Toyo Engineering Corporation Annual Report 2010

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/

2010
Annual Report

Year ended March 31, 2010©2010 Toyo Engineering Corp.
Printed in Japan

Corporate Profile
Toyo Engineering Corporation (TOYO) is one of theworld’s leading engineering contractors. Since its
inception in 1961, TOYO has actively deployedEngineering, Procurement, and Construction (EPC)
businesses, and has successfully delivered large andcomplex projects in more than 50 countries. TOYO’s
engineering business focuses on the segments ofEnergy, Oil Refining, Petrochemicals & Chemicals, Oil& Gas Development, Infrastructure, Environment, andother manufacturing facilities.
We have a globally networked organization named
CONTENTS“Global Toyo,” which makes us capable of execut-

To Our Shareholders....................................................................1

ing work based on common work standards in close

Consolidated Financial Highlights....................................2

cooperation with our group companies as well as

News.......................................................................................................3

in an optimal formation. Under the mission entitled

Review of Operations.................................................................4
Major Projects..................................................................................8“Engineering for Sustainable Growth of the Global

Management System...............................................................10

Community,” Global Toyo companies maintain and

HSSE + Quality..............................................................................12strengthen TOYO’s image of reliability and assure

Financial Section
Consolidated Five-Year Summary...............................................14
Management’s Discussion and Analysis.................................16
Business Risk and Other Risks.........................................................17
Consolidated Balance Sheets.........................................................18
Consolidated Statements of Income........................................20
Consolidated Statements of Changes in Net Assets.......21
Consolidated Statements of Cash Flows................................22
Notes to Consolidated Financial Statements.......................23
Report of Independent Auditors.................................................43

Worldwide Network..................................................................44
Stock Information.......................................................................45
DEFINITION OF TERMS¡ Fiscal 2009 means the fiscal year ended March 31, 2010.
(April 1, 2009–March 31, 2010).
¡ 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.

clients that projects will be delivered safely, to a highquality standard, and on schedule.

To Our Shareholders
In fiscal 2009, the global economic
structure rapidly changed. In emerging
countries, the demand for energy,
infrastructure, and natural resource
development increased. In advanced
economies, including Japan, manufacturing industries shifted the production baseto emerging countries. In line with thesechanges, the needs of clients in our market
became more diversified and sophisticated, requiring engineering companies toadapt quickly and accurately to evolving
businesses.
Amid structural changes in the global
economy, TOYO’s first priority to attainsustained growth is to make innovativechanges to our corporate structure. In
particular, it is urgent to address the task of
expanding new orders. TOYO intends toquickly implement management strategies
such as advancing Global Toyo and developing new technologies, and to strive for
improvement in overall corporate value.
August 2010

Yutaka Yamada
President and Chief Executive Officer

TOYO ENGINEERING CORPORATION   Annual Report 2010Consolidated Financial Highlights
Financial Summary

Millions of yen

Years ended March 31,
Net sales...................................................................................
New orders.............................................................................
Backlog of contracts at end of the year................
Net income.............................................................................
Total assets..............................................................................
Total net assets.....................................................................
Per share data (in yen and U.S. dollars):
Net income........................................................................
Cash dividends................................................................

Thousands of
U.S. dollars*

2010

2009

2010

¥173,944
132,457
168,179
7,132
190,127
65,295¥326,248
119,265
224,416
6,516
199,41358,509$1,869,359¥¥   33.91
7.00

$

37.12
7.00

1,423,500
1,807,407
76,642
2,043,282
701,723
0.40
0.08* U.S. dollar amounts are stated at ¥93.05 to U.S.$1.00, the exchange rate prevailing on March 31, 2010.

Operational Summary>>> Ongoing large-scale projects are being completed.
>>> Net sales fell significantly, but net income increased.
>>> Focus on securing new orders.

Net Sales (¥ billion)

Net Income (¥ billion)

’10

173.9

’10

7.1

’09

326.2

’09

6.5

’08

327.4

’08

8.0

’07

223.8

’07

5.3

’06

195.6

’06

3.4

New Orders (¥ billion)Backlog of Contracts (¥ billion)

’10

132.5

’10

168.2

’09

119.3

’09

224.4

’08

268.7

’08

444.4

’07

355.0

’07

499.2

’06

257.8

’06

373.5

News
TOYO’s Major Topics in Fiscal 2009
Jun. 2009		Jul. 2009				lTOYO Awarded an FCC (INDMAX) / Propylene Recovery Unit Project in IndialNetherlands Foreign Minister Visits Pearl GTL Project
Site in Qatar (Photo 1)lPresident & CEO Yutaka Yamada Inaugurated as
President of ENNAlTOYO’s Sakhalin-Ⅱ and Offshore GTL Attract Attention — GASTECH 2009 in Abu Dhabi (Photo 2)
lTOYO Awarded Monosilane Plant ProjectAug. 2009 lTOYO and Chart E&C Sign Mid-Scale LNG Liquefaction Technology and Equipment Supply Agreement(Illustration 1)
		lTOYO Awarded a Urea Granulation Contract from
Russia		lThree CDM Projects in China Registered with theUnited Nations
		lLarge-Scale Petrochemical Project Awarded by
China’s BASF-YPC (Photo 3)

Photo 1

Photo 2Illustration 1

Photo 3

Sep. 2009	lTOYO Awarded Polycarbonate Resin Production
Facilities in China (Map 1)
Nov. 2009	lToyo-India Awarded Three Consecutive Refinery
Projects in India in the Second Quarter of 2009 (Map 2)
Dec. 2009 lTOYO Appears in Petronas Magazine (Photo 4)		lTOYO Awarded Nutritional Feed Additive Manufacturing Facilities in China
Jan. 2010		

Photo 4Photo 5
QuickTime˛ Ç∆êLí£ÉvÉçÉOÉâÉÄ
QuickTime˛ Ç∆Ç™Ç±ÇÃÉsÉNÉ`ÉÉÇå©ÇÈÇΩÇﬂÇ…ÇÕïKóvÇ≈Ç∑ÅBêLí£ÉvÉçÉOÉâÉÄ
Ç™Ç±ÇÃÉsÉNÉ`ÉÉÇå©ÇÈÇΩÇﬂÇ…ÇÕïKóvÇ≈Ç∑ÅBlNew Year’s Speech of President and CEO Yutaka
Yamada to Employees
lToyo-Venezuela Opening Ceremony (Photo 5)

UP

TOYO COMMUNICATIONSMarch 2010 Vol.1

TO DATE

Amid the financial concerns that emerged infall 2008 and the ensuing economic turmoil,
China and other Asian countries have been
the quickest to find the road to recovery,
becoming the driving force behind global
economic recovery. For this issue of TOYOTIMES, we invited the presidents of our groupcompanies in India, China, Korea, and Malaysia—Global Toyo’s Engineering, Procurement,
and Construction (EPC) bases—to talk aboutprogress with developing Global Toyo.

Round Table Conference

Mar. 2010	lCooperation with PETROBRAS for Verification Testsof Small- and Medium-Scale GTL (Illustration 2)
		lNewsletter TOYO TIMES Issued (Photo 6)

Targeting Further
Progress with Global Toyo
Four EPC Bases Supporting Global Toyo—Individualcompany status reports
Mr. Cho: In this round table conference, we would like toinform readers of Global Toyo’s current status and future
direction by reporting on the latest conditions at our EPC
bases and our business strategies. To start with, would
each of you please tell us about the lineup at your company
and any major projects that are currently underway?
Mr. Osone: Toyo-India employs about 2,000 people.
Approximately 1,000 of them are in the engineering
division, giving us the largest team of engineers amongthe 11 Global Toyo companies.* As for our projects, wehave a variety of major EPC projects that were won overthe past three years and are heading towards completion.
Specifically, an LNG terminal for Petronet LNG Limited
and LNG processing facilities for Oil and Natural Gas
Corporation Limited (ONGC) were constructed in 2009.
The construction of an ethylene plant for Indian Oil
Corporation Ltd. (IOCL) is scheduled for completion
shortly. With the completion of these major projects,

Toyo-India is focusing on sales activities to win new orders
in the current fiscal year. We have successfully won four
EPC projects from such clients as Mangalore Refinery &Petrochemicals Limited (MRPL). This pushes our orders forthe fiscal year above the ¥40 billion level.
* Global Toyo companies: 11 companies located in Japan, Korea,
China, Malaysia, India, Europe, the Middle East, and North andSouth America.

Mr. Nakao: Toyo-China has grown rapidly since it wasestablished in 2004. We currently have approximately
450 staff members, of which about 130 are in theengineering division, and about 150 are project staff.
Among our ongoing projects, we have a siloxane plantfor Dow Corning Corporation, China (Zhangjiagang), andIntegrated Petrochemical Site (IPS-II) project for BASF-YPC
Company Limited, a joint venture of BASF Corporation,
Germany, and China Petroleum & Chemical Corporation(SINOPEC). Since both of these global projects are being
done on a cost reimbursable basis, we consider them tobe trailblazing projects that indicate the future direction of
Global Toyo.

From the left:
Kenjiro Miyashita (Toyo-Korea), Toji Kawakami (Toyo-Malaysia),
Kiyoshi Nakao (Toyo-China), Hisashi Osone (Toyo-India)

Independently, Toyo-China won an order for a catalyst
developing new work, mainly targeting PETRONAS. On a
TEC COMM. has beenplant for an American chemical company in September
different note, since Malaysia is a multiethnic nation, ourrenamed2009. We believe that this is an epoch-making
project TOYO TIMES.
workforce is a mixture of people of Malay, Chinese, andfor Toyo-China because it is the first project in which we
Indian descent. I have been keeping this feature in mind in
applied our position of “Sole foreign engineering company
our business operations.
in China with licenses for all three EPC functions.”
Mr. Miyashita: Toyo-Korea has approximately 280
Mr. Kawakami: Toyo-Malaysia’s team encompasses
employees. The main point in which our business styleabout 130 people. One feature of our operation isdiffers from the other three bases is that our proportion ofthat our independent project ratio is the highest
domestic business is small. Most of our business comesamong TOYO’s four Asian bases. In terms of our sales
from working together with Toyo-Japan in providing
breakdown, approximately 50% is accounted for by the
Malaysian national oil corporation Petroliam Nasional
Berhad (PETRONAS). The remaining 50% comes fromJapanese-related companies and European- and North
Chairperson
American-related companies located in Malaysia. Among
Juzan Cho
Japanese-related companies, we regularly receive orders
General Manager,
for revamping and maintenance from a glass plant for
Corporate Planning &electronic devices.
Administration Unit,
I have been in charge of the company for less than halfAffiliate Administrationa year. As the current fiscal year represents a slow period
Division
following the end of a major project, I am concentrating on
http://www.toyo-eng.co.jp/0

Illustration 2

Dongying ........... ●Hangzhou .......... ●Xilin .................... ●Zhenhai.............. ●Huhehaote ......... ●Jiujiang .............. ●Luzhai ................ ●Pingdingshan..... ●Qujing ............... ●Wanxian............. ●Weixian .............. ●Xiamen............... ●Dalian................. ●Fuzhou............... ●Kunshan ............ ●Shaoxing ........... ●Daqing ............... ●●Weihe................. ●●Xinjiang .............. ●●Panjin................. ●●Chongqing......... ●●Jincheng ............ ●●Lucheng............. ●●Wuxi................... ●●Jilin .................... ●●●Fushun............... ●●●Yinchuan............ ●●●Guangzhou ........ ●●●Lanzhou............. ●●●●
Chengdu............ ●●●●
Tianjin ................ ●●●●
Nantong............. ●●●●

