Brief report on the Financial Statements for the period ending March, 2002 (consolidated)
May 23, 2002

Name of listed company:
DAI-DAN Co., Ltd.
Listed stock exchanges: Tokyo and Osaka
Code No.:1980
Location of head office: Osaka Pref.
(URL http://www.daidan.co.jp)
Inquiries to be addressed to: Toshikazu Ando, Executive Director and General Manager of Operations Div.
Tel. (06) 6441 - 8231
Date of Director's meeting on closing of accounts: May 23, 2002
Adoption of American Accounting Standards:
None

1. Consolidated performance for the period ending March, 2002 (From April 1, 2001 to March 31, 2002)(1) Consolidated management performance (Note: Amounts are indicated with figures less than 1 million yen discarded.)
Sales amountOperating profit
Ordinary profit
Period ending
March 2002
Period ending
March 2001

Million yen％

Million yen％

Million yen％

166,904

-6.5

1,679

57.6

1,803

36.9

178,589

5.9

1,065

-73.5

1,317

-69.0

Current net
earnings per
share

Current net earningper share after
making potential
share adjustments

Shareholders
capitalCurrent net profit
rate

Total capital
Ordinary profit
rate

Sales amount
Ordinary profit
rate

Current net profit
Million yen％

Yen SenYen Sen％％％-1,455－-31.69

－

-3.2

1.2

1.1

-8,480－-184.65

－

-16.6

0.8

0.7

Period ending
March 2002
Period ending
March 2001

Note: 1) Investment profit or loss on equity method
End of March 2002 0 million yen
End of March 2001 -23 million yen
2) Interim average number of shares (consolidated) End of March 2002 45,923,188 shares
End of March 2001 45,925,606 shares
3) Changes in accounting procedures: none
4) Percentage indication of sales amount, operating profit, ordinary profit, and current net profit show increase or decrease
compared with previous period(2) Consolidated financial condition
Total assets

Shareholder's capitalMillion yen
Period ending
March 2002
Period ending
March 2001

Shareholders capital rate Shareholder's capital per share

Million yen

147,454

44,422

162,430

46,296

Note: Issued number of shares at the end of period (consolidated)%

Yen Sen30.1

967.5028.5

1,008.07

End of March 2002 45,914,005 shares
End of March 2001 45,925,725 shares(3) Consolidated cash flow condition
Cash flow on sales
Cash flow on investment Cash flow on financial Period end balance of
cash and equivalent items
activities
activities
activities
Million yen
Period ending
March 2002
Period ending
March 2001

Million yen

Million yen

Million yen

-499

213

-3,81429,004

2,544

1,037

-1,79033,068(4) Consolidation scope and items relating to application of equity method
Number of consolidated subsidiaries: 11
Number of non-consolidated subsidiaries with equity method applied: none
Number of affiliated company with equity method applied: 1(5) Consolidation scope and situation on changes in equity method application
Consolidated (new): 1(excluded): 1

Equity method (new): none

(excluded): none

2. Estimated of consolidated performance of period ending March 2003 (From April 1, 2002 to March 31, 2003)
Sales amount
Ordinary profit
Current net profit
InterimMillion yen
51,000165,000

Million yen-2,7002,500Million yen-1,7501,150

Total period(Reference) Estimated current net profit per share (for total period) 25.05 yen
Since the performance is estimated based on the information available as of the announcing date,actual results can be different from estimated ones due to various factors.
For the items of the above performance estimate, see the attached material for consolidation at page 5.

1. Situation of the Corporate Group
Our corporate group consists of our company, 11 subsidiary companies and 1 affiliated company, mainly
engaged in the business of designing, supervising, and job execution of electrical, air conditioning, plumbing& sanitation. The position of our group relating to business and the systematic chart of our business are as
follows:(1) Position of our group relating to business
Facility construction work
Electrical, air conditioning, and plumbing & sanitation
Part of the work of orders received by us is relegated to DAI-DAN Service Kanto Co., Ltd.,DAIDEN Koji Co, Ltd., DAIDEN Koji Corp., DAI-DAN Service Kansai Co., Ltd., Okayama
DAIDEN Setsubi Co., Ltd., Kyushu DAIDEN Setsubi Co., Ltd., Kumamoto DAIDEN Setsubi Co.,
Ltd., CNA ENGINEERS PTE LTD. and DAI-DAN PHILIPPINES, INC. To the MERINO O.D.D.
SDN BHD., we sell facilities and equipment and to THAI O.D.D. CO., LTD, we offer technicalassistance.
Gas piping work
Kyo Gas Co., Ltd. executes gas piping work for orders placed by Osaka Gas Co., Ltd. and orders
placed by our company are minimal.
(2) Systematic chart of business

Customers

Electrical, air conditioning,plumbing & sanitary work

Sales offacilities andequipment

Technical
assistance

Subsidiary company
THAI O.D.D.
CO.,LTD.

Electrical, air conditioning
facility work

Construction facility work

Subsidiary company
MERINO O.D.D.
SDN BHDElectrical, air conditioning,plumbing & sanitary work

DAI-DAN Co., Ltd.

Works execution,
manufacturing andsales of facilities
and equipment

Works execution

Electrical, air conditioning, plumbing& sanitary work
Subsidiary companies
DAI-DAN Service Kanto Co., Ltd.
DAI-DAN Service Kansai Co., Ltd.
Okayama DAIDEN Setsubi Co., Ltd.
Kyushu DAIDEN Setsubi Co., Ltd.
Kumamoto DAIDEN Setsubi Co., Ltd.
DAI-DAN PHILIPPINES, INC.

Affiliated company
CNA ENGINEERS
PTE LTD.

Works execution

Electrical facility workGas piping work

Subsidiary companies
DAIDEN Koji Co. Ltd.
DAIDEN Koji Corp.

