ANNUALREPORT

For the year ended
March 31, 2013

2013

464

475

500

ProfileS

Financial Highlights

ince its foundation in 1881, Toda Corporation has remained steadfastly committed to

ANNUAL REPORT 2013400

Toda Corporation and Consolidated Subsidiaries—Years ended March 31

construction that contributes to safe, secure, and comfortable communities guided by our

452 489 497

motto of realizing high-quality construction, safely and on time. Today, together with our Group300

Companies in Japan and overseas, and led by our primary segments of construction and civilengineering, we continue to grow as a business that places our priority on quality and trust.

Millions of yen

2009

Today’s business climate is one of drastic change, and our clients want more value as
their needs become more diverse and complex. To give our clients what they need in this new

Consolidated

business climate, Toda Corporation is evolving into a full-service construction firm that applies its

Net sales

2010

Thousands of
U.S. Dollars (Note )

200

2011

2013

2013

¥497,048$5,284,942

2012
100

¥475,653¥464,762¥452,499¥489,385

technology and expertise to providing solutions that accurately address our client’s construction

Ordinary income (loss)

5,480

7,460

7,265

0

issues across the entire building lifecycle. We also place a high priority on fulfilling our corporate

Net income (loss)

2,533

2,906

3,567

(19,872)

social responsibility, and we intend to continue the efforts that maintain the trust of our clients

Comprehensive income (loss)––(2,586)(17,167)(41,516)(441,432)

and broader society, including addressing environmental concerns such as reducing CO2 emissions

Total net assets

179,851

194,859

189,581

171,537

128,095

1,361,997

Total assets

540,856

501,189

499,111487,160

500,199

5,318,440

and promoting reusable energy, making efficient use of social capital stock, and promoting seismic

Per share of common stock:(in yen and U.S. dollars)

safety and recovery and reconstruction assistance.

2.5¥ 602.35¥ 617.42¥ 563.76
464 475452 489 497

		

Net assets

		

Net income (loss)		Cash dividends applicable to the year500

Net cash provided by (used in) operating activities

400¥

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Okuma Auditorium,
Waseda University(1927)Cash and cash equivalents at end of period

Marunouchi oazo
Marunouchi Kitaguchi
Building (2004)

Pacifico Yokohama(1991)(484,652)(45,581)(6,690)2009 20102011 2012 2013

Number of employees

Haneda Airport
International Flight
Passenger Terminal(North Wing) (2010)

Cover PhotoNon-consolidated

Otemachi Financial City
South Tower
Location: Tokyo, Japan
Client: Mitsubishi Estate Co., Ltd.

Orders received

This report contains forward-looking statements
regarding Toda Corporation’s corporate plans,
strategies, forecasts and other statements thatare not historical facts. They are based on current
expectations, estimates, forecasts and projections
about the industries in which Toda Corporation
operates. As the expectations, estimates, forecasts
and projections are subject to a number of risks,
uncertainties and assumptions, including andwithout limitation, changes in economic conditions;fluctuations in currency exchange rates; changes
in the competitive environment; the outcome ofpending and future litigation; and the continued
availability of financing, financial instruments andfinancial resources, actual results may differ materially from those presented in these forward-looking
statements.

Message from Management

Toda Corporation, therefore, wishes to cautionthat readers should not place undue reliance on
forward-looking statements and, further, that Toda
Corporation undertakes no obligation to update
any forward-looking statements as a result of new
information, or other future developments.

Notes to Consolidated Financial Statements...................................................................

1
2

Focus!: Building the foundation for new revenue sources ................ 6
Business Review by Segment
Corporate Governance

7.00(8,577)¥ 32,152¥ 10,379(8,478)(7,948)(5,278)¥ 4537.53¥ 397.18$ 4.223(64.28)		 (209.70)

		 (2.229)

		

		

3

$(188,813)(445)(4,739)(3,089)(3,754)(1,557)

13,834

147,100

60,45961,654

1 52,024

48,015510,535

4,996

5,051

5,034

5,101

5,091

¥434,428
100¥402,755¥452,122¥411,691¥346,775

200

0

-1

2009 2010 2011 2012 2013

Net Income (Loss)

Orders Received

Billions of yen

Billions of yen

Billions of yen

475(Consolidated)

452 489 497$3,687,141

2009 2010 2011 2012 2013

Net Sales

464

0.053

¥ (17,757)

2.5

2.9

(Non-consolidated)

3.5 -19.8 -65.2

434
500

9

400

3

400

................................................................ 10

300

2

300

200

1

200

100

0

100

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

5.00

(48)

4

8

6.00

2 (7,837)¥500..................................................................

3.5 -19.8 -65.2

4,422(Consolidated)...................................................................................

11.53

7.00

Note: The rate of ¥94.05=US$1.00, the foreign exchange rate on March 31, 2013, has been used for translation.

Contents
Financial Highlights

9.36

7.00

2.9

(694,157)

39,302300

0Forward-looking Statements

8.10(65,285)402

452 411 346— Financial Section —Consolidated Balance Sheets

Consolidated Statements of Income.................................................... 12

Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows........................ 13............................................. 14..................................... 15

Independent Auditors’ Report ................................................................ 28
Corporate Information / Board of Directors,
Corporate Auditors and Executive Officers

02009 2010 2011 2012 2013-1

2009 2010 2011 2012 201302009 2010 2011 2012 2013..................................... 29

1

ANNUAL REPORT 2013

Message from Management
Fiscal 2012 business results and mediumterm management plan revision

The Toda Group is
United in Achieving
its medium- to long-term management vision
How we generate profit…
depends on how we become the most usefulcompany possible for our clients
Recognizing
valuesCustomer
Clients, End Users

Source of
Revenues

Toda Corporationmeans value
Securing
revenues

Customers’ recognitionof Toda’s values
leads to earnings

Toda
Corporation
Valuable
Employees

A Group of
Valuable Human
Resources

Masanori Imai, President

Career summary2

Apr. 1978

Joined Toda Corporation

Feb. 2004

Osaka Branch Deputy Branch Manager(in charge of Architectural Construction
Sales)

Apr. 2008

Executive Officer and Osaka Branch
Deputy Manager

Aug. 2009Managing Executive Officer and Osaka
Branch Manager

Apr. 2013

Deputy President and Executive Officer

Jun. 2013

President and Representative Director

Toward being a company that provides
value to its customers and society
I was appointed President of Toda Corporation in June 2013.
I joined Toda Corporation in April 1978, where I have mainly
been in charge of construction projects.
Business conditions surrounding the construction industry have become increasingly harsh in recent years. This harshbusiness climate has made it an urgent priority that we undertake projects that will produce a reasonable profit. We havetaken up the motto “Toda Corporation means value” to guide
us in achieving consistent growth in this competitive environment. Projects currently underway will stand as records of
our achievement for many years to come. We build excellent
things of high quality. The Toda Group works together in asincere effort to meet the expectations of our clients, including their expectations after a project is completed. I am convinced that establishing Toda Corporation as a company thatprovides value to its clients and society as a whole is linked
to our clients and society recognizing just how valuable every
one of our employees is to creating that value.

Looking back on the business year ending March 31, 2013(fiscal 2012), it is evident that demand stimulated by earthquake and tsunami recovery efforts has improved corporate
profits and personal consumption. Nonetheless, concerns
persist about a downturn in business conditions overseas, andthe outlook ahead remains unclear. Amid these conditions,
the Toda Group recorded 497.0 billion yen in consolidated net
sales (489.3 billion yen in the previous year). For operating
income and loss, however, increasingly severe cost conditions
for construction business due to such factors as a very tightlabor market have negatively impacted the cost performanceof outstanding orders, resulting in a 46.9 billion operating
loss (7.9 billion yen loss in the previous year). In addition, werecorded an ordinary loss of 45.5 billion yen (6.6 billion loss
in the previous year) and a net loss of 65.2 billion yen (19.8
billion loss in the previous year), resulting in losses for two
consecutive business years.
This unfavorable result was mainly due to losses in our
primary business of building construction. Specifically, thevolume of construction projects exceeded our labor capacity,which reduced the profit margin of orders received.
Seriously taking these circumstances to heart, we havereassessed the conditions and issues for the Toda Group andpresented our reevaluated Medium-Term Management Planin November 2012. First, we revised our business performancetargets. We revised our revenue targets and the time frames
for achieving them by reorganizing our construction businessand resizing it to a reasonable scope. Second, we strengthened our strategic policies. While the plan announced last
fiscal year remains our guide, we have supplemented it with
an emergency business strategy and a medium-term strategy
to further enhance plan effectiveness.
Moreover, in October 2012, we established a structuralreform committee that has deliberated on such issues as
employee awareness, strategy, and organization with nothing
off-limits. Based on a thorough investigation and verificationof the construction costs of outstanding projects and a conservative profit estimate that takes into account soaring material costs and future cost planning, we posted a 41.8 billion
operating loss for the building construction business segment.
This thorough cost review has enhanced the accuracy of
cost estimates for fiscal 2012 and also establishes a firm foundation for a profitable Toda Corporation for fiscal 2013 (theyear ending March 31, 2014) and beyond. To further improveasset liquidity, we recorded a 1.8 billion yen special profit
from the gain on the sale of investment securities for fiscal
2012. We also plan to sell investment securities during fiscal
2013, which we estimate will produce a 4 billion yen gain forthe company.
Based on these efforts, we forecast consolidated net
sales of 444.0 billion yen, a 3.3 billion yen operating income,a 4.6 billion yen ordinary income, and a 7.6 billion net income
for fiscal 2013. Bolstered by our robust overseas business andthe continuing expansion of our real estate business, we areworking to rebuild our construction business.

Revised Medium-Term Management Plan

1. Revised business performance targets
Achieve consolidated net sales of 400 billion yen
with a domestic construction business resized
for more efficient performance. Moreover,extend the target deadline by one year to theend of the 2015 business year.

2. Strengthen focus on priorities
Improve Construction Business Profits(Urgent priorities)
Secure profits by improving cost efficiency
through careful project selection, improving
the construction management framework,and reevaluating cost structure.

A United Group Growth Strategy(Medium-term priorities)
Get away from the project-to-projectapproach that values projects for theirscale to a solutions-oriented approach thatdeepens the relationship with the client tosecure sustained revenue through every stageof the building lifecycle.

Medium-Term Management Plan Targets(FY 2012–15, consolidated)
Net sales
Operatingmargin¥400 billion
2% or higher

Approx.

