©2011 Toyo Engineering Corp.
Printed in Japan

Annual Report 2011 Year ended March 31, 2011

Corporate Profile
Toyo Engineering Corporation (TOYO) is one of theworld’s leading engineering contractors. Since its
foundation in 1961, TOYO has actively deployedEngineering, Procurement, and Construction (EPC)
businesses, and has successfully delivered large and
C

O

N

T

E

N

T

S

complex projects in more than 50 countries. TOYO’s
engineering business focuses on the segments of01

To Our Shareholders

Energy, Oil Refining, Petrochemicals & Chemicals,

02

Consolidated Financial Highlights

Oil & Gas Development, Infrastructure, Environment,

03

Review of Operations

and other manufacturing facilities.

06

New Orders and Topics

07

Major Projects (Ongoing and Completed)named “Global Toyo,” which makes us capable of08

Management System

executing work based on common work standards

10

HSSE + Quality

in close cooperation with our group companies as

We have a globally networked organization

well as in an optimal formation. Under the mission
Financial Section
12

Consolidated Five-Year Summary

14Management’s Discussion and Analysis

15

Business Risk and Other Risks

16

Consolidated Balance Sheets

18

Consolidated Statements of Income

19

Consolidated Statements of Comprehensive Income

20

Consolidated Statements of Changes in Net Assets

21

Consolidated Statements of Cash Flows

22

Notes to Consolidated Financial Statements

43

Report of Independent Auditors

44

Worldwide Network

45

Stock Information

DEFINITION OF TERMS
Fiscal 2010 means the fiscal year ended March 31, 2011
(April 1, 2010–March 31, 2011).
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 andchanges in circumstances. Actual results may differ due tochanges in economic, business, competitive, technological,
regulatory, and other factors.

entitled “Engineering for Sustainable Growth of
the Global Community,” Global Toyo companies
maintain and strengthen TOYO’s reliability andassure clients that projects will be delivered safely,
to a high-quality standard, and on schedule.

To Our Shareholders
Globally, the economies of developed countries areheaded for some difficult maneuvering, where theymust balance both economic stimulus and financial
reconstruction in response to a range of arising issues.
In contrast, emerging countries are demonstrating
extremely robust economic activity and business
investments and continue to achieve high economic
growth.
In Japan, the economy again was showing
signs of recovery supported by firm exports andmarket entrances into other countries, mainly
emerging countries. Then the Great East Japan
Earthquake struck on March 11, causing the loss ofa multitude of lives and devastating damage. The
concern that this disaster will have a significant impact on Japan’s economy, industry, public finance,and other areas in the days to come has clouded
Japan’s path forward with uncertainty.
Amid this situation, TOYO aggressively promoted sales activities to win orders in the energy,hydrocarbon, and infrastructure fields. To sustain
the expansion of operations in growing markets andto ensure our competitiveness, we further developed our global operations with the Global Toyoorganization. Our measures to respond to changesof business type and field contributed to the growthin new orders.
In May 2011, TOYO celebrated the 50th anniversary of its founding. We would like to thank ourshareholders and many others for their support andcooperation over the years.
In the year of this important milestone, we
intend to once again revisit our roots as an engineering company in planning our first steps toward another half century of sustainable and strong growth.
We look forward to your continued support andencouragement.
August 2011

Yutaka Yamada
President and Chief Executive Officer

TOYO ENGINEERING CORPORATION

Annual Report 201101

Consolidated Financial Highlights
Financial Summary

Thousands of
U.S. dollars*Millions of yen

Years ended March 31,

2011

2010

2011

Net sales¥155,697¥173,944$1,872,482

New orders

222,540

132,457

2,676,373

Backlog of contracts at end of the year

224,694

168,179

2,702,268

Net income

3,774

7,132

45,382

Total assets

198,388

190,127

2,385,900

Total net assets

67,09765,295806,936¥   19.65
5.00¥   37.12
7.00$     0.24
0.06

Per share data (in yen and U.S. dollars):
Net income
Cash dividends* U.S. dollar amounts are stated at ¥83.15 to U.S.$1.00, the exchange rate prevailing on March 31, 2011.

Net Sales (¥ billion)
’11

155.7

’10

173.9

’09

326.2

’08

327.4

’07

223.8

Net Income (¥ billion)
’11

3.8

’10

7.1

’09

6.5

’08

8.0

’07

5.3

New Orders (¥ billion)
’11
’10
’09

222.5
132.5
119.3

’08

268.7

’07

355.0

Backlog of Contracts (¥ billion)
’11
’10
’09
’08
’07

224.7
168.2
224.4
444.4
499.2

Review of Operations

TOYO ENGINEERING CORPORATION

Annual Report 2011

02 03

In fiscal 2010, the business environment for the Toyo Group’s core business field, plantand manufacturing facility market, was summarized as follows: In Japan, despite thestagnant domestic economy, projects for shifting production bases overseas were in arecovery trend. However, overall domestic business suffered from a decline in investment
projects. Overseas, expanding demand in growing economies in Brazil, China, India, andother countries produced robust capital investment. Nevertheless, the overseas market
remained stringent because of intense competition around the globe with contractors from
Korea and China.

Fiscal 2010 Strategic Initiatives
In fiscal 2010, TOYO made strategic initiatives to enhance orders corresponding toEngineering, Procurement, and Construction (EPC) demands in emerging country
markets and to improve profitability. Focusing on these emerging markets, we aggressively promoted sales activities to win orders in the energy, hydrocarbon, andinfrastructure fields. To sustain the expansion of operations in growing markets andto ensure our competitiveness, we further developed our global operations with the
Global Toyo organization and gave priority to investing management resources tostrengthen our overseas companies’ capability to execute EPC projects.
Specifically, we acquired a new operating base in Canada and reinforced our operating base in Brazil. We worked to establish a common project management systemfor our overseas bases and to improve our quality, safety, health, and environment
management. At the same time, we maintained our efforts to reduce indirect expenses, revising organizations and business procedures and endeavoring to reducehead office fixed expenses and project expenses.

Fiscal 2010 Business Results
In fiscal 2010, consolidated net sales declined ¥18.2 billion year on year, to ¥155.7
billion. Although project work, particularly for large-scale projects, was executed
successfully during the fiscal year, the impact of the stagnation of new orders inprevious years resulted in an overall decline in net sales. Operating income also fell
because of lower net sales and less soft type jobs such as cost reimbursableprojects, decreasing ¥6.3 billion, to ¥6.8 billion. As a consequence of the above
factors, net income decreased ¥3.4 billion from a year earlier, to ¥3.8 billion.
New orders in fiscal 2010 increased ¥90.1 billion, to ¥222.5 billion, boosting our orderbacklog at the fiscal year-end by ¥56.5 billion, to ¥224.7 billion. The substantial growth
can be attributed to our sales efforts in the power plant market finally bearing fruit.
The power plant market is part of the social infrastructure field, where TOYO has beenstrengthening its efforts. Our measures to respond to changes of business type and field,
such as the development of the Global Toyo organization, helped us to win a large-scalefertilizer plant contract in Indonesia and also contributed to the growth in new orders.
The Company increased its year-end dividend by ¥2.00 per share from the original forecast, to ¥5.00 per share. In deciding to increase the dividend, we took into
consideration that our final net income exceeded our performance forecast announced on February 10, 2011, by ¥1.3 billion. This achievement can be attributed
to improved performance results on major projects and the success of measures tothoroughly reduce fixed costs and project costs.

Performance Outline (Consolidated)
Net sales¥ 155.7 billion(down 10.5%)

Operating income¥    6.8 billion(down 47.9%)

Net income¥    3.8 billion(down 47.1%)

New orders¥ 222.5 billion(up 68.0%)

Cash dividends (annual)¥    5.0 per share (¥2.0 decrease from the previous
fiscal year)

Fiscal 2010 New Orders
Although consolidated new orders did not reach our original target of ¥280.0 billion,
they did increase to ¥222.5 billion, reflecting the winning of significant orders thatwill lead to future Toyo Group growth. The following are the four major projects won
in fiscal 2010.
• Floating Production, Storage, and Offloading (FPSO) Facility in Brazil
In collaboration with MODEC, Inc., we received an order for a fourth FPSO facility.
The project has strengthened our position in the offshore oil and gas production
facility market, which shows strong future growth potential.
• Power Plants in Thailand and Azerbaijan
Continuous marketing efforts over the last few years by the Toyo Group in the power
plant market have come to fruition in these orders, giving TOYO a strong foothold inthis large market.
• Large-Scale Fertilizer Plant in Indonesia
TOYO won this project as a result of enhanced competitiveness generated by the
Global Toyo organization developed by the Toyo Group. Against the background of
the growth in the world’s population, the project represents the first step in winningmore projects in a market that is growing in countries around the world.
• Front End Engineering and Design (FEED) for Mid-Scale LNG Plant in Australia
A joint project with Hitachi, Ltd., our FEED services represent a powerful new
product for TOYO in our efforts to target the mid-scale gas field development
market. A great deal of activity is expected in this market in the future, and TOYO
plans to develop this business.