Subsidiary company
Kyo Gas Co., Ltd.

DAI-DAN Service Kansai Co., Ltd., which was newly established in the current consolidated fiscal year,
has been included in the consolidated subsidiary companies since the current consolidated fiscal year.
Furthermore, DAIDEN Setsubi Koji Co., Ltd., which was wound up, has been excluded from theconsolidation scope.

12. Management Policies(1) Basic policy on management
Our company, as a general facility implementation company, pursues a basic management policy ofcontributing to society by offering a safe and easy to use, high quality environment by technology
which meets customer confidence and satisfaction and also contributes to environmental preservation.
Under such a management policy, based on planning and implementation of electrical, airconditioning, plumbing & sanitation, etc., in order to respond sensitively to changes in the industrial
structure and the needs of the customers, the company boldly challenges to develop new technologies
that accompany new businesses, and aims to become a vigorous company.
As a management index, we aim for the Return on Equity of more than 5%.
(2) Basic policy on distribution of profits
Our basic, consistent policy is to endeavor to build a solid financial constitution and return profits
stably and continuously to our shareholders achieving their satisfaction possible.
(3) Corporate governanceIn order to respond immediately to drastically changing management environment, a management
council has been set up to discuss taking unerring countermeasures against important management
issues expeditiously, and to make the decision on the management and implementation policies byadopting opinions that are given from inside and outside the company and also on the basis of
opinions from a committee of young leaders toward a promising future. At the same time, proposals
are made to board of directors, thereby aiming to activate the board of directors.
The auditors hold their meeting before the meeting of the board of directors’ is held, and confirm theitems to be discussed by the board of directors and present the opinions of the auditors’ meeting to theboard of directors. This has become and established practice.
Furthermore, to unify the business and affairs of the entire company, a branch office managers’
meeting is being held every month, where not only management policies and measures are explained
but various problems in branch offices are discussed to solve them as quickly as possible.
(4) Management strategy for the mid and long term
Regarding the mid-term management plan, “Challenge NEW DAI-DAN 100”, which has been carriedout since April 2000, we review the progress every year in order to respond to changes in the
management environment, and urge concrete measures as follows.
? Sales aspects
Regarding energy-saving technologies represented by co-generation system, open network
technologies represented by LONWORKS, and clean technologies represented by electronic device
industry and biotechnology industry, we are focusing our concentration on these technologies andpromoting positive sales for them using an unified organization that covers everything from planningto work execution and maintenance. Furthermore, we have embarked on the ESCO project.
As to the fields of pharmaceutical, food, and IT-related industries as well as the field of medical
industry of our core field, we are also strongly promoting proposal-making type of sales activities
that can suggest the development of new technologies or improvement of existing technologies,
targeting an unified organization that covers every from planning to work execution andmaintenance.
In addition, we are actively promoting measures to increase orders of renewal construction where theenergy-saving technologies are utilized, making good use of practices for many years.
2

@ Development technology aspects
We are pursuing our research and development for new technologies by realizing changes in thesocial situation accurately to meet the growing needs of the market.
Furthermore, we continue working on research and development, and improving the existingdevelopment system and products to ensure the high work execution quality and enhance the work
efficiency.
A Work execution technology aspects
We are continuing to offer facilities with not only high quality but also high cost performance by
fully utilizing our work execution technology that we have accumulated over a hundred years of ourexperience.
In addition, we are intensifying our supervising department for the work execution technologies andpromoting to offer construction facilities that can meet the needs of the customers, focusing on
quality, safety, and environmental preservation.
B Information Technology (IT) aspects
Towards the complete operation in April 2003, we are proceeding with re-building the information
system in the entire company in order to achieve higher efficiency and speed of operations that willlead to sharing the information among individual departments. Part of the system is already inoperation.
C ISO
We acquired the ISO14001 certification for the entire company en bloc in February 2002. We arealso carrying out the work of meeting the standard of the year 2000 update even for the ISO 9000
series certification that we have already obtained.
D Personnel aspects
We are proceeding with the effective utilization of personnel and the activation of organizations inorder to establish the result-based performance remuneration using “New Target Management
Evaluation” and let the introduced “Competency Evaluation” take root in the company.
In addition to implementing the above type of measures in a concrete manner, the entire company isworking together to improve the corporate performance towards March 2003 when our company will
be celebrating our hundredth anniversary.

33. Management Record and Financial Condition(1) Management Record
The economy of Japan for the current consolidated fiscal year continuously showed low levels of private
capital investment and personal consumption due to the policy of restricting public expenditures in the
promotion of the structural reform by the Japanese government, the recession of US economy, and theletup in IT (Information technology) related business. Furthermore, under the situation of deteriorating
deflation, expanded hollowing out of industry, and unsettled problems involving bad debts, the growth ofdomestic demand was hardly observed, and the bottom out was not expected yet.
In the construction and facilities industry, public investment was hanging low through the period, andprivate capital investment was continuously decreasing due to strengthened pressure to restrict theinvestment. Hence the order environments turned severe.
Under these economic conditions, our corporate group fully implemented the mid-term management plan
as mentioned above. However, the amount of work orders received was 154,835 million yen, a decreaseof 2.4% over that of the previous period. And the amount of work completed was 166,904 million yen, adecrease of 6.5% over that of the previous mid-term period.
As far as profits are concerned, since total rate of return in completed works was improved thanks to thepromotion of the cost reduction concentrated on the improvement of works efficiency, operating profit
totaled 1,679 million yen, an increase of 57.6% over that of the previous period, and ordinary profit
totaled 1,803 million yen, an increase of 36.9% over that of the previous period. Furthermore, 2,207
million yen evaluation loss on listed stock due to slump of stock prices, and 751 million yen transferred
to allowance for bad debt, which resulted from business contacts’ filing for financial reconstruction under
the Corporate Reorganization Law, were accounted as special losses. As a result, net loss for the current
period totaled 1,455 million yen (net loss for the previous period was 8,480 million yen).
(2) Financial Position
Cash and cash equivalents (hereafter referred to as funds) for the current consolidated fiscal year totaled
29,004 million yen, a decrease of 12.3% over that of the previous period.
(Cash flow from sales activities)
Cash flow involving sales activities for the current consolidated fiscal year amounted to -499 million
yen, which was due mainly to the deterioration of works related cash flow. It was -3,044 million yen, as
compared to that of the previous period.
(Cash flow from investing activities)
Cash flow involving investing activities for the current consolidated fiscal year amounted to 213 million
yen, which was mainly because the receipt from selling fixed assets was larger than the disbursementfrom acquiring fixed assets. It was -823 million yen, as compared to that of the previous period.
(Cash flow from financing activities)
Cash flow involving financing activities for the current consolidated fiscal year amounted to -3,814
million yen, which was mainly because the disbursement from repaying borrowings was larger than thereceipt from borrowing. It was -2,024 million yen, as compared to that of the previous period.