Overseas Business
FY 2015 target

Overseas sales

Medium- tolong-term target

Overseas sales¥30 billion¥50 billion

Investment Business (Real estate, PFI, PPP)FY 2015 target

Segment profit

Medium- tolong-term target

Segment profit¥4 billion¥5 billion

Environment and Energy
Making it a source for receiving
construction project orders
Creating renewable energy
business

3

ANNUAL REPORT 2013

Message from Management

Outlook for fiscal 2013
Fiscal 2013 is a crucial year in terms of what we want toachieve, and we continue to move forward with the reforms
needed to accomplish our goals.
First, we are improving our framework for accepting
orders. This entails a major shift to selecting and accepting
projects that will allow our clients to recognize the value of
Toda Corporation. For those areas in which we have knowledge and expertise—medical and welfare facilities, educational facilities, production facilities, offices, and so on—we will
promote projects with scales corresponding to our capacity
to effectively execute them. Moreover, we are making transparent and strengthening our order approval process, pricedetermination process, and approval decision reviews at every
stage and restructuring our organization so that cost planning
is more effective when taking on projects. We are especially
focusing on our process for determining prices; in March 2013
we consolidated the cost estimate department and purchasing
department to form the Cost Management Center and ensurethat our costs are competitive and accurate.
After accepting orders as well, we are thoroughly reducing and controlling for lost costs and building a frameworkthat both incorporates quality and achieves cost planning.
We are improving our cost competitiveness by implementing
construction profitability reviews and strict cost monitoring
management, along with reevaluating common field expenses
and coordinating with partner companies to rationalize projects. Moreover, we are re-estimating all of our general costs—
labor, outsourcing, operating expenses, and so on—from azero base. Based on this re-estimate, we are forecasting a 1.8
billion yen in selling, general and administrative expenses forthe parent company, a reduction of 2.1 billion yen from theprevious year’s performance.

Achieving our medium- to long-term
management vision
In May 2012, Toda Corporation announced its Medium- to
Long-Term Management Vision. The strategy singled out thesustainable use of building stock, infrastructure redevelop-

Gross profit ratio

FY 2012FY 2013By FY 2017

CriticalCondition• Reinforce order selection• Enhance cost control

Becoming highly
profitable company-5.0 %

5.5 %Resolve current problems
Operating margin-9.5 %

0.7 %“Becoming a truly valuable company is to be ahighly profitable company. To accomplish thisgoal, we need to reform ourselves.”

4

ment, disaster preparedness, globalization, and environmental
problems as social issues in need of solutions, and Toda Corporation declared its commitment to “creating new answers”
that would provide optimal solutions for our clients grapplingwith these issues.
“Created by people. Created with people” sums up our
corporate message and serves as our guide as we fulfill ourcommitment of always putting the client and facility users
first. In our search for the best solutions, we apply our passion
and wisdom to the fullest and promise a kind of construction
craftsmanship that information and communications technology and machines alone cannot provide—something that
only people are capable of. Ensuring that our clients recognize
the value our employees provide is crucial to establishing the“Toda Corporation means value” motto, which is the basis of
our brand.
For Toda Corporation, the worksite is where everything
begins. Completing each and every job received from our clients with integrity is what has made our growth possible. Our
history is one of growth driven by understanding the needs
and expectations for buildings; ensuring safety and security;and providing excellent quality, technology, and solutions
throughout the entire building lifecycle. But our history is also
one of activities that bring satisfaction to our many stakeholders, including our employees, the employees of our project
partners, and the local residents living in communities where
our construction projects will remain for decades.
We strive to be the most useful company possible forour clients by creating new value through partnerships withdiverse enterprises and in diverse regions. For example, weare creating value in the environmental field with our ventures in floating wind turbine power generation and megasolar power. Likewise, our social contribution activities create
value by, for example, synthesizing disaster recovery and newtechnology in lightly populated smart communities such as
Kawamata-cho in Fukushima Prefecture. These will form thefoundation of the business model of the Toda Corporation
as we chart our path forward. As we explore partnershipsthat move beyond the project framework, the whole group is
united in making the vision laid out in the Medium- to LongTerm Management Vision a reality.

Management
VisionFY 2012–17“Create New Answers”
Every employee of the Toda Group shares the conviction that
putting our business philosophy into action is crucial to finding
solutions to the increasingly urgent social problems around us.
Toda Corporation strives to enrich quality of life guided by our business philosophy of “contributing to the promotion of social welfare through construction.”
In today’s business environment, Toda Corporation contributes to social
welfare and enhances revenue by finding solutions to problems in such areas as
the sustainable use of existing building stock, globalization, and environmental
issues. Moreover, with the increasing urgency of these social problems, a totally
integrated and diversified business model has become essential for success.
The Medium- to Long-Term Management Vision positions Toda Group as
a company that “creates new answers” intended to expand the breadth anddepth of construction as a business and ensure a consolidated operating profit
margin of 3% or greater. The strategy specifies following three “Total Commitments” for achieving its goals.

Total commitment to:

#1

#2

#3

Facility
Lifecycle

Client’s
Management Concern

EntireProject Cycle

Building a total business operation,from facility project proposals to
operation and maintenance, thatcan provide our clients with longterm value.

Supporting our clients throughboth craftsmanship and structure
creation that address issues including
globalization and environmental
concerns.

Taking the initiative to create newvalue in such areas and structures asreal estate, private finance initiative(PFI), and public–private partnerships(PPPs).

Our Principle“Created by People. Created with People”

Our Vision“Create New Answers”

FY 2017Growth Target

Defy stereotypes and create new values

Decent profit distribution
to society, shareholders,and employees

Long-Term

Give “construction” a wider and deeper significance.
Seek the best results for our customers.

8 % or higher
3 % or higher

Medium- to

Achieve theminimum level of
earnings expectedby society andmarket3 Challenges for Growth
Total commitment to:Consolidated operating profit margin of

3 % or higher

#1

#2

#3

Facility
Lifecycle

Client’s
Management
Concern

EntireProject Cycle

5

Feature

ANNUAL REPORT 2013

Building
the foundation for
new revenue sources

Toda Corporation is pursuing future
growth by laying the groundwork for
new revenue sources. In particular, wehave positioned overseas markets andenvironment and energy for strategic
development and growth, and we areenacting measures to strengthen ourcompetitiveness in these key areas.

Overseas Markets
We are aiming to expand oursources of overseas revenue
by energetically supporting
private sector construction
and the entry of Japanese firms into foreign
markets, especially in
the growing markets ofBrazil and Asia (Thailand,
Vietnam, China, and thePhilippines).
Moreover, in otherparts of the world, we are
accumulating unique expertise by building on our trackrecord, gaining trust on
the local level throughdiverse ventures such as
construction funded by
Japanese government
grants centered in Africa
and the real estate business in the U.S.

BrazilLocalizing and diversifying
the business content ofConstrutora Toda Do Brasil

Opening markets in Asia
In recent years, a growing number of Japanese manufacturers,
including both mainstays and small- to medium-sized firms,
have entered the Asian market. Given its outlook for economic
growth, the region is firmly positioned as the world’s growthcenters. In July 2012, Toda Corporation elevated the company’s
Bangkok Regional Office to the Southeast Asia Regional Officeand bolstered the staff with employees from Japan. This new
regional office acts as a support organization for local subsidiaries in the region. In its new role, the office has improved thequality of our technical proposals and project estimate accuracy
and strengthened the organizational framework and businesses base. In April 2013, we opened a representative officein Jakarta, Indonesia, and we have also begun exploring thepossibility of a new venture in Myanmar.

6

Toda Corporation is aiming to prevent global warming by promoting the spread and working toward thecommercialization of renewable energy, which is gaining increasing attention. Moreover, by advancing ourenvironmental and energy conservation technology,
we expect these ventures to positively contribute toconstruction orders.

Wind power: onshore and offshore

Asia

Itoh Seiko (Thailand) New Plant
Location: Chonburi Province, Thailand
Client: Itoh Seiko (Thailand) Co., Ltd.

Environment and Energy

Construtora Toda Do Brasil has built a uniqueposition as the only Japanese general construction
company in Brazil to date. The company specializes
in maintenance suited to the local climate and provides outstanding solutions with a Japanese-style commitment to ontime delivery and quality control practiced in close partnershipwith Japan. At the same time, amid tough economic conditions that have persisted since the 1980s, a shift to localization
centered on a local staff-oriented framework has won thecompany many projects
from European, North
American, and also
local firms. Currently,
the ratio of orders fromJapanese firms to thosefrom non-Japanesefirms is about one-toone, and we intend to
DENSO do Brasil Ltda. South American
continue this localizaTechnical Centertion trend as we move
Location: São Paulo State, Brazil
Client: DENSO do Brasil Ltda.
forward.

Toda Corporation was involved from the design phasethrough construction in thedevelopment of the Date
Wind Farm. This onshore
wind power generation facility located in Date, Hokkaido
has minimal impact on thesurrounding environment. In
particular during construction, our care toward thesurrounding grasslands wasvery positively received by residents of the community. We are
currently performing demonstration experiments on our floating wind turbine power generation technology.

Mega-solar power generation
By conducting construction with efficient panels that secure maximum
power generation at low cost, Toda
Corporation provides project planningwith high commercial viability.

Biomass energy
Toda Corporation took part inthe construction of MKE BIMA
Station Miura* located in Miura,
Kanagawa Prefecture. For energy
to operate the facility, methanegas and heat, which are generated
through processes at the facility,
are converted to electricity.

Wind turbines begin operation
off of the Goto Islandsin August 2012
Toda Corporation and Kyoto University havebeen jointly developing floating wind turbine
power generation technology since 2007.
Floating wind turbines can be installed inwaters deeper than 50 meters—where the potential for exploiting strong, steady offshore
winds is greatest—and are currently
undergoing demonstration experiments worldwide, with wide
anticipation for their future
success and expansion.
Tests started with
1/100 scale model experiments, and in 2011 theMinistry of the Environment commissioned
testing. Toda Corporation represents a group
comprised of itself,
Kyoto University, Hitachi, Fuyo Ocean Development & Engineering,and the National Maritime Research Institute,which was formed tocarry out the commission.
In August of 2012, thegroup set up a small 1/2
scale test device off of Kaba
Island, one of the Goto Islandsof Nagasaki Prefecture.

*MKE BIMA Station Miura was designed and built by Mitsui Engineering &Shipbuilding Co., Ltd., which also holds naming rights.