Market Environment and Focused Fields
Market Environment

Focused Fields

Intensifying competition
Intensifying
competition

Oil andand gasgasdevelopment
development(Upstream)(Upstream)

GrowthGrowthininemerging
emergingcountries
countries

Infrastructure
Infrastructure

Expandingpopulations
Globalpopulation
growthFertilizer
Fertilizer

TOYO ENGINEERING CORPORATION

Annual Report 2011

04 05

Fiscal 2011 Performance Forecast (Consolidated)
New orders¥ 280.0 billion

Net sales¥ 180.0 billion

Operating income¥    2.5 billion

Net income¥    0.5 billion

Cash dividends (annual)¥    3.0 per share

Although there are signs of a recovery from the stagnation in new orders over the
past few years, the impact of those low-levels of new orders affects the next period.
Therefore, we recognize that improving performance by increasing new orders is ourhighest priority management issue with regard to achieving stable business performance. To that end, we have two essential objectives to realize at this time. First, we
will seek to enhance our project execution capabilities so they will be highly evaluated and trusted by our clients. We intend to achieve this goal by offering specificproposals that respond to the needs of society and clients as well as value-added
professional services. Second, we will cope with major changes in our businessenvironment and severe competition in obtaining new orders. Our strategy is to accelerate innovation in our business model and further bolster the differentiation andcompetitiveness of our services.
In Japan, we believe our top priority mission is to provide support for the recoveryof the region affected by the major earthquake with the full range of our engineering knowledge and services. We have established a post-earthquake recovery team,which is responding quickly and accurately to our clients’ needs. Furthermore, paying attention to the changes in the industrial structure of Japan’s economy, we willcontinue to provide the services expected of us as an engineering company.
Overseas, we are implementing measures to strengthen our activities in the oil andgas development field including FPSO in response to growth in global demand. We
are accelerating our efforts to commercialize small- to medium-scale Gas to Liquids(Micro-GTL) plant technology, which we are currently testing at a pilot plant. Moreover, we are taking steps to establish a performance record in the mid-scale LNG
plant market. We also plan to continue expanding our marketing efforts in the infrastructure field including the power plant market.
From a medium- to long-term perspective, we are returning to our roots as an engineering company and working to strengthen our client base. This enables TOYO to
cultivate project orders based on our relationship of trust with clients. Furthermore,
we are strengthening and expanding our overseas company network for the further
expansion and evolution of our global operations. We also intend to take up the challenge of developing markets in regions where TOYO has never been active before.

New Orders and Topics
TOYO’s Major Topics in Fiscal 2010
May 2010• TOYO Awarded Technology License Agreement for Urea
		 Production & Granulation Plant with a Production Capacity of
		 2,200 Tons Per Day from Cuvenpeq S.A., Cuba. (Photo 1)

Photo 1
Myanmar
Laos

Jun. 2010• TOYO’s Flare Gas Recovery Project for Abu Dhabi Oil Refining
Company (TAKREER) Received the International Technology
		 Exchange Award from the Japan Petroleum Institute.

SAC

Sep. 2010• Toyo Engineering Corporation, China, Awarded a Contract for		 an Ethanolamine Production Plant Constructed in China by Honam
		 Petrochemical Corporation (HPC), Korea.

Oct. 2010•	TOYO Awarded Power Plant Construction Contracts in Seven Sites
in Bangkok (Total Generation Capacity 780 MW) with Specific Purpose Companies Wholly Owned by Gulf JP Co., Ltd. (Illustration 1)

ICC

PCC

CCC

Bangkok

RCC
Cambodia

Thailand

Malaysia

Illustration 1• TOYO Established a Joint Venture, LG Toyo Engineering Co., Ltd.,		 with Korea LG Group through Toyo Engineering Korea Limited and		 SERVEONE CO., LTD.

•	MODEC and TOYO Offshore Production Systems Pte. Ltd.
(MTOPS), a Joint Company of TOYO and MODEC, Inc., Awarded a
Topside Processing Facility from MODEC to Be Installed on a Floating Production, Storage, and Offloading (FPSO) System, Delivered
to Offshore Brazil and Used for Oil Development in the BM-S-9
Block of the Guará Oil Field. (Illustration 2)

Photo 2

Jan. 2011• TOYO Awarded a 400 MW Gas Combined Cycle Power Plant from		 Azerenerji Joint Stock Company of Azerbaijan. (Illustration 3)
Illustration 2

Feb. 2011• TOYO and Hitachi, Ltd., Appointed by Eastern Star Gas Limited (ESG)		 to Undertake Front End Engineering Design (FEED) for ESG’s LNG
		 Newcastle Project Fed by Coal Seam Gas. (Illustration 4)

Mar. 2011• TOYO Awarded a Large-Scale Fertilizer Plant (with a Production
		 Capacity of 2,500 Tons per Day of Ammonia and 3,500 Tons
		 per Day of Urea) from the State-Owned Indonesian Fertilizer
		 Company, PT. Pupuk Kalimantan Timur (Kaltim).

SBC

CHP

• TOYO Acquired ASRC Energy Services Inc.’s Tri Ocean
		 Engineering Ltd., an Engineering Firm Located in Calgary, Alberta,
		 Canada. (Photo 2)

Nov. 2010

VietnamIllustration 3• TOYO Donated ¥50 Million in Relief Funds for the Great East Japan
		 Earthquake.

Illustration 4

Major Projects (Ongoing and Completed)

TOYO ENGINEERING CORPORATION

Annual Report 2011

06

07

Major projects are progressing on schedule and within budget
with collaborative project management by Global Toyo companies and partners.

CHINA

JAPAN

QATAR
THAILANDINDIA

VENEZUELA
BRAZILJAPAN
Name of Client

Type

Scope

Taiyo Oil Co., Ltd.

FCCG HDS

E.P.C.

Name of Client

Type

Scope

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

Polycarbonate Resin
Production Facility

E.P.C.

Name of Client

Type

Scope

PTT Polyethylene Co., Ltd.

Ethylene Plant

E.P.C.

CHINA

THAILAND

Completed refinery plant (Japan)

INDIA
Name of Client

Type

Scope

ONGC Mangalore andPetrochemicals Ltd.

Aromatics Complex

E.Ps.Cm.

Name of Client

Type

Scope

Qatar Shell GTL Limited

GTL Liquid Processing Unit

E.P.C.

QATAR

Completed refinery plant (Brazil)

VENEZUELA
Name of Client

Type

Scope

Petroquímica De Venezuela
S.A. (Pequiven)

Urea Plant

E.P.C.

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

Type
Delayed Coker Unit / Coker
Naphtha Hydrotreating Unit

Scope
E.P.C.

●

Ongoing●

Completed

E

EngineeringP

Procurement

Ps

Procurement service

C

Construction

Cm

Construction management

Management System
Corporate GovernanceInternal Control System

The Auditing Department of TOYO, which is under the direct control of the President, performs audits concerning the execution of business activities by all divisions
and verifies the appropriateness and effectiveness of the internal management structure, including compliance and risk management. In addition, there are specialized
units to perform other internal audits, such as the SQE (Safety, Quality and Environment) Management Division and the Export Control Administration Division.
In order to promote the Internal Control System of the Group, TOYO is making
efforts to ensure proper operations across Toyo Group companies by establishing corporate procedures to strengthen the corporate administrative functions of each company.

Risk Management System

For risk management concerning project profitability and financial matters within
TOYO, all business operations are constantly monitored and supervised, and reports
are submitted to the Board of Directors, the Executive Committee, and the Boardof Corporate Auditors. In addition, matters of particular importance concerning
individual bidding and projects undergo a risk analysis overseen by the Project Risk
Management Committee, and reports are submitted to the Executive Committee.
TOYO has drawn up the Crisis Management Policy to clearly set forth risk
management procedures to forestall serious risks (crises) that have the potential
to seriously affect the operations of the Company. The Crisis Management Team isconstantly prepared for potential crises.

Corporate Governance Structure (As of March 2011)&&

TOYO ENGINEERING CORPORATION

Annual Report 2011

Management

Directors* Representative Director

Executive Officers

ChairmanYushi Nagata

Chief Executive Officer
Yutaka Yamada

President
Yutaka Yamada*

Executive Vice Presidents
Takuma Hatano
Kenji Soejima
Kazuomi Nishihara

Directors
Takuma Hatano*
Kenji Soejima*Kazuomi Nishihara*
Makoto Fusayama
Keiichi Matsumoto
Satoshi Kuwahara
Hideki Shiinoki
Mitsutoshi Hamamura
Masayuki Uchida
Auditors

Senior Executive Officers
Makoto Fusayama
Keiichi Matsumoto
Satoshi Kuwahara
Hideki Shiinoki
Mitsutoshi Hamamura
Masayuki Uchida
Kiyoshi Nakao
Akhilesh Kumar
Tadashi Hori
Katsumoto Ishibashi

Senior Corporate Auditor
Makoto Shimagaki
Corporate Auditors
Hideaki Kinoshita
Takashi Umezu (Outside Auditor)
Yoshiyuki Shinohara (Outside Auditor)

Executive Officers
Masaru Takezawa
Kazuharu Murayama
Motoyoshi Kamoshima
Seiichi Itakura
Hisashi Osone
Yutaka Kita
Masaaki Yamaguchi
Takayoshi Imanishi
Shoji Koshikawa
Hiroshi Sato
Koji Kojima
Masayuki Yoshizawa(As of June 23, 2011)

A Yushi Nagata
B Yutaka Yamada
C Takuma Hatano
E

C

B

A

D

D Kenji Soejima
E Kazuomi Nishihara

08 09

HSSE + Quality
Safety Takes Priority over Everything Else.
Safety is an integral part of the TOYO brand.
In 2010, TOYO’s Lost Time Incidence Rate (LTIR), as defined by ILO, was 0.07. Although this rate is an improvement from 0.08 in 2009, we are not satisfied with thisresult, and will strive to improve it to the ultimate target of zero.
We are aware that the premises for a corporation that is trusted by the community include paying sufficient attention to safety. We are confident that our efforts, initiatives, time and expenses spent to respect human life must take precedence over allother things. Loss of valuable human life must absolutely be avoided in the process of
TOYO and its group companies’ business evolution, such as plant construction.
Safety is an important brand of TOYO. In order to boost the brand value of all groupcompanies in the world, we are strongly promoting safety measures as part of the companywide safety goal for fiscal 2010: “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. Through promoting standardization in this manner, the Toyo Group is making its
best effort to maintain and improve quality as well as safety.
TOYO’s Safety & Environmental Report 2011 is available on our website. It introduces TOYO’svarious activities on safety and the environment during fiscal 2010. Some of these activities are
explained below.

In-House Corporate Safety Training
Recognizing that safety is a basic aspect of corporate activities,
TOYO is conducting corporate safety training programs for all corporate members to raise awareness of the risks and hazards thatmight lead to accidents. In order to disseminate safety culture andimprove sensitivity toward safety issues, training about such issues as safety management systems and risk assessment is given
to particular members.

On-Site Safety Activity
Our main goal is to hand over superior facilities to our clients
through construction work that is completed without any accidents or injuries. For this purpose, each construction site member,
together with clients and partners, takes part in daily activities ina planned and positive manner, with an established management
system.

