44.2

29.5

27.3

19.2

General manufacturing facilities andinformation technology ................................................................

15.2

14.9

14.7

11.5

12.2

Others .......................................................................................

7.1

5.2

4.9

7.8

7.3

(Overseas sales) .........................................................................

(66)

(68)

(72)

(78)

(79)

Number of employees ..................................................................

3,126

2,668

2,376

2,310

2,146

Total Assets

Total Net Assets

Composition of
Net Sales by Sector (FY2006)(¥ billion)(¥ billion)

(%)

7.1

282.8

2.9

51.6

199.5 201.1

15.2

209.6 202.7

25.6

35.6
29.7

28.4

36.9

12.3

24.7

’03

’04

’05

’06

’07

’03

’04

’05

’06

’07

■Chemical Fertilizers■Petrochemicals■Refinery■Energy-Related■General Manufacturing Facilities
and Information Technology■Others

TOYO ENGINEERING CORPORATION

Annual Report 200719

Management’s Discussion and Analysis

In fiscal 2006, the Toyo Group enjoyed increases in both net sales and earnings. In particular, net income increased 58.0%.
New orders reached the highest level with a 37.7% increase. The following items are particularly noteworthy achievements ofthe fiscal year under review.
1. New orders far above our target
New orders received for the year totaled ¥355.0 billion ($3,006 million), a reflection of overseas orders for oil refineries, petrochemical plants and other large-scale projects. The backlog of contracts at the end of March 2007 was ¥499.2 billion ($4,228
million), which equates to about two years of net sales. This provides an adequate backlog of contracts to give the Toyo
Group a stable base of operations.
2. Substantial improvement in operating cash flow and reduction in interest-bearing debt
Interest-bearing debt declined ¥8.3 billion compared with the previous fiscal year-end to ¥39.1 billion ($331 million) as the
Toyo Group actively made loan repayments, with consistently improved operating cash flow.
Sales and Earnings
Net sales increased ¥28.3 billion to ¥223.8 billion ($1,896 million) as a result of successful progress of projects. Operating
income increased ¥2.7 billion to ¥6.9 billion ($58 million). Net income was ¥5.3 billion ($45 million), which was ¥1.9 billion
more than that achieved in the previous year.
Cash Flows
Cash from operating activities was ¥51.0 billion ($432 million). The principal source of cash was income before income taxes
and minority interest of ¥7.4 billion ($62 million) and increase in advance receipts on uncompleted contracts of ¥51.6 billion($437million). Cash used for investing activities was ¥5.4 billion ($46 million). This mainly represented expenditure on realestate for rent. Cash from financing activities was ¥1.5 billion ($12 million), reflecting dividend payments, continued repayment of interest-bearing debt based on the debt reduction plan and a capital increase by a third-party allocation of shares.
The result of the above cash flows was a net increase of ¥47.4 billion in cash and cash equivalents compared with one year
earlier to ¥75.7 billion ($641 million). This figure includes ¥9.6 billion ($81 million) of deposits received in conjunction withjoint venture projects.

20

TOYO ENGINEERING CORPORATION

Annual Report 2007

Business Risk and Other Risks

The following is a list of potential risks associated with the information concerning the Toyo Group’s operating results andfinancial 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.
1. Business risk
The nature of our business activities, which mainly involve conducting projects outside Japan, is exposed to the risks listed
below. Any interruption or suspension in work due to these risks could have an adverse effect on our operating results andfinancial condition. We are aware of the possibility that these risks may occur and taking actions to reduce exposure to theserisks by using export credit insurance, maintaining a risk management system and taking other steps.
(1) War, civil commotion, riots, revolutions, coup d'état, terrorism and other unusual events in the country where the projectis carried out or in a neighboring country. (2) Regional risks that occur particularly in an area near a project site, such as asurge of political unrest and a serious outbreak of a epidemic disease. (3) Extraordinary natural phenomenon, such as earthquakes, floods, typhoons and other storms as well as unusual weather, such as extreme heat or cold. (4) Drastic changes inindustrial or financial policies in the host country affecting the permission, laws and regulations involving import duties, immigration, foreign exchange, telecommunications, taxation and other items. (5) A sudden and substantial reduction of investments globally in business fields where we are active.
2. 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 amount received. In addition, the yen’s appreciation makes
TOYO less price competitive when competing for new orders in foreign currencies. This could have an adverse effect on ouroperating results and financial condition. In response, the group uses foreign exchange forward contracts, procures materials
and equipment in foreign currencies, utilizes the resources of its overseas bases and takes all other possible steps to minimize
exposure to foreign exchange risk.
3. Sudden increases in prices of equipment and materials
A large share of contracts signed with clients involves turnkey lump-sum projects. Therefore, the possibility exists of sudden
and steep rises in the cost of equipment and materials, transportation, 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 international situation. The possibility also exists of a supplier becoming insolvent. 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 andfinancial condition. To reduce our exposure to these risks, we utilize our experience to enter into contracts that incorporate
measures to offset these risks and gather information on market trends. To avoid an undue reliance on a particular supplier,
we work on placing orders with a large number of suppliers and stringently monitor the financial condition of suppliers.

Business Risk and Other Risks

TOYO ENGINEERING CORPORATION

Annual Report 200721

Consolidated Balance Sheets
Toyo Engineering Corporation and Consolidated Subsidiaries March 31, 2007 and 2006

Thousands of
U.S. dollars(Note 1)Millions of yen

Assets

2007

2006

2007

Cash and deposits ......................................................................................................

¥ 43,225¥ 28,884$ 366,032

Marketable securities (Note 12)...................................................................................

32,976—279,245

Notes and accounts receivable (Note 3).......................................................................

31,82329,229269,483

Less: Allowance for doubtful receivables ..................................................................

(3,545)(2,735)(30,019)

28,27826,494239,464

Contract work in progress.............................................................................................

92,12374,090780,109

Prepaid expenses and other current assets (Note 4) .....................................................

30,69919,250259,959

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

227,301

148,718

1,924,809

Investment securities (Note 12) ...................................................................................

9,705

7,437

82,179Investments in unconsolidated subsidiaries and affiliates (Note 12)..............................

3,311

5,149

28,039Long-term loans .........................................................................................................

141

214

1,197

Other .........................................................................................................................

3,910

5,378

33,112

Less: Allowance for doubtful receivables ..................................................................

(789)(2,072)(6,681)

Total investments..................................................................................................

16,278

16,106

137,846

Land (Note 3)..............................................................................................................

18,543

18,528157,023

Buildings and structures (Note 3) ................................................................................

31,653

26,628268,045

Tools, furniture and fixtures ........................................................................................

3,771

3,573

31,934

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

136

3,085

1,152

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

54,10351,814458,154

Less: Accumulated depreciation (Note 3)..................................................................

(17,130)(16,190)(145,056)

Property, plant and equipment, net ......................................................................

36,97335,624

313,098

Other assets (Note 4) ..................................................................................................

2,262

2,214

19,152

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

¥282,814¥202,662$2,394,905

Current assets:

Investments:

Property, plant and equipment, at cost:

See notes to consolidated financial statements.

22

TOYO ENGINEERING CORPORATION

Annual Report 2007

Millions of yen

Liabilities and Net Assets

Thousands of
U.S. dollars(Note 1)

2007

2006

2007

Current liabilities:
Short-term borrowings ...............................................................................................
Current portion of long-term debt (Note 3).................................................................
Bonds due within one year (Note 3) ............................................................................
Notes and accounts payable .......................................................................................
Income taxes payable .............................................................................................................
Advance receipts on uncompleted contracts ...................................................................
Reserve for anticipated loss on contract work .............................................................
Other current liabilities................................................................................................
Total current liabilities...........................................................................................