7

Business Review by Segment (Consolidated)

Corporate Governance

Building Construction
Net sales for construction were 398.9 billion yen, a 6.6% year-on-year increase.
The segment recorded a 41.8 billion yen operating loss (the previous consolidated
fiscal year for the segment recorded a 3.5 billion yen operating income). Revenue
from orders received in all sectors—the domestic private sector, the domestic
public sector, and overseas—decreased, totaling 255.8 billion yen, a 22.3% yearon-year decrease, due in part to the policy establishing profitability as a priority.

ANNUAL REPORT 2013

Net sales (Billions of yen)
Operating income (Billions of yen)

At Toda Corporation, dynamic corporate governance that consistently raises corporate
value is a top management priority. We have put in place a management structure andimplemented the measures needed to ensure that we do business properly and efficiently
monitored by an auditing system, practice transparent and sound management, andexercise robust compliance.

Percentage of total sales

374.1

398.9

An enhanced auditing structure

The board of directors and stronger
executive management

79.3%
Japanese Red Cross Society Wakayama
Medical Center Main Building (Above)
Location: Wakayama, Japan
Client: Japanese Red Cross Society

3.5

2011

Gifu Skywing 37 (Left)
Location: Gifu, Japan
Client: Western Toiya-machi South Block Urban
Redevelopment Association

2012

-41.8

Civil Engineering
Net sales for civil engineering were 88.5 billion yen, a 15.4% year-on-year
decrease. The segment recorded a 900 million yen operating loss (the previous
consolidated fiscal year for the segment recorded a 1.3 billion yen operating
income). For revenue from orders received, domestic private sector revenue
decreased 25.2% year-on-year, while domestic public sector revenue increased
27.3% year-on-year. The overall total for the segment, including overseas, was83.1 billion yen, a 12.7% year-on-year increase.

Percentage of total sales

Net sales (Billions of yen)
Operating income (Billions of yen)

104.6

17.6%

88.5

1.3
Corporate Governance Structure

-0.9
2011
Meguro Tenku Teien (Sky Garden)
Location: Tokyo, Japan
Client: Metropolitan Expressway Co.,
Ltd. (Commissioned from Meguro City)

General Meeting of Shareholders

2012

Appointment

Higashi-Kyushu Expressway
Minamibaru Tunnel
Location: Fukuoka, Japan
Client: West Nippon Expressway Co.,
Ltd., Kyushu BranchAppointment/
Oversight

Real Estate

Direction

Percentage of total sales

Coordination

2.8%

14.1

-5.4

1.4

2011

2012

Corporate Auditor Office

Accounting audit

Management Meeting

Accounting Auditors

Coordination

Reporting
ReportingDirection

Net sales (Billions of yen)
Operating income (Billions of yen)Appointment
Coordination

Board of Corporate Auditors

ReportingPresident (Representative Director)

Committees

14.5

8

Appointment
Audit

Board of Directors

Appointment/
Oversight

Net sales for real estate were 14.1 billion yen, a 2.9% year-on-year decrease.
The segment recorded a 1.4 billion yen operating income (the previous consolidated fiscal year for the segment recorded a 5.4 billion operating loss).

Toda Corporation has a corporate auditing system. Auditor
duties include seats on the Board of Directors, where they
oversee auditing to ensure the legality and propriety of management operations. In June 2008, oversight of management
was further bolstered by adding an additional external auditor
so that there are now two internal auditors and three external
auditors.
To ensure that the auditing system maintains its independence from the Board of Directors and Executive Officers,
personnel and organizational changes to the Corporate Auditor Office that assists corporate auditors are determined by
the Board of Corporate Auditors or according to the advice ofauditors designated by the Board.

Toda Corporation has an executive officer system that separates decision making by the Board of Directors from business
operations conducted by the Executive Officers. This clearly
defines the scope of roles and responsibilities and strengthens
the management and executive functions of each.
The Board of Directors has eight members (as of June27, 2013). As a general rule, it meets once a month to deliberate on important management issues and exercise oversightof executive management. The one-year terms that directors
serve both emphasize their management responsibilities andenable a prompt response to changes in the management
environment.
Executive Officers are appointed by the Board of Directors and execute business in accordance with the management policy set by the Board of Directors. Moreover, regularly
held management and Executive Committee meetings deliberate and report on important management and company
matters. At these meetings, executive management delegates
responsibilities and establishes the scope of responsibility andprocedures for the rules and regulations for company organization, division of duties, management authority, formal
approval procedures, and other management-related matters.

Related Business
Management Department

ReportingExecutive Officers

Internal audit

Coordination

Risk Management Committee

ReportingDirection

Coordination

Executive Committee
Departments

Direction
Internal audit

Audit Department(Managers of Headquarters, Supervisory Department and Branch Offices)

ReportingTraining

Corporate Ethics Committee

Affiliates
Reporting(internal contacts)

Training
Reporting(internal contacts)

9

ANNUAL REPORT 2013

Consolidated Balance Sheets
Toda Corporation and Consolidated Subsidiaries—As of March 31, 2012 and 2013
Thousands of
U.S. dollars (Note1)

Millions of yen

2012

2013

Thousands of
U.S. dollars (Note1)

Millions of yen

2013

ASSETSLIABILITIESCurrent assets:

Current liabilities:

Cash and deposits (Notes 8 and 10)¥ 36,935¥ 38,782$ 412,356

Notes and accounts payable—trade (Note 10)

Notes and accounts receivable—trade (Note 10)

164,203

164,719

1,751,405

Short-term loans payable (Note 10)

2012

2013

2013

¥132,799¥155,148$1,649,642

37,05941,765444,078–

11,000116,959

732

607

6,461

Short-term investment securities (Notes 10 and 11)

15,9999,900

105,263

Commercial paper (Note 10)

Real estate for sale (Note 4.10))

19,541

24,845

264,169

Income taxes payable (Note 10)
Advances received on uncompleted construction contracts

41,27034,341365,145

Provision for bonuses

Costs on uncompleted construction contracts (Note 4.9))
Other inventories

30,976

20,179214,557

596

463

4,925

Deferred tax assets (Note 14)

10,23061

656Provision for warranties for completed construction

Other

3,871

13,878

147,564

Provision for loss on construction contracts (Note 4.9))

Allowance for doubtful accounts
Total current assets(991)(1,018)(10,825)

Provision for loss on disaster

281,364

271,8112,890,073

Provision for loss on litigation

Noncurrent assets:
17,765

16,354

173,887

709

724

7,699

66,58960,878647,298

134

185

1,973

		 Construction in progress

2,165

53

573

		 Total property, plant and equipment

87,36578,196

831,433

		 Machinery, vehicles, tools, furniture and fixtures, net
		 Land (Notes 4.3), 8) and 10))
		 Lease assets, net

11,402

1,471

15,646

14,01023,195

246,628

218

–

–

–

985

10,480

Deposits received

15,253

11,589123,229

Other

10,91812,814

136,247

Total current liabilities

255,773

293,993

3,125,923

Long-term loans payable (Notes 4.7) and 10)

20,443

20,652

219,592

Deferred tax liabilities (Note 14)

3,172

22,372

237,882

Deferred tax liabilities for land revaluation (Note 14)

9,780

9,557

101,626

Provision for retirement benefits (Note 13)

22,03021,355

227,065

Provision for directors’ retirement benefits

245

181

1,931

Asset retirement obligations

156

145

1,546

Other

4,021

3,844

40,874

Total noncurrent liabilities

59,85078,110830,520

315,623

372,1033,956,443

23,001

23,001

244,567

Capital surplus

25,50225,502

271,160

Retained earnings

103,746

36,723

390,467(5,956)(5,987)(63,660)

146,293

79,240842,535

17,00740,046425,795

Total liabilities
Intangible assets:
372

316

3,362

		 Other

2,640

2,721

28,932

		 Total intangible assets

3,012

3,037

32,295

		 Goodwill

1,072

940

Noncurrent liabilities:

Property, plant and equipment: (Notes 4.1) and 15)
		 Buildings and structures, net (Note 4.10))

2,570

NET ASSETS
Shareholders’ equity:
Capital stock

Treasury stock

Investments and other assets:

Total shareholders’ equity

		 Investment securities (Notes 4.2), 3), 10 and 11)

110,715

143,300

1,523,666

		 Long-term loans receivable (Notes 4.3) and 10)

1,405

1,336

14,215

Accumulated other comprehensive income (Note 6) :

229

213

2,274

Valuation difference on available-for-sale securities

		 Other

4,623

3,786

40,257

Deferred gains on hedges

57

1

14

		 Allowance for doubtful accounts(1,555)(1,483)(15,776)

Revaluation reserve for land (Note 4.8))

6,073

5,940

63,162

		 Total investments and other assets

115,418

147,154

1,564,638

Foreign currency translation adjustments(2,066)(1,611)(17,130)

Total accumulated other comprehensive income

21,07144,376

471,841

205,796

228,387

2,428,367

4,172

4,478

47,620Total net assets

171,537

128,095

1,361,997

Total liabilities and net assets¥487,160¥500,199$5,318,440

		 Deferred tax assets (Note 14)

Total noncurrent assets

Total assets¥487,160¥500,199$5,318,440

Minority interests

See accompanying notes to consolidated financial statements.