Global Toyo Quality / HSSE Management Meeting
As part of the continuous improvement of the Quality and Health/
Safety/Security/Environment (HSSE) Management System of
Global Toyo, the managers in charge of Quality/HSSE from groupcompanies convene every year. In fiscal 2010, the meeting washeld in Japan to discuss several subjects including a review of theannual plan and the progress of improvement activities for the
Quality/HSSE Management System, Global Toyo Standards, Project
SQE (Safety, Quality, Environment) Management and others.

TOYO ENGINEERING CORPORATION

Annual Report 201110

11

Project SQE Management
Department

The Project SQE (Safety, Quality, and Environment) Management Department, established in April 2010, has been training candidates for PQM (Project Quality Manger), HSSEM (Health, Safety, Security and Environment Manager) and other SQE key
personnel for the individual projects conducted by Global Toyo companies.
For this purpose, the department also facilitates the accumulation and improvement of know-how regarding project SQE, which can be applied to current andfuture projects.

Standards of Global Toyo

TOYO holds standards of Global Toyo, which have been established on cumulativeknowledge and experience gained from a number 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 company, along withdue care of clients’ requirements, TOYO guarantees to always provide high quality
products and services all over the world.

Environment
Micro Gas to Liquids (GTL) project applying technology for clean energy, contributing to environmental conservation
GTL is a process that transforms natural gas or associated gas into a clean diesel fuel or naphtha containing less impurities than petroleum-derived products.
Since November 2007, TOYO has been developing a compact, cost efficient Micro-GTL process jointly with Velocys Inc., and MODEC, Inc. Because of the compactness, the Micro-GTL plant can be installed not only onshore but also
onboard a ship.
Early commercialization of on-board GTL (floating GTL) is expected to be effectively developed and utilized because
it will allow development of deep-sea natural gas that has not been easily exploited.
Micro-GTL
development
schedule

2007

2009

2011

2013

Stage-1

Stage-2

Stage-3

Commercialization- Process development- Small-scale verification test

- Fabrication of practical-size
reactor- Construction and operationof demonstration plant- Deployment to floating GTL- Establishment of technology
for commercialization

The module was fabricated in Thailand and reached PETROBRAS’ refinery plant in Brazil in May 2011.
The project aims to achieve commercialization by 2013 after constructing and operating a pilot plant.

Module of Micro-GTL demonstration plant
being assembled in Thailand

Module of Micro-GTL demonstration plant being loaded on ship in Thailand bound for Brazil

The module was off-loaded in Brazil

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

Net sales ...........................................
Gross profit .......................................
Operating income..............................
Income before income taxes andminority interest ...............................
Net income ........................................
Total assets.......................................
Total net assets.................................
Long-term debt..................................
Purchases of property, plant andequipment .......................................
Depreciation and amortization...........
Common stock ..................................
New orders........................................
Backlog of contracts at end of theyear .................................................

2011

2010

2009

2008

2007

2011

¥155,697
26,573
6,815¥173,944
32,984
13,070¥326,248
34,752
15,168¥327,413
34,424
13,742¥223,844
22,236
6,890$1,872,482
319,583
81,960

6,917
3,774
198,388
67,097
15,164

14,236
7,132
190,127
65,29521,947

13,036
6,516
199,41358,50919,917

14,9098,029
280,139
57,331
22,0387,372
5,294
282,81451,55926,981

83,19245,382
2,385,900
806,936
182,364543
2,473
18,199222,540508
2,238
18,199132,457513
2,366
18,199119,265831
2,511
18,199268,693

2,752
1,995
18,199354,984

6,527
29,742
218,869
2,676,373

224,694

168,179

224,416

444,434

499,237

2,702,268
U.S. dollars(Note 1)Yen

Per share
Net income ......................................
Total net assets...............................
Cash dividends................................

¥ 19.65
340.43
5.00¥ 37.12329.547.00¥ 33.91294.71
7.00¥ 41.76283.98
6.00

$0.24
4.09
0.06

¥ 27.90255.50
3.00

Gross Profit

Operating Income

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

34.4 34.8

33.0

15.2

13.7

13.1

41.76

26.6

37.12
33.91

22.2
27.90
6.9

6.8
19.65

’07

’08

’09

’10

’11

’07

’08

’09

’10

’11

’07

’08

’09

’10

’11

TOYO ENGINEERING CORPORATION2011
Net sales by sector (%):
Chemical fertilizers...............................................
Petrochemicals ....................................................
Refinery................................................................
Energy-related .....................................................
General manufacturing facilities andinformation technology .......................................
Others ..................................................................
(Overseas sales) ..................................................
Number of employees ..............................................

2010

6.9%
22.8
23.8
18.7
20.0
7.8
(64)
3,956

Total Assets

Total Net Assets(¥ billion)(¥ billion)

13.1
7.0
(71)
4,024

10.6
4.2
(78)
3,769

1.9%
28.7
8.8
43.7

’08

’09

’10

2.9%
25.6
12.3
36.9

11.8
5.1
(78)
3,527

15.2
7.1
(66)
3,126

7.8 6.9

58.5

20.0

22.8

198.4

18.7

’07

2007

67.1

51.6
190.1

6.9%
29.2
14.0
35.1

’11

’07

’08

’09

12

Composition of
Net Sales by Sector (FY2010)
65.3

199.4

2008

(%)

282.8 280.1
57.3

14.0%
23.9
27.6
14.4

2009

Annual Report 2011

’10

’11

23.8

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

13

Financial Section

Management’s Discussion and Analysis
During fiscal 2010, the stagnation resulting from the Lehman Shock in September 2008 continued in Japan’s economy.
Amid this trend, companies remained cautious about capital investments. Despite these conditions, the economy was
beginning to show signs of a recovery during the fiscal year. With the emphasis on emerging countries, a revitalization ofexports and overseas market entrance projects by Japanese companies was underway when the Great East Japan
Earthquake hit on March 11. Since the major earthquake, the direction of Japan’s economy has remained uncertain
because of concerns about its impact on the economy, industry, public finances, and other aspects.
In Japan, under the previously mentioned conditions, it was a difficult environment for acquiring new orders. Despite
the recovery trend in overseas market entrance projects, overall domestic business was dampened by a decline ininvestment projects. On the other hand, the impact of the Great East Japan Earthquake on the fiscal year under review
was relatively minor.
Overseas, expanding domestic demand in the growing economies of Brazil, China, India, and other countries
produced robust capital investment. Nevertheless, orders were difficult to come by because of aggressive sales efforts bycontractors from Korea and China that resulted in intensified competition in the Middle East, Asia, and Central and SouthAmerica.
In response, the Toyo Group focused its efforts on the emerging countries that are driving the global economy. We
aggressively implemented marketing activities to win orders in the energy, hydrocarbon, and social infrastructure fields.
Moreover, to support the expansion of operations in growth markets and to ensure our competitiveness, we further
developed Global Toyo and invested business resources to strengthen the capability of overseas subsidiaries to handle
EPC projects. Among those measures, we expanded our network by acquiring a new operating base in Canada andreinforcing our subsidiary in Brazil. In addition, we worked to establish a common project management system for ouroverseas subsidiaries and to improve our quality, safety and health, and environment management. While focusing on
enhancing our sales activity, project execution, and management, we also maintained our efforts to reduce overhead,revising organizations and business procedures and endeavoring to reduce head office fixed expenses and project
expenses.
New Orders
New orders increased 68.0% year on year, to ¥222.5 billion ($2,676 million). The recovery in new orders can be attributed
to our adaption to new types of growth businesses. We received power plant orders in the social infrastructure market that
TOYO has been focusing on recently and a large-scale fertilizer plant order in Indonesia using Global Toyo operation. Of
this amount, overseas orders totaled ¥183.6 billion and domestic orders accounted for ¥38.9 billion.
Sales and Earnings
Net sales totaled ¥155.7 billion ($1,872 million) as a result of successful progress of projects. Operating income was ¥6.8
billion ($82 million). Net income decreased to ¥3.8 billion ($45 million).
Cash Flows
Cash from operating activities was ¥11.3 billion ($136 million). The principal source of cash was income before income
taxes and minority interest. Cash used for investing activities was ¥1.4 billion ($16 million). This mainly represented
expenditure on purchases of investments in subsidiaries. Cash from financing activities was ¥3.8 billion ($46 million),reflecting loan of long-term debt. The result of the above cash flows was a net increase of ¥13.4 billion ($161 million) in
cash and cash equivalents.

TOYO ENGINEERING CORPORATION

Annual Report 201114

15

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 acomplete 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 andfinancial condition. We are aware of the possibility that these risks may occur and are taking actions to reduce exposure tothese risks by using 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 theproject is carried out or in a neighboring country.
(2) Regional risks that occur particularly in an area near a project site, such as a surge of political unrest and a serious
outbreak of an 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) Notable changes in a country’s commerce, trade, manufacturing, and financial policies, such as license approvals,
customs clearance, export and export controls, foreign exchange systems, communications, and taxes.
(5) A major and global contraction in capital investment activities in the Company’s business fields or a sharp decreasein opportunities to win orders due to intensified competition.
2. Foreign exchange fluctuation
For overseas plant construction contracts denominated in foreign currencies, the appreciation of the yen relative to theapplicable 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 effecton our operating results and financial condition. In response, the group uses foreign exchange forward contracts, procuresmaterials and equipment in foreign currencies, utilizes the resources of its overseas companies and takes all otherpossible 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 andsupplies of these items, due to rapid change in the international situation. The possibility also exists of cost increasecaused by a supplier becoming insolvent or failure of quality control or delivery schedule delay bysuppliers/sub-contractors. These events may deteriorate the profitability of a project affected by soaring cost, delivery
delay and other problems. Such events may therefore have a detrimental effect on our operating results and financial
condition. To reduce our exposure to these risks, we, developing our accountability system to clients and project
management system in project execution, utilize our experience to enter into contracts that incorporate measures 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.

Financial Section

Consolidated Balance Sheets
Toyo Engineering Corporation and Consolidated Subsidiaries

March 31, 2011 and 2010
Thousands of
U.S. dollars(Note 1)Millions of yen

AssetsCurrent assets:
Cash and deposits (Note 19) .............................................................
Marketable securities (Note 14) .........................................................
Notes and accounts receivable ..........................................................
Less: Allowance for doubtful receivables .........................................