¥ 2,398
7,719
2,000
38,006
1,229
134,511
1,457
11,176
198,496¥ 4,205
22,1781,000
22,679693
82,894
1,135
6,847
141,631$

Long-term liabilities:
Long-term debt (Note 3) .............................................................................................
Accrued retirement benefits (Note 5) ..........................................................................
Other long-term liabilities (Note 4) ..............................................................................
Total long-term liabilities.......................................................................................
Total liabilities....................................................................................................

26,981
2,953
2,825
32,759231,255

19,9902,727
2,665
25,382167,013228,476
25,00723,926
277,409
1,958,295

Net assets:
Shareholders’ equity (Note 6)
Common stock
Authorized: 500,000,000 shares in 2007 and 2006
Issued: 192,792,539 shares in 2007 and 175,692,539 shares in 2006 ..................
Capital surplus.........................................................................................................
Retained earnings ....................................................................................................
Treasury stock: 474,172 shares in 2007 and 403,553 shares in 2006 .......................
Total shareholders’ equity ..............................................................................................

18,19920,761
6,983(159)
45,78413,01815,5952,218(118)
30,713

154,111
175,806
59,134(1,346)
387,705

Valuation and translation adjustments
Net unrealized gain on securities..............................................................................
Deferred hedge loss.................................................................................................
Foreign currency translation adjustments .................................................................
Total valuation and translation adjustments ..........................................................

3,324
(220)
249
3,353

3,062
—
(167)
2,895

28,144(1,860)2,112
28,396

Minority interest .........................................................................................................
Total net assets.....................................................................................................
Total liabilities and net assets .......................................................................

2,422
51,559¥282,814

2,041
35,649¥202,662

20,509436,610$2,394,905

20,30765,362
16,936
321,842
10,411
1,139,051
12,34094,637
1,680,886

Contingent liabilities (Note 7)

TOYO ENGINEERING CORPORATION

Annual Report 200723

Consolidated Statements of Income
Toyo Engineering Corporation and Consolidated Subsidiaries Years ended March 31, 2007 and 2006

Thousands of
U.S. dollars(Note 1)Millions of yen
2007

2006

2007

Net sales (Note 8)........................................................................................................

¥223,844¥195,584$1,895,536

Cost of sales ................................................................................................................

201,608

177,759

1,707,243

Gross profit ..........................................................................................................

22,236

17,825

188,293

Selling, general and administrative expenses (Note 9) ...........................................

15,346

13,630129,951

Operating income...................................................................................................................

6,890

4,195

58,342

Interest and dividend income.........................................................................................

1,892

1,301

16,020Gain on sales of investment securities ....................................................................................

348

880

2,949

Gain on sales of fixed assets ..........................................................................................

55

—

467

Gain on sales of memberships .......................................................................................

54

—

456

Other income:

Other .........................................................................................................................

341

328

2,894

2,690

2,509

22,786

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

986

1,192

8,354

Foreign exchange loss .................................................................................................

255

204

2,158

Other expenses:

Loss on valuation of investment securities ...................................................................

4

31

34

Loss on impairment of fixed assets ..............................................................................

221

616

1,872

Other (Note 10) ..........................................................................................................

742

301

6,279

2,208

2,344

18,697

7,372

4,360

62,431

Current.......................................................................................................................

1,714

786

14,513

Deferred .....................................................................................................................

74

76

631

Income before income taxes and minority interest .................................................
Income taxes (Note 4):

1,788

862

15,144

Minority interest income............................................................................................

(290)

(148)

(2,459)Net income ..................................................................................................................

¥ 5,294¥ 3,350

Per share of common stock:
Net income .................................................................................................................
See notes to consolidated financial statements.

24

TOYO ENGINEERING CORPORATION

Annual Report 2007

Yen

¥ 27.90¥ 19.11$44,828

U.S. dollars(Note 1)$

0.24

Consolidated Statements of Changes in Net Assets (Note 15)
Toyo Engineering Corporation and Consolidated Subsidiaries Years ended March 31,2007 and 2006

Millions of yen

Balance at March 31,2005 .............

Commonstock

CapitalsurplusRetainedearnings(Note 6)

TreasurystockNetunrealized
gain onsecurities¥13,018¥15,594¥ (606)¥ (59)¥1,133

Dividends paid to shareholders......

(526)

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

3,350

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

Deferred Foreign
Minorityhedge
currencyinterest
loss
translation
adjustments¥ —¥(638)¥1,881¥30,323
(526)
3,350

(59)

Sale of treasury stock ......................

Total

(59)

1

1

Changes of items other thanshareholders' equity...................

1,929

Balance at March 31,2006 .............

13,01815,595

Common stock issued ...................

5,181

5,164

2,218

(118)

3,062

—

471

160

(167)

2,041

2,560
35,64910,345

Dividends paid to shareholders......

(526)

(526)

Bonus paid to directors .................

(3)

(3)

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

5,294

5,294

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

2

(43)

(43)

2

4

Changes of items other thanshareholders' equity...................
Balance at March 31,2007 ............

¥18,199¥20,761¥6,983

Commonstock

CapitalsurplusRetainedearnings(Note 6)¥(159)

262

(220)

416

381

839

¥3,324¥(220)¥249¥2,422¥51,559

Thousands of U.S. dollars (Note 1)
TreasurystockNetunrealized
gain onsecurities

Deferred Foreign Minority
hedge
currency interest
loss
translation
adjustments

Balance at March 31,2006 ............. $110,235 $132,060 $18,785 $(1,003)$25,934$

Common stock issued ...................

43,876— $(1,412) $17,281

43,731Dividends paid to shareholders......

Total$301,880
87,607(4,453)(4,453)

Bonus paid to directors .................

(26)

(26)

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

44,82844,828Purchase of treasury stock ..............
Sale of treasury stock ......................

15

(361)

(361)

18

33

Changes of items other thanshareholders' equity...................
Balance at March 31,2007 ............ $154,111 $175,806 $59,134 $(1,346)

3,524

3,228

7,102

$28,144 $(1,860) $2,112

2,210(1,860)$20,509$436,610

See notes to consolidated financial statements.

TOYO ENGINEERING CORPORATION

Annual Report 200725

Consolidated Statements of Cash Flows
Toyo Engineering Corporation and Consolidated Subsidiaries Years ended March 31, 2007 and 2006

Millions of yen
2007

2006

2007

¥ 7,372¥ 4,360$ 62,431

1,995
221
(353)
38
(475)
322
(163)
267
2,044
(1,892)986(1,000)(1,400)(3,508)

1,701
616
(880)
31
(2,488)
(492)
(85)
237
1,443
(1,301)
1,192(1,192)(277)(6,564)

16,891
1,872(2,993)324(4,022)
2,725(1,379)2,258
17,307(16,020)8,354(8,467)(11,856)(29,709)(2,371)(17,856)
15,15951,59450,98011,354(11,794)(9,359)7,964(5,534)(20,075)(151,206)
128,367
436,904
431,706

Cash flows from investing activities:
Purchases of property, plant and equipment ...............................................................
Purchases of other assets ............................................................................................
Purchases of investment securities ..............................................................................
Proceeds from sales of marketable securities and investment securities .......................
(Increase) decrease in loans, net ..................................................................................
Other, net...................................................................................................................
Cash used for investing activities........................................................................

(2,752)
(789)
(34)
505
(3,139)765(5,444)(3,455)
(787)
(5)
1,331
(2,007)353(4,570)(23,304)(6,681)(288)
4,280(26,579)
6,474(46,098)

Cash flows from financing activities:
Decrease in short-term borrowings, net ......................................................................
Proceeds from long-term debt ....................................................................................
Repayment of long-term debt .....................................................................................
Issuance of corporate bonds .......................................................................................
Redemption of corporate bonds .................................................................................
Issuance of common stock ..........................................................................................
Cash dividends paid....................................................................................................
Other .........................................................................................................................
Cash from (used for) financing activities.............................................................
Effect of exchange rate changes on cash and cash equivalents .............................
Net increase (decrease) in cash and cash equivalents..............................................
Cash and cash equivalents, beginning of the year ..................................................
Cash and cash equivalents, end of the year .............................................................