(Map 1): TOYO’s Projects in China

Photo 6

Luzhou............... ●●●●●
Zhenjiang........... ●●●●●●●●
Changshu .......... ●●●●●●●●
Beijing................ ●●●●●●●●●
Zhangjiagang..... ●●●●●●●●●●
Zibo ................... ●●●●●●●●●●●●●●●Nanjing .............. ●●●●●●●●●●●●●●●
Shanghai ........... ●●●●●●●●●●●●●●●●●●●●●●●●●●●●

More than 160 Projectsl Petrochemical, Polymers...... 69 projectsl Fertilizers, Chemicals............ 59 projects
l Energy...................................... 9 projectsl Industrial Systems................. 24 projects

0

Paradip
MumbaiMangalore

Chennai(Map 2): Newly Awarded
Projects in India

TOYO ENGINEERING CORPORATION

Annual Report 2010



Review of Operations
Targeting Business Expansion in Emerging Markets
Performance Outline (Consolidated)
Net sales ........................................................................................................................................ ¥173.9 billion (down 46.7%)
Operating income . .......................................................................................................................¥13.1 billion (down 13.8%)
Net income..................................................................................................................................................¥7.1 billion (up 9.5%)
Net income (per share).........................................................................................................................................................¥37.12>>> New orders...................................................................................................... ¥132.5 billion (58% of fiscal target)>>> Cash dividends (annual)............................................ ¥7.0 per share (¥2.0 increase from initial forecast)In fiscal 2009, TOYO faced an increasingly difficult business climate. In the hydrocarbon field, although some major projects started up again, many companies continued to postpone major capital investments or slow down execution of their capital
investment plans in light of continued uncertainty about sustained economic recovery, changes in their product markets, and financing difficulties caused by the credit
crunch. Our new orders suffered particularly because of the heated competition fromcompetitors, including Korean contractors.  
Under these circumstances, we strove to constantly meet the market demandfor highly professional and reliable services. While aiming to further strengthen ourpartnerships with existing clients, we also aggressively developed our businesses in
response to the changing needs in the market.
Guided by the three basic strategies of the medium-term management plan
launched at the start of fiscal 2009, we endeavored to increase the corporate value of
TOYO Group through efforts to enhance our competitiveness, further strengthen our
project management, and expand our profitability. The three basic strategies of theplan are to 1) respond to changes in business type and field, 2) advance Global Toyo,and 3) enhance human resources. Reflecting those efforts, TOYO achieved the consolidated performance shown above.
We took such steps to expand orders as strengthening our marketing organizationand emphasizing a proactive marketing approach. However, these measures could
not overcome the tough business climate, leading to total consolidated orders of¥132.5 billion, only 11.1% better than last year’s performance. Of this amount, overseas orders totaled ¥92.6 billion and domestic orders accounted for ¥39.9 billion.
Looking at major new orders received, we were awarded a contract for Engineering, Procurement service, and Construction management (EPsCm) for the expansionof a petrochemical complex in China for BASF-YPC Company Limited. We also won a
project to build a polycarbonate resin production facility in China for the Mitsubishi Gas
Chemical Company, Inc., and Mitsubishi Engineering-Plastics Corporation. In Japan, we
received an order for a monosilane plant project from Evonik Monosilane Japan Co., Ltd.



Fiscal 2010 Performance Forecast (Consolidated)
New orders.................................................................................................................................................................¥280.0 billion
Net sales .....................................................................................................................................................................¥160.0 billion
Operating income . ..................................................................................................................................................... ¥4.0 billion
Net income......................................................................................................................................................................¥1.0 billion
Net income (per share)...........................................................................................................................................................¥5.21
Cash dividends (annual)................................................. ¥3.0 (Interim dividend of ¥0.0, year-end dividend of ¥3.0)

As mentioned in the Performance Outline, TOYO expects to continue to face an extremely difficult business environment, especially in terms of winning orders. Accordingly, we realize that raising our competitiveness and further differentiating TOYO in
the market are our most important issues. At the same time, amid the rapid progressin the structural changes of the global economy, the needs of clients in our market arechanging daily, requiring engineering companies to adapt quickly and accurately to
evolving businesses. Some of those structural changes include the demand for energy
and natural resource development in emerging countries; the production base shift
to emerging countries by manufacturing industries in advanced economies, including
Japan; the construction of infrastructure in emerging countries; the development ofhigh value-added products; the diversification and sophistication of clients’ manufacturing needs; and the demand for diversification in energy sources and investment in“green” plants.
As TOYO failed to meet its target for new orders in the previous fiscal year, we
expect sales and profits to decline in fiscal 2010. Nevertheless, as shown in Fiscal 2010
Business Issues, the plant construction market is recovering, particularly in the BRIC
countries, and TOYO is implementing multiple marketing measures targeting suchgrowth. By winning such projects, we will expand orders and ensure that performance
improves starting with fiscal 2011. In the year ahead, all of our energies will befocused on that goal.

TOYO ENGINEERING CORPORATION

Annual Report 2010



Review of Operations

Fiscal 2010 Business Issues• Advance Global Toyo
• Develop new technology• Focus on engineering service projects• Develop new business fields• Innovate business management platforms• Implement thorough cost reduction

In emerging countries with business growth potential, TOYO is targeting expansion inorders and in profitability by aligning itself with its clients’ growth strategies.
To that end, TOYO will rapidly implement the following strategies:
Advance Global Toyo
TOYO will make further progress with developing its global operations to ensure thecontinued uncovering of new projects and developing opportunities to participate
in the planning of projects. Assigning a sales role to each company in our worldwide
network, we will build solid relationships with clients. We will also strengthen our
Engineering, Procurement, and Construction (EPC) capabilities, working to enhancesystems that improve profitability.
Develop New Technology
Amid the growing demand that companies reduce the burden they place on theenvironment, TOYO has been collaborating with MODEC, Inc., and Velocys Inc., on
the development of a small- to medium-scale GTL technology that can produce“green” diesel fuel from associated gas from oil drilling. The technology enables highly
compact production facilities that can be fitted on Floating Production Storage andOffloading units (FPSOs). Currently, the partners are pressing forward with the construction of a demonstration plant as the first stage in commercialization. Amongother ongoing developments, TOYO has concluded an agreement with Chart Energy& Chemicals, Inc., to commercialize mid-scale LNG plants for small- to medium-sizedgas fields that feature lower investment cost and quick delivery as well as easy operation and maintenance. The partners are now working on building up the business inpreparation for developing orders. Based on gas utilization technology, one of its specialties, the Company is also developing technology for the alternative energy field,
such as DME and methanol production technologies.  
Focus on Engineering Service Projects
Against the backdrop of a trend toward large-scale projects, the scarcity of humanresources among clients, and other factors, the demand for engineering services suchas providing EPsCm customized for individual clients remains strong. By flexibly meeting the requirements of such clients, TOYO can become aware of capital investment
plans at an early stage once the economy recovers. The Company can use this knowledge to strengthen its close-relationship-oriented sales efforts, and cultivate demand
among clients.
Develop New Business Fields
In view of the growing demand for infrastructure in emerging countries along with
their developing economies, TOYO is reinforcing its expansion efforts in infrastructure
fields such as power generation, transportation, and water resource, based on its
collaboration with Mitsui & Co., Ltd. In natural resource and energy development, theCompany is expanding its alliance partnerships with such clients as national oil companies and international oil companies, aiming to provide comprehensive, high valueadded engineering services. In addition, TOYO plans to develop and expand thesecapabilities to perform project execution on an EPsCm basis.
Innovate Business Management Platforms
By further sophisticating its project management system, which comprehensively andefficiently manages the progress, costs, and other aspects of projects, TOYO will givepriority to thoroughly managing project risk. Linking the project management systemwith its business management system, the Company will endeavor to establish a reliable and transparent business management system.
Implement Thorough Cost Reduction
TOYO will continue its sincere efforts to reduce costs, thoroughly revising its fixed andproject expenses.

TOYO ENGINEERING CORPORATION

Annual Report 2010



Major Projects
CHINA
Name of Client

Type

Scope

Lingyou Engineering-Plastics (Shanghai)lCo., Ltd.

Polycarbonate Resin Production Facility

E.P.C.

l Dalian Sumika Jingang Chemicals Co., Ltd.

Nutritional Feed Additive Production
Facilities

E.Ps.Cm.

l BASF-YPC Company Limited

Expansion of Petrochemical Complex

E.Ps.Cm.

IPS-Ⅱ project construction site (China)

Ground breaking ceremony for polycarbonate
production facility (China)

THAILAND
Name of Client
Completed LLDPE plant (Thailand)l PTT Polyethylene Co., Ltd.

Type

Scope

Linear Low Density Polyethylene (LLDPE)

E.P.C.

Type

Scope

Ethylene Plant

E.P.C.

Type

Scope

Gas Processing Plant

E.P.C.

Ammonia

E.P.SC.

Type

Scope

GTL Liquid Processing Unit

E.P.C.

Type

Scope

INDIA
Name of Clientl Indian Oil Corporation Ltd.

IRAN
Name of Client
l Petropars Ltd.
Ethylene Plant (India)l

Petrochemical Industries Development
Management Company

QATAR
Name of Client
l Qatar Shell GTL Limited

SAUDI ARABIAName of Client

l Saudi Basic Industries Corporation (YANSAB) EG
Project completion ceremony for the South Pars 6th,
7th, and 8th gas field project (Iran)

E.P.C.

•M
 ajor projects are progressing on schedule and within budget with collaborative project
management by Global Toyo companies and partners.
• T argeting EPC demands in emerging countries.

JAPAN
Type

Scope

l Evonik Monosilane Japan Co., Ltd.

Name of Client

Monosilane Plant

E.P.C.

l Tosoh Corp.

Recovery of Salt for Ethylene Amine Plant

E.P.C.
Ground breaking ceremony for Monosilane Plant
Project (Japan)● New Order● In Progress● Completion

E: Engineering
P: Procurement
C: Construction
Ps: Procurement service

VENEZUELA
Name of Client

Type

Scope

l Petroquímica De Venezuela S.A. (Pequiven) Ammonia / Urea Plant

E.P.C.

SC: Supervision of Construction
Cm: Construction management

BRAZIL
Name of Client
l Petróleo Brasileiro S.A. (PETROBRAS)

Type

Scope

Delayed Coker Unit / Coker Naphtha
Hydrotreating Unit

E.P.C.

REVAP Refinery (Brazil)

GTL liquid processing unit (Qatar)

TOYO ENGINEERING CORPORATION

Annual Report 2010Management System
Corporate GovernanceInternal Control System

Risk Management System

The Auditing Department of TOYO, which is under the direct

For risk management concerning project profitability andcontrol of the President, performs audits concerning thefinancial matters within TOYO, all business operations are

execution of business activities by all divisions and verifies theconstantly monitored and supervised, and reports areappropriateness and effectiveness of the internal

submitted to the Board of Directors, the Executive Committee,

management structure, including compliance and risk

and the Board of Corporate Auditors. In addition, matters ofmanagement. In addition, there are specialized units toparticular importance concerning individual bidding andperform other internal audits, such as the SQE (Safety, Quality

projects undergo a risk analysis overseen by the Project Risk

and Environment) Management Division and the Export

Management Committee, and reports are submitted to theControl Administration Division.