2011

2010

Contract work in progress ..................................................................
Prepaid expenses and other current assets (Note 4) .........................
Total current assets..........................................................................

¥ 45,070
43,99330,737(2,373)28,364
18,763
12,503
148,693¥ 36,899
37,99427,373(6,972)
20,401
21,677
24,695
141,666$ 542,032
529,077
369,663(28,534)
341,129
225,658
150,357
1,788,253

Investments:
Investment securities (Note 14) .........................................................
Investments in unconsolidated subsidiaries and affiliates (Note 14) .....
Long-term loans .................................................................................
Other ..................................................................................................
Less: Allowance for doubtful receivables .........................................
Total investments ...........................................................................

4,793
5,747
4,589
3,046
(5,226)
12,949

4,648
5,372
78
3,488
(703)
12,88357,642
69,12055,18836,631(62,852)
155,729

Property, plant and equipment, at cost:
Land (Note 3) .....................................................................................
Buildings and structures (Note 3) .......................................................
Tools, furniture and fixtures................................................................
Leased assets ....................................................................................
Construction in progress ....................................................................
Total ...............................................................................................
Less: Accumulated depreciation (Note 3) ........................................
Property, plant and equipment, net ................................................
Other assets (Note 4) .........................................................................
Total assets ....................................................................................

16,80529,479
3,896
2,107
120
52,407(20,850)
31,557
5,189¥198,388

16,82429,563
3,528
2,151
7
52,073(19,627)
32,446
3,132¥190,127

202,109354,525
46,85525,345
1,443
630,277(250,752)
379,525
62,393$2,385,900

See notes to consolidated financial statements.

2011

TOYO ENGINEERING CORPORATION

Annual Report 2011

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

Liabilities and Net Assets
Current liabilities:
Short-term borrowings........................................................................
Current portion of long-term debt (Note 3) .........................................
Bonds payable due within one year ...................................................
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 ..................................................................

16

2011

2010

¥

5,391
13,3831,000
40,811
534
33,952
677
9,514
105,262¥ 3,113
4,673—
35,084878
35,568914
10,39890,628$15,164
4,972
1,281
4,612
26,029131,291

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

182,364
59,795
15,411
55,470313,040
1,578,964

Net assets:
Shareholders’ equity (Note 6)
Common stock
Authorized: 500,000,000 shares in 2011 and 2010
Issued: 192,792,539 shares in 2011 and 2010 ..............................
Capital surplus .................................................................................
Retained earnings ............................................................................
Treasury stock: 858,030 shares in 2011 and 751,115 shares in 2010 ...
Total shareholders’ equity ..............................................................

18,19920,75928,435(348)
67,04518,19920,76025,525(316)
64,168218,869
249,661
341,968(4,182)806,316

Accumulated other comprehensive income
Net unrealized gain on securities .....................................................
Deferred hedge loss.........................................................................
Foreign currency translation adjustments ........................................
Total accumulated other comprehensive income ...........................

471
(18)
(2,158)(1,705)619(26)(1,475)
(882)

5,665
(223)
(25,951)(20,509)

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

1,757
67,097¥198,388

2,009
65,295¥190,127

21,129806,936$2,385,900

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

2011
64,381
160,956
12,026490,818
6,417
408,318
8,144
114,4141,265,924

Contingent liabilities (Note 7)17

Financial Section

Consolidated Statements of Income
Toyo Engineering Corporation and Consolidated Subsidiaries

Year ended March 31, 2011 and 2010
Thousands of
U.S. dollars(Note 1)Millions of yen

2011¥155,697
129,124
26,57319,7586,815

2010¥173,944
140,960
32,984
19,914
13,0702011$1,872,482
1,552,899
319,583
237,623
81,960

532
—
26
608
188
1,354

1,072
1,151
808
—
304
3,335

6,395
—
317
7,316
2,262
16,290

772
175
—
305
1,252

733
—
1,213
223
2,169

9,282
2,109
—
3,667
15,058

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

6,917

14,236

83,192

3,769
(507)
3,262

5,377
1,586
6,963

45,326(6,088)39,238

Income before minority interest .......................................................
Minority interest income (loss) .........................................................
Net income..........................................................................................

3,654
(119)
3,774

—
141
¥ 7,132

43,954(1,428)45,382

Net sales .............................................................................................
Cost of sales.......................................................................................
Gross profit ....................................................................................
Selling, general and administrative expenses (Note 8) ..................
Operating income...............................................................................
Other income:Interest and dividend income .............................................................
Foreign exchange gain.......................................................................
Reversal of allowance for doubtful receivables ..................................
Equity in earnings of affiliate companies ............................................
Other ..................................................................................................

Other expenses:
Interest expense ................................................................................
Foreign exchange loss .......................................................................
Loss on impairment of fixed assets (Note 11) ....................................
Other (Note 10) ..................................................................................

¥

U.S. dollars(Note 1)Yen

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

¥

19.65

$

¥ 37.12$

0.24

TOYO ENGINEERING CORPORATION

Annual Report 201118

Consolidated Statements of Comprehensive Income
Toyo Engineering Corporation and Consolidated Subsidiaries

Year ended March 31, 2011

Millions of yen

Thousands of
U.S. dollars(Note 1)

2011

2011

¥3,655$ 43,954

(148)
7
(744)

(1,773)79(8,946)Comprehensive income (Note 9) ..........................................................................

(19)
(904)
2,751

(229)
(10,869)
33,085Comprehensive income attributable to:Shareholders of Toyo Engineering Co. ................................................................
Minority interests ..................................................................................................

2,950¥ (199)35,477$ (2,392)

Income before minority interests .........................................................................
Other comprehensive income:Net unrealized gain on available-for-sale securities .............................................
Deferred gains or losses on hedges.....................................................................
Foreign currency translation adjustments ............................................................
Share of other comprehensive income of associates accounted forusing equity method ...........................................................................................

See notes to consolidated financial statements.

19

Financial Section

Consolidated Statements of Changes in Net Assets (Note 18)
Toyo Engineering Corporation and Consolidated Subsidiaries

Years ended March 31, 2011 and 2010
Millions of yen

Balance at March 31, 2009......
Dividends paid to shareholders...
Net income .........................
Purchase of treasury stock ......
Sale of treasury stock ............
Changes of items other thanshareholders’ equity .............
Balance at March 31, 2010......
Dividends paid to shareholders...
Net income .........................
Purchase of treasury stock ......
Sale of treasury stock ............
Changes of items other thanshareholders’ equity .............
Balance at March 31, 2011......

Commonstock

Capitalsurplus¥18,199¥20,761Retainedearnings(Note 6)¥19,642(1,249)7,132

20,760¥20,759

Foreigncurrencytranslation
adjustments

Minority
interest¥(294)

¥ 127

¥ (6)

¥(1,809)¥1,889¥58,509(1,249)
7,132
(25)
2

492
619

(20)
(26)

334
(1,475)

120
2,009

926
65,295
(864)
3,774
(33)
0

(148)
¥ 471

8
¥(18)

(683)
¥(2,158)(252)¥1,757(1,075)¥67,097

Total
net
assets25,525
(864)
3,774

(316)

¥28,435¥(348)(1)¥18,199

Deferred
hedge
loss

(25)
3

(1)
18,199TreasurystockNetunrealized
gain onsecurities

(33)
1

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

Balance at March 31, 2010......
Dividends paid to shareholders...
Net income .........................
Purchase of treasury stock ......
Sale of treasury stock ............
Changes of items other thanshareholders’ equity .............
Balance at March 31, 2011......

Commonstock

Capitalsurplus$218,869$249,663

TreasurystockNetunrealized
gain onsecurities

Deferred
hedge
loss

Foreigncurrencytranslation
adjustments

Minority
interest$306,979(10,393)
45,382$(3,798)$ 7,438$(302)$(17,740)$24,163$785,272(10,393)
45,382(390)
4$341,968$(4,182)(1,773)$ 5,66579$(223)(8,211)$(25,951)(3,034)$21,129(12,939)$806,936

Retainedearnings(Note 6)

(2)
$218,869$249,661

See notes to consolidated financial statements.

(390)
6

TOYO ENGINEERING CORPORATION

Annual Report 201120

Consolidated Statements of Cash Flows
Toyo Engineering Corporation and Consolidated Subsidiaries

Years ended March 31, 2011 and 2010
Thousands of
U.S. dollars(Note 1)Millions of yen

2011

2010

¥ 6,917¥ 14,236

2,473
—
6
(76)
(227)
(608)
162
1,033
(532)
772
(781)
(4,082)
(964)

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

29,742—68(916)(2,731)(7,316)
1,954
12,423(6,395)
9,282(9,394)(49,090)(11,583)(4,013)
2,951
3,723
6,065

9,008
4,282
5,971
(9,581)(48,266)
35,48444,76972,938(1,513)
11,306(13,395)
10,807(18,191)
135,970

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 ..........................................
Purchases of investments in subsidiaries ..........................................
Other, net ...........................................................................................
Cash used for investing activities .................................................

(543)(1,157)
(306)
6
4,069
(842)
(2,563)(35)(1,371)(508)(1,732)
(525)
4
741
827
—
509
(684)

(6,527)(13,918)(3,680)75
48,939(10,122)(30,819)(441)(16,493)

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 .........................
Cash and cash equivalents, end of the year (Note 19) ...................

2,426
7,600
(4,673)
(580)
(864)
(86)
3,823
(374)
13,38473,954¥87,33898
7,253(3,121)(659)(1,249)
(80)
2,242
127
12,492
61,462¥ 73,954

29,17991,401(56,206)(6,980)(10,393)(1,028)45,973(4,500)160,950
889,411$1,050,361

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 valuation of investment securities.......................................
Changes in allowance for doubtful receivables ................................
Changes in allowance for anticipated loss on contract work ............
Equity in earnings of affiliated companies ........................................
Changes in accrued retirement benefits...........................................
Interest and dividends received .......................................................
Interest and dividend income ...........................................................
Interest expense ..............................................................................
Interest paid .....................................................................................
Income taxes paid ............................................................................
Other, net .........................................................................................
Changes in operating assets and liabilities:(Increase) decrease in notes and accounts receivable ..................
(Increase) decrease in contract work in progress...........................
(Increase) decrease in other receivables .......................................
Increase (decrease) in notes and accounts payable ......................
Increase (decrease) in advance receipts on uncompleted
contracts.......................................................................................
Cash from (used for) operating activities......................................