(1,807)
16,407(22,863)
1,000(1,000)10,345
(526)
(95)
1,461
353
47,35028,306¥75,656(2,309)8,151(12,713)
—
—
—
(526)
(127)
(7,524)487(17,141)
45,447¥28,306(15,302)138,938(193,610)
8,468(8,468)87,606(4,453)(806)
12,373
2,987
400,968
239,695$640,663

Cash flows from operating activities:
Income before income taxes and minority interest ......................................................
Adjustments to reconcile income before income taxes andminority interest to cash from operating activities:
Depreciation and amortization.................................................................................
Loss on impairment of fixed assets...........................................................................
Gain on sales of marketable and investment securities, net ......................................
Loss on valuation of investment securities ................................................................
Changes in allowance for doubtful receivables.........................................................
Changes in allowance for anticipated loss on contract work ....................................
Equity in earnings of affiliated companies ................................................................
Changes in accrued retirement benefits ...................................................................
Interest and dividends received ................................................................................
Interest and dividend income ...................................................................................
Interest expense.......................................................................................................
Interest paid ............................................................................................................
Income taxes paid....................................................................................................
Other, net................................................................................................................
Changes in operating assets and liabilities:(Increase) decrease in notes and accounts receivable.............................................
(Increase) decrease in contract work in progress....................................................
Increase (decrease) in notes and accounts payable ................................................
Increase (decrease) in advance receipts on uncompleted contracts ........................
Cash from (used for) operating activities ............................................................

See notes to consolidated financial statements.

26

Thousands of
U.S. dollars(Note 1)TOYO ENGINEERING CORPORATION

Annual Report 2007

Notes to Consolidated Financial Statements
Toyo Engineering Corporation and Consolidated Subsidiaries

1

BASIS OF PREPARATION
The accompanying consolidated financial statements of Toyo Engineering Corporation (the “Company”) and consolidated subsidiaries are prepared on the basis of accounting principles generally accepted in Japan, which are
different in certain respects as to application and disclosure requirements of International Financial ReportingStandards, and are compiled from the consolidated financial statements prepared by the Company as required by
the Securities and Exchange Law of Japan.
For the convenience of the readers, the accompanying consolidated financial statements and the relevant notes
have also been presented in U.S. dollars by translating all Japanese yen amounts at the exchange rate of ¥118.09
to U.S.$1.00 prevailing on March 31, 2007.

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. Intercompany accounts and transactions are
eliminated in consolidation. The difference between the acquisition cost and the equity in the net assets at the time ofacquisition is amortized in principle over twenty years on a straight-line basis.
(b) Securities
All debt and equity securities are classified into one of three categories: trading, available-for-sale or held-to-maturity
securities. Trading securities are bought and held principally for the purpose of selling them in the near term. Held-to-maturity securities are those securities in which the Company and its domestic subsidiaries have the ability and intent to holduntil maturity. All securities not included in trading or held-to-maturity are classified as available-for-sale.
Trading and available-for-sale 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 are included in earnings. Unrealized gains or losses on available-for-sale securities are excluded from earnings and arereported, net of the related tax effect, as a separate component of net assets.
Cost of securities sold is determined by the moving average-method.
(c) Contract Work in Progress
Contract work in progress is stated at cost, determined by the identified-cost method.
(d) Depreciation
Depreciation of property, plant and equipment is principally computed by the declining-balance method based on the estimated useful lives of the assets.
(e) Leases
Noncancelable leases are primarily accounted for as operating leases except that leases which stipulate the transfer ofownership of the leased assets to the lessee are accounted for as finance leases.
(f) Allowance for Doubtful Receivables
The Company and its domestic subsidiaries have provided an allowance for doubtful receivables principally at an estimatedamount of probable and reasonably possible bad debts plus an estimated amount computed on the actual percentage ofcredit losses.
(g) Advance Receipts on Uncompleted Contracts
Advance receipts on uncompleted contracts from customers are shown as a liability, not as a deduction from the amountof contract work in progress.
(h) Reserve for Anticipated Loss on Contract Work
Reserve for anticipated loss on contract work is provided in case the material loss is forecasted for a certain large-scale
contract work.

TOYO ENGINEERING CORPORATION

Annual Report 200727

(i) Accrued Retirement Benefits
The accrued retirement benefits at the year-end are stated in accordance with the projected plan assets and the projected
retirement benefit obligation. The difference arising from the adoption of the new standard of accounting of ¥3,696 million ($31,297 thousand) is amortized over fifteen years on a straight-line basis. Actuarial loss is amortized over mainly fifteen years starting following the year of recognition. Prior service cost is amortized over fifteen years.
(j) Derivative Financial Instruments
Derivative financial instruments are carried at fair value with changes in unrealized gain or loss charged or credited tooperations, except for those which meet the criteria for deferral hedge accounting under which unrealized gain or loss isdeferred as a separate component of net assets. Receivables and payables hedged by qualified forward foreign exchange
contracts are translated at the corresponding foreign exchange contract rates.
Deferred hedge gain or loss is excluded from earnings and is reported, net of the related tax effect, as a separate component of net assets.
(k) Foreign Currency Translation
Both short-term and long-term receivables in foreign currencies are translated at the exchange rates at the balance sheet
date. The balance sheet accounts of the consolidated foreign subsidiaries are translated at the rate of exchange in effect atthe balance sheet date, except for common stock and capital surplus, which are translated at their historical exchange
rates. Revenues, expenses and net income for the year are translated at the rate of exchange in effect at the balance sheet
date.
Differences arising from translation are presented as “Foreign currency translation adjustments” in the accompanying
consolidated balance sheets.
(l) Recognition of Revenues
Revenues are recognized on the completion of construction work and acceptance by the client, except for the following
contracts.
For contracts with prices equal to or in excess of ¥5 billion ($42 million) and construction periods in excess of eighteenmonths, revenues are recognized by the percentage-of-completion method. According to this method, the revenue iscomputed by multiplying the contract price by the ratio of costs incurred at the balance sheet date to the total estimatedcost.
Effective from April 1, 2005, the company changed its scope of contracts whose revenues are recognized by the percentageof-completion method with respect to the construction period from exceeding two years to exceeding eighteen months.
The company made this change in accounting policy in order to achieve appropriate recognition of periodic accounting profit and loss, in light of the recent trend that large construction contracts with short-term periods are increasing. (and in accordance with the international accounting standards).
As a result of this change, net sales increased by ¥790 million ($6,694 thousands) in 2006. Operating income and income
before income taxes and minority interest increased by ¥96 million ($820 thousands) in 2006, compared with the amounts
which would have been recognized under the previous method of accounting.
(m) Net Income per Share
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 in 2007 or 2006.
(n) 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 and operating loss carryforwards. 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.