Executive Committee.

In order to promote the Internal Control System of the

TOYO has drawn up the Crisis Management Policy to clearlyGroup, TOYO is making efforts to ensure proper operations

set forth risk management procedures to forestall serious risks

across Toyo Group companies by establishing corporate(crises) that have the potential to seriously affect theprocedures to strengthen the corporate administrative

operations of the Company. The Crisis Management Task Team

functions of each company.

is constantly prepared for potential crises.

Corporate Governance Structure (As of March 2010)
Shareholders Meeting
Appointment/Removal

Appointment/Removal

Appointment/Removal
Audit

Board of Corporate Auditors
Corporate Auditors(External Corporate Auditors)

ReportBoard of Directors
Directors

Accounting Auditors (CPA)

ReportConsent of Appointment/Removal & Evaluation of CPA Auditing
Liaison

Audit

ReportAppointment/
RemovalReportCorporate Planning Committee
Appointment/Removal & Monitoring

President (Chief Executive Officer)

Direction/Report

Executive Committee
Regular Committee
Direction/
ReportAuditing Department

Audit

Audit

ReportProposalCommittee
SQE Committee

SQE Promotion Committee
ISMS Committee

Project Committee
Executive Officers

SQE Committee

ReportRisk Control Structure
Project Risk Management Committee
Crisis Management Task Team

General Affairs Division
Export Control
Administration Division

Audit/Guidance

Operation Unit, Centers

Compliance Committee
Business Development Committee

Direction/
Report
SQE Management
Division

10Supporting Committee
Human Capital Development Committee

Seismic Disaster Front Office
ReportSecurity Management DivisionCorporate Disclosure Manager
Risk Hotline System

Group Companies (Subsidiaries, Affiliates)

Management

Directors* Representative Director¡ Chairman
Yushi Nagata¡ President
Yutaka Yamada*¡ Directors
Takuma Hatano*
Kenji Soejima*Kazuomi Nishihara*
Makoto Fusayama
Keiichi Matsumoto
Satoshi Kuwahara
Hideki Shiinoki
Mitsutoshi Hamamura
Masayuki Uchida
Auditors¡Senior Corporate Auditor
Kunimichi Gamo
¡Corporate Auditors
Hideaki Kinoshita
Takashi Umezu (Outside Auditor)
Yoshiyuki Shinohara (Outside Auditor)

Executive Officers¡Chief Executive Officer
Yutaka Yamada¡Executive Vice Presidents
Takuma Hatano
Kenji Soejima
Kazuomi Nishihara¡Senior Executive Officers
Makoto Fusayama
Keiichi Matsumoto
Satoshi Kuwahara
Hideki Shiinoki
Mitsutoshi Hamamura
Masayuki Uchida
Kiyoshi Nakao
Akhilesh Kumar
Tadashi Hori
Katsumoto Ishibashi¡Executive Officers
Makoto Shimagaki
Masaru Takezawa
Koji Nagatomi
Kazuharu Murayama
Motoyoshi Kamoshima
Seiichi Itakura
Hisashi Osone
Yutaka Kita
Masaaki Yamaguchi
Takayoshi Imanishi
Shoji Koshikawa(As of June 23, 2010)

A Yushi Nagata
B Yutaka Yamada
E

C

B

A

D

C Takuma Hatano
D Kenji Soejima
E Kazuomi Nishihara

TOYO ENGINEERING CORPORATION   Annual Report 201011

HSSE + Quality
Safety Takes Priority over Everything Else.
Safety is an integral part of the TOYO brand.
In 2009, TOYO’s Lost Time Incidence Rate (LTIR), as defined by
ILO, was 0.08. Although this rate is an improvement from 0.18
in 2008, we are not satisfied with this result, and strive to improve it to the ultimate target of zero. As for continuous nonLTI hours for ongoing domestic and overseas projects, TOYO
has achieved 120 million man-hours as of September 2009,
which is TOYO’s new record for safety.
We are aware that the premises for a corporation that istrusted by the community include paying sufficient attention
to safety. We are confident that our efforts, initiatives, and timeand expenses spent to respect human life must take precedence over all other things. Loss of valuable human life must
absolutely be avoided in the process of TOYO and its groupcompanies’ business evolution, such as plant construction.

Safety is an important brand of TOYO. In order to boost
the brand value of all group companies in the world, we arestrongly promoting safety measures as part of the companywide safety goal for fiscal 2009: “Make Safety Standard Drill
into Global Toyo.”
TOYO will extend the unified construction HSSE standards
to group companies. Moreover, TOYO is developing a standardized work procedure across group companies. Throughpromoting standardization in this manner, the Toyo Group ismaking its best effort to maintain and improve quality as well
as safety.

In-House Safety Training

On-Site Safety Activity

Recognizing that safety is a basic aspect of corporate activi-

Our major goal is to hand over superior facilities to our clientsties, TOYO is conducting safety training programs for all cor-through construction work that is completed without any

porate members to raise awareness of the risks and hazards

accidents or injuries. For this purpose, each construction sitethat might lead to accidents. In order to disseminate safety

member, together with clients and partners, partakes in daily

culture and improve sensitivity toward safety issues, training

activities in a planned and positive manner, with an estab-

about such issues as safety management systems and risk as-lished management system.

TOYO’s Safety & Environmental Report 2010 is available on our website. It introduces
TOYO’s various activities on safety and the environment during fiscal 2009. Some ofthese activities are explained below.

sessment is given to particular members.

Global Toyo Subcommittee Meeting
As part of the continuous improvement of the Quality Management System (QMS) of Global Toyo, members in charge of
QMS from group companies convene at Global Toyo Subcommittee Meetings held twice every year. In fiscal 2009, themeetings were held in Mumbai and Kuala Lumpur. The subjects of the meetings included a review of the annual plan andthe progress of improvement activities for QMS, Global Toyo
Standards, HSSE, and others.
12Establishment of Project
SQE Management Departmentcompany, along with due care of client’s requirements, TOYOIn April 2010, TOYO established Project SQE (Safety, Quality,

vices all over the world.

guarantees to always provide high quality products and ser-and Environment) Management Department. This integral func-

Toyo-Japan
Local
Standards

tional organization facilitates accumulation and improvementof know-how regarding project safety, quality, and environmental issues through the execution of projects and applies it
to future projects. This organization works not only to integrate
the entire Toyo Group but also for the satisfaction of clients.

Toyo-India
Local
Standards

Toyo-Korea
Local
Standards

Global Toyo
Standards

Standards of Global Toyo
TOYO holds standards of Global Toyo, which have been established on cumulative knowledge and experience gained from anumber of projects TOYO has accomplished around the globe.
With standards of Global Toyo consisting of Global Toyo Standards (GTS) and the Local Standards (LS) of each group

Toyo-China
Local
Standards

Toyo-Malaysia
LocalStandards

TOYO conducts its projects with due consideration for the environment. Examples include a fertilizer complex in Venezuela. Suchcomplex neighborhoods are rich in wildlife. On the annual Marine Day holiday, local residents, clients, and members of a local environmental study group and consortium companies pick up garbage on the coast in front of the Complex. TOYO also takes measures
for the environmental protection of water resources, noise control of equipment, observation of wildlife (turtles, iguanas, birds) in thecomplex area, study of atmospheric phenomena, and other measures.

Volunteer garbage pick up on the coast

A turtle returning to the sea

An iguana found in the complex

Birds near the complex

Construction waste and general waste are separated
by type. A person is placed in charge of managing
each type of waste, and the majority of the waste
is recycled. For example, ferrous metals are sold torecycling companies or donated along with wood tothe local technical school for use as teaching materials. Soil is also donated to restore roads in floodprone areas.

Soil donation for road restoration

TOYO ENGINEERING CORPORATION   Annual Report 201013

Financial Section
Consolidated Five-Year Summary
Toyo Engineering Corporation and Consolidated Subsidiaries

Years ended March 31

Thousands of
U.S. dollars(Note 1)Millions of yen
2010

2009

2008

2007

2006

2010

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

¥173,944¥326,248¥327,413¥223,844¥195,584$1,869,359

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

32,98434,752

34,424

22,236

17,825354,475

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

13,07015,16813,742

6,890

4,195

140,463

minority interest ....................................................

14,236

13,036

14,909

7,372

4,360

152,994

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

7,132

6,516

8,029

5,294

3,350

76,642

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

190,127

199,413280,139

282,814202,6622,043,282

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

65,29558,50957,331

51,55935,649701,723

Long-term debt ........................................................

21,947

19,91722,03826,981

19,990235,863

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

508

513

831

2,752

3,455

5,460

Income before income taxes andDepreciation and amortization..................................

2,238

2,366

2,511

1,995

1,701

24,050Common stock .........................................................

18,19918,19918,19918,19913,018

195,583

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

132,457

119,265

268,693354,984

257,840

1,423,500

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

168,179

224,416

444,434

499,237

373,518

1,807,407
U.S. dollars(Note 1)Yen

Per share:
Net income............................................................

¥ 37.12¥ 33.91¥ 41.76¥ 27.90¥ 19.11$0.40

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

329.54294.71

283.98255.50191.73

3.54

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

7.00

7.00

6.00

3.00

3.00

0.08

“Total net assets” is a newly provided section to conform to Japanese accounting standard revisions. The figures for the year
ended March 31, 2006 were stated as “Total shareholders’ equity” under the previous standards.

Gross Profit(¥ billion)

34.4 34.8

Operating Income

Net Income Per Share(¥ billion)

(¥)

15.2

33.0

13.7

13.1

41.76
37.12
33.91

22.2
27.90

17.8

6.9
19.11
4.2

’06

14

’07

’08

’09

’10

’06

’07

’08

’09

’10

’06

’07

’08

’09

’10

2010

2009

2008

2007

2006

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

14.0%

6.9%

1.9%

2.9%

7.8%

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

23.9

29.2

28.7

25.6

24.9

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

27.6

14.0

8.8

12.3

3.0

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

14.4

35.1

43.7

36.9

44.2

13.1

10.6

11.8

15.2

14.9

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

7.0

4.2

5.1

7.1

5.2

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

(71)

(78)

(78)

(66)

(68)

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

4,024

3,769

3,527

3,126

2,668

Total Assets

Total Net Assets

Composition of
Net Sales by Sector (FY2009)(¥ billion)(¥ billion)

(%)

65.3

282.8 280.1
57.3

7.0

58.5

51.6
202.7

199.4

14.0

13.1

190.1

23.9

14.4
35.6

27.6

’06

’07

’08

’09

’10

’06

’07

’08

’09

’10

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

TOYO ENGINEERING CORPORATION

Annual Report 201015

Financial Section
Management’s Discussion and Analysis
In fiscal 2009, TOYO faced an increasingly difficult business climate. In the hydrocarbon field, although some major projects
started up again, many companies continued to postpone major capital investments or slow down execution of their capital
investment plans in light of continued uncertainty about sustained economic recovery, changes in their product markets, andfinancing difficulties caused by the credit crunch. Our new orders suffered particularly because of the heated competition
from competitors, including Korean contractors.
New orders
We took such steps to expand orders as strengthening our marketing organization and emphasizing a proactive marketing
approach. However, these measures could not overcome the tough business climate, leading to total consolidated orders of¥132.5 billion ($1,424 million), only 11.1% better than last year’s performance. Of this amount, overseas orders totaled ¥92.6
billion and domestic orders accounted for ¥39.9 billion.
Sales and Earnings
Net sales totaled ¥173.9 billion ($1,869 million) as a result of successful progress of projects. Operating income was ¥13.1 billion ($140 million). Net income increased to ¥7.1 billion ($77 million).
Cash Flows
Cash from operating activities was ¥10.8 billion ($116 million). The principal source of cash was income before income taxes
and minority interest. Cash used for investing activities was ¥0.7 billion ($7 million). This mainly represented expenditure onpurchases of other assets. Cash from financing activities was ¥2.2 billion ($24 million), reflecting loan of long-term debt. The
result of the above cash flows was a net increase of ¥12.5 billion ($134 million) in cash and cash equivalents.