See notes to consolidated financial statements.

2011$

83,19221

Financial Section

Notes to Consolidated Financial Statements
Toyo Engineering Corporation and Consolidated Subsidiaries

1. BASIS OF PREPARATION
Toyo Engineering Corporation (the “Company”) and its domestic consolidated subsidiaries maintain their accounting
records and prepare their financial statements in accordance with accounting principles generally accepted in Japan, andits overseas consolidated subsidiaries maintain their books of account in conformity with those of their respective
countries of domicile. The accompanying consolidated financial statements have been compiled from the accounts
prepared by the Company in accordance with the provisions set forth in the Financial Instruments and Exchange Law ofJapan and with accounting principles generally accepted in Japan, which are different in certain respects as to theapplication and disclosure requirements of International Financial Reporting Standards. Certain reclassifications havebeen made to present the accompanying consolidated financial statements in a format which is familiar to readers outside
Japan.
For the convenience of readers, the accompanying consolidated financial statements and the relevant notes have also
been presented in U.S. dollars by translating all Japanese yen amounts at the exchange rate of ¥83.15 to U.S.$1.00
prevailing on March 31, 2011.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(a) Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its significant subsidiaries.
Investment in significant affiliates is accounted for by the equity method. Intercompany accounts and transactions are
eliminated in consolidation. The difference between the acquisition cost and the equity in the net assets at the time ofacquisition is amortized in principle 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 ofthree 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 forthe amortization or accumulation of premiums or discounts. Unrealized gains or losses on trading securities are includedin 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 theestimated 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 calculatedby 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
estimated amount 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 amountof contract work in progress.

TOYO ENGINEERING CORPORATION

Annual Report 201122 23(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 ¥404 million ($4,860 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 ¥151 million ($1,818 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($44,448 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 is amortized over 13 years within the average of the estimated remaining service years when incurred.
(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 aseparate component of net assets. Receivables and payables hedged by qualified forward foreign exchange contracts aretranslated at the corresponding 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 thebalance sheet date. The balance sheet accounts of the consolidated foreign subsidiaries are translated at the rate ofexchange in effect at their balance sheet date, except for common stock and capital surplus, which are translated at their
historical exchange rates. Revenues, expenses and net income for the year are translated at the rate of exchange in
effect at their balance sheet date.
Differences arising from translation are presented as “Foreign currency translation adjustments” and “minority interest”
in the accompanying consolidated balance sheets.
(l) Recognition of Revenues
Revenues and costs of construction contracts of which the percentage of completion can be reliably estimated, arerecognized by the percentage-of-completion method. The percentage of completion is calculated at the cost incurred as apercentage of the estimated total cost. The completed-contract method continues to be applied for contracts for which thepercentage of completion cannot be reliably estimated.
(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 in2011 or 2010.
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 the enacted 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.
(p) Cash and Cash Equivalents
For the purposes of the consolidated statements of cash flows, the Company and its consolidated subsidiaries consider all
highly liquid investments with insignificant risk of changes in value purchased with an original maturity of three months orless to be cash equivalents.
(q) Reserve for Loss on Disaster
The Company and its consolidated subsidiaries have provided reserve for loss on disaster at estimated amount for
preparing the expenditure to recover from the Great East Japan Earthquake.

Financial Section

3. LONG-TERM DEBT
Long-term debt at March 31, 2011 and 2010 is summarized as follows:
Millions of yen

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

2011¥ 1,741
26,8061,000
29,547
14,383¥15,1642010¥ 7,644
17,9761,000
26,620
4,673¥21,947

The following assets at March 31, 2011 and 2010 were pledged as collateral principally for long-term debt:
Years ended March 31,
Cash and deposits ....................................................................................
Land and buildings, net of accumulated depreciation ...............................

Millions of yen

2011
¥ 832
855
¥1,687

2010
¥ —
7,857
¥7,857

Thousands of
U.S. dollars

2011$ 20,942
322,379
12,026355,347
172,983$182,364

Thousands of
U.S. dollars

2011$10,000
10,286$20,286

The following schedule shows the maturities of long-term debt subsequent to March 31, 2011:
Years ended March 31,

2012 ............................................................................................................................
2013 ............................................................................................................................
2014 ............................................................................................................................
2015 ............................................................................................................................
2016 ............................................................................................................................
2017 and thereafter.....................................................................................................

Millions of yen¥14,383
3,131
3,458
2,647
3,547
2,381
¥29,547

Thousands of
U.S. dollars$172,983
37,656
41,59331,83142,65528,629$355,347

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 ¥11,000 million ($132,291 thousand) in 2011 and ¥6,500 million in 2010.

4. INCOME TAXESThe statutory tax rates applicable to the Company and its domestic subsidiaries for the year ended March 31, 2011 and2010 were approximately 40.4%. Income taxes of the foreign subsidiaries are based generally on the tax rates applicablein their countries of incorporation.
(1) The effective tax rates on income before income taxes in the accompanying consolidated statements of income are notequal to the above-mentioned statutory tax rate for the following reasons:Year ended March 31, 2011
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%
2.3
(2.3)
9.4
(0.9)
(1.7)
47.2%

TOYO ENGINEERING CORPORATION

Annual Report 2011

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

24

25

40.4%
1.4
(0.8)
23.3
(2.4)
(13.0)
48.9%(2) Significant components of the deferred income tax assets and liabilities at March 31, 2011 and 2010 are as follows:
Thousandsof U.S.
dollars

Millions of yen

2011

2010

2011

¥

193
1,261
498
860

¥ 212
1,235
396
634

$

Total deferred tax assets (gross) ...............................................................

2,812

2,477

33,818Deferred tax liabilities (gross):
Difference in net unrealized gain on securities .......................................
Undistributed earnings of subsidiaries and affiliates...............................
Other ......................................................................................................

(460)
(669)
(107)

(538)
(810)
(135)

(5,531)(8,047)(1,286)

Total deferred tax liabilities (gross) ............................................................
Net deferred tax assets ..............................................................................

(1,236)¥ 1,576(1,483)¥ 994(14,864)$ 18,954

Deferred tax assets (gross):Reserve for bonuses ..............................................................................
Accrued retirement benefits....................................................................
Reserve for compensation for completed works.....................................
Other ......................................................................................................

2,317
15,170
5,985
10,346

Note: The Company and its consolidated subsidiaries had temporary differences excluded from calculation of deferred
tax assets of ¥13,086 million ($157,378 thousand) and ¥12,097 million at March 31, 2011 and 2010, respectively,
which are available to be offset against future taxable income.
(3) Net deferred tax assets at March 31, 2011 and 2010 are included in the consolidated balance sheets as follows:
Millions of yen

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

2011¥1,111470(0)(5)¥1,5762010¥1,753
122
(0)
(881)
¥ 994

Thousands of
U.S. dollars

2011$13,366
5,656
(1)
(67)
$18,954

5. 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.

Financial Section(1) Accrued retirement benefits for employees at March 31, 2011 and 2010 consisted of the following:
Millions of yen

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

2011¥(15,100)
8,886(6,234)
994
1,257
(940)
(4,923)49¥ (4,972)

2010¥(15,643)
8,903(6,740)1,241
1,812(1,128)(4,815)—¥ (4,815)(2) Net periodic pension cost for the years ended March 31, 2011 and 2010 consisted of the following:
Millions of yen

2011
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 .....................................................................................................

¥ 595
311
(21)
246
728
(188)
112
1,783
¥1,783

2010
¥ 691
291
—
246
1,315
(188)
115
2,470
¥2,470Thousands of
U.S. dollars

2011$(181,597)
106,625(74,972)
11,957
15,119(11,305)(59,201)594$ (59,795)

Thousands of
U.S. dollars

2011$ 7,154
3,738
(248)
2,963
8,752
(2,261)
1,343
21,441$21,441(3) Basis of calculation of projected benefit obligation for the years ended 2011 and 2010, respectively.
Method of allocation of estimated pension cost
Discount rate
Expected rate of return on plan assets
Amortization period for unrecognized actuarial loss
Amortization period for unrecognized obligation at transition
Amortization period for unrecognized prior service cost

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

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) betransferred to the capital reserve and the legal reserve, respectively, until the sum of the capital reserve and the legal
reserve equals 25% of the common stock account. Such distributions can be made at any time by resolution of theshareholders, or by the Board of Directors if certain conditions are met, but neither the capital reserve nor the legal
reserve is available for distributions.

7. CONTINGENT LIABILITIESThe Company and its subsidiaries were contingently liable as guarantors of loans to others in the aggregate amount of¥530 million ($6,368 thousand) and ¥528 million at March 31, 2011 and 2010, respectively.

TOYO ENGINEERING CORPORATION

Annual Report 201126

8. RESEARCH AND DEVELOPMENT COSTS
Research and development costs included in selling, general and administrative expenses for the years ended March 31,
2011 and 2010 amounted to ¥1,278 million ($15,369 thousand) and ¥1,417 million, respectively.

9. OTHER COMPREHENSIVE INCOME
Effective the year ended March 31, 2011, the Company adopted “Accounting Standard for Presentation ofComprehensive Income” (“ASBJ Statement No. 25” issued on June 30, 2010). In accordance with this new standard,
consolidated statements of comprehensive income for the year ended March 31, 2010 and 2009 are not presented. The
comparative information for the year ended March 31, 2010 is as follows:
Millions of yen
2010
Other comprehensive income:Net unrealized gain on available-for-sale securities ........................................................................
Deferred gains or losses on hedges................................................................................................
Foreign currency translation adjustments .......................................................................................
Share of other comprehensive income of associates accounted for using equity method ..............
Other comprehensive income........................................................................................................

¥491
(20)
340
33
¥844

Comprehensive income attributable to:Shareholders of Toyo Engineering Co. .........................................................................................
Minority interests .............................................................................................................................
Comprehensive income..................................................................................................................