4

(3) Forecast through the period
Regarding the future forecast, although it began to be clear that the falling in the amounts of export andproduction stop, it is predicted that the trends of lower domestic capital investment continue due to theinvisible business situation and the movement to overseas production sites.
In the construction and facilities industry, it is predicted that severe order environments continue due tothe scale-down of the market resulting from the restriction of public investment and sluggish private
capital investment.
To cope with the future changes in economic conditions, our corporate group will concentrate our effort
en bloc to enhance efficiency of work execution and ensure gross profit of completed works by utilizing
our advantage of general facility works.
The consolidated amount of work orders 160,000 million yen, completed work of 165,000 million yen,ordinary profits of 2,500 million yen, and a current net profit of 1,150 million yen are predicted throughthe period.

5

4. Consolidated Financial Statements, etc.
(1) Consolidated Balance Sheet(Unit: million yen)
By period

Accounts

End of the current consolidated
accounting year
(As of March 31, 2002)

AmountEnd of the previous consolidated
accounting year
(As of March 31, 2001)

Component
ratio

Amount%(Assets)

Difference

Component
ratio%

Current assets
Cash on hand and in banks
Note receivables, completed work
accounts receivables
Securities

27,11028,399-1,28955,00965,498-10,488

2,330

4,872

-2,542

Incomplete work expenditures

30,594

27,697

2,897

534

1,719

-1,184

Others

5,783

6,605

-822

Reserves for bad debts

-699

-357

-341

Total current assets

120,663

Deferred tax reserves

81.8

134,435

82.8-13,772

Fixed assets

Tangible fixed assets
Buildings and structures
Machinery and equipment, andtransportation equipment
Tools and facilities

3,437

3,643

-205

100

124

-23

177

199

-21

Land

2,118

2,133

-15

Total tangible fixed assets

5,834

6,101

-266

419

148

270

9,102

10,594-1,491

190

189

0

Deferred tax reserves

6,190

4,841

1,349

Others

6,704

6,762

-57

Reserves for bad debts-1,650-641-1,009Total investments

20,537

21,745-1,207

Intangible fixed assets
Investments
Investment securities
Long term loans receivables

Total fixed assets

26,791

18.2

27,99517.2-1,203

Total assets

147,454100.0

162,430100.0-14,9756

(Unit: million yen)
By period

Accounts

End of the current consolidated
accounting year
(As of March 31, 2002)

End of the previous consolidated
accounting year
(As of March 31, 2001)

Component
ratio

AmountAmount%(Liabilities)

Difference

Component
ratio%

Current liabilities
Notes payable, work accounts
payableShort term loans payable

60,39867,913-7,5159,486

12,268-2,781

Corporate taxes, etc. payable

156

112

43

Incomplete work amount received
Incomplete job compensation
reserves
Others

16,577

17,810-1,233

34

54

-20

5,485

7,278

-1,793

Total current liabilities

92,13762.5

105,43864.9-13,300

Fixed liabilities
Long term loans payable

4,824

5,112

-287

Severance costs reserve
Directors’ retirement allowance
reserve
Liability guarantee loss reserve

5,284

4,716

567

442

496

-53

210

210

–

Consolidated adjustment account

14

18

-3

Others24

24–

Total Fixed liabilities

10,801

7.3

10,5786.5

223

102,93969.8

116,01671.4-13,076

93

0.1

117

0.1

-24

Capital stock

4,479

3.0

4,479

2.8

–

Capital reserves

4,716

3.2

4,716

2.9

–

Consolidated reserves

34,922

23.7

37,11322.8-2,191

270

0.2

–

–

270

55

0.0

4

0.0

51

-7

-0.0

-0

-0.0

-7

-14

-0.0

-15

-0.0

1

44,42230.1

46,29628.5-1,874147,454100.0

162,430100.0-14,975

Total liabilities(Minority interest equity)
Minority interest equity(Shareholders' equity)

Evaluation difference of othersecurities
Foreign exchange adjustment
account
Treasury stock
Stocks of parent company owned
by subsidiary companies

Total Capital
Total liabilities, minority interest
equity and shareholders' equity7(2) Consolidated Profit and Loss Statement(Unit: million yen)
By period
Accounts

Current consolidated
accounting year
(From April 1, 2001
to March 31, 2002)

AmountCompleted work amountCompleted work costCompleted work gross profit
Selling expenses and general administrative expenses

Operating profit
Non-operating revenue
Interests received
Dividends received
Consolidated adjustment account depreciation

Investment profit by equity method
OthersNon-operating expenses
Interest payable
Investment loss by equity method
OthersOrdinary profits
Special profits
Profit on sales of fixed assets
Profit on sales of investments in securities
Reimbursement profit of reserves for liability
guarantee loss
Profits from retirement allowance in trust
Special losses
Loss on sales of fixed assets
Loss on retirement of fixed assets
Loss on sales of investments in securities
Evaluation loss on investments in securities
Evaluation loss on golf club membership rights