16

Business Risk and Other Risks
Business Risk and Other Risks
The following is a list of potential risks associated with the information concerning TOYO’s operating results and financial condition in this annual report that may have a significant bearing on investors' decisions. This is not intended to be a complete
list of these potential risks.
1. Business risk
The nature of our business activities, which mainly involve conducting projects worldwide, 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 and financial
condition. We are aware of the possibility that these risks may occur and are taking actions to reduce exposure to these risks byusing export credit insurance, maintaining a Risk Management System, Risk Control Structure 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 us
less price competitive when competing for new orders in foreign currencies. This could have an adverse effect on our operating results and financial condition. In response, the group uses foreign exchange forward contracts, procures materials andequipment in foreign currencies, utilizes the resources of its overseas bases and takes all other possible steps to minimize
exposure to foreign exchange risk.
3. Sudden increases in prices of equipment, materials and construction
In turnkey lump-sum contracts, the possibility exists of sudden and steep rises in the cost of equipment and materials, transportation, construction, labor and other items associated with a project, or of problems caused by tight demand and suppliesof these items, due to rapid change in the international situation. The possibility also exists of cost increase caused by a supplier becoming insolvent or failure of quality control or delivery schedule delay by suppliers/sub-contractors. These events may
deteriorate the profitability of a project affected by soaring cost, delivery delay and other problems. Such events may therefore have a detrimental effect on our operating results and financial condition. To reduce our exposure to these risks, we,developing our accountability system to clients and project management system in project execution, utilize our experience toenter 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.
We also diversify contract conditions such as cost reimbursable basis to reduce our risks.

TOYO ENGINEERING CORPORATION

Annual Report 201017

Financial Section
Consolidated Balance Sheets
Toyo Engineering Corporation and Consolidated Subsidiaries

March 31, 2010 and 2009

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

Assets

2010

2009

2010

Cash and deposits (Note 18) .......................................................................................

¥ 36,899¥ 33,117$ 396,555

Marketable securities (Note 13)...................................................................................

37,99429,990408,313

Notes and accounts receivable ....................................................................................

27,37335,858294,180

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

(6,972)(7,808)(74,928)

20,401

28,050219,252

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

21,67725,758232,962

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

24,69532,189265,390

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

141,666

149,104

1,522,472

Investment securities (Note 13) ...................................................................................

4,648

3,602

49,953

Investments in unconsolidated subsidiaries and affiliates (Note 13)..............................

5,372

5,147

57,733Long-term loans .........................................................................................................

78

93

841

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

3,488

3,765

37,487

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

(703)

(484)

(7,557)

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

12,88312,123

138,457

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

16,82417,509180,805

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

29,563

29,201

317,706

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

3,528

3,316

37,918

Leased assets ..........................................................................................................................

2,151

2,240

23,118Construction in progress .............................................................................................

7

5

78

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

52,07352,271

559,625

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

(19,627)(17,710)(210,930)

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

32,44634,561

348,695

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

3,132

3,625

33,658

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

¥190,127¥199,413$2,043,282

Current assets:

Investments:

Property, plant and equipment, at cost:

See notes to consolidated financial statements.

18

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

Liabilities and Net Assets

2010

Current liabilities:
Short-term borrowings ...............................................................................................
Current portion of long-term debt (Note 3).................................................................
Notes and accounts payable .......................................................................................
Income taxes payable .............................................................................................................
Advance receipts on uncompleted contracts ...................................................................
Reserve for anticipated loss on contract work .............................................................
Other current liabilities (Note 4) ..................................................................................
Total current liabilities...........................................................................................

2010

3,113
4,673
35,084878
35,568914
10,39890,628

¥

2,934
2,571
44,339419
48,658878
10,665
110,464$

21,947
1,744
4,815
5,698
34,204
124,832

19,917
2,288
3,853
4,382
30,440140,904

235,863
18,746
51,74961,231
367,589
1,341,559

Net assets:
Shareholders’ equity (Note 6)
Common stock
Authorized: 500,000,000 shares in 2010 and 2009
Issued: 192,792,539 shares in 2010 and 2009......................................................
Capital surplus.........................................................................................................
Retained earnings ....................................................................................................
Treasury stock: 751,115 shares in 2010 and 672,540 shares in 2009 .......................
Total shareholders’ equity ..............................................................................................

18,19920,76025,525(316)
64,16818,19920,761
19,642(294)
58,308

195,583
223,101
274,318(3,394)
689,608

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

619
(26)
(1,475)
(882)

127
(6)
(1,809)(1,688)

6,651
(275)
(15,852)(9,476)

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

2,009
65,295¥190,127

1,889
58,509¥199,413

21,591
701,723$2,043,282

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

¥

2009

33,46050,225377,046
9,436
382,2429,820
111,741
973,970

Contingent liabilities (Note 7)

TOYO ENGINEERING CORPORATION

Annual Report 201019

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

Years ended March 31, 2010 and 2009

Thousands of
U.S. dollars(Note 1)Millions of yen
2010

2009

2010

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

¥173,944¥326,248$1,869,359

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

140,960

291,496

1,514,884

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

32,98434,752354,475

Selling, general and administrative expenses (Note 8) ...........................................

19,914

19,584

214,012

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

13,07015,168140,463Interest and dividend income.........................................................................................

1,072

1,960

11,520Foreign exchange gain ................................................................................................

1,151

—

12,369

Reversal of allowance for doubtful receivables.......................................................................

808

—

8,679

Equity in earnings of affiliate companies .........................................................................

—

374

—

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

—

199

—

Other income:

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

304

357

3,268

3,335

2,890

35,836

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

733

750

7,880

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

—

767

—

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

—

2,516

—

Loss on impairment of fixed assets (Note 10) ..............................................................

1,213

585

13,033

Other (Note 9) ............................................................................................................

223

404

2,392

2,169

5,022

23,305

14,236

13,036

152,994

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

5,377

4,698

57,787

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

1,586

1,466

17,047

6,963

6,164

74,834

Other expenses:

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

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

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

20

(141)
¥

7,132

(356)
¥

6,516

37.12

¥

76,642

U.S. dollars(Note 1)Yen¥

(1,518)
$

33.91

$

0.40

Consolidated Statements of Changes in Net Assets (Note 17)
Toyo Engineering Corporation and Consolidated Subsidiaries

Years ended March 31, 2010 and 2009

Millions of yen

Balance at March 31, 2008 ............

Commonstock

CapitalsurplusRetainedearnings(Note 6)

TreasurystockNetunrealized
gain onsecurities¥18,199¥20,762¥14,435¥(214)¥1,248Deferred Foreign
Minorityhedge
currencyinterest
loss
translation
adjustments

Total
net
assets¥ (2)¥57,331¥163¥2,740Effect of changes in accounting policies
applied to foreign subsidiaries .........

33

33

Dividends paid to shareholders......

(1,730)(1,730)Net income .......................................

6,516

6,516

Change of scope of consolidation .......

(266)

(266)

Change of scope of equity method .....

654

654

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

(1)

(102)

(102)

22

21

Changes of items other thanshareholders’ equity...................
Balance at March 31, 2009 ............

18,19920,761

19,642(294)(1,121)(4)(1,972)(851)(3,948)127(6)(1,809)1,889

58,509Dividends paid to shareholders......

(1,249)(1,249)Net income .......................................

7,132

7,132

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

(1)

(25)

(25)

3

2

Changes of items other thanshareholders’ equity...................
Balance at March 31, 2010 ...........

¥18,199¥20,760¥25,525

Commonstock

CapitalsurplusRetainedearnings(Note 6)¥(316)

492

(20)

334

120

926

¥ 619

¥(26)

¥(1,475)¥2,009¥65,295

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

Balance at March 31, 2009 ............ $195,583 $223,112 $211,096 $(3,164)

Deferred Foreign
Minorityhedge
currencyinterest
loss
translation
adjustments$1,368 $ (60)$(19,442) $20,301

Total
net
assets$628,794

Dividends paid to shareholders......

(13,420)(13,420)

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

76,642

76,642

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

(11)

(264)

(264)

34

23

Changes of items other thanshareholders’ equity...................

5,283

Balance at March 31, 2010 ........... $195,583 $223,101 $274,318 $(3,394)(215)$6,651 $(275)

3,590

1,290

9,948

$(15,852) $21,591$701,723

See notes to consolidated financial statements.

TOYO ENGINEERING CORPORATION

Annual Report 201021

Financial Section
Consolidated Statements of Cash Flows
Toyo Engineering Corporation and Consolidated Subsidiaries

Years ended March 31, 2010 and 2009

Millions of yen

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...........................................................................
Loss on sales of marketable and investment securities, net.......................................
Loss on valuation of investment securities ................................................................
Loss on valuation of memberships ...........................................................................
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 other receivables .................................................................
Increase (decrease) in notes and accounts payable ................................................
Increase (decrease) in advance receipts on uncompleted contracts ........................
Cash from (used for) operating activities ............................................................
Cash flows from investing activities:
Purchases of property, plant and equipment ...............................................................
Purchases of other assets ............................................................................................
Purchases of investment securities ..............................................................................
Proceeds from sales of investment securities ...............................................................
(Increase) decrease in loans, net ..................................................................................
(Increase) decrease in time deposits, net .....................................................................
Other, net...................................................................................................................
Cash used for investing activities........................................................................
Cash flows from financing activities:
Increase (decrease) in short-term borrowings, net .......................................................
Proceeds from long-term debt ....................................................................................
Repayment of long-term debt .....................................................................................
Repayment of lease obligations...................................................................................
Cash dividends paid ....................................................................................................
Other .........................................................................................................................
Cash from (used for) financing activities.............................................................
Effect of exchange rate changes on cash and cash equivalents .............................
Net (decrease) increase in cash and cash equivalents..............................................
Cash and cash equivalents, beginning of the year ..................................................
Decrease in cash and cash equivalents resulting fromchange of scope of consolidation...........................................................................
Cash and cash equivalents, end of the year (Note 18).............................................
22

See notes to consolidated financial statements.