28

TOYO ENGINEERING CORPORATION

Annual Report 2007

(o) Consolidated Tax Return
The Company files a consolidated tax return with certain domestic subsidiaries.
(p) 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 three months orless to be cash equivalents.
(q) Impairment of Fixed Assets
Effective from April 1, 2005, the Company and its consolidated subsidiaries adopted the new accounting standard for
impairment of fixed assets (“Opinion Concerning Establishment of Accounting Standard for Impairment of Fixed Assets”
issued by the Business Accounting Deliberation Council on August 9, 2002) and the implementation guidance for theaccounting standard for impairment of fixed assets (the Financial Accounting Standard Implementation Guidance No.6
issued by the Accounting Standard Board of Japan on October 31, 2003). As a result, income before income taxes
decreased by ¥616 million ($5,215 thousands) in 2006, compared with the amounts which would have been recognizedunder previous methods of accounting. Accumulated losses are included in the accumulated depreciation.
(r) Accounting Standard for Presentation of Net Assets in the Balance Sheet
Effective the year ended March 31, 2007, the Company and its domestic consolidated subsidiaries have adopted new
accounting standards, “Accounting Standard for Presentation of Net Assets in the Balance Sheet” (“Statement No.5”
issued by the Accounting Standards Board of Japan, hereinafter ASBJ, on December 9, 2005), and “Guidance on
Accounting Standard for Presentation of Net Assets in the Balance Sheet” (“Guidance No.8” issued by ASBJ on December
9, 2005).
The balance sheet is divided into “Assets”, “Liabilities”, and “Net Assets” section. “Net Assets” section is divided into
“Shareholders’ equity”, “Valuation and translation adjustments”, and “Minority interest”. “Shareholders’ equity” is divided into “Common stock”, “Capital surplus”, “Retained earnings” and “Treasury stock”. “Valuation and translation
adjustments” is divided into “Net unrealized gain on securities”, “Deferred hedge loss” and “Foreign currency translation
adjustments”.
In addition, effective the year ended March 31, 2007, the Company is required to prepare consolidated statements ofchanges in net assets instead of consolidated statements of shareholders’ equity. In this connection, the previously reported consolidated balance sheets as of March 31, 2006 and the consolidated statements of shareholders’ equity for theyears ended March 31, 2006 and 2005 have been restated to conform to the presentation and disclosure of the consolidated financial statements for the year ended March 31, 2007.
The adoption of standards above had no effect on the statements of income for the year ended March 31, 2007.
In addition, the amount corresponding to shareholders’ equity for the year ended March 31, 2007 and 2006 under theprevious standards were ¥49,357 million ($417,962 thousand) and ¥33,608 million, respectively.
(s) Accounting Standard for Directors’ Bonus
Effective the year ended March 31, 2007, the company and domestic consolidated subsidiaries have adopted “AccountingStandard for Directors’ Bonus” (“Statement No.4” issued by ASBJ, on November 29, 2005).
The standard requires that directors’ bonuses be accounted for as an expense of the accounting period in which suchbonuses were accrued. Accordingly, “Operating income” and “Income before income taxes and minority interest” weredecreased by ¥10 million ($85 thousand) compared to the previous method.
(t) Accounting Standard for Business Combinations
Effective the year ended March 31, 2007, the Company and its domestic consolidated subsidiaries have adopted“Accounting Standard for Business Combinations” (issued by Business Accounting Council on October 31, 2003) and“Implementation Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures” (“Guidance No.10” issued by ASBJ on December 22, 2006).

TOYO ENGINEERING CORPORATION

Annual Report 2007

29

3

LONG-TERM DEBT
Long-term debt at March 31, 2007 and 2006 is summarized as follows:
Millions of yen

Years ended March 31,
Secured Loans ..................................................................................................
Unsecured Loans ..............................................................................................
1.080% bonds, due 2007...........................................................................................
1.470% bonds, due 2007...........................................................................................
1.450% bonds, due 2012...........................................................................................
Total long-term debt................................................................................................
Less: Current portion..........................................................................................

Thousands of
U.S. dollars

2007

2006

2007

¥11,438
22,261
—
2,000
1,000
36,6999,718¥26,981¥19,149
21,019
1,000
2,000
—
43,16823,178¥19,990$ 96,859
188,512—
16,936
8,468
310,775
82,299$228,476

The following assets at March 31, 2007 and 2006 were pledged as collateral principally for long-term debt:
Millions of yen

Thousands of
U.S. dollars

Years ended March 31,

2007

2006

2007

Notes and accounts receivable..........................................................................
Land and buildings, net of accumulated depreciation .......................................

¥ 1,962
18,574¥20,536¥ 4,430
22,238¥26,668$ 16,616
157,282$173,898

The following schedule shows the maturities of long-term debt subsequent to March 31, 2007:
Years ending March 31,
2008 ..................................................................................................................................
2009 ..................................................................................................................................
2010 ..................................................................................................................................
2011 ..................................................................................................................................
2012 ..................................................................................................................................
2013 and thereafter ...........................................................................................................

Millions of yen

Thousands of
U.S. dollars¥ 9,718
5,463
2,098
2,096
13,047
4,277¥36,699$ 82,299
46,25917,766
17,754110,480
36,217$310,775

In order to maintain access to a stable and effective source of operating capital, the company has entered into commitment-line contracts with seven trading banks.
The balance of unused commitment-line based on these contracts at the end of the consolidated reporting period
is ¥5,000 million ($42,341 thousand) in 2007 and ¥11,960 million in 2006.

30

TOYO ENGINEERING CORPORATION

Annual Report 2007

4

INCOME TAXESThe statutory tax rates applicable to the Company and its domestic subsidiaries for the year ended March 31, 2007
and 2006 were approximately 40.4%. Income taxes of the foreign consolidated subsidiaries are based generally on
the tax rates applicable in their countries of incorporation.
(1) The effective tax rates on income before income taxes in the accompanying consolidated statements ofoperations differed from the above-mentioned statutory tax rate for the following reasons:Year ended March 31, 2007
Statutory tax rate in Japan ...........................................................................................................................
Adjustments:
Permanently nondeductible expenses..................................................................................................................
Permanently nontaxable dividends received ........................................................................................................
Effect on operating loss carryforwards, etc. .........................................................................................................
Other....................................................................................................................................................................
Effective tax rate ...........................................................................................................................................

40.4%
3.7
(0.6)
(20.5)
1.3
24.3%

Year ended March 31, 2006
Statutory tax rate in Japan ...........................................................................................................................
Adjustments:
Permanently nondeductible expenses..................................................................................................................
Permanently nontaxable dividends received ........................................................................................................
Effect on operating loss carryforwards, etc. .........................................................................................................
Other....................................................................................................................................................................
Effective tax rate ...........................................................................................................................................

40.4%
6.1
(0.7)
(28.0)
2.0
19.8%(2) Significant components of the deferred income tax assets and liabilities at March 31, 2007 and 2006 are as follows:
Millions of yen
2007

2006

Thousands of
U.S. dollars
2007

Deferred tax assets:
Allowance for doubtful receivables ................................................................
¥ 365
¥ 379
$ 3,094
Accrued retirement benefits ..........................................................................
995
998
8,429
Provision for anticipated loss on contract work ..............................................
527
410
4,461
Other ............................................................................................................
2,520
2,067
21,338
Total deferred tax assets ...................................................................................
4,407
3,854
37,322
Deferred tax liabilities offset to deferred tax assets:(2,060)(1,894)(17,447)
Difference in net unrealized gain on securities ...............................................
Undistributed earnings of foreign subsidiaries................................................
(372)—(3,151)
Reserve for overseas investment losses...........................................................
—(1)—
Depreciation expense ....................................................................................
(92)
(111)
(779)
Other ............................................................................................................
(199)
(60)
(1,688)
Total deferred tax liabilities ...............................................................................
(2,723)(2,066)(23,065)
Net deferred tax assets..............................................................................................
¥1,684¥1,788$14,257
Note: The Company and its subsidiaries had operating loss carryforwards equivalent to unrecognized tax assets of¥2,493 million ($21,109 thousand) and ¥4,053 million at March 31, 2007 and 2006, respectively, which areavailable to be offset against future taxable income.