166,904
153,611
13,292
11,613
1,679
(472)
54
58
6
0
353
(348)
290
–
57
1,803
(244)
242
1

Percentage
%
100.0
92.0
8.0
7.0
1.0
0.3

0.2

1.1
0.1

Amount178,589
166,634
11,954
10,889
1,065
(835)
123
137
5
–
569
(584)
338
23
222
1,317
(4,803)692
39

Percentage
%
100.0
93.3
6.7
6.1
0.6
0.4

0.3

0.7
2.7

Difference-11,685-13,023
1,338
724
613
(-363)
-69
-79
0
0
-215
(-235)
-47
-23
-164
485
(-4,559)
-449
-37

–

20

-20

–
(3,644)
8
14
6
2,207
334

4,051
(19,353)
0
27
77
158
588

-4,051(-15,709)
7
-12
-71
2,049
-254

Depreciation of difference at the time of changing
the severance costs accounting basis

2.2

10.8

–

11,213-11,213

–
–
–

3,431
3,115
189

-3,431-3,115
-189

–

545

-545

–
751
321

6
–
–

-6
751
321

Evaluation loss on real estate
Loss due to extraordinary construction settlement

Evaluation loss on real property trust
Depreciation of completed work accounts
receivables

Evaluation loss on investments
Amount transferred reserves for bad debts
OthersPrevious consolidated
accounting year
(From April 1, 2000
to March 31, 2001)

Current net profits (or loss) before tax
adjustments etc.

-1,596-1.0-13,232-7.4

11,635

Corporate tax, residence tax and business tax
Adjustment amounts such as for corporate taxes
Losses of minority interests

235
-362
-14
-1,455

0.1
-0.2
-0.0
-0.9

237
-4,784-206-8,480

0.1
-2.7
-0.1
-4.7

-2
4,421
191
7,024

Current net profit (or loss)8

(3) Statement of Consolidated Earned Surplus(Unit: million yen)
By period
Accounts(From April 1, 2001
to March 31, 2002)

Previous consolidated
accounting year
(From April 1, 2000
to March 31, 2001)

AmountAmountCurrent consolidated accounting year

Difference

Consolidated surplus balanceat beginning of period

37,11346,441-9,328

Consolidated surplus
decreased amount( 735)( 848)( -113)

734

734

-0

0

113

-112

(Out of which auditors'
portion)

( 0)

( 10)

( -10)Net profit (or loss) for thecurrent period-1,455-8,4807,024

Consolidated surplus balanceat end of period

34,922

37,113-2,191

Shareholders' dividend
Directors bonus

9(4) Statement of consolidated cash flow
By period
Accounts
I.

(Unit: million yen)
Current consolidated accounting year
(From April 1, 2001 to March 31, 2002)
AmountCash flow on sales activities
Current net profit (or loss) before adjustment for tax
Depreciation expenses
Consolidated adjustment account depreciation amount
Increased or decreased amount of reserves for bad debts
Increased or decreased amount of reserves for severance
costs and reserves for Director’s retirement allowance
Amount set for severance costs in trust
Profits from severance costs in trust
Increased or decreased amount of reserves for liability
guarantee loss
Earned interest and dividends received
Interest paid
Investment profit or loss by equity method
Evaluation loss on investments in securities
Profit or loss on sales of investments in securities
Profit or loss on sales of fixed assets
Loss on sales of retirement of fixed assets
Evaluation loss on golf club membership rights
Evaluation loss on real estate
Paid amount of Director’s bonus
Increased or decreased amount of sales credits
Increased or decreased amount of incomplete work
expenditures
Other increased or decreased amounts of current assets
Increased or decreased amount of procurement credits
Increased or decreased amount of incomplete work
received amount
Other increased or decreased amounts of current liabilities
Sub-total

Received amount of interests and dividends
Paid interest amountPaid amount of corporate tax, etc.
Cash Flow on Sales Activities
II. Cash flow on investment activities
Expenditures by depositing of time deposits
Revenue by pay back of time deposits
Expenditures by acquiring of securities
Revenue by sales of securities
Expenditures by acquiring of tangible fixed assets
Revenue by sales of tangible fixed assets
Expenditures by acquiring of investment securities
Revenue by sales of investment securities
Expenditures by acquiring of shares of subsidiarycompanies
Expenditures by loans
Revenue by recovery of loans
Expenditures by acquiring of other fixed assets
Revenue by sales of other fixed assets
Cash Flow on Investment Activities
III. Cash flow on financial activities
Revenue by short term loans
Expenditures by return of short term loans
Revenue by long term loans
Expenditures by return of long term loans
Expenditures by acquiring of treasury stock
Revenue by sales of treasury stock
Revenue by sales of shares of parent company owned bysubsidiary company
Paid amount of dividends
Paid dividend to minority interests
Other financial activity cash flow
Cash Flow on Financial Activities
IV. Conversion difference relating to cash and cash
equivalent items
V. Increased or decreased amount of cash and cash
equivalent items
VI. Balance at beginning of period of cash and cash
equivalent items
VII. Balance at end of period of cash and cash equivalent
items

10

Previous consolidated accounting year
(From April 1, 2000 to March 31, 2001)
Amount-1,596
194
-6
1,350