Thousands of
U.S. dollars(Note 1)

2010

2009

2010

¥ 14,236¥ 13,036$ 152,994

2,238
1,213
—
0
—
(618)
28
87
954
1,606
(1,072)733(731)(3,974)
(178)

2,366
585
7
2,516
48
(1,235)
194
(374)
721
3,417
(1,960)750(777)(8,496)
5,256

24,05013,033—0—(6,638)303
930
10,256
17,264(11,520)
7,880(7,856)(42,713)(1,912)

9,008
4,282
5,971
(9,581)(13,395)
10,807(1,756)37,371
10,396
3,429(74,455)(8,961)

96,81146,01364,169(102,967)(143,955)
116,142(508)(1,732)
(525)
4
741
827
509
(684)

(513)
(1,012)(3,136)48(484)(1,040)
1,148(4,989)(5,460)(18,618)(5,639)
46
7,964
8,884
5,470
(7,353)

98
7,253(3,121)(659)(1,249)
(80)
2,242
127
12,492
61,462(176)
1,200(6,838)(661)(1,730)(140)(8,345)(1,514)(23,809)86,533

1,056
77,947(33,540)(7,079)(13,420)(865)
24,0991,367
134,255
660,526—¥ 73,954(1,262)¥ 61,462—$ 794,781

Notes to Consolidated Financial Statements
Toyo Engineering Corporation and Consolidated Subsidiaries

1

BASIS OF PREPARATION
Toyo Engineering Corporation (the “Company”) and its domestic consolidated subsidiaries maintain their accounting
records and prepare their financial statements in accordance with accounting principles generally accepted in Japan,
and its overseas consolidated subsidiaries maintain their books of account in conformity with those of their respective countries of domicile. The accompanying consolidated financial statements have been compiled from theaccounts prepared by the Company in accordance with the provisions set forth in the Financial Instruments andExchange Law of Japan and with accounting principles generally accepted in Japan, which are different in certain
respects as to the application and disclosure requirements of International Financial Reporting Standards. Certain
reclassifications have been made to present the accompanying consolidated financial statements in a format which isfamiliar to readers outside Japan.
For the convenience of readers, the accompanying consolidated financial statements and the relevant notes havealso been presented in U.S. dollars by translating all Japanese yen amounts at the exchange rate of ¥93.05 to
U.S.$1.00 prevailing on March 31, 2010.

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 of acquisitionis amortized in principle within twenty years on a straight-line basis.
(b) Securities
All debt and equity securities other than equity securities issued by subsidiaries and affiliates are classified into one of three
categories: trading, held-to-maturity, or other 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 which the Company and its consolidated subsidiaries have the ability and intent to hold until maturity. All securities not included in trading or held-to-maturity are classified
as other securities.
Trading securities are recorded at fair value. Held-to-maturity securities are recorded at amortized cost, adjusted for theamortization or accumulation of premiums or discounts. Unrealized gains or losses on trading securities are included in earnings. Marketable securities classified as other securities are recorded at fair value with changes in unrealized holding gain or
loss, net of the applicable income taxes, included directly in net assets. Non-marketable securities classified as other securities
are recorded at cost.
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
Depreciation of assets on finance leases which do not transfer ownership of the leased assets to the lessee are calculated by
the straight-line method over the lease period with their residual value zero.
(f) Allowance for Doubtful Receivables
The Company and its consolidated 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 of credit 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 amount ofcontract work in progress.

TOYO ENGINEERING CORPORATION

Annual Report 201023

Financial Section(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.
The amounts of loss on contract work in progress of ¥392 million ($4,210 thousand) is included in reserve for anticipatedloss on contract work and shown as a liability, not as a deduction from the amount of contract work in progress.
The amount of provision for anticipated loss on contract work included in cost of sales is ¥859 million ($9,227 thousand).
(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($39,719 thousand) is amortized over 15 years on a straight-line basis. Actuarial loss is amortized over nine years within the
average of the estimated remaining service years when incurred, starting following the year of recognition. Prior service cost isamortized over 13 years within the average of the estimated remaining service years when incurred. Effective from April 1,
2008, as the average of the estimated remaining service years was shortened, the above amortization period of actuarial loss
was changed from 13 years to nine years. As a result, net periodic pension cost was increased by ¥693 million and operating
income and income before income taxes and minority interest were decreased by ¥588 million, respectively, for the year
ended March 31, 2009.
(j) Derivative Financial Instruments
Derivative financial instruments are carried at fair value under which unrealized gain or loss is recorded to earnings, except for
those which meet the criteria for deferral hedge accounting under which unrealized gain or loss is deferred as a separate component of net assets. Receivables and payables hedged by qualified forward foreign exchange contracts are translated at thecorresponding foreign exchange contract rates.
(k) Foreign Currency Translation
Both short-term and long-term receivables and payables 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 at their balance sheet date, except for common stock and capital surplus, which are translated at their historicalexchange rates. Revenues, expenses and net income for the year are translated at the rate of exchange in effect at their balance sheet date.
Differences arising from translation are presented as “Foreign currency translation adjustments” in the accompanying consolidated balance sheets.
(l) Recognition of Revenues
Formerly, revenues and costs of construction contracts on long-term (over 18 months) were recognized by the percentage-ofcompletion method (hereinafter POCM) for contracts with a value of ¥5 billion or greater.
Otherwise revenues are recognized on the completion of construction work and acceptance by the client.
Effective April 1, 2009, the Company and its consolidated subsidiaries have applied ”Accounting Standard for Construction
Contracts“ (”Statement No. 15“ issued by ASBJ on December 27, 2007) and ”Guidance on Accounting Standards forConstruction Contracts“ (”Guidance No. 18“ issued by ASBJ on December 27, 2007).
Under the new accounting standard and guidance, revenues and costs of construction contracts that commenced on or after April
1, 2009, of which the percentage of completion can be reliably estimated, are recognized by the percentage-of-completion method.
The percentage of completion is calculated at the cost incurred as a percentage of the estimated total cost. The completed-contract
method continues to be applied for contracts for which the percentage of completion cannot be reliably estimated.
This change had no material effect on the consolidated statement of income for the year ended March 31, 2010.
(m) Per Share Information
Net income per share is computed based on the weighted average number of shares outstanding during each year. Diluted net
income per share is not presented since there was no potential for dilution by the issuance of common stock in 2010 or 2009.
Total net assets per share is computed based on outstanding shares at the balance sheet date.
(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. Deferred tax assets and liabilities are measured using theenacted tax rates and laws which will be in effect when the differences are expected to be reversed.
(o) Consolidated Tax Return
The Company files a consolidated tax return with certain domestic subsidiaries.

24

(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 or lessto be cash equivalents.
(q) Accounting Standards Adopted by Foreign Subsidiaries
Effective from April 1, 2008, the Company and its consolidated subsidiaries have changed accounting policy by adopting“Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements” (“Practical Issues Task Force No. 18” issued by ASBJ, on May 17, 2006).
This change had no material effect on the consolidated statement of income for the year ended March 31, 2009.

3

LONG-TERM DEBT
Long-term debt at March 31, 2010 and 2009 is summarized as follows:
Thousands of
U.S. dollars

Millions of yen

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

2010

2009

2010

¥ 7,644
17,9761,000
26,620
4,673¥21,947¥ 8,145
13,3431,000
22,4882,571¥19,917$ 82,150
193,191
10,747
286,088
50,225$235,863

The following assets at March 31, 2010 and 2009 were pledged as collateral principally for long-term debt:
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,
Land and buildings, net of accumulated depreciation .......................................

2010

2009

2010

¥7,857¥7,857¥8,385¥8,385$84,435$84,435

The following schedule shows the maturities of long-term debt subsequent to March 31, 2010:
Millions of yen
Years ending March 31,
2011 ..................................................................................................................................
¥ 4,673
2012 ..................................................................................................................................
14,0232013 ..................................................................................................................................
2,271
2014 ..................................................................................................................................
2,099
2015 ..................................................................................................................................
2,072
2016 and thereafter ...........................................................................................................
1,482¥26,620

Thousands of
U.S. dollars$ 50,225
150,70924,40622,553
22,272
15,923$286,088

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 balances of unused commitment-line based on these contracts at the end of the consolidated reporting periods are ¥6,500 million ($69,855 thousand) in 2010 and ¥6,500 million in 2009.

TOYO ENGINEERING CORPORATION

Annual Report 201025

Financial Section

4

INCOME TAXESThe statutory tax rates applicable to the Company and its domestic subsidiaries for the year ended March 31, 2010
and 2009 were approximately 40.4%. Income taxes of the foreign 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 of income
are not equal to the above-mentioned statutory tax rate for the following reasons:Year ended March 31, 2010
Statutory tax rate in Japan ...........................................................................................................................
Adjustments:
Permanently nondeductible expenses..................................................................................................................
Permanently nontaxable dividends received ........................................................................................................
Temporary differences excluded from calculation of deferred tax assets.............................................................
Difference in tax rates for foreign subsidiaries .....................................................................................................
Other....................................................................................................................................................................
Effective tax rate ...........................................................................................................................................

40.4%
1.4
(0.8)
23.3
(2.4)
(13.0)
48.9%

Year ended March 31, 2009
Statutory tax rate in Japan ...........................................................................................................................
Adjustments:
Permanently nondeductible expenses..................................................................................................................
Permanently nontaxable dividends received ........................................................................................................
Temporary differences excluded from calculation of deferred tax assets.............................................................
Difference in tax rates for foreign subsidiaries .....................................................................................................
Other....................................................................................................................................................................
Effective tax rate ...........................................................................................................................................

40.4%
1.7
(1.0)
15.0
(2.0)
(6.8)
47.3%

(2) Significant components of the deferred income tax assets and liabilities at March 31, 2010 and 2009 are as follows:
Millions of yen
2010

2009

Thousands of
U.S. dollars
2010

Deferred tax assets (gross):
¥ 212
¥ 391
$ 2,273
Reserve for bonuses.......................................................................................
Accrued retirement benefits ..........................................................................
1,235
1,418
13,268Reserve for compensation for completed works.............................................
396
719
4,258
Other ............................................................................................................
1,204
1,412
12,944
Total deferred tax assets (gross) ........................................................................
3,047
3,940
32,743
Deferred tax liabilities (gross):
Difference in net unrealized gain on securities ...............................................
(538)
(75)
(5,783)
Undistributed earnings of subsidiaries and affiliates .......................................
(810)
(623)
(8,706)
Other ............................................................................................................
(705)
(202)
(7,575)
Total deferred tax liabilities (gross) ....................................................................
(2,053)(900)(22,064)
Net deferred tax assets..............................................................................................
¥ 994¥3,040$ 10,679
Note: The Company and its consolidated subsidiaries had temporary differences excluded from calculation ofdeferred tax assets of ¥12,097 million ($130,010 thousand) and ¥5,127 million at March 31, 2010 and 2009,
respectively, which are available to be offset against future taxable income.

26

(3) Net deferred tax assets at March 31, 2010 and 2009 are included in the consolidated balance sheets as follows:
Thousands of
U.S. dollars

Millions of yen

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

5

2010

2009

2010

¥1,753
122
(0)
(881)
¥ 994

¥1,651
1,447
(15)
(43)
¥3,040$18,841
1,309(3)(9,468)$10,679

RETIREMENT BENEFITSThe Company and certain consolidated subsidiaries have defined benefit pension plans which provide for pension
annuity payments or lump-sum payments to eligible employees upon retirement.
The Company also has defined contribution pension plan, which was transferred from a portion of defined benefit
pension plan in May, 2003.
(1) Accrued retirement benefits for employees at March 31, 2010 and 2009 consisted of the following:Thousands of
U.S. dollars

Millions of yen
2010

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.......................................................