TOYO ENGINEERING CORPORATION

Annual Report 200731

(3) Net deferred tax assets at March 31, 2007 and 2006 are included in the consolidated balance sheets as follows:
Millions of yen

Current assets–prepaid expenses and other current assets ................................
Other assets .....................................................................................................
Other long-term liabilities .................................................................................
Net deferred tax assets .....................................................................................

5

Thousands of
U.S. dollars

2007

2006

2007

¥1,524318(158)¥1,684¥1,767193(172)¥1,788$12,902
2,695(1,340)$14,257

RETIREMENT BENEFITSThe Company and certain 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, 2007 and 2006 consisted of the following:
Millions of yen

Projected benefit obligation..............................................................................
Plan assets........................................................................................................
Unreserved projected benefit obligation ...........................................................
Unamortized obligation at transition.................................................................
Unamortized actuarial loss................................................................................
Unrecognized prior service cost ........................................................................
Accrued retirement benefits for employees.......................................................

Thousands of
U.S. dollars

2007

2006

2007

¥(16,366)
9,628(6,738)
1,980
3,634(1,692)¥ (2,816)¥(15,611)
9,193(6,418)2,226
3,491(1,845)¥ (2,546)$(138,591)
81,532(57,059)
16,76530,772(14,328)$ (23,850)

The consolidated balance sheet includes directors’ and statutory auditors’ retirement allowances of ¥137 million($1,157 thousand) and ¥181 million at March 31, 2007 and 2006, respectively, in addition to the accrued retirement
benefits for employees presented above. The retirement benefit plan for directors and statutory auditors had been
terminated at June 28, 2005. The balance of reserves recorded as of March 31, 2007 are the cumulative amounts up
to the period for the above termination of retirement benefit plan.
(2) Net periodic pension cost for the year ended March 31, 2007 and 2006 consisted of the following:
Millions of yen

Components of net periodic benefit cost:Service cost ...................................................................................................
Interest cost...................................................................................................
Expected return on plan assets ......................................................................
Amortization of unrecognized retirement benefit obligation at transition.......
Amortization of unrecognized actuarial loss...................................................
Amortization of prior service cost ..................................................................
Other ............................................................................................................
Net periodic pension cost .................................................................................
Payments of special retirement benefits ............................................................
Total.................................................................................................................

32

TOYO ENGINEERING CORPORATION

Annual Report 2007

Thousands of
U.S. dollars

2007

2006

2007

¥ 832
294
(230)
247
332
(153)
122
1,444
—
¥1,444

¥ 646
293
(205)
246
368
(153)
121
1,316
98
¥1,414$ 7,046
2,492(1,945)
2,087
2,808(1,293)
1,030
12,225—$12,225

(3) Basis of calculation of projected benefit obligation for the year ended 2007 and 2006, respectively.
Method of allocation of estimated pension cost
Straight-line method
Discount rate
Mainly 2.0%
Expected rate of return on plan assets
Mainly 2.5%
Amortization period for unrecognized actuarial loss
Mainly 15 years
Amortization period for unrecognized obligation at transition
15 years
Amortization period for unrecognized prior service cost
15 years

6

SHAREHOLDERS’ EQUITY
The new Corporation Law of Japan (the “Law”), which superseded most of the provisions of the Commercial Codeof Japan, went into effect on May 1, 2006. The Law provides that an amount equal to 10% of the amount to be
distributed as distributions of capital surplus (other than the capital reserve) and retained earnings (other than thelegal reserve) be transferred to the capital reserve and the legal reserve, respectively, until the sum of the capitalreserve and the legal reserve equals 25% of the common stock account. Such distributions can be made at any timeby resolution of the shareholders, or by the Board of Directors if certain conditions are met, but neither the capitalreserve nor the legal reserve is available for distributions.

7

CONTINGENT LIABILITIESThe Company and its subsidiaries were contingently liable as guarantors of loans to others in the aggregate amountof ¥4,157 million ($35,198 thousand) and ¥4,576 million at March 31, 2007 and 2006, respectively.

8

NET SALESNet sales include revenues recognized by the percentage-of-completion method as described in Note 2 (l).
The following table shows net sales recognized by the percentage-of-completion method:
Millions of yen

Years ended March 31,

9Thousands of
U.S. dollars

2007

2006

2007

¥136,612¥121,575$1,156,846

RESEARCH AND DEVELOPMENT COSTS
Research and development costs included in selling, general and administrative expenses for the years ended March
31, 2007 and 2006 amounted to ¥706 million ($5,980 thousand) and ¥550 million, respectively.

10

OTHER EXPENSES“Other” in “Other expenses” for the years ended March 31, 2007 and 2006 consisted of the following:
Millions of yen

Years ended March 31,
Taxes and dues.................................................................................................
Loss on valuation of memberships ....................................................................
Payments of special retirement benefits ............................................................
Other ...............................................................................................................
Total .......................................................................................................

2007

¥ 255
76
—
411
¥742

2006

¥ —
—
98
203
¥301

TOYO ENGINEERING CORPORATION

Thousands of
U.S. dollars
2007$2,156646—
3,477$6,279Annual Report 2007

33

11

LEASES(a) Finance Leases(a-1) Finance Leases (as Lessee)
The following pro forma amounts represent the acquisition costs, accumulated depreciation and net book value ofleased property as of March 31, 2007 and 2006 which would have been reflected in the balance sheets if financelease accounting had been applied to the finance leases currently accounted for as operating leases:
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,
Acquisition costs:
Tools, furniture and fixtures...........................................................................
Accumulated depreciation:
Tools, furniture and fixtures...........................................................................
Net book value:
Tools, furniture and fixtures...........................................................................

2007

2006

2007

¥2,115¥659$17,909

407

347

3,449

1,708

312

14,460Future minimum lease payments (including the interest portion thereon) subsequent to March 31, 2007 and 2006
for finance leases accounted for as operating leases are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,

2007

Within one year................................................................................................
Over one year...................................................................................................
Total .......................................................................................................

¥ 557
2,904
¥3,461

2006

¥154
181
¥335

2007

$ 4,717
24,589$29,306

Lease payments relating to finance leases accounted for as operating leases for the years ended March 31, 2007 and2006 amounted to ¥260 million ($2,205 thousand) and ¥176 million, respectively, which were equal to the depreciation expense of the leased assets computed by the straight-line method over the respective lease terms.
(a-2) Finance Leases (as Lessor)
Future minimum lease receivables (including the interest portion thereon) subsequent to March 31, 2007 and 2006
for finance leases accounted for as operating leases are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,

2007

Within one year................................................................................................
Over one year...................................................................................................
Total .......................................................................................................

¥ 296
1,458
¥1,754

2006

¥18
6
¥24

2007

$ 2,507
12,343$14,850

All the above lease receivables were derived from the subleasing business. As every subleased property was leased tothird parties through the Company’s subsidiary on approximately the same terms, approximately the same amountof future lease receivables as those presented above are included in Table (a-1) as the amount of the future sublease
payments.

34

TOYO ENGINEERING CORPORATION

Annual Report 2007

(b) Operating Leases(b-1) Operating Leases (as Lessee)
Future minimum lease payments subsequent to March 31, 2007 and 2006 for noncancelable operating leases are
summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,

2007

Within one year................................................................................................
Over one year...................................................................................................
Total .......................................................................................................

2006

¥13
13
¥26

2007

¥2
3
¥5

$105
112
$217

(b-2) Operating Leases (as Lessor)
Future minimum lease receivables subsequent to March 31, 2007 and 2006 for noncancelable operating leases are
summarized as follows:
Thousands of
U.S. dollars

Millions of yen

12Years ended March 31,

2007

2006

2007

Within one year................................................................................................
Over one year...................................................................................................
Total .......................................................................................................