7,937
179
¥8,116

10. OTHER EXPENSES“Other” in “Other expenses” for the years ended March 31, 2011 and 2010 consisted of the following:
Millions of yen

Years ended March 31,

2010

2011

Thousands of
U.S. dollars
2011

Loss on disposal of fixed assets .............................................................

¥

4
6

¥ 15
—

$

Loss on valuation of investments securities ............................................
Equity in losses of affiliated companies...................................................
Provision for disaster loss .......................................................................
Other .......................................................................................................
Total ..................................................................................................

—
95
200
¥305

87
—
121
¥223

—
1,146
2,409
$3,6674468

11. IMPAIRMENT 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 years ended March 31, 2011 and 2010 were comprised of the following:
Year ended March 31, 2011
There is no material impairment of fixed assets.
Year ended March 31, 2010
Location:
Chiba Prefecture and Fukushima Prefecture
Major use:
Real Estate
Asset category:Amount:Land, building and structure, etc.
¥1,213 million

27

Financial Section

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 using
real-estate appraisal values, etc., for the year ended March 31, 2010.

12. LEASESThe Company and its consolidated subsidiaries have adopted “Accounting Standard for Lease Transactions.”(a) Finance Leases
Finance leases are capitalized, and recorded on the balance sheet based on finance lease contracts.
(b) Operating Leases
Operating leases are not capitalized, but future minimum lease payments and receivables are as follows:(b-1) Operating Leases (as Lessee)
Future minimum lease payments subsequent to March 31, 2011 and 2010 for noncancelable operating leases are
summarized as follows:

Thousands of
U.S. dollars

Millions of yen

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

2011

2010

¥311
405
¥716

¥163
190
¥353

2011

$3,7384,869$8,607(b-2) Operating Leases (as Lessor)
Future minimum lease receivables subsequent to March 31, 2011 and 2010 for noncancelable operating leases are
summarized as follows:

Thousands of
U.S. dollars

Millions of yen

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

2011

¥ 897
5,492
¥6,389

2010

2011

¥ 925
6,215
¥7,140$10,791
66,048$76,839

TOYO ENGINEERING CORPORATION

Annual Report 201128 29

13. FINANCIAL INSTRUMENTS
For the year ended March 31, 2011
1. Condition of Financial Instruments
The Company and its consolidated subsidiaries hold their temporary cash surplus through low-risk financial assets andraise funds through borrowing from banks and issuing corporate bonds.
Derivative financial instruments are utilized for reducing the risk of exchange fluctuations, interest fluctuations, andcredit. 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 these risks
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.
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, 2011
(1) Cash and deposits ..................................................................................
(2) Notes and accounts receivable...............................................................
Less: Allowance for doubtful receivables . ............................................
Notes and accounts receivable, net ......................................................

Book value¥ 45,070
30,737(416)
30,328(3) Other current assets. ..............................................................................
Less: Allowance for doubtful receivables ..............................................
Other current assets, net ......................................................................
(4) Marketable and investment securities
Held-to-maturity securities ....................................................................
Other securities.....................................................................................
Total of assets.......................................................................................
(1) Notes and accounts payable ..................................................................
(2) Short-term borrowings ............................................................................
(3) Bonds payable due within one year ........................................................
(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

¥ 45,070¥—

30,327

(1)

8,401
(2)
8,399

8,399

—

43,993
4,328
132,118
40,8115,391
1,000
28,54775,74943,993
4,328
132,11740,8095,391
1,009
28,791
76,000

0
—
(1)
(2)
—
9
244
251

10
(18)
(8)

10
(18)
(8)

—
—
—

¥

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 derivativetransactions are presented. Values in parentheses show contra-asset account, net liabilities and unrealized loss.

¥

Financial Section(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 tosuch 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.
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 are nearly
equal to such book values. Fair values of other items are based on the present value discounted by the proper discountrate 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 payable due within one year
Fair values are shown as the present value discounted by the proper discount rate coupled with period for settlement andcredit 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 “15. DERIVATIVE TRANSACTIONS.”(Note 2) Financial instruments for which it is extremely difficult to determine the fair value
Unlisted securities that amounted to ¥2,436 million ($29,300 thousand) as of March 31, 2011 are excluded from the abovetable because they are deemed extremely difficult to determine the fair values; they do not have market prices and it is notpossible 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
After one year
through five years

Within one year

¥ 45,070
29,716
8,399
43,993¥127,178

Cash and deposits ..................................
Notes and accounts receivable ...............
Other current assets................................
Held-to-maturity securities ......................
Total ..................................................

After five years
through ten years

¥ —
612
2
—
¥614

After ten years

¥—
—
—
—
¥—

¥—
—
—
—
¥—

(Note 4) Schedule for repayment of bonds and long-term borrowings
For the year ended March 31, 2011
Millions of yen

Within one
year

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

After two
After one
years
year
through two through three
years
years

¥ 1,000¥—

13,383¥14,383

3,131¥3,131¥—

3,458¥3,458After threeyears
through four
years

After four
years
through five
years

Over five years

¥

¥

¥

—

2,647
¥2,647—

3,547¥3,547—2,381¥2,381TOYO ENGINEERING CORPORATION

Annual Report 201130

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 “Guidanceon 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 andraise funds through borrowing from banks and issuing corporate bonds.
Derivative financial instruments are utilized for reducing the risk of exchange fluctuations, interest fluctuations, andcredit. 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 these risks
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.
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.
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

Book value(1) Cash and deposits ..................................................................................
(2) Notes and accounts receivable...............................................................
Less: Allowance for doubtful receivables ..............................................
Notes and accounts receivable, net ......................................................

¥ 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 payable due within one year ........................................................
(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 derivativetransactions are presented. Values in parentheses show contra-asset account, net liabilities and unrealized loss.

31

Financial Section(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 tosuch 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.
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 are nearly
equal to such book values. Fair values of other items are based on the present value discounted by the proper discountrate 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 andcredit 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 “15. 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 the abovetable because they are deemed extremely difficult to determine the fair values; they do not have market prices and it is notpossible 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
through five years

After five years
through ten years

After ten years¥ 36,899
24,435
11,98437,994¥111,312

¥ —
2,939
2
—
¥2,941

¥—
—
—
—
¥—

¥—
—
—
—
¥—

Cash and deposits ...........................................
Notes and accounts receivable ........................
Other current assets.........................................
Held-to-maturity securities ...............................
Total ...........................................................

(Note 4) Schedule for repayment of bonds and long-term borrowings
For the year ended March 31, 2010
Millions of yen

Within one
year

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

¥

After oneyear
through
two years

After twoyears
throughthree years—¥ 1,000

¥

—

4,673
¥4,67313,023¥14,023

2,271¥2,271After threeyears
throughfour years

After four
years
throughfive years

¥

¥

—

2,098
¥2,098—2,072¥2,072

Over five
years

¥

—

1,482
¥1,482

TOYO ENGINEERING CORPORATION

Annual Report 201132 33

14. INVESTMENT SECURITIESThe book value, unrealized gain and loss and the related fair value of held-to-maturity securities at March 31, 2011 aresummarized as follows:
Millions of yen

At March 31, 2011

Book
Value

Government bonds.........................................................

¥43,993

Unrealized
Gain

Unrealized
Loss

¥1

¥(1)

Fair
Value

¥43,993

The cost, unrealized gain and loss and the related book value of other securities with available fair values at March 31,
2011 are summarized as follows:
Millions of yen

At March 31, 2011
Equity securities .............................................................

Acquisition
Cost

Unrealized
Gain¥3,114¥1,230

Unrealized
Loss

¥(15)

Book
Value

¥4,329The 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

Book
Value

Government bonds.........................................................

¥37,994

Unrealized
Gain

Unrealized
Loss

¥0

¥(0)

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¥2,927

Unrealized
Gain

Unrealized
Loss¥1,441

¥―

Book
Value

¥4,368

15. DERIVATIVE TRANSACTIONS
For the year ended March 31, 2011
1. Derivatives not designated as hedging instruments(1) Currency-related
Millions of yen

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

All notionalamounts

Notional
amounts due
over one year

¥421

¥—

¥5

¥5

3
47
¥471

—
—
¥—

(0)
5
¥10

(0)
5
¥10

Fair value

Unrealized
gain / loss

Financial Section

2. Derivatives designated as hedging instruments(1) Currency-related
Millions of yen
Main hedged
items

All notionalamounts

Notional
amounts due
over one year

Fair value

The method unrealized gains or losses are recorded in deferred hedge gains or losses:
Foreign exchange forward contracts
Selling
USD ............................................ Accounts
¥ 684
¥ 384
receivable
EUR ............................................
77—
andBuyingaccounts
USD ............................................
415
247
payableEUR ............................................
153—
The method unrealized gains or losses are included in their hedged items:
Foreign exchange forward contracts
Selling
USD ............................................
6,959
885
EUR ............................................ Accounts
706—
receivable
SEK.............................................
4,682
1,300
and
Buyingaccounts
USD ............................................
11,103
2,487
payableEUR ............................................
228
51
SEK.............................................
5,982
450
Total ............................................
¥30,989¥5,804

¥ (5)
(3)
5
6

N/A

Computational
method of fair value

Based on prices
offered by thefinancial
institution

Based onforwardexchangemarket prices¥ 3(2) Interest-related
Main hedged
Items

All notionalamounts

Millions of yen
Notional
amounts due
over one year

Fair value

The method unrealized gains or losses are recorded in deferred hedge gains or losses:
Interest swap contracts
floating-for-fixed rate swap ............ Long-term
¥ 282
¥ 247
borrowings

Computational
method of fair value

Based on priceprovided by thefinancial
institution
The method unrealized gains or losses are recorded over the terms of such agreements in interest expense:
Interest swap contracts
floating-for-fixed rate swap ............ Long-term
10,9781,468
N/A Based on priceprovided by theborrowings
financial
institution
Total...........................................
¥11,260¥1,715¥(20)¥(20)