2009¥(15,643) ¥(15,708)
8,903
7,958
(6,740)(7,750)
1,241
1,487
1,812
3,726
(1,128)(1,316)¥ (4,815)) ¥ (3,853)

2010$(168,112)
95,675(72,437)
13,333
19,478(12,122)$ (51,748)(2) Net periodic pension cost for the years ended March 31, 2010 and 2009 consisted of the following:Thousands of
U.S. dollars

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

2010

2009

2010

¥ 691
291
—
246
1,315
(188)
115
2,470
¥2,470

¥ 794
295
—
246
1,199
(187)
118
2,465
¥2,465$ 7,429
3,130
—
2,648
14,127(2,025)
1,241
26,550$26,550(3) Basis of calculation of projected benefit obligation for the years ended 2010 and 2009, respectively.
Method of allocation of estimated pension cost
Straight-line method
Discount rate
Mainly 2.0%
Expected rate of return on plan assets
Mainly 0.0%
Amortization period for unrecognized actuarial loss
Mainly nine years
Amortization period for unrecognized obligation at transition
15 years
Amortization period for unrecognized prior service cost
13 years

TOYO ENGINEERING CORPORATION

Annual Report 201027

Financial Section

6

SHAREHOLDERS’ EQUITYThe Corporation Law of Japan (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 the legal reserve)
be transferred to the capital reserve and the legal reserve, respectively, until the sum of the capital reserve and thelegal reserve equals 25% of the common stock account. Such distributions can be made at any time by resolution of
the shareholders, or by the Board of Directors if certain conditions are met, but neither the capital reserve nor thelegal 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 ¥528 million ($5,671 thousand) and ¥1,911 million at March 31, 2010 and 2009, respectively.

8

RESEARCH AND DEVELOPMENT COSTS
Research and development costs included in selling, general and administrative expenses for the years ended March
31, 2010 and 2009 amounted to ¥1,417 million ($15,233 thousand) and ¥1,178 million, respectively.

9

OTHER EXPENSES“Other” in “Other expenses” for the years ended March 31, 2010 and 2009 consisted of the following:
Millions of yen

Years ended March 31,
Loss on valuation of memberships ....................................................................
Loss on sales of investment securities................................................................
Loss on disposal of fixed assets .........................................................................
Equity in losses of affiliated companies .............................................................
Other ...............................................................................................................
Total .......................................................................................................

10

2010

¥ —
—
15
87
121
¥223

2009

¥ 48
8
147
—
201
¥404

Thousands of
U.S. dollars
2010

$

—
—
158
930
1,304
$2,392IMPAIRMENT OF FIXED ASSETSThe Company and its consolidated subsidiaries adopted the accounting standard for impairment of fixed assets. The
loss on impairment of fixed assets for the year ended March 31, 2010 and 2009 were comprised of the following:
Year ended March 31, 2010
Location: Chiba Prefecture and Fukushima Prefecture
Major use: Real Estate
Asset category: Land, building and structure, etc.
Amount: ¥1,213 million ($13,033 thousand)Year ended March 31, 2009
Location: Chiba Prefecture
Major use: Real Estate
Asset category: Building and structure, etc.
Amount: ¥585 million

28

The Company and its consolidated subsidiaries have grouped their fixed assets into each company for EPC Business,each object for Real Estate and Idle Assets.
Due to decline in rents’ level, the Company and its consolidated subsidiaries reduced the book value of some assets
to the recoverable amounts.
The recoverable amounts of the asset groups were measured by applying net selling prices which were assessed
based on the current market price of land and other salable prices or value in use which was computed by discounting estimated cash flow in the future using discount rate of 8.2% for the year ended March 31, 2009, and by using
real-estate appraisal values, etc., for the year ended March 31, 2010.

11

LEASES
The Company and its consolidated subsidiaries have adopted “Accounting Standard for Lease Transactions.”(a) Finance Leases
Finance leases are capitalized, and recorded on the balance sheet based on finance lease contracts.
(b) Operating Leases
Operating leases are not capitalized, but future minimum lease payments and receivables are as follows:(b-1) Operating Leases (as Lessee)
Future minimum lease payments subsequent to March 31, 2010 and 2009 for noncancelable operating leases are
summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,

2010

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

2009

¥163
190
¥353

¥159
337
¥496

2010

$1,7492,040$3,789(b-2) Operating Leases (as Lessor)
Future minimum lease receivables subsequent to March 31, 2010 and 2009 for noncancelable operating leases are
summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Years ended March 31,

2010

2009

2010

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

¥ 925
6,215
¥7,140¥ 923
7,130¥8,053$ 9,938
66,797$76,735

TOYO ENGINEERING CORPORATION

Annual Report 201029

Financial Section

12

FINANCIAL INSTRUMENTS
For the year ended March 31, 2010
Effective April 1, 2009, the Company and its consolidated subsidiaries have adopted “Accounting Standard for
Financial Instruments and its Implementation Guidance” (“Statement No. 10” revised by ASBJ on March 10, 2008)
and “Guidance on Disclosure about Fair Value of Financial Instruments” (“Guidance No. 19” issued by ASBJ on
March 10, 2008).
1. Condition of financial instruments
The Company and its consolidated subsidiaries hold their temporary cash surplus through low-risk financial assets
and raise funds through borrowing from banks and issuing corporate bonds.
Derivative financial instruments are utilized for reducing the risk of exchange fluctuations, interest fluctuations,and credit. Therefore, there is no derivatives for speculative purpose.
Notes and accounts receivable are exposed to credit risks of customers and risks of exchange fluctuations. We deal
with these risks by organizing careful reviews on awarding contracts, letters of credit, and export credit insurance.
We minimize exchange fluctuation risks by organizing their corresponding forward-exchange contracts, in principle.
Marketable securities and investment securities are exposed to volatility risks of market price. We deal with theserisks by periodic monitoring, as they mainly consist of short-term held-to-maturity bonds and stocks of our business
partner.
Notes and accounts payable are mostly due within one year.
Borrowings from banks and corporate bonds are raised mainly for capital investment or working capital. For somelong-term borrowings, we entered into interest swap agreements to minimize risks of interest rate fluctuations.
Regarding derivatives, forward-exchange contracts are used to minimize exchange fluctuation in foreign-currency
operations, and interest-swap contracts are used to minimize interest rate fluctuations.
The fair value of financial instruments is based on their quoted market prices, if available, or reasonably estimatedamounts if there is no market price. Since various assumptions and factors are reflected in estimating the fair value,
different assumptions and factors could result in different fair value. In addition, the notional amounts below are notnecessarily indicative of the actual market risk involved in derivative transactions.

30

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

At March 31, 2010
(1) Cash and deposits ..............................................................................
(2) Notes and accounts receivable ............................................................
Less: Allowance for doubtful receivables ............................................
Notes and accounts receivable, net ....................................................

Book value¥ 36,899
27,373(1,444)25,929(3) Other current assets............................................................................
Less: Allowance for doubtful receivables ............................................
Other current assets, net ...................................................................
(4) Marketable and investment securities
Held-to-maturity securities .................................................................
Other securities .................................................................................
Investments in unconsolidated subsidiaries and affiliates ....................
Total of assets ...................................................................................
(1) Notes and accounts payable ...............................................................
(2) Short-term borrowings .......................................................................
(3) Bonds .................................................................................................
(4) Long-term borrowings (including current portion)...............................
Total of liabilities ...............................................................................
Derivatives
not designated as hedging instruments.................................................
designated as hedging instruments.......................................................
Total derivatives.................................................................................

¥

Fair value

Unrealized
gain / loss

¥ 36,899¥—

25,926(3)

11,986(2)
11,984

11,984—37,9942,860
2,486
118,152(35,084)(3,113)(1,000)(25,621)(64,818)

37,994
2,860
3,916
119,579(35,084)(3,113)(1,017)(25,964)(65,178)

(0)
—
1,430
1,427
(0)
—
17
343
360

1
(26)
(25)

1
(26)
(25)

—
—
—

¥

¥

Notes and accounts receivable and other current assets listed above are offset by the corresponding figures ofallowance for doubtful receivables listed above. Net receivables and payables derived as a result of derivative transactions are presented. Values in parentheses show contra-asset account, net liabilities and unrealized loss.
(Note 1) Computational method and related issues
Assets(1) Cash and deposits
Book values are used as fair values because they are nearly equal to such book values.
(2) (3) Notes and accounts receivable and other current assets
Book values for items which are settled in a short-term used as fair values of these items because they are nearly
equal to such book values. Fair values of other items are based on the present value discounted by the proper
discount rate coupled with period for settlement and credit risks.
(4) Marketable and investment securities
Fair value of stock items are based on the market prices and bond items are based on the market prices or their priceprovided by the financial institution.

TOYO ENGINEERING CORPORATION

Annual Report 201031

Financial Section

Liabilities(1) Notes and accounts payable
Book values for items which are settled in a short-term are used as fair values of these items because they arenearly equal to such book values. Fair values of other items are based on the present value discounted by the proper
discount rate coupled with period for settlement and credit risks.
(2) Short-term borrowings
Book values are used as fair values because they are nearly equal to such book values.
(3) Bonds
Fair values are shown as the present value discounted by the proper discount rate coupled with period for settlement
and credit risks.
(4) Long-term borrowings (including repayment of long-term borrowings within one year)
The present values of the principal and total interest, discounted by the rate assumed to be applied to the new borrowings under the same conditions, are used as the fair values.
Derivative Transactions
See “14 DERIVATIVE TRANSACTIONS.”(Note 2) Financial instruments for which it is extremely difficult to determine the fair value
Unlisted securities that amounted to ¥4,053 million ($43,558 thousand) as of March 31, 2010 are excluded from theabove table because they are deemed extremely difficult to determine the fair values; they do not have market prices
and it is not possible to conduct alternative methods such as the estimation of their future cash flows.
(Note 3) Redemption schedule for monetary assets with maturity date and marketable securities
Millions of yen
Within one year

After one year
After five years
through five years through ten years

After ten years

Cash and deposits .............................................................
Notes and accounts receivable...........................................
Other current assets ..........................................................

¥ 36,899
24,435
11,984

¥

—
2,939
2

¥—
—
—

¥—
—
—

Held-to-maturity securities.................................................
Total............................................................................

37,994¥111,312—¥2,941—¥——¥—After one year
After two years After three years After four years
through two years through three years through four years through five years

Over five years(Note 4) Schedule for repayment of bonds and long-term borrowings
Millions of yen
Within one year

Bonds....................................
Long-term borrowings(including current portion)..
Total ...............................

32

¥

—

¥ 1,000

¥

—

4,673
¥4,67313,023¥14,023

2,271¥2,271¥—

2,098¥2,098¥—2,072¥2,072¥—

1,482¥1,482

13

INVESTMENT SECURITIESThe book value, unrealized gain and loss and the related fair value of held-to-maturity securities at March 31, 2010
are summarized as follows:
Millions of yen

At March 31, 2010
Government bonds ...........................................................................

Book
Value

Unrealized
Gain

Unrealized
Loss

¥0

¥(0)

¥37,994

Fair
Value

¥37,994

The cost, unrealized gain and loss and the related book value of other securities with available fair values at March
31, 2010 are summarized as follows:
Millions of yen

At March 31, 2010
Equity securities ................................................................................