¥ 1,127
9,812¥10,939¥ 1,142
11,594¥12,736$ 9,541
83,088$92,629

INVESTMENT SECURITIESThe book value, unrealized gain and loss and the related fair value of held-to-maturity securities at March 31, 2007
are summarized as follows:
Millions of yen

At March 31, 2007
Government bonds ...........................................................................
Corporate bonds...............................................................................

Book
Value

Unrealized
Gain

Unrealized
Loss

¥1
—

¥ (0)
(0)

¥20,984
11,992

Fair
Value¥20,985
11,992The cost, unrealized gain and loss and the related book value of available-for-sale securities with available fair values
at March 31, 2007 are summarized as follows:
Millions of yen

At March 31, 2007
Equity securities ................................................................................
Debt securities ..................................................................................

Cost¥5,160304

Unrealized
Gain

Unrealized
Loss¥5,532
—

¥ (2)
(101)

Book
Value

¥10,690
203

The contractual maturities of debt securities classified as available-for-sale and held-to-maturity were as follows:
At March 31, 2007
Due within one year ...........................................................................................................
Due after one year through five years.................................................................................
Due after five years through ten years ................................................................................
Due after ten years.............................................................................................................
Total .........................................................................................................................

Millions of yen

Thousands of
U.S. dollars¥32,976——
203¥33,179$279,245——
1,721$280,966

TOYO ENGINEERING CORPORATION

Annual Report 2007

35

The cost, unrealized gain and loss and the related book value of available-for-sale securities with available fair values
at March 31, 2006 are summarized as follows:
Millions of yen

At March 31, 2006
Equity securities ................................................................................
Debt securities ..................................................................................

Cost

Unrealized
Gain

Unrealized
Loss¥4,861
249

¥(14)
(93)

¥10,018
568

Millions of yen

Thousands of
U.S. dollars¥5,171
412

Book
Value

The contractual maturities of debt securities classified as available-for-sale were as follows:
At March 31, 2006
Due within one year ...........................................................................................................
Due after one year through five years.................................................................................
Due after five years through ten years ................................................................................
Due after ten years.............................................................................................................
Total .........................................................................................................................

13

¥ 2
46
107
413
¥568

$

15
393
906
3,492
$4,806DERIVATIVE TRANSACTIONSThe Company operates internationally in circumstances which give rise to exposure to market risks from fluctuations inforeign currency exchange rates and interest rates. In order to limit those risks, the Company enters into forward foreignexchange contracts, currency swaps and interest rate swaps, etc. in accordance with the Company’s own internal risk control rules. The Company does not have derivative positions for speculative trading purposes. The Company is subject tocredit risk incurred by the default of counter parties to the derivatives. As the Company enters into such agreement onlywith credible counter parties, the risk of any such default is deemed negligible. The Company’s Finance Division is incharge of entering into and monitoring the Company’s derivative positions in order to ensure risk control.
Forward foreign exchange contracts
The Company has entered into forward foreign exchange contracts to reduce its exposure to adverse fluctuations in foreign exchange rates relating to receivables and payables denominated in foreign currencies. The contract amounts and therelated market values of those contracts without firm commitments related to receivables or payables at March 31, 2007
and 2006 were as follows:
Thousands of
U.S. dollars

Millions of yen

At March 31,
Forward foreign exchange contracts to buy U.S. dollars:
Contract amounts .........................................................................................
Related market value .....................................................................................
Net gain ........................................................................................................

2007

¥147
151
¥ 4

2006

¥38
38
¥ 0

2007

$1,242
1,275$ 33

The contract and related market value amounts above exclude forward foreign exchange contracts designated ashedges on forecasted transactions with a firm commitment to the hedged items since such contracts are accounted
for in the financial statements in conjunction with the computation of foreign exchange gain and loss by the deferral of gain and loss.
The contract and related market value amounts above do not directly indicate the level of market risk or credit risk
incurred, as these amounts do not indicate the potential risk of the forward foreign exchange contracts.

36

TOYO ENGINEERING CORPORATION

Annual Report 2007

Interest rate swaps
The Company has entered into interest rate swap agreements to reduce its interest expense or its exposure toadverse fluctuations in interest rates relating to loans payable. The total notional amounts and related market valueof these interest rate swap agreements at March 31, 2007 and 2006 were as follows:
Thousands of
U.S. dollars

Millions of yen

At March 31,

2007

Notional amounts.............................................................................................
Related market value ........................................................................................
Net gain ........................................................................................................

2006

¥400
0
¥ 0

2007

¥600
1
¥ 1

$3,387
4$
4

The notional amounts and related market value amounts above exclude interest rate swaps agreements designatedas hedges on forecasted transactions with a firm commitment to the hedged items since such agreements are or will
be accounted for in the financial statements as interest on borrowings allocated periodically based on fixed rate.
Credit derivative swaps
The Company had entered into credit derivative swap agreement to reduce its credit exposure relating to collectionof receivables. The total notional amounts and related market value of credit derivative swap agreements at March
31, 2007 and 2006 were as follows:
Thousands of
U.S. dollars

Millions of yen

At March 31,

2007

Notional amounts.............................................................................................
Related market value ........................................................................................
Net loss .........................................................................................................

2006

¥—
—
¥—

2007

¥940
1
¥ (6)

$—
—
$—

In 2006, the Company terminated credit derivative swap agreement.

14

SEGMENT INFORMATION(1) Business Segments
Millions of yen

Year ended March 31, 2007
I Net sales and operating income:Net sales(1) Net sales to outside customers ................................
(2) Inter-segment net sales ...........................................
Total ............................................................................
Operating expenses.........................................................
Operating income ........................................................
II Assets, depreciation and capital expenditures:
Assets .............................................................................
Depreciation....................................................................
Capital expenditures........................................................

EPC
BusinessReal
EstateTotal

Eliminations
and Other Consolidated¥220,85615
220,871
215,081
5,790¥ 2,988
321
3,309
2,224
1,085

¥223,844
336
224,180
217,305
6,875¥¥250,968
1,416
1,593

¥20,443580
1,948¥271,411
1,996
3,541

¥11,403 ¥282,814
(1)
1,995
—
3,541

— ¥223,844(336)—(336) 223,844(351) 216,954
15
6,890

TOYO ENGINEERING CORPORATION

Annual Report 2007

37

Millions of yen

Year ended March 31, 2006

EPC
BusinessReal
EstateTotal

Eliminations
and Other Consolidated

I Net sales and operating income:Net sales¥193,418¥ 2,166 ¥195,584¥— ¥195,584(1) Net sales to outside customers ................................
(2) Inter-segment net sales ...........................................
3
322
325
(325)
—
Total ............................................................................
193,421
2,488
195,909(325) 195,584
Operating expenses.........................................................
190,297
1,394
191,691(302) 191,389
Operating income ........................................................
3,124
1,094
4,218
(23)
4,195
II Assets, depreciation and capital expenditures:
Assets .............................................................................
¥173,826¥18,327 ¥192,153¥10,509 ¥202,662
Depreciation....................................................................
1,284
418
1,702
(1)
1,701
Capital expenditures........................................................
1,448
2,794
4,242
(0)
4,242
Notes: 1.The classification of the business segments adopted is based on the Company segmentation which isdetermined by the similarity of each business.
2.The Companies’ reportable operating segments consist of the following two business groups:
EPC Business — Engineering, procurement and construction for chemical fertilizer, petrochemical andrefinery plants, energy-related businesses, general manufacturing facilities and information technology
Real Estate — Rent and administration of real estate
3.All administrative department expenses of the Company and consolidated subsidiaries are allocated to thecorresponding business segments.
4.Assets included in “Eliminations and Other” for the years ended March 31, 2007 and 2006 totaling¥11,583 million ($98,082 thousand) and ¥10,923 million primarily consisted of investment in securities.
5.The impairment losses recorded in EPC Business for the years ended March 31, 2007 and 2006 were ¥56
million ($476 thousand) and ¥445 million, in Real estate were ¥165 million ($1,396 thousand) and ¥171
million, respectively.
(2) Geographic Segments
Millions of yen

Year ended March 31, 2007
I Net sales and operating income:Net sales(1) Net sales to outside customers ................................
(2) Inter-segment net sales ...........................................
Total ............................................................................
Operating expenses.........................................................
Operating income ........................................................
II Assets:
Assets .............................................................................