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

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

All notionalamounts

Notional
amounts due
over one year

¥45

¥—

¥2

¥2

3
¥48

—
¥—

(0)
¥2

(0)
¥2

Fair value

Unrealized
gain / loss

TOYO ENGINEERING CORPORATION

Annual Report 201134 35

2. Derivatives designated as hedging instruments(1) Currency-related
Millions of yen
Main hedged
items

All notionalamounts

Notional
amounts due
over one year

The method unrealized gains or losses are recorded in deferred hedge gains or losses:
Foreign exchange forward contracts
Selling
USD .............................................. Accounts
¥ 772
¥ 55
EUR .............................................. receivable
175
—
and
Buying ............................................. accounts
USD .............................................. payable369—
EUR ..............................................
56—
The method unrealized gains or losses are included in their hedged items:
Foreign exchange forward contracts
Selling
USD
3,204
149
Accounts
EUR
843—
receivable
Buyingand
USD .............................................. accounts
2,460—
EUR .............................................. payable
433—
CHF...............................................
25—
3—
GBP ..............................................
Total ..............................................
¥8,340¥204

Fair value

¥(22)
13
14
(8)

N/A

Computational
method of fair value

Based on prices
offered by thefinancial
institution

Based onforwardexchangemarket prices¥ (3)(2) Interest-related
Millions of yen
Main hedged
Items

All notionalamounts

Notional
amounts due
over one year

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

Fair value

Computational
method of fair value

Based on priceprovided by thefinancial
institution
The method unrealized gains or losses are recorded over the terms of such agreements in interest expense:
Interest swap contracts
floating-for-fixed rate swap ............ Long-term
12,4899,979
N/A Based on priceprovided by theborrowings
financial
institution
Total...........................................
¥12,807¥10,261
¥(23)
¥(23)

Financial Section

16. RENTAL PROPERTIESFor the year ended March 31, 2011
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, 2011, the Company andsome of its consolidated subsidiaries recorded ¥992 million of rental revenues.
Book value, increase (decrease) in value, and fair value of rental properties are listed below.
Millions of yen
Book value
at March 31, 2010

Increase (decrease)in book value

Book value
at March 31, 2011

Fair value
at March 31, 2011¥18,154¥(538)¥17,616¥23,102
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 depreciation expense.
3. Computational method of fair value
Mainly based on Real Estate Appraisal Standards.
For the year ended March 31, 2010
The Company and its consolidated subsidiaries have adopted “Accounting Standard for Disclosures about Fair Value ofInvestment and Rental Properties” (“Statement No. 20” issued by ASBJ on November 28, 2008) and “Guidance on
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 officebuildings (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)¥18,154¥23,496
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 of impairment loss.
3. Computational method of fair value
Mainly based on Real Estate Appraisal Standards.

17. SEGMENT INFORMATION
Effective the fiscal year ended March 31, 2011, the Company has adopted new accounting standards for disclosuresabout segments of an enterprise and related information. Segment information for the year ended March 31, 2010 has
been restated in accordance with such accounting standards for comparative purposes.
(1) Operating Segments
The operating segments of the Group are components for which discrete financial information is available and whose
operating results are regularly reviewed by the Executive Committee to make decisions about resource allocation and toassess performance.
The Companies’ reportable operating segments consist of the following three business groups:
EPC Business— Research and development, design, engineering, procurement, and construction of a variety ofplants, such as oil, gas, petrochemical, and general chemical.
IT Business— Solution business based on other companies’ ERP package products and product business basedon our subsidiary ERP package products, etc.
Real Estate— Rent of commercial facilities and residences, and administration.

TOYO ENGINEERING CORPORATION

Annual Report 2011

36

Millions of yen

Year ended March 31, 2011

EPC Business IT BusinessNet sales and segment profits:
Net sales(1) Net sales to outside customers ...
(2) Inter-segment net sales .............
Total ............................................
Segment profits .................................
II Segment assets..............................
III Others
Depreciation ......................................
Amount invested in equity method
affiliates ...........................................
Increase of fixed assets ....................

Real Estate

Total

Adjustments

Consolidated

I¥141,729
202
141,931
5,562¥164,209¥11,06151
11,112225¥ 7,096¥ 2,907
243
3,150
1,026
¥21,390¥155,697
496
156,193
6,813¥192,695

¥

—
(496)
(496)
2
¥5,693¥155,697—
155,697
6,815¥198,388

¥

¥

¥

¥

¥

¥

1,112
3,005
985

743
—
676

583
—
23

2,438
3,005
1,684

(1)

2,437

—
—

3,005
1,684

Adjustments

Consolidated

Thousands of U.S. dollars

Year ended March 31, 2011
I Net sales and segment profits:
Net sales(1) Net sales to outside customers ..
(2) Inter-segment net sales ............
Total ...........................................
Segment profits ................................
II Segment assets .............................
III Others
Depreciation .....................................
Amount invested in equity method
affiliates ..........................................
Increase of fixed assets ...................

EPC Business IT Business

Real Estate

Total$1,704,487
2,445
1,706,932
66,889$1,974,851$133,029
611
133,640
2,711$ 85,342$ 34,966
2,913
37,87912,336$257,247$1,872,482
5,969
1,878,451
81,936$2,317,440— $1,872,482(5,969)—(5,969)1,872,482
24
81,960$68,460 $2,385,900

$

$

$

$

$

13,377

8,931

36,141
11,844

7,016

—
8,132

29,324

—
278

$

(11)

36,141
20,254$29,313——36,141
20,254

Notes: 1. “Adjustments” for Segment profits and Depreciation represent the elimination of inter-segment transactions.
2. “Segment profits” represents operating income from Consolidated Statement of Income.
3. Segment assets adjustments include (¥476) million (($5,719) thousand) of inter-segment eliminations and¥6,167 million ($74,179 thousand) of non-allocated corporate assets, which is chiefly the Company’s
investment securities attributed to the administrative department.
Millions of yen

Year ended March 31, 2010
I Net sales and segment profits:
Net sales(1) Net sales to outside customers ..
(2) Inter-segment net sales ............
Total ...........................................
Segment profits ................................
II Segment assets .............................
III Others
Depreciation .....................................
Amount invested in equity method
affiliates ..........................................
Increase of fixed assets ...................

EPC Business IT Business

Real Estate

Total

Adjustments

Consolidated¥160,100
179
160,279
11,879¥154,893¥10,792
57
10,849191¥ 7,146¥ 3,052
263
3,315
1,000
¥22,422¥173,944
499
174,443
13,070¥184,461

¥

—
(499)
(499)
0
¥5,666¥173,944—
173,944
13,070¥190,127

¥

¥

¥

¥

¥

¥

950
2,702
1,054

621
—
1,130

661
—
8

2,232
2,702
2,192

0
—
—

2,232
2,702
2,192

Notes: 1. “Adjustments” for Segment profits and Depreciation represent the elimination of inter-segment transactions.
2. “Segment profits” represents operating income from Consolidated Statement of Income.
3. Segment assets adjustments include (¥471) million of inter-segment eliminations and ¥6,137 million of
non-allocated corporate assets, which is chiefly the Company’s investment securities attributed to theadministrative department.

37

Financial Section(2) Information by Geographical Segments Based on the Location of Projects
Millions of yen

Year ended March 31, 2011

Japan

Brazil

India

China

OthersTotal

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

¥55,409¥26,638¥17,613¥17,301¥38,736¥155,697(3) Information by Major Customer
Millions of yen

Year ended March 31, 2011

COMPANHIA DE DESENVOLVIMENTO E
MODERNIZAÇÃO DE PLANTAS INDUSTRIAIS S.A.

Related business segment¥16,854EPC

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

18. SUPPLEMENTARY INFORMATION FOR CONSOLIDATED STATEMENTS OF CHANGES IN
NET ASSETSFor the year ended March 31, 2011(a) Type and number of outstanding shares
Number of shares
Type of shares

Balance at beginningof yearIncrease in shares
during the year

Decrease in shares
during the year

Balance at end ofyear

192,792,539
192,792,539

—
—

—
—

192,792,539
192,792,539

751,115
751,115

108,176108,176

1,261
1,261

858,030
858,030

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

Notes: 1. Treasury stock increased by 108,176 shares due to the repurchase of shares less than one unit.
2. Treasury stock decreased by 1,261 shares due to the sale of shares less than one unit.
(b) Dividends(b-1) Dividends paid to shareholder
Date ofapproval

Resolution
approved byType ofsharesAmount(Thousands of
U.S. Dollars)

Amount per
share
(Yen)

Amount per
share(U.S. Dollars)

Shareholders’
cut-off date

Effective
date

June 23,2010

Annual general
meeting ofshareholders

Amount(Millions ofyen)

Common
stock

864

9,287

4.5

0.05

March 31,2010

June 24,2010(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 ofsharesAmount(Millions ofyen)June 23,2011

Annual general
meeting ofshareholders

Commonstock

959

AmountAmount per(Thousands ofshare
U.S. Dollars) Paid from(Yen)

Amount per
share(U.S. Dollars)

Retainedearning

0.06

11,533

5.0

Shareholders’ Effective
cut-off datedate

March 31,2011

June 24,
2011

TOYO ENGINEERING CORPORATION

Annual Report 2011

38 39

For the year ended March 31, 2010(a) Type and number of outstanding shares
Number of shares
Type of shares

Balance at
beginning of year

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

Increase in shares
during the year

Decrease in shares
during the year

Balance at
end of year

192,792,539
192,792,539

—
—

—
—

192,792,539
192,792,539

672,540
672,540

85,72785,727

7,152
7,152

751,115
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 of approval

June 23,2009
November 11,
2009

Resolution
approved by

Annual general
meeting ofshareholders
Board ofDirectors

Type of shares

Commonstock
Commonstock

Amount(Millions of yen)Amount per share
(Yen)

768

4

480

2.5

Shareholders’
cut-off date

Effective date

March 31,2009
September 30,
2009

June 24,2009
December 1,
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 byJune 23,2010

Annual general
meeting ofshareholders

Type of shares

Amount(Millions ofyen)

Commonstock

864

Paid fromAmount per
share
(Yen)

Shareholders’
cut-off date

Effective
date

Retainedearning

4.5

March 31,2010

June 24,2010

19. 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 of March 31, 2011
and 2010 is summarized as follows:
Millions of yen

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

2011¥45,070(1,725)

2010¥36,899(939)

43,993¥87,338

37,994¥73,954

Thousands of
U.S. dollars

2011$ 542,032(20,748)

529,077$1,050,361

Financial Section

20. RELATED PARTY TRANSACTIONS
Unconsolidated subsidiary
Millions of yen
For the years ended March 31,
Name: CCDL CONSTRUCOES DE
DUTOS LTDA.