Acquisition
Cost

Unrealized
Gain

Unrealized
Loss¥2,927¥1,441

¥—

Book
Value

¥4,368The contractual maturities of debt securities classified as other securities and held-to-maturity are as follows:
At March 31, 2010

Millions of yen

Thousands of
U.S. dollars¥37,994———¥37,994$408,313———$408,313

Government bonds
Due within one year ...........................................................................................................
Due after one year through five years.................................................................................
Due after five years through ten years ................................................................................
Due after ten years.............................................................................................................
Total .........................................................................................................................

The book value, unrealized gain and loss and the related fair value of held-to-maturity securities at March 31, 2009are summarized as follows:
Millions of yen

At March 31, 2009
Government bonds ...........................................................................

Book
Value

¥29,990

Unrealized
Gain

Unrealized
Loss

¥1

¥(0)

Fair
Value

¥29,991

The cost, unrealized gain and loss and the related book value of other securities with available fair values at March
31, 2009 are summarized as follows:
Millions of yen

At March 31, 2009
Equity securities ................................................................................

Acquisition
Cost

Unrealized
Gain

Unrealized
Loss¥2,927

¥532

¥(30)

Book
Value

¥3,429The contractual maturities of debt securities classified as other securities and held-to-maturity are as follows:
At March 31, 2009

Millions of yen

Government bonds
Due within one year ...............................................................................................................................
Due after one year through five years.....................................................................................................
Due after five years through ten years ....................................................................................................
Due after ten years.................................................................................................................................
Total .............................................................................................................................................

TOYO ENGINEERING CORPORATION¥29,990———¥29,990

Annual Report 201033

Financial Section

14

DERIVATIVE TRANSACTIONS
For the year ended March 31, 2010
1. Derivatives not designated as hedging instruments(1) Currency-related
Millions of yen
Notional
amountsdue overone year

Fair value

Unrealized
gain / loss

45

—

2

2

3
48

—
—

(0)
2

(0)
2

Fair value

Computational
methodof fair value

All notionalamounts

Non-market transaction:
Foreign exchange forward contracts
Selling
USD ........................................................................
Buying
USD ........................................................................
Total .......................................................................
2. Derivatives designated as hedging instruments(1) Currency-related

Millions of yen

Main hedged
items

All notionalamounts

Notional
amountsdue overone year

The method unrealized gains or losses are recorded in deferred hedge gains or losses:
Foreign exchange forward contracts
Selling
USD ...................................................
772
55
Accounts
receivable
and
EUR ...................................................
175—
accounts
BuyingpayableUSD ...................................................
369—
EUR ...................................................
56—
The method unrealized gains or losses are included in their hedged items:
Foreign exchange forward contracts
Selling
USD ...................................................
3,204
149
EUR ...................................................
843—
Accounts
receivable andBuying ..................................................
accounts
2,460—
USD ...................................................
payableEUR ...................................................
433—
CHF ...................................................
25—
GBP ...................................................
3—
Total ..................................................
8,340
204

34

(22)
13
14
(8)

N/A

(3)

Based onprices offeredby the financial
institution

Based onforwardexchangemarketpricesFor the year ended March 31, 2010
2. Derivatives designated as hedging instruments(2) Interest-related
Millions of yen

Main hedged
item

All notionalamounts

Notional
amountsdue overone year

Fair value

The method unrealized gains or losses are recorded in deferred hedge gains or losses:
Interest swap contracts
318
282
floating-for-fixed rate swap...................
Long-term
borrowings(23)

Computational
methodof fair value

Based onprice provided
by the financial
institution

The method unrealized gains or losses are recorded over the terms of such agreements in interest expense:
Interest swap contracts
12,489
9,979
floating-for-fixed rate swap...................
N/A
Long-term
Based onborrowings
price provided
by the financial
institution
Total ..................................................

12,807

10,261(23)

For the year ended March 31, 2009
1. Derivatives not designated as hedging instruments(1) Currency-related
Millions of yen
Notional
amountsdue overone year

Fair value

Unrealized
gain / loss

1,281

410

1,525

(244)

—
1,281

—
410

—
1,525

—
(244)

All notionalamounts

Non-market transaction:
Foreign exchange forward contracts
Selling
USD ........................................................................
Buying
USD ........................................................................
Total .......................................................................
(2) Interest-related

Millions of yen

All notionalamounts

Non-market transaction:
Interest swap contracts
floating-for-fixed rate swap........................................
Total .......................................................................

——

Notional
amountsdue overone year

Fair value

Unrealized
Gain / Loss

—
—

—
—

—
—

TOYO ENGINEERING CORPORATION

Annual Report 201035

Financial Section

15

RENTAL PROPERTIESFor the year ended March 31, 2010
The Company and its consolidated subsidiaries have adopted “Accounting Standard for Disclosures about Fair Valueof Investment and Rental Properties” (“Statement No. 20” issued by ASBJ on November 28, 2008) and “Guidanceon Accounting Standard for Disclosures about Fair Value of Investment and Rental Properties” (“Guidance No. 23”
issued by ASBJ on November 28, 2008).
The Company and some of its consolidated subsidiaries own their commercial facilities, residences and office buildings (including land) for rent in Chiba prefecture and the other areas. For the year ended March 31, 2010, theCompany and some of its consolidated subsidiaries recorded ¥1,068 million of rental revenues and ¥1,191 million of
impairment loss for the aforementioned rental properties.
Book value, increase (decrease) in value, and fair value of rental properties are listed below.
Millions of yen
Book value
at March 31, 2009

Increase (decrease)in book value

Book value
at March 31, 2010

Fair value
at March 31, 2010

19,929(1,775)
18,15423,496
Notes: 1. Book value is calculated by deducting accumulated depreciation and accumulated impairment loss from its
acquisition cost.
2. Major item in “Increase (decrease) in value” consists of ¥1,191 million ($12,804 thousand) of impairment
loss.
3. Computational method of fair value
Mainly based on Real Estate Appraisal Standards.

36

16

SEGMENT INFORMATION(1) Business Segments
Millions of yen

Year ended March 31, 2010
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¥170,892
6
170,898
158,828
12,070¥ 3,052
263
3,315
2,315
1,000

¥173,944
269
174,213161,143
13,070¥¥161,729
1,571
2,184

¥22,422661
8¥184,151
2,232
2,192

¥5,976 ¥190,127
(0)
2,232
—
2,192

— ¥173,944(269)—(269) 173,944(269) 160,874
013,070Millions of yen

Year ended March 31, 2009

EPC
BusinessReal
EstateTotal

Eliminations
and Other Consolidated

I Net sales and operating income:Net sales(1) Net sales to outside customers ................................
¥322,690¥ 3,558 ¥326,248¥ — ¥326,248(2) Inter-segment net sales ...........................................
6
266
272
(272)
—
Total ............................................................................
322,696
3,824
326,520(272) 326,248
Operating expenses.........................................................
308,638
2,719
311,357(277) 311,080
Operating income ........................................................
14,058
1,105
15,163
5
15,168
II Assets, depreciation and capital expenditures:¥170,597¥24,308 ¥194,905¥4,508 ¥199,413
Assets .............................................................................
Depreciation....................................................................
1,602
765
2,367
(1)
2,366
Capital expenditures........................................................
1,668
67
1,735
—
1,735
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 its consolidated subsidiaries are allocated tothe corresponding business segments.
4.Assets included in “Eliminations and Other” for the years ended March 31, 2010 and 2009 totaling¥6,138 million ($65,963 thousand) and ¥4,677 million primarily consisted of investment in securities.
5.The impairment losses recorded in Real Estate for the years ended March 31, 2010 and 2009 were ¥1,213
million ($13,033 thousand) and ¥585 million, respectively.

TOYO ENGINEERING CORPORATION

Annual Report 201037

Financial Section(2) Geographic Segments
Millions of yen

Year ended March 31, 2010
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 .............................................................................

Eliminations
and Other Consolidated

Japan

OthersTotal¥157,487
426
157,913
146,835
11,078¥16,457
12,42528,88227,014
1,868¥173,944
12,851
186,795
173,849
12,946¥¥178,061¥18,567¥196,628¥ (6,501) ¥190,127— ¥173,944(12,851)—(12,851) 173,944(12,975) 160,874
124
13,070Millions of yen

Year ended March 31, 2009

Japan

OthersTotal

Eliminations
and Other Consolidated

I Net sales and operating income:Net sales(1) Net sales to outside customers ................................
¥308,688¥17,560 ¥326,248 ¥— ¥326,248(2) Inter-segment net sales ...........................................
742
16,30917,051(17,051)—
Total ............................................................................
309,430
33,869343,299(17,051) 326,248
Operating expenses.........................................................
296,270
32,057328,327(17,247) 311,080
Operating income ........................................................
13,1601,812
14,972
196
15,168
II Assets:
Assets .............................................................................
¥187,634¥20,548 ¥208,182 ¥ (8,769) ¥199,413
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, 2010
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¥22,251¥23,681¥2,374¥59,806¥14,890

12.8%

13.6%

1.3%

34.4%

8.6%

¥123,002
173,944
70.7%

Millions of yen

Year ended March 31, 2009
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¥45,839¥74,361¥15,712¥106,252¥12,371

14.1%

22.8%

4.8%

32.6%

3.8%

¥254,535
326,248
78.1%

Each area mainly represents the following countries:
Southeast Asia: Thailand, Indonesia, and Singapore
Southwest Asia, Middle East and Africa: India, Iran, Qatar, and Saudi Arabia
Russia and Central Asia: Russia
Central and South America: Venezuela and Brazil
Others: PR China and Korea

38

17

SUPPLEMENTARY INFORMATION FOR CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended March 31, 2010(a) Type and number of outstanding sharesYear ended March 31, 2010
Number of shares
Balance at
beginning of year

Type of shares

Increase in shares
during the year

Decrease in shares
during the year

Balance at
end of year

Issued stock:
Common stock

192,792,539——

192,792,539

Total

192,792,539——

192,792,539

672,540

85,7277,152

751,115

Treasury stock:
Common stock

Total
672,540
85,7277,152
751,115
Notes: 1.Treasury stock increased by 85,727 shares due to the repurchase of shares less than one unit.
2.Treasury stock decreased by 7,152 shares due to the sale of shares less than one unit.
(b) Dividends(b-1) Dividends paid to shareholders
Date ofapproval

Resolution
approved byType ofsharesJune 23,2009

Annualgeneralmeeting ofshareholders

November 11,
2009

Board ofDirectors

AmountAmountAmountper share

Amountper share(Yen)(U.S. Dollars)(Millions of yen)(Thousands of
U.S. Dollars)Common
stock

768

8,259

4

Common
stock

480

5,162

2.5

Shareholders’
cut-off date

Effective
date

0.04

March 31,2009

June 24,
2009

0.03

September 30, December 1,
2009
2009

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

Resolution
approved byType ofsharesJune 23,2010

Annualgeneralmeeting ofshareholders

Commonstock

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

864

9,287

Paid
from
Retainedearnings

Amountper share

Amountper share(Yen)(U.S. Dollars)

4.5

0.05

Shareholders’
cut-off date

Effective
date

March 31,2010

June 24,
2010

TOYO ENGINEERING CORPORATION

Annual Report 201039

Financial Section

For the year ended March 31, 2009(a) Type and number of outstanding sharesYear ended March 31, 2009
Number of shares
Balance at
beginning of year