-13,232
288
12
554

514

1,632

–
–

9,221
-4,051

–

-20

-112
290
-0
2,207
4
-234
14
115
–
-1
9,745

-260
338
23
158
38
-692
27
334
3,431
-116
-3,935-2,8893,209

818-7,515-3,841
10,034-1,233-477-1,807

1,665

-141

4,339

116
-283
-191
-499

258
-340
-1,713
2,544

-179
–
-201
149
-100
406
-459
219

-13
20
-249
399
-80
738
-411
442

-5

–

-44
38
-702
1,092
213

-195
27
-497
856
1,037

11,760-13,808
5,830-6,850-7
016,217-16,676
6,633-7,224
-0
0

1

–

-738
-1
–
-3,814-736-2-1-1,79037

5-4,063

1,796

33,06831,271

29,00433,068(5) Basic items for preparing consolidated financial statements
1. Items relating to scope of consolidation
Number of consolidated subsidiaries:
11 companies
Names of major consolidated subsidiary companies:
Will be abbreviated here as they have been given in “1. Status of corporate group”.
DAI-DAN Service Kansai Co., Ltd., which was newly established in the current consolidated
fiscal year, has been included in the consolidated subsidiary companies since the current
consolidated fiscal year.
Furthermore, DAIDEN Setsubi Koji Co., Ltd., which was wound up, has been excluded fromthe consolidation scope
2. Items relating to application of the equity method
Number of affiliated companies using the share cross-holdings method: 1 company
Company Name:
CNA ENGINEERS PTE LTD.
The account closing date of the above affiliated company is different from the consolidated accountclosing date, but the financial tables for the fiscal year of this company have been used.
3. Items Related to the fiscal year of Consolidated Subsidiaries
Out of the consolidated subsidiary companies, the accounts closing date of MERINO O.D.D. SDN. BHD,
THAI O.D.D. CO., LTD. and DAI-DAN PHILIPPINES, INC. is December 31.
In the preparation of various financial statement of consolidated accounting, the financial statementsof that date have been used and necessary adjustments have been made in consolidating regarding theimportant transactions that were generated between that date and the consolidated account closing
date.
4. Items relating to accounting procedure standards(1) Evaluation standards and methods for important assets
1) Securities
Bonds held up to the maturing date: Depreciation cost method (straight- line method).
Other securities
With current market valueMarket price method based on the market price of theaccount closing date
(Evaluation differences are treated according to fullcapital direct accounting method, and sale cost is
calculated according to the movable average method.)
Without current market value
Cost method based on the movable average method
2) Derivative:
Market price method
3) Inventory assets
Incomplete work expenditures
Cost method based on actual cost method
Materials and stored goods
Lower cost method based on the movable averagemethod(2) Method of depreciation of important depreciated assets
Tangible fixed assets
Straight-line method in regard to buildings (excluding equipment) and fixed percentage
method in regard to others are adopted. However the straight-line method is adopted foroverseas consolidated subsidiary companies.
Depreciable life and salvage value in our company and domestic consolidated subsidiaries are
set in accordance with the same standards as prescribed in the corporate tax law.

11

(3) Basis for recording important reserves
1) Reserves for bad debts
To cope with losses due to completed work accounts receivables and bad debts, generalbonds are based on the past record of bad debt ratio, while for particular bonds including
bonds likely to become bad debts, estimated unrecoverable amount is accounted byconsidering the possibility of recovery individually.
2) Reserves for completed work compensation
This is set with the object of warranting defects of completed work, accounted withconsideration given for future compensation predictions, basing on past records for theobject work subject to compensation.
3) Severance costs reserve
In order to prepare for the severance costs of employees, the severance costs obligation at
the end of the current consolidated accounting year and the estimated pension asset amountare taken as the basis and the amount considered to have become due for payment at the endof the current consolidated accounting year is carried over in the books.
Differences on the mathematical calculation start to be processed in the next consolidated
accounting year in accordance with the straight-line method based on the given number ofyears (10 years) within average residual service years of employees at the time ofoccurrence.
4) Reserves for Directors' retirement allowance
To provide for retirement allowance of Directors', the company has accounted reserves foramounts required to be paid at the end of the mid-term period, based on in-house
regulations.
5) Reserves for liability warrantee loss
To provide for losses relating to warranting of liabilities, an estimated loss amount has beenaccounted with consideration given to the financial condition of the warranted party.
(4) Standard for converting important assets or liabilities held in foreign currency into Japanese Yen
The financial assets and liabilities held in foreign currency are converted into Japanese Yen at
the direct exchange rate on the account closing date, and the difference amount on the accountclosing date has been processed as profit or loss. Further, the assets and liabilities of overseas
consolidated subsidiaries are converted into Japanese Yen at the direct exchange rate on theaccount closing date, the incomes and the costs are converted into Japanese Yen based on the
average market price for the current period, and the difference amount on the account closing
date has been included in the exchange rate conversion adjustment account and minority interest
equity.
(5) Treatment of important lease transactions
Finance lease transactions other than those for which transfer of ownership rights of the leased
object to the lessee is recognized, are accounted, basing on method relating to normal leasetransactions.
(6) Method of important hedge accounting
1) Method of hedge accounting
2) Hedge means and hedge targets• Hedge means:• Hedge targets:

We are using the postponement hedge processing
method.
Interest swap transactions
long term borrowings

3) Hedge policy
In order to avoid changes in the interest rate risk on long term borrowings, we are using
derivative transactions.
Further, we have a policy of not carrying out derivative transactions for investment
purposes.
4) Evaluation method of hedge availability
Hedge availability is evaluated by means of analyzing the ratio between the total of the
12cash flow for hedge targets and the total of cash flow for hedge means.
(7) Different important items for the consolidated financial statements
1) Standard for accounting amount of completed works
This is based on the standard for accounting completed works. The standard of work
progress is used for overseas consolidated subsidiary companies.
2) Accounting of consumption tax, etc.
Based on tax exclusion method.
5. Items relating to evaluation of assets and liabilities of consolidated subsidiaries
Evaluation method of assets and liabilities of consolidated subsidiaries is in accordance with total market
price evaluation method.
6. Items relating to depreciation of consolidated adjustment accountConsolidated adjustment account is depreciated by straight line method over 5 years.
7. Items relating to treatment of surplus appropriation accounts
Consolidated surplus calculation is made basing on surplus appropriation decided during the consolidated
accounting year.
8. Scope of funds in the consolidated cash flow statement
Funds (cash and equivalent) in the consolidated cash flow statement consist of cash on hand, deposits
payable upon demand and time deposits for which maturity is within 3 months after acquiring, andshort-term investments, which are readily convertible into cash without maturity date or redemption
date and low-risk in the fluctuation in prices.