38

TOYO ENGINEERING CORPORATION

Annual Report 2007

Eliminations
and Other Consolidated

Japan

OthersTotal¥210,865
31
210,896205,328
5,568¥12,979
18,06831,04729,4391,608¥223,844
18,099241,943
234,767
7,176¥¥264,355¥34,824¥299,179¥(16,365) ¥282,814— ¥223,844(18,099)—(18,099) 223,844(17,813) 216,954
(286)
6,890

Millions of yen

Year ended March 31, 2006

Japan

OthersEliminations
and Other Consolidated

Total

I Net sales and operating income:Net sales¥181,837¥13,747 ¥195,584 ¥— ¥195,584(1) Net sales to outside customers ................................
(2) Inter-segment net sales ...........................................
425
10,212
10,637(10,637)—
Total ............................................................................
182,262
23,959206,221(10,637) 195,584
Operating expenses.........................................................
178,598
23,529202,127(10,738) 191,389
Operating income ........................................................
3,664
430
4,094
101
4,195
II Assets:
Assets .............................................................................
¥190,327¥17,714 ¥208,041 ¥ (5,379) ¥202,662
Notes: 1.Geographic segmentation is according to geographic proximity.
2.Countries included in Others: Korea, Malaysia, India, Luxembourg, U.S.A. and PR China
3.Net sales and Assets included in “Eliminations and Other” are mainly due to inter-segment transaction.
(3) Sales to Foreign Customers
Millions of yen

Year ended March 31, 2007
Overseas sales (A) ..........................................
Consolidated sales (B) ....................................
Overseas sales ratio (A/B) ............................

Southeast
Southwest Asia,
Russia andCentral andAsia
Middle East and Africa Central Asia South America

OthersTotal¥10,517¥52,506¥36,034¥25,114¥22,514

4.7%

23.5%

16.1%

11.2%

10.0%

¥146,685
223,844
65.5%

Millions of yen

Year ended March 31, 2006

Southeast
Southwest Asia,
Russia andCentral andAsia
Middle East and Africa Central Asia South America

Overseas sales (A) ..........................................
¥8,420¥54,717
Consolidated sales (B) ....................................
4.3%
28.0%
Overseas sales ratio (A/B) ............................
Each area represents the following countries:
Southeast Asia: Thailand, Singapore, Indonesia and Malaysia
Southwest Asia, Middle East and Africa: Saudi Arabia, Iran and India
Russia and Central Asia: Russia
Central and South America: Brazil
Others: PR China, Australia, U.S.A., Korea and European countries

OthersTotal¥132,482
195,584
67.7%¥44,890¥8,115¥16,340

23.0%

4.1%

8.3%

TOYO ENGINEERING CORPORATION

Annual Report 2007

39

15

Supplementary Information for Consolidated Statements of Changes in Net Assets(a) Type and number of outstanding sharesYear ended March 31, 2007
Number of shares
Balance at
beginning of year

Increase in shares
during the year

Common stock

175,692,539

17,100,000—

192,792,539

Total

175,692,539

17,100,000—

192,792,539

403,553

77,366

6,747

474,172

Type of shares

Decrease in shares
during the year

Balance at
end of year

Issued stock:

Treasury stock:
Common stock

Total
403,553
77,366
6,747
474,172
Notes: 1.Issued stock increased by 17,100,000 shares due to issue of new ordinary shares to third parties.
2.Treasury stock increased by 77,366 shares due to the repurchase of shares less than one unit.
3.Treasury stock decreased by 6,747 shares due to the sale of shares less than one unit.
(b) Dividends(b-1) Dividends paid to shareholders
AmountDate ofapproval

Resolution
approved byType ofsharesAmountJune 28,
2006

Annualgeneralmeeting ofshareholders

Commonstock(Millions of yen)(Thousands of
U.S. Dollars(Note 1))

526

4,453

Amountper share

Amountper share(Yen)(U.S. Dollars(Note 1))3

0.03

Shareholders’
cut-off date

Effective
date

March 31,2006

June 28,2006(b-2) Dividends with a shareholders’ cut-off date during the current fiscal year but an effective date subsequent to thecurrent fiscal year
Amount40

Date ofapproval

Resolution
approved byType ofsharesJune 26,
2007

Annualgeneralmeeting ofshareholders

Commonstock

TOYO ENGINEERING CORPORATION

Annual Report 2007

Amount(Thousands of(Millions of yen) U.S. Dollars(Note 1))

577

4,886

Paid
from

Retainedearnings

Amountper share

Amountper share(Yen)(U.S. Dollars(Note 1))3

0.03

Shareholders’
cut-off date

Effective
date

March 31,2007

June 27,
2007

Independent Auditors’ Report

TOYO ENGINEERING CORPORATION

Annual Report 200741

Worldwide Network● HEAD OFFICE
2-8-1 Akanehama, Narashino-shi,
Chiba 275-0024, Japan
Tel: 81-47-451-1111
Fax: 81-47-454-1800
URL http://www.toyo-eng.co.jp/

Jakarta

Kuala Lumpur

Indonesia

Malaysia

TehranIranShanghai
Beijing

China

China

Moscow

Seoul

RussiaKorea

Luxembourg

Japan● TECHNOLOGY RESEARCH CENTER
2-6-3 Akanehama, Narashino-shi,
Chiba 275-0024, Japan
Tel: 81-47-408-2371
Fax: 81-47-408-2372

Calgary● Jakarta
Midplaza, 8th Fl., Jl. Jendral Sudirman
Kav. 10-11, Jakarta 10220, Indonesia
Tel: 62-21-570-6217/5154
Fax: 62-21-570-6215● DohaBldg. No. 9, 802 Al Abbas Street,
P.O. Box 24131, Doha, Qatar
Tel: 974-437-8860
Fax: 974-437-8861● TehranWest Side / Grand Floor, No. 4 Alvand
Street, Argentine Square, Tehran, Iran
Tel: 98-21-8866-3088/4598
Fax: 98-21-8879-4019● Moscow
Room No. 605, World Trade Center,
Krasnopresnenskaya Nab., 12,
Moscow 123610, Russia
Tel: 7-495-258-2064/1504
Fax: 7-495-258-2065
MAJOR SUBSIDIARIESAND AFFILIATED COMPANIESDomestic● TEC Estate, Ltd.
Property development and real estate business
2-6-3 Akanehama, Narashino-shi,
Chiba 275-0024, Japan
Tel: 81-47-408-2171
Fax: 81-47-453-3250● Suntec Corporation
Real estate and building maintenance
2-6-3 Akanehama, Narashino-shi,
Chiba 275-0024, Japan
Tel: 81-47-454-1639
Fax: 81-47-454-1842【HEAD OFFICE】
2-2-7 Honcho, Funabashi-shi,
Chiba 273-0005, Japan
Tel: 81-47-433-4511
Fax: 81-47-433-4593● TEC Software &Technical Services Corporation
Staffing services, job placement services
and translation / interpretation
7-11-5 Honcho, Funabashi-shi,
Chiba 273-0005, Japan
Tel: 81-47-425-8461
Fax: 81-47-425-8464