1011

Consolidated Statements of Income

Consolidated Statements of Changes in Net Assets

Toda Corporation and Consolidated Subsidiaries—For the years ended March 31, 2012 and 2013

Toda Corporation and Consolidated Subsidiaries—For the years ended March 31, 2012 and 2013

Thousands of
U.S. dollars (Note1)

Millions of yen

Net sales:
Net sales of completed construction contracts
Net sales of real estate business and otherTotal net sales
Cost of sales:
Cost of sales of completed construction contracts (Notes 5.1) and 4))
Cost of sales of real estate business and other (Note 5.2))
Total cost of sales
Gross profit:
Gross profit (loss) on completed construction contracts
Gross profit (loss) on real estate business and otherTotal gross profit (loss)
Selling, general and administrative expenses (Notes 5.3) and 4))
Operating income (loss)
Non-operating income:Interest income
Dividend income
Dividend income of insurance
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Commission fee
Provision for allowance for doubtful accounts
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income:Gain on sales of noncurrent assets (Note 5.5))
Gain on sales of investment securities
Gain on negative goodwill
Other
Total extraordinary income
Extraordinary loss:
Loss on sales of noncurrent assets (Note 5.6))
Impairment loss (Note 5.7))
Loss on sales of investment securities
Loss on valuation of investment securities
Provision for loss on litigation
Loss on disaster (Note 5.8))
Other
Total extraordinary losses
Income (loss) before income taxes and minority interests
Income taxes—current
Income taxes—deferred
Total income taxes (Note 14)
Net income (loss) before minority interests
Minority interests in income
Net income (loss) (Note 18)

2012

2013

¥475,603
13,782
489,385¥483,649
13,399497,048$5,142,472
142,469
5,284,942

455,982
18,256474,239

510,774
10,917
521,6915,430,878
116,0845,546,962

19,620(4,474)
15,14623,140(7,994)(27,124)2,481(24,643)
22,354(46,997)(288,405)
26,385(262,020)
237,683(499,704)

260
1,792
278
226
2,557

263
1,856
221
317
2,657

2,797
19,7392,353
3,370
28,260

768
170
173
141
1,253
(6,690)

785
155
227
73
1,242
(45,581)

8,350
1,657
2,413
786
13,208(484,652)

6
31
47
5
90

242
1,812
–
51
2,107

2,583
19,275–551
22,410

254
2,488
–
3,355
–
179
138
6,415
(13,015)
792
5,963
6,755
(19,770)
102¥(19,872)

95
919
454
1,822
985
–
125
4,402
(47,876)713
16,42017,134(65,010)274¥ (65,285)

1,019
9,773
4,833
19,372
10,480–1,333
46,813(509,055)
7,591
174,590
182,181(691,237)
2,920$ (694,157)

Consolidated Statements of Comprehensive Income
Toda Corporation and Consolidated Subsidiaries—For the years ended March 31, 2012 and 2013

Thousands of
U.S. dollars (Note1)

Millions of yen

Comprehensive income (loss) attributable to:Shareholders of the Company
Minority interests
See accompanying notes to consolidated financial statements.

2012

2013

2013

¥(19,770)¥(65,010)$(691,237)

1,408
73
1,401
(280)
2,602
(17,167)

23,063(56)–486
23,494(41,516)

245,228
(596)
–
5,172
249,804(441,432)(17,240)¥72(41,847)¥330$(444,944)
3,511

Thousands of
U.S. dollars (Note1)

Millions of yen

2013

See accompanying notes to consolidated financial statements.

Income (loss) before minority interests
Other comprehensive income (loss) (Note 6):
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income (loss)

ANNUAL REPORT 2013

Shareholders’ equity
Capital stock:
		 Balance at the beginning of current period
		 Changes of items during the period
		 Balance at the end of current period
Capital surplus:
		 Balance at the beginning of current period
		 Changes of items during the period:			
Disposal of treasury stock			
Total changes of items during the period
		 Balance at the end of current period
Retained earnings:
		 Balance at the beginning of current period
		 Changes of items during the period:			Dividends from surplus
			Net income (loss)			
Reversal of revaluation reserve for land
			
Other
			
Total changes of items during the period
		 Balance at the end of current period
Treasury stock:
		 Balance at the beginning of current period
		 Changes of items during the period:			
Purchase of treasury stock			
Disposal of treasury stock			
Total changes of items during the period
		 Balance at the end of current period
Total shareholders’ equity:
		 Balance at the beginning of current period
		 Changes of items during the period:			Dividends from surplus
			Net income (loss)			
Purchase of treasury stock			
Disposal of treasury stock			
Reversal of revaluation reserve for land
			
Other
			
Total changes of items during the period
		 Balance at the end of current period
Accumulated other comprehensive income
Valuation difference on available-for-sale securities:
		 Balance at the beginning of current period
		 Changes of items during the period:			Net changes of items other than shareholders’ equity
			
Total changes of items during the period
		 Balance at the end of current period
Deferred gains or losses on hedges:
		 Balance at the beginning of current period
		 Changes of items during the period:			Net changes of items other than shareholders’ equity
			
Total changes of items during the period
		 Balance at the end of current period
Revaluation reserve for land:
		 Balance at the beginning of current period
		 Changes of items during the period:			Net changes of items other than shareholders’ equity
			
Total changes of items during the period
		 Balance at the end of current period
Foreign currency translation adjustments:
		 Balance at the beginning of current period
		 Changes of items during the period:			Net changes of items other than shareholders’ equity
			
Total changes of items during the period
		 Balance at the end of current period
Total accumulated other comprehensive income
		 Balance at the beginning of current period
		 Changes of items during the period:			Net changes of items other than shareholders’ equity
			
Changes of items during the period
		 Balance at the end of current period
Minority interests
		 Balance at the beginning of current period
		 Changes of items during the period:			Net changes of items other than shareholders’ equity
			
Total changes of items during the period
		 Balance at the end of current period
Total net assets
		 Balance at the beginning of current period
		 Changes of items during the period:			Dividends from surplus
			Net income (loss)			
Purchase of treasury stock			
Disposal of treasury stock			
Reversal of revaluation reserve for land
			
Other
			
Net changes of items other than shareholders’ equity
			
Total changes of items during the period
		 Balance at the end of current period

2012

2013

2013

¥ 23,001
		–¥ 23,001¥ 23,001
		–¥ 23,001$ 244,567
		–$ 244,567¥ 25,595¥ 25,502$ 271,160

		
(92)
		
(92)
¥ 25,502

		–		–¥ 25,502¥ 125,893¥ 103,746$1,103,094		 (2,163)
		 (19,872)
		
(111)
		
–
		 (22,147)¥ 103,746

		 (1,868)
		 (65,285)
		
133
		
(2)
		 (67,022)¥ 36,723

		 (19,863)
		 (694,157)
		
1,418
		
(23)
		 (712,626)$ 390,467

		
		
		

–
–
271,160¥ (6,683)¥ (5,956)$(63,338)

		
(13)
		
740
		
726
¥ (5,956)

		
(30)
		
–
		
(30)
¥ (5,987)

		
		
		
$

(322)
–
(322)
(63,660)¥ 167,806¥ 146,293$1,555,484

		 (2,163)
		 (19,872)
		
(13)
		
647
		
(111)
		 (21,513)¥ 146,293

		 (1,868)
		 (65,285)
		
(30)
		
–
		
133
(2)
		 (67,052)¥ 79,240		 (19,863)
		 (694,157)
		
(322)
		
–
		
1,418
		
(23)
		 (712,948)$ 842,535¥ 15,594¥ 17,007$ 180,830

		 1,412
		 1,412¥ 17,007

		 23,039
		 23,039¥ 40,046

		 244,965
		 244,965$ 425,795

–

¥

(15)

¥

57

$

611

		
		
¥

73
73
57

		
		
¥

(56)
(56)
1

		
		
$

(596)
(596)
14

¥

4,561

¥

6,073

$

64,580

		
		
¥

1,512
1,512
6,073

		
		
¥

(133)
(133)
5,940

		
		
$

(1,418)(1,418)63,162¥ (1,812)¥ (2,066)$(21,975)

		
(254)
		
(254)
¥ (2,066)

		
455
		
455
¥ (1,611)

		
		
$

4,844
4,844
(17,130)¥ 18,327					 2,744
		 2,744¥ 21,071¥ 21,071
					 23,305
		 23,305¥ 44,376$ 224,046
		 247,795
		 247,795$ 471,841

¥

3,447

¥

4,172

$

44,363

		
		
¥

725
725
4,172

		
		
¥

306
306
4,478

		
		
$

3,257
3,257
47,620¥ 189,581¥ 171,537$1,823,894

		 (2,163)
		 (19,872)
		
(13)
		
647
		
(111)

		 (1,868)
		 (65,285)
		
(30)
		
–
		
133
(2)
		 23,611
		 (43,441)¥ 128,095

		 (19,863)
		 (694,157)
		
(322)
		
–
		
1,418
		
(23)
		 251,052
		 (461,896)$1,361,997–

		 3,469
		 (18,044)¥ 171,537

See accompanying notes to consolidated financial statements.

12

13

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Toda Corporation and Consolidated Subsidiaries—For the years ended March 31, 2012 and 2013

Toda Corporation and Consolidated Subsidiaries

Thousands of
U.S. dollars (Note1)

Millions of yen

Net cash provided by (used in) operating activities:
Income (loss) before income taxes and minority interests
Depreciation and amortization
Loss on impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Decrease in provision for retirement benefits
Increase in other provision
Gain on negative goodwill
Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities
Loss (gain) on sales of property, plant and equipment
Interest and dividend income
Interest expenses			
Decrease (increase) in notes and accounts receivable—trade
Decrease in costs on uncompleted construction contracts
Decrease in real estate for sale
Increase (decrease) in notes and accounts payable—trade
Decrease in advances received on uncompleted construction contracts
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Proceeds from sales and redemption of securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities

ANNUAL REPORT 2013

2012

2013

2013

¥(13,015)
2,088
2,488
55
(1,869)
(703)
3,958
(47)
3,355
(31)
248
(2,053)768(31,784)
20,063
10,574
14,789(14,191)
4,627
(679)
2,051
(766)
(654)
(48)

¥(47,876)
2,038
919
55
(45)
(739)
8,978
–
1,822
(1,358)(147)(2,119)785(321)
10,811
3,256
22,082(6,965)(9,476)(18,299)
2,120
(771)
(807)
(17,757)$(509,055)
21,679
9,773
593
(482)
(7,866)
95,465–
19,372(14,441)(1,563)(22,536)
8,350(3,414)
114,950
34,625
234,793(74,060)(100,757)(194,575)
22,551(8,202)(8,586)(188,813)

(382)
83
70
(3,419)384(1,106)(3,641)
68
(64)
81
89
(7,837)

(450)
763
–
(2,934)1,288(300)(2,297)
3,239
(81)
151
175
(445)

(4,792)
8,119–(31,201)
13,703(3,196)(24,426)
34,441
(863)
1,606
1,871
(4,739)Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Net increase in commercial paper
Proceeds from long-term loans payable
Repayment of long-term loans payable
Cash dividends paid
Cash dividends paid to minority shareholders
Purchase of treasury stock
Proceeds from disposal of treasury stock
Other, net
Net cash provided by (used in) financing activities(2,272)–
10,225(8,573)(2,163)
(16)
(13)
1,330
(72)
(1,557)

5,810
11,0003,020(3,991)(1,868)
(34)
(30)
–
(70)
13,834

61,775
116,959
32,110(42,439)(19,863)
(364)
(322)
–
(754)
147,100

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of current period
Cash and cash equivalents at the end of current period (Note 8)(186)(9,629)61,65452,024360(4,008)52,02448,015

3,829(42,623)
553,158
510,535

1. Basis of Presenting Consolidated Financial Statements
The consolidated financial statements presented herein of Toda Corporation(the “Company”) and its consolidated subsidiaries (together, the “Companies”) are prepared in accordance with the provisions set forth in the
Financial Instruments and Exchange Law of Japan, and in conformity withaccounting principles generally accepted in Japan.
These consolidated financial statements incorporate certain modifications in format so as to make the financial statements more meaningful toreaders outside Japan.
These modifications have no effect on total assets, net sales, retained
earnings or net income.