(Additional information)
Accounting of financial instruments
From the current consolidated fiscal year, regarding the evaluation method of other securities having
current market value, the accounting standards related to financial instruments (“Opinions on theestablishment of accounting standards related to financial instruments” – Corporate Accounting
Evaluation Committee, January 22, 1999) was applied. In view of this application, in the main, theevaluation method of other securities was changed from Cost Method based on the movable averagemethod to Market Price Method based on the market price of the account closing date. (The evaluationdifferences were treated according to full capital direct accounting method, and the sale cost wascalculated according to the movable average method.) As a result, the evaluation difference amount ofother securities was accounted by 270 million yen, and deferred tax assets decreased by 196 million
yen.

13

Remarks[Those relating to consolidated balance sheet]
Current consolidated
accounting year

1. Accumulated amount of depreciation of tangible fixed
assets
2. Transferred amount by endorsed notes receivable
3. Number and amount of treasury stock

4,973 million yen

5,061 million yen

155 million yen

35 million yen

17,398 shares
7 million yen

4. Number and amount of shares of parent company held byconsolidated subsidiaries

Previous consolidated
accounting year

32,400 shares

1,678 shares
0 million yen
36,400 shares

14 million yen

15 million yen

478 million yen

464 million yen

27 million yen- million yen

1,092 million yen

1,455 million yen

Work accounts payable

43 million yen- million yen

Long term borrowings to be repaid within a year.
Long term borrowings

742 million yen
781 million yen

874 million yen
223 million yen

5. Shares of affiliated companies
Investments securities
6. Pledged assets and liabilities with pledge(1) Assets placed as collateral
Fixed deposit
Investment securities(2) Liabilities for the above

7. Method of accounting promissory notes becoming mature at the end of the term
Regarding the method of accounting promissory notes that are becoming mature on the last date of theconsolidated fiscal year, the settlement processing is being done on the date of exchanging the promissory
note. Further, since the last date of the current consolidated fiscal year was a holiday for financial
institutions, the promissory notes becoming mature on the last date of the next fiscal year have been
included in the balance at the end of this consolidated accounting term.
Notes receivable

640 million yen

1,085 million yen

Notes payable

3,739 million yen

3,298 million yen

14

[Regarding consolidated profit and loss statement]
1. The important expense items and amount of sales expenses and general management expenses and theiramounts are as follows.
Current consolidated
accounting year

Salaries and allowances to employees

Previous consolidated
accounting year

3,910 million yen

4,062 million yen

Severance costs

954 million yen

358 million yen

Amount of deferred reserves of directors’ retirement
allowance
Amount of computers

82 million yen

80 million yen

706 million yen

734 million yen

Communication and transportation expenses

1,081 million yen

1,068 million yen

Amount of transferred reserves for bad debts

405 million yen

60 million yen

Depreciation expenses

165 million yen

250 million yen

375 million yen

395 million yen

2. Total expenditures for research and development
Selling costs and general administrative costs

3. Transferred reserves for bad debts of 268 million yen is included in evaluation loss on golf clubmembership rights.

[Those relating to consolidated cash flow statement]
Period end balance of cash and cash equivalent objects and relation to the amount and account stated in the
consolidated balance sheet(Unit: million yen)
Current consolidated
accounting year

Previous consolidated
accounting year

Cash and deposit accounts

27,11028,399Securities account

2,330

4,872

Total

29,44033,272

-233

-54

-202

-149

29,00433,068Time deposits with time period more than 3 months
Securities other than additional type public bonds
investment trusts
Cash and cash equivalent objects

15

[Those relating to lease transactions]
Finance lease transactions other than those for which ownership rights of the leased object transfers to thelessee1. Amount equivalent to acquired amount of the leased object, amount equivalent to accumulated depreciation
amount, and amount equivalent to balance at end of period(Unit: million yen)

Current consolidated
accounting year

Previous consolidated
accounting year

Amount equivalent to acquired amount

1,451

1,537

Amount equivalent to accumulated depreciation amount

867

819

Amount equivalent to balance at end of period

584

717

Tools and equipment, fixtures

2. Amount equivalent to unexpired lease charge balance at end of year
(Unit: million yen)

Current consolidated
accounting year

Previous consolidated
accounting year

Within 1 year

315

334

Over 1 year

290

401

606

736

Tools and equipment, fixtures

Total

3. Payable lease charges, amount equivalent to depreciation expenses and amount equivalent to interest
payable(Unit: million yen)Tools and equipment, fixtures

The current consolidated The previous consolidated
accounting year
accounting year

Payable lease charges

406

429

Amount equivalent to depreciation expenses

375

396

Amount equivalent to interest payable

2641

4. Calculation method of amount equivalent to depreciation expenses
Calculation was made by the straight line method with lease period set as the service life and residual
value set at zero.
5. Calculation method of amount equivalent to interest
Amount equivalent to interest is defined as a difference between total of lease charge and the amountequivalent to acquisition prices for the lease property. The method of allocation to each period is basedon the interest law.