2011
Transaction
amountAddress:
BrazilCapital and investments:
1,139 thousand BRL
Business:
Construction
Equity ownership percentage:
Holding 60% directly
Relation with related party:
Loan for operating fund
Summary of transactions:
Loan for operating fund

Title ofaccount

2010
Accountbalance

Transaction
amountN/A—

Title ofaccount

Accountbalance

Short-term
loan

2,826

Note: Interest rate on loan is determined by considering effective market rates.
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.
Affiliate
Millions of yen
For the years ended March 31,
Name: NEDL - CONSTRUCOES DE
DUTOS DO NORDESTE LTDA.

Address:
BrazilCapital and investments:
2,524 thousand BRL
Business:
Construction
Equity ownership percentage:
Holding 42% directly
Relation with related party:
Loan for operating fund
Summary of transactions:
Loan for operating fund2011
Transaction
amount—Title ofaccount

Long-term
loan

2010
Accountbalance

Transaction
amount3,708—

Title ofaccount

Accountbalance

Short-term
loan

5,750

Note: Interest rate on loan is determined by considering effective market rates.
The Company decreased ¥239 million ($2,874 thousand) and ¥1,424 million, and then reserved ¥3,708 million($44,593 thousand) and ¥3,947 million of allowance for doubtful accounts at March 31, 2011 and 2010, against
each loan above.

TOYO ENGINEERING CORPORATION

Annual Report 201140

Other affiliates subsidiary
Millions of yen
For the years ended March 31,
Name: MIT-POWER LIMITED

Address:
Thailand
Capital and investments:
14,019 thousand BHT
Business:
Construction
Equity ownership percentage:
N/A
Relation with related party:
Contract for engineering andconstruction
Summary of transactions:Contract for engineering andconstruction

Transaction
amount2011

Title ofaccount

Advancereceipt oncontract2010
Accountbalance

Transaction
amountTitle ofaccount

Accountbalance

3,253

2,830

N/A

Accounts
receivable

14

Note: “Contract for engineering and construction” is determined by price negotiation based on market price, which issimilar to general transaction. “Transaction amount” does not include consumption tax while “Account balance”
includes consumption tax.

21. BUSINESS COMBINATIONSYear ended March 31, 2011
Effective April 1, 2010, the Company adopted “Accounting Standard for Business Combinations” (“ASBJ Statement No.
21” issued on December 26, 2008) , “Accounting Standard for Consolidated Financial Statements” (“ASBJ Statement No.
22” issued on December 26, 2008), “Partial amendments to Accounting Standard for Research and Development Costs”(“ASBJ Statement No. 23” issued on December 26, 2008), “Revised Accounting Standard for Business Divestitures”(“ASBJ Statement No. 7” revised December 26, 2008), “Revised Accounting Standard for Equity Method of Accounting forInvestments” (“ASBJ Statement No. 16” revised December 26, 2008) and “Revised Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures” (“ASBJ Guidance No. 10” revised December
26, 2008).
Based on the share purchase agreement on September 15, 2010, the Company acquired all the shares of ASRC
Energy Services Tri Ocean Engineering Ltd. as of October 4, 2010.
(1) Outline of business combinationa. Name and business of acquired company
Name:
ASRC Energy Services Tri Ocean Engineering Ltd.
Business details: Engineering, procurement, and construction management of upstream facilities for energy
development and production facilities for oil sand.
Scale of business: Net sales were approximately 32 million CAD for the year ended December 31, 2009b. Reason for the acquisition
The experience of ASRC Energy Services Tri Ocean Engineering Ltd is effective for expanding the community-basedengineering network which works on whole plant lifecycle on upstream facilities for energy development andproduction facilities for oil sand in Canada and the surrounding region.
c. Date of combination
October 4, 2010
d. Legal form of combination
Share acquisition from ASRC Energy Services, Inc.
e. Name after acquisition
Tri Ocean Engineering Ltd.
f. Acquired voting right ratio
100.0%

41

Financial Section(2) Period for which acquired company’s operating results included in the consolidated financial statements
Consolidated balance sheet only, as the deemed acquisition date is December 31, 2011
(3) Acquisition cost and details
Purchase price: ¥2,704 million (33 million CAD) in cash
Direct expense: ¥25 million for advisory expense(4) Assets and liabilities assumed on the date of combination
Millions of yen

Current assets....................................................................................................................................
Fixed assets.......................................................................................................................................
Total assets........................................................................................................................................

¥

Current liability ...................................................................................................................................
Long-term liability ...............................................................................................................................
Total liability .......................................................................................................................................

¥

Note: Current assets include ¥166 million of cash and cash equivalents.
(5) Goodwill, amortization method and amortization period.
a. Goodwill: ¥1,847 million (22 million CAD)
b. Amortization method and amortization period
Straight-line method over 10 years

950
68¥ 1,018

¥

121
26
147

TOYO ENGINEERING CORPORATION

Annual Report 201142 43

Worldwide Network
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/●

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●

Offices
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◉

Doha
Bldg. No. 9, Al Abbas St., near Mannai R/A,
off AI Rayyan St., P.O. Box 24131, Doha, Qatar
Tel: 974-4437-8862
Fax: 974-4437-8861◉

TehranUnit 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,
RussiaTel: 7-495-258-2064/1504
Fax: 7-495-258-2065◉

Global Toyo and Group Companies
Toyo Engineering Korea Limited
Engineering and construction for plants andfacilities
Toyo Bldg., 677-17, Yeoksam-1 Dong,
Kangnam-ku, Seoul 135-915, Korea
Tel: 82-2-2189-1620
Fax: 82-2-2189-1891
http://www.toyokorea.com/■

Toyo Engineering Corporation, China
Engineering and construction for plants andfacilities
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
http://www.toyo-eng.com.cn/■

Toyo Engineering &Construction Sdn. Bhd.
Engineering and construction for plants andfacilities
Suite 25.4, 25th Fl., Menara Haw Par,
Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia
Tel: 60-3-2731-1100
Fax: 60-3-2731-1110
http://www.toyo-m.com.my/■

Toyo Engineering India Limited
Engineering and construction for plants andfacilities“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/■

Saudi Toyo Engineering Company
Engineering and construction for plants andfacilities
B-504 Mada Commercial Tower 1, Prince TurkiStreet, Corniche District, P.O. Box 1720,
Al Khobar-31952, Saudi Arabia
Tel: 966-3-897-0072
Fax: 966-3-893-8006■

Toyo Engineering Europe, S.r.I.
Procurement services in Europe
10, Via Alzata, I-24030 Villa d’Adda, Bergamo,
Italy
Tel: 39-035-4390520■

Toyo Canada Corporation
Engineering and construction for plants andfacilities#640 Ford Tower, 633, 6th Avenue S.W.,
Calgary, Alberta T2P 2Y5, Canada
Tel: 1-403-237-8117 / 8127■

Tri Ocean Engineering Limited
Engineering and construction for plants andfacilities
1400, 727-7th Avenue S.W., Calgary,Alberta T2P 0Z5, Canada
Tel: 1-403-266-4400
Fax: 1-403-266-5525■

Toyo U.S.A., Inc.
Engineering and construction for plants and facilities
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 andfacilities
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 andfacilities
Praia de Botafogo, 228-Sala 801C-Ala B, Botafogo, 22250-906 Rio de Janeiro, RJ, Brazil
Tel: 55-21-3621-6100
Fax: 55-21-3621-6101■

Toyo-Thai Corporation Public Company
LimitedEngineering and construction for plants andfacilities
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/■

Atlatec, S.A. de C.V.
Engineering and construction and operation &maintenance for water facility treatment
Privada San Alberto 301, Residential Santa
Barbara, San Pedro Garza García, N.L. 66266
MexicoTel: 52-81-8133-3200
Fax: 52-81-8133-3282
http://www.atlatec.com/■

Domestic
TEC Estate, Ltd.
Property development and real estatebusiness
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 2730005, Japan
Tel: 81-47-433-7234
TEC Software &Technical Services Corporation
Staffing services, Job placement services,
and Translation / Interpretation
7-11-5 Honcho, Funabashi-shi,
Chiba 273-0005, Japan
Tel: 81-47-425-8461
Fax: 81-47-425-8464●

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 systems
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, 2011)

Stock Information

TOYO ENGINEERING CORPORATION

Annual Report 2011

44 45

(As of March 31, 2011)

Founded:May 1, 1961

Common Stock:¥18,199 million

Stock Exchange Listing:Tokyo Stock Exchange

Authorized Shares:

500,000,000

Capital Stock Issued:

192,792,539

Number of Shareholders:

15,355Administrator of
Shareholders’ Register:

The Chuo Mitsui Trust and Banking Company, Limited
3-33-1 Shiba, Minato-ku, Tokyo 105-8574, Japan

Major Shareholders:Number of shares(thousands)

Percentage of total(%)

Mitsui & Co., Ltd.

43,77022.70

Mitsui Chemicals, Inc.

25,703

13.33

Japan Trustee Services Bank, Ltd. Trust Account

8,212

4.25

The Master Trust Bank of Japan, Ltd. Trust Account

5,953

3.08

Taisei Corporation

5,000

2.59

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

3,850

1.99

Japan Trustee Services Bank, Ltd. Trust Account 9

3,319

1.72

Trust and Custody Services Bank, Ltd.
Pension Trust Account

3,028

1.57

Nomura Asset Management U.K. Ltd.
Sub Account Evergreen Nominees Ltd.

2,452

1.27

Sumitomo Mitsui Banking Corporation

2,350

1.21

Others0.74

ess than 5 000 shares

Financial institutions
21.05

5 000 4

Individuals
22.26

sharesNumber of
Shares Helde of
Shareholder

Foreign shareholders
14.25

1 000 000 s

Domestic companies
41.70

50 000 4

shares500 000

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©2011 Toyo Engineering Corp.
Printed in Japan