Type of shares

Increase in shares
during the year

Decrease in shares
during the year

Balance at
end of year

Issued stock:
Common stock

192,792,539——

192,792,539

Total

192,792,539——

192,792,539

553,293

168,350

49,103

672,540

Treasury stock:
Common stockTotal
553,293
168,350
49,103
672,540
Notes: 1.Treasury stock increased by 168,350 shares due to the repurchase of shares less than one unit.
2.Treasury stock decreased by 49,103 shares due to the sale of shares less than one unit.
(b) Dividends(b-1) Dividends paid to shareholders
Date ofapproval

Resolution
approved byType ofsharesAmountJune 24,2008

Annualgeneralmeeting ofshareholders

Common
stock

1,153

November 12,
2008

Board ofDirectors

Commonstock

576(Millions of yen)Amountper share

Shareholders’
cut-off date

Effectivedate

6

March 31,2008

June 25,2008

3

September 30, December 11,
2008
2008

(Yen)

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

40

Date ofapproval

Resolution
approved byType ofsharesJune 23,2009

Annualgeneralmeeting ofshareholders

Commonstock

Amount(Millions of yen)

768

Paid
from
Retainedearnings

Amountper share(Yen)

4

Shareholders’
cut-off date

Effective
date

March 31,2009

June 24,
2009

18

CONSOLIDATED STATEMENTS OF CASH FLOWS
A reconciliation between the balance of cash and deposits reflected in the accompanying consolidated balance
sheets and that of cash and cash equivalents in the accompanying consolidated statements of cash flows as ofMarch 31, 2010 and 2009 is summarized as follows:
Thousands of
U.S. dollars

Millions of yen

19Years ended March 31,

2010

2009

2010

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

¥36,899(939)¥33,117(1,645)$396,555(10,087)

37,994¥73,954

29,990¥61,462

408,313$794,781

RELATED PARTY TRANSACTIONS
Effective from April 1, 2008, the Company and its consolidated subsidiaries have adopted “Accounting Standard for
Related Party Disclosures” (“Statement No. 11” issued by ASBJ, on October 17, 2006) and “Guidance on
Accounting Standard for Related Party Disclosures” (“Guidance No. 13” issued by ASBJ, on October 17, 2006).
Related party transactions during the years ended March 31, 2010 and 2009, were summarized as follows:
Unconsolidated subsidiary
Millions of yen
For the years ended March 31,
Name: CCDL CONSTRUCOES DE DUTOS LTDA.

2010
Transaction
amountTitle ofaccount

2009
Accountbalance

Transaction
amountTitle ofaccount

Accountbalance

Address: Brazil
Capital and investments: 1,139 thousand BRL
Business: Construction
Equity ownership percentage:— Short-term
2,826— Short-term
2,141
Holding 60% directly
loan
loan
Relation with related party:
Loan for operating fund
Summary of transactions:
Loan for operating fund
Notes: Interest rate on loan is determined by considering effective market rates.
The Company wrote off ¥2,713 million and then reserved ¥363 million of allowance for doubtful accounts at
March 31, 2009, against Short-term loan above.
The Company decreased ¥102 million ($1,098 thousand) and then reserved ¥261 million ($2,805 thousand)of allowance for doubtful accounts at March 31, 2010, against Short-term loan above.

TOYO ENGINEERING CORPORATION

Annual Report 201041

Financial Section

Affiliate
Millions of yen
For the years ended March 31,
Name: NEDL - CONSTRUCOES DE DUTOS
DO NORDESTE LTDA.

2010
Transaction
amountTitle ofaccount

2009
Accountbalance

Transaction
amountTitle ofaccount

Accountbalance

Address: Brazil
Capital and investments: 2,524 thousand BRL
Business: Construction
Equity ownership percentage:— Short-term
5,750
756 Short-term
6,466
Holding 42% directly
loan
loan
Relation with related party:
Loan for operating fund
Summary of transactions:
Loan for operating fund
Notes: Interest rate on loan is determined by considering effective market rates.
The Company increased ¥3,954 million and then reserved ¥5,370 million of allowance for doubtful accounts
at March 31, 2009, against Short-term loan above.
The Company decreased ¥1,424 million ($15,300 thousand) and then reserved ¥3,947 million ($42,416
thousand) of allowance for doubtful accounts at March 31, 2010, against Short-term loan above.

42

Independent Auditors’ Report

TOYO ENGINEERING CORPORATION

Annual Report 201043

Worldwide Network
Jakarta

Kuala Lumpur

Indonesia

Malaysia◉ 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◉ 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◉ Tehran

Unit No. 3, 4th Fl., No. 2, Saba Ave., Africa Ave.,
Tehran, Iran
Tel: 98-21-2204-3808/3869
Fax: 98-21-2204-3776◉ Moscow

Room No. 605, World Trade Center,
Krasnopresnenskaya Nab., 12, Moscow 123610, Russia
Tel: 7-495-258-2064/1504
Fax: 7-495-258-2065
Global Toyo and Group Companies■ Toyo Engineering Korea Limited

Engineering and construction for plants 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
http://www.toyokorea.com/■ Toyo Engineering Corporation, China

Engineering and construction for plants and facilities
18th Fl., Shanghai Zhongrong Plaza, No. 1088
Pudong South Road, Pudong New District,
Shanghai 200122, China
Tel: 86-21-6187-1270
Fax: 86-21-5888-8864/8874■ Toyo Engineering & Construction Sdn. Bhd.

Engineering and construction for plants and facilities
Suite 25.4, 25th Fl., Menara Haw Par,
Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia
Tel: 603-2731-1100
Fax: 603-2731-1110
http://www.toyo-m.com.my/■ Toyo Engineering India Limited

44

Engineering and construction for plants and facilities“Toyo House,” L.B.S. Marg, Kanjurmarg (West),
Mumbai-400 078, India
Tel: 91-22-2573-7000
Fax: 91-22-2573-7520/7521
http://www.toyoindia.com/

TehranIran● HEAD OFFICE
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/

Offices

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

Doha

MumbaiBangkok

Shanghai

Beijing

China

China

Seoul
Korea

Moscow
RussiaLuxembourg

Japan■ Toyo Engineering Europe, S.A.

Procurement services in Europe
25, Route d’Esch, L-1470, Luxembourg
Tel: 352-497511
Fax: 352-487555

Calgary

Rio de Janeiro

CanadaBrazilHoustonU.S.A.

CaracasVenezuela■ Toyo Canada Corporation

Engineering and construction for plants and facilities#640 Ford Tower, 633, 6th Avenue SW,
Calgary, Alberta T2P 2Y5, Canada
Tel: 1-403-237-8117
Fax: 1-403-237-8385■ Toyo U.S.A., Inc.

Procurement services and market developmentin the U.S.A.
15415 Katy Freeway, Suite 600,
Houston, TX 77094, U.S.A.
Tel: 1-281-579-8900
Fax: 1-281-599-9337■ Toyo Ingeniería de Venezuela, C.A.

Engineering and construction for plants and facilities
Edif. Cavendes, Piso 10, Av. Francisco de Miranda
c/1ra Av., Urb. Los Palos Grandes,
Caracas 1062, Venezuela
Tel: 58-212-286-8696
Fax: 58-212-285-1354■ Toyo do Brasil—Consultoria E Construcoes

Industriais Ltda.
Engineering and construction for plants 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■ Toyo-Thai Corporation Public Company Limited

Engineering and construction for plants and facilities
28th Fl., Sermmit Tower, 159 / 41-44 Sukhumvit 21,
Asoke Road, North Klongtoey, Wattana, Bangkok
10110, Thailand
Tel: 66-2-260-8505
Fax: 66-2-260-8525/8526
http://www.toyo-thai.com/
Domestic● 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● Tecno Frontier Co., Ltd.
Environmental engineering and construction 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●T EC Software &Technical Services Corporation
Staffing services, Job placement services, andTranslation / Interpretation
7-11-5 Honcho, Funabashi-shi,
Chiba 273-0005, Japan
Tel: 81-47-425-8461
Fax: 81-47-425-8464● 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● TEC Accounting & Consulting, Ltd.
Business support and consulting for accounting
and accounting system development
2-8-1 Akanehama, Narashino-shi,
Chiba 275-0024, Japan
Tel: 81-47-454-1690
Fax: 81-47-454-1289● Toyo Business Engineering Corporation
System consulting and solutions provider
20th / 17th Fl., KDDI Otemachi Bldg., 1-8-1
Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan
Tel: 81-3-3510-1600
Fax: 81-3-3510-1624
http://www.to-be.co.jp/● Chiba Data Center Corporation
Website planning and its production &maintenance, data entry, and commercial printing
6-5-3 Tendai, Inage-ku, Chiba-shi,
Chiba 263-0016, Japan
Tel: 81-43-284-3611
Fax: 81-43-284-3533● Toyo Transport Engineering Co., Ltd.
Consulting for total transportation solutions
2-8-1 Akanehama, Narashino-shi,
Chiba 275-0024, Japan
Tel: 81-47-454-1660
Fax: 81-47-454-1160(As of August 1, 2010)

Stock Information(As of March 31, 2010)

Founded:Common Stock:
Stock Exchange Listing:Authorized Shares:
Capital Stock Issued:
Number of Shareholders:
Administrator of
Shareholders’ Register:

May 1, 1961
¥18,199 million
Tokyo Stock Exchange
500,000,000
192,792,539
16,925The Chuo Mitsui Trust and Banking Co., Ltd.
3-33-1 Shiba, Minato-ku, Tokyo 105-8574, Japan

Major Shareholders:

Others0.67

Number of shares(thousands)

Percentage of total(%)

Mitsui & Co., Ltd.

43,77022.70

Mitsui Chemicals, Inc.

25,703

13.33

Japan Trustee Services Bank, Ltd. Trust Account

6,331

3.28

The Master Trust Bank of Japan, Ltd. Trust Account

4,703

2.43

Taisei Corporation

4,000

2.07

Kanto Natural Gas Development Co., Ltd.

2,656

1.37

State Street Bank and Trust Company 505223

2,656

1.37

HSBC Bank PLC-Clients Nontax Treaty

2,500

1.29

Sumitomo Mitsui Banking Corporation
Mellon Bank, N.A. as Agent for its Client
Mellon Omnibus US Pension

2,350

1.21

2,328

1.20

Financial institutions
16.00

Less than 5,000 shares
9.78

1,000,000 shares or more
55.69

5,000–49,999 shares
14.52

Individuals
24.53

Number of
Shares Held(%)

Type of
Shareholder(%)

Foreign shareholders
16.84

50,000–499,999 shares
12.13

Domestic companies
41.96

500,000–999,999 shares
7.88

Stock Chart:
(Yen)
1,000
900
800

Stock Price

700
600
500
400
300
200
100
0

100,000

Trading Volume (Thousands of Shares)

75,00050,00025,000
0

4

5

6

7

8

9 10 11 12 1
FY2007

2

3

4

5

6

7

8

9 10 11 12 1
FY2008

2

3

4

5

6

7

8

9 10 11 12 1

2

3

FY2009TOYO ENGINEERING CORPORATION

Annual Report 201045

Toyo Engineering Corporation Annual Report 2010

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/

2010
Annual Report

Year ended March 31, 2010©2010 Toyo Engineering Corp.
Printed in Japan