(U.S. Dollar Amounts)
The U.S. dollar amounts are included solely for convenience and have beentranslated, as a matter of arithmetical computation only, at the rate of ¥94.05= US$1, the exchange rate prevailing on the Tokyo foreign exchange market
on March 31, 2013, and have been then rounded down to the nearest
thousand. This translation should not be construed as a representation thatthe yen amounts actually represent, have been or could be converted into U.S.
dollars at this or any other rate.

2. Summary of Significant Accounting Policies
1) Scope of consolidation
The accompanying consolidated financial statements include the accountsof Toda Corporation and 16 subsidiaries, namely Toda Road Co., Ltd., Toda
Reform Co., Ltd., Chiyoda Kenkou Co., Ltd., Chiyoda Staff Service Co., Ltd.,
Sipco Industries Co., Ltd., APEC Engineering Co., Ltd., Chiyoda Tochi Tatemono Co., Ltd., Toda Finance Co., Ltd., Towa Kanko Kaihatsu Co., Ltd., Toda
America, Inc., Construtora Toda do Brasil S/A, Toda Construction (Shanghai)Co., Ltd., Thai Toda Corporation Ltd., Toda Vietnam Co., Ltd., ABTD, INC.
and Toda Philippines, INC. Other subsidiaries were not consolidated, as
they were not significant in terms of the effect on total assets, net sales, net
income or retained earnings of the consolidated financial statements.
2) Application of the equity method
All non-consolidated subsidiaries and affiliates were not accounted forusing the equity method, as these companies were not significant interms of the effect on net income or retained earnings of the consolidated
financial statements.
3) Fiscal year of consolidated subsidiaries
Of the consolidated subsidiaries, Toda America, Inc., Construtora Toda do
Brasil S/A, Toda Construction (Shanghai) Co., Ltd., Thai Toda Corporation
Ltd., Toda Vietnam Co., Ltd., ABTD, INC. and Toda Philippines, INC. close
their fiscal year on December 31 each year. In preparing the consolidated
financial statements, the Company used financial statements as of December 31 of all these subsidiaries.
			 However, adjustments necessary for the purpose of consolidation
have been made for fiscal year-end.
			 The fiscal year-end of all other consolidated subsidiaries is the sameas the consolidated fiscal year-end.
4) Standards and evaluation methods for important assets(a) Held-to-maturity debt securities
			 Amortized cost method (straight-line method)
			 Available-for-sale securities			 •Securities with a fair value:
Stated at fair value, determined by the market price at the consolidated fiscal year-end date (the difference between the book value
and the fair value is recorded as a component of net assets, while
the cost of securities sold is computed using the moving-averagemethod)			 •Securities with no fair value:
Stated at cost, determined by the moving-average method(b) Inventories
			 Costs on uncompleted construction contracts
Stated at cost, determined by the specific identification cost
method			 Real estate for saleStated at cost, determined by the specific identification cost method(The book value on the consolidated balance sheets is presented after
write-down for decline in profitability.)5) Methods of depreciation and amortization
depreciable assets(a) Property, plant and equipment (excluding lease assets)
The declining-balance method is primarily used. However, the straight-line
method is used for buildings (excluding building fixtures) acquired on andafter April 1, 1998.
			 Standards Identical to regulations in the Corporate Income Tax Law are
utilized to determine expected lifetime and residual value.
(b) Intangible fixed assets (excluding lease assets)
The straight-line method is used.
			 Standards identical to regulations in the Corporate Income Tax Law
are utilized to determine expected lifetime and residual value.
			 However, the amortization of software used by the companies
is computed using the straight-line method based on the estimateduseful life.
(c) Lease assets
Leased assets under finance leases other than those that are deemed totransfer ownership to lessees.
			 Depreciation is based on the straight-line method over the lease termof the leased assets with no residual value.
6) Allowances and provisions(a) Allowance for doubtful accounts
The allowance for doubtful trade receivables and loans has been provided
based on historic loss experience for general accounts and also includes
the aggregate amount of the estimated loss for the accounts for which
concern actually exists for collectability.
(b) Provision for bonuses
This is provided for the payment of bonuses for employees, based on
expected payment amount.
(c) Provision for warranties for completed construction
To cover expenses for defects claimed concerning completed work, this isprovided based on the estimated amount of compensation in the future
for the work completed during the consolidated fiscal year.
(d) Provision for loss on construction contracts
The provision for loss on construction contracts is provided at the estimated amount for the future losses on contract backlog at the fiscal year-end
which will be probably incurred and which can be reasonably estimated.
(e) Provision for retirement benefits
The provision for retirement benefits for employees is calculated based on
estimated amounts of retirement benefit obligations and pension assets
as of the consolidated fiscal year-end.

See accompanying notes to consolidated financial statements.

14

15

ANNUAL REPORT 2013

Notes to Consolidated Financial Statements

			 Actuarial differences are amortized commencing the following year
after the difference is recognized primarily by the straight-line method
over a period of five years.
			 Prior service cost is amortized by the straight-line method over a
period of five years.
(f) Provision for directors’ retirement benefits
To prepare for the payment of retirement benefits for executive officers
and subsidiaries’ directors, the provision is provided at the amount to be
paid according to internal regulations if they had retired at the consolidated fiscal year-end.
(g) Provision for loss on litigation
The provision for loss on litigation is provided at the estimatedamount for a possible future loss arising from litigation.
7) Recognition of net sales from construction contracts andrelated costs
The Companies apply the percentage of completion method to thosecontracts in which the percentage of completion at the consolidated fiscal year-end can be reliably estimated, and other contracts are recorded
under the completed contract method.
8) Translation of foreign currency assets and liabilities
All monetary assets and liabilities denominated in foreign currencies
are translated into Japanese yen at the exchange rates prevailing at theconsolidated fiscal year-end. The resulting gains and losses are included in
net income or loss for the consolidated fiscal year.
			 Assets and liabilities accounts of foreign consolidated subsidiaries aretranslated into Japanese yen at the exchange rate prevailing at the fiscal
year-end.
			 Income and expense accounts of foreign consolidated subsidiaries aretranslated into Japanese yen at the average annual exchange rate.
			 The resulting translation adjustments are included in foreign currencytranslation adjustment and minority interests in the net assets of theconsolidated balance sheets.

9) Hedge accounting
The Companies apply hedge accounting as follows:

7) Financial restrictive covenantsCommitment line agreement and Term loan agreement are respectively set the financial restrictive covenant.

(a) Method of hedge accounting adopted
Deferral hedge accounting
If the interest rate swap contracts are used as hedge and meet certain
hedging criteria, net amounts to be paid or received under the interest
rate swap contracts are added to or deducted from the interest or liabilities for which the swap contract were executed.
(b) Measure and objects
1. Measures: Forward foreign exchange contracts
			 Objects: Transactions to be paid in foreign currencies in cases of				overseas construction
2. Measures: Interest rate swap
			 Objects: Borrowings(c) Hedging principles:
Based on internal regulations which stipulate the execution authority
regarding on derivative transactions and those for transaction limits, theCompanies utilize hedges to minimize the risk of currency exchange rateand interest rate fluctuations associated with the hedge objects.
(d) Evaluation method of effectiveness of hedging:
During the period from the time when the hedging first started until the
consolidated fiscal year-end, the Companies have been assessing thehedge effectiveness primarily by comparing, in terms of variation amounts,(1) cumulative cash flow changes or exchange rate changes of the hedge
objects and (2) cumulative cash flow changes or exchange rate changesof the hedge measures.
			 However, the evaluation of hedge effectiveness is omitted for interest
swaps as they meet certain hedging criteria for the exceptional treatment.
10) Cash and cash equivalents
For the consolidated statements of cash flows, cash and cash equivalents
are defined as cash on hand, deposits that can be withdrawn at any timeand highly liquid short-term investments with a maturity date within threemonths after acquisition.

(a) Commitment line agreement
Although the Company’s financial situation of the end of this consolidated fiscal year is contrary to the covenant, the Company has in advance received
the waiver of forfeiture of benefit of time from the correspondent financial institutions. The Company and the correspondent financial institutions havereached the understanding to amend the covenant and have already revised the agreement. After the end of this consolidated fiscal year, there is nofact that the Company’s financial situation is contrary to the covenant.
(b) Term loan agreement
Although the Company’s financial situation of the end of this consolidated fiscal year is contrary to the covenant, the Company has in advance received
the waiver of forfeiture of benefit of time from the correspondent financial institutions. The Company and the correspondent financial institutions havereached the understanding to amend the covenant and have already revised the agreement. After the end of this consolidated fiscal year, there is nofact that the Company’s financial situation is contrary to the covenant.
8) Land revaluation
Based on the Land Revaluation Law, the Company has revaluated land held for business use and has recorded any discrepancies in the consolidated balance sheets as revaluation reserve for land.
9) Provision for loss on construction contracts included in costs on uncompleted construction contracts
Thousands of
U.S. dollars

Millions of yen

As of March 31

2012

2013

2013

Costs on uncompleted construction contracts¥1,849¥2,149$22,859

10) Change in holding purpose of assets
The following real estate held for sale was reclassified as noncurrent assets due to change in holding purpose.

Thousands of
U.S. dollars

Millions of yen

As of March 31

2013

2013

2012

Buildings and structures
Land

¥157
¥360

–
–

$1,678$3,830The following noncurrent assets were reclassified as real estate held for sale due to change in holding purpose.
As of March 31

3. Change in accounting method
The Company and the domestic subsidiaries have changed the depreciation
method regarding property, plant and equipment obtained after April 1, 2012
based on the latest Corporate Income Tax Law, from this consolidated fiscal

year. Due to this change, operating loss, ordinary loss and loss before income
taxes and minority interests were respectively declined by ¥33 million (US$359
thousand), compared to the previous method.