42

TOYO ENGINEERING CORPORATION

Annual Report 2007

Rio de Janeiro

CanadaOverseas Offices● Shanghai
17th Fl., Shanghai Zhongrong Plaza,No. 1088 Pudong South Road, Pudong
New District, Shanghai 200122, China
Tel: 86-21-5888-9935
Fax: 86-21-5888-8864/8874

Qatar

India

Thailand● TOKYO HEAD OFFICE
11th Fl., Shin-Marunouchi Building,
1-5-1 Marunouchi, Chiyoda-ku,
Tokyo 100-6511, Japan
Tel: 81-3-6268-6611
Fax: 81-3-3214-6011● Beijing
E. 7th Fl., Bldg. D, Fuhua Mansion,
Chaoyangmen North Avenue No. 8,
Beijing 100027, China
Tel: 86-10-6554-4515
Fax: 86-10-6554-3212

Doha

MumbaiBangkokBrazil● Tecno Frontier Co., Ltd.
Environmental engineering andconstruction of facilities
2-8-1 Akanehama, Narashino-shi,
Chiba 275-0024, Japan
Tel: 81-47-454-1178
Fax: 81-47-454-1550【HEAD OFFICE】
2-2-7 Honcho, Funabashi-shi,
Chiba 273-0005, Japan
Tel: 81-47-433-7234● TEC Air Service Corporation
Travel and insurance services
2-6-7 Ginza, Chuo-ku, Tokyo 104-0061, Japan
Tel: 81-3-3564-0130
Fax: 81-3-3564-0530● Toyo Business Engineering Corporation
System consulting and solutions provider
17th / 20th Fl., KDDI Otemachi Bldg.,
1-8-1 Otemachi, Chiyoda-ku,
Tokyo 100-0004, Japan
Tel: 81-3-3510-1600
Fax: 81-3-3510-1624● Chiba Data Center Corporation
Data input service, documentation using
word processors and printing
6-5-3 Tendai, Inage-ku, Chiba-shi,
Chiba 263-0016, Japan
Tel: 81-43-284-3611
Fax: 81-43-284-3533● TEC Accounting & Consulting Ltd.
Business support and consulting foraccounting and accounting systemdevelopment
2-8-1 Akanehama, Narashino-shi,
Chiba 275-0024, Japan
Tel: 81-47-454-1690
Fax: 81-47-454-1289
Overseas● Toyo Engineering Korea Limited
Engineering and construction forplants and facilities
Toyo Bldg., 677-17, Yeoksam-1 Dong,
Kangnam-ku, Seoul, 135-915, Korea
Tel: 82-2-2189-1619
Fax: 82-2-2189-1891● Toyo Engineering Corporation, China
Engineering and construction forplants and facilities
17th Fl., Shanghai Zhongrong Plaza,No. 1088 Pudong South Road, Pudong
New District, Shanghai 200122, China
Tel: 86-21-5888-9935
Fax: 86-21-5888-8864/8874● Toyo Engineering Corporation(China) Procurement
Procurement services in China
17th Fl., Shanghai Zhongrong Plaza,No. 1088 Pudong South Road, Pudong
New District, Shanghai 200122, China
Tel: 86-21-5888-9935
Fax: 86-21-5888-8864/8874

HoustonU.S.A.

● Toyo-Thai Corporation Ltd.
Engineering and construction forplants and facilities
22nd Fl., Serm-Mit Tower, 159 Soi Asoke,
Sukhumvit 21 Road, Bangkok 10110,
ThailandTel: 66-2-260-8505
Fax: 66-2-260-8525/8526● Toyo Engineering &Construction Sdn. Bhd.
Engineering and construction forplants and facilities
Suite 25.4, 25th Fl., Menara Haw Par,
Jalan Sultan Ismail, 50250 Kuala Lumpur,
Malaysia
Tel: 60-3-2078-5796
Fax: 60-3-2078-5798● Toyo Engineering India Limited
Engineering and construction forplants and facilities"Toyo House", L.B.S. Marg, Kanjurmarg(West), Mumbai-400 078, India
Tel: 91-22-6796-7000
Fax: 91-22-6796-7520/7521● Toyo Engineering Europe, S.A.
Procurement services in Europe
25, Route d’Esch, L-1470, Luxembourg
Tel: 352-497511
Fax: 352-487555● Toyo Canada Corporation
Engineering and construction forplants and facilities#640 Ford Tower, 633, 6th Avenue SW,
Calgary, Alberta T2P 2Y5, Canada
Tel: 1-403-237-8117/8127
Fax: 1-403-237-8385● Toyo U.S.A., Inc.
Procurement services and market
development in the U.S.
15415 Katy Freeway, Suite 600,
Houston, TX 77094, U.S.A.
Tel: 1-281-579-8900
Fax: 1-281-599-9337● Toyo do Brasil–Consultoria E
Construcoes Industriais Ltda.
Engineering and construction forplants and facilities
Praia de Botafogo, 228-Sala 801C-Ala B,
Botafogo, 22250-906, Rio de Janeiro-RJ, Brazil
Tel: 55-21-2551-1829
Fax: 55-21-2551-2048(As of August 1, 2007)

Corporate Data
(As of March 31, 2007)

Founded:May 1, 1961

Common Stock:¥18,199 million

Number of Employees:

1,045

Stock Exchange Listing:Tokyo Stock Exchange

Authorized Shares:

500,000,000

Capital Stock Issued:

192,792,539

Number of Shareholders:

18,997Administrator of
Shareholders’ Register:

The Chuo Mitsui Trust and Banking Co., Ltd.
3-33-1 Shiba, Minato-ku, Tokyo 105-8574, Japan

Major Shareholders:Number of shares(thousands)

Percentage of total(%)

Mitsui & Co., Ltd.

43,77022.70

Mitsui Chemicals, Inc.

25,343

13.14

Bank of New York, GCM Client Accounts EISG

8,626

4.47

Taisei Corporation

4,000

2.07

Kanto Natural Gas Development Co., Ltd.

3,956

2.05

HSBC Bank Plc-Clients Nontax Treaty

3,500

1.81

Goldman Sachs International

3,317

1.72

Japan Trustee Services Bank, Ltd.

2,966

1.53

Morgan Stanley & Co. Incorporated

2,456

1.27

Sumitomo Mitsui Banking Corporation

2,350

1.21

Note: On May 31, 2006, the Company increased its capital through a private placement of 17.1 million shares with Mitsui & Co., Ltd.

Others0.48

Financial institutions
11.80

Individuals
27.98

Less than 5,000 shares
11.03

1,000,000 shares or more
57.62

5,000–49,999 shares
16.39
Number of
Shares Held

Type of
Shareholder

(%)

(%)

Foreign shareholders
16.98

Domestic companies
42.76

Stock Price:
1,000

50,000–499,999 shares
9.80

500,000–999,999 shares
5.16

Stock Price Range(Yen)

Trading Volume(Thousands of Shares)

900
800
700
600
500
400
300
200
100
0

200,000
150,000
100,000
50,000
0

4

5

6

7

8

9 10 11 12 1
FY2004

2

3

4

5

6

7

8

9 10 11 12 1
FY2005

2

3

4

5

6

7

8

9 10 11 12 1

2

3

FY2006TOYO ENGINEERING CORPORATION

Annual Report 200743

Toyo Engineering Corporation Annual Report 2007

A

2-8-1 Akanehama,Narashino-shi, Chiba 275-0024, Japan
Tel: 81-47-451-1111
Fax: 81-47-454-1800
http://www.toyo-eng.co.jp/

e
R
por t
l
a
u
nn

2007
20
Year ended March 31, 2007

PRINTED WITH

SOY INK

TMThis report was printed with soy ink and was produced with waterless printing methods.

©2007 Toyo Engineering Corp.
Printed in Japan