16

5. Securities(Current consolidated fiscal year)
1. Bonds with current market value and intended to be held until maturity date (March 31, 2002)(Unit: million yen)Amount in the consolidatedbalance sheet

Current value

Difference amount(Those whose current market value is above the amountin the consolidated balance sheet)
Government bonds/local–
government bonds
Corporate bonds
50

–

–

50

0

–

–

–

Sub-total
50(Those whose current market value is not above theamount in the consolidated balance sheet)
Government bonds/local–
government bonds
Corporate bonds
650

50

0

–

–

646

-3

–

–

–

Sub-total

650

646

-3

Total

700

696

-3

OthersOthers

2. Other securities with current market value (March 31, 2002)(Unit: million yen)Amount in the
consolidatedbalance sheet

Acquisition cost(Those whose amount in consolidated balance sheet isabove the acquisition cost)
Stock
2,053

Difference amount

3,012

958

CreditGovernment bonds/local
government bonds
Corporate bonds

–

–

–

2

2

0

OthersOthers

–
–

–
–

–
–

2,056
(Those whose amount in consolidated balance sheet is
not above the acquisition cost)
Stock
4,436

3,015

959

3,944

-492

–

–

–

–

–

–

–

–

–

183

183

–

4,620

4,128

-492

Sub-total

CreditGovernment bonds/local
government bonds
Corporate bonds
OthersOthersSub-total

6,676
7,143
466
Note: For other securities with current market value, 2,207 million yen is distracted as shrinkage losses.
Total

17

3. Other securities sold for the current consolidated fiscal year (From April 1, 2001 to March 31, 2002)(Unit: million yen)
Sale value

Total of sale profit

Total of sale loss

343

39

77

4. Contents of main securities without current market value and amount in the consolidated balance sheet(March 31, 2002)(1) Bonds intended to be held until maturity
Unlisted foreign bonds
0 million yen
Discount bank debentures
99 million yen
Non-public domestic bonds
2 million yen(2) Shares of subsidiaries and affiliated companies
Shares of affiliated companies

478 million yen(3) Other securities
Unlisted shares (excluding over-the-counter sold shares)
Money management fundMid term government bond fund

880 million yen
1,232 million yen
895 million yen

5. Estimated amount of redemption for other securities with maturity and bonds intended to be held until
maturity(March 31, 2002)(Unit: million yen)Over a year and Over 5 years andOver 10 years
Within 1 year
within five years within ten years(Bonds intended to be held
until maturity date)
Government bonds/local––––
government bonds
Corporate bonds
201
100
–
500
–

–

–

–

201

100

−

500

–

–

–

–

–

–

2

–

–

–

–

–

–

–

–

–

Sub-total

–

–

2

−

Total

201

100

2

500

OthersSub-total(Other Securities)
Bonds

Government bonds/local
government bonds
Corporate bonds
OthersOthersNote:

Out of corporate bonds intended to be held until maturity, those whose maturity is over ten years,
500 million yen, are perpetuity subordinated bonds with call option, and so it is possible that they will
be redeemed after March 2003 by executing call option.

18

(Previous consolidated fiscal year)
1. Bonds with current market value and intended to be held until maturity date (March 31, 2001)(Unit: million yen)Amount in the consolidatedbalance sheet

Difference amountCurrent value(Those whose current market value is above the amountin the consolidated balance sheet)
Government bonds/local–
government bonds
Corporate bonds
200

–

–

202

2

–

–

–

200

202

2

(Those whose current market value is not above theamount in the consolidated balance sheet)
Government bonds/local–
government bonds
Corporate bonds
500

–

–

498

-1

–

–

–

Sub-total

500

498

-1

Total

700

701

1

OthersSub-total

Others

2. Other securities with current market value
Based on Finance Ministerial Ordinance of 2000, vol. 9, Supplementary provisions vol. 3, the description
is omitted.
3. Other securities sold for the current consolidated fiscal year
(From April 1, 2000 to March 31, 2001)(Unit: million yen)
Sale value

Total of sale profit

Total of sale loss

343

39

77

In addition to the above, amount of severance cost in trust, 9,221 million yen and profit from severance
cost in trust, 4,051 million yen are accounted.
4. Contents of main securities without current market value and amount in the consolidated balance sheet(March 31, 2001)(1) Bonds intended to be held until maturity
Unlisted foreign bonds
0 million yen
Discount bank debentures
149 million yen
Non-public domestic bonds
2 million yen(2) Shares of subsidiaries and affiliated companies
Shares of affiliated companies(3) Other securities
Unlisted shares (excluding over-the-counter sold shares)
Money management fundMid term government bond fund19

464 million yen

866 million yen
3,868 million yen
854 million yen

5. Estimated amount of redemption for other securities with maturity and bonds intended to be held until
maturity(March 31, 2001)(Unit: million yen)Over a year and Over 5 years andOver 10 years
Within 1 year
within five years within ten years(Bonds intended to be held
until maturity date)
Government bonds/local––––
government bonds
Corporate bonds
149
202
–
500
–

–

–

–

149

202

−

500

–

–

–

–

–

–

2

–

–

–

–

–

–

–

–

–

Sub-total

–

–

2

−

Total

149

202

2

500

OthersSub-total(Other Securities)
Bonds

Government bonds/local
government bonds
Corporate bonds
OthersOthersNote:

Out of corporate bonds intended to be held until maturity, those whose maturity is over ten years,
500 million yen, are perpetuity subordinated bonds with call option, and so it is possible that they will
be redeemed after March 2003 by executing call option.