2012

Buildings and structures
Land

–
–

2013

2013

¥2,344¥6,721$24,925$71,463

5. Notes to Consolidated Statements of Income
4. Notes to Consolidated Balance Sheets

Thousands of
U.S. dollars

Millions of yen

2012

As of March 31

1) Accumulated depreciation of property, plant and equipment
2) Investments in non-consolidated subsidiaries and affiliates
included in investment securities
3) Assets pledged as collateral:
Land
Investment securities
Long-term loans receivable
Total4) Contingent liabilities
5) Discounts on notes receivable6) Loan commitment agreement:
Maximum limit under the agreement
Loan balance outstanding
Difference (unused portion)

16

2013

2013

¥

34,961¥ 32,436$344,885

¥

1,386

¥

1,386

$ 14,745

¥
		
		
¥
¥
¥

9
488
656
1,154
552
603

		
		
		
¥
¥
¥

–
558
652
1,211
356
421

–
5,938
6,942
$ 12,881$ 3,785$ 4,485¥
		
¥40,000–40,000¥ 30,000		–¥ 30,000$318,979–$318,979

Thousands of
U.S. dollars

Millions of yen

For the years ended March 31

1) Provision for loss on construction contracts included in costs of sales¥
2) Valuation loss on real estate for sale included in costs of sales¥
3) Principal components of selling, general and administrative expenses:
Employees’ salaries and allowances¥
Provision for bonuses		Retirement benefit expenses
		Provision (reversal) of allowance for doubtful accounts
		4) Research and development expenditures included in selling, generaland administrative expenses and construction costs¥5) Gain on sales of noncurrent assets:
Land
¥
Other
		
Total
¥
6) Loss on sales of noncurrent assets:
Buildings and structures
¥
Land
		
Other
		
Total
¥

2013

2013

10,017
7,387¥ 19,205¥
516$204,209$ 5,490

10,612
1,314
1,031
(388)

¥ 10,891
		
344
		
984
		
(163)

$115,807
3,664
10,4662012(1,733)

1,903

¥

1,346

$ 14,314

0
5
6

¥
		
¥

235
7
242

$ 2,49983$ 2,583

26
228
0
254

¥
		
		
¥

56
39
0
95

$

600
418
0
$ 1,019

17

ANNUAL REPORT 2013

Notes to Consolidated Financial Statements

7) Impairment loss on fixed assets
The group puts its assets for business purposes, primarily into main office and branch office. And other assets are put each properties. Impairment loss on
fixed assets was as follows.
For the fiscal year ended March 31, 2012
PurposeType

Kiyota-ku, Sapporo City, and other

Idle assets

Buildings, structures and land

Number of shares

For the fiscal year ended March 31, 2012

Impairment loss

Location

7. Notes to Consolidated Statements of Changes in Net Assets

Issued stock
Treasury stock(Millions of yen)

¥2,488Class of shares

April 1, 2011

Increase

Decrease

March 31, 2012

Common stock

322,656,796––

322,656,796

Common stock

13,642,948

47,0832,391,354

11,298,677

The recoverable value of assets or assets group is primarily estimated from the net sale value based on real estate appraisal standards.
Number of shares

For the fiscal year ended March 31, 2013
Location

Chuo-ku, Kumamoto City, and other

PurposeType

Rental locations

Buildings, structures and land

Impairment loss

Impairment loss

(Millions of yen)(Thousands of U.S. dollars)¥919$9,773For the fiscal year ended March 31, 2013

Issued stock
Treasury stock

Class of shares

April 1, 2012

Increase

Decrease

March 31, 2013

Common stock

322,656,796––

322,656,796

Common stock

11,298,677

120,057–

11,418,734

The recoverable value of assets or assets group is primarily estimated from the net sale value based on real estate appraisal standards.

For the years ended March 31

2013

2012

8) Loss on disaster
The Company recorded an extraordinary loss as a result of the Great
East Japan Earthquake. This is comprised of estimated costs to restore
real-estate holdings, inventories and others. The figure includes theestimated amount of loss to be incurred.

¥179

Number of shares

Thousands of
U.S. dollars

Millions of yen

		For the fiscal year ended March 31, 2012

2013

–

		

Reclassification and tax effect of comprehensive income for the years ended March 31

Valuation difference on available-for-sale securities:
AccrualReclassification
Before adjust tax effectTax effect
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges:
AccrualReclassification
Before adjust tax effectTax effect
Deferred gains (losses) on hedges
Revaluation reserve for land:Tax effectRevaluation reserve for land
Foreign currency translation adjustments:
Accrual
Total of other comprehensive income

2012

Thousands of
U.S. dollars

2013

2013

¥35,402		
412
		 35,814
		 (12,751)¥23,063$ 376,420
		
4,386
		 380,806		 (135,577)$ 245,228
(390)
(572)
(962)

–
–

¥
		
		
		
¥

233
104
1,304
1,408

¥
		
		
		
¥

92
26
119
(46)
73

¥
		
		
		
¥

(36)
(53)
(90)
(56)

$
		
		
		
$

¥
¥

1,401
1,401

		
		

–
–

		
		

¥
¥

(280)
2,602

(128)

34

486
¥
¥ 23,494

Total dividends

Dividends per share

Record date

Effective dateCommon stock¥2,179 million¥7.00

March 31, 2011

June 30, 2011

June 28, 2012 resolution by annual
general meeting of shareholders

Common stock¥1,868 million¥6.00

March 31, 2012

June 29, 2012

Number of shares–

6. Notes to Consolidated Statements of Comprehensive Income
Millions of yen

Class of shares

June 29, 2011 resolution by annual
general meeting of shareholders

365

(596)

For the fiscal year ended March 31, 2013

Class of shares

Total dividends

Dividends per share

Record date

Effective dateJune 28, 2012 resolution by annual
general meeting of shareholders

Common stock¥1,868 million¥6.00

March 31, 2012

June 29, 2012

June 27, 2013 resolution by annual
general meeting of shareholders

Common stock¥1,556 million¥5.00

March 31, 2013

June 28, 2013($19,863 thousand)($16,546 thousand)8. Notes to Consolidated Statements of Cash Flows
Reconciliation between cash and deposits on the consolidated balance sheets andcash and cash equivalents at the fiscal year-end:2013

As of March 31

2012

Cash and deposits of the consolidated balance sheets(Less) time deposits with maturities of more than three months
Short-term investment securities
Cash and cash equivalents of the consolidated statements of cash flows¥36,935(911)

15,999¥52,024¥ 38,782
		
(666)
		
9,900
¥ 48,015

2013$412,356(7,083)

105,263$510,535

9. Lease Transactions$ 5,172$ 249,804

Thousands of
U.S. dollars

Millions of yen

As of March 31

18

Thousands of
U.S. dollars

Millions of yen

2012

2013

2013

Future minimum lease payments under non-cancelable operating leases:
Due within one year
Due after one year
Total

¥ 107
187
¥ 294

¥
		
¥

139
110
249

$ 1,478
1,173$ 2,652

Future minimum lease income under non-cancelable operating leases:
Due within one year
Due after one year
Total

¥1,666
6,465¥8,131¥ 1,495
		 5,905¥ 7,401$15,903
62,793$78,69719

ANNUAL REPORT 2013

Notes to Consolidated Financial Statements

Notes:
1. The fair value of unlisted stocks is considered to be extremely difficult to calculate, as there are no market prices and no valuations of future cash flow.
Therefore, these stocks are not included in “Short-term investment securities and investment securities.”
2. The value of assets and liabilities arising from derivative is shown at net value and with the amount in parentheses representing net liability position.
3. Long-term loans receivable are equivalent to the carrying amount after deduction of allowance for doubtful accounts.

10. Fair Value of Financial Instruments
Millions of yen

As of March 31, 2012

Book value

Fair value(1) Cash and deposits¥ 36,935¥ 36,935¥ –(2) Notes and accounts receivable—trade164,203

164,172(31)(3) Short-term investment securities,
investment securities (Note)

117,746

117,7470

As of March 31, 2013 (stated at book value)

1,255

1,280

24

Stocks of non-consolidated subsidiaries and affiliated companies
which are not accounted for by the equity method:¥320,141¥320,135¥ (6)¥132,799¥132,799¥ –37,05937,059

–

732

732

–

20,443

20,46320

Stocks of subsidiaries
Stocks of affiliated companies
Unlisted preferred equity securities
Other investment securities:
Unlisted stocks
Unlisted preferred equity securities
Others(4) Long-term loans receivable
Assets total(1) Notes and accounts payable—trade(2) Short-term loans payable(3) Income taxes payable(4) Long-term loans payable
Liabilities total
Derivative transactions

Difference¥191,034¥191,055

¥20

¥

¥

¥ –

92

92

Unlisted stocks:

As of March 31, 2012

As of March 31, 2012 (stated at book value)

Securities with a fair value that does
not exceed the book value

Millions of yen

Stocks of non-consolidated subsidiaries and affiliated companies
which are not accounted for by the equity method:

Total
114
217
1,055

As of March 31, 2012

(1) Cash and deposits¥ 38,782¥ 38,782(2) Notes and accounts receivable—trade

164,719

164,692(3) Short-term investment securities,
investment securities (Note)

143,577

143,690112(4) Long-term loans receivable
Assets total¥

Book value

Fair value¥1,731¥1,737

Difference

¥6

791

786

(5)

¥2,523¥2,524¥0Book value

Acquisition cost

Difference

Securities with a book value thatexceeds the acquisition cost:Thousands of U.S. dollars

Difference$62,10225,370102

Millions of yen

Millions of yen
Fair value¥5,8402,386
9

Available-for-sale securities with a fair value:¥5,8561,716
9Book value$ 1,213
2,314
11,217

Millions of yen

Securities with a fair value that exceeds
the book value

As of March 31, 2013

114
217
1,055

Held-to-maturity debt securities:

Unlisted stocks:¥¥

Thousands of
U.S. dollars

11. Marketable Securities and Investment Securities

Notes:
1. The fair value of unlisted stocks is considered to be extremely difficult to calculate, as there are no market prices and no valuations of future cash flow.
Therefore, these stocks are not included in “Short-term investment securities and investment securities.”
2. The value of assets and liabilities arising from derivative is shown at net value and with the amount in parentheses representing net liability position.
3. Long-term loans receivable are equivalent to the carrying amount after deduction of allowance for doubtful accounts.

Stocks of subsidiaries
Stocks of affiliated companies
Unlisted preferred equity securities
Other investment securities:
Unlisted stocks
Unlisted preferred equity securities
OthersMillions of yen

Difference			Stocks¥ 76,258¥

43,640¥32,618

			Subtotal

76,258

		

43,64032,618

			Stocks

21,751

		27,978(6,227)

			Bonds

209

		

250

(40)

Securities with a book value that does
not exceed the acquisition cost:

Book value

Fair value–$ 412,356$ 412,356(27)

1,751,405

1,751,112(293)

1,526,610

1,527,811

1,201

			Others

17,002

		

17,002–

			Subtotal

38,964

		

45,231(6,267)¥115,222¥

88,871¥26,350

$

–

948

998

49

10,087

10,615527¥348,028¥348,163¥135$3,700,460$3,701,896$1,435

			Total

Note: The Companies recognized losses on write-down of ¥264 million for available-for-sale securities.

(1) Notes and accounts payable—trade155,148

155,148–

1,649,642

1,649,642–(2) Short-term loans payable andcommercial papers

52,76552,765–561,037

561,037–

For the year ended March 31, 2012

Sales amount

Total gain on sales

Total loss on sales

607

607

–

6,461

6,461

–

Available-for-sale securities sold

¥68

¥31

–

20,652

20,673

20

219,592

219,813220¥229,174¥229,195¥ 20$2,436,735$2,436,955

$ 220

¥

¥

¥ –

$

$

$

Millions of yen(3) Income taxes payable(4) Long-term loans payable
Liabilities total

Derivative transactions

20

0

0

9

9

–

21

ANNUAL REPORT 2013

Notes to Consolidated Financial Statements

12. Derivative Transactions

Held-to-maturity debt securities:
Millions of yen

As of March 31, 2013

Book value

Fair value

Thousands of U.S. dollars
DifferenceBook value

Fair value

For the year ended March 31, 2012

Difference

Securities with a fair value that exceeds
the book value¥2,434¥2,558¥124$25,888$27,208$1,320

Securities with a fair value that does notexceed the book value

639

628

(11)

6,804

6,684

(119)

¥3,074¥3,187¥112$32,692$33,893$1,201

Total

Derivative transactions to which the hedge accounting method is applied:(1) Currency-related transactions

Thousands of U.S. dollars

Millions of yen
Book value

Acquisition cost

DifferenceBook value

Acquisition cost

Millions of yen
Objects

Contract
amountMore than
1 yearEstimated
fair value

		 Buy EUR

Forecasted purchasingtransaction¥1,306¥89¥54

		 Buy USD

Forecasted purchasingtransaction

673

–

37

¥1,980¥89¥92

Method of processing

Available-for-sale securities with a fair value:
As of March 31, 2013

Derivative transactions to which the hedge accounting method is not applied:
None.

Measures

Forward foreignexchange contracts

Difference

Securities with a book value that exceeds
the acquisition cost:

Method in principle

		 Stocks¥113,256¥50,016¥63,239$1,204,212$531,806$672,405

		 Bonds

102

100

2

1,087

1,063

23

Total

		 Others

1,035

1,002

32

11,010

10,660350

Estimated fair value was calculated based on price information provided by the counterparty financial institution.

		 Subtotal

114,394

51,11963,274

1,216,310

543,530

672,779(2) Interest-related transactions

Securities with a book value that does notexceed the acquisition cost:
		 Stocks

16,086

17,152(1,066)

171,038

182,381(11,342)		 Bonds

122

150

(27)

1,305

1,594

(289)

		 Others

9,900

9,900

–

105,263

105,263–

		 Subtotal

26,10827,202(1,094)

277,607289,239(11,632)

		 Total¥140,502¥78,322¥62,180$1,493,917$832,770$661,147

Note: The Companies recognized losses on write-down of ¥1,812 million (US$19,273 thousand) for available-for-sale securities.
Write-down losses are recognized in each of following cases.
Case of securities with a fair value• Fair value of fiscal year end and quarter settlement day in a row decline more than 30% compared to book value in succession.
• Fair value declined more than 50% compared to book value.
Case of securities without a fair value• Net worth of equivalent of Equity declines more than 50% compared to acquisition cost.

Available-for-sale securities soldTotal gain on sales

Total loss on sales¥4,053¥1,812¥454

Objects

Contract
amountMore than
1 yearEstimated
fair value			 			
¥3,960¥1,960*Interest rate swaps
Payment fixed,
Receive floating

Long-term loans
payable* These interest rate swaps, subject to the exceptional treatment, are treated en bloc with the relevant long-term loans payable.
Therefore, the fair value of the contracts is included in the fair value of the relevant long-term loans payable.

Derivative transactions to which the hedge accounting method is not applied:
None.
Derivative transactions to which the hedge accounting method is applied:Thousands of U.S. dollars

Sales amount

Exceptional treatment
of interest rate swaps

Measures

For the year ended March 31, 2013

Millions of yen

For the fiscal year ended March 31, 2013

Method of processing

Millions of yen

Sales amount$43,097

Total gain on sales

Total loss on sales$19,275$4,833(1) Currency-related transactions
Thousands of U.S. dollars

Millions of yen
Method of processing

Method in principle

Measures

Objects

Contract
amountMore than
1 yearEstimated
fair value

¥290

–

¥0

Contract
amountMore than
1 yearEstimated
fair value–$9

Forward foreignexchange contracts
		 Buy EUR

Forecasted purchasingtransaction$3,090Estimated fair value was calculated based on price information provided by the counterparty financial institution.

(2) Interest-related transactions
Thousands of U.S. dollars

Millions of yen
Method of processing

Exceptional treatment
of interest rate swaps

Measures

Objects

Contract
amountMore than
1 yearEstimated
fair value

Interest rate swaps
Payment fixed,
Receive floating

Long-term loans
payable			 			
¥1,960¥1,960*Contract
amountMore than
1 year				 		$20,839$20,839

Estimated
fair value** These interest rate swaps, subject to the exceptional treatment, are treated en bloc with the relevant long-term loans payable.
Therefore, the fair value of the contracts is included in the fair value of the relevant long-term loans payable.

22

23

ANNUAL REPORT 2013

Notes to Consolidated Financial Statements

13. Retirement Benefits

15. Investment and Rental Properties

The Company had a defined benefit plan that consists of a defined benefit pension plan and a lump-sum benefit plan. Some of the foreign consolidated
subsidiaries have defined contribution plans. And the other consolidated subsidiaries have lump-sum benefit plans.
Thousands of
U.S. dollars

Millions of yen

As of March 31

2012

2013

2013

Retirement benefit obligation
Pension assets
Unfunded retirement benefit obligation
Unrecognized actuarial differences
Unrecognized prior service costs
Provision for retirement benefits¥(44,425)
22,549(21,876)737(890)¥(22,030)¥(45,602)
22,342$(484,873)
237,563(247,309)
26,559(6,315)$(227,065)(23,259)

2,497
(593)

¥(21,355)

Thousands of
U.S. dollars

Millions of yen

For the years ended March 31

Service cost
Interest cost
Expected return on pension assets
Amortization of actuarial differences
Amortization of prior service costs
Retirement benefit costs
For the years ended March 31

Basis of calculating retirement benefit obligation:
Periodic allocation method of projected retirement benefit obligation
Discount rate
Expected return on pension assets
Amortization period of prior service costs
Amortization period of actuarial differences

2013

2012

¥1,672
861
(269)
691
(296)
¥2,659¥1,810
907
(281)
712
(296)
¥2,852

Straight-line
methodStraight-line
method2.00%
1.20%
5 years
5 years

1.20%
1.20%
5 years
5 years$17,783
9,160(2,861)
7,353(3,157)$28,277

Deferred tax assets:
Real estate for sale
Buildings and structures
Investment securities
Allowance for doubtful receivables
Provision for bonuses
Provision for loss on construction contracts
Provision for retirement benefits
Tax loss carryforwards
Other
Subtotal
Less: valuation allowance
Deferred tax assets
Deferred tax liabilities:
Reserve for advanced depreciation of noncurrent assets
Valuation difference on available-for-sale securities
Other
Deferred tax liabilities
Net deferred tax assets (liabilities)¥74,005
Thousands of U.S. dollars

As of March 31, 2013

Book value

Fair value

Real estate for rent

¥50,596¥65,787

Book value

Fair value$537,977$699,495

Adjustments

Consolidated

16. Segment Information
Millions of yen
Reporting segments

For the year ended
March 31, 2012

Net sales:
Customers
Inter-segment
Total
Segment profit (loss)

Building
construction

Civilengineering

Real estate¥ 371,871
		 2,285
		 374,156¥ 3,544¥ 103,731
		878
		 104,609¥ 1,371¥ 13,216
		 1,376
		 14,593
		 (5,483)¥ 565
		 750		 1,315
¥
99

¥
¥

¥
¥

¥
¥

380
55

¥
¥

39
–

968
–

Other

Total

¥ 489,385¥ 489,385¥––
		 5,290 		 (5,290) 		
		 494,675 		 (5,290) 		 489,385¥ (7,994)¥(467)¥ (7,526)

9
–

¥
¥

1,397
55

¥
¥

¥
¥

691
–

2,088
55

Millions of yen

For the year ended
March 31, 2013

2012

2013

2013

¥ 2,982
1,774
1,088
901
965
5,222
7,957
5,789
2,509
29,190(9,963)¥19,227

¥

80
860
1,812
1,034
402
8,715
7,718
21,323
3,631
45,579(45,232)
¥
347

$
858
		
9,147
		 19,269
		 10,997
		
4,276
		 92,668
		 82,072
		 226,720
		 38,616
		 484,628
		 (480,935)$
3,692(2,152)(9,409)(377)(11,939)¥ 7,287–(22,146)(298)(22,445)¥(22,097)		–		 (235,475)
		
(3,176)
		 (238,652)$ (234,959)

In addition to the above, the Companies recognized deferred tax liabilities of ¥9,780 million and ¥9,557 million (US$101,626 thousand) related to revaluation reserve for land at March 31,
2012 and 2013, respectively.