20

6. Relating to Derivative Transactions
1.Items relating to transaction conditions(1) Contents and purpose of transactions
In regard to some interest of long-term borrowings with floating rate, our company is, for interest raterisk hedge, conducting interest rate swap transactions, in which interest cost is fixed.
(2) Policy and contents of risk concerned with transactions
Our company is adopting a policy of applying derivative transactions only for the purpose of avoiding
the interest rate risk of borrowings, not conducting derivative transactions intended for speculation or
those with high leverage effect.
We consider that since derivative transactions relating to interest rate are interest rate swap
transactions, in which floating rate and fixed rate are exchanged, there is little risk due to thefluctuation of money market rate. We also consider that there is little credit risk due to the otherpartner’s breach of contract, since contractants of derivative transactions are domestic financialorganizations with high credit rating(3) Risk management system for transactions
In accordance with company rules, interest rate swap transactions are approved within fund raisingand implemented and managed by the accounting dept. of the head office.
2. Item relating to current market value of transactions
Although our company is conducting interest rate swap transactions, we are applying hedge accounting.
Accordingly, notes are omitted21

7. Relating to Severance Costs
1. Outline of adopted severance costs system
Our company and domestic consolidated subsidiaries have set up such systems as employees’ pension
fund, tax-qualified pension, and lump-sum retirement allowance as defined benefit pension plan. Our
company has also set up severance costs in trust.
2. Items regarding to severance costs obligation(Unit: million yen)
End of the current
consolidated fiscal year

End of the previous
consolidated fiscal
year

a. Severance costs obligation-31,376-30,243b. Pension fund21,241

23,128c. Unreserved severance costs obligation (a + b)
d. Unprocessed amount of differences at the time ofchanging accounting basise. Unrecognized differences on mathematical
calculation
f. Unrecognized past service liabilities (Decreased
liabilities)
g. Net amount in consolidated balance sheet (c+d+e+f)-10,134-7,114––h. Prepaid pension costs

2,692

5,383
–

–

-4,750-4,422533

294

i. Reverses for severance costs (g−h) (Note 2)-5,284-4,716
Notes: 1. Substitution of employees’ pension fund is included.
2. In regard to consolidated subsidiaries, for calculating severance costs obligation relating tolump-sum severance costs, an easy method is being adopted.
3. Items regarding to severance costs(Unit: million yen)
Current consolidated
fiscal year

Previous consolidated
fiscal year

a. Service costs (Note 1,2)

843

816

b. Interest costs

895

849

c. Expected operational profitsd. Processed amount of the costs of differences at thetime of changing accounting basis
e. Processed amount of differences on mathematical
calculation
f. Processed amount of past service liabilities

-475

-468

–

11,213265––-1,180g. Severance costs (a+b+c+d+e+f)

1,528

11,231

Notes:
1. Amount of employees’ contribution to employees’ pension fund is deducted.
2. Severance costs of consolidated subsidiaries adopting an easy method are accounted as“ a. Service costs”.

22

4. Items regarding to the basis of calculation of severance costs obligation
Current consolidated fiscal
year

Previous consolidated fiscal
year

a. Method of period allocation for estimatedamount of severance costs

Period fixed amountbasis

Same as in the left

b. Discount rate

3.0％

Same as in the leftc. Expected operational profit rate

3.0％

Same as in the left

d. The number of years when amount of past
service liabilities is processed

Processed in a lump in
the occurrence year.

–

e. The number of years when differences onmathematical calculation are processed.

10 years (Differences on
the mathematical
calculation starts to beprocessed in the next
consolidated fiscal yearin accordance with thestraight-line method
based on the given
number of years withinaverage residual service
years of employees at
the time of occurrence.)

Same as in the left

Processed in a lumpf. The number of years when differences at thetime of changing accounting basis areprocessed.

‑23

8. Those relating to tax effect accounting
1. Contents of main causes for occurrence of deferred tax assets and deferred tax liabilities (Unit: million yen)

Deferred tax assets
Surplus of transferred reserves for severance

costs
Repudiated evaluation loss on real estate
Repudiated evaluation loss on investments insecurities
Surplus of transferred allowance for bad debt
Repudiated write-down of incomplete work
expenditures
Repudiated reserves for Director’s retirement
allowance
Repudiated evaluation loss on golf clubmembership rights
Repudiated reserves for liability guarantee loss
Subsidiaries’ loss carry-forward on taxes
Loss carry-forward
Deductible temporary differences concernedwith subsidiaries’ investments
OthersDeferred tax asset sub-total
Amount of valuation reserves
Deferred tax asset total

End of the current
consolidated fiscal year

End of the previous
consolidated fiscal year

4,850

4,599

1,384

0

1,440

846

12

594

51

205

288

186

208

155

224

88
67
–

88
195
962

–

150

713
9,093
-213
8,880

601
8,822
-349
8,473

1,701
196

1,701
–

Deferred tax liability
Profits from severance costs in trust
Other evaluation differences of securities
Entertainment expenses included in incomplete
work expenditures
Reserve from fixed asset reduction
OthersDeferred tax liability total

134

104

72
48
2,154

75
31
1,912

Deferred tax asset net amount

6,725

6,560

2. Contents of main items which became causes for serious difference where there is a serious difference
between the legal effective tax rate and the burden rate of corporate taxes, etc. after application of tax effectaccounting.
Since each net loss was accounted in the current and the previous fiscal years, the description is omitted.

24

9. Segment Information
1. Segment information by type of business
The current consolidated fiscal year (April 1, 2001 to March 31, 2002) andthe previous consolidated fiscal year (April 1, 2000 to March 31, 2001)
Since our corporate group is engaged in facility construction works, there are no business types otherthan this. Accordingly, segment information by business type is not described.
2. Segment information by location
The current consolidated fiscal year (April 1, 2001 to March 31, 2002) andthe previous consolidated fiscal year (April 1, 2000 to March 31, 2001)
Since the total sales amount of all segments of "Japan" exceeds 90%, description of segment
information by location is omitted.
3. Overseas sales amountThe current consolidated fiscal year (April 1, 2001 to March 31, 2002) andthe previous consolidated fiscal year (April 1, 2000 to March 31, 2001)
Since overseas sales amount is less than 10% of the total consolidated sales, description of overseas
sales is omitted.

10. Transactions with related parties
Non-applicable25