24¥54,522

Reporting segments

Thousands of
U.S. dollars

Millions of yen

Fair value

Millions of yen

Net sales:
Customers
Inter-segment
Total
Segment profit (loss)

The tax effects of temporary differences which gave rise to deferred tax assets and liabilities
at March 31, 2012 and 2013 are as follows:Book value

Real estate for rent

Depreciation and amortization
Amortization of goodwill

14. Deferred Tax Accounting

As of March 31

As of March 31, 2012

2013

2013

2012

Millions of yen

Depreciation and amortization
Amortization of goodwill

Total

Building
construction

Civilengineering

Real estate¥396,553
		 2,413
		 398,967¥ (41,877)¥ 87,096
		 1,411
		 88,507¥ (919)¥ 12,845
		 1,327
		 14,172¥ 1,498

¥
¥

348
55

¥
¥

39
–

¥ 1,018¥–

Adjustments

Consolidated

Other

¥ 554
		 685
		 1,239¥ (36)¥¥¥ 497,048¥ 497,048¥––
		
5,838 		 (5,838) 		
		 502,887 		 (5,838) 		 497,048¥ (46,997)¥ (41,334)¥ (5,662)

13
–

¥
¥

1,419
55

¥
¥

619
–

¥
¥

2,038
55

Thousands of U.S. dollars
Reporting segments

For the year ended
March 31, 2013

Net sales:
Customers
Inter-segment
Total
Segment profit (loss)
Depreciation and amortization
Amortization of goodwill

Building
construction

Civilengineering

Total
Real estate

Adjustments

Consolidated

Other$ 5,891$ 5,284,942$ 4,216,409$ 926,063$ 5,284,942$–$ 136,578–
		
25,667 		 15,009 		 14,116 		 7,289 		
62,082 		 (62,082) 		
		 4,242,076 		 941,072 		 150,695 		 13,180 		 5,347,024 		 (62,082) 		 5,284,942$ (392)$ (499,704)$ (445,264)$ (9,777)$ (439,499)$ (60,204)$ 15,934
$
$

3,700
593

$
$

423
–

$ 10,829
$
–

$
$

141
–

$
$

15,095
593

$
$

6,583
–

$
$

21,679593• Adjustments of segment profit (loss) includes negative ¥200 million and negative ¥46 million (US$493 thousand) elimination of intersegment transactions
and negative ¥7,326 million and negative ¥5,615 million (US$59,710 thousand) corporate expenses which are not allocated to the reporting segments forthe years ended March 31, 2012 and 2013, respectively. The corporate expenses mainly consist of selling, general and administrative expenses which do notbelong to the reporting segments.
• Segment profit (loss) is adjusted in accordance with operating income as recorded in the consolidated statements of income.

25

ANNUAL REPORT 2013

Notes to Consolidated Financial Statements

The Companies operate in the following four reporting segments:
Building construction …….... Research, planning, design, management and execution of building construction work, and architectural andcomprehensive engineering and consulting related thereto.
Civil engineering ….....…...... Research, planning, design, management and execution of civil engineering work, such as tunnel construction, andarchitectural and comprehensive engineering and consulting related thereto.
Real estate ………............... Resale, rent and intermediating of real estate and building management.
Other business .………......... Worker dispatching and hotel business, and financing and leasing mainly for the group companies.

1. Related party transactions between the Corporation and related parties
Parent Company and major shareholders (Company, etc. only), etc., of the Corporation
For the year ended March 31, 2012
Relatedparty

Nature oftransaction

DaichiShokusan
Co.,Ltd.*1

Amounts oftransaction

Address

Capital orinvestment

Type ofbusiness

Chuo-ku,Tokyo

Account

Relationship(Held by others)

Real estatebusiness

12

Percentage ofvoting rights held

Direct:(11.77%)

Interlocking
directors

Balance at the endof the year
Millions of yen¥21–

Relatedparty

DaichiShokusan
Co.,Ltd.*1

Address

Chuo-ku,
Tokyo

Amounts of transaction
Millions of yen

Rental ofland*2(Millions of yen)

DaichiShokusan
Co.,Ltd.*1

Chuo-ku,
Tokyo

Amounts oftransaction

Nature oftransaction

12

Account

Millions of yen

Payment forinterests*2
Parent company’s
stock acquisition
that held byconsolidated
subsidiary*3

Percentage ofvoting rights held
(Held by others)

Real estatebusiness

Direct:(11.77%)

Interlocking
directors

Balance at the endof the year
Millions of yen

¥ 300

–

–

¥

3

–

–

¥ 796

–

–

¥21

Capital orinvestment

Type ofbusiness

Account

RelationshipDirect:(11.77%)–

U.S. dollars

YenInterlocking
directors

As of March 31

2012

2013

2013

Net assets per share of common stock
Net income (loss) per share of common stock¥537.53(64.28)397.18(209.70)$4.223(2.229)Balance at the end of the year
Millions of yen–

Percentage ofvoting rights held
(Held by others)

Real estatebusiness

12

Thousands of
U.S. dollars$231

Not applicable.

18. Per Share Information

Thousands of
U.S. dollars–*1. 50.4% of voting rights are held by our four board members, chairman (including any equivalent person) Junosuke Toda,
and the other three board members.
*2. About rental lands, the rental charge is decided by vicinal state.

Thousands of
U.S. dollars

Millions of yen

Years ended March 31

Basis for calculation of net assets per share:
Total net assets
Amount attributable to items other than common stock
Net assets attributable to common stock
Number of shares of common stock outstanding at fiscal year-end
Basis for calculation of net income (loss) per share:
Net income (loss)
Net income (loss) attributable to common stock
Average number of shares of common stock outstanding during the fiscal year

26

Relationship

For the year ended March 31, 2013

(Millions of yen)

Nature oftransaction

Type ofbusiness

Capital orinvestment–

For the year ended March 31, 2013

Main
shareholder

Address*1. 50.4% of voting rights are held by our four board members, chairman Junosuke Toda, and the other three board members.
2. Conditions for deals were decided by taking into consideration the circumstances of market interest rate.
3. Trading price is decided by accordance with marketing price of Tokyo Stock Exchange.

*1. 50.4% of voting rights are held by our four board members, chairman Junosuke Toda, and the other three board members.
*2. About rental lands, the rental charge is decided by vicinal state.

Category

Relatedparty

Borrowing funds

Millions of yen

Rental ofland*2Category*2(Millions of yen)Mainshareholder

For the year ended March 31, 2012

Main
shareholder

17. Related Party Transactions

Category

2. Related party transactions between subsidiaries and related parties
Parent Company and major shareholders (Company, etc. only), etc., of the Corporation

2012

2013

2013

¥171,537¥128,095

4,172

4,478

47,620¥167,364¥123,617$1,314,377

311,358,119
shares311,238,062
shares¥ (19,872)¥ (65,285)$ (694,157)¥ (19,872)¥ (65,285)$ (694,157)

309,180,409
shares311,323,066
shares$1,361,997

27

Independent Auditors’ Report
Toda Corporation and Consolidated Subsidiaries

Independent Auditors’ Report

ANNUAL REPORT 2013

Corporate Information
As of June 27, 2013

Company Name:TODA CORPORATIONFounded:January 5, 1881

Company Headquarters:
7-1, Kyobashi 1-chome, Chuo-ku, Tokyo 104-8388, Japan

Stock Listings:
Tokyo Stock Exchange andOsaka Securities Exchange

Areas of Business:
1. Research, planning, design, management and execution
associated with all aspects of architectural and civilengineering together with related comprehensive
engineering and consulting
2. Research, planning, design, management and execution
associated with local development, urban development
and other comprehensive engineering and consulting
3. Real estate sale and purchase, rental, intermediary services,management and appraisal

Capital Stock:¥23.0 billion (as of March 31, 2013)
Number of Employees:
5,091 (Consolidated)
4,028 (Non-Consolidated)(as of March 31, 2013)

Board Of Directors, Corporate Auditors and Executive Officers
As of June 27, 2013

Directors

Executive Officers

President and Representative Director
Masanori Imai

President and Chief Executive Officer
Masanori Imai

Representative Directors
Noboru Nomura
Yushi Kikutani
Yasushi Miyazaki

Senior Managing Executive Officers
Noboru Nomura
Yushi Kikutani
Yasushi Miyazaki

Directors
Hideshige Toda
Makoto Hayakawa
Noboru Yamaki
Yutaka Nishizawa

Managing Executive Officers
Makoto Hayakawa
Noboru Yamaki
Yutaka Nishizawa
Katsuaki Fukushima
Kazuo Yamane
Shunichi Akiba
Tetsunaga Yamaguchi

Corporate Auditors
Standing Corporate Auditors
Morimichi Toda
Etsuo Nonoguchi

Executive Officers
Teruo Sahashi
Koji Tada
Takeshi Nishimaki
Hiroyuki Miyazaki
Keiichi Ebihara
Yuji Yokomizo
Toshihiro Otomo
Tetsuo Ota
Toshio Hirata
Kenichi Okabe
Hiroshi Uekusa
Takao Fukashiro
Hideo Takamasu
Yoshihiko Yamamoto
Kouichi Takahashi
Kaoru Mitsumochi
Takanori Matsushima
Yoshinori Shibuya
Atsushi Oouchi

Corporate Auditors
Yoshiaki Kaji
Katsutoshi Suzuki
Fumiyuki Akikusa

2829

7-1, Kyobashi 1-chome, Chuo-ku, Tokyo 104-8388, Japan
Phone: +81-3-3535-1591 Fax: +81-3-3561-5745

CONSTRUTORA TODA DO BRASIL S.A.
Rua Manuel da Nobrega, 1280-3° Andar. São Paulo, Brasil
Phone: +55-11-3886-5844 Fax: +55-11-3885-0705
TODA CONSTRUCTION (SHANGHAI) CO., LTD.
6A, 9 Joy Tower, 9 Zhenning Road, Changning District, Shanghai, China, 200050
Phone: +86-21-6252-0777 Fax: +86-21-6252-5030
THAI TODA CORPORATION LTD.
Somerset Lake Point (Tower-A, 5th Floor), 41 Soi Sukhumvit 16, Sukhumvit Road, Klongtoey Bangkok 10110, Thailand
Phone: +66-2-261-6544 Fax: +66-2-261-6545
TODA VIETNAM CO., LTD.
10th Floor, Star Building, 33ter-33bis Mac Dinh Chi Street, Da Kao Ward, District 1, Ho Chi Minh City, Vietnam
Phone: +84-8-6291-4127 Fax: +84-8-6291-4126
TODA PHILIPPINES, INC.
2nd Floor, 6788 Ayala Avenue Building, 6788 Ayala Ave.
Oledan Square, Makati City, Philippines
Phone: +63-2-478-6625 Fax: +63-2-886-8137
TODA AMERICA, INC.
5816 Corporate Avenue, Suite 160, Cypress, CA 90630, U.S.A.
Phone: +1-714-220-3141 Fax: +1-714-220-1360

Paper used in this annual report is produced using fiber sourced from well-managed forests and other forests where
unacceptable sources have been excluded, as defined by the Forest Stewardship Council.
Printed using soy ink made from plants containing minimal volatile organic compound